Planned obsolescence and marketing strategy

Atsuo Utaka
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Atsuo Utaka: Graduate School of Economics, Osaka University, Osaka, Japan, Postal: Graduate School of Economics, Osaka University, Osaka, Japan

Managerial and Decision Economics, 2000, vol. 21, issue 8, 339-344

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 © 2000 John Wiley & Sons, Ltd.

Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:21:y:2000:i:8:p:339-344

DOI: 10.1002/mde.1007

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