A quick pop quiz for you.
Which of the following is the primary objective of demarketing?
Is it to slow down or back off on specific marketing activities?
Would you use demarketing to target your competition’s product or service?
How about its use to discourage customers from buying a specific product or service?
To be honest, demarketing consists of a bit of all three of these strategies, with the latter being the most common.
You might be wondering, when in the heck would we ever want to discourage customers from buying a specific product or service?
The answer might surprise you.
In fact, it’s likely something you’ve been doing already.
Reasons for Demarketing
Let’s assume for a moment that your product or service is being replaced or upgraded.
There’s a need to slow or even halt demand (overtime) for the existing product.
Then demarketing is the exact strategy you’d use to influence customers to consider the newer or improved product or service.
Demarketing is the name given to the strategies you deploy when you want to slow or redirect customer buying behaviour.
Consider which of the following is the primary objective for demarketing in your circumstance:
- Reducing demand to align with supply.
- Dealing with shortages caused by supply chain disruptions.
- Shifting demand to accommodate new pricing strategies.
- Accommodating diminished capacity resulting in a desire to slow down demand.
- Influencing consumer behaviour to adopt a new brand.
Let’s look at some selective demarketing examples in different industries.
In the automotive sector, demarketing is a means of slowing demand of an existing vehicle model in order to introduce a new model year or design.
You’ll see this in play at the end of each model year where manufacturers offer deep discounts to clear out model years.
Demarketing is also common in healthcare, influencing consumers to cease the use of a specific medication in favour of a different brand.
This is quite common when pharmaceutical brands introduce a new brand of product (often their own name brand) in order to capture market share of high-demand pharmaceuticals.
Use of demarketing as a strategy is also common amongst grocery chains, as a way to deal with consumer demand outpacing product supply.
This is common around holidays or when seasonal demand for fruits or vegetables exceeds the available supply.
Most Effective Demarketing Strategies
Diminishing demand through demarketing can take the form of various strategies.
Each strategy has its own pros and cons, and therefore is applicable in different situations depending on your objectives.
The following outlines the various demarketing strategies:
This strategy involves using demarketing to limit demand and differentiate a product in the marketplace.
An example of this would be pricing a specific model of car so high that it stands out in the market. This strategy limits the number of those who are willing to invest in the vehicle and ensures low demand at a very high margin.
Too good to be true:
This strategy involves setting a price point so low or stacking the value of an investment so high that it almost seems “too good to be true.”
An example of this is timeshare opportunities that are often pitched to travelling consumers.
The aim is to convince consumers that making a small investment in a timeshare is so cheap, as compared to paying for a vacation, they’d be crazy not to make the investment.
In this strategy, the cost of purchasing multiple units of a product or service is made so irresistible, that buying one (at a premium price) would seem ridiculous.
An example of this strategy would be the premium price paid to purchase one apple, versus buying a bag of apples.
Why would you buy just one?
Creating a diminishing supply is another great demarketing strategy. In this instance, “buy one before they’re gone” becomes the marketing message.
This is quite common when it comes to end-of-season sales. Think snowblowers or lawnmowers.
You know there are more available to the retailer, but this is the “last one at this price,” which makes the investment seem worth it.
When you place a limited quantity of a product for sale, you are practicing product shortage demarketing.
The advantage, of course, is that you can set a price that is advantageous to the seller. Think about limited production stamps or jewelry.
When to Use a Demarketing Strategy
Demarketing is part of any good marketing strategy.
Using the various strategies above, you can easily drive higher demand (and higher prices) at will.
More specifically, however, there are times when you’ll want to deploy demarketing as your key demand strategy:
To reduce the demand on your resources.
Finding it difficult to keep up with demand? Demarketing may allow you a chance to reduce demand on your existing resources, while increasing profits.
Providing additional benefits to switching over to a new product.
Trying to convince customers to shift their buying to a new product or service? You might use demarketing as a method to convince customers of the need to change.
As a means to refocus customer behaviour.
Attempting to launch a new and improved product or service? Demarketing can redirect your customers’ behaviour to make investments that support your objectives.
You can easily see how demarketing is a necessary component to any marketing strategy.
How to Develop a Demarketing Strategy
There are some key steps you’ll want to take in order to develop and deploy your own demarketing strategy.
The key steps include the following:
- Determine when you should use demarketing to achieve your objectives.
- Identify how demarketing can support your existing marketing goals.
- Select the best demarketing strategy for your specific situation.
How to Get Started Using Demarketing
Before you read this, you might have believed that demarketing was an oxymoron.
Although there are plenty of options, the key question you need to answer before using demarketing is, which of the following is the primary objective of demarketing?
Answering this question will help you select the strategy that is right for your business.
How will you use these strategies to drive and direct your customers’ buying behaviours?
© Shawn Casemore 2020. All Rights Reserved