Ted Levitt’s observations on the purpose of a business


Insights & Joy

May 2014

Richard Morgan

Richard P. Morgan CMC, FIMC

 Helping leaders accelerate profitable growth by enhancing a team’s ability to create and deploy right actions, right now!


Ted Levitt’s observations on the purpose of a business

It has been more than thirty years since Theodore Levitt, Harvard marketing professor, outlined a few simple statements about the requisites of competitive success. Levitt’s statements are as true today as they were back in 1983 when his book, The Marketing Imagination, became a best-seller. Here is what Professor Levitt outlined in simple, powerful terms:

  • “The purpose of a business is to create and keep customers.
  • To do that you have to produce and deliver goods and services that people want and value at prices and under conditions that are reasonably attractive relative to those offered by others to a proportion of customers large enough to make those prices and conditions possible.


  • To continue to do that, the enterprise must produce revenue in excess of costs in sufficient quantity and with sufficient regularity to attract and hold investors in the enterprise, and must keep at least abreast and sometimes ahead of competitive offerings.


  • No enterprise, no matter how small, can do any of this by mere instinct or accident. It has to clarify its purposes, strategies, and plans, and the larger enterprise the greater the necessity that these be clearly written down, clearly communicated, and frequently reviewed by senior members of the enterprise.


  • In all cases there must be an appropriate system of rewards, audits, and controls to assure that what’s intended gets properly done and, when not, that it gets quickly rectified.


  • Not so long ago a lot of companies assumed something quite different about the purpose of a business. They said quite simply that the purpose is to make money. But that proved as vacuous as saying that the purpose of life is to eat. Eating is a requisite, not a purpose of life.”


It is interesting to note that at no time does Professor Levitt mention government bailouts, government loans, business czars, or the necessity of additional government interference in what at the time were fairly free capitalist enterprises operating in relatively open markets, all with varying degrees of success. ‘Too big to fail’ schemes and increasingly active social engineering through quasi governmental agencies by politicians and appointed bureaucrats are potent phenomena that have adversely affected our entire economic system in the twenty-first century.

Do we really need more government rules and regulations on most businesses in the face of intense global competition? What if the various agencies, like the S.E.C., effectively enforced the maze of existing laws? As always, the burden of added regulations and taxes eventually passes through to all consumers. Increased prices for domestic goods enhances the attractiveness of foreign-made products, thereby affecting domestic employment. Hopefully, future elected legislators will more carefully consider the unintended consequences of proposed legislation before allowing added restraints on our economic engine.

Recent forecasts indicate that China will overtake the United States as the world’s largest producer! Perhaps in the future, government will come to recognize its more limited economic roles, and enterprises will return to business basics and ethical operations that recognize all stakeholders. The present adversarial approach clearly is not working in our favor.

“Effective marketing doesn’t take millions. It takes imagination, enthusiasm, and the willingness to experiment and change.”

                                                                                                                                                                                                     Richard P. Morgan CMC, FIMC 


$ Million Marketing Tips

Tip: To position yourself in the market is not possible; your customers position you in their minds. What you can do is make everything you do a positive influence on their perceptions in the way you want to look to them in the future.

Tip: Give your products and services distinctive names. Brand names help customers become more familiar with you and your offerings. Names spur memory. That is a good start toward improved marketing and easier selling.

Marketing Facets

The Market-focused Guide to Company Analysis by Richard P. Morgan CMC, FIMC

Marketing Facets is a practical resource for those involved in determining the current health of a company and gauging its future prospects. Designed to be a supplement to other due diligence or business evaluation work, the 103-page guidebook takes a holistic approach. The guidebook assembles facts about twenty-five marketing functions along with management assumptions in key areas to help analysts form and support conclusions about the enterprise.

Marketing Facets is a valuable resource for private equity fund managers, individual investors, investment banks, and valuation specialists. C-level executives will find Marketing Facets a helpful guide for internal analysis, as part of normal business planning, or in advance of efforts to refinance or divest.

Marketing Facets is available in electronic form via the Internet, on CD/ROM, or in print with a ring binder.

> Electronic in MS Word or Adobe .pdf format via the Internet @ $80.00

> CD/ROM format @ $90.00 including U.S. shipping and handling

> Ring binder print version with CD/ROM combo @ 100.00 including U.S. shipping and handling

Consulting is also available. Please contact Morgan Marketing Solutions, Inc. for additional information. 972.931.7993 * email

Smiles make the day!

  • A government that gives too much costs too much.


  • Wouldn’t it be wonderful if the government was half as fussy about how it spends our money as it is about how we spend what’s left? 


  • Ignorance of the law is no excuse – neither is the ignorance of our lawmakers.


  • The cost of government won’t go down until the voters rise up. 

  • Ours is no longer a government of checks and balances, but a government of checks and deficits!


  • Many a small businessman wanted his kids to share in the business but the government beat them to it!


  • Said one elderly lady to the IRS auditor, “I do hope you will send my money to one of the nice countries.”


  • Whatever the faults of our government, we are primarily to blame because it is still our government…or is it?


A client speaks: 

“Dick helped create a comprehensive and successful marketing and sales strategy for a short line railroad bridging from Mexico to Dallas/Fort Worth. Additionally, he provided valuable mentoring to prepare us for sales calls in Mexico and the U.S. His experience allowed us to successfully build new traffic on the line.”  James Craig, former COO, Dallas, TX

 Our ideal client: is a business owner or CEO, 30 to 60+ years of age. Usually with a financial, engineering, or production background. Our client is often impatient, and interested in improving company performance. Comes alive when you ask, “How’s business?” He, or she is practical but also enjoys the finer things in life. So, you may see my client driving a Lexus or SUV to Neiman Marcus…and to Sam’s Club. Who do you know that fits this description?

P.S. Ninety-three percent of our engagements originate as a referral from helpful people like you. Please don’t keep me a secret!

Feel free to forward Insights & Joy to friends and associates. Subscribe directly by e-mail to and write ‘subscribe’ in the subject line.

To unsubscribe, e-mail to and write unsubscribe in the subject line.

Check our website for other Insights & Joy and our article library.

Richard P. Morgan CMC, FIMC

Morgan Marketing Solutions, Inc.

Two Galleria Tower, Suite 1000
13455 Noel Rd, Dallas, TX 75240-6620

Telephone 972.931.7993

Author, Marketing Facets – The Market-focused Guid to Company Analysis


CMC (Certified Management Consultant) is a mark awarded by the Institute of Management Consultants USA, and represents evidence of the highest standards of consulting and adherence to the ethical canons of the profession. Less than 1% of all consultants have achieved this level of performance and dedication. The CMC process is now recognized as an ISO17024 process. For more information go to