The Report On Marketing Strategy For Dell Marketing Essay

Successful companies under today’s competition have one thing in common: they attach a great importance to their consumers’ perspective and needs, and they are putting a lot energy and money into marketing. They encourage every employee in their organization to construct long-term relation of loyalty through providing consumers with services or products of high quality at a reasonable price (Coughlin & Louis, 2001). When Dell Inc. is concerned with this respect, it has done a pioneering job in marketing by selling its products through telephone or via internet. However, with the changing marketing and competition environment, it is of great significance of the company to make adjustment in the following fields: marketing segmentation, marketing communications tools as well as distribution channels.

Under the circumstances of buyer’s market and fierce competitions between companies, marketing plays an indispensible role for promoting sales and, as the result, an enterprise’s competitive competence. And when it refers to modern marketing, it is not just confined in developing a good product, pricing it attractively, and making it available to target customers (Thomas & Reed, 2002). In terms of the computer market, it has also witnessed unprecedented competition among rivalries. Here in this report, the case of Dell Company is discussed under the guidance of relevant marketing theories and concepts. It primarily includes the following parts: firstly, this report starts with the introduction of the concept and theory of marketing segmentation, and five marketing segmentation approaches, which include geographic, age and life-cycle, gender, and behavioral and income segmentation, are recommended for Dell; secondly, five communications tools, consisting of personal selling, sales promotion, advertising, public relation, direct marketing, are suggested for Dell to promote its sales under the guidance of the theory of marketing communications mix and its content ; lastly, as the company has made collaboration with some retailers, such as Sam’s Club and Wal-Mart stores, to sell its personal computers, the evaluation of this strategy is made in terms of both advantages and disadvantages.

2. Marketing segmentation of Dell

Markets are composed of different consumers, and they differ from each other in one or more aspects, such as purchasing attitudes, consumption practices, resources, desires and locations. Therefore, it is of great necessity to divide the computer market into smaller ones to match the unique demands of different customers by marketing segmentation.

2.1 The concept and theory of market segmentation

Market segmentation refers to partitioning a special market into distinct units with varied demands, features, or behavior which might need separate products or marketing mixes (Stanley, 1992). And when it comes to methods which are used to segment a particular market, there is more than one way. A marketer can try varied segmentation variables, alone an also in combination, to search for the best approach to view the market structure (Kotler, 2002). The primary components which might be made use of during the process of making marketing segmentation are geographic, demographic, psychographic, behavioral and income variables. And here in the case of the company of Dell, five marketing segmentation approaches would be recommended.

2.2 Five marketing segmentation approaches for Dell

Considering the reality of computer market and the successful approaches taken by Dell in market segmentation, geographic, demographic, psychographic, behavioral and income segmentation are illustrated.

geographic segmentation

When the market is divided into different geographical units such as regions, nations, counties, states, cities or neighborhoods, this method is called geographical segmentation (Stanley, 1992). One enterprise might determine to run its business within one or a few special regions or to carry out its business all over the country and even the world but would undoubtedly notice the geographical variances in terms of consumer demands. In case of Dell, it has become a global company with its products sold around every corner of the world. However, due to geographical differences, it is of great significance to segment the global computer market geographically. Up to now, the company has segmented the global market into three parts: the Americas, Europe/Middle East/Africa and Asia Pacific/Japan. However, with the development of some emerging and potential market, for instance, China, it would be better to segment the market into smaller ones.

Age and life-cycle segmentation

Age and life-cycle segmentation refers to dividing a market into different ages and life-cycle groups (McCarthy, 1960)). The rationality of segmenting market on the basis of age lies in that people’s demands and wants change with age. Therefore, it makes sense for Dell to provide different products or taking advantage of varied marketing tools for varied age and life-cycle groups. For instance, when advertising its products by adverting on TV or via Internet, the theme of advertisements to teenagers and young people should be full of adventures, fashions, beat-up music and fast-paced cutting from scene to scene, and the content for adults could be more mature, softer.

Gender segmentation

In terms of gender segmentation, it indicates to divide a market into different groups due to differences in gender (Kotler, 2002). Traditionally, the method of gender segmentation has long been applied in cosmetics, clothing, and magazines and so on. However, as the expansion of Dell’s business in Asia and other regions, it should take gender variable into consideration. This is because of the increased social status and financial independence of Asian women in recent years. And the gender segmentation can be reflected by designing the appearance of PCs differently.

behavioral segmentation

When it comes to behavioral segmentation, it refers to segmenting a market into groups based on customers’ knowledge, use, attitude, or response to a product (Gatignon, 1993). In terms of this market segmentation approach, Dell has really done a great job by providing a wide range of service or products from desktop to notebook computer, form hardware products to software. To make best use of behavioral segmentation method, the company may, on the basis of use for different people, develop computer for business people, student, or home use.

income segmentation

When marketers divide a market into income groups, this is income segmentation (Doyle, 1994). In tradition, computer marketers target on affluent consumers as computer once was considered as luxury. However, with the popularity of computers, it is of great significance to focus on customers of low-income. This is especially true when Dell run its business in developing countries, such as China, India and African countries. Therefore, when Dell starts business in the developing areas, it is of great necessity of pay attention to develop low-end products.

3. Recommendations for Dell in marketing communications

Here in this part, Communication mix is emphatically discussed. The communication is comprised of direct marketing, advertising, personal selling, promotion and public relations. Communication mix is mainly used to promote the new products. It is an effective method to attract consumers and increase the selling (Gatignon, 1993).

