Marketing plan and strategies for dell

Are current customers satisfied with their products or what are customer needs that separate Dell from its competitors？ 3.. Furthermore, in order to make it possible to allow each custom

Marketing plan and strategies for Dell Content

Executive Summary 1

1 Situation Analysis 2

1.1 Macro-Environmental Analysis 2

1.1.1 Demographic Environment 2

1.1.2 Political-Legal Environment 3

1.1.3 Economic Environment 3

1.1.4 Social-Cultural Environment 4

1.1.5 Technological Environment 4

1.2 Competitive Analysis 4

1.3 Customer Analysis 5

1.4 Distribution Channels Analysis 6

1.5 SWOT Analysis 6

1.5.1 Strengths 6

1.5.2 Weaknesses 8

1.5.3 Opportunities 8

1.5.4 Threats 9

2 Objectives 10

2.1 Financial Objective 10

2.2 Marketing Objective 10

3 Marketing Strategies 11

3.1 Segmentation 11

3.2 Positioning 12

4 Marketing Mix 13

4.1 Product Strategy 13

4.1.1 Definition of Product 13

4.1.2 Core Product 13

4.1.3 Expected Product 14

4.1.4 Augmented Product 14

4.2 Price Strategy 14

4.3 Place Strategy 15

4.4 Promotion Strategy 16

5 Action Plan 16

6 Budgets 17

7 Control 17

8 Conclusion 17

Reference 18

Executive Summary

Dell is a multinational technology corporation that develops, manufactures, sells, and supports personal computers and other computer-related products Based in Round Rock, Texas, Dell employs more than 82,700 people worldwide Dell grew during the 1980s and 1990s to become the largest seller of PCs and servers As of 2009 it held the second spot in computer-sales within the industry behind HP

Every product level must develop a marketing plan for achieving its goals as one of the most important outputs of the marketing process There is a marketing plan for Dell’s laptop has been well prepared and the main objectives of the plan will be

explained in details as following:

1. Whether to determine brand awareness within the target market can meet financial budgets

2. Are current customers satisfied with their products or what are customer needs that separate Dell from its competitors？

3. What features do macro and micro environment include? So on, what are Dell’s strengths against its weaknesses?

4. How to capture the entire segment of Dell by drawing an action strategy?

5.

Dell’s consumers are no age limited both of the male and female There is a huge market potential Customized design is the key of the company to attract customers Dell laptop belongs to on-line product But as the increasing market maturity, its products can be classified the stage The product meets consumers’ needs and

demands to reach a high customer satisfaction Referred to price, administered prices are used for extending Dell’s Internet sales products Due to the high involvement with customers, advertisings and direct response promotion will always be the best ways for Dell to promote its products By those promotions, customers will be showed and explained the reason why Dell laptops will be their best choice Furthermore, in order to make it possible to allow each customer to purchase from Dell factory

directly, Dell cuts out the retail sellers as distributors Therefore the customers now have the opportunity to customize their own laptops As consequence, there will be a big improvement of delivery Company operations are totally under controlled by Dell’s rules Such as: managers are required to reduce mistakes and to get more

successful to approach better sales analysis; managers are required to compete

regularly their performance with other competitors to make better performance

analysis; And for marketing cost analysis, they are required to control and distribute the costs by using the useful account With the effective company operations, even if Dell’s competitors become stronger and larger, Dell will not be beaten Compared with Dell’s sales, the costs of the whole company are relatively high For further company operation development, Dell will find a proper way to redistribute and reduce the costs to achieve the final goal, which is higher profit

1 Situation Analysis

1.1 Macro-Environmental Analysis

1.1.1 Demographic Environment

Demographic elements are the most important elements of the macro-environment Population, growth rates, and age mix are all included in the demographic

environment It is well known that the world population is continuous growing every single second Nowadays, our planet crowded by young people; the age of laptop users’ tends younger and younger each day The users’ age range will be extended It

is clear that there will definitely be a very potential and huge market for Dell Also because laptops can provide customer a greater flexibility, so they can take the laptop with them wherever they go The laptop is now highly preferred by businessmen international business environment But to occupy the whole global market, it is not as easy as it seems to be Globalization brings greater choice availability and the

customers now can enjoy the advantages of using internet to get information, the difficulties of Dell to enlarge their market share also rises Rather than mass

marketing, Dell should focus on micro markets, such as businessman, educators and students Different marketing strategy is needed for different target segmentation

