Dell Marketing Strategies
Executive Summary Dell is considered doing well in the market segmentation in order to avoid unnecessary loss. The management carry out analysis and report to find out which part or area can let them make the most profit. They position themselves as a strategic vendor, which is important in the business. From this, they have the competitive advantage in order to compete with other IT big business. Dell is also trying to sell affordable or more cheaper product to the customer. Apple is the top IT business in the world nowadays. As a result, Dell can not compete with them at the moment.
Therefore, Dell’s product strategy is more focus on developing one specific product that can satisfy the customer. Dell also provides variety of services to maintain good relationship with old and loyal customer. Last but not least, Dell Company has a short product life cycle in where produce theirs products just in time. As well, it also wins the customer relationships and attracts customers and investors in the same time. Dell better supply chain management and direct sales strategy also helping Dell Company in gaining comparative advantages in the marketplace nowadays.
Dell Company was able to address its problems associated with rapid growth and build itself into a tasting profitable company. Its smart marketing tactics are attracting customers in where all computers are customized to the customer needs. Therefore, Dell gained comparative advantages in the marketplace nowadays. Furthermore, Dell also participated in many health improvement programs to maintain. Business Overview In the year of 1984, Dell was founded by Michael Dell who actually is a freshman at University of Texas in Austin.
Dell used his creative brain thinking out to bought parts wholesale and assembly them into a cheaper product to be sold to them who unwilling to pay higher price charged by computer stores by mail order. The success idea was then developed into his business, thus Dell companies was born. Dell was then change name into Dell Inc. In the early stage of Dell business, IBM is one of the biggest competitors in mail-order firm. Within the help of Tandy team, they soon raise their gross in a short period. In the late 1980s, the competition had become intense. They started to open their first subsidiary in U.
K. Along the 1990s, Dell Inc. had pass through a tough time and it finally got opportunity for expansion of business. They continued its exponential growth till the late 1990s. During early of 2000s, there was a downturn in global PC but they still success to cross over it. The success of Dell Inc. is due to the scopes of the company which formulate by the company’s top management. All the employees of Dell have to developed the mission and objectives which listed by the company. The mission of Dell Inc. is to be the most successful computer company in the world.
They achieve their mission with satisfying the customer needs of: •Highest quality •Leading technology •Competitive pricing •Individual and company accountability •Best-in-class service and support •Flexible customization capability •Superior corporate citizenship •Financial stability Moreover, the Dell Inc. was maintaining the relationship with customer since early of 1990s. This is the major concern of Dell Inc. in order to compete with other competitors. The sales method of Dell Inc. also different from other, they has been practicing direct model since Michael Dell start his business.
As a conclusion, Dell Inc. has been evolved from time to time in order to sustain its business by adapting the business to the environmental trend. The 10 Key Marketing Successful Factors Market Segmentation of Dell The first marketing successful factor of Dell that we would like to talk about is market segmentation. Basically, it means dividing a market into smaller groups with distinct needs, characteristics, or behaviours that might require separate marketing strategies or mixed. In fact, there are four bases for the segmentation, which is geography, demographics, psychographics and behavioural.
In here, we are talking about the geography variable of Dell. Geographic segmentation divides a market into different geographic units, such as states, regions, countries and city size. For instance, Dell seemingly segments geographically adopting different strategies to India. As the segmentation is supported by different communication activities, Dell has divided ITS marketing to two main segments namely, consumer market and business market which had helped Dell in winning new customers and satisfying the existing once.
Dell in India market has had success with its applied business model, but in order to gain the trust of customers in the Asia-Pacific region it will have to change its model according to these markets special needs and wants in order to gain customer satisfaction and loyalty. For example, the people in this region are not used to surfing on the Internet and making purchases of the products they need. People in Asia-Pacific are used to going to a specific retail chains where they can visually obtain the information, product or service they are looking for.
Dell does not offer this option, so in order to gain customers in this region Dell will have to partner with retail chains in this region in order to offer its products to its customers. Market positioning of Dell The market positioning of Dell plays a big part in the key successful of marketing. Market positioning means the process by which marketers try to create an image or identity in the minds of their target market for its product, brands, or organization. Dell is position themselves as a strategic vendor.
