Dell is a technology company, offering a broad range of product categories, including desktop computer systems, storage, servers and networking products, mobility products, software and peripherals and services to manage IT infrastructure for large organisations. Dell are the number one supplier of personal computer systems in the United States, and the number two supplier worldwide. Dell proposition The main Dell product offerings are: 1 Desktop PCs. Five lines of desktop computer systems are produced for different markets. For example, the OptiPlex line is designed to help business, government, and institutional customers manage their total cost of ownership by offering stability, security, and managed product transitions; the Dimension line is designed for small businesses and home users requiring the latest features for their productivity and entertainment needs. The XPSTM and Alienware lines are targeted at customers who require the highestperformance gaming or entertainment experience available. In July 2007, Dell introduced the VostroTM line, which is designed to provide technology and services to suit the specific needs of small businesses. 2 Servers and networking. The PowerEdgeTM line of servers is designed to offer customers afford able performance, reliability, and scalability. Again different options are available for different markets including highperformance rack, blade, and tower servers for enterprise customers and lowerpriced tower servers for small organisations, networks, and remote offices. 3 Storage. For example, storage area networks, networkattached storage, directattached storage, disk and tape backup systems, and removable disk backup. 4 Mobility. Notebook computers are targeted at customers who require the highestperformance gaming or entertainment experience available. 5 Software and peripherals. Office software and hardware including printers, televisions, notebook accessories, networking and wireless products, digital cameras, power adapters, scanners, and other products. 6 Enhanced services. Tailored solutions that help customers lower the cost of their services environment and maximise system performance, efficiency, and return on investment. These include: Infrastructure Consulting Services; Deployment Services to install and integrate new systems; Asset Recovery and Recycling Services; Training Services; Enterprise Support Services and Managed Life Cycle Services (outsourced IT management). 7 Financial services for business and consumer customers in the US through a joint venture between Dell and CIT Group, Inc. Dell business strategy Dells vision is to: strive to provide the best possible customer experience by offering superior value; high-quality, relevant technology; customized systems; superior service and support; and differentiated products and services that are easy to buy and use. The core elements of the strategy which are evident in Dells marketing communications are: We simplify information technology for customers. Making quality personal computers, servers, storage, and services affordable is Dells legacy. We are focused on making information technology afford able for millions of customers around the world. As a result of our direct relationships with customers, or customer intimacy, we 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. We offer customers choice. Customers can purchase systems and services from Dell via telephone, kiosks, and our website, www.dell.com, where they may review, configure, and price systems within our entire product line; order systems online; and track orders from manufacturing through shipping. We have recently launched a retail initiative and plan to expand that initiative by adding new distribution channels to reach additional consumers and small businesses through retail partners and valueadded resellers globally. Customers can purchase custom-built products and custom-tailored services. Historically our flexible, buildtoorder manufacturing process enabled us to turn over inventory every five days on average, thereby reducing inventory levels, and rapidly bring the latest technology to our customers. The market and our competition has evolved, and we are now exploring the utilization of original design manufacturers and new distribution strategies to better meet customer needs and reduce product cycle times. Our goal is to introduce the latest relevant technology more quickly and to rapidly pass on component cost savings to a broader set of our customers worldwide. We are committed to being environmentally responsible in all areas of our business. We have built environmental consideration into every stage of the Dell product life cycle from developing and designing energyefficient products, to reducing the footprint of our manufacturing and operations, to customer use and product recovery. Dells sales and marketing Dell sells products and services directly to customers through dedicated sales representatives, telephone based sales, and online at www.dell.com. Customer segments include large corporate, government, healthcare, and education accounts, as well as smalltomedium businesses and individual consumers. Dell stresses the importance of its direct business model in providing direct and continuous feedback from customers, thereby allowing them to develop and refine their products and marketing programs for specific customer groups. In its SEC filing Dell emphasises how it listens to customers to develop relevant innovative technology and services they trust and value. Evidence for using the participative nature of Web 2.0 is