The Marketing Message of Theodore Levitt
“And if you want biographies," Friedrich Nietzsche once wrote, “do
not look for the legend Mr. So-and-so, and his times,' but for one
whose title might be inscribed a fighter against his time." That is
the role—as a “fighter against his time”—that Theodore Levitt has
played during his intellectual life.
This was a role he earned the right to play. Levitt mastered
"normal science" before setting off in search of new "paradigms."l
His doctoral dissertation, “World War II Manpower Mobilization
and Utilization in a Local Labor Market,” was squarely in the main-
stream of academic endeavor. Firmly grounded in economics
through his doctoral training at Ohio State, Levitt proved he could
satisfy the most rigorous standards of his profession by publishing
in the American Economic Review, the Review of Economics and Statis-
tics, the Journal of Finance, and elsewhere.3
Levitt's goal, however, was always to make a difference—a big
difference not only in his own discipline but in academics as a
whole and indeed in society. He wanted to think creatively. It was
the combination of his background in formal economics along
with a jagged streak of lightning called genius that enabled him to
succeed at so doing. One of Levitt's articles is entitled “Marketing
Success Through Differentiation-of Anything." His own greatest
achievement in differentiation has been of himself.
Theodore Levitt has written numerous articles that have
changed the way important people think about important matters
(which was his own standard when he served as editor of the Har-
vard Business Review). Among the most noteworthy of these is “The
Globalization of Markets," published in 1983.
The article's argument is that new technology, which has “pro-
letarianized” communication, transport, and travel, has created “a
new commercial reality—the emergence of global markets for stan-
dardized consumer products” of a hitherto undreamed-of magni-
tude. The era of the “multinational corporation" was drawing to a
close, Levitt asserted. The future belonged to the “global corpora-
tion.” The global corporation did not cater to local differences in
taste. Those differences were being overwhelmed by the ability of
the global corporation to market standardized products of high
quality at a cost lower than that of competitors due to enormous
economies of scale in production, distribution, marketing, and
management." The global corporation was being called forth by a
new era of "homogenized demand.”
Levitt's claim was breathtaking in its inclusiveness. “Nothing,"
he declared, “is exempt.” Not steel, not automobiles, not food, not
clothes. Variety costs money, and the modern consumer demanded
the best for less.
Levitt is a man of the world, quite aware of the conflicts that
pockmark it. He makes reference to the 1979 Iranian uprising that
resulted in the downfall of the shah, to the Nigerian-Biafran civil
war, to life in Bahia in Brazil and in Krasnoyarsk in Siberia. But
though beliefs might differ sharply from one nation or region to
the next, consumption patterns were converging. The rebels in
Iran were wearing “fashionable French-cut trousers and silky body
shirts.” In Biafra, “soldiers carrying bloodstained swords” were “lis-
tening to transistor radios while drinking Coca-Cola.” The world
was witnessing nothing less than the “vindication of the Model T,"
the basic transportation vehicle of which Henry Ford said, “It takes
you there, and it brings you back."
There is no other appeal like price. People like money, and
they want to spread it over as many goods as they can. What the
global company understands, which the multinational does not, is
the power of scarcity: “Nobody takes scarcity lying down; everybody
wants more."
If “The Globalization of Markets” were the only article one had
ever read about marketing, one would find its argument com-
pelling. But in the context of its times, what Levitt was proposing
was little short of a revolution in both how companies organized
themselves and in how they thought about what they were doing.
Levitt's argument flew in the face of hallowed principles of mar-
keting both and what seemed to be the stark realities of the world
as it was in 1983.
Consider, for example, what had come to be known during the
quarter-century prior to the 1983 publication of “Globalization” as
"the marketing concept." We do not mean a marketing concept;
in fact we must italicize the article: the marketing concept.
By 1983, this idea, so simple that it scarcely seems to deserve
the label “concept,” was that companies should give customers
what they want. The marketing concept gained currency during
the 1950s and was founded on the belief that the “problem of pro-
duction" had been solved. Supply-side shortages not being in the
offing, there was no need for companies to be guided by a pro-
duction analogue to the marketing concept. “The sales concept,"
such as it was, had also fallen into disrepute in the literature. The
sales concept was about pushing a product onto the consumer
through sales techniques.” The “sales concept" was waning as early
as 1941. IBM, for example, which was in the process of developing
one of the greatest sales forces in history, was instructing its sales-
people by that time to tell prospects that their job was not "to sell”
but "to serve."
Thus, we arrive at the marketing concept.” Behind the phrase
lay the idea that business begins not with the factory but with the
customer. Marketing was the most important of business functions
because it drove everything else—or at least that was the ideal. In
practice, businesses kept seeming to revert to the satisfaction of
their own internal needs at the expense of customer desires. Look
around, and you will find that this is true today. The promise of
customer satisfaction is omnipresent. (No company promises cus-
tomer dissatisfaction.) Delivering on the promise is a good deal
less common.
