Selective demarketing is a marketing strategy that aims to specifically reduce demand for certain products or services in order to solve certain problems or achieve certain goals. This can be the case, for example, with products or services that have a negative impact on the environment, pose health risks or lead to problems due to overproduction or excess demand. Your Coaching Institute Frankfurt can advise you in more detail.
An example of selective demarketing is the targeted restriction of advertising for tobacco products or the introduction of high taxes on sugary drinks in order to reduce their consumption. Offering alternatives such as substitute products or healthier alternatives can also be part of a selective demarketing strategy.
Selective demarketing can be a challenge for companies, as it can be difficult to reduce sales of certain products or services without damaging the brand or the company as a whole. Nevertheless, in some cases it may be necessary to demonstrate social responsibility and sustainability or to reduce negative impacts on the environment and society.
What is it used for?
Selective demarketing is used to specifically reduce demand for certain products or services that are considered problematic. It can be used for various reasons, such as
- To demonstrate social responsibility: Companies can use selective demarketing to demonstrate their responsibility towards society and the environment. For example, they can restrict the sale of products that have a negative impact on the environment or health in order to demonstrate their sustainability.
- To comply with legal requirements: In some cases, governments may impose restrictions on certain products or services. Selective demarketing can help to comply with these requirements and avoid fines or other legal consequences.
- To improve the image of the company: Companies can use selective demarketing to improve their image and credibility. By promoting environmentally conscious and health-promoting measures, they can gain the trust of their customers and demonstrate their commitment to society.
- To adapt the offer to customer needs: Selective demarketing can also be used to adapt the offer to customer needs. For example, companies can limit their product range in order to focus on their core competencies and use their resources more effectively.
Overall, selective demarketing can be a useful strategy to demonstrate social responsibility and reduce demand for problematic products or services.
Demarketing management
Demarketing management refers to the planning, implementation and control of marketing strategies aimed at reducing demand for specific products or services. In contrast to traditional marketing, which aims to increase demand, demarketing management aims to specifically reduce demand in order to achieve certain goals.
Demarketing management can be used in various areas, e.g. in healthcare, environmental protection and transportation planning. Demarketing management can be used, for example, to reduce the consumption of tobacco products, sugary drinks or environmentally harmful products.
Demarketing management encompasses a variety of strategies, such as restricting advertising and sales promotion, introducing taxes or levies on certain products, raising awareness and educating people about the negative effects of certain products or services and promoting alternatives.
Some topics that are directly related to demarketing and could be of interest to you:
- Shitstorm and damage to image
- Transformation
- Growth and ethical reduction
- Focused advice
- Sustainability
The aim of demarketing management is to reduce the demand for problematic products or services while raising consumer awareness and encouraging them to choose alternatives that are more environmentally friendly, healthier or more sustainable. Demarketing management can help to demonstrate social responsibility and sustainability and promote people's health and well-being.
Based on 20 years of experience in success-oriented customer management combined with the latest findings in marketing research, we at TRANSTECHTURE have developed a systematic demarketing approach for the management of loss-making customer relationships.
Our Demarketing management can be Seamlessly integrate into existing marketing strategies, to ensure ex ante that potentially loss-making customers are not targeted and to ensure ex post that loss-making customers are no longer targeted and existing loss-making customer relationships are systematically reduced. In this way, we support our partners in significantly increasing the efficiency and effectiveness of their marketing activities.
Unwanted customers, so-called Deficit customers in the sense of the selective demarketing, are unprofitable, strategically insignificant customers.
Under selective demarketingwe understand the targeted management of demand from non-target markets and loss-making customer relationships, with The aim is to optimize the efficiency and effectiveness of the entire customer base. As part of the selective demarketing, we focus overall demand more strongly on the value proposition. In doing so, we avert the risks associated with possible customer exclusion (e.g. shitstorms) from the company.
Phase model of selective demarketing
The approach we have developed comprises the three phases:
Phase 1: Analysis + diagnosis
Phase 2: Target formulation + planning
Phase 3: Execution + skills development
The Phase 1 reveals the extent of deficient customer relationships in order to unmask the actual impact of these relationships on results. Furthermore, all existing marketing implementations are subjected to a diagnosis in order to reveal the extent to which non-target groups are addressed in addition to customers from desired target groups.
The central questions that need to be answered in this phase are:
Who are the loss-making customers?
How many loss-making customer relationships are currently in the entire portfolio?
