Significant sales growth does not just happen. It is generally planned and brought about through some deliberate chain of analysis and decision making—what I call the management effect. Those decisions are then implemented and the result, hopefully, is sales growth. Think for a moment of some of the things that typically create major sales growth: new products, new markets, sales-force recruiting and training, new advertising and promotional campaigns, improved  service levels, changes in distributionchannel strategy, and pricing. All these possibilities are traditional elements of what is known as the marketing mix.

Lots of planning and management  attention typically go into these marketing-mix adjustment efforts, as Judy Nagengast, CEO of Continental Design, can clearly attest. Her plans for CD, a contract staffing firm in the midwest with a consistent record of 30% annual growth, started with sales growth, but she has also concentrated on reengineering the marketing mix in significant ways. New-product development is expensive, as is entry into new markets. Changes in distribution channels and selling methods can easily take several months or longer to make; and then they have to be de-bugged and fine-tuned. Shifting your customers’ perceptions about product and value propositions can sometimes take years.

Even relatively simple modifications to existing products, along with associated repositioning or repricing efforts, are often more complex, and even dangerous, than they may first appear. One specialized software developer, Financial Proformas Inc., in Walnut Creek, Cal., introduced a new version of an established, industry-leading product that was already in its fifth generation. The new version was designed to run with the latest IBM operating system; then Microsoft ran away with the operating-system market for business PCs, and the company saw sales volume drop precipitously. It took Financial Proformas more than two nearly disastrous years to regroup and catch up from the bad bet it had made by tying its main revenue source to IBM’s OS2 platform.

Taken From : Cash Rules