During my recent weekend Management Classes, I understand that one of the fundamental scopes of marketing management is to generate customer value by selling what customer needs or wants, that is identifying the untapped requirements or the customer. However, one thing which has been revisited in recent years especially post COVID-19 scenario is the concept around Demarketing. Not only that even a week back I happened to read a blog post by world famous author Phillip Kotler suggesting that we should be aiming for demarketing with Vodka as an example.
Given this context, when a Marketing person is asked to cell a comb to a bald person. The traditional mind set aims at selling with different strategies like product use or similar strategies. However, Demarketing suggests not to sell such products to customers who do not require them in the first instance. Why would you be selling a product which is not needed for a customer to begin with. It not only impact customer satisfaction, but brand reputation also impacts sustainability principles like the product is not needed in this context at all and further there is no demand for such product, and it is desperately needed for some other customer. So, by reducing the unnecessary sales or marketing of product or Demarketing the demand where it is not actually needed you would be helping the companies and sustainability.
As I written in my earlier blogs about the famous Netflix episode by Sir, Dr. David Attenborough where the author tried to explain the impact of humans on natural environment. This very concept of demarketing will help in achieving the sustainability by promoting discourage of product use. For example, during the recent COVID – 19 there were instances of how different products were misused in the name of the impact reduction or stock piling of products for use. You can find lot of references on the topic of how mega shopping malls got a empty shelfs which only ended up in landfills. Here those products might be needed the most for different set of customers but due to different target strategies those got consumed by different set of users. Similarly, when you put the concept of demarketing to reduce the consumption of tobacco, alcohol consumption or similar products we might end up being politically incorrect and may not be correct. But the concept of demarketing is an excellent platform for companies to achieve ESG or sustainability strategies especially post COVID-19 scenarios.
You might be trying to understand how the topic of demarketing work in real world scenario would. The same set of marketing management principles of 4 P’s like Product, Place, Price and Promotion are strategically used to reduce the use of products which impact the environment principles or social impact. Here taking the example of selling the comb to a bald haired person, you segment this product sale to group who are in need it badly. That is demarketing works by strategically identifying your market segment and targeting specific segment to consume the product and discouraging the other group from consuming the product as it is not needed. But given such scenario we might end up being labelled as partial to certain segment of people and it might not go well. For such scenario, the selective demarketing strategies by governments, business organizations and trade unions and others will help in reducing those consumption and help in achieving demarketing for undesirable product consumption. We can easily remember the classic advertisements which we notice during screening of films which warn about negative impact of smoking or drinking which are nothing but demarketing strategies.
Historically as proposed by Kotler and Levy, microenvironment strategies are suggested to achieve demarketing in the real world to avoid temporary shortages and chronic over-popularity etc. However, using the macroeconomic principles of cost, government taxes and regulations are needed to help in discouraging their consumption like levying high price on unnecessary water bottle consumption, reduction of unnecessary sugar content or unnecessary tourism to places which is not warranted or similar scenarios which impact Sustainability or ESG principles or release GHG gases like 3920 kg / tourist. For example, a study found a factor of 30 emission intensity because of unnecessary tourism. Coming to the detailed blueprint on how to achieve the same using marketing management principles requires validation of concepts on a case-by-case basis. Though the implementation of demarketing is difficult but not impossible. There are various barriers to its implementation like varying socio-economic conditions and political scenarios.
Some of the strategies to achieve demarketing include
- Reduce promotion expenditure
- Reduce the advertising expenditure and rather delivering sustainability content
- Reducing the incentives to the marketing team for sellign the product in undesired place, price
- Government introduction of trade barriers, price or levying heavy taxes on its use
- Difficult to purchase or strains the customers in trying to purchase the product
- Reduce the distribution centers or similar places.
Similarly the list can be expanded to include similar strategies which are used traditionally to achieve marketing. The famous book by Nigel and Jim on ” Demarketing’ suggested strategies like synchormarketing, counter-marketing, General Demarketing besides other strategies. Which is a must read, besides the book titled “Small is Beautiful” for those who are interested to research further on this topic.
To conclude there is a heightened interest on the topic of demarketing post COVID-19 era and organizations are embarking on its journey by target reduction in their energy consumption, circularity encouragement or even banks are going for green finance etc, which are helping in meeting the demarketing. However, the 4 P principles of marketing are required to be effectively managed to be achieved greater benefit. it requires continued support from major organisations to achieving the same with proper marketing strategies to achieve maxim benefit.