Strategic vendor means define what you could do, and what it would cost, your firm to build or supply something that this customer couldn’t do without once they’ve got it. In the IT business, we find that it is important to position as a strategic vendor. For the information, Dell is one of the top strategic vendor together with Microsoft, IBM, and Cisco. Dell is positioning itself to focus on many of the infrastructure hardware elements of dynamic computing and is bringing in partners to solve the major infrastructure software, management and business process challenges of the dynamic computing equation.
Dell approaches customers with a more narrowly-focused value proposition that stresses a phased approach to drive standards and scalability within an enterprise datacenter which will lead to better IT support and adaptability for business processes over time. Of course IBM, HP and others would say they can provide a greater array of dynamic computing solutions now, and that customers have no need to wait several years to take advantage of them.
However Dell believes customers will be more comfortable with their longer-term, phased-in approach that emphasizes standard and that by leveraging its direct model, customers will see Dell’s approach as more affordable as well. Product of Dell The third marketing successful factor of Dell is product. Product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. It summaries the brand positioning. Dell’s product strategy is to target the high-volume systems infrastructure needs of IT managers.
While this has proven to be a revenue-rich strategy for Dell,it has the strongest financial performance of the four vendors we examined . The company faces the same challenge that every other hardware vendor in the market does which become more closely connected to the objectives of your client’s business or be relegated to a commodity position. By selling customized products directly to end customers, Dell has empowered businesses and consumers to choose the best solutions for their computing needs. Today, Dell’s messaging is heavily targeted at IT management decision-makers.
However, that messaging is consistent between Dell’s corporate and product marketing so Dell’s path to a stronger business technology (BT) orientation does not have to start with fixing the position gaps its competitors face. The goal of positioning is to convince customers to believe the marketer’s offerings are different in some way from its competitors on an important benefit sought by the market. For instance, if a customer has discovered she has a need for an affordable laptop computer, a company such as Dell may come to mind since their marketing efforts position their products as offering good value at a reasonable cost.
As we know, product is a key element in the overall market offering. It used to be personal computers sold direct to business, a hole drilled in the mind by a brilliant Dell strategy that promised lower prices plus the ability to tailor the machines to your needs. In 1997, Dell set up a new division to sell personal computers to consumers primarily through retail stores, including Sears, Walmart and other large chains. In 2003, Dell started to sell flat-panel television sets, handheld computers, omputer printers and MP3 players, all under the Dell name. Today, It reasserted its historically close ties to chip king Intel by taking machines using rival Advanced Micro Devices chips off its virtual shelves and selling them only in retail outlets. Dell has been pushing hard to branch out. It has signed a flurry of deals to put consumer-friendly PCs, such as the new Dell XPS One, into retail outlets, including Best Buy keyboard-to-keyboard alongside models from rivals Hewlett-Packard and Apple. Services provided by Dell
The forth marketing successful factor of Dell is good service. Services are a form of product that consists of activities, benefits, or satisfaction offered for sale that are essentially intangible and do not result in the ownership of anything. Example are banking, hotel, airline and retail. The service plays a huge part in the successful road of Dell. The customer service of Dell is considered among the best of the world. The customer service of Dell can be divided into five major parts. The first service is Online orders, and by a single production.
Dell companies to enable customers to purchase computer Dell. com and PremierDell. com for enterprise customers, the company has provided more than 60,000 customized web site to allow customers to track orders for the purchase and implementation. Valuechain. dell. com orders through direct transmission to the supplier of raw materials Dell companies, such suppliers will be able to receive real-time information on raw materials, thus contributing to Dell companies control inventory. The second customer service is video distribution and delivery guarantee.
Dell particularly unique is that the company provided a special specialized services network users can choose in accordance with their own preferences and needs of the computer, the company provides distribution of the final outcome of the hardware, and system performance forecasts. As a result, the network of shops in the best possible selection, Dell sites in the forefront in computer networks. Dell customers at the centre of the customer requirements for different customers different custom, personalized products. In all customers choice, the website also provides the corresponding price, payment method and delivery address and the dentification and door-to-door in two days. The next service is online technical services and technical support. Dell companies provide online services and technical support is very broad, users answer questions, the escalation on Windows, software upgrades informed, and so on. A wide range of services not only to increase the intrinsic value of their products, can also be user satisfaction, and enhance the competitiveness of our products. The forth service is online forums, help and Search services. Not only large customers, small enterprises, a large number of persons were also attracts home office in Dell brands around.
