Marketing Model of Dell Computers Research Papers
The marketing model employed by Dell Computers is not totally dependent on electronic marketing means. To reach key customers, the firm uses in-person meetings and telephone solicitation. The majority of its orders, however, come through its Internet purchasing options. Currently about 50% of sales and technical support activities occur on-line along with 76% of order-status transactions. The firm intends to increase the range and scope of its Internet interactions with customers in the future through aggressive marketing. Product service and customer service is conducted through the Internet. Unlike one of Dell’s direct market competitors, Gateway, Dell has no plans in the future to open any brick and mortar locations or sell its computers through any channel other than direct marketing.
Although sales and net revenue grew in the past two years, the competitive nature of the market has reduced profitability. Average revenue per unit sold decreased in both fiscal year 2000 and 1999 by 8% and 10% respectively. For 2000, most of this decrease is attributable to Dell’s pricing strategy, which is designed to increase market share as through aggressive pricing practices. The decrease in 1999 net revenue is primarily attributable to component price reductions that affected all computer manufacturers. Nevertheless, Dell not only remains the second largest computer manufacturer worldwide, but is also a leader in profitability as determined by gross margin, return on equity, and return on assets. The firm is currently ranked as the leading supplier of PCs to the American market.
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