Introduction of Dell Inc.
Dell Inc. is a multinational technology corporation that develops, manufactures, sells, and supports personal computer and other computer related-products. Dell Inc. based in Round Rock, Texas. Dell Inc. employs more than 82,700 people worldwide. Dell Inc. grew during the 1980s and 1990s to become (for a time) the largest seller of PCs and servers. As of 2008 it held the second spot in computer sales within the industry behind HP. The company currently sells personal computers, servers, data storage devices, network switches, software and computer peripherals.
Dell Inc. also sells HDTVs that are manufactured by other brands. In 2006, Fortune Magazine ranked Dell Inc. as the 25th-largest company in the Fortune 500 list, 8th on its annual “Top 20” list of the most admired companies in the United States, In 2007 Dell Inc. ranked 34th and 8th respectively on the equivalent lists for the year. A 2006 identified Dell Inc. as one of 38 high-performance companies in the S&P 500 which had consistently out-performed the market over the previous 15 years.
Background and Origins
While a student at the University of Texas at Austin in 1984, Michael Dell founded the company as PC’s Limited with capital of $1000. Operating from Michael Dell’s off-campus dorm-room at Dobie Center , the startup aimed to sell IBM PC-compatible computers built from stock components. Michael Dell started trading in the belief that by selling personal computer-systems directly to customers, PC’s Limited could better understand customers’ needs and provide the most effective computing solutions to meet those needs. Michael Dell dropped out of school in order to focus full-time on his fledgling business, after getting about $300,000 in expansion-capital from his family.
Dell Inc.’s Marketing 4P
From the successful selling of the range of products being offered by Dell Inc, especially the rapid increase of the sales of Dell Laptop, other than the established brand name and the reputation of Dell Inc. worldwide, part of the success factors can be attributed to the successful marketing effort by Dell Inc. In this assignment, we will be doing a research on the Marketing 4Ps Mix (product, promotion, price, place) being implemented by Dell Inc to market the range of home users’ laptops. [pic]
As for the case study of Dell Inc, the point on product worth highlighting is that, the vision and mission of setting up the company itself, is to solve and fulfill IT consumers’ needs, want, and demands. The original idea of setting up the company by Michael Dell, the founder of Dell Inc, is “to eliminate the retailer and sell directly to the consumer”. To quote Michael Dell, he said this before, “as a customer, I was disappointed that when I went to a computer store, the salespeople didn’t really know about computers”. This shows that Michael Dell has had the vision and commitment of satisfy the IT consumers’ needs, wants and demands, which is the essence of a product means to consumers. The above paragraphs summed up the commitment of Dell Inc.’s to solve IT consumers’ needs, wants and demands, which in and of itself is an excellent product marketing. Dell’s Laptops/ Notebooks
From the above diagram, it shows the each category of Dell’s laptops for home users caters for different home users’ with different needs and wants. Guides and Assistance Provided by Dell Inc. In Purchasing its Laptops For the potential buyers of Dell’s laptops, they are provided with guide and assistance in the process of selecting and purchasing laptops. Below are the guides and assistance being provided by Dell Inc for its potential laptop buyers: (1) “Customize Yours” feature
Dell Inc offers the “Customize Yours” feature, this feature help with the laptop buyers to build their own laptops, yes, literally building their own laptops, they can choose on their own the notebook colour kit, processor, operating system, warranty and service, display size, memory, hard drive, optical drive, video card, audio solution, wireless network card, Bluetooth device, USB cable for printer, batteries, power option, keyboard, service, Datasafe Backup Service. The options for each feature and accessory come with a stated price, while the basic feature is imposed no extra charges, as they are already included in the quotes price. Only upgraded and added-value features and accessories come with extra charges.
After the laptop buyers built the laptops that fit exactly what they are looking for, they can review the laptop, there will be a list shown on every specification of the laptops they have built before adding to the cart. Also, the price for every component, feature and specification being picked by the buyer are stated clearly when the buyers are reviewing the laptop they built. This “customize yours” feature in and of itself is an effective marketing, as the buyers can buy exactly what they are looking for, without buying something that “comes with the package” that they are actually not looking for, but they have to pay for it just to buy the package. This “customize yours” shows that the home users’ laptops Dell Inc offers provide solutions to consumers’ needs and wants, which is the essence of a marketing offering.
