Case Study of Dell: Primary Target Markets and Positioning Strategy

Primary Target Markets & Positioning Strategy of Dell

Business activities of Dell are organized in each region incorporating different customer segments. Which includes the following include:

  1. Large corporate (Relationship) customers.
  2. Home and small business (Transaction) customers.
  3. Public sector (government and educational) customers.

Dell segments its customers into Relationship, Transaction, and Public/International customers. Dell’s segmentation of customers helps it respond to changes in demand among different customers, to develop new customer segments. Relationship customers are Fortune 1000 companies. They currently number about 50 companies, including Boeing, Exxon, Ford, Goldman Sachs, MCI, Microsoft, Mobil, Oracle, Procter &Gamble, Sears, Shell Oil, Toyota, and Wal-Mart.

Transaction customers, which represent 30% of U.S. sales, are small and medium-sized enterprises (about 20%) and Individual Customers and consumers (about 10%). Transaction customers are served by several thousand inside sales representatives who can call up historical sales records to assist the customers in choosing systems that match their prior purchase pattern.

The basic strategies in Dell’s marketing communications are:

Simplify technology for customers

Making quality personal computers, servers, storage, and services affordable is Dell’s legacy. They are focused on making information technology affordable for millions of customers around the world. As a result of direct relationships with customers. They are best positioned to simplify how customers implement and maintain information technology and deliver hardware, services, and software solutions tailored for their businesses and homes.

Customer’s choice and custom-tailored services

Dell’s systems & services can be accessed easily by customer via telephone and purchase from website www.dell.com, where they may review, configure, and price systems within entire product line. Although the focus of Dell’s business strategy has been selling directly to its customers, it also uses some indirect sales channels when there is a business need. Dell began offering Dimension desktop computers and Inspiron notebook computers in retail stores in the Americas and announced partnerships with retailers in the U.K., Japan, and China. Dell first steps in retail strategy, which will allow extending business model and reaching customers that have not been able to reach directly.

Dell’s business base has been built on direct sales, build-to-order strategy for producing and selling PCs. Dell offered competitive prices, high levels of support, and a focus on selling and supporting PCs without the distraction of offering a number of hardware and services. Dell has made the most of the inherent advantages of its business model to grow rapidly and profitably. A key advantage of direct sales and build-to-order production is that expensive inventory does not build up in the channel and lose value before it can be sold.

Advantages of Direct sales

Dell’s inventory turnover rate of 60 times per year compares to 12-15 times for most indirect vendor Perhaps most important are the benefits that Dell gains from the direct customer relationship. Flexible, build-to-order manufacturing process enabled us to turn over inventory every five days on average, thereby reducing inventory levels, and rapidly bring the latest technology to customers. The market and competition has evolved, and now exploring the utilization of original design manufacturers and new distribution strategies to better meet customer needs and reduce product cycle times

Unlike indirect vendors whose channel partners generally refuse to reveal even who the final customer is, Dell knows who the end user is, what equipment it has bought from Dell, where it was shipped, and how much the customer has spent with Dell. Dell uses that information to offer add-on products and services, to coordinate maintenance and technical support, and to help the customer plan its PC replacement and upgrade cycle.

Environment Friendly

They built environmental consideration into every stage of the Dell product life cycle — from developing and designing energy-efficient products, to reducing the footprint of manufacturing and operations, to customer use and product recovery.

Source: Scribd.com

Bookmark the permalink.