Introduction Customer relationship management (CRM) has attracted the expanded attention of practitioners and scholars.

More and more companies are adopting customer-centric strategies, programs, tools, and technology for efficient and effective customer relationship management. They are realizing the need for in-depth and integrated customer knowledge in order to build close cooperative and partnering relationships with their customers. The emergence of new channels and technologies is significantly altering how companies interface with their customers, a development bringing about a greater degree of integration between marketing, sales, and customer service functions in organizations. For practitioners, CRM represents an enterprise approach to developing full-knowledge about customer behaviour and preferences and to developing programs and strategies that encourage customers to continually enhance their business relationship with the company. Marketing scholars are studying the nature and scope of CRM and are developing conceptualizations regarding the value and process of cooperative and collaborative relationships between buyers and sellers. Many scholars with interests in several subdisciplines of marketing, such as channels, services marketing, business-to-business marketing, advertising, and so forth, are actively engaged in studying and exploring the conceptual foundations of managing relationships with customers. They are interested in strategies and processes for customer classification and selectivity; one-to one relationships with individual customers; key account management and customer business development processes; frequency marketing, loyalty programs, cross-selling and up-selling opportunities; and various forms of partnering with customers including co-branding, joint-marketing, codevelopment, and other forms of strategic alliances. Customer Relationship Management (CRM) In the marketing literature the terms customer relationship management and relationship marketing are used interchangeably. As Nevin (1995) points out, these terms have been used to reflect a variety of themes and perspectives. Some of these themes offer a narrow functional marketing perspective while others offer a perspective that is broad and somewhat paradigmatic in approach and orientation. A narrow perspective of customer relationship management is database marketing emphasizing the promotional aspects of marketing linked to database efforts. Another narrow, yet relevant, viewpoint is to consider CRM only as seeking customer retention by using a variety of after marketing tactics that lead to customer bonding or staying in touch with the customer after a sale is made. A more popular approach with the recent application of information technology is to focus on individual or one-to-one relationships with customers that integrate database knowledge with a long term customer retention and growth strategy. Thus, Shani and Chalasani (1992) have defined relationship marketing as an integrated effort to identify, maintain, and build up a network with individual consumers and to continuously strengthen the network for the mutual benefit of both sides, through

interactive, individualized and value added contacts over a long period of time. Jackson (1985) applies the individual account concept in industrial markets to suggest CRM to mean, Marketing oriented toward strong, lasting relationships with individual accounts. The core theme of all CRM and relationship marketing perspectives is its focus on a cooperative and collaborative relationship between the firm and its customers, and/or other marketing actors. Dwyer, Schurr, and Oh (1987) have characterized such cooperative relationships as being interdependent and long-term orientated rather than being concerned with short-term discrete transactions. The long-term orientation is often emphasized because it is believed that marketing actors will not engage in opportunistic behaviour if they have a long-term orientation and that such relationships will be anchored in mutual gains and cooperation. Another important facet of CRM is customer selectivity. As several research studies have shown, not all customers are equally profitable for an individual company. The company therefore must be selective in tailoring its program and marketing efforts by segmenting and selecting appropriate customers for individual marketing programs. In some cases, the outsourcing of some customers could be called for so that a company allocates its resources to those customers it can serve the best in order to create mutual value. However, the objective of a company is not really to prune its customer base but to identify the programs and methods that would be the most profitable as it creates value for the firm and the customer. Hence, definition of CRM is that Customer Relationship Management is a comprehensive strategy and process of acquiring, retaining, and partnering with selective customers to create superior value for the company and the customer. It involves the integration of marketing, sales, customer service, and the supply-chain functions of the organization to achieve greater efficiencies and effectiveness in delivering customer value. As is implicit in the above definition, the purpose of CRM is to improve marketing productivity. Marketing productivity is achieved by increasing marketing efficiency and by enhancing marketing effectiveness. In CRM, marketing efficiency is achieved because cooperative and collaborative processes help in reducing transaction costs and overall development costs for the company. Two important processes of CRM include proactive customer business development and building partnering relationships with the most important customers. These lead to superior mutual value creation.

I N T R O D U C T I O N OF DELL Michael Dell established Dell Computer Corporation in 1984 in Austin, TX with the capital of $1,000, during the time he was Attending University of Texas. He had a vision that he could do great things by upgrading PCs and sell them. In 1983, his father asked him what he wanted to do with his life; Michaels answer was I want to compete with IBM! Eventhough his father was not amused; he made his choice and started his own business with all his heart. While upgrading and selling PCs, he found out that traditional manufacturer-retailer chain is not as productive as it should be. Therefore he started to think of finding ways to sell to the end users directly. By doing so, decreasing the costs on the supply chain and more important servicing the customer with those saved dollars would be a great solution in order to increase customer satisfaction and loyalty. He was right to do what he believed in as an entrepreneur and now he has a reputable company not only in terms of the sales but also building great customer relationships. We, direct marketers, are in an environment, which changes so quickly and only way to survive is keeping track with customers preferences and trying every possible method to build strong, long-term relationship with customers in order to increase customer satisfaction, customer loyalty and customer profitability in cost effective way. In Dell Corporation, success is coming from proper research, positioning and the most important segmentation. Successful segmentation work gives Dell an opportunity to adjust its approach to each customer in each segment to build and improve customer relationships. That is customer relationship management and that is competitive advantage of Dell Computers. That is not an inside out company but outside in. Since what he is doing is a perfect example of direct marketing, I have enjoyed making research and preparing this project. I would like to give you detailed information of Dells success in the view of Customer Relationship Management and Direct Marketing. What is happening in PC Market Place? (1) According to the PC World Magazine (April 2003 issue), here is the latest sales status in PC market place for 2003.

