Page 173 - International Marketing

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BRILLIANT'S Overseas Market 175

 Intense competition.
 Thin profit margins (a price to cost ratio approaching 1.0).
 Manufacturing where factors of production are least expensive.
 No R&D.
 No advertising.
 Saturated markets worldwide.
Three stages of IPLC can be summarized in the following graph:

Fig.: International Product Life Cycle
Example: If we take into the account the development of cellular
phone industry, we will notice following features:
 The new technology of mobile phones was introduced by USA
and the company ‘Motorola’ played the prominent role in it. So ,
USA was the Innovating Firm's Country and the Motorola was the
'Innovating Firm'.
 Company has spent lot of time and money in research and devel-
opment of the product. This is shown at the point 'zero' in the
graph where there is no production and no consumption. Still, it is
the stage of IPLC as at this point lots of efforts are being put in
research work.
 After thorough R&D, when company starts production of that prod-
uct, company may create awareness about that product before
they launch in the market or they may advertise their product after
launching of it. It completely depends on company’s plans and
policies about that product.