Dell divides its customer base into two main segments: consumer/home and small business. The consumer segment focuses on latest features and value, while small businesses need computers that are easy to upgrade and service. Dell advertises through national newspapers, magazines, TV, and inserts to get customers to order computers directly. It measures campaign effectiveness by calls and website clicks to optimize marketing spend.

1. Business 2000 E I G H T H e d i t i o n Working in Dell’s Sales and What is Direct Marketing? Support Customer Centre Michael Dell is one of the most famous business people in the Imagine that you are a member of the Dell sales team. It is a busy day with world. The story of how he DIRECTLY FROM DELL lots of calls and email enquiries. A call comes in from a householder who founded Dell in 1984 (with just says he has seen your brochure in the Sunday paper. He is reading from $1,000), is well known. A it and says he is interested in the Dell Dimension TM 2400 desktop. He tells critical key to success used you that he doesn’t understand any of the mysterious terminology about TO THE CUSTOMER from the very start was his processors and so on.The flat screen looks nice and will save space. He concept of direct marketing. just wants to type letters and keep domestic accounts. Is the product any Most computer companies sell good and when can it be delivered? You handle these kinds of calls every their products to retailers, who day, offering advice and support. Another sale is made and another introduction sell them on to customers domestic customer is satisfied. through their shops. This Dell Inc. is a premier provider of products and services required for customers worldwide to build their indirect distribution process The next call is from the manager of a small company. She is thinking of information technology and internet infrastructures.The company supplies PCs to business and domestic obviously adds cost and the buying a server. She knows all the technical language but is not sure about customer must pay for this. customers across the globe. In addition, Dell supplies a range of IT products and services to businesses, installing the machine on the local network.This requires some specialist Dell eliminates this additional including powerful servers, storage, workstations, notebooks, and desktops. Dell employs input, so you get advice from a colleague who deals with these types of cost by selling directly to the questions. Your colleague tells the customer everything she needs to approximately 47,800 people worldwide.Total sales currently exceed US$43.5bn per annum. customer. Furthermore, this know.The customer purchases a Dell server. Another business customer approach brings a number of is satisfied. Dell is a truly global company, headquartered in Round Rock, other critical business Texas, USA.The European Manufacturing plant is located in advantages: These are only two of the many daily orders received by Dell sales staff. Limerick. Dell’s advanced, just-in-time, build-to-order The order details are automatically forwarded to the manufacturing plant ◗ By dealing directly with its customers, Dell can find out exactly what manufacturing system produces computers for customers in Limerick to be specially made and customers receive their computers they need and want.This ensures that expectations are met and that in seven to ten working days. Thousands upon thousands of customers throughout Europe, the Middle East, and Africa. Sales and customers are not disappointed. In addition, Dell hears the views of have made a similar phone call, received advice, and purchased a support centres for small business and domestic customers thousands of individual customers and gains a deep understanding of computer. They did not have to spend time visiting shops. They have are located in a number of centres around Europe their individual requirements. reaped the benefits of direct marketing. including Bray, Co.Wicklow and Cherrywood Science ◗ Each computer is built to order.The customer can specify the features and Technology Park, Co. Dublin. Dell also has they want. That particular PC is then built and delivered to that offices in most European countries to serve particular customer. Such a PC is said to be customised .This is a highly the needs of large corporate and personalised service. government customers. ◗ Dell builds computers on a just-in-time (JIT) , build-to-order Dell (BTO) basis. Therefore, if a new technology emerges it can be is Ireland's largest included immediately.A company with stocks of ready-made computers cannot do this. exporter * and largest technology company with approximately 4,300 ◗ The JIT/BTO approach also means that Dell does staff. Overall it is ranked the second not have to keep stocks of components or ready- largest company in Ireland. + In addition, made computers. Stock, which is also called Dell is considered the largest PC supplier inventory , costs money. Dell does not have these in Ireland, with about a 35 percent costs and, therefore, can sell to the customer at a lower price. market share*.You can find out more about Dell at In the Dell Direct Model , the customer is the beginning and www.dell.ie end of the process. As a result, Dell can deliver high quality computers to satisfied customers at the best possible prices. * Irish Exporter's Association + IDC Q4 2003 Furthermore, Dell can do this all over the world. Business 2000 Dell - Directly from Dell to the Customer www.business2000.ie E I G H T H e d i t i o n

