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Demarketing – what is it and when is it used? Real life examples

Demarketing is a type of marketing aimed at reducing demand among the entire target audience or its specific groups. Wait, but why reduce demand – you have to rejoice that things are going uphill! However, not all so simple. In what cases you can’t do without demarketing, read our article.

Table of contents:
Demarketing, decay and hopelessness
Why does demand exceed supply?
How does this threaten the entrepreneur?
Types of Demarketing
Demarketing strategies
1. General demarketing
2. Selective demarketing
3. Apparent demarketing
How to reduce demand with demarketing?
1. Product price increase
2. Collapse the advertising campaign
3. Positioning the company as an elitist, not for everyone
4. Refusal from unprofitable customers who do not bring much profit, and the brain is eaten up regularly
5. A straightforward failure to service part of the CA
6. Creating an alternative direction, which will switch the attention of customers
7. Formation of a negative opinion about a product for which demand is overestimated
Demarketing and counter-marketing: what is the difference?
How to protect yourself from losses
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Demarketing, decay and hopelessness
The word demarketing is a little scary. Reduced demand, falling profits, ruin and poverty – these were some of the associations I had before I started working on this article. It turns out that not everything is so bad: the task of demarketing is to really reduce demand, but for the benefit of the entrepreneur himself.

Imagine a young businessman who made and started selling a new product – for example, unusual souvenirs. He launched advertising on all fronts and suddenly ran into unprecedented demand. He thought that they would buy up the first batch – and well, he will make more products to the rescue and will gradually unwind. But suddenly, demand exceeded supply, and the businessman realized that he simply could not cope with such turnover. There is no possibility to expand production yet, and he is not morally ready for this. So, you have to slow down – even if by artificial means. Demarketing in this case acts as an occasion in the hand of the charioteer, with whom he restrains too frisky horse.

Wait, to whom they say!
Wait, to whom they say!
Another example. Here is an elite craft beer bar where its target audience is going: bohemians, hipsters, highly spiritual maidens who conduct intellectual conversations under a glass of dark hop. Suddenly, drunken personalities burst from the cold and tear this warm tube atmosphere to shreds.

If you let everyone in a bar, you can lose regular visitors and not get anything in return.
Will it turn out well? Not. If you let everyone in a bar, you can lose regular visitors and not get anything in return. So, we must exclude such elements from our target audience.

An article will be useful if:

demand for your products exceeded supply;
you do not cope with turns and want to hold horses a little;
spend too much on advertising;
want to adjust the target audience.
Why does demand exceed supply?
Most often, this occurs due to inexperience: young entrepreneurs incorrectly predict demand, turnovers and profits and assume lower sales volumes than actually turns out. However, an experienced businessman can fall into this trap: for example, when starting a new line or product position.

Also, a sharp jump in demand is possible with active advertising on all fronts. Context, targeting, offline advertising – the entrepreneur wanted the best, but received unprecedented buying activity. Not everyone can cope with increased demand, and demarketing may be the best way out of the situation. This measure may be temporary – until the situation stabilizes and you find a way out.

How does this threaten the entrepreneur?
Nothing good. Rumors are spreading fast, and competitors will not miss the opportunity to take advantage of your miscalculation:

You can lose customers: for many, the goods simply won’t get, they will be sold out. Frustrated customers will go to competitors.
You can lose your reputation and secure the title of the one who did not cope with the business.
You can lose the business itself: in haste, increase turnover, increase production capacity, get into loans and … you can’t pull it.
Types of Demarketing
There are three types of demarketing. In business, the most often used is active, aimed at reducing demand. The one that this article is written about. Passive demarketing is mainly used by the state to talk about the dangers of the product to consumers. Most often tobacco and alcohol are presented in an unfavorable light, harmful products – palm oil, monosodium glutamate, etc. There is also absolute demarketing – the complete withdrawal of goods from sale if they are outdated, not in demand or turned out to be of poor quality.

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