Wednesday, February 13, 2013

Demarketing

Demarketing refers to all the activities or attempts to discourage customers in general or specific segment of customers on a temporary or permanent basis. The term demarketing was coined by Kotler & Levy. Simply, it includes marketing activities for reducing the demand for products.It procrastinates or postpones the demand but does not kill the demand.
There are three approaches for demarketing:

1) Selective Demarketing: Discourages the demand from particular segment of customers
   eg: Alcohol sales to minors in the US is restricted

2) General Demarketing: This type of demarketing is applied to reduce the demand for a product for specific time period

  eg: Firms facing shortage of products

3) Ostensible marketing: Creates artificial scarcity for a product for Building brand image.

Why De-marketing:

    Demarketing is a good strategy to use when the demand is greater than the production, insufficient production, and when the firm could not meet the huge demand. Moreover, it can be used as a tool for procrastinating the demand. It is also used when the marketer      does not want to serve particular customer segment or territory due to reasons like less   profits or high costs. Knowingly or unknowingly most of the retailers and firms use   demarketing in their business operations.

    Another reasons that can be attributed to demarketing are sustainable marketing practices, environmental conscious consumers and evolving consumer behaviour. Even researchers in Consumer Behavior suggest that consumers do give high value to less available products in some product categories. So demarketing has got a vital role to play in the contemporary marketing. Nevertheless, firms can make use of demarketing in a positive way to enhance brand image and to meet customer expectations on quality.

Some of Demarketing Tactics:
  1. Dicrease promotional expenditure
  2. Increase Price of products
  3. Reduce Product Attractiveness
  4. Restrict Product Availability
  5. Increase availability of Product Substitutes
  6. Warning Labels
  7. Increase Taxes
  8. Reduce Consumption Spaces
 

Ranganadh Emmadi

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