By Javier Sastre Martin, Sastre & Asociados.

Business administration Consultants

DOES THE CERAMIC TILE

MANUFACTURING INDUSTRY SUFFER
FROM MARKETING MYOPIA?
a review of the ideas of Theodore Levitt

The following paper was delivered at the Qualicer World In view of the parameter established at the outset (double digit
a review of the ideas of Theodore Levitt

Congress held in Spain, March 2004. annual growth), the Spanish ceramic industry is clearly no longer
an industry with a growing production.
ABSTRACT
One of the most famous articles of all time on business And note that this is despite the fact that the Spanish tile
management is the article entitled “Marketing Myopia”, which could industry “has caught up with” the Italian tile manufacturing
translate into Spanish as “Miopia en marketing”. Theodore Levitt industry, the Spanish industry’s reference point par excellence.
wrote this in the 1960s and the paper’s fame is due to the stir that However, the Italian industry has also for quite some time
it caused in the business and academic world at that time. ceased to be a growth industry (see table below).

This article, which deals with the lack of vision by executives and Italy 1997 1998 1999 2000 2001 2002
the mistaken assumptions and beliefs that take hold widely in Annual 3.2% 2.9% 2.9% 4.2% 1.0% -5.2%
industry, has had such an influence that it is still quite commonly production
found in today’s textbooks on marketing or business growth
administration. In fact, it is still studied at the most prestigious
business schools. This has happened in a context in which, on a global scale,
world tile production growth has remained approximately stable
Theodore Levitt is currently professor emeritus of the Harvard (see table below). The table shows that the Spanish ceramic tile
Business School (Massachusetts, U.S.A.) and is one of the most industry’s share in world tile production has fallen since 2000, as
respected authorities on business administration and marketing. Spanish tile production has grown less than that of world tile
MARKETING MYOPIA?

production.
In this communication we shall review the basic ideas that Levitt
set out in his paper, with a view to ascertaining whether today, In addition, the average growth of some of the more important
in the Spanish ceramic tile industry, managers could be guilty to emerging tile producing countries has been much higher, as the
some extent of those erroneous assumptions or nearsightedness. following table shows (average annual growth between 1996
Based on this, we shall then attempt to draw some constructive and 2002).
conclusions in these times of change for the sector.
World 1997 1998 1999 2000 2001 2002
Annual 4.0% 6.7% 4.6% 4.1% 5.4% 6.1%
1. GROWTH INDUSTRIES production
In his classic article, Levitt observes that all the major industries growth
(automobile, railroad, oil, etc.) were at some time considered
growth industries. Unfortunately, many of these found These figures should logically be accompanied by production
themselves almost suddenly in a situation of stagnation, if not value, but although these values are unavailable, they may
decline. certainly be considered significant. Could the Spanish tile
industry be entering a situation of sudden downturn, as Levitt
What do we mean by a growth industry? indicates occurred in other important industries? How could we
determine this?
To put it simply, we can say that an industry is a growth industry
when it has continuous double digit annual growth rates. That is
to say, rates of 10 per cent or higher. The Spanish ceramic tile Countries Production growth Production 2002
manufacturing industry is, of course, an important industry (annual average) (thousands of m2)
because of its dynamism, its export vocation, its relative global Vietnam 63.1% 97.184
importance, etc. Can the Spanish tile manufacturing industry be
Poland 20.4% 53.608
considered a growth industry? It obviously was in the 1990s,
when according to data from ASCER, average tile production Egypt 19.5% 73.159
grew by over 16 per cent annually between 1990 and 2001. Czech Republic 15.6% 47.697
However, perhaps it would be advisable instead to focus on the
Iran 13.6% 107.507
most recent data, set out in the following table, to establish
whether this is still the case. India 12.4% 137.262
Mexico 11.4% 150.520
Spain 1997 1998 1999 2000 2001 2002
China 7.7% 2.240.000
Annual 14.4% 16.3% 6.7% 3.2% 2.7% 2.0% Spain 7.3% 651.000
production
growth Italy 1.1% 605.500

