adpeople aea winner case
TRANSCRIPT
A BUSINESS CASE ON DELL AND ADPEOPLE
ADVERTISING AGENCY: ADPEOPLEADVERTISER: DELL COMPUTER CORPORATION EMEA
Case:
A Business Case on Dell and AdPeople – A new perspective on effectiveness
AdPeople
A BUSINESS CASE ON DELL AND ADPEOPLE
ADVERTISING AGENCY: ADPEOPLEADVERTISER: DELL COMPUTER CORPORATION EMEA
Case:
A Business Case on Dell and AdPeople – A new perspective on effectiveness
AdPeople
A BUSINESS CASE ON DELL AND ADPEOPLE
ADVERTISING AGENCY: ADPEOPLEADVERTISER: DELL COMPUTER CORPORATION EMEA
Case:
A Business Case on Dell and AdPeople – A new perspective on effectiveness
AdPeople
Per Henrik Lings Allé 4
2100 Copenhagen, Denmark
+45 3344 5100
adpeople.com
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A BUSINESS CASE ON DELL AND ADPEOPLE
1. Executive summary .................................................... Page 01
2. Introduction ................................................................. Page 02
3. The effective marketing function? ............................... Page 03
4. PC market in the UK .................................................... Page 04
5. Dell ............................................................................... Page 05
6. AdPeople’s answers to Dell’s challenges ...................... Page 09
7. Results ......................................................................... Page 14
8. Summary ..................................................................... Page 17
9. The future .................................................................... Page 18
10. BrandShareTM ................................................................ Page 19
1 1 . Contact information ..................................................... Page 20
index page
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A BUSINESS CASE ON DELL AND ADPEOPLE
1. Executive summary
For Dell, AdPeople developed the tool DellShare™,
which provides Dell with the technological platform
for the introduction of ‘Lean’ processes and improving
organisation of the marketing function.
This has led to the following key results:
Internally:
• Reducing overall agency costs over 5 years by 50%.
81 morf seicnega fo rebmun eht gnicudeR •
to 2 at European level.
• Reducing ‘time to market’ by 60%.
tnemeganam gnitekram fo rebmun eht devlaH •
employees on Dell’s European business.
Externally:
rieht devorpmi evah lleD ,sraey evfi tsap eht gniruD •
market share in the European market by significant
yearly growth rates in a very competitive market.
hcihw tekram eht no dnarb ylno eht egral dna yb si lleD •
performs well in all product categories – both in the
private and business markets.
The basis for Dell’s great success in the PC market is to
a large degree due to their business relationship with
AdPeople on creative development of relevant and
integrated communication as well as development and
implementation of the DellShare™ marketing portal.
The cooperation between Dell and AdPeople has made
Dell Marketing in Europe a “Lean marketing machine”.
A marketing organisation based on the recognition that
‘effectiveness’ must be seen in a greater perspective,
where both internal processes and external results are
optimized to achieve ‘Marketing efficiency’ and thereby
the best possible ROI.
The purpose of this case is to put into perspective the
concept of effectiveness within the marketing function.
The case describes how Dell and AdPeople have
developed an effective marketing function. A function
which has produced continuous effective gains in market
communication, in the marketing organisation, in the
cooperation with partners and in the optimization of
marketing processes.
The case will demonstrate that the marketing function,
in close cooperation with the agency, can deliver effective
results in relation to business opportunities and problems.
With the improvement in AdPeople’s ‘marketing
efficiency’, the relationship with Dell has developed over
the past 6-7 years. The relationship began in 1999 with
ad hoc tasks in the Nordic markets and has expanded to
AdPeople now having responsibility for all of Dell’s DM
communication in Europe.
The cooperation with Dell has been a learning curve
– starting in ‘the good old fashioned way’ with chaos,
lack of vision and work duplication, to today being an
optimized marketing process.
In 2005, the extent of cooperation covered:
• + 20 Pan European DM campaigns
• + 840 million tactical activities
• + 15,000 unique ad pages
• + 6,000 unique emails
• + 40,000 unique banners
To manage tasks of this magnitude requires that systems
and management tools are developed and in place for Dell
to build a uniformed and streamlined marketing process.
