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XAVIER INSTITUTE OF SOCIAL SERVICE

DR.CAMIL BULCKE PATH, RANCHI

Session-2019-21

INTERNAL ASSIGNMENT PROJECT FOR MARKETING MANAGEMENT (MM) –

FINANCE 1 (2019-2021)

ON

MARKETING PLAN OF DELL

Submitted in partial fulfillment of the Post Graduate Diploma in Management

(FINANCE)

BY

ROSHNI KATARUKA

Roll No- 53

UNDER THE GUIDANCE OF PROF.PRASHANT KUMAR JHA

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DELL COMPUTER CORPORATTION

Dell Computer Corporation is a major manufacturer of personal computers, computer peripherals, and software.
Among the leading producers of computers in the world, Dell sells its products directly to customers through
the Internet and mail-order catalogs rather than through retail outlets. The company is based in Round Rock,
Texas. At Dell Computers, customers are brought into the product planning and manufacturing processes, with
all employees encouraged having contact with customers. Through effective collaboration across boundaries,
ideas can be shared about product designs and value propositions. The result is faster and more customer-
focused product and service innovation. To produce the capacity for this, considerable attention must be placed
on organizational structures, processes, skills and culture. Such elements may need a radical overhaul in
established companies (Dennis & Harris, 2002). Dell was founded in 1984 by Michael Dell. In 1983, during his
freshman year at the University of Texas, he bought excess inventory of RAM chips and disk drives for IBM
personal computers from local dealers. He resold the components through newspaper advertisements at prices
far below retail cost. By 1984, his sales totaled about $80,000 a month. In April 1984, Dell dropped out of
school to launch his company (Ford, Honeycutt, & Simintiras, 2003)

The new company soon began manufacturing its own IBM-compatible computers under the name PCs Limited.
Because Dell sold computers directly to users through advertisements in magazines and catalogs, the company
could price its machines lower than those sold through retail stores. Sales reached nearly $6 million during the
company’s first year, climbing to $34 million the following year. By 1987, Dell was the leading mail-order
computer company in the United States. In that year, it created a sales force to target large
corporations and began adding international offices to capture the direct-mail market outside the United
States (Ford, Honeycutt, & Simintiras, 2003). While the company continued to grow rapidly; Dell experienced a
series of setbacks that hurt profits. In 1990, the company began selling computers through retail stores, an effort
it abandoned in 1994. In 1991, Dell launched a line of notebook computers, but quality problems and
inadequate production planning forced the company to stop selling for a year. In 1994, Dell launched a new line
of notebook computers and expanded efforts to increase overseas sales. Dell also began focusing on the market
for servers, which used the computers to run local area networks. By the late 1990s, Dell was firmly in place as
the world’s number one direct seller of computers. More than 50 percent of the company’s computer sales
transactions took place via its website, which generated worldwide sales in excess of $40 million a day (Ford,
Honeycutt, & Simintiras, 2003).

From unconventional PC start-up to global technology leader, the common thread in Dell’s heritage is an
unwavering commitment to the customer. As a leading technology company, Dell has a fantastic long-market
term growth strategy and focuses with a single-minded purpose on customers. It was one of the first laptop
companies to offer mass customization in its laptops.

Dell’s mission statement is “To be the most successful computer company in the world at delivering the
best customer experience in markets we serve.” It is a straight forward but hard to achieve target as nowadays
people are more concern about services and convince. Dell introduces online purchase system and delivery
service which enable people to shop easier. And with the help of E-Connect, Dell’s customers can ask for
support online.
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Management Overview
The management concepts of Dell are “improve efficiency, increase IT productivity and reduce costs”.

Dell creates the comprehensive systems management solutions with open standards and incorporated with
industry-leading partners. By following the solutions, Dell can protect its investment in the skills of its IT staffs
and the recent systems management framework, while the superior systems management abilities of Dellâ„¢
servers, storage and networking is still being a benefit to Dell.

