Planned obsolescence explained

Find out about the types of obsolescence and why organisations choose to instigate it

What is planned obsolescence?

Obsolescence is where goods or services no longer meet the needs of the consumer. Planned obsolescence is the deliberate introduction of obsolescence into the marketing strategy of an organisation to phase a product out of the customer offering.

If planned obsolescence is introduced over a long period of time, then it’s usually done by organisations where the sale revenue is offset by the additional costs of research, development, and production to produce the goods or services that are being sold. If it’s over a short period of time, then the reverse logic applies to the sales cycle and production costs.

Planned obsolescence is a useful tool for organisations to stimulate consumer demand. This is done at a time that benefits the organisation and can be viewed as a necessary enabler of innovation and economic growth. It can, however, also be viewed as incompatible with good corporate social responsibility.

What are the types of obsolescence?

There are five main types of planned obsolescence:

What is an example of planned obsolescence?

Planned obsolescence can be drawn from the likes of the automotive and textile industries. This is due to styling on motor vehicles being implemented annually, and clothing fashions changing seasonally.

Automotive industries

Have you noticed that many car manufacturers bring out a new model every year? This means that your old car model becomes difficult to repair, as the parts you need are often discontinued. The newer models often change parts, as well as cosmetic updates, meaning you’ll find it difficult to grab hold of a part you need. This forces consumers to think about changing their car, often not for style reasons, but for ease.

Textile industry

Fashion trends change quickly. The industry is constantly trying to keep up with the popular clothing choices and therefore, they tend to bring these to market quickly. The problem here is that bringing the clothes to market quickly, may reduce the quality of the product. It also has an impact on the people who are making the clothes and impacts the environment in which they work.

Why would you instigate planned obsolescence?

An organisation may decide to make a product range obsolete for several reasons:

The product has reached the end of its life cycle
The introduction of an upgraded model, often called phase in phase out process
Changes in the market which are impacting on demand and supply

The effect of market competition
Inaccurate forecasting that has led to surplus stock and slow-moving levels of inventory
Changes to production methods, leading to new product capabilities or an inability to continue producing the product

What is operations management?

Operations management is a key area within any organisation. It plays a key role in keeping supply chains operational in today’s challenging environment. Discover the key to success when thinking about operations management

Find out more about Operations Management

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