Dell Is One Among the Largest Computer

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.

Marketing Process

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.

Situation Analysis

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.

Marketing Strategy

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 made the lives of the people very easy. Now they are not required to move around the market and look for the cheap, efficient and the product that best fits their needs. Moreover, in past times, people usually used to throw away the machine if any problem occurs instead of getting it repaired. Since, they were supposed to move around the whole market for the person who might fix the error and cost high amounts. However, Dell introduced the technical and customer support departments for the ease of people and now it provides online solutions for the minor problems and fix the hardware and software problems. So now customers do not need to throw away their expensive machines but can easily get them fixed online.

Dell's Marketing Strategy

There are various computer products. Companies classify these products into software and hardware. The companies segment these products separately and make sub-divisions. Dell has always dealt in hardware products and offer personal computers and machines. Later on, the company expanded its product segments by offering servers, notebooks, computer peripherals, and tablets. Dell kept on adding changes and minor strategies to the marketing mix plan and thus increased revenues. In recent years, Dell has also collaborated with the software companies and major corporations like Microsoft so that to increase its profits.

Dell's Customer Segmentation

Dell segments its customers as well as products when it is about to offer any product to the specific market or specific segment of customers. Dell has segmented it market geographically into EMEA, Asia Pacific-Japan, and U.S.. Each segment has different marketing strategies and pricing. Moreover, Dell has also segmented customers' needs demographically based on income, education, and occupation. Since, needs of the customers varies depending upon various factors. Since, Dell has its own computer manufacturing plants and service teams so the company has strength to offer products at much lower price. Therefore, the company targets the market that requires low service costs, good quality and low prices so that to get an opportunity to lead in market.

Dell specifically targets two classes of customers that are relationship customers and the transactional customers. Relationship customers refer to large corporations, education sector and government institutes. These sectors are main sources of profits, are supported by account managers, and dedicated sales representatives. Dell makes its large profits through corporate relationship accounts since it is facilitating greatly to its customers via customer-specific website like "Premier Pages" that provides an option to develop custom products and predetermine the budgets. The corporate customers can easily place an order as according to their needs and receives free services for some period.

The others are transactional customers who seek for the low cost products that should also be more reliable, high quality services and has various benefits. The transactional customers are usually the individual buyers who choose the product of their choice via website and place an order online. Dell keeps on upgrading its systems and products so that to satisfy customers' latest demands.

The Dell does not need to invest more on surveys and analysis to identify the customers' needs and demands since the customer segmentation itself gives an idea of the current market trends.

Dell's Just in Time Approach

Dell do not reserves products in inventory but offers customized products so there are less chances of negative impact over the company's brand image and value proposition. There are low loss or risk chances due to just in time inventory strategy. Moreover, the company does not need to maintain the inventory stores and bear high costs of the warehouse.

Dell does not manufacture components of its final products but has collaboration with some of the trusted suppliers that are only at the distance of 15 minutes from the Dell's production centers. However, most of the analysts have been critical about this scenario. Since, Dell depends on third party suppliers for its final products and it may be a major threat for the organization but at the same time, the current strategy is also providing the major profit to the organization.

Dell's Value Proposition

Dell alters its positioning as according to the demands of large corporations so that to maintain the competitive advantage and value proposition. Like in early days, Dell started its business by selling quality computers at low prices via an internet to the world market and later on it positioned its brand as the value oriented computer-manufacturing company. If Dell would have not extended its product segmentation and customer segmentation then it might had faced losses. Since, the online marketing and sales strategies were already had become common among the other computer companies so the competition had become tough. (Rennie, 2012)

Dell's Marketing Mix

Product -- Dell offers a large range of computer system workstations, desktop computers, servers, and notebook computers. In addition to the systems, the company also provides computer hardware peripherals, technical support and hardware solutions. Dell has also become a partner of Microsoft and so now providing software and its solutions as well.

Place -- The placement or distribution strategy of the organization provides the major advantages. Dell uses the direct channel model according to which the products are directly distributed to the customers without involving an intermediary or a distributor. There is no need of warehouse maintenance and investments since the organization deliver the products on demand thus saving the costs and providing order to customers at lower prices. Dell was the first organization who introduced the model of direct marketing via phone and later it expanded business using an internet.

