Dell case study

Case Study

10/23/2012

Planning & media Management SEGi University By: Kabiru Ahmed Shahir

1|Page SEGI UNIVERSITY

Case Study

Table of Contents Question 1 ..................................................................................................................................................... 2 Answers ..................................................................................................................................................... 2 Question 2 ..................................................................................................................................................... 3 Answers ..................................................................................................................................................... 3 Part: B........................................................................................................................................................ 4 Question 3 ..................................................................................................................................................... 5 Answers Part: A ......................................................................................................................................... 5 Part B:........................................................................................................................................................ 5 Question 4 ..................................................................................................................................................... 7 Question 5 ..................................................................................................................................................... 8 Bibliography ................................................................................................................................................ 11

Individual assignment By: Kabiru Ahmed Shahir

SCM -013621

2|Page SEGI UNIVERSITY

Case Study

Question 1 How did Dell put the customer in control of the buying process? How does the Internet help in this feature of Dell’s business?

Answers The term buying process can be defined as a step by step procedure that businesses and individuals go thru when purchasing a product or service it involves an interacting structure of people ,equipment ,methods and controls (Ulric & Richard, 2009)the decision on WHEN ,WHAT, WHERE and HOW MUCH is that which is the leading or key component of an effective inventory management because a purchasing system manages all A purchasing system manages the entire buying process from requisition down to purchase order and till payment is being done (Investopidea, 2012) This study will be on the consumer buying process online under the dell company how dell put its customer in control of the buying process Dell makes its order for computers ,workstations and servers based on orders from customers ,dell never kept inventory or stock of any computer , they put the customers in power because every customer’s computer was made to his own order and according to the type of machine they want either a desktop or a personal PC (laptop) the configuration they want how fast (RAM)it should be how powerful it should be ?(Processor ) the hard-disk capacity which CD-ROM drive ,down to their preferred speakers and accessories. (Malviya, Nair, & Aniket, 2010) Another aspect that Dell used was the Upwards communication upward meaning from the customer to the company, allowing something close to pepper’s idea one-to-one scenario. Secondly the zero stock structure eliminated a whole series of costs which fell out of the supply chain, allowing lower cost to be transferred to the customer improving company competitiveness as well. (Saini, 2010) . Dell had operated its assembly lines in traditional fashion, with workers each performing a single operation but few years later dell shifted to "cell manufacturing" techniques whereby a team of workers operating at a group workstation (or cell) assembled an entire PC according to customer specifications. The shift to cell manufacturing reduced Dell’s assembly times by 75 percent and doubled productivity per square foot of assembly space. An order form accompanied each metal chassis across the production floor; drives, chips, and ancillary items were installed to match customer specifications. (Malviya, Nair, & Aniket, 2010) Individual assignment By: Kabiru Ahmed Shahir

SCM -013621

3|Page SEGI UNIVERSITY

Case Study

To conclude on this question the study shows that dell puts its consumer in leading role making their consumer in control at a leading role which means they work for their consumer.

Question 2 What can Dell do to regain eminence with its core B2B market? How can it move into the consumer market successfully?

Answers A company like dell with its strong history over the online market it should have not encounter any problems remaining the core of Business –to- business online but unfortunately with the internet becoming more and more business oriented and competitors such as HP , Acer and IBM Lenovo all joining the online sale the Dell company would have change its strategy bring in a game changer ,according to the case study some of the strategies use by Dell mostly direct marketing and internet marketing dell built it reputation on direct marketing which they claimed has been working for them dell company is mostly focused on direct marking i.e. sharing of catalogs door to door and ,inserts dell also marketed on TV adds radio ,emails and print media . Dell Company was using all the right medium of getting to be the number 1 brand but was still failing the problem here is not where it was marketing but the question here is how was dell marketing its products to which target audience and which market? What segments? With recent studies from an online marketing firm cited that now 60% of B2B have implemented the a social media strategy or plan (Krish, 2009) which in the case of dell company that means dell should join the social media and make it an open blog or conversation, post videos cartoons and animations this strategy will make dell have more brand awareness, increasing new business, and building community (Krish, 2009) Dell should also rely on a very strong medium which was not listed in the case study which is the-word-of-mouth because it is easier to sell new product to existing customers than new