3.1 Personal selling

Personal selling is the interpersonal arm of the promotion mix (Kotler, 2002). Different from the non-personal and one-way communication approach of advertising, personal selling makes salespeople and consumers communicate each other directly by phones, through web conferences or video or other methods. However, when it comes to different types of companies, personal selling can have quite different roles. In terms of the computer company Dell, final consumers can rarely meet salesperson. This is because Dell interacts with its consumers through its Websites or by telephone. Therefore, in terms of utilizing this marketing tool, Dell set a good example for its competitors.

3.2 Sales promotion

Sales promotion refers to activities or performances taken by companies in a short term to stimulate the purchase or sale of the product or service using varieties of formats such as premiums, coupons, contests, etc (Brick, 1982). Through a serial of activities or performances, it can promote people to purchase more. And sales promotion is targeted at final buyers, wholesalers and retailers, other business customers and members of the sales force (Schall, 1983). It can be effective especially for introducing new products or services. Therefore, considering benefits brought by promotion, Dell should take advantage of this marketing tool especially when the company sells new products.

3.3 Advertising

It is any paid form of no personal presentation and promotion of ideas, goods or services by an identified sponsor. It is a widely-used means of publicity. The major media types for advertising are: newspapers, television, magazines, radio, internet and so on (Rao, 1993). Advertisements help to draw the public’s attention and make people aware of this product. As a result, it undoubtedly could promote sales of Dell. However, it is also kind of double-edged sword as advertisements can be very money-consuming. What is more, advertisements may mislead consumers if they are not properly designed or contain any exaggerated information. Therefore, when choosing advertisements as it means for promotion, Dell must be very careful to select an advertising company and be clear the messages and the image that it wants to convey to it current and perspective customers.

3.4 Public relation

Public relations mean establishing good relations with the publics by earning a good reputation, shaping a favorable image and dealing with the company’s rumors and events (Doyle, 1994). It mainly contains keeping good relations with the firm’s different social groups by getting favorable publicity and setting up a healthy and good corporate image in public and at the same time, tackling or heading off stories, rumors, and events which damage its reputation. As a result, consumers get a good impression with this kind of firms and, therefore trust and purchase products manufactured by them. From the perspective of enterprises’ social obligations, especially in modern times, companies can be condemned and eventually be abandoned by consumers if they fail to perform their social responsibilities. Therefore, today, it is not whether firms should build good relations with the public, but how to construct it in a better and more impressive way.

3.5 Direct marketing

It refers to direct contacts with carefully targeted individual customers in order to acquire a reply in time as well as cultivate permanent consumer relationship, for example, using telephone, mail, fax, e-mail, the Internet, and other tools to communicate directly with specific consumers (Kotler, 2002). Direct marketing is very useful helps companies obtain the first hand information directly from consumers. And companies can give an immediate reply to their customers if there are any questions. Through this way, customers obtain a sense of being respected and cared by firms and, therefore, consumers can be loyal to this kind of companies. However, there are also negative effects brought by direct marketing. Firstly, it undoubtedly costs a lot of money, time and human resources. Secondly, companies may not draw any useful conclusions for decision-makers at all if information is processed in a scientific way. Therefore, to make full use of direct marketing, firms must make sufficient preparations.

4. The evaluation of Dell’s cooperation with retailers in PCs distribution

In the filed of marketing, marketing channel is very important in many aspects (Coughlin & Louis, 2001). In recent years, in order to defeat its competitors including Hewlett-Packard, Gateway and Acer in the sales of personal computer and other equipment, Dell determined to cooperate with world’s largest retailer Wal-Mart. This plan is carried out in more 3500 Wal-Mart and Sam’s Club stores in the USA, Puerto Rico and Canada. And the models of Dell computer, including the necessary accessories, in Wal-Mart is sold at the price of no more than $700. As far as this strategy is concerned, it could bring the company both benefits as well as risks.

(1) The advantages of Dell’s alliance with retailers in PCs distribution

As it is known to us that Wal-Mart the largest retailer in the world, therefore, the company is world famous and it has a wide contact with consumers from rich people to the poor. As the result, Dell’s cooperation with the biggest supermarket would make its products exposed to consumers completely, which would stimulate the sales of Dell. Secondly, considering Wal-Mart’s proposition value of “Always Low Price, Always”, Dell sells its product at a price of less than $700. This is perfectly coincided with the value of Wal-Mart and would undoubtedly be helpful to sell its low-end products to consumers of low income. In addition, Dell revolutionized its industry by selling personal computers directly to it consumers instead of through retail stores (). However, today, it changed its strategy partially for surviving in the fierce competition. And this flexible adjustment could promote the sales its low-end products by increasing its distribution channels.

(2) The disadvantage of Dell’s cooperation with retailers in PCs distribution

The biggest challenge for Dell’s setting distribution channels with retailers is that the company cannot readily replace distribution channels with enterprise-owned Web sites or stores when the external or internal circumstance changes. This is because cooperation with retailers involves negotiation, compromise as well time lag in feedback, which costs time. And in the business world, time determines the promptness in reaction to the market and, undoubtedly, it competitive capabilities. Besides, selling its products through a supermarket like Wal-Mart would not helpful for Dell to get the direct information from the consumers. This can result in incorrect decisions from top managers and, as the result, in disadvantaged positions in competition with its rivalries.

5. Conclusion

As one of the largest computer producers in the world, Dell Inc. has made progress in the field with a unique style and has done a revolutionized job in marketing by selling its products directly to customers rather than through retailers. Because of the unique approach in marketing, the company has made big profit. However, as the market become much more fierce than ever before and its competitors becomes more competitive, it is of great significance for company to adopt creative marketing approaches, for instance new marketing segmentation methods and marketing communications mix. Besides, it also makes sense to make adjustment in distribution channel.

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