2. manager in each country who is consulted about the details of any local Communicating Dell Segments its Market campaign. National differences also influence the type of media used for an the Dell message advertisement. For example, in the UK and Spain, there are TV channels Glossary The market Dell serves from its customer centre in Bray is known as the with very large audiences. Accordingly, advertisement on television is used Home and Small Business (HSB) market. Sometimes it makes sense to All businesses work hard to ensure that people know who they are and more frequently in these countries. Configure: To arrange the components in a computer.A divide customers into categories if each category shares common what they do. Dell works harder than most in this area. It is critical for a PC contains various components such as memory and a characteristics. This process is called segmentation and each category is direct marketing business to manage its public communications in a highly European Campaigns hard disk. When customers choose the size and mix of called a segment. A company’s approach to segmentation is a very effective manner. How else would customers know what Dell has to offer are managed from Ireland these components they are configuring their computers. important element in its marketing strategy. Each segment must then be since there are no retail outlets where products can be seen or inspected? Promotional materials are produced in-house by Dell staff.They produce managed in a unique way, probably by using a different marketing mix . Build-to-Order : A customer can specify the Dell’s public communications strategy has three main components: the adverts for national press, computer magazines, and faxes. The place components and features they want included - the For example, a business customer usually needs all the computers in the they work in is called the Marcoms (Marketing Communications) Studio .The computer is specially built to their requirements. office to be the same and to be easy to upgrade and service. A domestic Advertising costs associated with campaigns are very high and it is extremely important customer is more focussed on the latest features and value for money. E-commerce: To carry out business transactions (for Dell advertises in the national newspapers, computer magazines, on the to control them.The Studio was put Marketing staff in Dell divide their market into two main segments - example, to place an order) by electronic means usually in place to do this and has been Internet and TV and by placing inserts in newspapers and magazines. Most consumer (domestic) and small business . In marketing terms a consumer via the Internet. very successful. The staff use their of us are familiar with these inserts. Dell’s advertising campaigns are designed or home market is known as B2C (business to consumer), while a business Just-in-Time (JIT): A manufacturing system where knowledge of different customer with one central objective - to get a potential customer to ring up or gomarket is known as B2B (business to business). About 1,000 people work products are only produced as they are needed and raw and country profiles to design and online and order a computer. Dell measures the impact of each individual in Dell’s HSB Division. materials are only delivered as they are required. This manage highly successful campaigns marketing campaign by assessing the volume of calls to sales representatives eliminates the costs associated with keeping stocks of across Europe, the Middle East, and and the number of clicks to the Dell website. Dell marketers map the finished goods or stocks of raw materials. Africa. Flexibility and speed are key campaign response to the original costs to measure the return on The Home and Small Business Segments Marketing Mix: Any combination of the various factors in this success story. For investment (ROI). Dell then measures the effectiveness of each campaign, There are several differences between domestic customers and business elements of marketing.The most famous mix is the 4Ps - example, if Dell introduces a new product or decides to promote a new price comparing and ranking campaigns, learning from best results, thus keeping customers. product, price, place, and promotion.The term media mix offer, it can design a new campaign immediately to communicate the changes advertising fresh and most importantly customer responsive. In addition, the ◗ Businesses often have dedicated budgets for the purchase of computers. applies to any mix of media used for advertising or to the customers. ◗ They usually spend more. promotion, e.g., television, radio, newspapers etc. effectiveness of different campaigns can easily be compared. ◗ They buy at regular intervals and are usually repeat purchasers unlike Servers: Computers used in networks to store files etc, domestic customers who often buy just one home computer and creative marketing brings Direct Mail for use by other PCs on the network. purchase another only when the original one is outdated. Any