Posted in Marketing and Strategy Terms, Total Reads: 1447
It is the marketing strategy adopted by manufacturers such that it discourages demand of a product.
These marketing strategies are aimed at reducing demand but not destroying it. These strategies can be adopted by either private or public organisations. Reasons for demarketing can be one or more of the following:
1. There are not enough resources, especially in case of natural resources, and hence must be preserved
2. The company cannot supply large quantities to match the demand
3. The cost of selling in a particular region is unusually high
4. Poor distribution channel/ no distribution channel available
5. The cost of promotion is unusually high
The last three can lead to reduced profit margin for the company; hence it would be in the company’s interest to avoid selling in such scenarios.
Some of the common demarketing strategies are:
1. Increased prices
2. Decreased advertising/ promotional spend
3. Product redesigning
4. Providing lesser margins (to retailers etc.)
For example, IPCL-Indian Petrochemicals Corporation Limited uses the demarketing strategy to encourage people to use oil judiciously by the tagline “Save Oil, Save India”.