Demarketing Water Supply

According to an announcement by the International Water Association, four in ten senior executives from water utilities around the world believe that it is highly likely that water demand will outstrip supply shortly due to “wasteful consumer behaviour”. A report by Oracle (Water for all?) found that water managers perceive high water use by customers as the biggest threat to the sustainability of supply.

Does this statement betray a lack of customer focus by water managers? The Oracle report has, like most publications on water management, a technological focus and does not seem to consider the marketing aspects of water management.

Marketing is not exclusively focused on increasing sales, in essence, marketing is the process of creating customer satisfaction, which goes beyond sales and promotion. In water management marketing is often a case of demarketing. In the words of Kotler and Levy:1

Rather than blindly engineering increases in sales, the marketer’s task is to shape demand to conform with long-run objectives.

Demarketing Water

Excess demand is as much a marketing problem as excess supply. This situation does not only occur in the sale of natural resources like water, but there are also many instances where commercial companies use demarketing in order not to disappoint too many consumers. Companies like Apple even use shortages to create a positive image of their product. Businesses can, according to Kotler and Levy, use several strategies for demarketing:

  • Reduce advertising, sales promotions and selling
  • Increase the price and other conditions of sale.
  • Increase time needed to use the service and psychological cost.
  • Reduce the quality of the service.
  • Reduce the number of sale outlets.

The first and last options are not applicable to water utilities—as monopolists, there is no need to sell the service and water companies cannot reduce sale outlets. Increasing time- and the psychological cost has been used in Australia when under certain water restrictions gardens can only be watered using hand-held hoses. Reducing the quality of the service can be achieved by minimising the pressure of the water, thus reducing usage.

In demarketing water, the same strategies that are used in positive marketing, i.e. maximising sales, can be used to curtail consumer demand. Demarketing should not only focus on promotion to change attitudes but the total marketing mix—Product, Price, Place and Promotion—needs to be taken into consideration.2

Footnotes

  1. Kotler P, Levy S. (1971) Demarketing, yes, demarketing. Harvard Business Review 49(6):74-80.
  2. Cullwick, D. (1975). Positioning demarketing strategy. Journal of Marketing, 39(2), 51-51.

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