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A BUSINESS CASE ON DELL AND ADPEOPLE
A business case on Dell & AdPeople – A new perspective on effectiveness
more specific and describes the business working
relationship between Dell and AdPeople – a relationship
which has solved many of the challenges, which both now
and in the future are needed for an effective
marketing function.
In order to provide a background on the results which
Dell have achieved working with AdPeople in the past six
years, an insight is given into: The PC market in Europe,
Dell’s business model and improved market standing
as well as AdPeople’s fulfilment of and role in Dell’s
challenges in Europe. Finally the case looks at the
results achieved.
The purpose of this case is to put into perspective the
concept of effectiveness in the marketing function. An
effectiveness suitable both for the market orientated
marketing activities and optimization of the internal
processes in connection with marketing.
The perspectivising aspects are illustrated via AdPeople’s
business relationship with Dell Computers Europe from
the early start in 1999 up to today’s extensive and
integrated cooperation.
The case begins with the debate on the marketing
function and its challenges. Thereafter, the case becomes
denfinoc si dna nwohs eb tonnac lleD tuoba atad sisylana cfiiceps yna ecneh dna evitcirtser si ytilaitnedfinoc ssenisub no ycilop s’lleD :etoN
to other references or main conclusions. In cases where market data is shown in non-indexed format, such information comes either
from generic or publicly available sources.
2. Introduction
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A BUSINESS CASE ON DELL AND ADPEOPLE
The above mentioned market conditions are some of
the demands and terms which producers must take into
account in today’s PC market environment.
Customer buying behaviour and IT infrastructure
Another decisive factor lies within the changes in buying
behaviour. In today’s lifestyle, the PC is to a large extent
considered a generic benefit, which becomes more
accessible to people. This is both the case within the
private market of PCs as well as within the business
market. Only a few years ago, buying a PC was more of
an investment in a long lasting commodity than today’s
experience, when the purchase bears more characteristics
of ‘impulse buying’ based on a good deal.
At the same time, the IT infrastructure is developing
increasingly faster across Europe. Broadband, mobility,
new applications etc. are available to most people across
the whole of Europe.
End users demand the latest technology to manage the
constantly increasing opportunities and solutions which
the PC offers in their daily activities – both when it comes
to simple and advanced user situations.
Producers under pressure
The above factors tell us about a market which is under
constant development and where suppliers are squeezed
to produce their best in order to enjoy a ‘raison d’etre’ in
the market.
To be able to achieve the optimum, the producers will
need a strategy and a very effective business model,
which can adjust to new market trends instantly.
The crucial market conditions referred to above mean
that PC suppliers must have very effective production
facilities ensuring low costs, a market model (for their
product range) which can be speedily adapted to meet
new market demands as well as optimized processes
and tools, which ensure that these are communicated
effectively in the market.
All in all a ‘Lean mean machine’ is required throughout
the entire value chain, if a producer is to be a successful
player in the PC market in Europe.
An intense competitive market
The market for PCs in Europe is characterised by intense
competition - a competition which, over the years, has
become more and more focused on price.
In the market, there are both established PC suppliers like
HP, Fujitsu Siemens, Toshiba and others as well as new
aggressive suppliers entering the market such as Acer,
Asus and Lenovo. In addition, there are powerful local/
regional PC suppliers within individual markets in Europe.
All suppliers use, on the whole, the same component
technology and this means that this parameter cannot be
used as a differentiating element in the competition. On
the other hand, this very much enables the potential PC
buyer to compare specifications and thereby let the price
element decide
choice of PC.
Large scale production benefits and retailer mergers
Pricing is squeezed further by the new aggressive players
with low cost production in the Far East, selling their PCs
close to production cost in order to ‘buy’ market share.
This causes pressure on profit margins. The ensuing
effects are that it becomes essential that large scale
production benefits be brought about, but this requires
constant added volume of products to be sold in the
market.