The combination approach to enterprise-wide systems management provides Dell efficiencies that help ensure
its IT services are available when the business needs them, including reduce IT complexity which means
maximize the effectiveness for staffs and resources of IT, hence reduce the system downtime. Besides, this can
avoid vendor lock-in which is the Integrate key management solutions from Dell and the systems management
partners, including BMC Software, Microsoft and Symantec.

Mission Statement
The target of Dell is to build a corporation culture for better awareness towards the environment because of the
values of environmental conservation, the efficiency of eliminating waste which follows the values of the direct
business model and is more effective to deliver the value of customers.

Dell’s goal is to be a careful attendant of the environment and to execute programs and processes to ensure the
operations and products are environmentally friendly. Other than that, Dell is also trying to make the
neighboring environment in society better for the people who work and to generate strategic partnerships with
organizations evenly dedicated to environmental objectives.

Marketing Mix of DELL

Dell is one of the leading Consumer durables brand. The marketing mix of dell talks about the way in which
dell has improvised to gain a competitive position.

Product:
Dell believes that, ‘Marketing is not about providing products or services it is essentially about providing
changing benefits to the changing needs and demands of the customer’. Dell provides a wide variety of both
business class and home/consumer class products and services. Dell designs, develops, manufactures, markets,
sells, and supports a wide range of products that in many cases are customized to individual customer
requirements. A few examples of products for individual and professional customers are Dell Precision
workstations, OptiPlex desktops, Dimension desktops, and Inspiring and Latitude notebooks.

Price:
Pricing strategies usually change as the product passes through its life cycle, because there is constrains on the
company’s freedom to price a product at different stage. The main objective of Dell is to produce the low price
and profitable PC for the customers. For the above reason Dell’s product pricing reflects the affordability of the
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local consumers. Because Dell products are so customizable, the price is largely dependent on the options and
services added to the product.Dell is undercutting competitors in price to rapidly gain market share.

Place:
Place is also known as channel, distribution, or intermediary. It is the mechanism through which goods and/or
services are moved from the manufacturer / service provider to the user or consumer.

Dell has been able to affect the location strategy aspect of its marketing campaign.

As Dell’s products are always available at the nearest dealer’s 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.

Promotion:
Another one of the 4 P’s is promotion. This includes all the tools available to the marketer for ‘marketing
communication’. Dell in the past have not concentrated on extensive marketing campaigns but these
revolutionaries in 1999 when Dell changed its tactics by engaging in extensive marketing campaigns.Dell
markets its products primarily by advertising on television and the Internet, advertising in a variety of print
media, and mailing or emailing a broad range of direct marketing publications, such as promotional materials,
catalogs, and customer newsletters. Dell has recently started promoting its products through retailers like Best
Buy, Staples, Wal-Mart, GOME, and Carrefour.

SWOT Analysis
SWOT analysis is to help marketers to analyze the strengths, weaknesses, opportunities, and threats of a
company. By understanding the SWOT of competitors, marketers can help to generate a better marketing plan
for leading the company to fight for market share in a more effective way. The below analysis is about the two
main competitors for Dell, which are HP ad Acer.

Strengths

 Dell employed over 76 million of workers which means that Dell has strong manpower.
 Dell has low manufacturing cost and nine manufacturing plants.
 Dell provides non-rest customer service which running 24 hours for 7 days a week
 Dell built its product based on, customers provide specifications which leads to higher customers’
satisfaction.
 Dell is the first company which establish product-recycling goal in information technology industry.

Weaknesses
 Dell declared the turndown of its manufacturing plant in Limerick, Ireland on 8 January 2009 with the
loss of 1900 workers.
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 Dell is weak at attracting the students in schools and colleges, this segment of market is only get 5% of
the total revenue of Dell.
 Dell is facing many criticisms against its claim of world most secured laptops.
 The dependency of Dell towards its suppliers is high which means that Dell’s activities will be limited
by its suppliers.

Opportunity
 The main opportunity is the reduction in cost of the latest technology.
 The new partnership and acquiring of suppliers are also a crucial opportunity for Dell.
 Dell has got the opportunity to directly sell its products to retailers and customers which can greatly
decrease the products’ price level.

