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
        o New technology replaces old (example: video tape -> DVD)
        o Obsolete products do not have the same functions or capabilities
          as new ones
   * 2) Style obsolescence
        o Marketers change the styling of products so as to make owners of
          the old model feel 'out of date' (example: cars, clothing)
        o A fashion is any style that is popularly accepted by groups of
          people over a period of time
        o A fad is a short term fashion
        o The fashion cycle is the repeated introduction, rise, popular
          culmination, and decline of a style as it progresses through
          various social strata
        o Marketers claim that style changes relieve peoples' boredom and
          allows for both self-expression and conformity at the same time
   * 3) Intentional physical obsolescence
        o A product is designed to last for a specific lifetime
          (example:home entertainment electronics)
        o 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!)
        o 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
        o 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)
        o 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
        o This will only work in a monopoly situation.

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