Planned Obsolescence, Re positioning & Brand

Planned Obsolescence

The intentional effort on the side of producers to make an existing product out of date in order to increase the market for replacement products. The term has been used in three ways:

1. Technological or functional obsolescence: Significant technological improvements result in a more effective product.

2. Postponed obsolescence: Technical improvements are available but they are not introduced until the demand for the existing product decreases and a new market stimulus is needed.

3. Style obsolescence or psychological or fashion obsolescence: Superficial characteristics of the product are altered, while it basically remains the same, to make people feel out of date if they continue to use old models.

Repositioning

Often a product may require repositioning. This can happen if a competitive entry has been positioned next to the brand with an adverse effect on its market share, consumer preferences have undergone a change, new, customer-preference clusters have been discovered with promising opportunities, or a mistake has been made in the original positioning.

Basically, there are three ways to reposition a product: among existing users, among new users, and for new uses.

(1) Repositioning among existing customers is sought by the promotion of more varied uses of the product. The purpose of repositioning among current users is to revitalize the product's life by giving it a new character as something which is needed not merely as a staple product, but also in order for one to be unique and fashionable. The repositioning among users should help the brand in its sales growth as well as in its increasing profitability.

(2) Repositioning among new users requires that the product be presented with a different twist to the people who have not hitherto been favorably inclined toward it. The addition of new users to a product's customer base helps enlarge the overall market and thus puts the product on a growth route.

Repositioning among new users also helps increase profitability since an essentially old product is marketed but in a revitalized fashion. Except for promotional costs, very few new investments have to be made to seek repositioning among new users.

(3) The repositioning for new uses requires searching for latent uses of the product if any. While all products may not have latent uses, there are products that may be used for purposes not originally intended. While new uses for a product can be discovered in a variety of ways, the best way to discover them is to gain insights into the customer's style of consuming the product.

If a large number of customers are using the product for a purpose other than the one originally intended, this other use could be developed into an alternative use with whatever modifications are necessary.

The new-use strategy is directed toward revamping the sales of a product whose growth based on its original conceived use has slowed down. This strategy potentially can be followed to increase sales growth, market share, and profitability.

Brand

The American Marketing Association defines a brand as "a name, term, sign, symbol, or design or a combination of these, which is intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors." In other words, a brand is the means by which the firm identifies itself to customers. When a seller has been granted legal protection for a brand such that it may not be used by anyone else, it is called a trademark.

A brand may include a brand name, a trademark, or both. The term is sufficiently comprehensive to include practically all means of identification except perhaps the package and the shape of the product.

All brand names and all trademarks are brands or parts of brands but not all brands are either brand names or trademarks. The brand is the inclusive general term. The others are more particularized.