Dell - Direct Marketing

In 1994, Dell made the bold decision to remove their products from retail stores and focused on direct to customer sales. In 1996 Dell began selling through their website which is to this day their most successful sales channel. By eliminating their retail store presence Dell was able to reduce costs on multiple fronts, reduce inventory, and maximize profits. Dell created an order system which allowed customers to specify and select options, components and features they wanted on their Dell device. Dell 's just in time inventory system lowered inventory holdings to just 3 days from 9 days and storage costs were thus minimized significantly. In 1995, Dell entered the Chinese market where a population of 1.3 billion was a great opportunity to create a significant market presence; IBM, Compaq, and Hewlett-Packard had all penetrated the Chinese market prior to this date and had opened offices in China during the early 1990’s. It wasn’t long before Dell proved to be worthy competition with not only international companies but also with local companies like Toshiba, Samsung, NEC and Acer. With so

The most critical shifts in Dell’s contextual factors, including industry dynamics, trends, technology changes and shift of the competitive landscape are following: The industry has changed significantly over the last 20 years. The traditional business model in the PC industry was inside-out, supplying machines based on orders from distribution, resell and retail channels, thus following the indirect selling concept. Dell’s direct model was at this time a new, challenging concept, taking orders directly from the end-consumer, and thereby, eliminating the middleman, costs and time. This was the initial crucial shift away from the traditional schema, allowing Dell’s quick

Dell's business strategy combines its direct customer model with a highly efficient manufacturing and supply chain management organization and an emphasis on standards-based technologies. This strategy enables Dell to provide customers with superior value; high-quality, relevant technology; customized systems; superior service and support; and products and services that are easy to buy and use.

4. By expanding the distribution channel one single customer doesn’t dominates the market share, and limited distribution channels could affect company’s bottom line.

Casablanca Kids is confronted with the interesting opportunity of redesigning their distribution channels. Effective distribution channel restructuring will allow the company to overcome their issue of declining net sales and therefore lead to a sustainable business. By developing a solution in a timely manner, the company has real potential to thrive.

Across both the distribution and retail businesses, mass market customers are seeking a seamless, effortless, convenient and low cost customer experience. We will continue to invest in digital channels, with self-serve capability, and will focus on ensuring our customer functions deliver a low cost to serve, and provide a timely, consistent response to customer needs. In the retail space, we will also focus on providing greater choice and flexibility to our customers, and enabling predictability around pricing.

Dell Computer Corporation was founded in 1984 by Michael Dell. From the early 1990s until the mid-2000s, Dell was ranked as a PC market leader relying on their distinctive marketing pattern “Direct Model” which undertook direct communication with customers and provided customized products. Recently, the PC industry is facing inconceivable worldwide competition, and Dell is gradually losing their competitive advantages by using its direct model in critical business segments. The company is facing shrinkage of growth, increasing competition, declining quality of customer service, and limitation of expansion. These issues have an enormous impact on Dell’s position as a technological giant in the PC industry.

Affordability of latest technology through Direct Sales Services - Dells uses direct customer relationship or as it calls it “customer intimacy” as its distribution strategy. This means meeting customer needs directly and cutting middleman interference as much as possible. This is done either through dedicated sales representatives, telephone based sales and online at www.dell.com. As a result, the purchase price would be lower than other competitors.

The Dell Computer Corporation was founded in 1984 by Michael Dell, who began the company by refurbishing IBM clones out of his dorm room for extra money. From the beginning and through the 1990’s, the company grew quickly and was very successful. Dell used a cost leadership strategy and focus on creating products that were already in the market place, but changed the timing of production and the method of distribution that was in place with the company’s competitors by assembling computers to order and selling directly to the customers. The company focused on creating value for customers and meeting their needs, but into the

Direct Approach: Unlike competitors Dell has done away with Resellers thereby reducing costs and offering better customer satisfactions.

Dell owed much of its success to its vaunted “Direct Model”: While competitors sold primarily

Dell has always been one of the largest PC makers in the United States. Recently, though its share of the PC industry has been declining. It went from the number one low cost provider of PCs in the world to number 3. Its inability to adapt to the new markets that have emerged has caused the company to fall behind other hi-tech companies such as IBM, Apple, and even HP. I feel this is an important topic because it is an example of a large company that has lost touch with what consumers want and is currently trying to restructure itself in order to gain back the dominance they once had. Consequently, Michael Dell has announced his decision to attempt a leverage buyout in order to retain control of his company. Furthermore,

The business model of dell which concentrates on a built to order framework where the middleman is removed and PCs are sold directly to the end buyer

marketing channel to allow the Company to sell directly to end users. This approach has

Dealing with wide range of channels through which business can interact with customer retailers have applied many concepts to achieve success and profitability. They optimized operations for each channel, which allowed to gain certain advantage in short-term. However, having independently managed channels within scope of operations of one organisation has proven to be rather ineffective approach – nowadays channels are not strictly separate routes of customer communication, but can cross and merge along the customer journey. This is why retailers don’t have other choice as to move to omni-channel concept, which “is about 1:1 experiences across the gamete of devices that consumers use” (Newman, 2014).