Dell Incorporation’s Marketing and Customer Focus

Company’s Background Information

Dell Incorporation (Dell, Inc.) was established in 1984 as PC’s Limited by Michael Dell. By 1989, the company was able to “commence their business dealings across country boundaries” and soon afterwards “go outside of the United States to Europe, and the company was able to achieve $50 million of sales turnover” (Dissanayake, 2012, p. 27). In 2014, Dell, Inc. “shipped over 10.8 million units growing 8.5% on the year”, mainly in the U.S. and Asia-Pacific excluding Japan region taking the third position on a worldwide basis after Lenovo Group Limited and Hewlett-Packard Company accordingly and leaving Acer, Inc. and Apple, Inc. behind (PC leaders continue growth and share gains as market remains slow, according to IDC, 2015, para. 11). Nowadays, scope of Dell, Inc. products and services includes business and consumer hardware (PCs and servers), networking and storage-related services, enterprise solutions and software technologies

Research Methods: Literature Review

Research methods are divided into qualitative, quantitative, and mixed types. According to Copper and Schindler (2014), qualitative studies include “interpretive techniques which seek to describe, decode, translate, and otherwise come to terms with the meaning, not the frequency, of certain more or less naturally occurring phenomena in the social world” (p. 144). Furthermore, qualitative techniques “emphasize words rather than quantification in the collection and analysis of data” (Bryman & Bell, 2015, p. 394). Thus, a subject of qualitative research can include grounded theory, ethnography, general research, participatory action research, and case study.

In terms of research strategy, qualitative research is “inductive”, “constructive”, and “interpretative” (Bryman & Bell, 2015, p. 394). As to data collection tools, they can include observation, focus groups, interviews, and literature analysis. Among data types of qualitative research are “written or recorded materials drawn from personal expressions by participants, behavioral observations, and debriefing of observers” (Copper & Schindler, 2014, p. 144). Therefore, the qualitative research explores a phenomenon telling how and why things happen.

In contrast, quantitative research “attempts a precise measurement of something” measuring “consumer behavior, knowledge, opinions, or attitudes” (Copper & Schindler, 2014, p. 146). Namely, quantitative research subjects include case study, cross-sectional, longitudinal, and cohort studies. According to Hair, Wolfinbarger-Celsi, Money, Samouel, and Page (2011), a collection of quantitative data involves “gathering numerical data using structured questionnaires or observation guides to collect primary data from individuals” (p. 197). Hence, quantitative methodologies answer “questions related to how much, how often, how many, when, and who” (Copper & Schindler, 2014, p. 146). Besides, data collection tools include chart reviews and surveys that can be “self-completion, interviewer completed, and observation” (Hair et al., 2011, p. 197). Therefore, the quantitative research examines and test theories using numerical data.

Research Question and Methodology

The primary research question of this study is to identify perceptions of the company’s marketing strategies, market segmentation, and customer focus strategy.

According to Copper and Schindler (2014), the qualitative research focuses on understanding and interpreting. Thus, the qualitative research method was used to answer the question of this study examining perceptions of market segmentation and customer focus strategies of Dell Incorporation. Furthermore, thorough literature analysis of business and marketing journal articles was chosen as a data collection tool.

By Bryman and Bell (2015), qualitative research should use “an inductive view of the relationship between theory and research, whereby the former is generated out of the latter” (p. 392). Moreover, in contrast “to adoption of a natural scientific model in quantitative research”, qualitative research focuses on “the understanding of the social world through an examination of the interpretation of that world” (Bryman & Bell, 2015, p. 392). Hence, an inductive analysis of the processed data from the literature overview was carried out to evaluate perceptions of Dell’s different marketing strategies and their outcome on the company.

