demarketing

Definitions of Demarketing

While there are many definitions of demarketing-the common thread is the intent to decrease demand.

Businessdictionary.com defines the market as: Efforts aimed at discouraging (not destroying) the demand for a product which (1) can not supply in large-enough quantities, or (2) does not want to supply a certain region where the high cost of distribution or promotion Common marketing strategies, scaled-down advertising, and product redesign. ^[3]

According to Websters dictionary, “The use of advertising to decrease demand for a product that is in short supply.” ^[4]

A few other definitions include one from DictionaryReference.com : “Advertising that urges the public to limit the consumption of a product, as at a time of shortage.” ^[5]

The All Business Definitions: Marketers attempt to reduce the demand for a product when the demand for the product is greater than the manufacturer’s ability to produce it. ^[6]

History

While demarketing may seem relatively new, it has been in fact for around for decades. In 1971 Phillip Kotler and Sidney Levy introduced the phrase “demarketing” in Harvard Business Review article titled “Demarketing, Yes, Demarketing.” ^[7]

Later in 1973, another article appeared in the Journal of Marketingby Phillip Kotler. Here, Dr. Kotler elaborates on the “current demand level” and the “desired demand level” in the context of marketing. There are “underdemand, adequate demand, and overdemand.” Specifically, where there is overdemand, the marketing task is to reduce demand by “demarketing.” While demarketing reduces the demand without impugning the product, “countermarketing” seeks to destroy the demand for a product that is “unwholesome” on its face, such as “vice” products. Kotler aussi used the term “unsell” which “may aussi be viewed as an attempt to sell something else.” Ahead de son time, Kotler Observed “unselling (gold demarketing) HAS hast social justification in much a democracy as does selling.” ^{[ 1]}

Kotler aussi Seemed to-have Anticipated the rise of ” behavioral economics ” when he Observed in 1973 That “Efforts to turn off demand can Profitably draw you some concepts and theories in psychology” SPECIFICALLY, deconditioning, habit extinction theory, and learning and reinforcement theory. ^[1]

In 2011, Dr. Kotler teamed up with R. Craig Lefebvre to write Design Thinking, Demarketing and Behavioral Economics: Fostering Interdisciplinary Growth in Social Marketing. “As the growing number of governments, businesses and private funding sources focus on consumer surplus conditions, we see the social marketing paradigm expanding to accommodate this cultural shift to an age of demarketing.” ^[8]

Reasons for Demarketing

Selon Lefebvre and Kotler (2011) “de-marketing can be viewed as blending all 4Ps of the marketing mix and aussi aiming for policy exchange 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. ” ^[8]

Mikl os-Thal and Juanjuan (2011). They consider that ostensible demarketing, Cialdini (1985) suggests a psychological tendency for humans to be less available. Amaldoss and Jain (2005) show that limited availability satisfies consumers’ need for uniqueness, and Stock and Balachander (2005) demonstrates that scarcity can signal high quality. ^[9]

Since the inventing of demarketing in the 1970’s, many different strategies for implementing demarketing have evolved. Traditionally in marketing – which seeks to grow the consumer base and increase the demand for a product or service – the 4 P’s are product, price, place / distribution and promotion. The logic then follows that demarketing would adapt this structure to the use of the product and service. Instead of increasing availability of a product or service, a demarketing strategy. In addition, it would be easier to make sales less attractive to consumers. To price the price, the taxes or price may increase with the purpose of shrinking the demand. Advertising can be minimized or eliminated. The placement of a product or service can be strategically changed to reduce the likelihood of consumption.^[10]

Demarketing strategies can be used by a private firm versus a government entity. Social marketing strategies have been adopted and implemented in the marketplace. Traditional marketing principles also apply to social marketing , which is used to advance or depress a social idea, cause or behavior. Instead of talking about products, social marketing makes a proposition. Instead of discussing the placement of a service or product, it deals with accessibility to those services or products. In place of social marketing promotion social communication to spread ideas. Rather than price, the costs of being marketed by their marketing or marketing message.^[11]

Demarketing activities discourage demand . This stands in sharp contrast to the objectives of marketing: create utility and enhance exchanges. In their provocative article “Demarketing, Yes, Demarketing,” Kotler and Levy (1971) identify three types of demarketing situations.

General demarketing

General demarketing occurs when the sales of the total demand. Suppliers of electricity and water use and advertising during periods of excess demand. ^[7]

Selective demarketing

Selective demarketing occurs when a company discusses demand from certain classes of consumers. Adult communities with children and producers of low-image retailers. ^[7]

Ostensible demarketing

Ostensible demarketing occurs when an artifact creates an artificial or perceived shortage to whet consume appetites. Limited distribution of goods may induce consumers to stockpile these “hard-to-get” items. ^[7]

Although Kotler and Levy (1971), the study of the market has been devised. This is not surprising, as marketers are trained to build demand rather than destroy it.

