MARKETING PROJECT PROGRESS REPORT DELLS MARKETING STRATEGY

Group 5 Anchal Khaneja Shonik Bhasin Varun Kaw Shefali Raj Singh Debashish Arora

COMPANY BACKGROUND
Dell Computer was founded by Michael Dell in 1984, while he was a student at the University of Texas, Austin. Dell began by selling upgrades of IBM-compatible PCs and in 1985 began to sell its own brand of PCs. From the beginning, Dell operated on the direct sales model, taking orders over the phone and building PCs to the customers specifications. By 1999, Dell had become the number one PC seller in the United States, and was number two worldwide. More importantly, profits were soaring, thanks to the cost structure of the direct, build-toorder model. By turning its inventory over 60 times a year, Dell minimized the rapid depreciation costs that mark the PC industry, and by receiving payment from its customers before it paid its suppliers for components, Dell operated on a negative cash conversion cycle. This minimized Dells working capital requirements and allowed it to achieve high rates of return on its invested capital.

INDIAN MARKET
A few years back Dell notebooks in India were found in only large enterprise, but in the last couple of years that scenario has considerably changed. Dells consumer slice is increasing and it is able to make a dent into that space with its Inspiron range, which hit the sub Rs. 50,000 last year.

BUSINESS ENVIRONMENT
Macro Environment Dell has tight competency with other big computer sellers like Compaq and HP. Social factors also effect the business environment of Dell. Computer companies have to acknowledge that in the Indian culture. Consumers are reluctant to order online, most Indians prefer to actually see the physical product before purchases. Companies then have to invest in door-to-door or face-to-face operations to gain consumers faith and consumers trust in the company and its product. Under the macro environment we will be conducting the PEST ANANLYSIS of DELL. Micro Environment The internet business environment of Dell is very good. Dell has achieved the ISO 14001 Environmental Management System (EMS). Dell aims at product design, transportation and so on. As a part of Dells ISO 14001 EMS, the organization implemented goals where by the goal is to improve internal business environment performance in a continuous improvement processes which are used to share successes throughout the company. Dell has positioned to extend its brand name beyond mainstream computer products by leveraging its reputation as an e-commerce leader.

DELLS MARKETING STRATEGY

The marketing model employed by Dell is not totally dependent on electronic marketing means. To reach key customers, the firm uses inperson meetings and telephone solicitation. The majority of its orders, however, come through its Internet purchasing options. Currently about 50% of sales and technical support activities occur on-line along with 76% of order-status transactions. The firm intends to increase the range and scope of its Internet interactions with customers in the future through aggressive marketing. 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. We will study the marketing strategy in full depth and analyze the marketing mix of the company in terms of 4Ps. Product: Home and Home Office Laptops Laptops for SMEs Large Business centres Price: Dell follows the variable price model for its products. Users can specify the hardware and software they require, and based on that the price is calculated. Promotion: Dell in the past has not concentrated on extensive marketing campaigns but this changed in 1999 when Dell changed its tactics by engaging in extensive marketing campaigns. In India, Dell has launched the Yours is Here campaign for non-business customer group.

For targeting businesses, Dell has launched the I Choose Dell, featuring business luminaries such as Raman Roy and P Rajendran. Placement: Earlier, Dell's consumers can be anyone and anywhere. The advantage of not categorizing customer is that it allows Dell to anticipate different kinds of consumers yet not targeting specific group of customers. In the recent years however, as Dell has grown, the customer base changed from individual professionals to corporate type.

COMPETITIVE ANALYSIS
We will conduct the SWOT Analysis and Porters five forces analysis.

PRIMARY RESEARCH
We have to visit Nehru Place for interacting with the dealers selling DELL products in order to gauge its performance. We will also be gathering information regarding the competitive environment of the PC Industry.

STRATEGIC OPTIONS
Market Penetration Product Development New International Market Development Diversification

Finally we will be conducting a critical analysis of the DELLs current marketing strategies.