Threats
 The main threat is the fluctuation of currency outside of US.
 Dell is marketing its products globally, there are many major competitors in the market.
 As the global financial recession took place earlier, Dell’s revenue will most likely be reduced by the
effect of it.
 Dell’s products will be obsolete easily as the change rate of technology is extremely fast, which means
that Dell will need to put in more investment into the research and development departments and will
lead to higher product cost.

Sector Trends

The trends of the computer sector can be analysis by using PESTLE analysis which consists of political,
economic, sociological, technological, legal, and environmental.

Political

One of DELL’s major intimidations is involving the fourth element of the external environment, the political or
legal environment. The Chinese government likes to promote national PC vendors as compare to foreign
companies and there are a lot of formalities involved in securing government contracts, which shows that local
firms and companies in China is more preferable by the China government. Another threat of Dell is that the
internet usage is being controlled by the China government which means the growth of internet is being limited.

Economic
The economic environment is the nature and economy direction in which a firm competes or may compete. The
problem of software piracy is the main threat that computer companies suffer in China. China has a lot of
economic opportunities as it has the highest population amount, but the shortage of skilled labor is making
China to suffer. DELL is aware that cheaper system is more preferable in China.
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Sociological

The social and cultural sector is follow closely with a society’s attitudes and cultural values. Dell has the
opportunities to expand into a new market as the potential of internet growth in China is tremendous. At the
same time, due to the huge expense of computer, China people are still unsure about card sales. Therefore,
DELL has to offer door-to-door or face-to-face operations in order to increase consumers’ trust and consumers’
belief in the company and product.

Technological
The technological sector consists of the agencies and activities which related with inventing new technology
into products, materials and processes. The main direction of technology nowadays is everything become
smaller and faster. Institution has proven a key government resource by providing access to technologies
developed. By the year 2000, it was observed that the annual PC production in mainland China would reach 7.6
million, making it the third largest in the world. With the help of internet, companies have a great opportunity to
get their name into the public area plus a fast way to custom services to its customer segments. However, the
high cost of using internet in China has become a threat to Dell in the technology sector.

Legal
Dell was fined $4 million for fake and misleading advertising about PCs sold to consumers in New York. While
in New Orleans, there are two companies which claim Dell is selling a surveillance camera system by
conspiring with city officials. This shows that Dell is being interrupted by the legality of their actions in
different countries.

SEGMENTATION, TARGETING, POSITIONING ANALYSIS

DELL segments its offerings based on Psychographics & Demographics factors. It targets tech savvy people,
Professionals & Executives. Moreover it makes customer engagement channel strong in order to stand ahead of
other companies.

A strong connect with customers as well as serviceability are the winning factors in the hardware & software
industry and that is what dell is working on. Dell’s strategy is global. It realizes that being geographically closer
to the customer is essential in carrying out its marketing strategies as well as in enabling it to build customer
base.

Dell positions itself based on User & benefit based positioning strategies in order to differentiate itself from the
other players in the market.

Tagline-“The Power to do more”.

COMPETITIVE ADVANTAGE
Dell has its manufacturing units in emerging markets like China, India, Ireland etc. apart from the developed
economies in the world. The major competitive advantage that the Dell is its serviceability i.e. prompt response,
better customer service and the value delivery channel.
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One of the sources of Dell’s initial competitive advantage can be attributed to its famous direct selling and
build-to-order approach. This just-in-time (JIT) strategy allowed it to operate with the lowest inventory level in
the industry. Dell works on customer driven strategies by collaborating with customers to find ways to make
technology work for them.

BCG MATRIX
Most of Dell products are stars because of the heavy competition in the technology segment. Personal
computers segment of DELL is a star. Due to the high acceptance of Smartphones, people are shifting to
smartphones because they find it portable & handy. But still, many tech savvy people love Dell’s unique
offerings like Alien ware as well as XPS series.

Enterprise solution of DELL are stars as they work on “Build to Order” strategy to cater the vast B2B market.

