Planned Obsolescence: Understanding the Crucial Business Concept with Types and Examples
Last updated on January 17th, 2023
Businesses use various tactics and techniques to increase their sales and revenue on a long-term and consistent basis. They apply engaging marketing strategies, advertisements campaigns, and branding efforts to keep the target audience engaged and informed about the upcoming features of the newly introduced products or services. Many tangible and intangible phenomena are taken into consideration regarding the persuasion of the consumers to buy more from the companies and increase their repeat purchases. One of the concepts and ultimately a business practice that is applied in this regard in the business world is planned obsolescence. It allows the businesses to increase the repeat purchase rate of the end consumers and shorten the replacement cycle.
How is this concept of planned obsolescence applicable and are there any types of this concept? Are there any practical real-life examples that exist regarding planned obsolescence? Before answering these crucial questions, you need to have a clear understanding of the concept of planned obsolescence on a priority basis.
What is Planned Obsolescence?
The concept of planned obsolescence focuses on intentionally including the attributes of limited life, and functionality in the products so that after a specific period of time they begin to deteriorate, and become obsolete after a defined time period. The fashion and design may become irrelevant and not useful after a specific timeline and in this way, the product will not remain valuable and fruitful for the end consumer. The basic logic behind this concept and practice is to increase the repeat purchases of the consumers that ultimately increase the repeat sales and generate more revenue for the business in a relatively shorter time period than expected.
The term planned obsolescence has been quite famous among product designers and economists throughout history but the very first origin of the concept is rooted back to 1932 when Bernard London’s pamphlet named “Ending the depression with planned obsolescence” was published. In the aftermath of the newly introduced concept, the United Kingdom’s Government further imposed legal obsolescence on everyday-use products to boost the purchasing cycle of the end consumers. After that, the concept has been propagating in the business world and many companies have tried to implement operational and marketing strategies based on this idea.
Why is this concept popular in the corporate world?
One of the main reasons for the existence of almost all of the businesses is to generate revenue and keep enhancing the flow of upcoming purchases from repeat buyers. For that purpose, companies keep introducing new, more functional, and innovative products with the passage of time to maintain the interest and cater to the needs, demands, and desires of the customers. Planned obsolescence provides the opportunity for businesses to increase their repeat sales with a defined strategy. It ensures prospective sustainable revenue and sales enhancement by introducing non-durable and perishable functionalities and characteristics in the launched products intentionally. This makes the old products get outdated and obsolete speedily and the need for new products with the added features and attributes arises. This benefits the businesses as they don’t have to spend much on their advertising campaigns as there is a product demand already in the target that exists due to the planned obsolescence of the previous products. But in any scenario, to maintain the trust and loyalty of the existing consumers, the manufacturer company should already inform the consumers to be aware of the perishable features of the products and the need for replacement of the old products with the new and updated products with passing time.
Types of Planned Obsolescence
Planned obsolescence is applied in business practices through various business techniques and tactics. Some of those types through planned obsolescence become functional and practical in the actual practice are given as follows.
1. Artificial Durability
Have you ever wondered why some of the old products that were in use by our parents still have durable structures and some of them even work until now? Why don’t the new products that companies manufacture last as long as their previous versions? The fact is that companies now understand the effectiveness of planned obsolescence in the perspective of artificial durability, and they manufacture the products in a way that allows them to generate more revenue from the repeat purchases of the end consumers. There are some parts in the products that are intentionally kept irreplaceable so that whenever the product gets dysfunctional, the user will have to purchase a new one rather than repair the old one.
2. Necessary software updates
Sometimes our digital products like computers and mobile phones need updates to function and operate in a better and enhanced way. Let’s say there was a computer printer that was being used with your PC to print some documents. When you tried to update your PC and installed new functional operational capabilities in it, your printer was no longer compatible with the newly updated operating system of your PC. Ultimately, you had to replace the old printer with a new one that would run fine with the newly installed updates. In this way, companies and manufacturers can manipulate their users to keep discarding old instruments and products and replace them with newer ones. One can say that software updation is used as a tool for applying planned obsolescence.
3. Perceived obsolescence
The fear of missing out in the booming digital era is something that is highly relatable to everyone. Sometimes there is no need to actually introduce a flaw or perishable attribute in the product. Businesses can simply market their products in a way that makes the users think that the existing product features are just not enough. Mobile phone companies are a great example here. Every time a new product is launched, extended battery timing, a bigger screen, more camera resolution, and more storage-like features are advertised so that there emerges a temptation among the users to get the newly launched cell phone on a priority basis. Hence by playing with the psychology of users and leveraging top-notch marketing tactics, businesses can utilize perceived obsolescence to get more sales. A technology roadmap can also be considered here as a part of the perceived obsolescence that helps in changing the technological infrastructure of the organization on a consistent basis not just for the present scenarios but also for the future. By understanding the technology needs of your business, the future products can be designed considering a technology roadmap that will not only serve the purpose of introducing innovative technology with the passage of time but also serve as a marketing tool to mobilize the future sales of the business. Delaying certain features of the products for future releases can also help in creating a business strategy formulated around the planned obsolescence. In this way, the consumers will preferably buy new and innovative products as they will not only get a more functional product but also a more advanced, innovative, and technologically-rich product.