Individual assignment By: Kabiru Ahmed Shahir

SCM -013621

4|Page SEGI UNIVERSITY

Case Study

customers because selling product to customers they do not know might really add any value unless they are aware of the product . (Krish, 2009)

Part: B How can it move into the consumer market successfully?

For dell to move successfully from business –to-business market to the consumer market they should put in to consideration the following According to the case study dell B2B has been a success in the past few years the early era of the e-marketing and e-business but now B2B is not enough for dell to remain in its position as the best because as dell have great products range if they maintain it and continue to improve it, they might have the opportunity to become the consumer brand as well because we all know that all business –to-business buyers have personal lives For Dell to penetrate into the consumer market they need to know who really is their consumer because the consumer have force to turn business around, either into a big success or a sorry failure (oddity Software, 2012) The moment dell knows the specific segment of its market is, the next thing they have to do is to check which of them are going to give you more business. Then they can then start ranking the actual people belonging in that category when developing their marketing strategy (oddity Software, 2012) Studies show that the consumer market is been characterized by different types of buyers with impulse –purchasers and emotional purchasers are involved in that markets dell needs to reach to these type of customers by making advertisements that are communicating to the consumer and creating the correct offer this is key in generating sales from consumers because offers control response rate which will lead to a high commitment which in the consumer market it is very important

Individual assignment By: Kabiru Ahmed Shahir

SCM -013621

5|Page SEGI UNIVERSITY

Case Study

Another thing Dell should take into consideration

are

three good points to consider in

determining whether or not the segment is profitable are its size, its congestion, and the group's buying power. The larger the market is, the more people can buy more dell product. The fewer competitors dell has on that market, the better their performance will be. And lastly, the ability of people within the group to buy or benefit of your product determines your actual profitability. (oddity Software, 2012) To conclude on this question if dell apply all the strategies above or take note of their market and keep their old customers happy they will penetrate easy into the consumer market.

Question 3 Why has Dell been forced into retail? Compare and contrast Dell’s direct approach with the Brand-building approaches of HP and IBM.

Answers Part: A According to the case study the reason that dell faced its greatest fear which is moving to a retail store was that two other players in that industry posted treats against dell the first was the swing of products towards matching computing power and entertainment and the high specks were needed for game playing in home entertainment another factor was that dell was mostly focusing on businesses and b2b market had become so competitive and tougher. And most business wanted standardized machines which were basically commodities which made price have gone into a free fall in the face of steep completion .so this made dell consumer market to start growing by 2005 consumer sales were growing twice as fast as b2b purchases

Part B: dell

HP

Individual assignment By: Kabiru Ahmed Shahir

IBM

SCM -013621

6|Page SEGI UNIVERSITY

Brand

dell

claims

Case Study

that

it

has The

company

HP The

company

IBM

is

building and transformed everyone within undertook the following building its brand throw direct

the company in to a marketer activities to develop a pan- genuinely

going

ahead

approach

so today more than ever they HP brand

with their plan of building

make their technical people

a smarter planet and being

become marketers and talking -Identify the HP brand a green company directly to the customers

strategy

–

a

cohesive

strategy across all entities. Dell is using social media to

IBM began by launching an online forum in which

build its brand and loyalty as -Implement focused brand employees

would

co-

well dell company post a free architecture to rationalize create an updated set of social

society

intervention

in

with

no existing

portfolio

customer drive future decisions.

