As defined in Evans Berman’s Marketing: “Planned obsolescence is a marketing practice that capitalizes on short-run material wearout, style changes, and functional product changes. In material planned obsolescence, firms choose materials and components that are subject to comparatively early breakage, wear, rot, or corrosion. In style planned obsolescence, a firm makes minor changes to differentiate the new year’s offering from the prior year’s. With functional planned obsolescence, a firm introduces new product features or improvements to generate consumer dissatisfaction with currently owned products.”
In recent years, NO company has applied planned obsolescence more than Apple. Yes, this practice has led to rapid advances in the technology of music players, tablets, and smartphones. But, does Apple’s philosophy also spur consumers to buy new product versions that they don’t need?
Apple has recently been criticized for its planned obsolescence strategy. Do YOU agree with this criticism?
Consider these observations by Catherine Rampell, writing for the New York Times:
“The new software and recent app updates from Apple offer fancy new features that existing users want; maybe the battery is sealed with tiny five-point screws for aesthetic considerations. Perhaps, but this isn’t the first time that tech analysts and random crazies on the Internet have noted that breakdowns in older Apple products can often coincide with when upgrades come onto the market. Many have taken this as evidence of ‘planned obsolescence,’ a term that dates to the Great Depression, when a real-estate broker suggested that the government should stimulate the economy by placing artificial expiration dates on consumer products so people would buy more.”
“There is, however, a simple way to effectively render an old product obsolete without fleecing your existing customers. Instead of degrading the old model, companies can offer innovations in the new model that make upgrading irresistible. Apple succeeded at doing this for a while, offering new iPhones that included major improvements. In the past, consumers were so excited about the cool new features, like Siri, the voice-activated interface, that they may not have minded (or even noticed) if their old phones started to deteriorate; they planned on upgrading anyway. This time around, that’s less true. The iPhone 5S and 5C offer fewer quantum improvements. Consumers are more likely to want their old phones to continue working at peak condition in perpetuity, and to feel cheated when they don’t.”
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If you are a typical economy fare flier, the airlines have come up with many ways to aggravate you over the years:
- Want to check a bag? Pay a fee.
- Want a meal? Buy it before you board the plane.
- Want a window seat? Pay an extra fee.
- Want a little extra leg room? Pay a fee.
- Want to board a little early to be sure there’s room for a carry on? Pay a fee.
What’s the latest inconvenience to add to this list? According to the Wall Street Journal, it is “The Incredible Shrinking Plane Seat.” As Jon Ostrower and Daniel Michaels report:
“Airlines’ push to lure high-paying fliers with flatbed business seats and premium economy loungers is leaving economy-class passengers with less space. A push over the past decade by carriers to expand higher-fare sections has shrunk the area devoted to coach on many big jets. But airlines don’t want to drop passengers. First they slimmed seats to add more rows. Now, big carriers including American Airlines, Air Canada, Air France-KLM, and Dubai’s Emirates Airline are cutting shoulder space by wedging an extra seat into each coach row. For almost 20 years, the standard economy setup in a Boeing 777 was 9 seats per row. But last year, nearly 70% of its biggest version of the plane had 10-abreast seating, up from 15% in 2010.”
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Tata Motors Limited is the largest auto company in India with annual sales of $35 billion (U.S.). It has more than 60,000 employees. The firm is listed on the New York Stock Exchange. As the company notes: “Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand, Spain, South Africa, and Indonesia. Among them is Jaguar Land Rover, acquired in 2008. In 2004, it acquired the Daewoo Commercial Vehicles Company, South Korea’s second largest truck maker. The rechristened Tata Daewoo Commercial Vehicles Company has launched several new products in the Korean market, while also exporting these products to several international markets.”
During its nearly 70 year history, Tata has been known for its inexpensive vehicles — to appeal to the Indian market — and cost efficiencies. Clearly, the acquisition of the Jaguar and Land Rover brands marks a new attempt at the upscale market as well.
One of Tata’s interesting recent efforts has been the Tata Nano, marketed as the world’s cheapest car — about $1,640 (U.S.) for the base model introduced in 2009 and $2,460 for the current version. Despite, Tata’s best efforts, the Nano has not lived up to expectations.
As Sean McLain reports for the Wall Street Journal: “When the Tata Nano, a stripped-down minicar priced at around $2,000, was introduced in 2009, it was marketed as a car that would transform the way aspiring consumers in India and other developing countries got around. But the low-cost automotive revolution fizzled. Selling poorly at home and with exports drying up, the Nano has become a cautionary tale of misplaced ambitions and a drag on sales and profit. It turns out that those climbing into India’s middle class want cheap cars, but they don’t want cars that seem cheap — and are willing to pay more than Tata reckoned for a vehicle that has a more upmarket image.”
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If you answer yes to that question, then you are not alone. For years now, many subscribers have been very unhappy about the “bundled pricing” strategy of cable providers — whereby they must pay for channels in which they have no interest. These subscribers would much rather have “a la carte pricing” — whereby they pay only for the channels they want.
New research indicates just how widespread discontent about cable TV pricing really is. So, what should be done about it?
As Paul Bond writes for Hollywood Reporter:
“A la carte television programming is a popular concept among consumers who presume they’d save money by ditching channels they don’t watch, but given that only 38 percent would be willing to pay more than $3 per channel each month, it’s not likely the idea will catch on with TV providers who aren’t inclined to stray from bundling. Not at that price.”
“A new study out today from PricewaterhouseCoopers says that 44 percent of consumers would like a total a la carte system and that 73 percent of consumers would prefer a la carte or at least more customization of packages than is currently offered. Only 14 percent are satisfied with the status quo.”
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