Recently it ventured out in smartphone market but still is unable to make its presence felt and it stands as
question mark in BCG matrix.
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DISTRIBUTION STRATEGY
DELL works on build to order business model and uses Just in time strategy to distribute its products at optimal
prices there by decreasing the inventory cost and delivery time. Dell also has its own dedicated retail stores. But
the major sale is driven through modern retailers as well as Ecommerce.

Dell is one company where the direct orders to its home site are also fantastic. This is because Dell offers you to
build up your laptop with the specifications that you want, thereby giving you a customized laptop.

In order to support its hardware business it has DELL solution centers to provide support services 24/7 to its
customers.

BRAND EQUITY
DELL saw a meteoric rise in year 2013 , going from fifth place to second in terms of Brand equity. Despite
being the third-most popular brand — with 12.8 percent market share, according to Gartner (2013) report,
DELL relies on customer trust to build evolving brand image. Customers rely on Dell to deliver technology
solutions that help them do and achieve more, whether they’re at home, work, school or anywhere in their
world.

COMPETITIVE ANALYSIS
DELL is facing tough competition from other players like Lenovo, Hewlett Packard as well as from assemblers
and Chinese manufacturers & price wars is also affecting their market share. Smartphones are the major threat
to the PC market which is affecting the industry as a whole. Selection of suppliers is the major factor that
affects company’s profitability in the IT hardware industry while software industry is driven by the
serviceability.

The market is highly competitive with many branded as well as unbranded players in the market, keeping the
company on its toes. The advantage of Dell is its set distribution channel with some strong players. Internal
market is ripe with competition with many brands trying innovation and differentiation. In the external market
front, the sale of smartphones is restricting the sale of laptops a lot.

CUSTOMER ANALYSIS
Customers of DELL are the tech Savvy youngsters as well as professionals who use DELL products to make
their life easier. DELL has different SKU’s for different customers, each of them holding its own advantage.
For example – the premium customers have Alien ware and XPS at their disposal. Under enterprise solution
business vertical it targets companies with customized solutions.
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PRODUCT LIFECYCLE:
INTRODUCTION STAGE: Dell introduced laptops on 1984. They introduced smaller design laptops and the
battery and overall quality enhanced within reasonable price. These laptops was introduced by announcing and
promoting the product by Dell with numerous advertisements.

GROWTH STAGE: Dell laptops started to increase their sales by about 150% from introduction stage. People
started to be aware about the product, proven by the increment of sales. The early adapters for development of
dell laptops can be marketing team who promoted to buy the product to the customers, since they are the one
who made people to recognize the presence of the product.

TODAY’S SCENARIO :
The dell laptops are currently in growth stage because as technology is changing they are developing new
laptops with latest technology.

PRICING STRATEGY:
Pricing is depending on the product life cycle. As different products come in market everyday so there is limit
for company to stick with one price. Dell offer customer to low price and profitable PC. For this reason dell,
attract local customer to product price. Because dell product price is largely depend on option and service as
product are customize. Dell is aging its market share price.

MEDIA PLANNING:
Media planning is a tool the company use for marketing communication. Previously, Dell did not concentrate
on marketing but after revolution in 1999 dell change its marketing strategy. Dell markets its product using
internet, catalogues, mailing and customer newsletters. Dell has recently started promoting using different
retails shop such as Wal-Mart, Best buy and Staples. Dell advertising is straightforward there is no hidden
charge. Dell has recently started social media and blogging to direct contact with customer query by using
wikis, twitter etc.

