There are few people who would contest the statement that most for-profit organisations are driven by efforts to maximise the sale of their products or services. In principle, there is nothing wrong with this provided that such sales contribute to the core outcomes required of the organisation.

Market share does not always equate to profit as there is almost always a cost of securing market share. Often the cost of growth is discounted by corporations in the pursuit of additional sales.

One (of many) large multinational Australian company was frustrated when as a result of a sales growth initiative, it secured its growth objective but found its profit had suffered badly. Staff when encourage to chase sales found it quite easy: they discounted stock. The error of management in that situation was they asked staff to chase sales, rather than margin - “One engenders the behaviour one measures.”

Most companies chase sales because of the benefit (profit) that such sales deliver. Sales for their own sake often leads to loss since the purpose of the sale has been “missed” i.e to generate net contribution.

The planning model proposed below argues that corporate (shareholder) objectives should drive the markets in which a company decides to be active. Each market has different characteristics and a different propensity to satisfy core objectives.

Within that market/s, the company must decide which products or services are best to “entice” the market to buy them. The total of sales and related activity in those markets must secure the objective required. If not, choose additional or different markets.

Once the product and service mix is chosen, then the method of enticing the consumer and getting and supporting the products in the market need to be resolved. Sometimes these decisions impact enormously on the real “cost” of product. The decision by Amazon.com to be web-based rather than retail-based had enormous impact on profitability in the short-term.

The lesson from all of this is quite pragmatic: unless the growth in sales delivers the outcomes desired by the corporation on behalf of shareholders, then don’t pursue it.

Choose the sales level and mix that gives you what you really are there to deliver – not what boosts your ego.

If shareholders have a profile of long-term growth, then strategic positioning in the market by securing market share may be an appropriate strategy. If shareholders have a profile of short-term dividend, then strategic product positioning over the long-term may not be appropriate. 

Product and service sales are enablers to achieve outcomes – not the outcomes themselves.