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Guest Column

Published on: Sept. 20, 2020, 11:26 p.m.
Planned obsolescence destroys value
  • Marketing is all about creating value

By Gautam Mahajan. The author is Founder Editor, Journal of Creating Value; Mentor, Creating Value Alliance; President, Customer Value Foundation. He can be reached at mahajan@customervaluefoundation.com

I wrote in my article on the new normal about Phil Kotler’s suggestion that marketing should focus on the more useful and the more necessary than on selling more. In the new normal, I suggested planned obsolescence should be examined, and perhaps more repairs and re-use. Why should a cellphone last two years and cost so much? Product obsolescence destroys value for consumers and the environment and creates value for manufacturers.

The smartphone manufacturers stop supporting two-year old models. Planning includes poor quality components or software that can fail in two years, not providing upgrades; and worse still, making hardware changes to attract switching, like a better camera. My camera works well on my OnePlus 5 and my friends say it is great. But now I am tempted by the camera of the OnePlus 8 because it is probably better (this move to buy the OnePlus 8 is not because my old phone camera has obsolesced. Yes, its battery has weakened. Is that due to planned obsolescence?)

Software failure happens on printers also. So apart from contrived durability, we also have prevention of repairs, both value destroyers.
 
Other examples are:

Light bulb manufacturers spent years to get light bulbs to fail after 1,000 hours.

Having irreplaceable batteries that die after a year or so causes value destruction.

Not being able to re-fill an ink cartridge, or showing a cartridge needs replacement triggered by a microchip or a light sensor forcing premature replacement.

College textbooks, nylon stockings, fashion items, video games are all planned to become replaceable.

Morris B Holbrook, who is WT Dillard Professor Emeritus of Marketing, Graduate School of Business, Columbia University wrote to me:

“I was thinking, in particular, of Microsoft’s habit of introducing a new operating system every couple of years, obsoleting the old ones. Lately, we’ve had Windows 7, 8, 10, and so forth. I had a laptop that was about ten years old but still working just fine. But Windows stopped ‘supporting’ its operating system. Then my PC with Windows 7 stopped functioning. I’ve had to buy new computers. And – when that happens – I also have to buy replacement versions of Word, PowerPoint, Excel, and so forth. Microsoft just rakes in the money. And... it’s annoying. For a while, I was furious with Bill Gates. But I notice that he’s become quite a generous philanthropist. So, in a way, when I get robbed by Microsoft, I’m supporting some worthwhile charities. At least, that’s my rationalisation.”

Lack of durability is another method of planned obsolescence…durability of toys, of clothes are examples.

Another case in point is luxury items that take advantage of customer desire and affordability strategised by planned obsolescence. Customers will opt to pay a substantial premium for products that often have finer craftsmanship, greater durability, and resale value. That takes us to another extreme: last forever and pay a premium.
 
But what happens to the luxury buyer, when the manufacturer starts to put the product and the name in the mass market. It makes the luxury buyer want to buy something else which is exclusive! This is perceived obsolescence!

The auto industry also practices phased obsolescence, as you all know, coming up with new models.

Tesla, by updating software is reducing obsolescence.

Lastly, product obsolescence is wasteful, it increases landfill, and it uses more resources. Post Covid can we have more re-use and create value? It goes against what Kotler is suggesting (in the Journal of Creating Value) – sell more useful and more necessary and not more.

Thus, buy durable brands in the first place. Add extended warranties that cover products should they fail. Buy products where spares such as batteries are easily available. Look for retailers who repair and recycle old products safely. Buy used products that will last.

France has a law against planned obsolescence and went after iPhone and Apple, who admitted software slowed down older models! They also said older batteries slowed down the phones.

One solution is to make products a service. They do that for cell phone services in the US, but they too ask you to upgrade to a better, newer phone. Service is a good idea if not linked to planned obsolescence. We need more ideas.

Can new manufacturers or existing ones disrupt this practice by coming up with durable, long-lasting products and create more value? Remember Kotler saying marketing is all about creating value!

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