Motivation for the creation, production and sale of...

Motivation to create, produce and sell innovation

The motivation for the creation and sale of innovation is the receipt by an economic entity of income and other effect from the sale of new products (technologies) immediately in order to invest this money in profitable businesses, raise its image in the market, and increase its competitiveness. >

Motive as an excuse for a particular action is closely related to the need of an economic entity at a given moment in time. The main motives for creating, producing and selling innovations are:

1) economic aspects: a) increase the competitiveness of their new products (the possibility of obtaining a higher compared with the industry average yield); b) the desire to maximize the added value created by knowledge and determining profit; c) seizure of new markets; d) increase in the amount of cash flow; e) the desire to extract a synergistic effect;

2) technological aspects: a) the desire for more full capacity utilization; b) preservation of production potential; c) the existence of various, often alternative, options for using raw materials, materials, technology, in particular, reducing the resource intensity of the product;

3) social aspects: a) the need for self-expression through creative activity; b) increasing its image in the market; c) the need to save staff, create new jobs, implement the innovative potential of managers. In a more general sense - the expansion of social needs;

4) financial aspect: achievement of financial stability in the short and long terms;

5) risk aspects: a) compensation and (or) distribution of risks to reduce them to an acceptable level;

b) diversification of sales markets, suppliers, consumers, products;

6) strategic aspects: a) the desire to counteract fluctuations in market conditions; b) the search for economically sound and optimal strategic management decisions in terms of the criterion "profitability - risk - liquidity - financial stability";

c) search for new areas of capital application.

The competitiveness of a new product (or technology) is the ability to meet the market's demands and requirements in a certain period of time and be profitable if other similar products (or technologies) are available on the market.

The competitiveness of a product is determined by a combination of properties of interest to buyers, i.e. which ensures the satisfaction of the needs of these buyers in the conditions of a particular market or its link.

The competitiveness of a new product depends on: 1) the consistency of the quality of the product with the existing or expected requirements; 2) prices with the same level of quality; 3) the consumer's confidence in the supplier's capabilities not only to ensure the stability of the quality of the product, but also to carry out deliveries on time;

4) availability of fast and reliable after-sales service;

5) product compliance with international and national standards, ensuring its compatibility, unification and interchangeability; 6) advertising.

The competitiveness of a product is largely determined by the image of the producer of the product (ie the producer) and/or the seller of this product.

Image is an image of an economic subject in the mind of a person, i.e. image is a set of associations and impressions about an economic subject that are formed in the minds of people and are associated with a concrete representation.

The image is created by advertising (enhanced promotional activities).

Rating is an estimate, i.e. referring an economic entity to a class, category, category (first class, higher category, category "luxury", etc.).

Motives for the creation, production and sale of innovations due to the following main factors are: 1) increased competition; 2) changes in the regulatory production and trade process; 3) improving the technology of operations; 4) changes in the taxation system; 5) changes in the international market.

Competition is an indispensable element of any market. Market regulators, combining with competition, form a single economic method of market economy. In the market of innovations, the mechanism of market management forces the producer and seller of innovations to take into account the interests and demands of the buyer. Strengthening the competitors of this economic entity forces it to carry out certain actions to increase its competitiveness, image and capture new markets for the product or service.

Regulatory production and trade process is a purposeful process that ensures the maintenance of the activity of an economic entity and the regulation of this activity in accordance with the norms, regulations, rules and procedures established by the responsible authorities and market economy conditions.

The regulation of the production and trading process is conditioned by a number of laws and relies on the wide use of various forms, methods, means and mechanisms of regulation.

An important factor contributing to the emergence of innovations are changes in the international market. In the period of prosperity, there is more free money from investors, which simultaneously causes greater opportunities to offer them products and technologies than in crisis periods. With the economic downturn, the main emphasis in innovation management is on reducing risk. With economic growth, other things being equal, preference is given to economic growth.

Practice shows that when there is little product that is in demand, the problem arises - to produce more of this quality product. When a product is a lot of both in quantity and in types, a difficult task arises: what kind and in what quantity should the product be released in order to ensure its full realization.

In these conditions, an important role is assigned to benchmarking and marketing. And benchmarking should be used to study changes both on the international and United States markets.

When selling innovations, the seller proceeds from the desire to satisfy the buyer's needs and from his behavior to the market.

The scheme for motivating the purchase and consumption of innovation is shown in Fig. 10.4.

The motivation for buying innovations is the receipt by an economic entity of cash in the future through the sale of new products or technologies purchased today.

The main reasons for buying innovations are:

1) economic aspects: a) increase the competitiveness of their new products (the possibility of obtaining a higher compared with the industry average yield); b) the desire to maximize the added value created by knowledge and determining profit; c) seizure of new markets; d) increase in the amount of cash flow; e) the desire to extract a synergistic effect; e) obtaining in the long term the return on the capital invested today;

The process of motivating the purchase and consumption of innovation

Fig. 10.4. The process of motivating the purchase and consumption of innovation

2) social aspects: a) increasing its image in the market; b) creation of new jobs. In a more general sense - the expansion of social needs;

3) financial aspect: achievement of financial stability in the short and long terms;

4) strategic aspects: a) the desire to counter fluctuations in market conditions; b) search for economically sound and optimal strategic management decisions in terms of the criterion "profitability - risk - liquidity - financial stability"; c) search for new areas of capital application.

Motives for buying and consuming innovations are conditioned by subjective and objective factors. To subjective include factors that reflect the interests of a particular buyer, plans and programs for its investment and financial activities, psychological abilities, managerial professionalism, etc.

The main objective factors are the changes: 1) in the regulatory production and trade process; 2) in the taxation system; 3) on the international market.

The above objective factors of buying and consumption of innovation coincide with the factors of motivation for the creation, production and sale of innovations. Only in the basis of their actions - the interests and requests of buyers of innovations.

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