At the same time retail mergers take place, whereby retail
chains become bigger and bigger. This enables the chains
to squeeze price even further in their powerful position
when negotiating pricing with producers.
Frequent changes in technology
New technology replaces old technology at greater
frequency and puts demand on producers to always
include the latest technology in their product range.
This requires that management control of products and
production are always optimized in relation to supply and
demand. Stock control and stock inventory levels become,
therefore, a critical factor in the changing situation.
3. The effective marketing function?
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A BUSINESS CASE ON DELL AND ADPEOPLE
Customer buying behaviour and IT infrastructure
Another decisive factor lies within the changes in buying
behaviour. In today’s lifestyle, the PC is to a large extent
considered a generic benefit, which becomes more
accessible to people. This is both the case within the
private market of PCs as well as within the business
market. Only a few years ago, buying a PC was more
of an investment in a long lasting commodity than
today’s experience, when the purchase bears more
characteristics of ‘impulse buying’ based on a good deal.
At the same time, the IT infrastructure is developing
increasingly faster across Europe. Broadband, mobility,
new applications etc. are available to most people across
the whole of Europe.
End users demand the latest technology to manage the
constantly increasing opportunities and solutions which
the PC offers in their daily activities – both when it comes
to simple and advanced user situations.
Producers under pressure
The above factors tell us about a market which is under
constant development and where suppliers are squeezed
to produce their best in order to enjoy a ‘raison d’etre’ in
the market.
To be able to achieve the optimum, the producers will
need a strategy and a very effective business model,
which can adjust to new market trends instantly.
The crucial market conditions referred to above mean
that PC suppliers must have very effective production
facilities ensuring low costs, a market model (for their
product range) which can be speedily adapted to meet
new market demands as well as optimized processes
and tools, which ensure that these are communicated
effectively in the market.
All in all a ‘Lean mean machine’ is required throughout
the entire value chain, if a producer is to be a successful
player in the PC market in Europe.
An intense competitive market
The market for PCs in Europe is characterised by intense
competition - a competition which, over the years, has
become more and more focused on price.
In the market, there are both established PC suppliers like
HP, Fujitsu Siemens, Toshiba and others as well as new
aggressive suppliers entering the market such as Acer,
Asus and Lenovo. In addition, there are powerful local/
regional PC suppliers within individual markets in Europe.
All suppliers use, on the whole, the same component
technology and this means that this parameter cannot be
used as a differentiating element in the competition. On
the other hand, this very much enables the potential PC
buyer to compare specifications and thereby let the price
element decide choice of PC.
Large scale production benefits and retailer mergers
Pricing is squeezed further by the new aggressive players
with low cost production in the Far East, selling their PCs
close to production cost in order to ‘buy’ market share.
This causes pressure on profit margins. The ensuing
effects are that it becomes essential that large scale
production benefits be brought about, but this requires
constant added volume of products to be sold in
the market.
At the same time retail mergers take place, whereby retail
chains become bigger and bigger. This enables the chains
to squeeze price even further in their powerful position
when negotiating pricing with producers.
Frequent changes in technology
New technology replaces old technology at greater
frequency and puts demand on producers to always
include the latest technology in their product range.
This requires that management control of products and
production are always optimized in relation to supply and
demand. Stock control and stock inventory levels become,
therefore, a critical factor in the changing situation.
The above mentioned market conditions are some of
the demands and terms which producers must take into
account in today’s PC market environment.
4. The PC market in Europe
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A BUSINESS CASE ON DELL AND ADPEOPLE
Dell’s background
Dell was established by Michael Dell in 1984, as a private
fi rm. Today Dell is ‘The no. 1 PC Manufacturer in the
World’ with more than 65,000 employees and a turnover
of 56 mia. USD (2006). The starting point for Dell was
the US market and they have since expanded to cover
markets throughout the world. Dell’s fi rst involvement in
Europe was in the UK in 1987 and today Dell now have
organisations in 13 European markets. Of Dell’s total
production, 23% is for the European market – their largest
market area in volume terms.
The direct model
In reality, Dell products are available to all who have
access to telephone and internet. The reason for this is
Dell’s direct business model – a model based on direct
contact between producer and end users.