There are two specific references to the Marketing Concept in
“Globalization," and the idea is alluded to elsewhere without being
labeled. Levitt treats this central idea of his discipline without
much respect. Somehow, corporations had allowed themselves to
fall prey to the perverse practice of the marketing concept and
the absence of any kind of marketing imagination....” (p. 98).
"Most executives in multinational corporations are thoughtlessly
accommodating. They falsely presume that marketing means giv-
ing the customer what he says he wants rather than trying to under-
stand exactly what he'd like."
What Levitt appears to be saying is that it is up to the company
to know more about what the customer wants than the customer
himself or herself does, or at least more than the customer can
articulate. He uses as an illustration the failed attempt by Hoover
to market its washing machine throughout western Europe. The
cause of this failure was Hoover's “proper' marketing orientation.”
The company conducted consumer research at a fine-grained level
that revealed that customers in various countries wanted different
features. The manufacturing costs of providing these features
drove the price of the appliance up, and the product did not sell.
What went wrong? Two things. First, Hoover asked the wrong
questions. It sought, in the type of phrase for which Levitt became
famous, to learn “what features (customers] wanted in a washing
machine rather than what they wanted out of life.”
Second, Hoover paid too much attention to what people said
and too little to what was actually going on in the marketplace.
Did everyone want a washing machine specifically customized to
their living space? Yes. Was everyone willing to pay substantially
more money for such a washing machine, thus depriving them-
selves of other possessions? No. “[People] preferred a low-priced
automatic ... even though [it] failed to fulfill all their expressed
preferences. The supposedly meticulous and demanding German
customers violated all expectations by buying the simple, low-
priced Italian machines” (p. 98).
The conclusion was that a cursory examination of the Hoover
story would leave one with the belief that global marketing is
impossible because of the strength of national wants and needs.
But what a little digging reveals is that we have seen a "distorted
version” and the “perverse practice” of the marketing concept. And
we have seen something else: what Levitt referred to as a "failure
of nerve."
Marketers must be more than mere receptacles of information
(which is sometimes poorly specified and collected). They must
actively mold the markets to which they sell. If Hoover had acted
in that aggressive fashion, it would have succeeded. With will and
vision, global marketing could become a reality.
Levitt was well aware at that time of the appeal of low prices.10
In recent years, Clayton Christensen of the Harvard Business
School wrote The Innovator's Dilemma," a book that became world
famous and in which he asserted ideas quite similar to Levitt's.
Christensen's thesis is that in their rush to give customers precisely
what they want, companies customize too much, spend too much,
and therefore charge too much. They thus leave themselves open
to the "disruptive innovator," marketing a product that is not per-
fect in terms of every function and feature but is good enough and
a lot less expensive. Although Christensen's book is not concerned
with world trade, the basic market dynamic he sees conforms to
Levitt’s. Variety is often generated by organizational dynamics inter-
nal to the firm. Customers tend to be unwilling to pay as much for
that variety as marketers may like to think.
In one sense, the ideas in “The Globalization of Markets” are
not surprising. For years, people had been coming to think of the
world as a single unit rather than as a patchwork of nations and cus-
tomers. The first armed conflict deemed a “world” war took place
between 1914 and 1918 (even though it was less a global conflict
than, say, the Seven Years' War of 1756 to 1763, which stretched
from Canada to India). The term global village was coined in 1960.12
The realization that radioactive fallout from nuclear weapons
could have global consequences led to the Nuclear Test Ban Treaty
of 1963,13 and general concerns for the environment led to Earth
Day in April 1970.14 The space race, beginning with Sputnik in 1957
and climaxing with the moon landing in 1969, endowed human
beings with a whole new perspective on “spaceship earth.”
Meanwhile, a little closer to home, social critics following
World War II were beginning to complain of the very homoge-
nization that Levitt was inviting corporations to exploit. The term
Coca-Colonization gained a certain currency during the 1940s and
1950s, suggesting the imposition of American cultural values on
the world through the spread of its consumer products.15 In 1967,
the French journalist Jean-Jacques Servan-Schreiber published The
American Challenge, in which he portrayed Europe being overrun
by American capital and American business organization prac-
tices. 16 Various domestic observers as well were noting with disap-
proval the “global reach” of what appeared to be the inexorably
growing American business firm.17
That said, there is another sense in which the ideas in “The
Globalization of Markets” are daring. In 1983, the world was still
very much a bipolar place, divided between “communist” and
“democratic” nations. The cold war had heated up considerably
with the Soviet invasion of Afghanistan in 1979. It was in 1983 that
President Ronald Reagan called the Soviet Union the “evil
empire," and this cartoon-strip phrase struck a responsive chord
in much of the American public. 18 Those people living under com-
munist regimes knew precious little of markets in the Western
sense, never mind marketing.
In 1983, there were, in fact, only a handful of countries in
which corporations had home offices that sold products or services
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