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2. THE FAILURE OF THE MANAGERS • The client is supposed to choose out of a wide range of
In the first place, Levitt tells us that in fact, in a broad sense, finished products, instead of the company inquiring into the
growth industries do not exist. What you have are individual user’s needs when the products were to be designed and
companies organized and directed to create and take advantage developed.
of growth opportunities that appear in their markets. And what
happens is that sometimes such opportunities are “more visible” • Growing numbers of items are made in an attempt, with any
and almost all the companies in a sector take advantage of luck, to find something that is successful among the clients,
them, whereas on other occasions, opportunities are much less even though every year witnesses talk of narrowing product
obvious, and only the best-equipped companies are able to take ranges.
advantage of these. Consequently, if sectors or industries no
longer grow or stop growing together, why is a company • The markets are not sufficiently differentiated; the entire
affected by a general decline? product range is offered to all markets, instead of being
adapted to the peculiarities of each market, leaving aside
Levitt indicates that the main reason for individual company the rest of the products.
growth to stagnate or be constrained is not market saturation,
an explanation that obviously lies at hand, but something much So, is the market defined in a narrow way in the Spanish tile
more essential: the failure of industry management. Failure, manufacturing industry? Judge for yourself:
inasmuch as executives are the persons responsible for
establishing the corporate objectives and strategies that decide It certainly is narrowly defined by those that think that their
the future of their companies, and which will make their business is the “production” of ceramic floor and wall tiles and
companies flourish or fail. that, therefore, their market is “only” represented by those

“
Why do managers fail? Because they
lack vision. Because they do not Companies in the Spanish tile manufacturing
define the aims of their companies
properly, but only do so in a limited
industry cannot be considered market oriented...”
and short-sighted way. Hence the
title of Levitt’s paper. This lack of vision materializes in two players in the market that buy their production directly from
forms: them. Although behind these buyers there logically stands an
end-user or consumer. In this case those that buy the
First, managers do not focus on what is truly important for any production, except for noteworthy exceptions that have their own
type of industry, independently of the existing economic distribution, are generally stockists, distributors and builders.
circumstances: satisfying the real needs of consumers, their None of these is an end-user or consumer. For this type of
actual clients. That is to say, they happen not to be market mentality, competitors are all those manufacturers that try to sell
oriented. This, despite their appearing to act as such, in view to these same builders, distributors and stockists.
of the superficial, highly fashionable cliches that are bandied
around merely as slogans in most companies, of the type: In contrast however, the market is not narrowly defined by those
“the client is pivotal”, “the customer is king”, etc. To be market that consider the business of the industry to be that of satisfying
oriented means to be completely focused on satisfying the tiling needs in the different habitats used by human beings,
actual needs (not the hypothetical ones) of clients. It should be whether in the workplace, living quarters or leisure domains,
noted that when we refer to clients we are referring in particular interiors or exteriors. Now the market, i.e., the clients, will be all
to the consumer, although one ought not to forget the direct who have tiling needs in their habitats. And this is a much larger
clients (whether these be stockists, distributors, builders, etc.). group, made up of all the end-users, whether individuals,
families, companies or public bodies. In this case, competitors
The second reality is that managers establish a narrow definition are all those that can offer tiling solutions for the different needs
of their own market. To establish a non-narrow market definition of the end-user, regardless of the user’s aesthetic and technical
again involves returning to the value chain, towards consumers, preferences. That is to say, substitute products are now also
and determining what essential needs the company can satisfy taken into account. In other words, these involve other ceramic
with available technology, both in markets of persons and in floor and wall tile manufacturers but also producers of natural
those of industry. In this way, the company market is stone, bricks, composite materials (gypsum mortar), organic
appropriately established. materials (wood, cork, wallpaper, textiles), polymer materials
(vinyl, linoleum, rubber, gum), metallic materials, etc.
Are companies in the Spanish tile manufacturing industry market
oriented, or instead, are they more production oriented, in the
sense of being basically concerned with manufacturing and 3. CHARACTERISTIC BELIEFS IN THE DOWNWARD
selling their production as profitably as possible? Companies in CYCLE
the Spanish tile manufacturing industry can not be considered Levitt identifies a series of widely held mistaken beliefs or
market oriented, in view of the scarce development, in general, assumptions amongst managers, together with an inadequate
of that corporate function that deals with ascertaining and trying market orientation and narrow market definition in industries that
to satisfy customer needs. That function is known as marketing. entered processes of unexpected decline from a previous
Indeed, in the tile manufacturing sector there continues to be a situation of continuous, prolonged growth. These downward
pronounced production or product orientation (in this latter case processes are characterized by having a large number of
the preoccupation centres on making quality products). companies in the particular industry involved start to operate
Examples of this are readily found: with a feeling of negative inertia, in which growth rates steadily
decrease and margins progressively tighten. We do not by any
continued on page 24