The direct model does not include the traditional links
such as distributors and retailers, as used by most of
Dell’s competitors.
This means that Dell supply PCs direct in accordance with
the customers’ wishes at time of ordering. Dell’s starting
point is having standard confi gurations for their various
products and these can thereafter be tailor-made to meet
specifi c needs of end users.
The advantage with this business model is that Dell
can manage their market prices in direct relation
to their production costs without the added cost to
intermediaries. Dell can thus maintain a better margin
than their competitors and still offer competitive prices in
the market.
5. Dell
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A BUSINESS CASE ON DELL AND ADPEOPLE
This direct model has a further advantage in that all
demand is known immediately at the point of customers
placing orders and, therefore, enables Dell to manufacture
without a stock inventory of components. All production is
based on ‘Just in Time’ and this means that Dell can have
the most up-to-date and relevant technology available.
Suppliers of components to Dell keep stock stores at their
production plants and Dell have thus secured access to all
necessary components without the cost of keeping stocks
themselves.
Distribution takes place direct to end users from Dell’s
production plants around the world.
Dell’s vision
“Be the most successful computer company in the
world at delivering the best customer experience in
markets we serve...”
With the direct customer contact, Dell believe they can
deliver the optimal solution based on the customer’s
specifi c wishes. Dell know the unique confi guration of
every unit sold and can therefore also deliver tailor-made
service and support. The direct service and support
means that Dell do not need to go through intermediaries
(distributor and/or retailer) to solve any after sales
problems – the customer is in direct contact with the
PC manufacturer.
5. Dell (continued)
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A BUSINESS CASE ON DELL AND ADPEOPLE
Distribution takes place direct to end users from Dell’s
production plants around the world.
Dell’s vision
“Be the most successful computer company in the
world at delivering the best customer experience in
markets we serve...”
With the direct customer contact, Dell believe they can
deliver the optimal solution based on the customer’s
specifi c wishes. Dell know the unique confi guration of
every unit sold and can therefore also deliver tailor-made
service and support. The direct service and support
means that Dell do not need to go through intermediaries
(distributor and/or retailer) to solve any after sales
problems – the customer is in direct contact with the
PC manufacturer.
The advantage with this business model is that Dell
can manage their market prices in direct relation
to their production costs without the added cost to
intermediaries. Dell can thus maintain a better margin
than their competitors and still offer competitive prices in
the market.
This direct model has a further advantage in that all
demand is known immediately at the point of customers
placing orders and, therefore, enables Dell to manufacture
without a stock inventory of components. All production is
based on ‘Just in Time’ and this means that Dell can have
the most up-to-date and relevant technology available.
Suppliers of components to Dell keep stock stores at their
production plants and Dell have thus secured access to all
necessary components without the cost of keeping stocks
themselves.
5. Dell (continued)
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A BUSINESS CASE ON DELL AND ADPEOPLE
Unique coding and response
In Dell, the management constantly evaluates the
communication effect via input reporting to the marketing
and sales data bank. The results are relayed daily to
relevant partners (including AdPeople). Each marketing
element has a unique code and can thus be traced in
relation to results.
Dell’s direct response model is made up of three response
elements and all effects of marketing activities are
evaluated in relation to these:
All accessible channels – both offline and online:
Step 1: esnopser( egapemoh no stih/sllac enohpeleT
rate per unique code)
Step 2: selas ot dessap stih ro sllaC
department (conversion)
Step 3: Achieved sale (ROI – Return on Investment)
The marketing activity must both provide attention,
relevance (branding) and buying stimulus (price) in one
and the same element in such a way that all activities can
be directly converted into sales.
Simple - but massive
To be able to handle this apparent straightforward model,
which really is massive in size, requires that the agency
have a deep understanding of both the market place and
Dell’s processes.
A message
Dell’s use of media channels is horizontal in relation to
the traditional vertical model, where the communication
message develops from image and product position
messages to pure tactical ‘call to action’ messages. Dell
use all media channels (offline and online) for by and large
the same message viz. that Dell can always deliver high
quality at a competitive price.