1.1.2 Political-Legal Environment

Business is never isolated from political environment all times Dell, as a local

company in USA, it contributes a parts of USA economy The future of Dell can be part related to the US politics As known that the political environment in the US has been changing abruptly in the past years, Dell has been highly affected Dell is not able to counter them The US government was trying to revive the PC-related business

by changing in the legislation and laws But unfortunately, the results were far away from what was expected Wall Street posted fewer losses by cutting costs to predict that the expectations will be more dip The company has been able to beat it As the conservatism increasing in the consumer spending, Dell’s sale has been affected By speaking of environment policies, due to the old products, Dell is also facing the significant pressure from environmental groups across the US Dell has to obey the e-waste regulations and take responsibility for public environment in terms of

environmental policies

1.1.3 Economic Environment

International market can bring great opportunity of business, but also brings the high tariff Especially the tariff of IT products is higher Then it will not be that easy for Dell to enter the other markets apart from USA For IT market, the most of the

population of the world is young people, who are adaptive to change in technology Dell needs to seize this huge opportunity Dell can manufacture its products with more

user friendly and close to fresh young people Not only that, but also the purchasing power is no more narrowed in working population due to the world’s economy is recession and meltdown Therefore, Dell needs to adopt new strategies and new policies to adapt with the changing era On the other hand, inventory and credit

management of receivables are also affected by the change of world’s economy Dell now is the change of its core policies Such as: the inventory conversion days need to

be reduced to shorten operation cycle and hence reduce the cost

1.1.4 Social-Cultural Environment

More and more young population and working population are now the key role in the

IT product market The need of computers is growing in a very rapid speed By the technological revolution, the world has changed from industrial age to information age Computer has become an irreplaceable and personal kit As the high speed

developing technology of internet and the purchasing habit changing, people prefer to shop online more than go to the traditional retailers Most of young people will

“google” the rate of producers or customers’ comments on line before they decide which one to buy Due to “dell.com”, Dell takes an advantage over others In addition, Dell supports projects and medical seminars and so has long term plans: they want to combine senses, people and the computers Dell takes the fruit of these works Of course, Dell makes all of these works for the sake of the humanity

1.1.5 Technological Environment

It is exciting that the development of technological is at a high speed, which gives Dell a huge stage to display advanced technology products to its customers

Technology is the soul of an industry If there is a development in technology, Dell has also made their product lines adjusted and adapted To keep the old technology can not bring Dell a constant continuing developing production The old technology will

be abandoned very soon, especially in IT technology One of the most important affects of technological changes is Dell’s direct business model, which has led to the increasing demand of Dell computers Dell has perfect e-commerce capabilities, which can be seen with the success of the dell.com (O C Ferrell & Michael D Hartline 2008)

1.2 Competitive Analysis

Dell’s major competitors in its PC market are HP, Sony, Apple and Toshiba One quarter for PC sales in U.S is showed in Figure 1 The worldwide market decreased 6.5% year-over-year to 66 million units in 2009 Apple’s Mac business leveled out after strong growth last year U.S Mac shipments were down 1% year-over-year, representing 7.4% of the market But that is a significant deceleration after the

company grew U.S shipments about 33% year-over-year during a quarter of 2008

Meanwhile, Dell, as its shipments fell 16% to 26.2% of the U.S market And netbook

specialist Sony grew its shipments by 49% to 13.6% of the U.S market, third to HP

and Dell HP recently posted better financial results than Dell, but has announced

around 26,000 redundancies as part of its attempts to cut costs and integrate the

？7.2bn acquisition of EDS Dell rival HP has also suffered in the global recession

(Tim Berry & Doug Wilson 2000)

(Thousands of Units)

Figure 1

Figure 2 shows the representation of HP, Dell and Apple on product and service

Competitors Customer

Awareness

Product Quality

Product Availability

Technical Assistance

Sales force

Apple E G F G F Note: E=Excellent, G=Good, F=Fair, P=Poor

Figure 2

1.3 Customer Analysis

Deciding to buy a laptop is not an easy decision for the customers, because the

consumer is highly involved in a purchase but sees little difference in brands This is a

high involvement decision as the laptops are expensive, bought infrequently, and

risky There are many different brands in the laptop market, but few significant

differences So this is a dissonance-reducing buying behavior of the customers

Therefore, the marketers have to ensure their products no defects, excellent service,

cheap spare parts and high performance and differentiate their competitors as well

Dell is aware of these and its philosophy is to “improve and make better” rather than

“inventing all the time” Now 75% of Dell’ sales revenue is from government

organizations and large businesses but only 5% comes from student market

According to a new survey, we will understand the reason why Dell lost the student

market

91% of university students own laptops;

24% own a Toshiba, followed by 22% who own HP, and 17% Dell;

61% think the appearance of Dell’s laptops is poor;

55% think the size is big;

57% think modification in the laptop appearance would enhance their decision to

buying a Dell laptop

From the survey, we know that design is greatly important to students

1.4 Distribution Channels Analysis

Channels of distribution are critical to the success of a manufacturer A well designed

channel creates time, place and ownership utility for the consumer and can augment

the manufacturer’s product Distribution channels may move product directly from the

manufacturer to the consumer, or make use of intermediaries between the

manufacturer and the consumer

Dell uses the direct model to distribute its products There are not retails between Dell and its customers Dell’s customers can order products directly from the factory and receive their computer often within days (William M Luther 2001)

1.5 SWOT Analysis

1.5.1 Strengths

Dell is the World’s largest PC marker Profits for the 3 months to July 2009 were in excess of $1.4 billion US, representing a growth of around 28% For the last couple of years it has held its position as market leader The Dell brand is one of the best known and renowned computer brands in the world

