Planned obsolescence

As we all know, products do not last forever. They deteriate or become obsolete. Obsolescence is when a product is no longer wanted even though it is still in good working order.

Planned obsolescence is when a marketer deliberately introduces obsolescence into his/her product strategy. The marketer's objective is to generate long-term sales volume by reducing the time between repeat purchases. In a highly competitive industry, this can be a risky strategy because consumers may buy from your competitors. There are also ethical considerations.

There are four types of obsolescence:

• 1) Technical or functional obsolescence
  • New technology replaces old (example: video tape -> DVD)
  • Obsolete products do not have the same functions or capabilities as new ones
• 2) Style obsolescence
  • Marketers change the styling of products so as to make owners of the old model feel 'out of date' (example: cars, clothing)
  • A fashion is any style that is popularly accepted by groups of people over a period of time
  • A fad is a short term fashion
  • The fashion cycle is the repeated introduction, rise, popular culmination, and decline of a style as it progresses through various social strata
  • Marketers claim that style changes relieve peoples' boredom and allows for both self-expression and conformity at the same time
• 3) Intentional physical obsolescence
  • A product is designed to last for a specific lifetime (example:home entertainment electronics)
  • If a product will be technicaly or stylisticly obsolete in five years, many marketers will design the product so it will only last for that time (this is done through a technical process called value engineering—great euphemism!)
  • Doing this will reduce the cost of making the product, and lower the price to consumers (unless there is a lack of competition in the industry, in which case the cost reduction will probably not be passed on to the consumer in the form of lower price)
• 4) Postponement obsolescence
  • Technological improvements are not introduced even though they could be (example: a large software manufacturer that specializes in operating system - name withheld for legal reasons)
  • The marketer feels either that consumers don't need the innovation or they are concerned that the new model will cannibalize the sales of their old model
  • This will only work in a monopoly situation.

see also: product management, marketing, marketing plan, product, ethics

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