sachin dell

8/9/2019 Sachin Dell

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Simple control system in Marketing for Dell Computers

Efficiency control.

As these mechanism or system exist in determining sales force efficiency, distribution efficiency,

and advertising and sales promotion efficiency. It shows a way to the marketer to enhance its

task.

1. Advertising objectives : The advertising objective must flow from prior decision on target

market, market positioning and market mix.

a. Informative advertising: The objective is to build primary demand. Thus, the

company should inform consumers the advantages of using its product.

b. Persuasive advertising: The objective is to build selective demand for a particular

brand. E.g. Dell should attempt to persuade consumers that its servers and

workstation have increasing availability of applications.

2. Message Execution : Some advertisements aim for rational positioning and others for

emotional positioning. I feel that advertisements should be more rational showing anexplicit feature or benefit designed to appeal the rational mind. Dell products should be

displayed showing toughness and reliability.

3. Media Selection : Involves finding the most cost effective media to deliver the desired

number of exposure to target audience. I.e. seeking a certain response from the target

audience. In a country like India where the internet exposure rate is very low compared to

other developed countries in such type of economy media plays a very important role.

4. Sales promotion : Consists of diverse collection of incentive tools, mostly short term,

designed to stimulate quicker and greater purchase of particular products or services byconsumers or trade. E.g. Coupons, cash refund offers, price off, premiums, prizes,

warranties, display allowances for traders, free goods etc. this type of schemes will help

in accelerating the business.

5. Selecting a price: A firm must set a price for the first time when it develops a new

product, when it introduces its regular product into a distribution channel or geographical

area. There can be a competition between price-quality segments. In such type of

situations the price should be dropped so ensure that the competitors dont survive.

PriceHigh Medium Low

1. Premium strategy 2. High value strategy 3. Super value strategy

4. Overcharging strategy 5. Medium value strategy 6. Goal value strategy

HIGHProd

uct


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7. Rip off strategy 8. False economy strategy 9. Economy strategy

All three competitions can co exists as long as the market consists of three groups of

buyers: those who insists on quality, those who insists on price, and those who balance

the two considerations.Strategies, the product should be of same high quality and its competitor but the charges

should be less.

Segmentation at Dell: The US Market.

Relationship Customer: - Were large enough to have ongoing technology, purchase

requirement and demanded continuous interaction with dell.

Transactional Customers: - Were consumers on small that tented to make one purchase at

a time and did not require designated sales representatives.

So dell assigned sales and support representatives for each different customers segment based on

their product and service needs.

Dell had created nine market segmentation in US which were divided into 3 business divisions

a) Relationship Business:-

Global

Enterprise

Large corporate accounts

Federal Government

Select the ricin ob ective

Selectin a rice

Anal zin com etitors costs rices and offers

Estimatin cost

Determine the demand

Selectin a final rice


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Education

State and Local Government.

b) Small and medium business

Preferred Account Division

Business System Division

c) Consumer Business

Payment in relationship buyers was usually through corporate purchase orders or lease

agreements. Transactional business- most credit card.

Relationship Business represented about 60% or dells US revenues and included global,

enterprise and large corporate scheme.

Small and medium sized business accounted for roughly 30% of dells US revenue.

(a) Strategic control

One of the avenues of Dells growth is international expansion. Direct model is efficientin the US market but where global market is concerned in some type of market structuredirect model is inefficient. Dell's consumer base is not a typical American or Canadianbut a wide range of customers from Asia, Latin America, and Europe as well each withdistinct needs and requirements. In a country like India retailers play a very importantrole in the sale of products. On the other hand in some countries the ratio of peopleexposed to internet is low in such places the concept of direct model does not work.Meeting global quality standards is the only way to get an advantage in a competitivearena.

(a) Efficiency control

As stated in the case the small and medium business is a large and the untapped segment.

It can be penetrated using stringent policies and meaningful relation can be developed.

The model is not that all powerful system. It is simply a way for Dell to cut on the

standard supply chain cycle and deliver goods directly from the manufacturer to the

customer. They created partnerships with several suppliers such as Intel and others to

deliver goods effectively at the time of the order to Dell's plant where the assembly takes

place.

(a) Strategic control

The online marketing model should be narrowed and focus should be given on thecampaign which addresses the consumer at large. By narrowing the scope of the currentmarketing strategy Dell would be able to achieve niche marketing goals. Suppliers wouldhave to be unique who can do mass customization at shorter production time frame as


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well as maintaining quality standards. Dell therefore has to focus on quality control as itgradually integrates this new marketing strategy.

The Direct Model

By using this simple concept, Dell can best understand their customer needs, and efficiently

provide the most effective computing solutions to meet those needs. The direct model is the

engine of the dells success.

The features are:

It enables the company to have an actual relationship with customers. This provides essential

information that is used to leverage relationships with suppliers as well as customers.

This model has proved efficient in maintaining coordination between the customer focus,

supplier partnerships, and mass customization and just-in- time manufacturing. Which will

result in higher efficiency, productivity and returns to investors.

Its a low cost, direct customer relationship and virtual integration.

Its a high velocity, efficient distribution system, build to order manufacturing, production

service targeted at specific market segment.

Dell is continually refining the direct business model through virtual integration, which relies on

information technology to improve the value chain of suppliers and customer.

Marketing ability

Built to order Procedure

Orders would come from factory from two major streams

Inbound calls from customers and several business customers.


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Orders placed by Dell inside sales representatives on behalf of large accounts.

Advantages:

Sell richer configured system

Achieve higher ARU ( Average revenue per unit)

Over period of time various business units added sales specialist for server and workstation

product, as well as for third party peripherals such as printer because their gross margin as well

as pricing were lowest.

Dell serviced the North American market from its plant in Austin, Texas and Nashville,

Tennessee

To support global business it had manufacturing facilities in Limerick, Ireland and Penang,

Malaysia and two new sites in Porto Alegre, Brazil, and Xiamen, China.

Advantages of online model for Dell.

1. Transaction Side: - The productivity of the average dell sales representatives increased by

50%.

2. Relationship side: - The external sales representatives now spent 60% of their time with

customers and 40% dealing with administrative matters.

3. Online Model :- This generated 50% revenue on the sales and averaged $40 million per

day

4. Market Share growth.

5. Dell also used internet to develop a collaborative planning methodology with its key

suppliers who would view the order flow and their pipeline inventory of their component.

Control mechanism

Strategic control it can be defined as process of monitoring as to whether to various

strategies adopted by the organization are helping its internal environment to be matched

with the external environment. Strategic control processes allow managers to evaluate a

company's program from a critical long-term perspective. This involves a detailed and

objective analysis of a company's organization and its ability to maximize its strengths

and market opportunities. It has to be assessed whether the organization cares for its

customers.

It is seen that dell is not getting help from Microsoft and Intel in terms of getting

the quality of stuff customers are looking for. This will have an adverse effect on

the business of Dell. As most of its customers are Relationship business and

knowledgeable buyers which required continuous technical updates and thought

of computer purchasing as a multi- dimensional process. Such people have a high


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rate of shifting to other brands if they are not satisfied with the services and the

features provided by the existing brands.

To overcome this problem dell has to improve on its research and development or form a

marketing alliance with most efficient firm providing the best technical support.

sachin dell

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