From the autumn of 1998, Dell established executives and customers online forum “had breakfast with Dell” extended to small business users, the topic of this live chat server market trend not only includes such large topics, but also for general users the opportunity to make a wide variety of issues, then adopted Dell online knowledge base in artificial intelligence software to help automatically answered. Dell also provides comprehensive search services. A user-friendly search service can find their desired product and technical support. The scope is very wide search, the search is on the hardware, but also software for the search.
Both assembled whole sets of search. There are various parts of the search, and so on. Last but not least, Dell also has orders enquiry and purchase logistics and delivery logistics. Customers only in the number of Internet customers of six figures or purchase orders numbers, a few minutes, will receive a detailed report on the progress of orders. Delivery logistics, the same achieved its online electronic payment, “customers trolleys” and transport management, etc. functions. Purchase of logistics enterprise-enterprise e-business, not reflected in the website, presumably in the company’s internal network will be involved.
Product Life Cycle Dell’s products obviously have short product life cycle in where products are produced just-in-time without warehouse. It saving the cost and introducing innovative products faster than other competitors so it is vital to become biggest supplier in the industry. It is using direct marketing strategy in where its business was the build-to-order strategy. For instance, customers ordered PCs directly and their order was routed through a credit check and then directly to the manufacturing floor. Those order was then been built, tested, and shipped to the customer who will receive it within 5 to 7 days after placing the order.
The company’s overall services capabilities are positioned according to four major stages of its products’ lifecycles and professional services are included in the ? rst stage which is plan, implement, train and maintain. Dell was build computers directly to customers not for inventory which this company did not waste resources building systems. Its direct marketing channel for selling computers was provided Dell for gaining advantages over its competition including low inventory costs, no dealer costs and current technology in every system manufactured.
For example, Dell manufactured systems only after they were ordered by a customer and Dell was able to guarantee delivery within five to seven days of order. On the other hand, Dell Company actually focuses on direct mail advertising, targeted email advertising, direct response advertising through promotions in newspaper. Besides, Dells license agreement with Agile Software for enterprise resource planning which allowed Dell to quickly integrate the suite into its manufacturing process to source components which offering the best technology, highest quality and lowest prices at any given point in time. Public relation
Dell workers are committed to acting responsibly and honestly while interacting or dealing with their suppliers, customers, partners, shareholders, government regulators and competitors. Dell truly wins customers and builds long-term customer relationships by providing quality products and services. Their marketing and advertising materials and other representations they make to customers are accurate, truthful and full compliance with applicable laws and regulations. Dell services are including Dell ProSupport, infrastructure consulting services, deployment services, asset recovery, training services, and managed lifecycle services.
Dell ProSupport is the service designed to address the technology challenges. Comprehensive training and certification programs for Dell hardware and popular software applications are offered. As well, their commitment to the environment and continuously improve the environmental with recycling, reuse programs and pollution prevention. They are trying to minimize the waste. However, Dell also receives considerable attention from the news media, financial community such as investors, financial analysts and stock brokers, and from other companies. Supply chain management
Dell sells its computer systems directly to end customers, bypassing distributors and retailers. Dell’s supply chain consists of only 3 stages which are the suppliers, the manufacturer (Dell) and end users since it is using direct model. Dell’s strategy is to provide customized, low cost, and quality computers that are delivered on time. Dell has the better control of their operation which has reduced safety stocks and has operates faster to get cash-to-cash conversion cycle. It has better supply chain management and successfully implemented “direct” sales strategy.
For instance, it takes orders directly from customers where it can save costs and times on processing orders that other companies normally incur in their sales and distribution system. Dell also uses information technology to gather and share a constant stream of data on supply and demand trends. For the supply side, Dell gathers the real-time information about the inventory levels of its suppliers at various positions in the supply chain. In addition, dell’s entire supply chain actually focuses on the fundamental business performance. Supply chain management at Dell truthfully viewed as strategy capability.
Price Strategy of Dell Pricing strategy is one of the elements that in a firm’s decision making, this element concern with the setting price that will affect attractiveness of customers on the targeted market and allows the targeted profit to be meet. This strategy usually changes as the product passes through the life cycle because there is certain constraint to the company to price the product at different price stage. There are few components in this strategy, which are skimming pricing strategy, penetration pricing strategy, competitive pricing strategy, price flexibility and promotional pricing.
