Marketing Homework



  • Demarketing is employed when an organisation actively seeks to decrease demand for its goods and services
  • Students will be introduced to the antecedents of the development of a demand-generation view of marketing
  • The following context for demarketing will also be considered:
    • General scarcity economies
    • Sectoral general demarketing
    • Organisational demarketing for chronic overpopularity
    • Organisational demarketing for product elimination

The assignment question will require students to prepare an individual 5000 word essay.

Your focus should be on critiquing the concept of demarketing in light of a demarketing example of your choice.

Your essay should be underpinned by a thorough understanding of the relevant literature on this topic.



Title: Trends in marketing demarketing



Introduction. 2

The need for demarketing. 4

The meaning of demarketing. 5

General scarcity economies. 7

Sectoral general demarketing. 11

Organizational demarketing for chronic over-popularity. 13

Organizational demarketing for product elimination. 18

Conclusions. 18

References. 19



In business organizations, demarketing is employed whenever the need to decrease demand for various goods and services arises. In the realm of marketing, which has traditionally been plagued by challenges as far as definitions are concerned, it is imperative to view the concept of demarketing in the context of various boundaries of the practice of marketing. Unfortunately, even these boundaries tend to be unclear in some cases, such that it becomes difficult to determine what constitutes marketing and what does not.

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In conventional contexts, marketing entails efforts aimed at increasing demand, either or the sake of profits for the welfare of humanity. However, there are situations in which the aim of marketing is to reduce demand in certain ways. In the case of traditional marketers, efforts to match supply and demand involve increasing demand with the aim of matching growth in production capacity. However, in today’s market environment, this sometimes becomes impossible. Many factors create constraints on the traditional approach to marketing.

One example where demarketing is used is in environmentalism. Environmentalists discourage consumers from buying products that are a threat to environmental sustainability. For example, many adverts have been placed by these environmentalists with the aim of discouraging consumers from using non-biodegradable plastic bags for shopping. In this undertaking, the objective is to encourage consumers to recycle the plastic bags that they have already bought in the past. Similar marketing campaigns are normally directed to manufacturers with the aim of discouraging them from using materials that are not environment-friendly.

Whenever restrictions are imposed on the supply of certain raw materials, the outcome is that demand for some products cannot be met efficiently. This means that the manufacturer has to put in place marketing campaigns aimed at reducing demand. In other cases, the manufacturer may even be forced to deter this demand until such a time when the production will be able to handle the task. In most cases, this happens in service industries, which are affected by the seasonality factor in their production processes. During periods of low demand, such companies tend to have many workers who are either idle or underworked (Sue, 2003). To deal with this problem, the best alternative is normally to defer demand until the peak season resumes.

In demarketing literature, a lot of focus is on macro-environmental factors. Some of the examples provided in this regard include the Great Depression of the early 1930s and the World War II era. During this time, demand for many consumer products decreased dramatically. Commodities that are normally bought on a daily basis such as bread and milk started to be viewed as luxury items.

In today’s globalized marketplace, marketers encounter numerous complexities. Businesses are being forced to compete for market share on a global scale. Many companies have adopted the strategy of globalizing demand for their products in order to establish competitive advantage. A major problem arises because demand is not always at equal levels in all the global markets of the firm. In other words, globalization causes serious problems for firms who face excess demand that is geographically distributed. Similar problems occur when pockets of very high demand emerge in different countries. In such a situation, marketing efforts must be made to stimulate demand in some markets while at the same time demarketing others.

The thinking behind demarketing is that if firms pursue marketing activities with the aim of meeting consumer demand, then the need for demarketing must arise. Similarly, if the objective of marketing is to generate demand, it is logical that various marketing activities may impact on demand by either increasing it or decreasing it. Literature that expounds on this way of thinking greatly contributes to a better understanding of the concept of demarketing.

The need for demarketing

There are many situations where the need for demarketing arises. This need arises out of different circumstances and the reasons for pursuing this approach tend to vary. For example, a company may stop the use of one of the materials used in making a product. Instead, the company may look for another raw material for producing the same item. A case in point is that of McDonald, which made a decision to discontinue the use of Styrofoam packages. This corporate decision was imposed on the multinational fast-food company by public opinion.

