Demarketing - Meaning, Factors & Example

Published by MBA Skool Team, Last Updated: August 13, 2021

What is Demarketing?

Demarketing 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 organizations.


Demarketing Factors

Factors or 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.


Demarketing Strategies

Some of the common demarketing strategies are

1. Increased prices

Increase in price can lead to reduction in demand.

2. Decreased advertising/ promotional spend

Reduced promotion can lower the demand for product offering

3. Product redesigning

Redesigning and changing the value proposition of the product can lead to demand reduction

4. Providing lesser margins (to retailers etc.)

A product goes through the supply chain where different stakeholders are involved. If the margin and value for some of the stakeholders is controlled then the demand can reduce.


Demarketing Example

IPCL-Indian Petrochemicals Corporation Limited uses the demarketing strategy to encourage people to use oil judiciously by the tagline “Save Oil, Save India”.

Hence, this concludes the definition of Demarketing along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

Browse the definition and meaning of more similar terms. The Management Dictionary covers over 2000 business concepts from 5 categories.

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