International Product Life Cycle Essay

The international product life cycle (IPLC) theory, developed and verified by economists to relieve trade in a context of comparative advantage, describes the diffusion process of an innovation across national boundaries. The life cycle begins when a developed unpolished, having a new product to satisfy consumer needs, wants to exploit its technological break by by selling abroad.Other advanced nations soon start up their own toil facilities, and before long LDCs do the same Efficiency/comparative advantage shifts from developed countries to developing nations. Finally, advanced nations, no longer cost-effective, import products from their former customers. The virtuous of this process could be that an advanced nation becomes a victim of its own creation. IPLC theory has the potential to be a valuable framework for marketing intend on a multinational basis.In this section the IPLC is examined from the marketing perspective, and marketing implications for both innovators and init iators are discussed below. Stages and Characteristics There are five distinct stages (Stage 0 through Stage 4) in the IPLC. Table below shows the major characteristics of the IPLC stages, with the United States as the developer of the innovation in question. Exhibit shows three life-cycle curves for the same innovation one for the initiating country (i. . , the United States in this instance), one for other advanced nations, and one for LDCs. For each curve, net export results when the curve is above the naiant line if under the horizontal line, net import results for that particular country. As the innovation moves through time, directions of all three curves change. Time is relative, because the time needed for a cycle to be unblemished varies from one kind of product to another.