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21
 means wish to suggest that the Spanish tile manufacturing investment-speculation component, according to which investors
industry is in a stage of decline. However, we do wish to have sought a safer and more traditional alternative to
establish whether these beliefs occur to any degree within the investments in financial markets. In addition to being very
sector, in order to put it on its guard to avoid that risk. profitable, given the continuous rise in prices. It does not seem
reasonable that such growth, based on economic
The four erroneous beliefs or assumptions of top managers, circumstances, will be sustainable in the middle or long term in
which Levitt identified in industries that entered a process of the domestic market. In foreign markets, this will depend on the
unexpected decline, are: particular circumstances of each market, although it will be
• 1st belief: The myth of population difficult to find similar situations.
• 2nd belief: The non-existence of competitive substitutes
a review of the ideas of Theodore Levitt

• 3rd belief: The unbeatability of mass production In the field of housing construction, a distinction can be drawn
• 4th belief: The obsession for R&D between the housing market of second family dwellings, whose
possibilities of development could be greater in Spain, owing to
We shall now review what each of these beliefs involves, and being a centre of tourist attraction. These possibilities are tied to
establish whether they are to be found in the Spanish ceramic the net growth of the individual wealth of citizens (Spanish and
tile manufacturing industry at this moment. from surrounding countries), which also depends on the
economic situation. Abroad, it will depend on the location of
1st belief: THE MYTH OF POPULATION geographic centres of leisure, tourism or business, or on the
Levitt tells us that many managers exhibit an unjustified surroundings of the large cities, and also on economic
confidence in indefinite market growth, based on population circumstances.

“
growth and a rising standard of
living of the population.
The danger...is that a market in permanent
The danger that lies in wait
behind this belief is that a market
expansion saves the manufacturer from needing
in permanent expansion saves to think too much...”
the manufacturer from needing
to think too much and
imaginatively, as company growth is expected to occur easily On the other hand, the increase in public construction, of a
MARKETING MYOPIA?

thanks to the “organic growth” of its market. Let us see whether public or private nature (hotels, shopping centres, etc.) depends
the factors relating to this belief have led to its spread in the tile directly on the economic situation. In the former case, this is
manufacturing industry. limited by the pursuit of a zero State deficit. In the latter, by the
possibilities of achieving a return on investment, which the high
Organic or natural growth of the tile manufacturing market can cost of the land in Spain make difficult in the middle term.
be produced by:
Finally, there is the possibility that the improvement in the
•Increased housing construction. standard of living, materializing in the form of greater income,
•Increased construction of public buildings. could lead to renewal of floor and wall tiling that is old-fashioned
•Greater and faster renewal of tiles in dwellings and other or in bad repair, by more modern and better tiling. This
facilities of public and private use. replacement market can occur, for private consumers, in the
purchase of the second or third family dwelling in the course the
Without going into further detail, which the length of this consumer’s life, in the pursuit of improvement of original
communication does not allow, increased housing construction qualities or renovation of the regular dwelling. And in decisions
depends on three variables: population growth, the investment- of image enhancement and upgrading of facilities, for private
speculation component and the rise in level of wealth of the companies and public bodies.
population.
This is a possibility that could of course display sustained growth,
Since the 1980s, population growth has been a factor that although it depends on a positive evolution of the levels of income
depends on economic circumstances, and is not a law that is of the population and on an economic situation that generates no
inevitably obeyed. Nowadays, few managers will expect market negative expectations. Such renovation can also be partly driven
growth in Spain to be achieved as a result of continuous by industry, by means of appropriate communication of the
population growth, as Spain has one of the lowest birth rates in advantages of a greater rate of turnover in replacing tiling
the world. Despite immigration. Moreover, this situation seems installations in housing or public buildings, somehow modifying
generalized in most of the developed Western countries. users’ scales of priorities. However, it is certainly true that the
industry has encountered other means of promoting growth,
Possibilities of population growth can be observed, although independently of the organic growth of its customary markets:
always of a circumstantial character, in developing countries.
Therefore, if the Spanish ceramic industry wishes to base its • Expansion into new geographic markets abroad.
growth on population growth, it will consequently not be in the • Broadening of the range of tile uses in the markets.
domestic market but in foreign markets, preferentially in the ones
mentioned above, where this can be done based on economic On the one hand we find that expansion into new geographic
circumstances. markets can not be unbounded, as these markets are finite.
Moreover, this resource has been extensively exploited by the
On the other hand, recent years have witnessed an enormous sector for years, so that considering the industry in general,
boom in new housing construction in Spain, driven by a strong there are few new markets left to discover. The industry is