Another situation is one in which a company has to stop customers from using a certain product or service (Shultz, 2009). This means that the business has to deny consumers the product or service. For example, water supply companies may ban the use of hosepipes for car washing and lawn irrigation with the aim being to increase the amount of water available for drinking and other domestic purposes.

It is also common for a business enterprise to discontinue the supply of a product by replacing it with a substitute. For example, an airline may decide to discontinue the practice of using cutlery for eating in flight means by passengers with sandwiches for security reasons (Wall, 2005). Similarly, state and federal authorities may ban certain behaviors that impact on spending habits with the aim of maintaining public health. A case in point is the decision by England to ban smoking in most public places, including shelters, pubs, universities, and hospitals.

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In the course of mankind’s history, demand in certain areas has been drastically reduced or stopped altogether for various reasons. For example, during the early nineteenth century, slavery was abolished in the US. With this abolition, it became illegal for slave merchants to sell human beings for labor in plantation farms and for employment as servants. Slavery was stopped through legislation simply because of the need to safeguard human conscience.

During the 1970s, many manufacturers stopped using chlorofluorocarbons (CFCs) in making aerosols as propellants and in refrigerators as refrigerants (Dadzie, 1989). This move followed the introduction of the concept of ‘regulated use’ to reduce the destructive impact of CFCs on the ozone layer. Another interesting example is that of UK BBC TV, which in 1973 introduced the policy of closing down early in the evening hours to save on the  consumption of energy. This move followed the onset of the ‘Oil Crisis’ of 1973 and subsequent appeal by British Prime Minister to public to reduce energy use to the barest minimum (Groff, 1998).

The meaning of demarketing

In marketing literature, a rigorous definition for the concept of demarketing is yet to emerge. However, marketing practitioners find this concept to be one that they are familiar with. One of the reasons for this familiarity is the fact that these practitioners have had to disengage with unwanted customers. Another major reason is that the practitioners may have made a serious marketing gaffe that led to loss of business. Literature that dwells too much on such framework as a starting point in defining demarketing fails to provide a clear typology for this concept.

According to Kotler & Levy (1971), there are three types of demarketing: general, selective, and ostensible demarketing. In general demarketing, the objective is normally to shrink the total demand for all products. This means that customers in general are discouraged from buying the company’s products either temporarily or permanently. The company may choose to discourage a certain category of customers or all customers in general.

Kotler & Levy (1971) argue that general demarketing may be occasioned by two major factors: temporary shortages and chronic over-popularity. It is common for companies to make temporary changes to products, thereby necessitating a temporary lapse in supply. Some companies resort to demarketing to scale down on demand in anticipation of the temporary lapse in supply. It is also common for a company to face runaway demand following the introduction of a highly popular product. It may take the company a lot of time before achieving enough capacity to respond to this demand.

General demarketing is also common in tourism, with the main cause being over-popularity. When a tourist attraction site draws a very large population of visitors, managers of the site may become wary of the problem of sustainability. The management of the tourist attraction site may lack the logistical capacity to cater for the needs of a very huge tourist population without compromising on quality of service. To address this problem, the managers resort to general demarketing.

An example of an attraction site the employed demarketing is the Island of Bali. This South Pacific Island has in recent years been receiving too many tourists that it becomes impossible for all of them to be catered for comfortably within the site’s facilities. For this reason, the Island’s ecosystem started being spoiled by huge crowds of tourists. This prompted authorities in the island to embark on a demarketing campaign, which portrayed the island as less attractive to middle-income tourists. At the same time, they maintained the appeal of the attraction site to high-income tourists. To succeed in this goal, more efforts will have to be directed towards building luxury hotels, targeting the rich and affluent class through discrete advertising.

In general demarketing literature, emphasis is on the idea that businesses should refrain from blindly pursuing increases in sales; rather, they should continually shape demand to ensure that it conforms to long-run objectives (Kotler & Levy, 1971). This essentially means that the measures used in de-emphasizing the attractiveness of a product should vary depending on the nature of the problem. To this context, some scholars to state the extent to which many companies continue to rely blindly on the traditional concept of marketing in which engineer sales increases to infinite levels. These marketers miss the point by assuming that a continued increase in sales volume will automatically lead to the achievement of the long-term objectives of the business organization.