By not differentiating the message on the whole in the
various media channels, the communication model
becomes very straightforward. Direct results of efforts
can be measured and can, unlike others who use a more
traditional communication model, immediately know the
isolated communication effect and thereby measure
ROI directly.
In the more traditional model, it can often be a problem
to identify which part(s) of the communication has led to
customer demand and when it happened and this makes
it difficult to work out the real ROI.
Dell’s business model is unique and the communication
model should be looked at in this context. It would not be
possible to have such a straightforward communication
model with the more traditional business model.
5. Dell (continued)
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A BUSINESS CASE ON DELL AND ADPEOPLE
Everything is measured and weighed
Dell is always a challenge to work for and with. All of Dell’s
business culture and ideology are based on an on-going
measuring of initiatives.
In AdPeople’s relationship with Dell throughout the years,
this challenging situation has always been the agenda
– there have never been times ‘to rest on one’s laurels’.
It has been an on-going process of development, where
every situation and opportunity is challenged, everything
is tested, measured and documented.
Meeting such a challenging situation, requires a
fundamental and deep understanding of Dell’s business
model as well as a readiness by the agency to accept
changes. The ability to react spontaneously to new
situations and/or opportunities is key.
3 fundamental concepts
The three fundamental concepts in
Dell’s world of marketing are:
• Direct response communication – in all elements
• Cost reduction - ‘leaner’ marketing management
’tekram ot emit‘ fo noitcudeR •
– rapid reaction to market forces
How is this possible?
It demands an attitude and dedication from both the
client and the agency, as well as a working relationship,
which goes much deeper in both organisations than is the
case in the more traditional client/agency relationship.
AdPeople’s vision
AdPeople management speak of ‘Marketing efficiency’
and not ‘only’ about ‘Advertising effectiveness’.
The effective marketing should be judged by the
communication AdPeople develops simultaneously
focusing on processes, agency tools and organisation.
The ambition of AdPeople is to be the creative force in
Marketing efficiency, which means:
“We deliver high creative quality – at low
implementation costs – as quickly as possible”
Creativity and effectiveness should be evaluated evenly
for these to be attractive to a client like Dell who is ‘value
driven’ both in respect of internal and external activities.
Relationship development
With the improvement in ‘Marketing efficiency’, AdPeople
have extended and developed their relationship with Dell
in Europe over the past 6-7 years.
The relationship began in 1999 with ad hoc tasks in the
Nordic markets and has expanded to AdPeople now
having responsibility for all of Dell’s communication in
Europe. DM includes all marketing activities except for
ads and TV advertising, which are developed by DDB in
London for the European region.
AdPeople have now responsibility for the following
marketing elements in Europe – 13 countries and 15
language versions:
Offline Online
Inserts E-mails
Catalogues & mailers Banners
Direct mails, postcards etc Website content
Fax alerts
AdPeople’s business relationship with Dell from 1999
to present day has been a learning curve – starting in
“the good old fashioned way” with chaos, lack of vision
and work duplication, to today being a super optimized
marketing process.
Throughout the period constant development has taken
place of new effective marketing elements and activities,
optimisation of internal and external processes – and the
development of the DellShare™ portal. A shift from a
decentralised (local) marketing organisation to one that
is central. The developments and changes have ensured
better use of resources in relation to the business model
and the marketing model which has evolved from it.
6. AdPeople’s answers to Dell’s challenges
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A BUSINESS CASE ON DELL AND ADPEOPLE
Integrated communication
The creative work developed from being ad hoc elements
without much reference to a brand’s identity and hence
its limited contribution towards the perception of Dell as
a brand.
Today - all marketing activities are fully integrated
and there is ‘harmony’ in style and tone at all levels of
exposures in the market place.
All marketing elements include the ‘direct response’
approach as well as a uniform identity, which throughout
contributes to the overall perception of Dell as a brand.
This integrated communication shows, of course, regard
for individual channels/media and their premises, but
will always bring the same fundamental message of high
quality at competitive prices. Likewise, the message
emphasis is varied in relation to the specific target group
– private or business.