Some of these strategies are implemented by the Dell Company to compete with their competitors such as promotional pricing strategy, a lower-than-normal price strategy that use by a firm to stimulate the sales of product. On any given day, Dell Company is doing as least one promotion to attract customers. Dell also have sufficient stock to sales and almost always have different promotion such as free printer, free shipping delivery, free memory upgrades and free CRT monitors. This is the reason why consumers will choose Dell.
Dell uses to position the products and make it appeal to its target market by offering the customers these incentives to buy their products. Their constantly promotion had been make a great impression in consumers mind. When consumers wish to purchase a computer, their first mind will be Dell, this make Dell win in the first step. In year 1999, Dell had changed their tactics by engaging in extensive marketing campaign. The “Be Direct” has changed the attitude of consumer to treat Dell as local producer in order to raise their sales volume.
Secondly, the strategy implemented by Dell is penetration pricing strategy, a strategy that set the price of product to be lower than competitor in order to enter the market. When Dell launched its personal computer to the market, it implemented penetration pricing strategy to compete with Hewlett-Packard(HP)/ Compaq. In addition, Dell’s product pricing also reflect the affordability of the local consumers. For example, China Dell has prices the product and services to Xiamen customers without incurring any extra costs to the price.
The reasonable price and the availability of support, after sales services have alleviate Dell’s position from others competitors. Dell also reduces their manufacturing cost by 100 to 200 U. S. D compare to other competitors through direct sales, which use low-cost marketing strategy. Brand of Dell Brand, a name, term, sign, symbol, design or some other combination that combine together to differentiate the product from other competitors in the markets. Branding is very important to a company because it not only the goodwill of a company, but also a powerful thing to influence consumers’ behaviour.
There are different types of brands, which are private brad, family brand, individual brand, brand type, brand name and also brand mark. Brand loyalty, consists of consumers’ commitment to repurchase of the same branding products or using the products and can be define as to repeated purchase the products or services or others positive behaviours such as word of mouth advocacy. There are 3 stages to measured the brand loyalty, which are brand recognition, brand preference and brand insistence. Dell Company is a family brand company and the company establish by Micheal Dell. ‘Direct from Dell’ is the title of Michael Dell’s strategy.
Dell has implemented the branded strategy to become the world’s No. 1 brand of personal computer. The will put their name on product lines related to storage, wireless and networking in addition of its personal computers too. The will only choose to add their name on the product only when the move helps its manufacturing and cost strategy. Advertising strategy of Dell Advertising strategy, a strategy that implemented by advertiser to prepare setting forth the competitive frame, message argument and target market to be used in an advertising campaign for specific product or services.
There are 2 types of advertising, which are product advertising and institutional advertising. Product advertising is defined as a non-personal selling of a particular product or services and institutional advertising is defined as a promotion of an idea, concept, or goodwill of a company, industry, organization or person. There are 4 types of strategies can be implemented by a company, which are comparative advertising, celebrating testimonials, retail advertising and also interactive advertisings.
Retailing advertising strategy had been implemented by Dell, the company has direct interacted to customer to sell their personal computer, and customers can customize their own computer. Dell is highlighted the ease of customizability and heavily advertised their product on Internet, magazine as well as uses direct mail advertise campaign. Dell also implemented cooperative advertising, a strategy that retailer shares the advertising costs with a manufacturer or wholesaler. In the fall of 2007, Dell announced partnerships with major computer retailers, including Officeworks, Best Buy and also Wal-Mart.
The partnerships ended Dell’s historical direct to customer sale, but also allowed the company to access the mass merchandise distribution channel. Nowadays, Dell continues it’s direct to customers marketing initiatives but also sought for new partnerships to promote its print and television advertising. They advertised heavily on television, internet, and newspaper as well as by direct mailing advertising. All of these promotional vehicles have been designed Dell Company the competitive edge to be the first computer selling company in the world. Market Opportunity/ Problem
Problem Place Dell’s greatest problem is the consumer can’t physically touch or see the product that they want to purchase. while Dell online store provides many the opportunity, it also provides disadvantage is customer cannot go to retailer try a few different of the Dell’s product. Dell is different with its competitor, customization also create problem that customer cannot go out to buy a Dell’s Product as simply as they could some other brands. A lot of the customers are wary of a product that they can’t personally examine before they purchase. ome of the anxious customer would have to wait a few days before the computer was delivered, so they may choose other brand. Opportunity Direct Model Most of the Dell’s opportunity come as result of the direct model. A few specific advantage are gained through the direct model. The direct Model allows consumers to choose in accordance with their own preferences and needs of the computer. By cutting out the retail seller as a distributor, Dell has made it possible for each consumer to order directly from the factory, so they giving their customer opportunity to fully customize their product.