(2) “Help Me Choose” feature
The picture above shows the “Help Me Choose” feature being offered to assist with laptop buyers on the Dell Online Store. As we can see the this feature gives detailed information to buyers in order to guide them through the purchasing process by furnishing them the information regarding the products, the specifications of the products, the financing and payments options, the access to Dell stores and retailer, the term of laptops, the awards won by Dell laptops, the reviews by Dell laptops’ customers, and also the online buying guide. This feature ensures the potential buyers can buy exactly the laptops that fit their needs, at the same time, this feature also makes the potential and actual buyers know more in-depth of the laptops Dell Inc offers, this in turn would make the buyers patronizing Dell Inc in future when they need another type of laptops, as they already have the information on the wide range of features and specification being offered by Dell Inc.
(3) “Narrow Your Selection” feature
This “Narrow Your Selection” feature helps with the buyers to be more specific with what they want. When comes to a broad array of selection, buyers are often being not able to make up their mind in choosing which model to purchase. This is when this “Narrow Your Selection” comes into help to the buyers. The buyers can have a look on the each range of product that are being categorized into a more specific that might interest them rather than being confused on which one to purchase.
From the above information regarding the commitment of Dell Inc in offering laptops that fit each and every user’s needs, the features and specifications of Dell’s home user laptops, and also the purchasing process guides and assistance. These all come to one conclusion: Dell Inc custom-builds a laptop that fits each and every customer’s needs, wants and demands. This effort in and of itself is a brilliant product marketing strategy.
In terms of promotion, Dell Inc. not only launches and implements one-time event such as road-show or advertisement when new products come out, but Dell Inc commits to continuously promote and make-known its products to the market. Dell Inc. does not practice aggressive selling in order just to increase sales transactions, but focuses on long-term promotion effort through (1) supporting its customers continuously, (2) giving effective and efficient after-sales services, and (3) conducting a customer review and feedback mechanism. (4) Contributing in charities. (1)Dell Inc.’s Continuous and Long-Term Promotion
Long-term customer support system and feedback mechanism in and of itself are the best promotion tools. The followings are the customer support systems and feedback mechanism being run by Dell Inc in its long-term effort in giving its customers value and satisfaction.
(a) Dell Connect
In mid 2007, Dell Inc introduced a new tool and technology, named Dell Connect. Dell Connect is an online technology that enables the tech staff to connect to the customer’s computer and fix problems on the spot or show the customers how to do it. For IT products such as laptops, after-sales service would be one of the primary concerns to customers, as laptops need regular and frequent services, updates, and upgrades. Hence, Dell Connect would be an attractive feature in promoting its laptops to the market.
(b) Idea Storm
On February 16, 2007, the company rolled out IdeaStorm, which is a forum for users to brainstorm what works, what does not and what new features they would like to see introduced. Here to quote Michael Dell: “We take the customer’s input and design the products and services.” Rather than telling the customers and the market what new products and ideas that Dell Inc has come out with, Dell Inc gives the customers and the market to have a say on the input and design. When the customers and the market have some say, they will feel being considered and treasured, which in turn Dell Inc succeeds in delivering customer delight. This in and of itself is a promotion of Dell Inc.
(c) Customer Product Reviews
For each and every model of Dell’s laptops, there will be a forum for its existing customers who bought the particular laptop model to write their own product reviews, they can also rate the laptop model in terms of quality, features, and value. Other than that, they can comment on the pros and cons of the particular laptop model. The customers are also allowed to give any additional thoughts that they have regarding the laptop model. This “customer product review” in and of itself is similar to word-of-mouth marketing.
This marketing approach is many times powerful than any marketing plans. As what a customer says is has much more influence and carries more impact on the company’s reputation and image rather than what an advertisement says. How the previous and existing customers perceive a company and product can influence a company’s position in a marketplace to a large extent. As so, Dell Inc’s decision of allowing the customers to write the product reviews shows that Dell Inc is confident on its laptops and proves Dell Inc’s integrity and transparency, at the same time, hence, the customer product reviews written by the customers act as a marketing tool itself. (2) Dell’s effort on charity contribution
(a) Dell participation in PRODUCT (RED) Scheme
PRODUCT RED is a worldwide charity scheme that runs with the vision of eliminating AIDS in Africa Continent. This charity concept operates by getting the contribution from the sales of signature products of top brands in the world, like American Express, Apple, Converse, Emporio Armani, Gap, Hallmark, Starbucks, and etc. And Dell Inc. is one of the participants among them. Dell will be selling computers as part of the PRODUCT (RED) scheme. According to the press release, “one hundred percent of the funds contributed” from the purchase of a Dell (RED) computer under the scheme goes to the Global Fund, the charity supported by PRODUCT (RED).