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 already present in the main economic areas of the globe. communicating this advantage to consumers, although it needs
to be borne in mind that a product or concrete model is never
Furthermore, there could be an increase in national competitors free of obsolescence. In this sense, Levitt indicates that there are
in foreign markets, together with the danger of price-based no products free of obsolescence, because if (technical and
competition. And this has been going on until now, with a view to market) research of the companies themselves do not cause its
capturing market share from the reference Italian industry. obsolescence, other companies will. As an example, Intel, the
Similar intentions of other competitors from China, Brazil, Turkey, world’s largest manufacturer of microprocessors, believes that if
etc., make such price-based growth very difficult. it fails to rapidly outstrip its own products, other companies will.
Intel, as all we know, has been market leader for many years. To
Finally, the most advanced competitors are trying to promote be sure, ceramic tile has substitutes. It may have certain
a review of the ideas of Theodore Levitt

growth in their markets by seeking new tile applications and advantages with regard to some of these, although the advances
novel domains for tile installation, striving to position ceramic tile achieved in other industries are probably not known, and this
products in all fields of construction: architecture, town planning, would require studies on an institutional level to detect possible
interior design and housing. However, the implementation of new threats. These advantages have certainly not been
applications and domains involves substituting other products communicated either sufficiently or efficiently to consumers. And
and requires long-term work in order to alter habits and customs. to get consumers to heed the excellent performance features of
This is akin to fostering a greater turnover in tile replacement. tile requires ceaselessly disseminating the qualities of ceramic
materials amongst the various specifiers.
Review of the factors that produce growth in the markets clearly
shows that organic factors do not grow indefinitely, because they No products are free of obsolescence, and to avoid this requires
depend on economic situations that will not always be ongoing development of more advanced products, with new
propitious. And regarding the factors that we could call performance features. Levitt indicates that the companies with
promoters, one factor, expansion into new geographic markets, the best outlook are those that construct their own luck and do
is displaying symptoms of exhaustion in the industry as a whole, not limit themselves to copying and following others. This
while another, the introduction of new tile applications and continues to be so today, though to construct the future with
domains requires both time and work, certainly on an institutional criterion requires understanding the grounds for success in the
and international level. business. And these grounds are now referred to, in more or less
general terms, as the key factors for success.
In view of the above, this belief should not be very deeply rooted
MARKETING MYOPIA?

