blished in 1980 by Michael Dell at the age of 19 when he decided to cut out

the middle man and directly connect himself with the customer supplying
computers without the expense of a distribution channel. Initially Dell was
distributed directly to customers as they were able to order a computer made to their
individual selections, with a gross turnover of $73 Million in the first year of trading it
seemed that Dell was going to be tough competitor in the Personal Computer
Market.

Manufacturers selling direct to the consumer as Dell did eliminates costs

associated with marketing and distribution as there is a reduction in the
number of links between the product being sold to the consumer and the
consumer buying the product. Dell has used many different channels to sell
their PC’s over time such as computer stores, department stores, over the
phone, Ebay and of course their website. A computer is relatively easy to
transport and can be easily distributed from the manufacturer to the
consumer. Whilst it may be a difficult purchase for some consumers Dell has
partnered customer service with their product and offered consumers the
ability to order a computer which is made to their specific selections known as
“Configuration To Order “. This removes the need for consumers to go into a
retail outlet to make a purchase. Consumers can call Dell during the
purchase process or request sales assistance online and receive a cal back
within approximately 48 hours. As can be seen below in the diagram the
intermediary such as a retail outlet is removed in Direct Channel Marketing,
which occurs when purchasing directly from Dell’s website.
By removing the Intermediary in the channel process this enables Dell to
have greater control over their product and control the price as there is
no retail outlet attempting to price cut their product (Iacobucci,
2014). This is a an essential marketing strategy for Dell as they target
consumers looking for the convenience of purchasing a PC which is
tailored to their needs at an affordable price with comparable quality to
A Direct Chanel is easy for the
the store brought product.
consumer and fits with Dells’ consumer behaviour.
In 2001 Dell became the world’s number 1 computer systems provider. With
years of experience configuring PC’s to order Dell knows what their
consumers want and have recently developed a growth plan for the future
which meant a change in their ability to distribute their products sooner. Dell
has developed “Smart Selection” which involves pre-building what they think
their consumers want to enable mass production of PC’s and enable them to
ship within 24 hours. This enables Dell to compete with their competitors and
reduce the wait time for commercial consumers which was previously seven
to ten days. With Dell now offering their commercial companies the option to
have their approved custom software image added by allowing 48 hours for
shipping. They have continued with their brand segmentation by allowing
commercial companies to also make purchases that are quick, convenient
and have the ability to be configured in a small way to their needs, building
upon their position in the market and continuing to collaborate with customers.
Dell now has a variety of products such as laptops, desktops, Cloud software
and servers all available online and ready to suit the growing market of online
shoppers and improve profit by targeting their current consumers. E-
Commerce generates an enormous amount of revenue globally and with
young people more likely to make purchases online Dell’s website promotes
secure online buying to ensure that customers are not discouraged by making
an expensive purchase online.

The ease of Dell’s distribution channel for large and small consumers alone
makes it a very powerful marketing strategy as it sets itself apart from their
competitors but also allows Dell to minimise costs to the consumers as a
number of costs are reduced, such as logistical costs, advertising, and other
mark up costs which would be passed onto the consumer if there was an
intermediary in the distribution channel.