I. INTRODUCTION
A review of literature in economics and marketing suggests that since Raymond Vernon
published his article “International Investment and International Trade in the Product
Cycle” in 1966,1 there has been a simultaneous development of literature pertaining to the
product cycle in marketing. There are differences between Vernons concept of the product
cycle and marketers perception of the product life cycle. However, when one reviews
publications in areas where these disciplines tend to overlap, particularly in international
marketing and international business, both of these terms tend to fuse together and be used
almost interchangeably.
While discussing Vernons model, Louis T. Wells, Jr. states that “the model claims that
many products go through a trade cycle, during which the United States is initially an
exporter, then loses its export markets and may finally become an importer of the
product”2. Warren Keegan, a marketing scholar, on the other hand, refers to the
International Product Life Cycle in the following manner: “The International Product Life
Cycle model suggests that many products go through a cycle during which high income,
mass consumption countries are initially exporters, then lose their export markets, and
finally become importers of the product.”3 These are clear instances where trade cycle and
product life cycle have been defined almost identically in the international context.
There could be several possible explanations for the interchangeable use of the product
cycle and product life cycle concepts. One explanation is that the product cycle, developed
by economists as part of the international framework, was initially unknown to marketers
when they developed the product life cycle concept.4 Another possibility is that marketers,
in order to extend the product life cycle concept to international markets, borrowed the
product cycle concept from economists who employed the concept to explain patterns of
international trade. The interchangeable use has created conceptual fuzziness in the
literature and has overshadowed the differences between the two.
II. PRODUCT CYCLE AND PRODUCT LIFECYCLE
The purpose of this paper is to make a distinction between the product cycle and product
life cycle concepts, clarify the relationship between the two and redefine the international
product life cycle. Raymond Vernon, attempting to explain patterns of international trade,
observed a circular phenomenon in the composition of trade between countries in the
world market. Advanced countries, which have the ability and competence to innovate as
well as high-income levels and mass consumption become initial exporters of goods.
However, they lose their exports initially to developing countries and subsequently to less