Dell cuts out the retailer and supplies directly to the customers It uses information technology, and Customer Relationship Management approaches to capture data on its loyal consumers Components are made by suppliers, never by Dell PCs are

assembled using relatively cheap labor You can even keep track of your delivery by contacting customer services The finished goods are then dropped off with the

customer by courier Dell has total command of the supply chain

Dell allows consumers to fully customize their laptops As the market growing more educated, the demand of specific needs is increasing from customers for their own target of laptops In case that each customer can purchase directly from Dell factory with their own customized laptop, Dell cut out the retailer as a distributor

Taking advantages from Dell’s direct business model, the latest IT technology is able

to be displayed faster on Dell’s computers than the other competitors For those who are running an indirect distribution channels, their inventory will not be able to be turned over frequently to catch up the latest technology In Dell, inventory is turns over for an average of every six days, which also keeps a low cost of inventory

Dell is not only good at the developing of their products, but they are also taking great cares about customer services In approximately 90% of the cases can be solved over the telephone by support specialist, which is named as “hot-line that was manned 24 hours a day” For such a high success rate of problem solving, customers were truly satisfied

Finally, one of Dell’s great strengths, which have to be mentioned, is defining the target market It is about 75% of all sales revenue is gained from organizations,

governments and large businesses It is not difficult to see that Dell has the ability to build a good Public Relationship with governments, large organizations and other

businesses As the benefit from this one particular strength, Dell earned most its business from the relationships

1.5.2 Weaknesses

Because Dell has a large range of products and components from many different suppliers from various countries, the occasional recall is inevitable, which made Dell embarrassed In 2004 Dell had recalled 4.4 million laptop adapters because they might overheat, leading to electric shocks or fires

Dell is a computer maker rather than a compute manufacturer It buys products and components from a number of concentrated hi-tech manufacturers, which is a big advantage in terms of business operations, allowing Dell to pay more attention on marketing and logistics However, Dell relies on a few large suppliers, and to an extent is locked in for periods of time

As well known that Dell has the ability to sense its target market, but Dell cannot be always successful The wrong market targeting in educational institution segment can

be seen as a fatal weakness of Dell Figure evidence from Dell’s total sales revenue says that only 5% was earned from educational institution segment There can be a strategy for focusing target market, but there should not be such a strategy for

neglecting a target market Therefore it seems that it is not ready for Dell being in a position to take advantage of educational institution segment yet

Direct business model, which considered as strength of Dell, brings lots of advantages for Dell But everything has two sides From another point of view, direct business model could be seen as one of Dell’s weaknesses For those who are not familiar with computers, it is becoming difficult to purchase the product without seeing and

touching it But Dell does not provide retail services, so the customer is not able to make a decision right away This is a limitation of time efficiency

1.5.3 Opportunities

As the general trend of globalization, integration of information, business and

technology, personal computers as the essential tool are being purchased and used more than ever before Due to the particular portable and movable advantages of laptop, it is becoming more and more popular in IT market The demand of laptop grows much faster than that of desktop computers Laptops can be a new growing opportunity for Dell The business can be targeted in all segments

Another great and potential opportunity for Dell is existing customers Young people

as one of the Dell’s customer groups is constantly growing, they are more educated

about personal computers and they know what they want after the first time

purchasing Dell should take great care about those existing customers to keep their loyalty for a constant continues business growing

Dell is making and selling low-cost, low-price computers to PC retailers in the US The PC is unbranded and should not be recognized as being Dell when the consumer makes a purchase Rebranding and retagging those low-cost and low-price PCs from Dell for retailers, and this business model bring Dell new market segments to attack with the associated marketing costs (Pinegar 2002)

1.5.4 Threats

Competitors will always be the biggest threats from outside The situation for Dell is that the competition of PC market is existed in international market All profitable brands, new entrants to the market and retaliation from competitors can all be Dell’s threats

Dell is making PC, but not manufacturing PC The most of Dell’s suppliers are from Far East The labor costs are relatively low than Western labors And this is not a big business secret; Dell’s competitors are all doing the same strategy Dell may share the

PC components or similar one from the same or similar suppliers In addition, there is nothing to stop competitors offering the suppliers a better deal to cut out others’

sourcing

Another big threat to Dell from external is the price war In IT market, the price

difference among brands is getting smaller Dell has a particular business model which makes it stand out in the market The business model is Dell’s Direct Model It attracts customers with a low price compared with other brands But as other companies are working on their supply chain to reduce cost, they can also offer customers a low price With almost identical prices, Dell’s price-conscious growing customer base will

be under threats Besides competitors, fluctuation in the World currency is also an unpredictable threat in international marketing It could leave the company to the potential risks of loosing in parts of its supply chain

For a further consideration, increasing demand of technology innovation could be a future threat for Dell Dell is occupying big market share now, which means Dell needs to work doubly hard on innovation to differentiate itself from its competitors to

be able to continue holding a significant market share (Gwendolyn Cuizon 2009)

2 Objectives

2.1 Financial Objective