promotional material sent to customers through the post is known as value to the customer Storage: Any device that can store computer data, for ◗ They will normally purchase to an agreed plan. Domestic customers direct mail. Direct mail is a widely used advertising process. Dell publishes example a hard disk.Businesses often use specialised high- often purchase for highly personal reasons, e.g., they want to email various 24-page monthly catalogues, describing available product ranges. Dell is one of the most successful companies in the world. This study capacity storage systems. family or play games. Different catalogues are geared to separate Dell markets - one for the concentrates on the HSB market but it should be mentioned that the ◗ Businesses often have a specialist staff member who looks after these company also serves the largest industries worldwide.The Dell combination small businesses and the other for domestic customers. This is sent to a purchases. of direct marketing and just-in-time, build-to-order manufacturing brings the selected group of customers who are on Dell’s mailing lists. ◗ They may purchase more complex machines such as servers. benefits of low cost and high quality to each and every customer.This focus ◗ They are focussed on more than just the price - they look at other on customer value is responsible for Dell’s market leadership position. TASKS & ACTIVITIES Online factors such as how easy is it to upgrade the computer or to service The Internet offers many advantages to a direct marketing company. it.This is called Total Cost of Ownership (TCO). Business Products can be shown and described in detail on a website. However, the Work and Dell 1 Identify the advantages of direct marketing for the website is not used for advertising purposes only. In effect, the website is Dell are publicly committed to offering value to all stakeholders - suppliers, In view of these differences, Dell appoints an Account Manager to look after the Dell shop. customers, shareholders, and employees alike. As discussed in the study, business and for the customer. Can you think of any the interest of a larger business. An Account Manger will build a long-term Customers can Dell serves customers across many different national cultures.Accordingly, disadvantages? relationship with the business customer.The customer will be able to make Dell values diversity in the workforce. People of many different 2 What are the benefits to the business of a JIT/BTO browse at their contact with their Account Manager to get advice, to solve a problem or to personalities, nationalities, skills and qualifications work in Dell.Anyone who leisure without place an order. system? would like to work at Dell would certainly need to possess a mix of skills, l eaving their 3 If you were selling CDs online, what media mix would especially analytical and interpersonal skills. home or office. you choose to advertise your services? People in different countries have In fact, Dell was 4 If you were responsible for promoting a football different preferences Just in Time (JIT) one of the first match, how would you segment your market? Another approach to segmentation is to consider differences in national Dell’s manufacturing plant in Limerick is among the most advanced in the companies to 5 Identify some of the differences between customers’ cultures. Dell’s experience shows that different nationalities do, indeed, world.Raw materials and components are delivered just in time through forty use the Internet have different preferences when buying computers. Customers in France dock doors on one side of the building. Computers are manufactured in cells buying behaviour in the B2B and B2C markets. for business and Germany tend to use their credit cards less than others. Therefore, by teams and rigorously tested.The finished products are then dispatched via purposes and they may be less likely to buy online. People in the Nordic countries are another forty doors on the other side of the building, destined for direct was the first to very willing to buy online. A German customer is more likely to be delivery to customers' offices record $1m in online sales. Dell’s e-commerce website, www.dell.com, is interested in all the technical and pricing details. On the other hand, a and homes throughout Europe, one of the busiest in the world.The site is distributed across 86 countries, Swedish customer likes to make a more spontaneous decision when the Middle East, and Africa. Raw materials Computers for and components Limerick using 28 languages or dialects and 29 different currencies. On the website, talking to the sales person. Customers in the UK and France are very Usually no component is in the delivered by delivery to Europe, Photo Middle East & Africa suppliers www.dell.ie customers can review, configure , and price computer systems for sensitive to prices. These cultural differences are important because all factory for more than three themselves.They can place an order online and then track the order from advertisements and other promotional material must be designed to suit days. the manufacturing stage to actual delivery. each country. This process is called localisation . Dell has an advertising Business 2000 www.business2000.ie E I G H t h e d i t i o n