International-Business-Dr-R-Chandran-E-book

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International Business- Dr. R. Chandran
1. A vast majority of the products are having very short life cycle such
as computers, tape recorder, musical discs and fashion items. Shifting
production from one country to another country may not achieve cost
reduction. The very nature of product itself is subject to obsolescence.
2. Cost involved in perfumes, cosmetics and other essential oils which
fail under luxury category do not make any impact on the customer
because brand is important to them.
3. Wherever costs of logistics are high the export is minimal at any
stage. At the same time, few countries are producing certain essential
bulk cargo. Irrespective of life cycle stages, they export all the time.
Articles like bitumen from Iran, sulphur from Jordan and coal from
China. They cannot shift production facilities to other countries.
4. Many MNCs are using aggressive marketing promotion such as
advertising, personal selling and sales promotion. Any other
competition will not be a great concern for such products.
5. Few products are very much associated with outstanding services and
specialized knowledge. More than product life cycle stages, customers
need assured technical support. Lifts and escalators will be accepted
by customers provided service is given top priority. Same concept is
applicable to life saving medical equipments produced in Germany.
Irrespective of the types of products the companies are all the time
introducing new products simultaneously, both in the domestic and
international markets. It is obvious that in the globalization era, companies
develop different products to different segments and different prices. They
cannot wait for an opportunity to start in the domestic market first and going
to other markets later on. Multi domestic operations are very common
among MNCs. Innovations are carried out to launch products in many
countries at a time especially health care items and industrial consumables.
Hence, product life cycle theory has very limited applications in the current
globalised era.
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