BRANDING:
‘A name, term, sign, symbol or design, or a combination of these , intended to identify the goods or services of
one seller or group of seller and to differentiate them from those of competitors(Kotler P, 2002). ‘

Dell uses several brand names for its different product ranges:

 Optiplex for office desktop computer

 Dimension for consumer desktop computer
 Studio for student computer
 Inspiron for consumer laptop
 Latitude for commercially focused laptop.
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ADVERTISING:
Dell advertise its goods and service using internet, direct marketing publications such as newsletter and leaflet.
They also put their kiosks in different shopping centres to allow customer to view product and purchase online.
They are also using blog side for communication as http://www.direct2dell.com/blogsite. In addition,
http://www.dell.com/ website gives the information about search and shopping. For customer to contribute ideas
and suggestion they using http://www.ideastorm.com/.Dell has recently started promoting its products through
retailers like Best Buy, Staples, Wal-Mart, GOME, and Carrefour.

Value Chain Analysis

The pattern of Dell value chain management has been extensively imitated by other companies, including
companies outside of consumer technology industry due to its evident contribution to the success of the

company.

Inbound logistics. Dell works with more than 165,000 channel partners in inbound logistics and provides USD
125 million partner incentives and investments annually. The company utilizes Just-in-Time (JIT) philosophy in
dealing with inbound logistics. Thanks to this strategy, Dell is able to save on huge inventory costs and sustain
cost leadership for the majority of its products and services. Customer orders are registered by Dell and its
vendors simultaneously by an integrated system. Then, materials are shipped by suppliers within 2 hours and
shortly received at Dell’s assembly unit due to geographical proximity.

Operations.

The main distinctive point between operations of Dell and its competitors relates to the fact that Dell is not a
computer manufacturer; the company merely assembles parts manufactured by other companies. At the same
time, high level of product customization is adapted as one of the bases of competitive advantage by the
business. Therefore, operations mainly consist of three stages – assembly of standard parts, installation of
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custom parts and testing product configurations.

Outbound logistics consists of five stages as marked in red color in Figure above. Thanks to the practice of
mass customization, Dell is able to complete order fulfillment in a short duration of time. Generally, Dell
completes customer shipments in a timely basis, staying committed to its promise of product customization as a
result of cumulative advantages of part modularity, inventory program managed by vendors, demand
management and mass customization.

Marketing and sales is acknowledged by Dell as a critically important primary activity and the company’s
marketing strategy has changed since the company became private in August 2013. Specifically, Dell marketing
management aims to associate the brand image with an entrepreneurial spirit by shifting attention to the fact that
the company is no longer publicly listed, hence the management is freed from the need to track stock prices on a
daily basis.

PORTERS FIVE FORCES MODEL

Dell is one of the major players in the PC industry and it has also felt the bite. Dell is known for its innovative
technology, excellent supply chain management and for its direct business model. However, it has continued to
lose market share. In 2017, its spotlight is on the customers. It has decided to become more customer oriented to
improve its sales and brand image.
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Most important thing about Dell is its direct business model where it has eliminated the middlemen and let the
customers have what they wanted and desired. It is an innovative company that is innovating continuously to
grow its customer base and to keep customers happy. Here is a Porter’s five forces analysis of Dell explaining
how various factors affect the competitive position of Dell in the market.

Threat of new entrants: Low

The threat of new entrants in the PC industry is low. It is because there are major barriers to entry in this
business. Apart from the huge capital investment, need for technological infrastructure and highly skilled
professionals also discourage anyone from entering this market. Moreover, being successful in the PC industry
also requires having a strong brand image. All these factors show that making an entry into the PC industry is
difficult.

Another important barrier to entry is that while the bigger players can manipulate prices to affect competition,
the new players would not be able to do so as efficiently. There is also a lot of investment in research and
development and that too discourages potential new entrants.

Bargaining power of buyers: Low to moderate

The bargaining power of buyers is weak to moderate which is because the number of large players with
established brand image is low. The customers are mainly either individuals or organizations. Customer loyalty
is high because customers would buy from a brand they consider reliable. Dell has focused on excellent
customer service and these factors together reduce the bargaining power of buyers. Brand image and brand
equity are important factors influencing the bargaining power of buyers and Dell is strong in both aspects.
However, the PC market has weakened recently and as such the PC makers like Dell have been forced to use
innovative tactics to retain their market share which gives the customers somewhat higher bargaining power.

