Demarketing: The Next Wave in Marketing

In 1969, Levy and Kotler co-authored a paper in the AMA’s Journal of Marketing titled “Broadening the Concept of Marketing.” They laid out the idea that marketing was about more than goods and services, it was about places, people and ideas. Instead of simply focusing on soap, toothbrushes and televisions, they wanted to expand marketing to cover cities, ideas and policies.

In a 1971 paper, titled “Demarketing, Yes, Demarketing,” Kotler and Levy explained that there are some products that are either not good for people or are in short supply. These products need to be rationed. They argued that shortages can be as much of a problem as surpluses.  They defined demarketing as “. . . that aspect of marketing that deals with discouraging customers in general or a certain class of customers in particular on a temporary or permanent basis.” “So, everything that’s opposite of building up the demand is to take down a demand”. “Demarketing is the science of reducing the demand for something, such as the demand for using water very carelessly when there’s a shortage.”

https://www.ama.org/publications/MarketingNews/Pages/friendship-changed-marketing-forever-kotler-levy.aspx

Demarketing in some ways may be considered “unselling” or “marketing in reverse”, which includes general and selective demarketing.

According to Lefebvre and Kotler, “Demarketing can be viewed as blending all 4Ps of the marketing mix and aiming for policy changes to nudge and sustain healthier and more socially responsible behavioural choices as well as a deeper understanding of the people we wish to serve, the environments in which we make choices, the market research we conduct and the programs we implement.”

Since the invent of demarketing in the 1970’s, many different strategies for implementing demarketing have evolved. Traditionally in marketing – which seeks to grow the consumer base and increase the demand for a product or service – the 4 P’s are product, price, place/distribution and promotion.

The logic then follows that demarketing would adapt the marketing mix structure to serve the opposite purpose of reducing the consumer base and discouraging demand for a product and service.

Instead of increasing availability of a product or service, a demarketing strategy restricts availability. Furthermore, demarketing seeks to increase the availability of the alternatives and highlight the downside of a product or service, therefore making it less attractive to consumers. To demarket in the pricing arena, the taxes or price might increase with the purpose of shrinking demand. Advertising and other marketing communication tactics can be minimized or eliminated. The placement of a product/service or the size of the consumption space can be strategically changed to reduce the likelihood of consumption. Another strategy would be to promote behaviour that does not require the product or service being demarketed. https://en.wikipedia.org/wiki/Demarketing

In “Welcome to the Age of Demarketing” Kotler points out that today many people are concerned about the planet’s “carrying capacity” to provide the resources on the scale needed to support the world’s growing population and the needs of this and future generations.   The “ecological footprint” concept says that we would need the equivalent of six to eight more earths of resources if all people in the world want to achieve the US living standard at the current rate of resource consumption.  One generation can exploit the existing resources – oil, water, air, timber, fish – so intensely that the next generation is doomed to accept a lower standard of living.  He suggests that as the earth’s resources diminish, society may have to move from the Age of Marketing to the Age of Demarketing.

From a business perspective, if every company sets the goal of doubling its business and if all succeed, sustainability would be impossible to achieve.  If the less developed countries achieve middle-class living standards, the pollution, road and air traffic, and energy power outages would smother their quality of life. Something between a zero-growth goal and a modest growth goal would make more sense.

The Demarketing movement is calling for companies to build demarketing thinking into their demand management strategy. 

  • Managing an existing shortage. Countries in the Middle East are short of water and must ration it to competing users. Frequent energy blackouts in various countries e.g. Africa, require campaigns to discourage unnecessary or wasteful energy consumption.
  • Avoiding potential shortages. As we have seen in Canada over-fishing had to be curtailed to maintain the fish supply. As we deplete our forests’ timber cutting must be followed by active replanting.
  • Minimizing harm to individuals. Efforts are needed to reduce cigarette smoking, alcohol and drug use and eating foods too high in sugar, salt, and fat.
  • Minimizing harm to nature or unique resources. Discouraging overcrowding at National Parks or other over-attended tourist areas.

