The Product Life Cycle Theory was developed originally by Raymond Vernon in the sixties. He theorized and later provided empirical proof that new products go through a life cycle of four stages: introduction, growth, maturation, and decline. In addition, Vernon observed that new products tend to be produced and consumed first in the United States and other high-income countries. As products mature, consumption and then production spread to other countries, with production ending finally in the developing countries as products become more standardized.
Why does the product life cycle originate in developed countries and only spread to less developed countries later? First, new product development requires large amounts of research and development funds and skilled labor. Second, new products require a sophisticated and affluent market—one both willing and financially able to try new products. Third, there must be quick and efficient communication between the producer and the consumer. Finally, patent protection is much more easily obtained and enforced in the developed world than elsewhere.
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