in the Spanish tile manufacturing industry, in spite of the In order to innovate with success, it is necessary to know the key
extremely favourable economic circumstances that have lately factors for success. These factors to success refer to those
been in place, and which analysed from a short-term perspective essential ones which, though they may alter with time, guide
could lead to unjustified optimism. consumers and buyers in our markets when they are acquiring
the product. We would therefore be aware of what consumers
2ND belief: THE NON-EXISTENCE OF COMPETITIVE want, because we have asked them directly. How many
SUBSTITUTES manufacturers truly know this? Those that understand the key
According to Levitt, the apparent solidity of growth industries factors to success, not just today of course, but also tomorrow
was due to the supposedly unquestionable superiority of their and the day after, will construct their own luck. The others will be
product, which would therefore produce unbroken demand. led, and be forced to imitate. If, in addition, these same
There was no effective substitute. In actual fact, the product companies head the development of future substitutes, they will
itself had surely been a formidable substitute of the predecessor be laying the groundwork for a new stage in which they could be
it replaced. The danger that this belief generates is that the leading players. In the same or in a different industry.
companies, aware of the superiority of their products, come to
be faced with the obsolescence of their products, without having 3RD belief: THE UNBEATABILITY OF MASS
researched or developed other new ones that satisfy the PRODUCTION
changing needs of consumers. Or they realize this very late. Mass production industries have an almost irresistible temptation
to raise production continuously. This is motivated, according to
Our perception today as regards this belief in the tile Levitt, by the prospect of reducing unit costs by increasing
manufacturing industry is that, apparently (although reliable data production, which by counting on the sale of production will
on a world-wide level are unavailable), tile seems to have an generate higher profits.
advantageous position in respect of other competing materials,
because of its technical properties and aesthetic possibilities. In The danger of striving for continuously lower unit costs of
this sense, to the excellent technical qualities of ceramic tile are production is that it usually puts a spiral of pressure on sales
being added the aesthetic possibilities of other materials, and prices, if we are not in a market with over demand. This is
imitating their colours, forms and textures, etc. Right now, these because cutting production costs is only interesting as long as
are competing in consumers’ minds with other alternatives that production is sold. Should this not occur, factories would be
had until recently been completely independent. However, one faced with undesired excess stocks. Excess stocks involve
matter is the perception of people tied to the sector, with their higher store maintenance costs, repercussion of floor cost,
logical knowledge and attachment to the product, and another labour costs, financial costs, etc., which make it difficult, if not
quite different matter is consumers’ perception. What we can say impossible to reduce unit costs (although this reduction is strictly
concerning this belief is not that ceramic tile lacks substitutes, in the production process).
since it has many, but that tile surpasses these at the moment,
at least in the view of people “in the know”. To avoid reaching this critical situation of excess stocks,
companies usually tend to apply excessive pressure on sales.
This is good news for the industry, because it means suitably Which in passing increases sales costs. This leads to completely

26 ISSUE 44 tiletoday.com.au
 prioritizing sales activities over other activities, particularly over behind. This gradual abandonment of mass production is due to
marketing activity, which could become side-lined. The sales the decision of companies to offer a steadily wider range of
department, faced with the insufficiency or absence of other products, and the intention of avoiding the accumulation of large
product differentiating arguments (owing to the absence of stocks. However, this entails important cutbacks in productivity,
marketing), makes a last-ditch attempt to achieve sales by which seriously impact the bottom line and will drive companies
competing on price. And this usually means just one thing: to seek other ways of propping up the bottom line.
smaller profits. Despite production unit costs being smaller.
4th belief: THE OBSESSION FOR R&D
Is this a belief that could take root in the Spanish tile As we know, R&D is absolutely necessary to achieve innovation
manufacturing industry with all its negative consequences? It is in a product, to make it different from the others, or innovation in
a review of the ideas of Theodore Levitt

true that the ceramic tile manufacturing industry has invested processes to generate a development in productivity. Both
very heavily in production in the last decade to increase features, differentiation and productivity, are important factors in
production. In addition, high and increasing stocks are kept in corporate competitiveness. However, the belief to which Levitt
many companies, signalling excessive production orientation. refers is obsessively and uniquely confiding in this activity.

