1

Module 1 Review
MGMT311
June 6, 2015

MODULE 1 REVIEW

Module 1 Review
1. What is marketing myopia, and how can it be avoided?
According to Kotler and Armstrong (2014), marketing myopia occurs when a given firm
becomes overly-preoccupied with the products it offers, therefore losing sight of customer
needs and the accompanying benefits of its produced goods (p. 29). Such near-sighted sellers
are inherently vulnerable to encroaching competitors, as a result of their skewed perceptions,
erroneously believing that customers will continue to buy existing products indefinitely,
despite the emergence of better, cheaper replacements (Kotler & Armstrong, 2014).
To better illustrate the potential dangers of marketing myopia, consider a telling example
proffered by Theodore Levitt, first appearing in his Harvard Business Review article in 1960.
Levitt explains that Americas first nationwide transportation system the railroad became
an early victim of marketing myopia, when train operators assumed themselves to be in the
railroad business rather than in the transportation business (1960). Gradually, customers
deserted the railways, opting instead to transport freight and passengers via alternative
methods like automobiles and aircraft, when railroad providers failed to consider or adapt to
customer needs.
To avoid the pitfalls of marketing myopia, organizations must adopt a customer oriented
approach to business, as opposed to the fallacious, product oriented model implemented by
the US railroad. Furthermore, Kotler and Armstrong stress the importance of widening the
marketing scope, enabling potentially-myopic firms to diversify their product/service lines to
create brand experiences for customers (2014, p. 29).

MODULE 1 REVIEW

2. What is customer-perceived value, and what role does it play in customer satisfaction?
In the aftermath of an overall decline in U.S.-based manufacturing industries, American
markets are now evolving towards a service-based economy. Essentially, this means that even
producers of tangible goods must implement ways to increase the value of their products by
forming lasting relationships with consumers (Gustafsson & Johnson, 2003). To achieve and
maintain customer relationships, Kotler and Armstrong (2015) posit that firms must create
superior customer value and satisfaction (p. 34). As both value and satisfaction are fairly
subjective concepts, in reality, sellers are thus tasked with improving consumer perceptions
in both areas. Customer-perceived value is defined as the customers evaluation of the
difference between all the benefits and all the costs of a market offering relative to those of
competing offers (Kotler & Armstrong, 2012, p. 35). Relatedly, the authors explain that
customer satisfaction depends on the products perceived performance relative to a buyers
expectations (Kotler & Armstrong, 2012, p. 35). Using two hypothetical online banks in an
example, imagine one financial firm is a bare-bones operation, offering account holders
basic online savings, checking, and money market services, for zero monthly fees. The
second bank, on the other hand, offers additional features to its members, including 24-hour
phone support, overdraft protection services, and unlimited check writing, but charges a flatrate fee of $15.00 per month for each account holder. Both banks provide services that create
customer-perceived value, albeit for very different types of customers: Bank #1 increases
perceived value for budget-conscious savers by eliminating fees, while Bank #2 enhances
perceived value by providing additional services that meet wealthier consumers needs.

MODULE 1 REVIEW

3. Explain the roles of market segmentation, market targeting, differentiation, and

positioning in implementing each strategy.
As an organization begins to develop its marketing strategy, it must first decide the
demographic of choice for its products or services. To achieve this, the firm categorizes
consumers into labeled groups, in a process known as market segmentation (Kotler &
Armstrong, 2012, p. 31). From those consumer groups, the nascent company selects those it
will ultimately pursue through target marketing (Kotler & Armstrong, 2012, p. 31).
Once segmentation and targeting are effectively implemented, the business then develops
its strategy to attract and maintain those consumers. Through differentiation, the firm
builds a unique image for its brand in the minds of consumers, setting it apart from
competitors (Kotler & Armstrong, 2012, p. 50).. Phase two of the second marketing strategy
is known as positioning, wherein the organization develops a niche in a specific market by
identifying a problem or opportunity for which it devises a novel solution (Kotler &
Armstrong, 2012, p. 50).

References
Kotler, P., & Armstrong, G. (2014). Principles of marketing (15th ed.). Retrieved from Pearson.

MODULE 1 REVIEW

Gustaffson, A., & Johnson, M.D. (2003). Competing in a service economy. Retrieved from Wiley
Publishing.