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Dell is ³a computer company founded in 1984 by Michael S. Dell, whose success

made him one of the wealthiest men in Texas. From its inception, the "Dell model"
became synonymous with efficiency, outsourcing and tight inventories. However, in
recent years the company has been plagued by serious problems, including misreading
the desires of its customers, poor customer service, suspect product quality and
improper accounting.´1
Dell Inc. designs, develops, manufactures, markets, sells, and supports computer
systems, as well as provides related services worldwide. It offers desktop PCs;
notebook computers, mobile workstations, and smart phones; servers and networking
products; storage solutions, including storage area networks, network-attached
storage, direct-attached storage, disk and tape backup systems, and removable disk
backup; and printers and displays. The company also provides third-party software
products, such as operating systems, business and office applications, anti-virus and
related security software, and entertainment software; and peripheral products, such as
printers, televisions, notebook accessories, mice, keyboards, networking and wireless
products, digital cameras, power adapters, and scanners. In addition, it offers
infrastructure technology services, as well as customer deployment, asset recovery,
and recycling services; IT consulting, strategy and enterprise consulting,
implementation for pre-packaged software applications, and research services;
applications development and maintenance services; and business process services,
such as claims processing, product engineering, payment and settlement management,
life insurance policy administration, receivables collection, and call centre
management.

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Dell's unique approach to manufacturing separates the different processes so that

Dell is not reliant on singular production or supplier's chain for equipment production.
Though there is no segregation of the different products and services but nevertheless
in separating the components enabled it to target the customers based on the regions
in which the products are manufactured. By assingning each regionalized production
center particular component for production not only have diversified the risk of
concentration of labor and production costs but also depending on particular
infrastructure.

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Dell's product pricing reflect the affordability of the local consumers. For example
basing plants in Xiamen, China Dell has been able to provide products and services at
the local prices without incurring additional costs to price. Price reasonability and the
availability of support, after sales services and parts have alleviate Dell's position
from others.

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Dell has been able to affect the location strategy aspect of its marketing campaign.
As Dell's products are always available at the nearest dealers customers develop trust
for the "local Dell" thereby achieving the objective of gaining their trust in Dell
products and services, and forming a large and diversified consumer base.
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: Dell in the past have not concentrated on extensive marketing campaigns
but this revolutionaries in 1999 when Dell changed its tactics by engaging in
extensive marketing campaigns. The "Be Direct" attitude has changed the way
consumer view Dell as the local producers.
Sales promotion

·? Broken down market

Dell computer companies will be in accordance with the product range of its
products, respectively, in different areas of application or market classification, a
different strategy.

·? Pricing strategy
Through direct sales, Dell than in the other major manufacturers of low cost 100
to 200 U.S. dollars, which use low-cost marketing strategy.

·? Advertising strategy
Advertising in Dell website, but no. Dell website contains a wide range of
multimedia pictures, and many more performance charts, and even made some
advertising in the form of slides. These customers can purchase fully stimulate desire.
Distribution channels
Direct modes in compressed product production lines, supplemented by online
purchase at great development of its direct sales model.
Customer Service

·? nline 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.

·? Video distribution and delivery guarantee

Dell particularly unique is that the company provided 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 customer¶s different
custom, personalized products. In all customers choice, the website also provides the
corresponding price, payment method and delivery address and the identification and
door-to-door in two days.

·? nline 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.

·? nline forums , help and Search services

Not only large customers, small enterprises, a large number of persons were also
attracting 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.

·? rders 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.


 

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Dell comprehensively uses information and communication technologies and the
Internet in its direct business model,? map out its business competencies including its
strength and unique capabilities.

Through the use of Delta Model maps, the current core business competencies
practised by Dell Inc which are in three foremost categories as follows:

á? System Lock-In

The ability of an organisation to get new customers, retain the existing ones and
increase the customer loyalty to the firm.

á? Best Products

Products and services perceived by customers as superior to others in the areas of

feature and functionality, quality, after sales services, value and price proposition
through differentiation and cost leadership.