“
There has also been increasing
pressure on sales, above all in
recent years. And there has been Selling centres on the needs of the producer, whereas
insufficient investment in
marketing. This explains the poor marketing centres on the needs of the consumer”
product differentiation and the high
uniformity of manufacturers’
product ranges. The danger of which he forewarns us is that excessive attention
towards R&D can lead a company into believing that it is an
The picture looks rather similar to the foregoing description. The efficient producer of excellent objects, rather than an
consequence of this belief is a price war between products with organization whose mission it is to serve its clients. Thus,
hardly any differentiation, which reproduces a terribly common companies develop great product quality or excellent new
situation in today’s markets. And the fact is that although it is developments from a technical point of view, but in fact turn their
sometimes difficult to distinguish between them, there are radical backs on actual market needs. At the root of this way of thinking
differences between companies focusing on sales alone, and and acting lies the belief that “a quality product sells itself”.
MARKETING MYOPIA?

those focusing on marketing: And this is not always true, as German manufacturers can bear
witness at this very moment.
• Sales-focused companies are obliged to sell at almost any
cost in order to turn products into “fresh” money to feed the It is in such cases that conceptions spread within the company,
bank account, forgetting about the market and marketing. which are more widely held than might be imagined, concerning
the client-consumer as an unpredictable, capricious, stupid,
• Marketing-focused companies also sell, but they need to myopic, stubborn and generally annoying being. Nonetheless, it is
know the real (and changing) needs of consumers to satisfy he or she who buys. And, therefore is right. Was he not king? The
these with products that the consumers want to buy, product satisfies the consumer’s need, not the other way around.
together with the related characteristics (presentation, time
and place of purchase, payment terms, etc.). Is this belief found in the Spanish ceramic tile manufacturing
industry? This situation does not seem to occur in the Spanish
Selling centres on the needs of the producer, whereas marketing tile industry, given its low investment in R&D. However, this low
centres on the needs of the consumer. It is a critical difference in R&D investment is the general situation in Spanish enterprise.
approach. It might be useful now to briefly glance at the case of Investment in R&D does not mean investment in technology,
Henry Ford, founder of the automobile company, paradigm of which, as we have seen in the previous belief, has been
the creation of the production line (or mass production). Levitt abundant. Decisions on investment in technology have not been
reminds us that Ford’s true genius and the reason for his strategic either in the sector, but have stemmed from the
success did not lie in the development of mass production, but machinery and glaze producing companies, and have followed
in an essential marketing insight. This insight was that he could the rhythm of innovation set by these branches, rather than
sell a great many cars, if he managed to set a sales price that imposing this on them.
even his workers could afford, at a time when cars were luxury
items. From that objective need to achieve low sales prices, The problem is that technology is no longer a key factor for
which a broad spectrum of the public could afford, came the success, because it lies within everybody’s reach, whereas R&D
implementation of mass production as a solution. It was not the can indeed be such a key factor. Regarding this belief, it would
other way around. Regrettably, companies focused on mass appear to be the case that the Spanish tile manufacturing
production usually fall into decline, instead of growing: because industry has not reached a sufficient level of investment in R&D
the product ceases to adapt itself to the continuously changing for there to be an excessive inclination towards this belief.
needs and tastes of consumers. And at present we face the
added disadvantage, compared with the time when Levitt wrote There is always a risk to be run, particularly by companies with
his paper, that tastes and preferences change ever more quickly. large R&D departments and extensive resources: namely, to
spend too much time on trying to perfect the same product or,
Today the tile manufacturing industry is being forced to act in a worse still, to perfect the manufacturing process in order to
direction counter to this belief, suggesting that a step is being produce the same item with greater productivity, without going
taken towards overcoming this misconception: increasingly beyond this. The organizations we are referring to usually
shorter series are being fabricated, leaving mass production concentrate on what they know and can control: research,

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 engineering and manufacturing. In all the companies with an • To adapt more and better than competitors to the segments
R&D component, which as we have already mentioned is of preferred clients for the company, an evolution required
essential, these tendencies do occur. The important thing by the rapid transition that has taken place in the sector from
however is that they should be governed by another main focus: a demand market (over demand) to a supply market (over
everything that is done must be market oriented, directed supply).
towards the consumer.
• To increase the company’s own capacity to find and develop
4. CONCLUSIONS new different and singular ideas to offer their clients,
After the foregoing review, we can briefly summarize whether the reducing the dependence on glaze and machinery
mistaken assumptions or beliefs that Levitt referred to in his manufacturing companies in this sense
a review of the ideas of Theodore Levitt