Operational guidelines
In addition to the market-orientated marketing activities,
AdPeople have developed an internal strategy on
corporate design guidelines for Dell in Europe. The
guidelines have been developed in such a way that they
are consistent across all channels and always with an
operational and practical aim based on templates to suit
all marketing elements.
Extent of the business relationship
between Dell and Ad.People
As mentioned, all marketing activities carried
out by Dell are based on a ‘simple’ marketing
and communication model.
However, this does not tell the full story about the
business relationship between Dell and AdPeople
– because behind this apparently simple model lies a
massive marketing effort which AdPeople manage for Dell
in Europe.
The extent of the relationship is illustrated in the
following figures (2005):
• + 20 Pan European DM campaigns
fo rebmun eht( seitivitca lacitcat noillim 048 + •
distributed elements in the market across all channels)
• + 15,000 unique ad pages
• + 6,000 emails
• +40,000 unique banners
As also mentioned, to manage tasks of this magnitude
calls for systems and management tools to be developed
and in place for Dell to build a uniformed and streamlined
marketing process.
The DellShare™ portal
AdPeople have developed for Dell a tool under the
trade mark DellShare™. In essence, this is a Marketing
Operation Management system or, in other words, a portal
for managing marketing processes.
DellShare™ is a tool which provides Dell with the
technological platform for the introduction of ‘lean’
processes and organisation of the marketing function.
The overriding objective with the development and
implementation of the DellShare™ system, has been the
need to make Dell’s marketing processes more effective.
6. AdPeople’s answers to Dell’s challenges (continued)
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A BUSINESS CASE ON DELL AND ADPEOPLE
6. AdPeople’s answers to Dell’s challenges (continued)
The situation before implementation of DellShareTM
Divided planning & work execution
• Manual processes
• Coordination-demanding
• Too time consuming
• Heavy costs
The situation after implementation of DellShareTM –
‘Lean Marketing Excellence’
• Optimized work distribution between global and
local marketing functions and external partners
• Best practice processes and work fl ow control
• Improved overview and coordination of the
planning process
• Enhanced productivity
• Cost effectiveness
IT-platform
Processes and management tools
Organisation & employees
Asset Management
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A BUSINESS CASE ON DELL AND ADPEOPLE
6. AdPeople’s answers to Dell’s challenges (continued)
DellShareTM supports optimization on all aspects of
Dell’s value chain within marketing and covers the
following main areas:
The implementation and further development of
DellShare™ have made Dell more effective – both today
and in the future.
This has been possible by reevaluating the most
important processes in relation to:
• Production and execution of marketing materials
and campaigns.
.sehcnual ngiapmac lacihpargoeg fo noitac fiilpmiS •
These changes have brought about considerable
reductions in marketing costs.
These changes have brought about considerable
reductions in marketing costs.
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A BUSINESS CASE ON DELL AND ADPEOPLE
Benefits for Dell Marketing
The process optimization has generated the following
benefits to Dell’s marketing function:
retteb dna erom – ssenevitceffE •
marketing at lower costs
htiw dna semit noitcudorp retrohS •
it faster time-to-market
• Greater uniformity in marketing materials
• Higher quality and fewer mistakes
dna esuer ,gnirahs-egdelwonK •
application of best practice
• Independence of time and place – open 24-7-365
rof noitacinummoc tnetsisnoc dnarb dna desilartneC •
local adaptation and execution
(‘Think global – act local’)
Motivation within Dell’s marketing organisation has also
improved with the introduction of DellShare™ in that their
marketing people find that they are performing ‘smarter’
than their competitors.
The daily work
The entire workflow and all deadlines during the
development process, from strategy to production-ready
materials, is managed through the DellShare™ system. All
communication and exchange of materials pass through
this channel. The relevant employees in Dell and AdPeople
have access to materials and information which precisely
their functions need in relation to the process.
All processes are automated in reference to the
defined business procedure. DellShare™ is operated via
AdPeople’s server
DellShare™ also handles work from AdPeople’s division in
Bangladesh. In Dhaka, AdPeople have a staff of 30 Desk
Top Publishing artists who put the finishing touches to
the creative material before approval and production.
