J. ALVAREZ

REGINALD G. WALKER, JR. B. WATTS

Principles of Marketing MKTG 3175-02

Dr. Anshu Arora

• He was born 2/23/65 in Houston, TX to a stockbroker mother and an orthodontist father.

• 8 years old sent away for info on GED. • 12 years old - worked as dishwasher at Chinese restaurant to save money for his

stamp collection. Turned into mail-order trading business for stamps and baseball cards. Earned $2000.

• ~14 years old got his first pc, an Apple II. To his parents dismay, he took it apart to see how it worked and learned that he had a knack for computers.

• High school – job delivering newspapers for Houston Post. Aggressive strategies (newly married couples) resulted in earnings of $18,000. Dell purchased a BMW.

• College – was supposed to be going to be a doctor. Dell used savings $1000 to start PCs Unlimited to build and sell computers to people at college. He was soon earning about $25,000 per month. He soon dropped out of college and focused entirely on his computer company.

• 1984 May 3rd – Michael Dell’s company began as PCs Unlimited – using parts from IBM & Compaq – added unique elements. – $6 million in sales.

• 1985 PCs Unlimited had over 30 employees. – Dell began producing Turbo PC – it’s own laptop.

• 1987 name changed from PCs Unlimited to Dell Computer Corporation. – Started offering house calls to service customers PCs because of lack of stores.

• 1988 Dell Computer Corporation’s stock went public. • 1992 Michael Dell was the youngest CEO of a Fortune 500 company. • 1993 technology industry suffering slowdown. Dell was suffering from numerous

management problems. – Company scrapped plans to create a new laptop because it realized the product

was outmatched. – An attempt to sell standardized Dell computers through retail outlets like Wal-

Mart and Best Buy failed. – Dell brought in several new high-level managers and reorganized. – Company came out with Latitude XP – it’s own successful new laptop.

• 1999 “Direct from Dell” by Michael Dell was published. • 2000 Michael Dell was a billionaire. Dell Computer Corporation had offices in 34

countries and more than 35,000 employees. • 2001 Dell Computer surpassed Compaq Computer as the world's largest PC maker. • 2003 Dell Computer Corporation was changed to Dell, Inc. signifying a global and

technological expansion. – Expanded line of products include network servers, storage systems, handheld

computers, and printers. • 2004 Dell stepped down as CEO but remained as Chairman of the Board.

– Company had grown faster in its first 20 years than Wal-Mart, Microsoft and General Electric.

• 2005 Dell took a $300 million charge to fix and replace faulty computers due to bad capacitors on Taiwanese motherboards. – Result was that Dell lost its top position in the industry.

• 2007 Michael Dell returned as CEO.

– Demand for laptops increases, the desire for

desktops decreases. – Dell is offering network servers, storage systems,

handheld computers and printers; in addition to customized desktop and laptop computers. No longer a “One-Trick Pony.”

– He discovered as a young boy that his time was best spent not trying to be all things to all people. If he wanted to run a great business, he needed to narrowly and specifically define who he wanted to spend his time and energy on.

2011 State of the PC Market (Units Shipments are in thousands)

• VALS Model • Thinkers look for products that are well-designed,

long-lasting and price-worthy. • Believers choose products that they already know.

They are typically loyal customers and prefer brands made in the USA.

• Achievers prefer prominent, established products that show their colleagues that they are successful.

• Product Market • Individuals, Enterprises, Businesses, Small and Medium Businesses.

• Segmentation and Targeting • “Realigning is nothing new to Dell” In 2008, Dell announced a global

segmentation strategy. • Marketing strategies had to work for both parts with minor

adjustments.

•Desktops •Servers •Notebooks •Netbooks •Peripherals – components •Printers •Television •Scanners •Storage

•Cost Effective System •Configurated System •Product Services •Easy-to-buy •Warranties

•Global Strategy •Dell Worldwide •Dell Americas •Dell Asia Pacific •Dell Euro, Middle East and Africa

PREFERABLY EVERYWHERE POSSIBLE!!!

•Advertisements Television Magazines Catalogs Newspapers Internet

•Sales promotion Extra incentives upon purchase

→ Determining dimension: affects customer’s purchase because of what it offers

→ Specific targets

How do customers convey/position the product as?

→ AFFORDABLE

INNOVATED HIGH

LOW

ₒ

Internal Factor External Factors

Strength-S Sell directly to consumer. Aggressive , visionary & innovator. Solid customer support.

Weakness-W Introvert. Lack in Competition. Low Quality.

Opportunities-O Selling PCs for less. Creating your Own PC. Focus on overall vision & strategy.

SO Strategies Execute & Practice

WO Strategies Taking Risk

Threats-T Low Price. Image as business tool & machine. Primary developer Poor Products

ST Strategies Research & Aggression

WT Strategies Review mistakes & Stay ahead

Many Business analysts have suggested that one of Dell’s

secret to success has been his ability to remain focused on his winning business model:

sell directly to consumers, keep prices low and quality

high, and offer solid technological support to

customers. Dell declared, “We run the business together, and

we’re going to continue!”

•Though time, Dell had to consider what other companies were selling their products for. HP, ACER, and other competitors with Dell not only in PC’s, but also in printers. • In addition, HP and Acer has a large diversified mix of business, which in the long- run give it an advantage over Dell going forward, especially with large corporate customer. •Although, others state Dell’s allegiance to Intel Chips has enable HP to gain ground in serves. Since many HP servers use AMD chip, which multiple industries believe to technically superior to those made by Intel

• Product: – Sunglasses – Portable/Virtual Keyboard – MP3 player – Windows-based PC

• Wi-Fi Connectable • Micro-SD Card • Includes Microsoft Office • On-the-move laptop

• Price – $999.99

• Place – Globally, Worldwide [NO limitations of location]

• Promotion – Everywhere Possible.

“ENVISION YOUR FUTURE!”

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ENVISION YOUR FUTURE!