paper are present or not in the Spanish ceramic tile

manufacturing industry. • To adapt to environmental regulations, promoting their use
and communicating company respect for these regulations
lst belief: The myth of indefinite market growth as a result of to consumers that are increasingly aware of their
population growth and improvement in the standard of living environmental responsibilities.
should not be very deeply rooted for those who observe the
evolution of the sector from a broad perspective, not bound to a There is still in the sector an excessive production or product,
circumstantial economic situation. rather than market, orientation. For this reason, for the ceramic
industry to transform itself into a group of growth and innovating
2nd belief: The belief in the non-existence of substitute products companies, it must convert its activity into a client-satisfying
does not appear to be present, since such products are process, in a broad sense, instead of a tile-manufacturing
abundant in the market, although there could be a certain hubris process. It must begin to understand its clients and their needs
owing to the excellent qualities of ceramic tile and an ignorance more closely and better, and based on this understanding,
of the advances in substitute products. develop in reverse form: creating tile products that satisfy those
needs in the broadest possible sense for each group of buyers-
3rd belief: The unbeatability of mass production is a belief that we consumers.
consider has been present in the tile industry until quite recently.
This may even still be the case in some companies. Developing optimum and feasible ways of manufacturing these
tiles. And finally, discovering the ideal raw materials for
MARKETING MYOPIA?

4th belief: The obsession for R&D has not taken root, given the manufacturing these tiles. In a word, companies must be more
low investment in this activity, though this is a deficiency of the client oriented, understand client needs and based on this,
Spanish industry in general. restructure their entire organization. For this, the relation in the
use of the factors must change. At present, 85 per cent of a tile
Therefore, if the presence of these beliefs in a widespread form manufacturer’s workforce is directly or indirectly engaged in
in the sector is the criterion, fast and sudden decline of the production. Can you imagine what could happen with 85 per
sector is not to be expected in the near term. However, it is cent of the workforce engaged in marketing and R&D? Let this
certainly true that the industry has entered a stage of maturity, in not surprise you. At the huge IBM company, only 6 per cent of
which some companies that are not sufficiently flexible and fail to the workers (315,000 workers) are engaged in a factory. The
adapt quickly to new market realities will falter. remaining 94 per cent works in immaterial and intellectual
services. And even that 6 per cent is largely engaged in service
What is this new reality? In our opinion, over and beyond tasks. The good thing is that the changes that are taking place
circumstantial economic situations (the exchange rate of the in the sector right now point in this direction. Some companies
US$, an economic slowdown in key markets, etc) the tile are now beginning to move; a few already started quite some
manufacturing industry faces challenges that will give rise to time ago, which makes them a model to follow.
structural changes in the middle term. These challenges,
amongst others, in our opinion are as follows: 5. COROLLARY
The foregoing all results in the demand for greater intensity in
• To accept that emerging competitors are gaining market the use of marketing activities in companies. An investment that
segments more concerned with price, forcing the industry to remains pending, particularly if we take into account that the
sell more up-scale products this is independent of decisions main asset of the industry is differentiation, in the entire market
regarding production outsourcing or delocalization, which do or in concrete niches (because to be leaders in costs is almost
not exclude the former and can lead to lower costs but impossible, while to be avoided, no matter what, is hanging in
which only lie within the reach of companies with greater the middle). However, based on recent surveys, we suspect that
resources. the point is not that companies do not want more marketing, but
that companies may not be very clear about what this is.
• To focus on those consumer segments concerned with other
aspects than price which seek more up-scale products or The question that remains to be answered is serious: do we not
products that have greater value for them. This requires know exactly what marketing is or what it is for? Or: do we just
developing a “multi-tier product”, which offers additional reduce this to some operation relating to advertising, trade fairs
advantages in terms of: quality, design, guarantee, after- and little else? Returning to the title of the present paper,
sales service, trademark, etc perhaps the sector may not be suffering from myopia, but, and
this is worse, it may not know what it has. ❏
• To accept that the market will probably demand of Spanish
manufacturers a steady or even lower production, but with a
greater value per square metre.

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