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Dell Computer's Marketing Strategy

Essay by   •  November 13, 2013  •  Case Study  •  5,065 Words (21 Pages)  •  843 Views

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Dell Computer's Marketing Strategy.

The CIM defines marketing as "Marketing is the management process responsible for identifying, anticipating & satisfying customer requirements and profitably"

According to Kotler et al (1996) "marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others"

1. Concept & Process of Marketing

Marketing is not a new concept. For as long as there have been markets, there have been marketers. The function of the marketer is to satisfy the customer's needs and wants. A successful marketer must satisfy the needs and wants of the customer and be able to anticipate what future requirements may be and ensure that they're met. The ultimate goal of the organisation is to provide this demand and be profitable

Organisations can be categorized into 4 distinct orientations. These determine how a business is focused and how products or services are marketed.

1) Product Oriented

2) Production Oriented

3) Selling Oriented

4) Market Oriented

Product Oriented Organisation

These organisations base their business strategies on the development and innovation of new products without having a clearly defined market. Food manufacturers continue to develop and improve products to attract new buyers. These include new toppings for pizza, new flavourings for chocolate bars etc. They are not aimed at a specific market but seen as an improvement to existing products. There are advantages to this type of orientation; it produces innovative products and will have a motivated staff as they are encouraged to be creative. However, their innovations will not be market or customer focused and thus may be prone to failure. Coke Cola's Dasani launched in 1985 and Guinness' light in 1979 both failed in the marketplace.

Production Oriented Organisation.

These organisations focus on effecting economies of scale by producing goods in large quantities. Companies with a production focus operate in markets where demand exceeds supply and the final market is guaranteed. They focus on constantly improving production techniques and costs and optimising distribution channels. The weakness with this strategy is that the end user's needs are not addressed. Electronics manufacturers for example, enjoy profits through economies of scale but they will be led by product and distribution costs.

Sales Oriented Organisation

Sales oriented businesses are focused on the short term profit. They are centred on the Sales team who are encouraged to "make the sale". Little thought is given to aftercare services or customer satisfaction. Although high profits can be made in a short amount of time, a sales oriented company can quickly falter when competitors enter the market. Without a loyal customer base, sales will dwindle. Real Estate agents come under the Sales Oriented strategy. While Sales oriented staff will be highly motivated by selling, they will also come under threat for under performance and these companies experience a high staff turnover.

Marketing Oriented Organisation

A Marketing Oriented organisation focuses its business strategies around the customer. They support the idea that the "customer is king" and focus activities on understanding the customer's needs and answering these needs by developing products & services accordingly. It is imperative that all departments must work as one towards achieving the goal of meeting the customer's requirements. This business is profit orientated but profit is seen as a long term strategy which will be achieved by understanding, meeting and anticipating the customer's needs. To succeed in the long term, they must focus on both profit and market presence. A marketing oriented business will adopt this strategy in order to embed their products and brands in the market and will be able to face competition through customer loyalty and strong brand and company image.

This orientation does have its limitations, as it is based on the entire company buying into the idea that the customer is king and all staff are responsible for the ultimate satisfaction of the customer. If the workforce is not fully on board with this idea, the essence of the marketing concept will be lost.

Kotler et al highlights the differences between the selling and marketing concepts.

Dell can be seen to have adopted the Marketing Orientation as they target the needs and wants of their target market and strive to meet demand more effectively and profitably than their rivals.

Dell could have been classed as a product or production oriented organisation, however they continue to create variations of their products to meet the customer demand, continue to attract new customers through media advertising, and provide a "one stop shop" where potential customers can visit a user friendly website and purchase all their computer needs in one go.

Dell also adopt a 2nd marketing approach - Societal marketing, where an organisation continues to provide for the needs and wants of a target market but also lives up to certain expectations. Under Dell's Corporate Responsibility banner, it lists what the company is doing in the following areas:

Protecting the Planet - Dell is committed to supporting the work of the Intergovernmental Panel on Climate Change (IPCC) to reduce emissions levels by between 50 & 80% buy 2050

Empowering Youth - Dell's focus is to link up with NGOs to bring technology to the world's neediest children. They have donated more than $8 million USD to this cause.

Supporting communities worldwide. - Dell are active in supporting diverse communities worldwide. They support those with disabilities, transgender, gay and lesbian communities with the aim to achieve innovative solutions for a diverse customer base.

A message from the founder, Michael Dell, outlines Dell's commitment to Corporate Responsibility highlighting that for the 6th year in a row, Dell has earned a perfect score with the Human Rights Campaign. Michael Dell's commitment to adopting a Marketing Strategy for his organisation is clear. However, such a strategy

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