Price -- Dell does not maintain inventories so the cost of warehouse is eliminated. Moreover, the medium of an internet further reduces the company's costs. Therefore, in return, the prices of products also are reduced for the customers. Dell even adjusts costs of distributors and promotions within the low prices collected from the customers. So, the pricing strategy provides high profits and advantage to the organization as well as the customers.

Promotion -- Promotion is the most important function of all P's of Marketing Mix. Dell uses several mediums to promote its products like television, magazines, newspapers, internet, direct mail ad campaigns, and social media websites. It also sponsors in professional sports and movies. It is due to direct marketing strategy of the Dell that the company is able to understand the actual need and requirements of the customers and maintain competitive edge.

Dell has a profound marketing mix strategies and it is for this reason that the company has competitive advantage. However, the company has to maintain the standing in the market and for that, it is important for the company to keep on updating the market strategies and explore market opportunities and threats. (Business Teacher, 2011)

PEST Analysis

Political Factors -- It is difficult for the organizations to operate in the countries where the political stability is not guaranteed even if the company deals in via only exports. Dell has to go through some rules that restrict the organization to do business in a country. Such countries do not want multinational companies to rule their market but they want domestic companies to make more profits. However, Dell makes good profits in the countries that lose their restrictions.

Economic Factors -- The growth of the company depends on the purchasing power, changing inflation rates and currency fluctuations in the specific country. As according to the overall estimate 10%, growth of computer industry is expected in the next years.

Social Factors -- Since, the demand of computers has highly increased and the advanced education has raised the demand of customers. Therefore, now the company has to make large efforts to maintain the standard and competitive advantage.

Technological Factors -- Now every other organization has adopted advanced technological mediums for advertisement. The companies are upgrading technology in their products. The competition has highly increased and therefore it requires the company to make large efforts to maintain the standard. (MBA Knowledge Base, 2011)

Dell New Product (PowerEdge 12th Generation Servers)

Since the technology changes every day and Dell being the computer manufacturing organization requires to keep its products up-to-date so that to compete with the other players in the market. Recently, Dell has introduced PowerEdge 12th Generation Servers that claims to be the most powerful server yet.

These PowerEdge 12th Generation Servers feature Intel Xeon Processor E5-2600 product family that helps to process more data, reduced infrastructure complexity, support more applications and increase efficiency.

Market segmentation for PowerEdge 12th Generation Servers

These servers may be effectively used by small, medium, and hyper-scale data centers. It is manufactured after collecting data through 7,700 customers and it is capable of facing biggest IT challenges.

PowerEdge 12th Generation Servers are capable of performing adaptive and modular solutions for critical business applications that is data warehousing, collaboration and high performance computing.

Positioning of PowerEdge 12th Generation Servers

As like other Dell products, PowerEdge 12th Generation Servers also has the power to provide high quality speed and IT solutions without an increase in prices. In past, organizations had to install additional network cards and technology that cost much higher but with deployment of Dell PowerEdge Servers, costs have been considerably reduced. Moreover, less power is consumed, thus saving the resources.

Marketing of PowerEdge 12th Generation Servers

Since, SMEs and big organizations are the target market for the PowerEdge 12th Generation Servers therefore DELL collected customers insights from 17 countries and four continents to meet their expectations. The company is offering this brand in 17 countries and has already received great response. DELL is using medium of television, magazines, websites, and newspapers for the advertisements of 12th Generation Servers.

Speed and minimum maintenance problems are the key objectives of corporative customers when deploying the servers for the organization. These are the two main specialty points that PowerEdge 12th Generation Servers offer to its clients. Though, there are other competitors offering the high-speed servers, but the best point of Dell PowerEdge Servers is that it is manufactured as per the demands of the customers and has highest speed. (infusion, 2012)

Individual Elements of the Extended Marketing Mix

Product -- Dell keeps on introducing new products and services from time to time. However, this time Dell has introduced a big brand that is PowerEdge 12th Generation Servers. The company studied the demands and requirements of the customers from several countries and manufactured the product accordingly. This 12th generation server is claimed to be the fastest server and with high control on bugs. It is capable of executing 162% of more business operations per second, thus responding to the requests in just minutes instead of days. The server has improved scalability, input/output capacity, increased memory and so ideal for performing most data demanding workloads. Several new and efficient hardware parts have been introduced in the 12th Generation Servers thus increasing the processor speed. Dell PowerEdge 12th Generation Server is currently the fastest server thus it has captured the customer market and maintaining the competitive advantage.