Marketing : Dell Pricing Strategy

Marketing. Because of the large number of suppliers selling similar products, apparel-retail firms must stimulate demand with attractive store layouts, colorful product offerings, and various sales promotions.

According to Horner and Swarbrooke (2005: 39), Segmentation may be defined as the process of dividing a whole market into subgroups or segments for marketing management purposes. Market segmentation is the division of the overall market for a service into various categories with common characteristics. In response to different segments, organisations facilitate the available resources to achieve greater efficiency, in order to satisfy specific needs of customers.

Dell’s strategies have different elements that have allowed the company to reach its current market position. The pieces of Dells strategy fit together just like all the elements of a clock, all the major pieces rely on one another in order for the company to succeed as a whole. This has permitted Dell’s strategy system to work so well because of its excellent logistics system. The system works so well it has enabled them to manage multiple pieces of the strategy simultaneously without glitches. Dells sales force management is able to interact with millions of customers worldwide through direct selling that is hands on and user friendly. They also have sales representatives for major clients such as governments, institutions and corporate clients who then customise their order.

The segmentation has been done on the basis of buying behavior of the customers. Knowledge of segment buying behavior can help redirect marketing resources for profit gain.

As every customer has unique needs and expectations towards certain products, the ultimate goal of market segmentation is to organize customers into groups which allows targeting of customers with similar needs of and response to the products. The key is to minimize differentiation within each segment

The proposal presented herein gives the background information of Dell Computers Corporation highlighting the current operation for the manufacture of computers. The proposal highlights the potential of the company to increase its market share and profitability through change of its culture from order based to inventory base.

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.

Dell Company has a successful business strategy. As it is following cost leadership strategy. Its success story is hidden in cost proposition, delivery, and unique customization. In response to the high performance and better chances for growth Dell is applying two way strategy parallel to one another.

Dell is the most successful company in PC industry of 21st century. It has shown phenomenal growth record over the past decades & listed as America’s third most admired company. Their core strength lies in Direct model offering closer customer interaction and Virtual Integration. This is giving a low cost advantage to Dell and its competitors are not able to imitate this model for all these years.

Segmentation consists on dividing the market into distinct group reflecting different target with homogeneous needs, characteristic or behavior (Armstrong and Kotler, 2005). Before opting for a segmentation strategy it is crucial to consider the attractiveness of the segment, its homogeneity and stability, as well as the accessibility of the target group.

The marketing segmentation concept allows a company to focus on a specific group of customers that it is best prepared and suited to satisfy. Rather than trying to be all things to all people, selecting a target market enables a company to tailor its offerings to more specific customer needs and preferences (Schewe & Hiam, 1998, p. 200). When a company focuses its efforts and capital (both tangible and intangible) on a more narrowly defined set of needs, it is more likely that the customers will get the product they desire. Companies that use the marketing segmentation concept typically have a more intimate knowledge of the customers they target, and customers usually relate better with companies that understand their interests. As such a relationship is built.

Segmentation is a tool; purpose is to choose target market.Segmentation comes prior to target market Many different tasks are involved other than segmentation when choosing target market Look at each segment on its own as an individual marketing opportunity. Potential worth of each segment To examine whether the whole market should be chosen or only few segments To find segments which are less satisfied in market from competitor brand.

The world is made up of different people, therefore segmentation provides consumers products that fulfil their individual needs. Martin (2011) states that companies have to try different segmentation variables either alone or in combination because often the best choices arise from using various strategies. There are few ways to segment a market, therefore, companies must think innovatively and be willing to re-segment if needed.

According to Blythe (2010), segmentation, targeting and positioning are fundamental to the concept of meeting customer need. This essay will outline and analyse these fundamental tools of marketing in an academic setting, in addition to, assessing how an organisation of my choice applies them in a working environment. Included in this essay, will be an academic discussion of the advantages of market segmentation, targeting and positioning drawing upon views of various scholars. Furthermore, I will provide a profile of my chosen organisation as well as an assessment of their market segmentation, targeting and positioning strategies. The essay will finish with a summary of the main points and will draw conclusions based on the evidence which has been presented.

Dell is making and selling low-cost, low-price computers to PC retailers in the United States. The PC 's are unbranded and should not be recognized as being Dell when the consumer makes a purchase. Re-branding and re-badging for retailers, although a departure for Dell, gives the company new market segments to attack with the associated marketing costs.