Demarketing Strategies

Demarketing
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Sarah Daghman
Lecturer, Russian Federation

Demarketing Strategies

🔥NEW There are many demarketing strategies. Here are the main ones:
  1. INCREASE PRICES/FEES:
    The easiest and most understandable way to arrange demarketing is to reduce demand by increasing prices. A part of the target audience, which will no longer be able to afford the product will be eliminated and supply and demand will be more balanced. But the increase in price can play a cruel joke on the company: the product will become more desirable, the excitement will increase, buyers may be tempted to buy more or anyhow.
    For example: Apple products. The company produces high-quality equipment, the demand for which remains high every year. But in order to (temporarily) reduce demand a little, the company deliberately increases the price somtetimes, thereby reducing demand.
  2. LIMIT ADVERTISING:
    If you are communicating with users across many channels andyou are unable to cope with the flow of customers, you might limit advertising.
    For example, advertise only in social networks, or remove outdoor advertising. When production stabilizes and you are ready for the total market demand, increase advertising again.
  3. CHANGE MARKET POSITIONING:
    This step is taken by brands that want to reach a different target audience, usually more solvent. The products are positioned as "luxury" and inaccessible to many. This entails a rise in prices. Such a step must be justified for the audience, otherwise they will not understand you and you risk losing too many loyal customers.
    For example: a Finnish cosmetic brand, Lumene, changed its positioning. Cosmetics were considered mass-market and cost no more than a cup of coffee for a tube of cream. The brand changed the packaging, started using different formulas and raised prices 3-5 times. Some did not understand this and abandoned the brand. But new, more solvent customers drew attention to the brand.
  4. NEGATIVE REVIEWS FOR HIGH-DEMAND GOODS:
    This strategy is also called counter-marketing. This tactic is also usedby competitors to denigrate a competitor in the market. Sometimes companies go on fines on purpose, just to be talked about. An example of the eternal "struggle of brands" - Pepsi and Coca-Cola, McDonald's and Burger King. The companies more than once exchanged "barbs" in relation to each other in the media, outdoor advertising, social networks. Comparative advertising is considered misleading and illegal in some countries.
  5. REFUSAL (ACCESS BAN) FOR PART OF THE TARGET AUDIENCE
    The product does not change, but part of the audience is eliminated. This is done when the company is not comfortable working with certain customer groups. The strategy is often used by various clubs, bars, circles, and other closed communities. For example: a bar with a sign "only for insiders". A disloyal audience will not get access.
  6. SHIFTING ATTENTION TO OTHER BRAND PRODUCTS
    This type of demarketing is used whena product in the assortment is sold a lot, but it brings little profit. The manufacturer artificially creates demand for other products. Part of the audience starts buying these products, bringing the company more profit. In stores, this strategy works like this: in the "load" to a hot product they sell another for half the price. As a result, buyers are more willing to buy sets, and as a result, they increase the demand for the second product.
When applying demarketing, you need to evaluate all the pros and cons. An increase in prices or a change in positioning can lead to unexpected consequences: demand may actually increase, or you might completely scare away all buyers. A safe strategy, which is guaranteed not to harm your reputation, is to temporarily reduce the advertising intensity.

⇨Are you aware of other demarketing strategies? What strategy do you think is best? Why?

Sources:
Lepisto, L. R. (1983). "Demarketing strategies: Assessment and implementation". The Mid-Atlantic Journal of Business, Vol.22(1), pp. 31-41.
Munish, G., Payal, G., & Priya, G. (2014). "Demarketing: A different marketing strategy to sustain the consumers". Advances in Management, Vol.7(12), pp. 41-45
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