General scarcity economies

One of the concepts that constitute a major underpinning for general demarketing is general scarcity economies. During general scarcity, macro-environmental factors come into play to influence the role of marketing. These factors are beyond the control of the marketer and the business enterprise. In such situations, marketing is often perceived to be of less importance than during the times when there is excess supply. This is unlike in times of excess supply when marketing plays a critical role in influencing the flow of products between producers and consumers.

There are situations where excess demand becomes a core feature of the whole economy. At other times, it becomes the reserve of very few firms. This tends to be in stark contrast to situations where individual sellers tend to face excess demand for some of their products. As one company is searching for customers, these sellers encounter the challenge of discouraging customers for some time. Unfortunately, some sellers become indifferent to customers while others adopt an arrogant stance. Organization that are keen to act responsibly should act in such a way that all the desirable values of marketing are adhered to. In this regard, the aim should be to ensure that the long-run gal of customer satisfaction is achieved.

In this discussion, it is evident that literature on general scarcity economies is scarce. Even the few scholars who touch on this issue tend to end redirecting their focus towards demarketing in respect of specific products or range of products within a business organization (Shultz, 2009). Alternatively, focus shifts to details regarding sectoral general demarketing (Shultz, 2009).

Nevertheless, one of the most crucial contributions made in this literature relates to the concept of ‘demarketing for sustainability’ (Sodhi, 2011). In this concept, focus is on the important role of the discipline of marketing in establishing an interface between consumers and the social settings in which they operate. In demarketing for sustainability, the assumption is that there is a need to ensure that the issue of sustainability is addressed, particularly considering that we live in a world of scarce, finite natural resources.

The notion of demarketing for sustainability is supported by those who observe that the growth of consumption that was observed during the 1990s was phenomenal. In this context, one may argue that the increase in the popularity of the concept of demarketing is an indication that the level of consumption in the contemporary society is unhealthily high. It is for this reason that the concept of demarketing is associated with sustainability.

During the 1990s, the world encountered serious inflationary pressures triggered by global financial crises. These crises brought about material shortages, thereby putting to test the ability by the marketing system to meet the its core objectives of ensuring that customers are satisfied, profitability is maintained in the long run, communities are satisfied, and there is accountability to all stakeholders.

However, given the resource-constrained environment in which the contemporary world operates, marketers have been forced to adopt a guarded approach. Such an approach perfectly manifests itself through demarketing. However, according to Shultz and Holbrook (1999), this approach has been triggered not only by the scarcity phenomenon but also the way consumers respond to it. A marketer may expect that consumers are going to refrain from buying a luxury product simply because there is an economic crisis, only to find out when it is too late that the demand is growing not only among the luxury buyers but also the middle-income buyers. In such a scenario, the best thing is for the company to launch a demarketing campaign. Such a campaign facilitates the process of managing demand as well as consumers expectations in a way that fits into the company’s long-term goals.

Marketers are conventionally expected to shoulder the responsibility of being responsive in terms of the products that they offer as well as the impact of the use and disposal of these products. In the context of this responsibility, one would expect demarketing to be one of the most crucial approaches of demonstrating a sense of responsibility. As new marketing environments emerge in general scarcity economies, these marketers face the need to ensure that the goal of sustainability is achieved.

Sometimes, demarketing is undertaken as an integral part of the business organization’s corporate social responsibility (CSR) efforts. In the present-day business environment, companies are being appraised not just in terms of the profits they generate but also the sustainability of the environments in which they generate them. This means that companies that blindly seek to make profits at the expense of sustainability are rated poorly in terms of overall performance.

The sustainability debate has triggered debate on whether the end of marketing is nigh. The assumption in this regard is that the future world will thrive on demarketing rather than on traditional principles of marketing. However, it is illogical to argue that marketing will lose its value in the world of business even if the phenomenon of general scarcity economies becomes a persistent feature of contemporary societies. This is simply because new businesses will continue being established and new products launched. The primary way of creating awareness to consumers in all these launches is marketing.

The debate on sustainability tends to be based on the moral realm of human thinking. However, not everyone agrees with this approach. In many instances, a shift towards potential solutions is to be found in market incentives, structures, and regulations. In fact, this is the perspective that continues to trigger a lot of interest in demarketing. It offers many new opportunities to marketers to manage demand through strategic planning. Moreover, it makes numerous opportunities available to companies that are keen to increase productivity as far as their marketing expenditures are concerned.

