It seems counter-intuitive, doesn’t it?
Why would any brand want their customers to use their products or services less? Shouldn’t the focus of every marketing strategy be to increase usage and sales?
While this is generally the case, there are indeed some brands that utilize a concept known as demarketing.
Demarketing is when brands consciously discourage people from using their products or services.
Seem strange? Let’s dig a little deeper.
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The idea behind demarketing is based on various reasons. Brands might resort to demarketing in order to manage high demand that exceeds availability, thus reducing the pressure of instant product shortages.
High advertising costs also motivate brands to demarket, and interestingly, this could incidentally spike the product’s demand.
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Types of Demarketing
Now, let us take a look at the different types of demarketing.
The first major form of demarketing is ‘Selective Demarketing.’
This is where brands strategically curb demand from particular consumer groups. The objective is to safeguard their loyal customer base and cater solely to their niche audience.
For instance, suppose a soft drink company discovers that its fruit-flavored beverages generate greater profit than other sodas. The logical approach is to market the former more aggressively than the latter.
Next, we come across ‘Ostensibility Marketing,’ where brands create an artificial shortage of a specific product to stimulate demand. The limited supply gives the product a rare, hard-to-find image, motivating people to purchase.
An apt example of this would be BMW’s Restriction of Sales in the UK in 1997.
Finally, we arrive at ‘General Demarketing.’ This applies when a brand aims to demarket its products or services to everybody.
A typical example is when government bodies demarket alcohol and tobacco products to safeguard public health.
Stories of Successful Demarketing
Pulling off demarketing requires wisdom and finesse. Let’s look at demarketing examples from brands that employed this strategy successfully.
The Tata Nano
Tata, renowned for their compact vehicle, the Nano, invoked demarketing strategies when supplies began to dwindle, yet the demand continued climbing.
They leveraged non-marketing tactics to push their other products, eventually ceasing promotion for the Nano altogether.
Patagonia’s Bold Move
Outdoor clothing manufacturer, Patagonia, is another brilliant example.
In an audacious PR campaign, they urged people, “Don’t buy this jacket.” The idea was to urge consumers to consider the environmental implications of their buying habits.
Lego’s Success Saturation
Finally, let’s examine Lego, the leading toy manufacturing company. Despite witnessing a whopping 25% annual sales increase, Lego cut back on its advertising efforts.
They struggled to keep up with the demand and needed some respite from the overwhelming success. Lego CFO John Goodwin eloquently stated, “We feel we need to invest to create some breathing space.”
So, that’s all for now.
Remember, demarketing isn’t about discouraging the use of your product entirely. Instead, intelligent demarketing will enable you to manage your demand, protect your brand equity, and still ensure customer satisfaction.
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