Bargaining power of suppliers: Low

The bargaining power of suppliers in the PC industry is weak. It is mainly because the industry is populated
with suppliers whereas the number of brands to which they sell is small. So, it is the brands that are having
better bargaining power and can pressurize the suppliers regarding prices and service. Whatever bargaining
power a supplier might have is based on product quality and quality of services. Brands like Dell carry out
regular supplier audits to ensure that they are adhering to the quality and sustainability guidelines.

Threat of Substitutes: (Moderate)

During the last five years, the PC industry has faced a steady decline. Even the big brands like Dell and Apple
lost market share and profits. The reason is the rise of substitute products. Till some years ago while a laptop
meant many things including a machine for professionals, a gaming machine, and a box of entertainment; now
there are better options that provide the same features. Tablets and smartphones allow people to surf, play
games, listen music and watch online streaming videos

So, anybody who does not need a laptop for professional work can use either a tablet or a smart phone. Gaming
consoles have also hurt PC business. In this way, there are several substitutes which even if they cannot replace
the Personal computer in its entirety, provide similar features and service. The new I phone is designed to serve
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professional uses too. So, the threat which used to be low has grown moderate and can turn severe. It is because
even now people need PCs and laptops to carry out office work and for professional use.

Level of Industry Rivalry: High

The level of rivalry in the computer industry is high. The top players include HP, Lenovo, Dell, Asus, Apple
and Acer. HP and Lenovo are at the top with highest market share closely followed by Dell, Asus and Apple.
Due to the consistent decline in the computer industry during the last five years the focus has shifted to price
and product innovation to retain market share. All the brands are focusing on delivering innovative products
with features better than their competitors. Price, Portability, design, productivity and several more factors have
become increasingly important because of the growing threat from mobile computing.

In order to surpass their competitors, the industry leaders are focusing heavily on new designs with better
productivity features and increased portability. The competition between these top players is particularly high
because the loss of one can be the profit of the other. Hewlett Packard recently broke into two separate divisions
HP and HPE, so that each of them could focus specifically on its business area. For Dell, the competitive threat
is intense and product and process innovation are the only means to regain the lost market share.

MASLOW HIERARCHY NEEDS

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The customers selected are the end users with in the corporate segment. When dell entered the US PC market it
sensed an issue/problem of dissatisfaction among customers in term of product and service delivery of PCs and
related components. Dell successfully filled the gaps by going to the root cause of the issue/problem. The nature
of the issue shall be analyzed with different models. The five performance objectives of quality, speed,
dependability, flexibility and cost shall be judged in relation to their adding value to customers. In the end
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recommendations to improve the relationship with the end user as well with the corporate client shall be
illustrated.

Dell- Customer Focused and Market Oriented

Dell is a perfect metaphor for a company which has embraced the concept of market orientation. The edifice of
Dell was built on meeting customer needs by anticipating and satisfying them. Other organizations realized this
late during their operational years, while Dell was born out of the idea of marketing concept and market
orientation. Michael Dell started by realizing that there was a better way to sell computers. In the early 1980s
when the computer business was in its early growth stages, he realized the inefficiencies in the computer
distribution system. The traditional model was effective in distributing high volumes of PCs with multi
configurations to a broad base of large customers. But some of the inherent weaknesses made it vulnerable to
changing technological environment, increasing competition and rising demand levels which was closely linked
to time based selling. This model was heavily relying on forecasting to run the production. With the fast
changing market dynamics it was almost impossible to accurately forecast the demand due to shorter product
cycles. Sometimes there was a shortage of high selling products which were then ultimately sold by the
competition.