The amount of money contributed depends on the product purchased: $80 is donated for each desktop purchased, $50 for each notebook and $5 for each (relatively inexpensive) printer. Dell Inc.’s participation in the PRODUCT (RED) actually proves 2 things: (1) Dell Inc. is concern for the world and social’s well-being, Dell Inc.’s effort in its social marketing campaigns is a promotion of Dell Inc. itself.
(3) Collaboration With Local Newspaper Press for Brochure Distribution
Locally in Malaysia, Dell Inc distributes its brochures through the Tuesday Star In-Tech, which is a weekly issue on latest news and updates on technology that comes with every The Star newspaper bought. This approach of distributing the brochures to the public is an effective and efficient strategy for the following reasons: (1) The Star newspaper is the best-selling English Newspaper in Malaysia, (2) The brochure comes with the Tuesday Star In-Tech, which is the favorite for regular IT consumers, is more specific in targeting markets with higher potential of purchasing its products, (3) The brochure distribution through the sales of newspaper is one of the most effective way of reaching the mass public, thus creating an product awareness in the market once a new product being introduced into the market. The above points show that Dell Inc.’s promotion effort in letting the mass public and the market in getting know about their products in an effective yet not a cost-consuming approach as the brochures printing and distribution costs would be insignificant to a giant corporation like Dell Inc.
From the above observation and research on Dell Inc.’s overall promotion effort, it is shown that Dell Inc. has established promotion channels which connects with its existing customers, also, reaches out to the entire market. And those promotion channels are being implemented successfully. PRICE
When comes to the price of Dell’s marketing offering, it is worth once again touch on the founder of Dell Inc, Michael Dell’s authentic vision. At the time that he founded PC’s Limited (now Dell Inc), IBM personal computers sold in stores for about $3000, after Michael Dell taking them apart and rebuilding them, he realized that the components could be purchased for one-fourth the price. Even with added memory, bigger monitors and faster modems, the PCs could still be sold at a handsome profit. The philosophy of Dell Inc on pricing decision is simple yet powerful: give more benefits with lower prices than others. Means purchasing Dell’s laptops is a value-for-money and added-value experience. Dell’s Home Users Laptops Pricing
In the research of Dell Inc’s pricing decisions on its home users laptops, the following points worth highlighting: (1) Online Price (discounted) For all the laptops, buyers get a discount if they were to purchase the laptops online. This is a win-win situation for both the customers and Dell Inc. As online selling saves up the retailing costs for Dell Inc, as for the customers, other than getting discounted price for their laptops, online purchase is hassle free to them, the customers need not to visit the physical Dell Stores to check out the models available, by visiting the Dell Online Store, the customers can check out all the models available at one glance, only a-click-away. (2) Buy and Pay for only what you want ( “Customize Yours” feature) The “Customize Yours” feature that allows the buyers to decide on the almost every specification of the laptops they are going to buy is also a good pricing decision by Dell Inc. A case study has been done to prove the pricing decision of Dell Inc that commits to accommodate consumers’ needs and wants.
Case Study 1:
The rationale of conducting this case study is to prove Dell Inc makes its effort to offer more different models for even a same price. From the comparison between Dell Inspiron 14 and Dell Inspiron 1525, the price are the same for these two models. Both of the models are more or less the same in terms of performance, the difference is that the size of the screen. As for Dell Inspiron 14, the monitor is 14.1” WXGA Display with AntiGlare. As for Dell Inspiron 1525, the monitor is 15.4” widescreen WXGA TFT Display. That means these two models accommodate different customers’ needs, for those customers that are particular with laptop memory and hard drive space would forgo a bigger screen size and go for Dell Inspiron 14, on the other hand, for customers that looking for a laptop with bigger screen size would not mind buying smaller hard drive space.
Hence, both segments of customers can purchase what they want at the price they are willing to pay. This solve one of the biggest marketplace and market offerings problem, some companies offer only one model for one price range, assuming that “one size fits all” strategy would work, in the end, causing the customers paying for what they are not willing to purchase for the sake of purchasing something that “comes with the package”, for Dell’s laptops buyers, this situation would not happen. Hence, the price being paid by customers to buy Dell’s laptops match with the benefits that the customers demand. This pricing strategy saves up customers’ money at the same time delivering customer satisfactions and expectations.
