Demarketing



General Overview




  • Definition: Demarketing is an attempt or device to reduce or limit demand for consumption of a specific product or service on a permanent or temporary basis. It is usually practiced by governments when shortage for any good or service arise in short term or when the demand for the product is greater than the manufacturer's ability to produce it.

  • Demarketing is strongly linked to the market demand. Market demand is the amount of one produce that consumer is willing to buy or is able to buy at a specific price in a specific time. Market demand always includes two factors: consumers are willing to buy, consumers are able to pay. Generally, every company wants to increase market demand of their produces. That's marketing job for creating customer's interest in goods or services. However, demarketing is considered to be adverse to it. Demarketing is the methods that have been used to reduce market demand for a particular item or product for profit- making. Why? Sometimes, as a customer, you can not sure you are able to pay one produce which you are willing to buy. Such as losing the life for drunk driving, people are able to pay for the alcohol drink but can not be able to pay this consequences. Therefore, the government, social group or company should remind customers or tell them truth about the negative effect role of produce.


  • Condition: First, One kind of produce is not benefit for consumers but consumers are willing to buy it. Such as cigarette, government will raise its taxes or make health education and smoking prohibition in public places. Second, one produce can not make more profit anymore. Some companies will decrease advertising power and reduce its affection in the target market. Third, one produce has great market demand but its raw resource is shortage and it might damage the natural environment such as oil. Government appeals to used new energy instead of fossil fuels.

  • Demarketing strategies: hiking prices, reducing advertising or other promotion activities, or removing product benefits. Demarketing does not aim to destroy the demand but reduce demand for declining the amount of producing.


  • Contribution: In the long term, demarketing is ensuring that supply demand relations is balanced basically and avoids the problem about "excess demand is more or less the same in situation as excess supply".

History





  • This word originates in 1970-175.The concept of demarketing was a very hot issue in the early period of 1970's especially with the popular incident when supply and demand imbalance. Mandy items couldn't be supplied to the marketing.

  • In 1971, Stem thought "There are two specific objectives for a passive demarketing strategy. Firstly, consumers would be educated as to the negative impact of the product on society, the economy of the environment and, if the alternative products and behavior to that product. The company would continue to keep the product on the market so as to maintain sales to consumers unaffected by the demarketing effort. Secondly, special interest groups, regulatory agencies, and executives of the firm wanting the firm to be more socially responsible would be evidence that the firm is moving in a positive direction. If the marketing effort is successful, pressure on the firm will then be reduced"

  • In 1971, according to Phillips and Sidney, demarketing is basically defined as: ".... attempts to discourage customers in general or a certain class of customers in particular on either a temporary or permanent basis."

  • In 1975, Cullwick mentioned two different types of demarketing strategies. "A demarketing strategy will either ration demand or reduced demand. When rationing demand, the marketer attempts to spread limited supply of products throughout the market. When reducing demand, active efforts are made to lower the overall demand for the product





Example:

  • The Cove is a 2009 American documentary film that describes the annual killing of dolphins in a NationalPark at Taiji, Wakayama, in Japan from an ocean conservationist's point of view. In Taiji, the dolphins commerce is popular and flourishing. The local residents trade dolphins as goods and kill dolphins for eating mercilessly. The Cove is a demarketing for the residents in Taiji and appeals to protect dolphins and prohibit this trade.







  • It is a public-interest ads . It appeals to leave smoke away for their healthy and never drive after drinking. It is also one kind of demarketing behavior.
More and more ads are evident in a wide range of media that directly attempt to reduce the consumption of cigarettes, drugs, and alcoholic beverages. Sometimes, business is not just only for profit but also have their social resiponsibility.
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  • This is iphone 4's advertisement. Recently, you find the iphone 4 commercial publicity advertisement everywhere. Then, the old style iphone3GS that you owned is not worth any more and you wanted to throw it away and buy new one. Why? The reason is business man was focused on the new produce which bringing more profit and reducing the advertisement of old produce. For the old produce, this behavior is demarketing.








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