‘Blurring the gap’

Computer has become the ultimate consumer product. In times of rapidly expanding technology the product
replaces itself after every few years. So this makes marketing business very interesting. They recognized that
efficiency and effectiveness on one hand and service on the other is very important in delivering superior
customer value. Being so close to the customer establishes Dell a close partner wherein the responsibilities
towards satisfying customer needs increases manifolds. The entire direct model is central to customer need
identification and fulfillment. It is organized around serving the customer. Customer feels comfortable and at
ease while transacting and interfacing with Dell. Direct selling gives Dell ready information about customer
preferences and needs and provides immediate feedback on design and quality problems. Daily contact between
customers and the sales force help the company keep a tab on the market pulse which helps in detecting shifts in
market trends and getting prompt feedback on problems with the products. The problem is corrected in a matter
of few days. Their product strategy is focused on providing products that customer want to buy rather than
selling newer technologies that are interesting but does not add any value to real customer needs. Dell’s e-
commerce platform is central and fundamental to its efforts in mapping and delivering superior customer value.
It is one company which has embraced IT as a differentiator in servicing customer. It has tremendously helped
customer in doing business with Dell on a day to day basis.
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The customer issue as identified is ‘Dissatisfaction with Product & service delivery’. Having done the analysis
it is clear as to why Dell chose Direct Business model. Dell identified significant gaps in the market when it
comes to overall customer satisfaction and trust. By getting to the root of the problem Dell focused on building
one to one relationships with the end customer. This customer centric core philosophy was instrumental in
shaping the entire organizational structure wherein all the stakeholders right from customers to suppliers were
involved in generating value.

Dependability
The above issues are important in light of the total customer experience and forms the key drivers of value
delivered to the end users in the corporate segment.

Operations Delivery = Quality + Speed + Dependability + Flexibility + Cost

The assumption here is that all the above attributes are relative. A customer’s perception of a product or service
is always judged with that of the competitor’s offering.
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Quality – Quality is the most important aspect for any corporate customer. It binds together all other
performance objectives. Quality is nothing but conformance to customer’s specifications on a consistent level.
Dell suppliers have to go through a rigorous quality management procedure. Good suppliers help built good
relationships with the customers.

Speed– Speed to market is what has catapulted Dell to become one of the top three in the business. Speed
means the time spent in fulfilling the needs of customers. It’s the time between customer order and delivery.
The faster a customer receives a product the happier he will be and more benefits in terms of timely usage it
shall receive. This system delivers immense value to Dell’s corporate customers. Its JIT (just-in-time) inventory
system greatly emphasizes this important aspect in operational efficiency. Dell produces goods exactly when
they are needed i.e. deliveries are made on request.
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Direct relationship with the customers means reduction in inventories and faster response time. It helps in
reduction of costs at all levels thereby passing those costs as benefits to the end customer.

Dependability – Direct to customer adds greater emphasis on timely deliveries. Dell with its e-commerce model
and online sales management helps in accurate order receiving and processing. Then through automated system
logistics companies are informed of the pending shipment. Simultaneously customer is also informed at the
same time. Customer through PremierDell.com can easily track the movement of the material. Normally orders
are shipped within seven days of receiving them.
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Flexibility – Flexibility means changing the operations in some or the other way. Flexibility is core to the
business philosophy of Dell. By offering a wide range of products over the internet through PremierDell.com a
corporate end user can configure the products of his choice with his range of specifications. It offers mass
customization features to the end users. PremierDell.com is specially tailored for the end users within the
corporate segment. It’s also a one to one customer relationship management tool forging loyalties with the
company. It is a password protected web page that allows users to order, track and monitor their customized
orders. End users can easily access the relevant information whenever they want it and wherever they want it
without having to send faxes, compose emails or made phone calls. An end user can log in to his organization’s
premier page and shop for notebooks, desktops, servers, storage devices and related components. He can view
past purchases, contracted prices, pre approved computer accessories etc. for his own department and easily find
contact information for Dell customer service representatives. Customers can standardize their PCs and related
equipments and that customization with 3-4 combinations of components is displayed on the site which enables
the end user to make quick purchasing decisions. It offers them a direct control over their environment. Dell
has so developed the system that it can launch a Premier site within two days. Better communication, lower cost
of purchase, no confusion & uncertainty, high confidence and better service are some of the customer values
being met by Dell with PremierDell.com

Cost – Direct business model is a perfect metaphor for cost reduction. Reaching direct to customers by
eliminating links pertaining to ‘distributor’ and ‘reseller/retailer’, which are key components of a traditional
business model not only helps in increasing and sustaining supply chain efficiencies but also helps in reduction
of costs which are ultimately passed on to consumers. Its direct contact with the customers helps in getting real
time information which accelerates its forecasting capabilities way ahead of competitors.