(3) 0% Installment Scheme
Buyers that purchasing Dell’s laptops can choose not to make one-off payment but an installment scheme. The good thing about Dell’s laptop installment scheme is that is a 0% interest scheme. This scheme is consider an assistance to the consumers and contribution to the society as well, as the scheme availability allows those customers that are not able to make full payment upon purchasing to own a laptop by paying through an installment scheme.
Viewing Dell Inc from the perspective of marketing 4Ps in terms of price, one conclusion can be drawn, buying Dell’s laptops is a value-for-money experience, as Dell Inc offers more benefits for less price, also, customers pay for only what they want exactly. In a nutshell, Dell’s pricing strategies and decisions make a good marketing plan in terms of price marketing.
Dell Inc.’s Online Store
Among the giant IT companies and manufacturers, Dell Inc. is the company that is the most successful with online selling, facts and figures show that its online sales make up a significant number from its total sales, meaning that Dell Inc sells more through the internet than the traditional retailing method. The online selling and purchasing concept is popular with the young generations and also the tech-savvy. The concept of online store, online selling and purchasing not only penetrates virtually the every corner of the world, so long as there is internet-access, there is access to Dell Inc.’s Online Stores. Plus the fact that the purchasing enquiry, the models and specifications selection, and payment methods can be done online, in brief, the A-Z of the purchasing process can be done without the customer physically present at a physical Dell Store, makes Dell Inc reaching out to a worldwide market, and relating with its customers and potential customers directly.
According to a survey, alone in the United States, some 65% of American online users now use the internet to shop, and the growth of online shoppers is rapid. Since the rapid development of the digital age and the invention of internet, direct marketing is being highly valued, as some marketers have hailed direct marketing as the “marketing model of the next century”. They envision a day when all buying and selling will involve direct connections between companies and their customers. And what should be highlighted here is that Dell Inc is already on the right track, and being established on the right track. This online store concept give Dell Inc. advantages over other laptops and PCs manufacturers which still operating a traditional retailing or agent distribution. The main advantages include (a) Operating an online store costs much less compared to traditional retailing and agent distribution. (b) The access to online store is always available at anytime and anywhere, so long as there is internet-access.
Although the concept of online buying and selling is popular and being used by the wide market, it may still be unappealing to some customers. Some customers are still prefer the idea of visiting a physical retailer store, talk to the salesperson, seeing and touching the products physically, “get the feel” of the products, in short, a traditional purchasing process rather than purchasing the products directly online and have it sent to the door. Dell Inc. is aware of this too, although the company is making huge revenues from it online selling. This means that Dell Inc. is a customer-oriented company, which strives to cater for every customer needs and wants, also, accommodates the exchange experiences which are comfortable to each customer. Dell Inc.’s effort in setting up the Dell Kiosks, employing the required staffing, and maintaining the operations of the Dell Kiosks show that Dell Inc. is committed to make its customers feel at home and their preferences are being valued and not taken lightly.
In a nutshell, from the operations of both Dell Online Store and the physical Dell Kiosks, they are successful in terms of customers’ access, enquiry availability, and customers’ convenience. These show Dell Inc.’s success in its place marketing strategy.
Dell Inc.’s strategies on it marketing mix 4Ps are in good alignment and working cross-functionally, all the areas are synergizing and supporting one another in term of product, promotion, price and place.
A good product is a marketing offering that comes it ways to solve consumers’ problems and satisfy consumers’ needs. Dell Inc. not only makes quality products, but the products are also being designed to fit each and every customer’s needs and want.
Dell Inc.’s effort on promotion is not only profit-oriented or with the sole aim of boosting sales transactions, but also to make Dell a name that equals to quality product. Thus, Dell Inc.’s promotion not only very successful in generating revenues, but also created a lasting impact and an established name in the IT market.
Dell Inc.’s price marketing and pricing decision has fulfilled the premise of a successful pricing strategy, which “giving customers the most by charging them the least”, this is one of the most important factors that attributes to Dell Inc. success.
Dell Inc.’s place marketing gives its customers the most convenient and comfortable ways to shop with Dell’s products. Dell Inc. caters for all kinds of shopping experiences that its customers demand for. In overall, Dell Inc.’s marketing 4Ps has been very successful, and that there is a point that worth mentioning, its marketing 4Ps is a continuous effort and it continues to make a lasting impact for its company success.