Marketing, Reverse

Reverse marketing refers to the situation in which a buyer encourages an organisation to enter a market that they otherwise had not planned to do. The term is based on the idea that marketing involves stimulating demand and satisfying it at a profit. Reverse marketing involves stimulating supply and receiving supply to create a saving. The motives for reverse marketing range from the absence of any supply market, for example in remote areas, to the absence of a competitive market. For example, two airlines operating out of an airport may find that a monopoly supplier of aviation fuel is charging a premium. By agreeing to guarantee a minimum volume to a prospective new entrant, the airlines may create the circumstances for a business case in which the new entrant invests in infrastructure in return for a guaranteed demand for a certain period of time. On the expiry of that period, normal competitive processes would apply. See also Forward Commitment Procurement.