According to Dadzie (1989), demarketing is being offered widely as an approach with a great potential in the quest for a strategic response to the macro-environmental phenomenon of shortages. However, the main problem, according to Dadzie (1989), is that there is a lack of empirical assessments of how best to implement it in both domestic and global markets. A good starting point as far as this challenge is concerned would entail carrying out comparison studies focusing on economic shortages on the one hand and demarketing activity performance on the other. In such studies, it may be imperative to compare how demarketing is used in different countries faced with macro-environmental phenomenon of scarcity.

As the wave of globalization rages on and the world heads into an uncertain future, one should expect oscillation within the market environment (O’Shaughnessy & O’Shaughnessy, 2002). In this oscillation, some measures will be geared towards creating or maintaining demand while others will be aimed at rationing or reducing demand (O’Shaughnessy & O’Shaughnessy, 2002). This phenomenon will continue unfolding for two main reasons. First, sustainability issues will continue being raised in the world of business. Secondly, the level of consumption within society will continue to increase. Such an increase will create scenarios where companies are unable to satisfy demand in certain products and services during certain times.

Sectoral general demarketing

In some instances, demarketing is undertaken in certain sectors and not in others. This selective approach is guided by uniqueness of shortage-related challenges facing certain sectors. For example, the global oil shortage presents a unique challenge that needs to be addressed through demarketing (Wall, 2007). Oil is a very critical source of energy in the contemporary world. It is so critical that all economies of today primarily rely on it for driving their economies. Without oil, no economy would survive in today’s global economy. Therefore, oil shortage presents a unique, highly emotive challenge that must be addressed in a unique, strategic way.

Today, oil exporters continue to face growing demand for energy at a time when the finite natural resources available to the world are diminishing at a very fast rate. Saddik (1977) highlights three strategic economic options for dealing with this sector-specific scarcity, two of which fall with the realm of demarketing. The first option entails freezing oil exports such that they remain constant at their current levels. The second option entails reducing oil exports. These two options are based on the principles of demarketing. The third option entails the traditional marketing practice of increasing exports in response to the increase in demand.

Sectoral general demaketing may also be used in public and not-for-profit sectors. In these sectors, the objective is to curb injurious consumption or to discontinue a service. In this situation, the marketer must undertake to start promoting de-consumption of a certain product or the disengagement from certain purchasing behaviours. This practice is particularly common in situations that are characterized by severe environmental impacts.

There is a growing body of literature on the importance of demarketing in the health sector. For example, Mark & Brennan (1995) highlight the benefits of adopting this strategy in the National Health Service (NHS) in the UK to manage demand as well as the way in which resources are allocated. The objective would be to ensure that the needs of both the patients and population are continually being met. According to Mark & Brennan (1995), it would be wrong for demarketing to be rejected as an ethically unacceptable practice. In that case, the marketing discipline would be said to have failed in recognizing the imperative for such a strategy in the health sector (Mark & Brennan, 1995; Mark, 1997).

In the UK health sector, some of the main beneficiaries would be the new purchasers of health for communities (Borkowski, 1994). The marketing discipline has so far neglected these new purchasers. The impression created by Mark & Brennan (1995) is that demarketing would bring about a situation in which efforts are made to match needs to resources using a demand-side approach.

Beeton (2002) also highlights the importance of demarketing in the health sector. Beeton (2002) argues that demarketing can be used as both a management tool and a policy option, not only in the health sector but also in tourism. According to Beeton (2002), the concept of demarketing has been employed successfully in the health sector in the process of reducing inappropriate health care consumption as well as reduction of smoking behavior. Beeton (2002) argues that this success can easily be replicated in the tourism industry particularly the difficult practice of managing mass tourism and the cultural and environmental contexts in which it lies.

At this point, it is imperative to point out differences between conscious and unconscious adoption of demarketing as a policy for managing mass tourism. Many tourist organizations have traditionally been using the concept of demarketing unconsciously through management systems in national parks and planning of tourism operations in various man-made attractions (Clements, 1989). In contrast, conscious application of demarketing principles focuses on intricate details relating to visitor management and the management of environmental contexts in which tourism practices are undertaken. Whether it is adopted consciously or unconsciously, demarketing remains a critical tool for managing markets from the demand side.

