The success of Dell lies in large part with market segmentation and specialization strategies

waterfall and sprinkler strategies, therefore for international marketing managers

set of factors which are impacting the choice between these two strategies, including the product life cycle, conditions of foreign markets, coordination with competitors about entry timing and cross-country spill-overs (Kalish et al, 1995).

1. Which segments should be targeted and how should these segments be defined? 2. Which country or countries should be selected for marketing the new product and in which order should they be entered? 3. What marketing launch strategy or strategies should be used to enter these markets? Include preannouncements, market entry commitment, distribution and product standardization?

Segmentation - identification of segments within and across countries and determination of which product differentiations have the biggest impact on the customers

2.1.1 Country-based segmentation

One of those three segmentation approaches is country-based segmentation. Marketers can form country groupings by using country characteristics as the basis. Characteristics which have been used generally cover a wide range of variables such as demographics (population size, age structure, ethnic composition), socioeconomic variables (e.g. GNP per capita), political variables (type of political system), culture (Hofstedes characterization of countries, individualism versus collectivism, power distance, uncertainty avoidance, and masculinity), and consumption related variables

(Angelmar et al, 2004).

For example, Marketers can classify Nordic countries such as Finland, Sweden, Norway, and Denmark as one same segment group since they have a similar economic situation and culture.

2.1.2 Individual consumer-based segmentation

Global segmentation of individual customers can be based on general characteristics of the customers that are not directly related to the category and product of interest, or on characteristics which are explicitly related to it, which is so called the domain-specific characteristics (Angelmar et al, 2004). General characteristics for global market segmentation of individual customers General characteristics of individuals consist of variables such as demographics, values and lifestyles. Individual demographics may include age, gender, income and occupation while organizational demographics include firm industry, size, and location (Ibid). Domain-specific characteristics for global market segmentation Domain specific characteristics on the other hand, refer to customer characteristics, attitudes, needs, and behaviours that are explicitly related to the product category of concern for new product introduction.

2.1.3 Diffusion-based segmentation

The third basic segmentation approach is diffusion-based segmentation. This approach allows marketers to cluster countries based on diffusion patterns. It is equivalent to say, countries can be divided into groups according to the similarities in a typical pattern of how new products gain market penetration (Gatignon, 2004). Marketers collect date of how several new products have gained market penetration in several countries over time, and according to the data of how each product gained market penetration in each country, they can analyze the similarity and differences of those countries. These differences and similarities can be described as diffusion path.

The Waterfall Strategy In a Waterfall strategy, the business is spread in international markets sequentially. First a firm enters a new market and establishes an identity in the same. Establishing an identity involves estimation of potential market size and revenue patterns, identification of target segment, creation of brand awareness, identification and creation of possible distribution channels and finally formulation and implementation of sales strategy. All these strategies at individual stage is dependent on the product type and the life cycle. Once the product identity is established in the new market, the learning from the same is utilized to expand into another new market, somewhat with similar structure, sequentially. Learning is an iterative process in such a strategy formulation and it is a less risky process of expansion of business. The Sprinkler Strategy Markets are approached simultaneously in the sprinkler strategy. While this is a more risky strategic framework for entering new markets, typically it is more suitable for products with a shorter life cycle (like Technology products) or are at the Introduction and Growth Stage of the Product Life Cycle. In such a strategic framework, markets are entered simultaneously and often a Skimming Product Pricing strategy is used to generate as much profits as possible from sales. Experiences from market responses are limited to individual markets and the same are not replicated in the other markets. Dellse Direct model Dells direct model is based on direct sales to the consumers as well as corporate customers over the phone and the Internet. Not like other computer companies HP, IBM for instance, which rely on their distributors and retailers for the sales who naturally demand each of a 10 percent return. The directness provides Dell with customers immediate feedback efficiently on the expectations and needs from customers, the direct model also allows Dell to build every system to order and offer customers low prices

Dell Customer Group 1. 2. 3. 4. Home and home offices Small and medium size companies Large enterprises Public sectors

4.4 5.

Dells product

6. Dell designs and produces 9 different categories of products (servers, storage, printing 7. and imaging systems, workstations, notebook computers, desktop computers, 8. networking products, electronics products and accessories products), from highly 9. technical-concentrated such as storage, servers and work stations to private and homeused 10. computer systems such as desktops and notebook computers and many other 11. electronic accessories. Generally the products can be categorized to two different 12. clusters based on the different purposes they serve (Interview with Dell, 2006). 13. Consumer-based product 14. Dell's consumer-based product covers notebook computers and desktop computers for 15. personal use, plus the electronics and accessories. Customers purchase them purely for 16. the reason of private and home use. 17. Technology-based product 18. Dell's technology-based products cover a wide variety of storage, server systems, 19. workstation and networking that are necessary for large size enterprises. In other words, 20. customers of such are usually business units or public sectors, and they focus mostly on 21. the performance, reliability, and scalability that come with the product and they are 22. more or less price insensitive.

This fact is driven by the conditions favoring sprinkler strategy such as short product life cycle, a large size of foreign market, a rapid growth rate in foreign market, a low entry fixed cost and a strong competition. On a contrary, the reasons for that Dell still uses waterfall strategy for 10 percent of its new products provided us deeper understanding of the conditions favoring waterfall strategy. These conditions cover factors such as the small foreign markets, less wealthy markets, low innovativeness, and the nature of the product. All of these factors provide Dell to have higher uncertainty in success of new product introduction. Therefore, waterfall strategy is used to reduce this high risk.

Dell began advertising at electronics trade shows, in trade magazines and through other mediums targeted at corporate chief technology officers, who were responsible for their companies' computer purchases. In marketing to these executives, Dell highlighted the ease of customizability, the simplicity of placing orders through Dell's website and Dell's rapid order fulfillment abilities. The company also promoted its "Premier Pages" service, which provides corporate customers with 24-hour technical support services. Read more: Dell Marketing Strategies | eHow.com http://www.ehow.com/howdoes_4963888_dell-marketing-strategies.html#ixzz1X3rtcyRT

Focusing on Personal Users

In the early 2000s, Dell attempted to diversify its business by targeting personal consumers, such as families and students that needed to purchase computers. In doing so, the company highlighted many of the same features, including customizability and ease of ordering. Dell targeted personal consumers through direct email campaigns as well as television and print advertising. Additionally, Dell introduced a number of new products and features that personal users value, including enhanced graphics and sound cards as well as multicolored laptops. Dell also promoted larger servers and consulting services to its corporate customers as a way of grabbing a larger share of the corporate market and competing with companies such as IBM. Dell relied heavily on direct-to-consumer marketing efforts (such as electronic and paper mailers) in promoting both its personal and corporate computer products.

Dell's Retail Strategy

Dell's corporate computer business has slowed in recent years, forcing the company to increase its efforts to attract personal computer users. In the fall of 2007, Dell announced partnerships with major computer retailers, including Wal-Mart, Best Buy and Officeworks. These partnerships ended Dell's historical reliance on the direct-toconsumer channel and allowed the company to access the mass merchandise distribution channel, which is an enormous potential business opportunity for the company. Dell continued its direct-to-consumer marketing initiatives but also sought to promote its new partnerships in television and print advertising, often in conjunction with its retail partners. In doing so, Dell has begun to compete more heavily on price, as retailers such as Wal-Mart are known as low-price shopping destinations for all types of goods. Recently, Dell's marketing efforts have been less focused on product features and customizability and more focused on low price as the defining feature of Dell computers.

Read more: Dell Marketing Strategies | eHow.com http://www.ehow.com/howdoes_4963888_dell-marketing-strategies.html#ixzz1X3sQGWB1