Demarketing is the set of all actions taken by a company with the aim to temporarily or permanently discourage the consumption of a certain product.
Demarketing is used to reduce demand when it's too high compared to the production or distribution capabilities of the company, or to encourage the purchase of another product that is more profitable.
Beyond traditional demarketing, there is also selective demarketing, which occurs when demand is not overall but rather focused on specific market segments.
Demarketing Strategies
Let's analyze why a company would want to reduce the demand for its goods.
The reasons can be multiple:
- The company has underestimated the demand for its product;
- It reduces the demand until the product is available on the market again.
The company's customers are divided into two categories:
- "Good" customers: customers from whom profits are made, that is, they purchase, pay promptly and do not create problems;
- Less "good" customers: customers for whom the company incurs more costs than profits, that is, they make minimal purchases and do not pay promptly.
To this last category, where the company does not gain any economic benefit, demarketing is applied.
It is used to discourage demand from a certain sector of consumers and lose the "less good" customers.
Some sectors where demarketing is used include:
- Tourism: which introduces an entry ticket or limited entry;
- Tobacco: It is difficult to sell a harmful product, so the company pretends to discourage the use of that product, but in reality it wants to achieve the opposite effect, this is called apparent demarketing.
Demarketing can therefore be used in different companies across various sectors when there's a need to reduce demand for one reason or another.
Examples of Demarketing
Kodak and the introduction of the camera
The name Kodak is associated with cameras and film.
They were industry leaders for 100 years and in the early sixties, when they introduced their camera, they couldn't immediately meet the demand.>
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