PLC vs IPLC

1 -BY SHYAM PRASAD MIB-1113-007

PLC(Product Life-Cycle)
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Products progression through sequence of stages

from Introduction to growth, maturity and decline.

PLC
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Introduction Stage :
Product is introduced, pricing levels are fixed at low levels. Distributed to selective customers.

PLC
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Growth Stage :

firm seeking to build brand preferences. Market share. Product quality is maintained. Added service measures taken Price remains the same as the firm enjoys profits. Expands in distribution Promoted to broader customers.

PLC
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Maturity Stage: Growth in sales diminishes. Company faces tough competition. Defending market share value.
Additional innovative features maybe added to product Lowering of price maybe done Promotional costs raise backing goodwill of the product.

PLC
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Decline Stage : Finally at the decline stage, the

company can do few things.

Maintain the product by adding new features to it. Reduce the cost of the product. Liquidate the product or sell inventory to other company.

IPLC(International Product Life-Cycle)

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1966, Raymond Vernons theory.

The stages of promotion and life of a product into the

international market till the decline of the same. The Life cycle begins when a developed country, having an innovative product, wants to exploit its technological breakthrough by selling abroad.

IPLC
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Other advanced nations soon start their own

production facilities. Before too long Lesser Developed Countries(LDC) soon follow. Efficiency/ comparitive advantage shifts from developed countries to devoloping nations. Finally advanced nations, no longer cost-effective, imports products their foremore customers.

IPLC
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Moral of the story : Advanced nation becomes victim

of its own creation. This can be explained in four stages Graphically represented with three distinct curves.
Initiating country curve Advanced nations curve LDC curve

Stages of IPLC
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IPLC
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Stage 1: Local innovation stage :

Innovations are more likely to occur in highly developed nations. Reasons :

Consumers are affluent. Have Unlimited wants. Supplier firms have both technical Know-how and abundant capital to develop new products.

IPLC
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Local markets are florished with

new product. Overseas markets are established Other developed nations start importing because similar needs are noticed while having high income levels.

IPLC
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Stage 2 : Other developed nations start

their own production of similar product. Initiating nations exports are stable because LDCs find a need of that product.

IPLC
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Stage 3: worldwide imitation stage. Initating firms imports are

declined as the cost of production begins to raise. Other developed countries raise their imports with offering lower prices and using product differentiation techniques. At the end Initiating nations exports dwindles. Example : US native Automobile industry.

IPLC
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Stage 4: Reversal Stage : Product

standardization and comparative disadvantage. As the initiating nation lacks competitiveness. High labour costs make it impossible for Initiating nation to produce. Where as LDCs have high advantage with lower labour costs.

Distinctions
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PLC

IPLC

Prodcut life-cycle takes place at domestic level

Cycles through different stages of development of the firm Growth takes place while touching all classes of customers.

Product Life-cycle takes place at International level

Cycles through different stages of expansion of the firm in the global market. Growth takes place depending on level development of a country.

At maturity stage, the company can take Other developing countries and LDCs measures like cost cutting, introducing compete with initiating country at new features to the product. maturity stage. The final stage may lead to company fall The final stage leads to transfer of down. production plants of innovative company to LDCs.

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QUESTIONS ?

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THANK YOU!!!