For Discussion: An Example of Demarketing

When discussing marketing, most educators will focus on how marketers develop strategies intended to increase business. That is, decisions that are primarily designed to stimulate customer demand, such as developing new products, creating new promotions, instituting new short-term discount pricing, etc. But in discussing demand-bolstering strategies, it is also important to consider how these decisions may impact other parts of the marketer?s own organization or organizations that are viewed as key business partners (e.g., retailers that stock a manufacturer?s product line).

A good example of why understanding the implications of marketing decisions is so important can be seen in this story from the Washington Post. It reports on the problems toy maker Lego is experiencing because interest in their products is too strong. What is most notable is the company’s decision to significantly reduce marketing spending to lessen customer demand (i.e., intentionally lower sales). While engaging in so-called demarketing, is relatively rare, it does happen and can happen to big name companies.