By having this function in Bangladesh, the time zone
difference is a bonus as well as lower overheads.
Both the optimisation and automization of processes
as well as communication have proved to be effective
– both internally and externally – as demonstrated by the
achieved results.
6. AdPeople’s answers to Dell’s challenges (continued)
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A BUSINESS CASE ON DELL AND ADPEOPLE
Internal results
During the past fi ve years, Dell have reduced overall
agency costs at European level by 50% - (2002: 8%,
2003: 10%, 2004: 11%, 2005: 21%) – results which can
be attributed to the increasing and extensive use of
DellShare™ as a tool in managing and automizing
marketing processes.
Reduced the number of agencies from 18 to 2 at the
European level – the reason for this big reduction is that
DellShare™ has made it possible to centralize many
functions compared with the previous local focus. In
addition, the centralization has enabled Dell and AdPeople
to negotiate lower prices for production due to the large
and common quantities of marketing materials needed.
Time to market has been reduced by 60% - which proves
that the time from starting a marketing initiative to when
it hits the market and target customers, has been reduced
signifi cantly. This provides a competitive advantage
and means that Dell can track market movements more
effectively. In many instances Dell can be ahead with
market development in relation to their competitors.
The opportunity to centralize many of the marketing
functions via DellShare™ has furthermore meant
that over the years, Dell have been able to optimize
their marketing organisation in Europe. Dell have
been in a position to halve the number of employees
at management level in Europe. Besides reducing
management salary costs, the decision-making process
has been shortened and made more effective.
All in all these improvements and results mean that Dell
– within their allocated marketing budget – can produce
far more marketing elements thereby increase both
product awareness and demand for PCs in the market.
This relationship between cost reductions and greater
product awareness in the market is illustrated in the
following graph:
The graph shows marketing costs (indexed) seen in relation to the growth in the number of unique pages. In other words, the lower costs provide the opportunity to produce more marketing materials and with it greater emphasis in the market place.
Total unique pages should be seen in the context of how much unique marketing materials are produced across Europe including local versions.
7. Results
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A BUSINESS CASE ON DELL AND ADPEOPLE
Market results:
The results achieved by making processes more effective, are also refl ected in the market. Through the integrated
communication, the effective processes and the shorter reaction time derived from this, Dell is now better equipped to react
faster to competitors’ initiatives and to challenge these. awareness in the market is illustrated in the following graph:
During the past fi ve years, Dell have been able to
increase their market share in the European market for
PCs. From being a medium-sized player for PCs in 1999
(achieving moderate growth rates), Dell have grown
to become a leading player over the past 5-6 years.
Growth rates over this period have been signifi cant in
what is a very competitive PC market. This impressive
performance applies both to the business market as
well as the market for private PCs.
That Dell’s business and marketing model is effective
in the market, is also manifested in Dell’s growth rates
in relation to the total PC market. Dell expanded their
volume at a greater rate of increase than the market’s
average. At the same time, the increase in growth
rate is also refl ected in the expansion and continuing
development of the DellShare™ system and the derived
positive effects over the years.
7. Results (continued)
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Communication of relevant and topical PC products within the different product categories is important. This helps to
widen the portfolio and make Dell less dependent on developments in individual European markets. The table below
shows Dell’s growth rates within the main product categories in relation to the rest of the market.
Market growth 2004-2005Total units sold as a % of total market – IDC 2006
Dell(index in relation to the overall market growth year by year)
Overall PC market(index = 100)
Total PC market - EuropeDesktops + Notebooks
28,9 % - (149) 19,4 % - (100)
Desktop Total 21,9 % - (205) 10,7 % - (100)
Desktop Private 31,7 % - (184) 17,2 % - (100)
Desktop Business 19,9 % - (276) 7,2 % - (100)
Notebook Total 47,3 % - (123) 38,6 % - (100)
Notebook Private 78,8 % - (150) 52,7 % - (100)
Notebook Business 40,0 % - (133) 30,0 % - (100)
As can be seen from the table, Dell have index figures higher than the market overall. These results can be traced
directly back to the effective and direct communication, which together with the topical and relevant products, create
the demand for Dell’s PCs.
