Wednesday, April 15, 2009

De- Marketing: Is it similar to Killing your own baby?






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Bharat Mundra IIM Calcutta

De-marketing is all about giving your product a back seat in a certain market where the company doesn't have proper profits,has more costs of manufacturing, demand/supply mismatch or it wants to
launch a new product in the same segment and thus de-popularizes its older products. But what de-marketing sometimes does is, it
creates a negative image in the eyes of the consumer when it tries to sell some new product in the same segment. More things
follow when a company tries and apply de-marketing in its strategies that reflects their overly safe approach in leaving some of the
available business and satisfying its profits rather than maximizing it. It results in a
negative image in the eyes of the share holders too. A close look at the product life
cycle reveals that de-marketing concepts are mostly applied in the maturity stage. Thus we find that our entire endeavor to reach this stage of product life cycle and motive of maximizing the returns to the fullest are
getting restricted by de-marketing. It’s not like killing your own baby, but its much worse than that; It’s killing your grown up kid!

It is more useful in the case when it is not a general de-marketing but segmental de- marketing. So that we can reap good returns
from the introductory and growth stages of the new segments even if we cut down the products in the existing segments. This again needs precision otherwise de-marketing is a
bad decision.

Counterview

Ninad Mande, IIM Bangalore

De-marketing is an attempt aimed at discouraging or limiting the demand of a product or service on a temporary or permanent basis. This often involves altering the marketing mix by raising prices, reducing advertising and promotion or eliminating product benefits. This strategy may be targeting all or a certain set of customers. The ultimate objective of a de-marketing strategy is to ensure that the demand of the product suits the objectives and goals of the company. It is considered to be an integral component of general marketing and needs to be positioned from a very wider prospect instead of a limited point of view. A de-marketing program will prove to be effective only when a large segment of consumers are receptive to such programs and ready to alter their behavior. De-marketing as a strategy strongly emphasizes on decreasing or rationing demand. Philips, Kodak HP, Wilkinson, Nokia etc are some of the companies that used ways of de-marketing for various reasons.
De-marketing, hence, although sounds like killing one’s own baby, is not exactly so. It’s a conscious and well-thought of decision taken by a marketer in order to meet the objective of the organization. It highlights a significant perspective that selling more is not always what one should be looking for and that there can be circumstances when reducing the growth of a product may be profitable when seen in the larger picture.



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