4. Repair Prevention
Companies like Apple, make it very hard for the users to actually replace a part of the device or even repair it easily. Even though Apple does this to avoid inferior parts of other companies being used in its products, there also exists a factor of avoiding the repairing process. Sometimes, descending battery performance also gets aligned with the repair prevention process and users are left with no choice eventually than to ultimately replace the old product with a new one. It is all a part of the process of planned obsolescence.
Digital Obsolescence: Another Relatable Concept
Another similar and highly relatable concept in the digital world is digital obsolescence which highlights the expiry of the digital resources that are used for everyday business and professional practices. There are further two types that may come under this umbrella and are given as follows.
1. Software obsolescence
This type of digital obsolescence happens when a software application becomes non-relative and outdated in the current scenario. For example, a software named WordStar was quite a popular word processor in the 1980s. But in the current scenarios, WordStar is no longer available on digital devices and is not supported by modern operating systems of the new age.
2. Hardware Obsolescence
Sometimes the digital hardware devices also become obsolete with the passing of time and lose their significance due to their outdated functionalities. One example of such types of hardware devices is Floppy disk that is no longer in the usage of commercial digital devices and is not recommended in the modern digital devices to be used for reading data and included as a standard built-in hardware option.
Real-Life Examples of Planned Obsolescence
Many of the businesses in the modern world utilize planned obsolescence in their marketing and brand strategies and they get sustainable dreams of revenue in this way, all thanks to planned obsolescence. Let’s see some Planned Obsolescence examples, some of the famous brands and companies that use planned obsolescence consistently are given as follows.
There is almost no need for an introduction to the famous Shoe conglomerate known as Nike. Nike leverages planned obsolescence in a way that it keeps introducing new materials and colors in its product launches to set up new trends for the users. In this way, users feel being left out and have an urge to purchase the most trending and updated Nike shoes, and sales of every newly launched product skyrocket. In reality, the product remains the same. Only the aesthetics and designs are changed and after doing engaging and productive marketing, enormous sales opportunities are created.
Companies like Apple make it very hard for the consumers to get the Apple Products repaired or replaced easily. The Tamper-resistant Penta lobe screws used in many Apple products are not easy to get removed and open with standard industrial and professional tools available in the market. Hence by making it hard for the users to get their faulty products repaired, Apple tries to force its users to replace the older and faulty products with new and fully-functional ones Moreover in the different cellphone models of Apple like iPhone 6, 7, 8, 10,12 or even 13, one can see that the users don’t get a different product altogether from the previous one. Only some of the aesthetics and design features are changed and an entirely new product with a different name is advertised in the target market. Hence by leveraging perceived obsolescence, Apple launches its product range every year.
Google is one of the leading companies having influence in almost every domain of the tech industry with products ranging from software to hardware. In its Pixel phone series, Google also keeps introducing new models of cell phones every now and then to persuade the users to grab the new phones with added features and functionalities whenever a new product is launched. In the actual scenario, the features are almost the same with minor changes in the actual products but their advertisement is so strong and revolutionary that it compels the buyers to grab the new cell phones whenever they are launched; a pure example of perceived obsolescence.
Advantages of using planned obsolescence
Planned obsolescence inspires companies in many ways and many fruitful and long-term benefits are gained by businesses too using this concept. Some of the advantages are given as follows.
- The research and development capabilities of the organizations are nourished as there is a need to develop new products with novel features every now and then.
- Higher sales are obtained generating much greater revenue generation opportunities. This helps the established businesses especially as they keep maintaining their brand stature in the market with the same profit margins as before.
- The consumers also get to have newer and updated versions of the products within a short period of time. This enhances the user experience of the customers as they get to use the innovative versions of technology on a consistent basis.
Disadvantages of using planned obsolescence
While there are significant benefits of using planned obsolescence for businesses, some negative aspects also exist there that just can’t be ignored. Some of the disadvantages of using planned obsolescence are given as follows.
- The disposing of old products after getting new ones may increase environmental pollution.
- The consistent usage of natural resources for manufacturing new products every now and then also badly affects the natural balance of the environment.
- Consumers can also stop using the products due to the higher price of the newly introduced products. They may either turn towards products with a higher life span or stop using the products entirely in the worst-case scenarios.
Planned obsolescence is a process in which the companies manufacture such products that have an intended shorter span of life and start deteriorating after a specific time period in terms of the product design, features, and functionalities. The main reason behind the idea is to increase the repeat purchases of the end consumers so that the business can generate maximum revenue in a relatively shorter time period. Many renowned businesses like Apple, Nike, and even Google have applied the planned obsolescence strategies in their business practices and keep iterating this practice to enhance their profit margins.