and corporate beliefs

values (among

and them,

“Innovation that matters –

conversation on social media

-Utilize a common asset for our company and the They use that brand loyalty to platform – integrated HP world”), bring

more

and

more digital asset management IBM spends over $600 on employee customers system to house source million training, contributes Dell claims that over 50 % of assets. $1,000 to every employee their customers are building - HP brand ambassadors for any kind of continuing education, and launched impressions about dell brands were identified: the “Transition 2 post-purchase i.e. customer  Optimistic Teaching” program to talking to their friends about  Brave support IBMers who seek to live the company’s dell brands  Relentless Brand Ideal in classrooms (Dave, 2012)  Ingenuity all over the world. (IBM, 2012)

Sources (Dell, 2012), (Morgan, 2011) , (IBM, 2012) (IBM, 2012)

Individual assignment By: Kabiru Ahmed Shahir

SCM -013621

7|Page SEGI UNIVERSITY

Case Study

Question 4 How should Dell use web search, e-mail, affiliate marketing and direct mail to best effect to support its inbound Web and telephone sales channels? Answerers More than half fortune 500 companies utilize direct marketing and dell happens to be no different dell company use the direct mailing service in the way that it will benefit the company, as we read from the case study dell has been using direct mailing but for the B2b business only not the consumer market but if dell would want to remain in the dominant position it should focus on its consumer market using magazines such as PC, magazine and PC world these would also serve as an inbound out bound telemarketing to reach its customers (Stanford University , 2000) Dell can achieve concentration by direct mail but the type of mail may include some sample of pictures or animations CD.s on how to purchase or some promotions and a prefilled reply on the device video in order to get the desired immediate response If dell was to use this channel of direct mail it would spend much less on marketing i.e. R&D And entering this channel is simple and easy for dell they will just have to imitated their competitors but with higher benefits and direct mail channel only requires them of a post office box and or a telephone number

Web search as inbound web service Dell company should use the inbound service in other to know more about the people who are already learning about the company products and service rather than doing masses of people who do not know nothing about dell, dell can open a social media (twitter, facebook and blogosphere) dell should , try to get payment priority l listing on google this will enable buyer to find it easy to gain a relationship with dell (Hillgan, 2010) Individual assignment By: Kabiru Ahmed Shahir

SCM -013621

8|Page SEGI UNIVERSITY

Case Study

Web search on Telephone sale channels The dell company can use web-search to gain telephone sales because the on the website or web listing for most organization their contact number is on the listing or website to sell their products over the telephone and create contact with consumers these are some of the ways that dell might make sure to handle their telephone sale channel effectively its telephone sale channel is

now much more easy with the invention of VOP (VIBER

FACETIME SKYPE and YAHOO VDO calling ) the strategies above will be easier for dell company to apply (Anonymouse, 2011)

Question 5 What are the key characteristics and differences for business-to-business (B2B) direct marketing compared to consumer (B2C) direct marketing?

The B2B market is very much different from the consumer market i.e. B2C one way to understand the Business 2 business market is to contrasts the consumer market as well as the business market the major difference of the consumer and the business market is that the 2 markets have 2 types of selling situation. (Moules, 2011) Many products are classified and raw materials or semi-finished goods however theses good are really sold in consumer markets making one major difference between the 2 markets because consumer only buy finished goods ,the goods sold to business are usually more of technical nature than that of the consumer market ,and business 2 business products are mainly bought

Individual assignment By: Kabiru Ahmed Shahir

SCM -013621

9|Page SEGI UNIVERSITY

Case Study

based on specifications, pricing for business goods are more often lower in ranking of importance rather uniformity and quality ,delivery ,servicing technical assistance and the ability to extend the credit terms (Moules, 2011) Another difference that distinguishes the two markets is the characteristics of the buyers; the industrial market is normally characterized by technical qualified, professional buyers. their motives are usually considered more rational than those found in the consumer market and the buying situation is based on factors such specification ,vendor analysis and cost effectiveness as opposed to emotional of impulse –purchasing of the consumer market , the industrial or b2b purchases involve the multiple buying influences are involved in almost all their purchases ,this means the decision to buy a system or products in b2b is not made by an individual rather it is made by a whole group of people i.e. a committee For an industrial or b2b purchases a company may select two or more suppliers from which to buy same products from that of which it meets its requirement

