Dell Computer’s Marketing Strategy

•  Dell Computer's StrategyBuilt around a number of core elements
•  Core Elements of StrategyBuild-to-order manufacturing Mass customization Partnerships with suppliers Just-in-time components inventories Direct sales Market segmentation Customer service Extensive data and information sharing with both supply partners and customers.
• Virtual Integrationa stitching together of Dell's business with its supply partners and customers in real time such that all three appeared to be part of the same organizational team
• Build-to-Order Manufacturing and Mass CustomizationNo inventory – all built to custom order.No resellers with unsold inventory.PC delivered in five to six business days.Not the traditional value chain model.
•  Partnerships with Suppliersname-brand processors, disk drives, modems, speakers, and multimedia components enhanced the quality and performance of Dell's PCs.
•  Partnerships with SuppliersBecause Dell committed to purchase a specified percentage of its requirements from each of its long-term suppliers, Dell was assured of getting the volume of components it needed on a timely basis even when overall market demand for a particular component temporarily exceeded the overall market supply.
•  Partnerships with SuppliersTo help suppliers meet its just-in-time delivery expectations, Dell openly shared its daily production schedules, sales forecasts, and new-model introduction plans with vendors.
•  Partnerships with SuppliersDell's formal partnerships with key suppliers made it feasible to have some of their engineers assigned to Dell's product design teams and for them to be treated as part of Dell.
•  Partnerships with SuppliersDell's long-run commitment to its suppliers laid the basis for just-in-time delivery of suppliers' products to Dell's assembly plants in Texas, Ireland, and Malaysia.
• JIT Commitmentmajor cost advantages shortened the time for new generations of computer to deploy.Minimized part obsolescence.Prices reducing 1% per week.Utilizing sophisticated data exchange systems, Dell arranged for its shippers to do the final “assembly” of devices. (monitor and computer)
•  Inventory Turn1998 by Dell 7 daysGateway 14 daysCompaq 23 daysDell’s goal was 3 days by 2000
•  Direct Salesfirsthand intelligence about customer preferences and needs.immediate feedback on design problems and quality glitchesDell had a quick response to the problems.
• Market SegmentationIn 1998, 90 percent of Dell's sales were to business or government institutionsIn 1997, 31 percent, or $3.8 billion, of Dell's sales came from foreign customers, especially Europe.1998 sales at its Web site would reach $1.5 billion.
•  Customer ServiceMaintaining its close customer relationships allowed Dell to become quite knowledgeable about its customers' needs and how their PC network functioned.Corporate customers paid Dell fees to provide support and service. Problems relating to faulty components or flawed components design were promptly passed along to the relevant supplier,Dell had plans in place to build Application Solutions Centers in both Europe and North America capital services group to assist customers with financing their PC networks.
• Virtual Integration and Information-Sharingthe company was using technology and information-sharing with both supply partners and customers to blur the traditional arm's-length boundaries in the supplier- manufacturer-customer value chain.On-line communications technology made it easy for Dell to communicate inventory levels and replenishment needs to vendors daily or even hourly.A number of Dell's corporate accounts were large enough to justify dedicated on-site teams of Dell employees.
•  Information Sharingregional forums to stimulate the flow of information back and forth with customers. Platinum Councils composed of its largest customers in the United States, Europe, Japan, and the Asia-Pacific region.Dell found that the information gleaned from customers at these meetings assisted in forecasting demand for the company's products.
• Premiere Pagescustomized intranet sitespurchasing and technical information about the specific configurations of products that their company had purchased from Dell.who the Dell sales and support contacts were in every country where the customer had operations, detailed product descriptions, what software Dell loaded on each of the various types of PCs the customer purchased, service and warranty records, pricing, and the available technical support.>> most comprehensive Web-based PC commerce capability of any PC vendor.immediate access to the same database and problem-solving information that Dell's support personnel used to assist call-in customers
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•                                                                                                                            By:
•                                                                                                                            Pushkar anand