INTERNATION

PRODUCT LIFE CYCLE

 THEORY
 The product life-cycle theory is an economic
theory that was developed by Raymond Vernon
in response to the failure of the Heckscher
-Ohlin model to explain the observed pattern of
international trade. The theory suggests that
early in a product's life-cycle all the parts and
labor associated with that product come from the
area in which it was invented. After the product
becomes adopted and used in the world markets,
production gradually moves away from the
point of origin.
 SEVERAL STAGES
 There are four stages in a product's life
cycle

 INTRODUCTION
 GROWTH
 MATURITY
 DECLINE
 INTRODUCTION
 Low Sales
 High Cost Per Customer
 Negative Profits
 Few Competitors
 Innovators Customer
 GROWTH
 Rapidly Rising Sales
 Average Cost Per Customer
 Rising Profit
 Growing Numbers of Competitors
 Early Adopters Customers
 MATURITY
 Peak Sales
 Low Cost Per Customer
 High Profits
 Middle Majority Customer
 Stable Number Beginning to Decline
 DECLINE
 Decline Sales
 Low Cost Per Customer
 Decline Profits
 Laggards
 Declining Number
Product Life Cycle Curve