Demarketing is necessary when there is a limited supply of a product and very heavy demand. For example, in the past, gasoline was demarketed in certain countries and it is quite likely that other forms of energy e.g. electricity will need to be demarketed in some countries if the supply situation does not improve. Water is becoming scarce in many regions and general demarketing will be necessary.

In recent years demarketing efforts have been applied in a wide range of situations: to persuade legislators to limit the number of licenses for hunting and fishing, to discourage the number of visitors to overcrowded national parks, to persuade hotel guests to request fewer towels, to persuade homeowners to use less air conditioning and electricity, and to persuade car buyers to purchase more fuel-efficient and lower-emission motor vehicles.

As Kotler points out there are caveats, however, when trying to reduce demand for a desired object.  First, the demarketing campaign might make the product or service more desirable: banning a book or movie or any other form of entertainment product often has this effect.  Second, it can create a criminal class that will prosper during the induced scarcity, as happened in the “prohibition era” in the U.S. when liquor was banned. In many countries laws against cannabis has created the rise of motorcycle gangs and other organized crime. Third, human rights advocates will complain about the government’s interference with what they consider “citizens’ rights.”

Demarketing poses difficult choices for organizations especially in the public and nonprofit sectors between individual freedom and what is the public good.

Does demarketing, limit our individual freedom?  Demarketing works best when there is high citizen consensus that the consumption of some good or service should be reduced.

For example, should the government be involved in banning or limiting the use of products like guns and other products that can cause injury or even death. In the USA the government banned the use of lawn darts after the death of three children but Americans can buy semi-automatic rifles and handguns.

Demarketing strategies may differ when being used by the private sector versus a public-sector entity. Traditional marketing principles apply to social marketing, which is used to advance or depress a social idea, cause or behaviour. Instead of talking about products, social marketing makes a proposition. Instead of discussing placement of a service or product, it deals with access to those services or products. In place of promotion, social marketing uses communication to spread ideas. Rather than price, the costs of involvement are highlighted by social marketing in ways that support their marketing or demarketing message.

Demarketing activities discourage demand. This stands in sharp contrast to the objectives of marketing which enhances exchanges. For example, promoting the use of paperless products at home and in the office to save  trees, is an example of demarketing paper products.

Due to the severe drought, places like California have been restricting water usage, while providing tax rebates for installing synthetic turf. An average home that converts to artificial grass saves about 22,000 gallons of water per year. https://windowfilmforturf.com/blogs/news/artificial-grass-tax-rebates-in-california

In Beijing, 9,000 citizens are in hospitals with respiratory sickness because of the lack of clean air. Therefore, Beijing is preparing to introduce new standards and regulations for vehicle emissions. The reforms are expected go further than pre-existing national regulations to cut vehicle emissions by 40-50 percent in the long-term. https://thediplomat.com/2016/02/the-next-step-in-beijings-war-on-pollution/

Other examples include promoting high fiber and healthy products that help to prevent obesity, diabetes and other diseases, instead of food and beverages with saturated fat, high fructose corn syrup, and artificial ingredients.

While demarketing may be employed to decrease demand, countermarketing seeks to destroy demand. Strategies include promoting anti-smoking/health themes, taxes on tobacco products, imposing mandatory warning labels, decreasing advertising spaces, increasing pricing, and restricting the consumption space in favour of nicotine patches, Nicorette gum, and lozenges.

The concept of demarketing for marketers who have spent their careers convincing people to buy their products, programs, and services is very challenging. When studying marketing in my youth I never expected to spend a good part of my career dissuading people from buying products, but we are living in a world of diminishing earthly resources and products that can seriously affect our health. Demarketing is becoming the new normal and a much-needed next wave in marketing.

Check out:  Marketing Workshops for Public Sector and Non-Profit Organizations

 

 

 

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