Dell’s leading direct to consumer model states the company’s view that no resellers ,no retailers or agents should separate the company from its customers. This sought of a customer care and service is achieved by Dell marketing its products through the internet and by telephone while the whole process from the initial order to loading for delivery takes only 36 hours and in some occasions as fast as 12 hours after been manufactured. With sales of a remarkable $55 million per day through its websites speaks for itself, for the advantages of the the internet being the ideal means for sustaining Dell’s strategy of made to order computers. More than half of Dell’s revenues today come from its websites, this not only reduces costs and time for the company but it also gives Dell a direct feel of the consumer’s demands and trends in any given time.
Consumers find that they are offered and receive a more personalised service through the internet in general, rather than when shopping using traditional ways. Supply chains have been changed with some levels disappearing and new ones appearing. The future capabilities of the internet are huge for the compamy, if the Dell web-site can be developed and implemented, it could mean further customisation and increasingly ‘electronic’ relationships with suppliers and customers.
The Internet option that is available to most people nowadays, has widened the choice available to customers because of low search costs, that occur as buyers are trying to find exactly what they need and costs are significantly reduced and less determined by geography. The internet has also reduced the search costs for sellers by allowing them to communicate product information through a website cost effectively to potential buyers and by offering sellers new ways to reach buyers through targeted advertising and one-to-one marketing. “The monetizing concept argues that online businesses must first capture large audiences of users or shoppers, and then later monetize those audiences through subscription fees, advertising and e-commerce” (Rayport – 2001). Dell has the advantage that the biggest share of the on-line users and buyers market already belongs to them and so on they should take advantage of it and continue offering customers made to order computers and keep innovating in order to retain current customers and also attract new customers with new products. “Online retailers are able to increase the number of product offerings and the information provided about each product because they are not constrained by physical shelf space” (Bakos – 2001).
Dells growth strategy is estimated to double in size in the next 5 years !! It sees huge potential in diversifying like its recent entry into the printer market and its expansion in the enterprise market where more & more customers are turning to Dell for net-working solutions. Dell’s strategy is to keep costs low, the service standards high, while not compromising on quality of the products and implementing the latest technology as far as possible. With this sought of strategy Dell is able to provide goods that more closely fit the customer’s needs, enhancing the business-to-consumer relationship and has the chance not only to sustain its market share but also become a growing threat to IBM’s business, which is the market leader in enterprise network solutions.
Dell seems to be extending the fundamental advantages i.e. focused on expansion of direct business model, current Dell initiatives include moving even greater volumes of product sales, customer service and support to the Internet channels. Dell still has a significant opportunity for expansion in all parts of the world and has expanded the reach of the direct model to new countries and regions that have great growth potential, such as Latin America and India. Opportunities for expansion also exist in all customer segments and in all product categories, from home pc’s to enterprise products, that play a key role in the build-out of the internet infrastructure.
After reviewing Dells performance it’s evidential; it’s been performing better than the market analysts expectations, for nearly two decades and
has performed better than expected by anyone. Its because of Dell’s marketing mix strategy that has added to its success, and it needs to expand on these marketing principles and work through the internet channels to continue selling directly to customers made to order computers, in order to sustain their strategies and continue increasing their profits and their market share.
