Contributed by: Sarah Daghman
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What is Demarketing? Meaning.
Demarketing (DEM) is an umbrella term for a range of marketing tactics aimed at reducing demand for products or services. DEM can be used for various reasons such as countering overdemand and social marketing. DEM can be used by various entities, such as the originating business firm, but also by governement agencies and pressure groups.
Typical for all usages of DEM is a situation of (perceived) overdemand, triggering a wish to deliberately limit sales (possibly reducing profits).
DEM is also referred to as "Unselling" or as "Demand Containment".
Use of Demarketing
DEM can achieved through a combination of the 4 factors in the marketing mix (Product, Price, Place, Promotion) and also "aiming for policy changes to nudge and sustain healthier and more socially responsible behavioral choices (and) deeper understanding of the people we wish to serve, the environments in which they make choices, the market research we conduct and the programs we implement (Lefebvre and Kotler (2011)).
Its aim can be avoiding various problems and financial losses for the company using it, or fostering more socially responsible behaviour like in social marketing.
History of Demarketing
The term was coined in 1971 by Phillip Kotler and Sidney Levy in an HBR article titled "Demarketing, Yes, Demarketing."
In 1973, Kotler distinguished between the "current demand level" and the "desired demand level", arguing logically that in the context of marketing there can be underdemand, adequate demand, or overdemand. Each demand situation requires different marketing approaches and corresponding tasks. Specifically, where there is overdemand, the marketing task is to reduce demand by DEM.
Reasons for Demarketing. Advantages
Normally a company will try to create more demand for its products through marketing. But sometimes DEM is necessary or desirable to cope with increased demand, to limit the consumption of a harmful product, to withdraw the product from circulation or to stop working with a certain audience.
In particular, DEM is indispensable if products with limited stock are (temporarily) in high demand. The company is faced with the fact that it cannot ship the goods to everyone, and there might be not enough capacity for quickly scaling up the production. As a result, confusion, anger and chaos may occur among buyers, causing continuous problems (logistics, service department) for the business and resulting in loss of customers, negative reviews, damage to corporate reputation, etc.
The following reasons are typically behind the decision by a business to (temporarily) demarket a product:
Some Types of Demarketing. Categories
This ends our Demarketing summary and forum.
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