This software-business example involved what looked like an adjustment rather than a major reengineering of the marketing mix, such as Judy Nagengast attempted at Continental Design. There, too, the conditions held high levels of technological risk.

Significant marketing-mix change in pursuit of major sales growth is usually expensive, in terms of both the additional assets and the direct-expense levels that will inevitably be necessary. The cash requirement doesn’t stop with that up-front investment though. There is also the higher level of investment in inventory and accounts receivable to support the higher sales level. And there are increased cash requirements for the ongoing elements of marketing-mix adjustments that trickle down through the income statement. In most cases, they ripple into increased SG&A costs. Such increases become almost inevitable as a company becomes larger and more complex.

At Continental Design, the contract-engineering staffing business was in need of major marketing-mix changes to stay technologically current and meet shifting customer needs. In response, CD soon began to offer clients the services of contract engineers in tandem with the equipment they needed to do their work. CD staffers could arrive at the customer’s job site fully outfitted and ready to go, with computer workstations, associated software and, of course, any necessary additional training. Clearly, this was a major shift in the marketing mix.

Taken From : Cash Rules