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Production Life Cycle Theory Essay
Product life cycle concept of thought: The product life cycle concept discovers that any products and bio-organisms, like the first-development-maturity-fall of the knowledge of innovation, developing new products. With product life cycle theory, will examine and determine the product life cycle in which stage, indicating that the way of the future growth of products, living products at the market correctly, And according to the characteristics of various levels to make the proper marketing mix strategies, improve enterprise competition quality, and improve economic efficiency of initiatives. Goods life cycle is continued.
The theory of a product life cycle was first introduced in the 1950s to explain the expected life cycle of a typical product from design to obsolescence, a period divided into the phases of product introduction, product growth, maturity, and decline. The goal of managing a product's life cycle is to maximize its value and profitability at each stage. Life cycle is primarily associated with marketing theory.
The product life cycle theory was propounded by economist Raymond Vernon in 1966. With the help of this theory, Raymond Vernon sought to explain the various stages that a product goes through after it enters the market. It explains the reasons that determine the growth, maturity and the decline of a product and how the life cycle stages determine foreign trade.
At that time, the product life cycle theory of international trade was found to be a useful framework for explaining and predicting international trade patterns as well as multinational enterprise expansion. This theory suggested that a trade cycle emerges where a product is produced by a parent firm, then by its foreign subsidiaries and finally anywhere in the world where costs are at their lowest possible (Vernon, 1966).
"The international product life cycle (PLC) theory of trade states that the location of production of certain kinds of products shifts as they go through their life cycles, which consist of four stages—introduction, growth, maturity, and decline. " There are many ins and outs when a company is putting a product into production and distribution.
Vernon's international product life cycle theory (1996) is based on the experience of the U.S. market. At that time, Vernon observed and found that a large proportion of the world's new products came from the U.S. for most of the 20th century. It was concluded that U.S. was the first to introduce technological driver products.
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