Work on Deck PART 1

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INTRODUCTION

Dell is a 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.

1 http://topics.nytimes.com/top/news/business/companies/dell_inc/index.html


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STRATEGY IDENTIFICATION.

Marketing Strategy

Product:

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 regionsin which the products are manufactured. By assingning each regionalized production

center particular component for production not only have diversified the risk ofconcentration of labor and production costs but also depending on particular

infrastructure.

Price:

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.

Place:

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 Dellproducts and services, and forming a large and diversified consumer base.


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Promotion: 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 wayconsumer view Dell as the local producers.

Sales promotion

Broken down marketDell 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 strategyThrough 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 strategyAdvertising 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 onlinepurchase at great development of its direct sales model.

Customer Service

Online orders, and by a single productionDell 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 guaranteeDell 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


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Hardware and system performance forecasts. As a result, the network of shops inthe best possible selection, Dell sites in the forefront in computer networks. Dell

customers at the centre of the customer requirements for different customers differentcustom, 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.

Online technical services and technical supportDell 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.

Online forums , help and Search servicesNot 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 awide 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.

Orders enquiry and Purchase logistics and delivery logisticsCustomers 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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E-MARKETING PLAN

Dell comprehensively uses information and communication technologies and the

Internet in its direct business model,map out its business competencies including itsstrength 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:

y System Lock-InThe ability of an organisation to get new customers, retain the existing ones and

increase the customer loyalty to the firm.

y 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.

y 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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Segmentation

Current Segmentation

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 lessfrequently 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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http://amrjournal.blogspot.com/2008/07/dells-e-marketing-strategies-to-enhance.htmlEach Segments is assigned with a team of internal representative sales which deals

with the particular segments requirements and needs to fulfil their expectations notonly that but also formulate and develop marketing programmes to target the

appropriate sub-segments. Moreover, Dell also employs account managers to manageall Relationship customer accounts.

In 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 Dell Premier Pages that are specific to the

customer account. The Premier Pages enables the customers 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 customers purchasing system via electronic

data interchange (EDI). [Dell, 1999, Pg. 98, 147 148]


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2

Dell uses telesales teams and its E-commerce website (www.dell.com.my) to target

Transactional segment customers. Dells online approach to target this segment is viamass marketing. Transactional segment customers are also encouraged to call in using

toll-free numbers at normal working hours.

Hence, Dells product and pricing strategies are formulated to support the abovesegmentation and targeting strategies. Product and service offerings are varied and

also priced differently between Relationship (where higher volume exists) and

Transactional segment customers. Online 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.

Recommended Segmentation

Targeting

Current TargetingRecommended Targeting

Differentiation

Current Differentiation

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 (PCs) and notebooks,

namelyOptiplex, Dimension PCs, along with Latitude and Inspironnotebooks. The Optiplex and Latitude product lines have a longer product

roadmap lifecycle, thus more stable and helps meet corporate customers asset

stability and depreciation lifecycles. In contrast, the Dimension and Inspiron

product lines have shorter product roadmap lifecycles, thus experience more frequent

2http://amrjournal.blogspot.com/2008/07/dells-e-marketing-strategies-to-

enhance.html


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new technology updates and introductions.

Further product differentiation at customer level is possible through Choice Boardsavailable 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. ChoiceBoardsenables mass customization. [Slywotzky, 2000, Pg. 60]

Recommendeddifferentiation

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 pricingstrategyPositioning

CurrentPositioning

Dell positions itself as engaging the customers directly without traditional sales

channel intermediaries. Dell develops direct relationships with the customer in order

to:

y Establish the most efficient path to the customery Become a single point of accountabilityy Develop build-to-order efficienciesy Become a low cost leadery Offer standards-based technologies

RecommendedPositioning

Strategies

Distribution Strategy

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


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cybermediary.

Since Dells 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. Figure2.2 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 buyers needs, negotiating pricing and process transactions; and


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facilitating functions such as market research. Logistical functions are outsourced.

In the upstream portion of Dells 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 channelsupporting traditional telesales and field sales activities.

E-marketing Communication Strategy

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

strategy are:

y e-Mailsy 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)

y e-Loyalty programmes e.g. e-Couponsy Internet advertising e.g. banner ads, keyword search, sponsorshipsy Links to online independent product reviews and technology e-magazines

(http://www.dell.com.my/) website landing pages, information search and shopping

experience

y Official Dell Blog Site (http://www.direct2dell.com/)y website for customers to contribute ideas and suggestions

(http://www.ideastorm.com/)

y Voice of the Customer e-mails Such as electronic word-of-mouthendorsements

Relationship Management Strategy

Dell also utilizes information and communication technologies to support itsrelationship management strategy. Both customer relationship management (CRM)

and partner or supplier relationship management (PRM) software and processes are inplace and practiced.

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

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

matters.


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Objectives

CONCLUSION

REFERENCES

Dell, Michael, with Catherine Fredman. (1999).Direct from Dell: Strategies that

Revolutionized an Industry. New York: Harper Business

Holzner, Steven. (2006).How Dell Does It: Using Speed and Innovation to Achieve

Extraordinary Results . New York: McGraw-Hill

Kirkpatrick, David. (October 28, 2002). Can anyone compete against Dell?


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Fortune, Vol.146 No 7, pg.42 48

Magretta, Joan. (March April 1998). The Power of Virtual Integration: AnInterview with Dell Computers Michael Dell.Harvard Business Review (Reprint

98208), pg.72 84

Park, Andrew, with Peter Burrows. (November 3, 2003). What you dont knowabout Dell.BusinessWeek(Asian Edition), pg.56 64

Porter, Michael E. (1985). Competitive Advantage: Creating and Sustaining Superior

Performance. New York: Free Press

Saunders, Rebecca. (2000). Business the Dell Way: 10 Secrets of the Worlds Best

Computer Business. Oxford: Capstone Publishing Ltd.

Serwer, Andy. (March 7, 2005). The Education of Michael Dell. Fortune, Vol.151

No.4, pg.50 56

Sloan School of Management. OpenCourseWare: Strategic Management I, Fall 2005.Dell University

Slywotzky, Adrian J. & David J. Morrison, with Karl Weber. (2000). How Digital is

your Business? New York: Crown Business

Strauss, Judy; El-Ansary, Adel & Frost, Raymond. (2006). E-Marketing. (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 yourCompany. 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, Oxford, UK.

Magretta, J., 1998. The power of virtual integration:an interview with Dell

Computers Michael Dell. Harvard Business Review, March April, 7384

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

York.


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APPENDIX

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


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GROUP TASK REPORT

Group Members:

Baraka Charles Rupia (TP017356)Lisham Mohamed (TP019121)Ojo (TP012707)Kimia Masoudi (TP017476)

No. Task/ Description / Responsibility Name &

S

ignature

1 Introductionand Strategyidentification Ojo

2 Environmentanalysis Lisham

3 E-marketingplan Baraka C Rupia

4 ImplementationofE-marketingplan & conclusion Kimia

Documents

Work on Deck PART 1