Organizational demarketing for chronic over-popularity

Literature on demarketing also highlights situations in which demarketing is resorted to with the aim of reducing demand to a level that is permanently low following a wave of chronic over-popularity. There are many situations in which the need to reduce demand may seem like the best option (Gerstner, 1993). The first situation is one in which present popularity of the product may seem to pose a serious threat to the overall ‘quality’ of the product. In some cases, a company may be compelled to compromise quality in order to meet the rising demand. Such a compromise may hurt core market segments, leading to loss of popularity. To avoid this situation, many companies prefer to engage in demarketing in order to bring demand down to a manageable level. This is precisely what authorities in the Island of Bali did to avoid destruction of the attraction site’s unique ecosystem. In this case, the authorities chose to discourage middle-income tourists while maintaining the island’s attractive to high-income tourists.

Another phenomenon that necessitates the adoption of the demarketing strategy arises when the management is reluctant to undergo the hassle of handling a high-demand situation. For example, Kotler & Levy (1971) give the example of a London restaurant that offers excellent services, leading to a situation where its sitting capacity is hardly enough to cater for demand. To deal with this challenge, the management of Wordofmouth Restaurant has devised a system in which customers book for means in advance (Kotler & Levy, 1971). Nevertheless, tourists who have not made reservations still mill around the restaurant hoping for cancellations among those who have already booked. The situation has in the past gotten worse to the extent that crowds of tourists make a lot of noise, thereby detracting those who are already inside (Kotler & Levy, 1971). This has left the restaurant with no other alternative than to engage in demarketing (Kotler & Levy, 1971).

In such a case of demarketing, marketing strategists should be keen to ensure that their efforts do not lead to a renewed increase in demand because of scarcity of resources. Indeed, it would not be strange if demarketing efforts led to the emergence of a reverse phenomenon. To avoid such a situation, Beeton (2002) suggests the use of strategic efforts to encourage de-consuming. The first step in this undertaking is demand containment, which entails efforts towards stabilizing or reducing demand to avoid further aggravation of product shortage.

To facilitate de-consuming, it may be appropriate for marketing strategists to adopt a reverse approach in the process of employing classic marketing instruments. Many examples of classical marketing instruments and how they can be employed in reverse have been provided in literature on demarketing. The most obvious step is the curtailment of advertising expenditures (Cullwick, 1975). In this undertaking, there is always a need for the messages contained in the advertisements to be modified. The company should also reduce its investments on trade exhibits, catalog space, and point-of-sale displays.

Another de-consuming effort involves cutting back on the selling time dedicated to the product by the company’s salespersons. The salespersons may need to start focusing on other products whose demand has not yet risen. One of the greatest challenges at this level is on ways of saying no to customers in such a way that they do not take offense. A lot of intelligence may need to be gathered before the salespersons come up with satisfactory reasons to dissuade customers from purchasing certain products. Alternatively, the company may choose to increase the prices of the affected commodities as well as conditions of sale. The sale arrangements should be arranged in such a way that the marketing company derives numerous advantages. For example, the company may eliminate trade discounts and freight allowances.

It is also common for business enterprises to add to the overall time and expenses required for buyers to procure the products being offered for sale (Achrol & Kotler, 2012). In this way, the seller is said to have introduced what may be referred to as ‘psychological costs’ as a way of discouraging people from buying the products (Achrol & Kotler, 2012). This demarketing approach is much slower than that of cutting back on advertising activities. Another activity that may trigger a slow-rate approach to demarketing is reduction in quality and content of a product. The intention in this regard may be two-fold: to ensure that more of the products on sale are available to consumers and to encourage de-consuming. There are also instances in which the number of outlets for the distribution of various products is greatly curtailed. In this regard, product shortage is regarded as an opportunity for the company to do away with undesirable customers and dealers.

In most marketing management efforts, these stems are never taken in isolation. Rather, they are adopted as integral components of the business organization’s demarketing mix. The outcome of these efforts is a phenomenon in which judicious estimates are made regarding aspects of elasticity in different instruments. This aspect of elasticity enables marketing strategists to make changes depending on how variations in the steps followed impact on the demarketing process.