Several of Dell’s competitors also do well in the market, but Dell is by and large the only brand which performs well in
all product categories – both in the private and business segments.
7. Results (continued)
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8. Summary
This is the main reason that Dell today have a
marketing model in tune with its business model.
The cooperation between Dell and AdPeople has
turned Dell Marketing in Europe into a ‘lean marketing
machine’ - a marketing organisation with optimized and
automized processes as well as a marketing function
which is always at the leading edge in development.
All in all Dell is a dynamic organisation based on the
realisation that ‘Effectiveness’ must be seen in a
greater perspective, where both the internal processes
and external results are being optimized, so that
‘Marketing efficiency’ is achieved and with it the best
possible ROI.
In order to put achieved results into perspective,
65 million PCs were sold in the European market
during 2005 – source: IDC. Comparing this with Dell’s
market share, it becomes clear that by effectivizing
communication and marketing processes, significant
contributions can be made to the bottom line.
Dell products can only be bought via internet or by
telephone due to Dell’s direct business model.
Unlike most of Dell’s competitors, Dell PCs cannot,
therefore, be bought in retail shops. This makes
Dell more dependent on relevant and direct response-
orientated communication to bring about demand.
All of Dell’s marketing is focused on direct response
and a flat and simple communication model is used
across all media channels. Marketing activities are
developed centrally and thereafter adapted for
individual European markets. All marketing activities
are measured and evaluated directly in relation to
effectiveness and customer response.
The basis for Dell’s great success is to a large
extent due to the close business involvement with
AdPeople – on creative development of relevant and
integrated communication as well as development and
implementation of the DellShare™ marketing portal.
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9. The future
With Dell’s integrated business and marketing model,
they are ready to face challenges in the highly
competitive PC market – a market constantly being
challenged by new producers with cost effective
production methods leading to further pressure on
profit margins.
Experts predict a market where as a result of falling
margins, an elimination race will emerge within the
next couple of years or so. Therefore, there will be
focus on cost reductions among all PC producers.
An advantage for Dell in this context is that they are
not dependent on the retail trade and are, therefore,
not being squeezed in the same way as many of their
competitors.
With Dell’s ‘well-oiled’ marketing function - developed
together with AdPeople – they are able to closely follow
the market and, if necessary, put their competitors
under further pressure.
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The experience gained with the development of the
DellShare™ portal has enabled AdPeople to develop
the product BrandShare.
BrandShare is an IT platform developed to
optimize marketing processes and thereby improve
effectiveness. The product has been designed
modularly and can be adapted to suit the needs of
different businesses.
Today, several of AdPeople’s clients use BrandShare
as a tool to improve ‘Marketing efficiency’.
10. BrandShareTM
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AdPeople
Vester Farimagsgade 41,
1606 Copenhagen V, Denmark
Phone: +45 72 21 51 00
Website: www.adpeople.com
Ronnie Job
CEO, Founder
Direct: +45 72 21 51 01
Mobile: +45 22 65 51 01
E-mail: [email protected]
Emre Gürsoy Jørgensen
Managing Director
Direct: +45 72 21 51 33
Mobile: +45 22 65 51 33
E-mail: [email protected]
11. For further information, please contact:
AdPeople
www.adpeople.com
Emre GürsoyGlobal COOMobile: +45 3078 4200E-mail: [email protected]
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AdPeople
Vester Farimagsgade 41,
1606 Copenhagen V, Denmark
Phone: +45 72 21 51 00
Website: www.adpeople.com
Ronnie Job
CEO, Founder
Direct: +45 72 21 51 01
Mobile: +45 22 65 51 01
E-mail: [email protected]
Emre Gürsoy Jørgensen
Managing Director
Direct: +45 72 21 51 33
Mobile: +45 22 65 51 33
E-mail: [email protected]
11. For further information, please contact:
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