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Planned obsolescence and marketing strategy

✍ Scribed by Atsuo Utaka

Publisher
John Wiley and Sons
Year
2000
Tongue
English
Weight
90 KB
Volume
21
Category
Article
ISSN
0143-6570

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✦ Synopsis

Abstract

By using a two‐period model of a durable goods monopolist, we investigate marketing activities that have an obsolescence effect on products already sold in the past period. We assume that the monopolist can stimulate consumer demand for second‐period products by marketing activities, and analyse not only the case where the level of marketing is determined in the second period, but also the case where it is determined in advance, namely, in the first period. It is shown that the equilibrium level of marketing becomes higher than the efficiency level not only in the former case, but also in the latter case if the obsolescence effect is not so large. Copyright Β© 2000 John Wiley & Sons, Ltd.

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