Awareness of the elasticity factor is crucial in order to avoid a situation where demand is greatly inhibited, thereby causing more harm than good to the company’s long-term goals (Achrol & Kotler, 2012). It takes a lot of time for the organization to examine the level of elasticity in various demarketing activities. This elasticity is determined by introducing various demarketing efforts at varying degrees of intensity. It may also be necessary for comparisons to be made between the outcomes achieved through individual efforts and the outcomes derived when different demarketing steps are adopted in combination.

In demarketing literature, indications are that many things need to happen at the same time throughout the demarketing process. This is particularly true if one puts into consideration the importance of assessing various alternatives. For instance, even as companies seek to undertake the aforementioned demarketing efforts, marketing managers also face the need to establish a coherent plan for product allocation (Achrol & Kotler, 2012). The company has to make critical decisions on how to allocate the existing supply. These decisions should be made in such a way that the greatest long-run benefits are derived. This entails proper choice on the beneficiaries of this supply as well as the quantities that should be allocated to different customers.

The problem of product allocation is a serious one that requires careful thought and consideration on the part of top executives within any particular business organization. This is because it touches directly on the very survival of the business enterprise. It is normal for management to make the decision to allocate products on  the basis of ‘first-come, first-serve’. The best thing about this approach is that it promotes fairness. New customers are perhaps the only ones who are likely to perceive it as being unfair. In many ways, this approach also makes demarketing seem like an age-old marketing strategy. The idea is to ensure that customers and dealers get their stock and supplies depending on the time of ordering.

Sodhi (2011) suggests an allocation strategy in which products are supplied on the basis of proportional demand. This essentially means that each customer is allocated a uniform percentage of the total quantity of items ordered. For example, a company may determine that it only able to provide 40 percent of the quantity ordered by all customers in any given day. For this reason, every customer may get only 40 percent of what he or she has ordered. The main problem with this strategy is that it may lead to an increase in demand. Customers may order for higher quantities in anticipation of a reduction in the quantity of stock ordered. A solution to this problem may entail supplementing this method with other methods of allocation.

The other options available in terms of approaches to allocation include the ‘favored customer’ basis and the ‘highest bid’ basis (Dadzie, 1989). In ‘favored customer’ basis, sellers focus primarily on satisfying wholly only the demand levels of it most valued customers. All the other customers may receive only a small fraction of what they requested for. The main problem with this strategy is that it discriminatory and it may leave many customers dissatisfied (Dadzie, 1989). For this reason, it may be better to use the ‘highest bid’ approach, in which case the highest-paying customer wins the bid to purchase the product.

 Organizational demarketing for product elimination

In some cases, demarketing is employed as a strategy for product elimination. This means that a company may have decided that time has come for a certain product to be permanently withdrawn from the market. For example, a motor vehicle manufacturer may have introduced a new model that supersedes an old one. This model may contain some improvements that are based on the existing motor vehicle. In this case, some loyal customers may still have the desire to buy the older model. To reduce ill will, the company may wish to lower demand at a rate equivalent to the one in which the production process for the product is being discontinued.

For this purpose, many demarketing strategies have been suggested in literature. One of them involves opening up to the customer about the reasons for dropping the product (O’Shaughnessy & O’Shaughnessy, 2002). Secondly, in the past, some companies have opted to compensate important customers who may be hurt if the product disappears from the market(O’Shaughnessy & O’Shaughnessy, 2002). The third alternative is for the business organization to continue maintaining minimum stock of that particular product with the aim of satisfying only its hard-core customers. This strategy may be appropriate particularly in situation where goodwill needs to be maintained for the hard-core customers for them to continue buying other core products from the business.


In summary, demarketing is a crucial concept in today’s society that is characterized by high consumption. In many cases, companies find out that they are unable to meet demand in a manner that is compatible with the achievement of its long-term goals. In such situations, the best solution is for marketing strategists to come up with a plan for demarketing. Literature on demarketing provides crucial insights for these marketers as they embark on the tough challenge of discouraging their loyal customers from buying high-demand products without triggering a perception of ill will among customers.

In demarketing literature, the main areas discussed include general scarcity economies, sectoral general demarketing, organizational demarketing for chronic over-popularity, and organizational demarketing for product elimination. In each of these aspects of demarketing, the greatest challenge is on the need for the establishment of a theoretical model that bridges the gap that exists between theory and practice as far as the practice of demarketing is concerned. Further research is needed in order to build a coherent model for use in demarketing strategies in all contexts.



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