that customers can offer suggestions for current and future Dell products, services, and operations on an interactive portion of the Dell website called Dell IdeaStorm. It says: This constant flow of communication, which is unique to our direct business model, also allows us to rapidly gauge customer satisfaction and target new or existing products. For large business and institutional customers, Dell maintains a field sales force throughout the world. Dedicated account teams, which include fieldbased system engineers and consultants, form longterm relationships to provide their largest customers with a single source of assistance and develop specific tailored solutions for these customers. Dell also maintains specific sales and marketing programmes targeted at federal, state, and local governmental agencies as well as specific healthcare and educational markets. Dell Premier For its large organisational customers, Dell offers Premier (http://premier.dell.com) which is a secure, customisable procurement and support site or extranet designed to save organisations time and money through all phases of IT product ownership. The main benefits of Dell Premier are described as: Easy Ordering A custom online store ensures access to your products at your price. Easy Tracking View realtime order status, online invoices and purchase history details. Easy Control Custom access groups define what users can see and do within Premier. Marketing communications Dell markets its products and services to smalltomedium businesses and consumers primarily by advertising on television and the Internet, advertising in a variety of print media, and by mailing a broad range of direct marketing publications, such as promotional pieces, catalogues, and customer newsletters. In certain locations, they also operate Dell stores or kiosks, typically located within shopping centres, that allow customers to view their products in person and purchase online with the assistance of a Dell expert. Dell online communications The management of the consumer site was presented to Econsultancy (2008). Dell has a threestage order funnel: Marketing communications execution measured by site visits Site merchandising measured by consideration % (site visits to estore visits) Store merchandising measured by conversion % (estore visits to ereceipts). The presenter explained how Dell aims to understand and act on customer behaviour based on identification of a series of consideration drivers, for example, the quality of online advertising; path quality through site; merchandising/offers and conversion drivers, for example, configurator ease of use; accessibility of decision support tools and consistency of message through entire path. Dell will invest in strategic improvements to the site to improve these levers; examples mentioned included new merchandising approaches such as customer ratings and reviews, videos, major path or customer journey changes created through decision support tools to help me choose. There are also more tactical initiatives to help deliver the right message to each customer including customisation/personalisation, real estate optimisation and message balancing. More tactical persuasion of site visitors is based on price moves/optimised price position to market and the mix of product features. A wide range of different offers need to be managed. Tactical promotions are driven by promotional end dates which are weekly or biweekly and include varying: Free shipping Money off discounts Free upgrades (e.g. memory) Free accessories Finance offers Service upgrades. The presenter also noted how across Europe, the pro motional mix has to vary to reflect the differences in buying psychology. He summarises the main differences between customers as follows: UK all about price CH add value over price DE all about highend products in mix IT design is important (!) DK cheap is good NO added value is key FR tailored for France. Dells use of digital media channels The main digital media channels used by Dell.com in Europe are: Paid search through programmes such as Google AdWords is used to promote value through time limited offers related to the phrase searched upon. Display advertising for example advertising on technology websites is particularly important for the corporate market. Affiliate marketing used to protect the Dell brand by enabling affiliates to bid on terms such as Dell lap tops and to target niche audiences such as owners of gaming machines. Email marketing an enewsletter is used to keep in touch with existing customers and deliver targeted offers when their hardware may be renewed. Dell and indirect channels Although the focus of Dells business strategy has been selling directly to its customers, it also uses some indirect sales channels when there is a business need. In the US it sells products indirectly through thirdparty solution providers, system integrators, and thirdparty resellers. During financial year 2008, Dell began offering Dimension desktop computers and Inspiron note book computers in retail stores in the Americas and announced partnerships with retailers in the UK, Japan, and China. Dell says: These actions represent the first steps in our retail strategy, which will allow us to extend our business model and reach customers that we have not been able to reach directly. Source: Security Exchange Commission filing 10K for Dell, 2007. Tutorial Questions - Debate in classes 100 to 200 word 1. Describe approaches used by Dell within their site design and promotion to deliver relevant offers for different types of online customers.