á? Total Customer Solutions

The ability of an organization to offer and deliver integrated solutions to meet

customer needs and satisfaction. Solutions comprises of products or services, products
coupled with services, and customer integration and engagement business processes.












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Dell segments its customers into two main groups, Relationship and Transactional.
Relationship customers are customers who buy repeatedly continuously and in larger
quantities or value, while Transactional customers are customers who buy less
frequently and in smaller quantities or value. Both Relationship and Transactional
customers are further sub-segmented.

Table 2.1 shows the segmentation strategy used by Dell.

 

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Each Segments is assigned with a team of internal representative sales which deals
with the particular segments requirements and needs to fulfil their expectations not
only that but also formulate and develop marketing programmes to target the
appropriate sub-segments. Moreover, Dell also employs account managers to manage
all Relationship customer accounts.

³In targeting offline customers such as those in the Relationship segment, Dell
typically engage the customers using direct sales and telesales teams, supported by
custom configured Websites known as ³Dell Premier Pages´ that are specific to the
customer account. The Premier Pages enables the customer¶s purchasing department
personnel to browse a catalogue of products and services containing pre-agreed
product and service specifications and pricing, place orders and track order status.
Premier Pages can also integrate with the customer¶s purchasing system via electronic
data interchange (EDI). [Dell, 1999, Pg. 98, 147 ± 148]´
2

Dell uses telesales teams and its E-commerce website (www.dell.com.my) to target
Transactional segment customers. Dell¶s online approach to target this segment is via
mass marketing. Transactional segment customers are also encouraged to call in using
toll-free numbers at normal working hours.

Hence, Dell¶s product and pricing strategies are formulated to support the above
segmentation and targeting strategies. Product and service offerings are varied and
also priced differently between Relationship (where higher volume exists) and
Transactional segment customers. nline Transactional customers typically
experience segmented pricing that are sales promotional driven via the organisation
E-commerce website, online Relationship customers enjoy pre-agreed negotiated
pricing via Premier Pages and offline Relationship and Transactional customers enjoy
negotiated pricing, This is an examples of dynamic pricing strategy in a Globalisation
marketing world.




 



 

 
 



 










  


   


Through Dell direct model, Dell Inc differentiates its computer hardware offerings,
ranging from PCs and notebooks to workstations and servers to other peripherals such
as storage, network switches, printers as well as enterprise software.

For Instance Dell offers two lines each of personal computers (PC¶s) and notebooks,
namely ptiplexŒ, DimensionŒ PCs, along with LatitudeŒ and InspironŒ
notebooks. The ptiplexΠand LatitudeΠproduct lines have a longer product
roadmap lifecycle, thus more stable and helps meet corporate customers¶ asset
stability and depreciation lifecycles. In contrast, the DimensionŒ and InspironŒ
product lines have shorter product roadmap lifecycles, thus experience more frequent

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enhance.html
new technology updates and introductions.

Further product differentiation at customer level is possible through Choice Boards

available during the online buying process that enable customers to self-select or
change the product configurations instance opting for 512MB of main memory
instead of the default 256MB main memory, or selecting a 80GB hard disk instead of
the offered 60GB hard disk, or to include a colour inkjet printer. ChoiceBoards
enables mass customization. [Slywotzky, 2000, Pg. 60]



  


A differentiation strategy requires the products and services to become differentiated
for different customer segments, thus again this results in and supports the need for a
dynamic pricing? strategy

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Dell positions itself as engaging the customers directly without traditional sales
channel intermediaries. Dell develops direct relationships with the customer in order
to:

á? Establish the most efficient path to the customer

á? Become a single point of accountability
á? Develop build-to-order efficiencies
á? Become a low cost leader
á? ffer standards-based technologies



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In the supply chain management process, Dell employs the direct distribution channel
strategy beginning with its suppliers of materials and components, Dell as the
assembler, and sells directly to the customer either via offline means e.g. telesales and
field sales and/or online via the Internet acting as the cyber-intermediary or
cybermediary.