DELL COMPUTERS The Company was founded in 1984 by Michael Dell on a simple concept: by selling personal computer systems directly to customers, the Company could best understand their needs, and efficiently provide the most effective computing solutions to meet those needs. Dell Corporation is based in Austin, TX. They have 40,000 regular employees (Approximately 27,000 in the U.S., and approximately 13,000 in other countries) Currently Corporate customers make up about 80% of Dells business. Dells direct relationship marketing eliminate 25% to 45% dealer mark-up Description of Business. Dell Computer Corporation designs, develops, manufactures, markets, services and supports a wide range of computer systems, including desktop computer systems, notebook computers

and enterprise systems (includes servers, workstations and storage products), and also markets software, peripherals and service and support programs. The Company is managed on a geographic basis. The three geographic segments are the Americas, Europe, and AsiaPacific and Japan. Dell Computer Corporation Organization.

Segmentation and Dell Computers Segmentation is the backbone of the Dell Computers operations. Based on segmentation, company takes its positioning and modifies its offerings for each segments customers. Michael Dell says, An Important element of virtual integration with customers is segmentation. The finer the segmentation, the better able Dell is to forecast what customers are going to need and when. Then coordination of flow of strategic information comes to stage all the way back to suppliers, effectively substituting information for inventory Dell's Market Segmentation

Results of Dell Operations

Factors Affecting Dells Business and Prospects That is important to stress factors which affect Dell computers business and its prospects, based on the Dell 2002 annual report. Here are the factors: General economic and business conditions The level of demand for Dells products and services Terrorism or public health issues on the economy generally On the level of demand for Dells products and services, and on Dells ability to manage its supply and delivery logistics in such an environment The level and intensity of competition in the technology industry and the pricing pressures Component availability and cost The ability of Dell to develop new products based on new or evolving technology and the markets acceptance of those products The ability of Dell to manage its inventory levels to minimize excess inventory, declining inventory values Dells ability to effectively manage its operating costs TIMELINE 1984 - With $1,000 in startup capital, Michael Dell registers his business as Dell Computer Corporate. The company becomes the first in the industry to sell custom-build computers directly to end-users, bypassing the dominant system of using computer resellers to sell mass-produced computers. 1986 - The company also pioneers the industrys first thirty-day money back guarantee, which becomes the cornerstone of Dells commitment to expand its service offerings and offer superior customer satisfaction and offers the industrys first onsite service program. 1987-Dell establishes its first international subsidiary in the

UK. 1990-Dell started to sell computers through consumer retail stores such as CompUSA and Best Buy. The company later exits this segment after determining the retail-store model did not meet its financial objectives. 1994-Dell launches its Dell Japan and Dell Asia/Pacific operations. 1996-Dell launches www.dell.com, starts selling custom-built computers online and introduces its custom-made web links for customers called premier pages 1998-Dell opens an integrated sales, manufacturing and support center in China. 1999-Sales over www.dell.com tops 35$ million per day. 2003-Dell ships out 6 million units over HP with 5 million units 2003-40,000 regular employees. Approximately 27,000 in the U.S., and approximately 13,000 in other countries

Business Strategy The Companys business strategy is based on its direct business model. The Companys business model seeks to deliver a superior customer experience through direct, comprehensive customer relationships, cooperative research and development with technology partners, computer systems custom-built to customer specifications and service and support programs tailored to customer needs Dell Direct Model. The direct model is based on the principle that delivering custom-built computer systems is the best business model for providing solutions that are truly relevant to end-user needs. This concept, together with the Companys flexible, build-to-order manufacturing process, enables the Company to achieve faster inventory turnover and reduced inventory levels and allows the Company to rapidly incorporate new technologies and components into its product offerings. In the same way that the Companys computer products are built-toorder, service and support programs are designed to fit specific customer requirements. The Company offers a broad range of service and support programs through its own technical personnel and its direct management of specialized service suppliers. These services range from online support to onsite customer-dedicated systems engineers. Dell is the first company, which starts the direct selling model to end users in computer market place. Following benefits give great competitive advantage to Dell Corporation: Eliminates the need to support an extensive network of wholesale and retail dealers Avoiding dealer mark-ups Avoids the higher inventory costs associated with the wholesale/ retail channel and the competition for retail shelf space