What impact do loss-making customers have on earnings?
What activities is marketing already undertaking to ensure a targeted reduction in unwanted customer relationships?
Once the questions have been answered, the demarketing target can be formulated in the second phase and, building on this, appropriate planning can be carried out.
In Phase 2 the project team develops a demarketing strategy based on previously defined quantitative and qualitative customer portfolio targets. In addition to defining the demarketing process steps, this includes specific measures and a milestone plan. The target-adequate adaptation of the UX forms the guideline that the corresponding project team follows throughout the entire process.
Phase 3 follows Goethe's motto: „It is not enough to know, one must also apply; it is not enough to want, one must also do“, which is why the final third phase of the demarketing management process focuses on the agile implementation of the previously developed demarketing measures. In concrete terms, this means that in-house demarketing skills are built up in 14-day sprints, while the implementation of the demarketing measures is supported by experienced demarketing experts.
In every process phase, but especially during the implementation of selective demarketing, a Ensure full compatibility with applicable law and company policies. We have developed a marketing-ethical reflection model especially for this purpose. The multi-stage reflection model was developed by combining TRANSTECHTURE's own demarketing management experience and renowned marketing experts with academics from the fields of economics, law and ethics. Based on a stage-gate approach, it continuously ensures that all these activities are carried out in accordance with the highest marketing ethical and legal standards. Please also read our article on the topic Coaching trends in 2023.
Conclusion
Selective demarketing is not a topic that can be reduced to a simple formula. The most important findings from this article:
- Professional support makes all the difference: Whether in a business or personal context - an experienced coach measurably accelerates development processes.
- Individual fit counts: There is no one-size-fits-all solution. The right method and the right coach are crucial to success.
- Act now: Knowledge alone changes nothing. The first step is always the most important - and often the most difficult.
If you are ready to take the next step, we are at your side as experienced sparring partners. A non-binding initial consultation will clarify whether and how we can support you.
What is demarketing and how does it differ from traditional marketing?
Demarketing is a concept that focuses on reducing demand for a product, service or idea. In contrast to traditional marketing, which aims to increase demand, demarketing is intended to deliberately reduce demand in order to achieve specific goals.
Demarketing can be used to reduce the consumption of products or services that are harmful to the environment, pose a health risk or are ethically questionable. Demarketing can also be used to reduce the consumption of resources or to regulate consumption if it leads to bottlenecks.
When should you use demarketing and what goals can it achieve?
Demarketing can be used in various situations and industries. Here are some examples of when demarketing can be useful:
To reduce the consumption of environmentally harmful products.
To regulate the consumption of scarce resources.
To reduce the consumption of products that are harmful to health.
To reduce the consumption of alcohol, tobacco or drugs.
To reduce the demand for certain products or services if they lead to an overload of resources.
Demarketing can achieve various goals, including
Reducing the consumption of harmful products or services.
Regulating the consumption of resources to avoid overloading.
Increasing appreciation for resources and the environment.
Improving the company's image by acting responsibly.
Creating long-term customer loyalty through ethical behavior.
Which companies have successfully implemented demarketing strategies and how have they benefited from them?
Some examples of companies that have successfully implemented demarketing strategies are:
Patagonia: Patagonia has launched a demarketing campaign to persuade customers to repair and reuse their old products instead of buying new ones. This campaign has strengthened the company's image and at the same time helped to reduce consumption.
Toyota: Toyota has launched a demarketing campaign to reduce fuel consumption. The company has developed and promoted hybrid vehicles that consume less fuel and are therefore more environmentally friendly. This campaign has helped to improve Toyota's image while reducing fuel consumption.
Coca-Cola: Coca-Cola has launched a demarketing campaign to reduce the consumption of sugar drinks. The company has expanded its product range to include sugar-free alternatives and encouraged its customers to consume less sugar. This campaign has helped to improve Coca-Cola's image as a responsible company while reducing the consumption of sugar drinks.
Overall, companies that have successfully implemented demarketing strategies have benefited from being perceived as responsible and environmentally conscious companies. By reducing the consumption of harmful products or services and regulating the use of resources, they have also helped to build long-term customer relationships and improve their image.
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About the author
About the author
Tim S. Tabrizi is the founder and managing director of Ihr Coaching Institut (Frankfurt). Certified Executive Coach (ICF, DBVC) with over 15 years of experience. 35 coaches throughout Germany. LinkedIn profile | Author page → | Your coaching institute on LinkedIn
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