Since Dell¶s products and services are not digital products that can be delivered or
transmitted across the Internet to the customer, product delivery or shipment
fulfillment is outsourced to a logistics service provider for e.g. DHL, FedEx. Figure
2.2 shows the Dell direct distribution channel strategy.

In the direct distribution channel strategy, Dell is responsible for the transactional
functions that involve contact with buyers, marketing communications, matching
products to buyer¶s needs, negotiating pricing and process transactions; and
facilitating functions such as market research. Logistical functions are outsourced.

In the upstream portion of Dell¶s direct distribution channel model, Dell utilizes B2B
e-commerce and EDI technologies with its suppliers, while B2C e-commerce and EDI
technologies are deployed in the downstream portion of the distribution channel
supporting traditional telesales and field sales activities.


 

 
  

The major e-marketing tools deployed by Dell in its e-marketing communications

strategy are:
á? e-Mails
á? Permission marketing e.g. opt-in or opt-out promotional e-flyers (in addition
to print media e.g. newspaper ads, flyers and direct mailers)
á? e-Loyalty programmes e.g. e-Coupons
á? Internet advertising e.g. banner ads, keyword search, sponsorships
á? Links to online independent product reviews and technology e-magazines
(http://www.dell.com.my/) website landing pages, information search and shopping
experience
á? fficial Dell Blog Site (http://www.direct2dell.com/)
á? website for customers to contribute ideas and suggestions
(http://www.ideastorm.com/)
á? Voice of the Customer e-mails Such as electronic word-of-mouth
endorsements

 
  

  

Dell also utilizes information and communication technologies to support its

relationship management strategy. Both customer relationship management (CRM)
and partner or supplier relationship management (PRM) software and processes are in
place and practiced.

However, relationship management extends beyond using CRM or PRM software to

the ability to develop a continuous learning organization and knowledge management
culture that will contribute to long-term relationship-oriented results that truly
matters.




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p 

Dell, Michael, with Catherine Fredman. (1999). |

|


 
   
. New York: Harper Business

Holzner, Steven. (2006). | |

    


 
 . New York: McGraw-Hill

Kirkpatrick, David. (ctober 28, 2002). ³Can anyone compete against Dell?´
ï
, Vol.146 No 7, pg.42 ± 48

Magretta, Joan. (March ± April 1998). ³The Power of Virtual Integration: An

Interview with Dell Computer¶s Michael Dell.´ 

   (Reprint
98208), pg.72 ± 84

Park, Andrew, with Peter Burrows. (November 3, 2003). ³What you don¶t know
about Dell.´   ! (Asian Edition), pg.56 ± 64

Porter, Michael E. (1985). "   

"
     


#

. New York: Free Press

Saunders, Rebecca. (2000).  |  

$%
 
&
"
 . xford: Capstone Publishing Ltd.

Serwer, Andy. (March 7, 2005). ³The Education of Michael Dell.´ ï
, Vol.151
No.4, pg.50 ± 56

Sloan School of Management. '"
 



 ( )ï *%%+.
Dell University

Slywotzky, Adrian J. & David J. Morrison, with Karl Weber. (2000). |   

 , New York: Crown Business

Strauss, Judy; El-Ansary, Adel & Frost, Raymond. (2006). -(
!  . (4th
International Edition). Upper Saddle River, New Jersey: Pearson Prentice Hall
?
Gulati, R. and Garino, J. (2000)Getting the Right Mix of Bricks and Clicks for your
Company. Harvard Business Review. May-June 2000, p107-114.

Porter, M. (2001) Strategy and the Internet. Harvard Business Review. March 2001,
62-78.

Smith, P.R. and Chaffey, D. (2001) eMarketing eXcellence: at the heart of eBusiness.
Butterworth Heinemann, xford, UK.

Magretta, J., 1998. The power of virtual integration:an interview with Dell
Computer¶s Michael Dell. Harvard Business Review, March± April, 73±84

Porter, M.E., 1990. The Competitive Advantage of Nations. The Free Press, New
York.



( Picture Sources; http://www.alexa.com/siteinfo/dell.com )

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