The consumer market on the other hand is so different that the decision making process with a house hold is are considered to be very different from decision making of the b2b or industry because one falls into the domain of the consumer behavior and other in to the domain of the organizational behavior, for the consumer market, the marketer is required to be concerned with how he affects or fits into the decision making process. (Moules, 2011) In the area of advertising many b2b advertisers treat business adds very differently from consumer adds mean while some argue that b2b Ads are very similar to consumer ads in many ways, but in reality they are both similarities and differences although the basic communication principles are the same business adds should follow citrine guidelines that do not necessarily apply to consumer ads. (Moules, 2011)

Individual assignment By: Kabiru Ahmed Shahir

SCM -013621

10 | P a g e S E G I U N I V E R S I T Y

Case Study

Business-to-business direct marketing involves communicating with business marketers, middlemen, and professionals such as doctors and lawyers the copy must be specific, proved news and information and be easily understood, another difference between the business and consumer markets is the communication strategy of advertising appear most often in how products and service are characterized and in what emphasis is placed on price. (Moules, 2011) Finally although firms make different kinds of offer to both consumers and business markets as key to generating sale but both are involve in the same principles

Individual assignment By: Kabiru Ahmed Shahir

SCM -013621

11 | P a g e S E G I U N I V E R S I T Y

Case Study

Bibliography Anonymouse. (2011). telephone selling. telephone sellling. Dave, R. (Director). (2012). Building Your Brand with social media [Motion Picture]. Dell. (2012). Dell Social Network. Retrieved 11 2, 2012, from Building your brand : http://www.dell.com/us/business/p/d/videos~en/Documents~tlv-03-social-media.aspx.aspx Hillgan, B. (2010). HubSpot's Inbound. inbound VS outbound, 1. IBM. (2012). Brand IBM: Strategy, Rediscovery And Growth. Rediscovery And Growth, 1. IBM. (2012). IBM.com. Retrieved november 4, 2012, from IBM approach: http://www01.ibm.com/software/lotus/products/smartsuite/approach.html Investopidea. (2012). investopidea. Retrieved 10 29, 2012, from Business and accounting : http://www.investopedia.com/terms/p/purchasing-system.asp#ixzz2AIBoQDtW Krish. (2009, November 26). Ayushveda marketing. Retrieved 11 1, 2012, from coprate social responsibility: http://ayushveda.com/blogs/business/corporate-social-responsibility-buildingbrands-with-innovation/ Malviya, M., Nair, V., & Aniket, B. (2010). PRODUCTION &OPERATIONS MANAGEMENT OFDELL COMPUTERS. India: Mohit Malviya. Morgan, K. (2011, march 9). HRM Today . Retrieved november 4, 2012, from Hewlett Packard : http://www.hrmtoday.com/featured-stories/case-study-%E2%80%93-hewlett-packard%E2%80%93-activating-the-brand-through-cultural-values-and-behaviors/ Moules, J. (2011, september 30). moving from business to consumer market. Financial times, p. 3. oddity Software. (2012). Odity software. Retrieved 11 1, 2012, from Oddity Blog: http://www.odditysoftware.com/blog/developing-a-consumer-marketing-strategy_39.html Saini, B. (2010, october 13). Retrieved 10 30, 2012, from Management Paradies.com: http://www.managementparadise.com/article.php?article_id=569?&lang=en_us&output=json Stanford University . (2000). DellCase . Dell Direct . Ulric, J. G., & Richard, D. (2009). the Purchasing Process. NewYouk, NY, USA.

Individual assignment By: Kabiru Ahmed Shahir

SCM -013621