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Franchising Should Take a Lead from Theodore Levitt

By Ed Teixeira

The surging popularity of Facebook and Twitter can cause us to stray from the basics of marketing. In spite of new technology the principles of marketing remain the same.

Twitter and Facebook are powerful communication vehicles and as such can represent important marketing tools; however, they are not a substitute for sound marketing practices. If the needs and desires of the customer are not properly identified then the message will be wrong. If the marketing message is wrong then it doesn’t matter if it’s being delivered by Facebook or a local newspaper.

In my opinion, one of the best business writers was Theodore Levitt, someone who I considered a true marketing guru. Mr. Levitt had a knack for describing marketing in simple yet profound terms.

In his 1960 classic from The Harvard Business Review, “Marketing Myopia” Levitt wrote: “Selling focuses on the needs of the seller, marketing focuses on the needs of the buyer. Selling is preoccupied with the seller’s need to convert his product into cash, marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering and, finally, consuming it.”

The marketing myopia theories originally proposed by Theodore Levitt, state that marketers should look towards the market and modify the company and products accordingly rather than looking towards your own company, its potential and then catering to the market. The needs of the market should receive first priority.

A classic example of marketing myopia used by Levitt in his 1960 article referred to the railroad industry:

“The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because that need was filled by others (cars, trucks, airplanes, and even telephones) but because it was filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they defined their industry incorrectly was that they were railroad oriented instead of transportation oriented; they were product oriented instead of customer oriented.”

In another Levitt work “Marketing Concept” he states: “Your product/service offering should be geared towards what the customer Wants, not what You Think they want. Some companies remain focused on the practice of building the product and assume the customer will come.

This approach can be applied to franchisors selling franchises (consider the franchise prospect a customer) and for franchisees selling products and services to the end user.

How can franchisors and franchisees relate to Levitt some fifty years later? Simply by causing us to pause and re-examine the needs and expectations of the customers we look to reach. It reminds us, that trying to “sell” a product or service that people don’t fully accept is doomed to failure regardless of how sophisticated our marketing tools are. Franchisors should take a good hard look at their customer offering.

How to create and deliver the right marketing message:

Focus on the customer
Use franchisees to survey their customers to identify their needs
Fully learn what customers want
Adapt and adjust to meet the customer’s needs
Maintain control over the customer offering

In terms of the franchise industry there are some steps we can take.

Franchisors looking to grow their franchise network should view prospective franchisees as customers.

Profile their target franchise prospect. Who is your ideal franchisee? Speak with existing franchisees and compare expectations with reality.
Carefully define and understand what franchise prospects want and desire. Be detailed rather than limited to one objective “making money.”
Make changes and adapt the franchise program to satisfy the needs of these “customers.”

Franchisors marketing their products or services need to consider the following:

The majority of franchises are based upon a specific business model that includes products or services marketed to customers. As the franchise evolves and its operation placed in the hands of franchisees adjustments may be required.
The fact that a franchise network is growing doesn’t guarantee success if the needs of the customers aren’t being met. The result could be most sellers marketing the wrong product or service.

The writings of Theodore Levitt should cause franchisors to review what they market to their targeted customers on an ongoing basis otherwise they can suffer from “Marketing Myopia.”