In short Dell’s direct model supported by its high product quality, Just-in-time inventory practices for speedy
customer reach and response, on time deliveries enhancing dependability of its operations and flexibility ensure
cost savings not only for Dell but also for its corporate customer
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SERVICE:Pre and post sales customer support can be specified as one of the solid bases of Dell’s
competitive advantage. It has been noted that Dell’s employees “take 50,000 phone calls from customers every
day and document and organize their comments, which are then distributed to managers”[3]. Also, there are
4300 Dell certified partners globally who assist with Dell solutions and services to customers.

Value Chain –
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Dell has so designed its business model that it incorporates and interlinks all the primary and support activities
in delivering customer value. It’s a customer centric organization and all the key components of the model;
suppliers, customers and employees work in tandem to generate value at all levels and thus strive to deliver
exactly what a customer really need. Therefore Value Chain at Dell encompasses all the activities that are
generating a distinct competitive advantage to the company.

Customer Delivered Value –

Customer’s delivered value has two components-

Total customer value = product value+ services value+ personnel value+ Image value

Total customer cost = Monetary cost+ time cost+ psychic costs+ energy costs

Customer delivered value (Profit to a customer) =

Total Customer Value - Total Customer Cost

By minimizing total customer costs Dell is creating more value to its customers as compared to its competitors.

RECOMMENDATIONS:
Dell has to open their physical shop in emerging country like India, Brazil and China because still customers are
not aware of e-commerce and the latest marketing trends.

Now a day’s HP follows new marketing strategy such as they stop asking shipping charges on computes
products so Dell has to follow the same strategy to compete in the e-market.

 Dell should introduce some high quality and performance laptops with limited edition to eye catch high
profile customers as Apple is doing currently in Market.
 Dell should offer to governments and private sectors to sell computers in very cheaper prices as it will
attract middle class customers to buy their own from Dell because in day-to-day life they will interact
with those computers. For Dell it will be a free advertisement.
 Dell should focus on computer accessories market where HP is doing product diversification.
 Dell should look into promotional activities with an innovative approach as other ecommerce shops are
providing to online customers.

The demand of online selling Notebooks for dell is increasing effectively however the supply is diminishing and
there is a long waiting time for customers to deliver, which makes customer dissatisfied.
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CONCLUSION:
Dell is the best hardware manufacturer company in the world in the terms of profits after HP because of their
founder Michael Dell. By using his unique marketing strategy, Dell makes his space in between Microsoft,
Intel, Acer and Hewlett Packard. As like there competitor HP, Dell also have to expand in that market. By using
the external market, Dell will make more profits and opportunity.Therefore, Dell has to diversify its product and
service to different sectors. It becomes clear that Dell is a pioneer in creating long lasting value to its customers
which helps in generating loyalty. By using e-commerce as the medium Dell has successfully retained its
corporate customers. In the preceding pages we have outlined the thinking that enables Dell to successfully
orient its offerings to the market. By Root cause analysis the reasons for customer dissatisfaction were
illustrated. Five performance objectives of the organization were evaluated in relation to Dell’s delivery of
customer value. Their effectiveness were measured by using tools such as Importance – Performance matrix,
Gap Analysis and Value Chain. And it was found that Dell is optimally performing at all levels. It has closed all
the gaps in existence between itself and the customer. It is a true metaphor for ‘Value Chain’ depicting intra-
organization coordination in delivering superior customers

Product – Providing innovative customer solutions

Price - Keeping costs down at the customer end

Place – Making the entire purchasing and interaction more convenient via internet

Promotion – Continuous touch with the customer thus maintaining flawless communicationerior customer
value. Dell has mastered the below four Ps of Marketing Mix-