Posted in Marketing and Strategy Terms, Total Reads: 657
Definition: Planned Obsolescence
Planned obsolescence is sometime referred to as built in obsolescence. In this case the goods manufactured becomes obsolete after a given time period. This makes the customer purchase the item frequently and the company can maintain a steady demand form its products. The product range can vary from light bulbs to cars or for that matter even mobile phones. The company must factor the existing competitor before deciding on the durability of the product. A competitor providing same quality and higher durability can garner much larger share with respect to a product with less durability. Similarly providing less durable goods may defame the existing company.
We generally come across 4 types of planned obsolescence :
a. Lifespan-limiting design: we can by design limit the life of an item. Deciding upon its life span we can choose the material to provide the wear and tear to match with the lifetime of the product. Some critical components can be made up of sub-optimal quality to spur its early degradation. A prime example can be of the electrolytic capacitor which are very heat sensitive. They are however placed very close to the power components and gets heated up. This significantly reduces its life span.
b. Style obsolescence : mobile phones can be categorized into it. Most people change their handset within 5 years. Fashions wear changes every season. Company innovate and pump new product into the system to make the existing ones obsolete.
c. Systemic obsolescence: changing the design of some of its parts makes repair of existing product difficult and force consumers to buy a new product. Software incompatibility also results in changing the gadgets used.
d. Programmed obsolescence: Here the company manufactures the product which deliberately by design stops working after a certain number of cycle. The parts are programmed to stop functioning after performing a particular number of operation.