2011财经英语授课8.ppt

Chapter 10 Product Life Cycle Objectives A. To understand the importance for an exporter to know product life cycle B. To know the stages of a product life cycle and its relevant strategy C. To grasp the main idea and the structure of the text D. To master the usage of key special terms, words and phrases in this chapter Introduction The product life cycle describes the stages a new product idea goes through from beginning to end and shows the sales of a product over time, which is useful to decide what marketing needs to be carried out for the product at different stages. Therefore, a thorough understanding of product life cycle is doubly important to an exporter . Comprehension questions 1. How many stages are there in the product life cycle? What are they? 2. Is there a distinction between products and product lines? What is it? 3. Why is it very important for an exporter to have a thorough understanding of product life cycle? Background Product Life Cycle ：the stages through which a product passes from development to being withdrawn from the market, which was developed by Raymond Vernon, a professor at Harvard University, in 1966 Background and terminology International Product Life Cycle model described an internationalisation process where a local manufacturer in an advanced country begins selling a new, technologically advanced product to high-come consumers in its home market. Production capabilities build locally to stay in close contact with its customers and to minimize risk and uncertainty. As demand from consumers in other markets rises, production increasingly shifts abroad enabling the firm to maximize economies of scale and to bypass trade barriers. As the product matures and becomes more of a commodity, the number of competitors increases. In the end, the innovator from the advanced nation becomes challenged in its own home market making the advanced nation a net importer of the product. This product is produced either by compet