Dell is one among the largest computer system companies in the world, which is unique and popular because of its direct marketing policy. It deals in manufacturing personal computers, servers or enterprise products, storages and offer IT solutions for the customers. The services provided by the company are of high quality and low cost, thus providing the source of economical investment to the clients. Dell is among the pioneers and still a unique company that carry direct marketing operations. It started its sales via telephone and then expanded it using internet.
A 19-year-old teenager Michael Dell founded Dell in 1984 with only $1,000 capital. He started business with an aim of selling IBM-compatible PCs. Dell received high worldwide success and profit in just few years of its functions. During the first year, it made $6 million gross revenue. The next year, Dell started selling computer of its own design name the Turbo PC. After three years, the company introduced public offering at $8.50 a share and renamed as Dell Computer Corporation. During 1990 to 1996, the company expanded its offerings up to 12 different countries. In 1997, Dell became one of the top five computer makers of the world.
Dell is famous for its unique selling and marketing strategies. It was the first company who introduced the selling of computers via website and providing technical support to the clients all over the world. Customers found it easy to purchase the products via website and get their order at doorstep. The feasibility of purchasing computer products via website highly increased the internet sales of the company up to $50 million in a day in year 2000. Even in 2001, Dell left Compaq behind and became the sales market leader. However, in 2006, Dell lost its leading position due the merging of HP and Compaq. It was due to increased competition and slow market growth that Dell's sales decreased by 15.9% from 2007 to 2008.
The Dell Company's mission is to become the most successful Computer Company in the world by delivering the best customer and technical support to clients. This report will discuss the marketing plan and strategies that the company follows to achieve its mission and vision. Moreover, how the company manage to maintain competitive edge in the market.
Dell's Marketing Process
Dell Inc. takes care of its customers' needs and delivers them with what they exactly want. It is due to only this practice that in just few years Dell reached at the top position among computer manufacturing companies. Dell is among the pioneers who implemented direct marketing strategies and later on rest of the top companies followed the same strategies. Dell made high sales and profits during the start years because of its unique marketing strategies but when others also started following the same practices, the competition became tougher and Dell sales drop.
In order to keep pace with the changing trends of the market, the companies must introduce new ideas and marketing strategies so that to fulfill customers' changing demands. Therefore, company must always keep their marketing process updated.
As according to the American Marketing Association, marketing is the process of planning and executing the conception, promotion, pricing, and distribution of goods, services and ideas to create exchanges that satisfy individual and organizational objectives. (Bennett, 1995)
The above definition of marketing explains that the companies' main emphasis needs to be on consumers' needs and demands. Thus, customer satisfaction is the measure of any company's success. It is for this reason; Dell has been able to make its place in the market in a minor period. Since, for Dell, the customer satisfaction, needs, and demands are the foremost priority.
The marketing concepts state that the company must follow the process before the implementation of marketing plan. The marketing process demands that the company must first identify the customers' needs and bring those products to the market that fulfills the demands of consumers. The customers' needs are in other terms considered as the opportunity for the companies. However, it depends on the company that how it formulizes the marketing strategies as according to the needs of the customers and earns profits.
The Marketing Process consists of four main stages including Situation Analysis, Marketing Strategy, Marketing Mix Decisions and Implementation and Control.
A thorough situation analysis forms the basis of success for the organization. The identification of any unfulfilled need of customers provides an opportunity to the organization to earn more profits. However, company also needs to understand its own capabilities and environment needed to fulfill the specific customer needs. Thus, situation analysis is also known as the analysis of internal and external environment.
The internal environment can be described in terms of micro-environmental factors that are related to only specific situation of the firm whereas the external environment is related with the macro-environment factors that makes an impact over other firms as well.
The detailed situation analysis includes an analysis of the past, present and future trends, needs, and company capabilities. The past trends help to improve the future decisions and forecast the upcoming trends. The company must assess the current situation of the market properly so that there should no gap be left between the customers' needs and the offered goods. Some important frameworks further organize the situation analysis structure that is 5 C. Analyses, PEST Analysis, and SWOT Analysis.
5 C. Analysis analyze company, competitors, customers, climate and collaborators. Company describes the internal situation whereas the other four considers the external situation.
The PEST Analysis forms the external factors report that includes political, economic, societal, and technological macro-environmental factors.
SWOT Analysis is for the assessment of internal and external situation measuring company's strengths, weaknesses, opportunities, and threats. This type of analysis is done to condense the situation analysis and assess the biggest opportunities and relevant problems so that to make plan as according to the company's capabilities.
Once the customers' unfulfilled needs are identified, the strategic plan is formulized. As according to the Philip Kotler states that the company should only offer its products to the segment where there are chances of profits and high sales. Market research identifies the target segment to which the company would make best product offerings. The market strategy includes segmentation, target market selection, positioning, and value proposition.
Marketing Mix Decisions
After developing the marketing strategy, the tactical decisions are made on the controllable parameters of marketing mix. These decisions include product development, pricing decisions, placement, and promotion of the products. The marketing mix should be flexible enough that can be adjusted if the environment changes.
Product development refers to the range of tangible or physical products and services that an organization offers to its clients. These products or services may include, brands, styling, quality, repairs and support, accessories and services, packaging and so on.
Pricing decisions are made as according to the profits earned and the competitors set prices. It is the price exchanged between the customer and the company for benefits availed on using product or service. Since, the low costs on product manufacturing reduce the prices for the consumers so the organizations tend to first lower their costs.
Placement or Distribution decisions are ones associated with channels that distribute the products to the customers. This system performs facilitating, logistic, and transactional functions.
Promotion decisions refer to methods of communication and selling to potential customers. These decisions include public relations, media types, and advertising. In most of the cases, these decisions take on higher costs as compared to the other functions.
Implementation and Control
At this point of marketing process, the marketing plan is already complete and just required to be launched. However, minor changes in customers' needs and demands are expected from time to time. Therefore, marketing process requires continual monitoring and adaptation so that to maintain the standard. Minor changes in customers' needs only require changing some of the advertising strategies but significant changes needs overall redesigning of the product. (NetMBA, 2010)
Dell's Marketing Orientation
Dell continually considers the needs of its customers and fulfills their demands. It was 1984 that the 19-year-old teenager first assessed the need of the customers and started selling Compaq-compatible PC by taking orders on phone and in just few years started dealing with the whole world. Currently, Dell is one of the youngest companies among the computer manufacturing companies but competing with the oldest companies.
Analysis of Customers' Needs
In past years, the customers were required to pay high costs for the computers and still were unable to get the product what they actually wanted. Moreover, the increasing needs of computers required customers to pay higher costs on even finding the right machine for their use. Dell for the first time introduced the process of placing an order via phone and later expanded through website. Now customers from all over the world are easily able to choose the product of their choice just from the Dell's customer friendly website and place an order instantly. This procedure…