Strategies

Price discriminating demarketing

Salop (1977), Chiang and Spatt (1982), Narasimhan (1984), and Gerstner and Holthausen (1986) have shown that price discriminating firms can be expensive. Busy consumers pay higher prices. For example, some retailers hold “3-hour sales” from 8 to 11 Saturday morning. Consumers who get to the store before 11:00 am incur the inconvenience of early morning shopping. Busy consumers who want a time-convenient product may be more expensive.

Bait and switch demarketing

The bait-and-switch demarketing strategy is one in which it is not intended that consumers buy a product, but that they buy a more profitable product in its place. Gerstner and Hess (1990) and Chu, Gerstner and Hess (1992), study of the problem of consumer goods and services. These practices, however, might be illegal.

Stockoutage demarketing

Another known demarketing strategy is stocking demarketing, where a firm actually plans to stock outage. Out of stock frustrate consumers, but stores often offer a future date. Nevertheless, Hess and Gerstner (1987) showed that it was possible to buy and sell two different products. Balachander and Farquhar (1991) showed how much more help was needed. The possibility of a stocking in one store makes the product in stock.

Crowding costs demarketing

Crowding cost is a strategy implemented on “Black Friday” when crowds will deter many consumers from a product at a lower price. ^[12] Retail stores, hotels, and airlines have limited capacities. A low price is usually available at large numbers of shoppers. Businesses may deliberately accept capacity constraints, recognizing that some customers would trade for reduced crowding. Gerstner (1986) derived symmetric equilibrium prices and crowding costs in such markets.

Differentiation Demarketing

It is a growing issue that can be construed as demarketing. There are many specific strategies for demarketing that would fall within the definition of terminology. Eitan Gerstner, James Hess, and Wujin Chu discuss a few of them in their 1993 article, “Demarketing as a Differentiation Strategy.” The differentiation strategy means that a firm might use a “nuisance factor” that actually drives consumers away from them, and into the arms of their competitors in order to keep them elevated. This can also be used to avoid a competitor. ^[12]

Examples

Healthcare

An example of demarketing in action is the demarketing of healthcare that occurred in Canada in the 1990’s. Canada’s social healthcare system was under stress from overuse or inefficient use. Dr. Gurprit Kindra, from the University of Ottawa, wrote an article written in 1995. Kindra suggests that some co-payments and user fees be applied to discourage consumption. It is also suggested that patients should be required to have a referral from a primary point of contact before seeing other specialties.^[13] [14]

Paper Reduction

Promoting the use of paperless products at the office to save the trees, is an example of demarketing paper products. Pennsylvania, Texas, Wisconsin, and other states are now issuing electronic vehicle titles. ^[15]

Water Conservation

Due to the severe drought, the State of California has been restricting water use. An average home that converts to artificial grass saves about 22,000 gallons of water per year. ^[16]

Carbon Footprint

Imposing tight regulations are coal by the Environmental Protection Agency and Promoting the use of natural gas at power plants to Reduce Carbon Emissions will accelerate the decline of coal for electricity generation. ^[17]

Junk Food

Promoting high fiber, organic, and healthy products against food and beverages with saturated fat , high fructose corn syrup , and artificial ingredients helps prevent obesity , diabetes , and other diseases.

Cigarettes as a “Vice” Product

While demarketing can be used to decrease demand, countermarketing seeks to destroy demand. Strategies include promoting anti-smoking / health topics, taxes on tobacco products, decreasing advertising patches, increasing pricing, and nicotine patches , Nicorette gum, and Nicorette lozenges.

Unintended Outcomes

Research points to behavioral reactions to anti-drug ads that have been intended. In other words, a boomerang effect occurs where greater levels of exposure to anti-drug campaign results in the use of drugs. The thinking is that anti-drug publicity may convey the idea that “everyone’s doing it.”

In addition, it is possible that the ads had an unintended positive impact on perceptions towards drugs by portraying “benefits” associated with using . Beliefs and behaviors of youths were also affected by perceptions regarding older peers.

Further, ABC News reported findings in 2008 that the federal government’s efforts to keep youngsters out of state drugs have also come under criticism. A December, 2008, article in Science Daily about an effort by the state of Montana states: “An independent review investigating the effectiveness of a publicly funded graphic anti-methamphetamine campaign has found that the campaign has been associated with many negative outcomes.” ^[18]

References