In addition to this customization, the Direct Model yields relatively fast delivery. This allow customers to place their order and receive their computer within a few days . Both of these Direct Model Benefits are great assets in target the home-user market . Customer Service Dell companies provide a great customer service to their client. They provide technical online services and technical support, customer answer questions, the escalation on Windows and software upgrades informed. While Dell’s customer has some technical problem, they can get help from Dell’s technical online services.
A wide range of services not only to increase the intrinsic value of their products, can also be Customer satisfaction, and enhance the competitiveness of their products. Thus, Dell increasing number of customer to become second-time buyer. Recommendations Due to the Fortune 500 which listed by Forbes magazine, Dell Inc. was ranked 25th largest company. There must be something fascinate about the company, but everything have a merits and drawback. Although Dell Inc. having a quite high ranking in the world, however it’s still exists many problem or market opportunity.
The first recommendation is set up store at each capital of the state. This step can provide the public a tangible PC model for ornamental. In the store, we suggest to use democratic selling which means selling the model that most people buy. Besides, it will increase the channel in communicating with customers. So, the customer will have a place for those who facing technical problem with their PC to obtain renovate. This will fulfill the place utility which mentioned in . Place utility means that the availability of goods and services where customer want them.
Next, direct model is undeniable a huge opportunity for Dell Inc. So we suggest by using new market trend, real timing to gain a further improvement. For information, all of us know direct model is one of the marketing strategies of Dell Inc. Real timing means the procurement of derived components from outsourcing right after receiving the order. By applying real timing, the company can reduce the time taken for direct model process. Otherwise, it also saves cost due to fully utilized of the derived components of the direct model.
Last but not least, customer service is the most important segment of Dell Inc. marketing strategy. They used to always stay in contact with customer to know the customer needs. Nowadays, social media have almost dominating the life of people. So, Dell Inc. should use tweetonomics (social media) to improve customer service. People loves changes nowadays, so we practicing perpetual adaptation to social media in order to enhance marketing strategy. In fact, social media is the core of Dell’s marketing strategy. So, tweetonomics is the best way to maintain relationship with customers.
By maintaining relationship, the market of Dell will effectively promoted by the loyal customer. In a nut shell, there are a lots of opportunity exists around us. Dell Inc. is one of the examples that seize those opportunity and making benefits from it. Marketing is a wide field that can be analysis through many points of view. Conclusion Dell’s greatest problem is the consumer can’t physically touch or see the product that they want to purchase. Dell’s opportunity is customer service and direct model. The direct Model allows consumers to choose in accordance with their own preferences and needs of the computer.
Dell’s customer service provide technical online services and technical support, customer answer questions, the escalation on Windows and software upgrades informed. Bibliography Dell – Our story. (n. d. ). Retrieved from Dell: http://content. dell. com/us/en/corp/d/corp-comm/our-story-facts-about-dell. aspx Dell – The Official Site. (n. d. ). Retrieved from http://www. dell. com/ Farfan, B. (n. d. ). Dell Computer – Facts, Research, History, Trivia, Mission Statement and Quotes. Retrieved from About. com: http://retailindustry. about. com/od/topusretailcompanies/p/dellincprofile. tm Cage,M. Dell Marketing Strategies. Retrieved from http://www. entrepreneurslife. com/thoughts/entry/dell-marketing-strategies/ What is Dell target market. Retrieved from http://wiki. answers. com/Q/What_is_Dell_target_market Caulfield B. Dell Tries To Restore Its Brand Position. Retrieved February 25, 2008 , from http://www. forbes. com/2008/02/25/dell-earnings-pcs-tech-enter-cx_bc_0225dell. html Fishburne T. Brand Positioning and the Consumer Mind. Retrieved April 06,2010, from http://www. brandingstrategyinsider. com/2010/04/brand-positioning-and-the-cons