 Reduces the high risk of obsolescence associated with products in a rapidly changing technological market Allows the Company to maintain, monitor and update a customer database that can be used to shape future product offerings and post-sale service and support programs. The Company develops and utilizes direct customer relationships to understand endusers needs and to deliver high quality computer products and services tailored to meet those needs. For large corporate and institutional customers, the Company works with the customer prior to the sale to plan a strategy to meet that customers current and future technology needs. After the sale, the Company continues the direct relationship by establishing account teams, consisting of sales, customer service and technical personnel, dedicated to the Companys large corporate and institutional customers. The Company also establishes direct relationships with small-to-medium businesses and individuals through account representatives, telephone sales representatives or Internet contact. These direct customer relationships provide the Company with a constant flow of information about its customers plans and requirements and enable the Company to weigh its customers needs against emerging technologies.

Chart of Dell Direct Model

DELL GOES ONLINE- DELL.COM. In late July 1996, Dell began conducting business through its Internet site. Almost immediately Dell began selling $1 million per week through Web. Once customers logged onto the site and configured the system that best suited their needs, they had the option of purchasing the system using a credit card. After ordering the system, the customer could use dell.com to track the orders status from the time it was entered in the system, through to the manufacturing process, and then to shipping. Once shipped, dell.com was linked to shipping partners who assigned the system an air bill number that racked delivery of the system. In addition to the purchase functionality, the site contained complete service and support data, with 35,000 pages of troubleshooting information-the same information used by the Dells technical representatives to solve hardware and software problems over the phone.

DELLs CRM Strategy Customer relationship management is a vital concept for Dell Corporation. Dells CRM strategy is established according to the following steps: Make segmentation. Identify customers. Segmentation on the basis of detailed data helped Dell build closer relationships with the customers. Listen their customers to make sure what they need and when they need & responding them. Learn from customers as much as possible (Michael Dell spends 40% of his time with domestic and international customers) Before building any product, they knew what the customer wanted and were able to deliver exactly that. To make this model successful it was important that the entire sales force is trained to understand the customer requirements and convey it to the production department. Customer support after sales over the phone and the internet According CRM strategy of DELL, each member of DELL is a student who is responsible of learning from the customer. DELLs CRM Strategic Objectives Dell Corporation is intending to make the most of every single touch point with the customers in order to build and expand the relationships with customers. Here are the CRM objectives of DELL: Better customer loyalty Greater customer satisfaction Higher-sales and marketing performance Improved marketing efficiency Stronger brand consistency Improved customer profitability More cost-effective customer service. Direct Model & CRM Dell Computers has started its unique direct selling model in PC market place. They cut the cost by eliminating the retail stores and spend those saved dollars on customer service and other after sale services in order to build great relationships with customers. Here are some highlights for direct model and CRM at Dell: Being able to contact with the customer directly so that can understand better they customer needs. Reducing the cost to reach the customer by eliminating middlemen Using saved dollars on customer service to increase customer satisfaction and customer loyalty. Building computers based on customers needs. Engaging with customer on each touch point as productive & efficient as possible. Capturing as much information as possible.

POINTS TO NOTE Dell has a different way to provide computers in market place, in terms of the channels and quality of contact moments. That gives a great advantage Dell reducing its costs by using direct marketing methods. Therefore they can give build better customer relationships by using saved dollars from regular distribution channel. Dell has to keep contacting with customers to determine any change on customers purchasing behavior and preferences. Dell has to keep an eye on rivals such as HP and IBM against any competitive move. Dells CRM strategy based on direct model is the best way to capture information about customers and analyze it. DATA IS THE KING in any CRM system as long as you know how to use it. High level of sales is the greatest indicator of success on CRM strategy along with customer loyalty and satisfaction.

CONCLUSION CRM-SCM integration strives to satisfy and promptly deliver products to customers, ensuring availability of the product and maintaining profitability of the manufacturer. There are many lessons learned from Dells experience. These lessons can be transferred to other companies in the industry. Ensure better customer service is offered. Dell has become an industry leader in service and reliability. Dell has used CRM to its advantage. This has instilled trust into their customers. By custom-building a computer that the customer desires, this has created a very strong relationship with the customers. Implement technology in a phased fashion Dell tested key tasks in each of its regions prior to deployment. It set-up mock environments to develop, test, and support the i2 systems in patches without disrupting the live version. Dell was able to bring on one piece of the i2 system at a time. As one part became more efficient, then Dell added other components in stages. Dell ensured that each stage of the process performed will and allowed for future growth before rolling out the entire system. This minimized the risk, while at the same time increasing efficiency. Extend the connection from the customer to the supplier Dell was able to extend its build-to-order model from suppliers to the customer while continuing to maximize operational efficiency and customer satisfaction. Customers were able to save money while being able to purchase a customized machine because Dell passed on the savings, which resulted from efficient inventory management, no excess inventory or inventory shortages. It was able to share, in real-time, information with suppliers about customer demands and buying patterns.