Data Collection and Analysis

Since its foundation, marketing strategy of Dell, Inc. has been perceived as “a consumer concentrated approach” avoiding intermediates so that “the company was able to pass the benefit to the consumer while reducing the cost of the product” (Dissanayake, 2012, p. 27). Initially, customers were segmented “by verticals (e.g., consumer, corporate, government and small business) as well as regions and size” (Davis, 2010, p. 8).

Nonetheless, since 2009 Dell, Inc., analytics testify of the change in Dell’s market segmentation strategy, as the company’s management decided “to look across an aggregated view of these existing groupings to identify shared values relating to product features and supply chain capabilities” (Davis, 2010, p. 8). The need for the change is seen as a result of “demand for commoditized products, changes in customer channel preferences, emerging market growth, component cost declines, a more capable supply base and globalization” (Davis, 2010, p. 3). Therefore, to preserve Dell’s value chain as “cost effective and directly linked with customer’s satisfaction” market segmentation of customer groups like “privates, small businesses, large businesses, public/state organizations” had to evolve (Bose, 2012, p. 115). According to Davis (2010), Dell, Inc. should “move from a single supply chain to a customer segmentation supply chain approach” (p. 1).

Furthermore, Dilworth (2013) claims that Dell, Inc. was forced to acknowledge demographic, psychographic and behavioral characteristic of its young and social networks active customers “when its poor reputation routinely contributed to the virality of angry blog posts and memes” (p. 27). In 2006 Dell, Inc. experienced a battery problem with one of its product. Since it was impossible “to ignore the online howls of customer discontent”, marketing team had “to go out and participate in these forums that were just incredibly unpleasant” (Dilworth, 2013, p. 27). Thus, social networks are considered to be one of the most useful tools in a new market segment. Besides, Dilworth (2013) believes that new technology gives an opportunity for Dell, Inc. to be always online, and new customer service strategy should be connecting “employees through social media training seminars… to engage with customers on their social pages, based on their role” (Dilworth, 2013, p. 28). This new strategy will ensure customer’s satisfaction to be ultimate and global preserving Dell’s customer focus marketing strategy.

Moreover, broad analysis of enterprises’ needs and expectations conducted by Hughess (2013) revealed a new target market for Dell, Inc. when the growing impact of “Big Data and public/private cloud services… on virtually every vertical industry” was detected (p. 1). The new target market is connected with Dell’s core philosophy of developing strong customer relationships to help customers to cope with constant data volume increase. Therefore, Dell can now use “its services capabilities to help companies manage the complexity inherent in cloud migration, security/risk/compliance, and other transformational processes” (Hughess, 2013, p. 3). To satisfy emerged needs, Dell can “play at a high level around cloud, virtualization, and data center” and also “provide specific assistance on how these technologies should evolve in the context of the larger IT themes” using its Dell Social Media Command Center (Hughess, 2013, p. 3).

Results

Analytics agree on the fact that customer-focused marketing strategy and vertical market segmentation that dominated in Dell Incorporation practice until 2009 have to change. Namely, it is suggested that Dell, Inc. should alter its highly effective in the past single supply chain to a customer segmentation supply chain. Moreover, the company should acknowledge demographic, psychographic, and behavioral characteristic of young and social networks active clients. Besides, Dell Incorporation is considered to have a high potential in the new market of big data storage using its developed strong customer relationships.

References

Bose, T. K. (2012). Market segmentation and customer focus strategies and their contribution towards effective value chain management. International Journal of Marketing Studies, 4(3), 113-121.

Bryman, A., & Bell E. (2015). Business research methods (4th ed.). Oxford, England: Oxford University Press.

Copper, D. R., & Schindler, P. S. (2014). Business research methods (12th ed.). New York, NY: McGraw-Hill/Irwin.

Davis, M. (2010). Case study for supply chain leaders: Dell’s transformative journey through supply chain segmentation. Gartner Research, ID Number G208603, 1-11. Web.

Dilworth, D. (2013). Dell-ving into the future. DM News, 35(12), 26-29.

Dissanayake, D. (2012). Integrated communication, integrated marketing communications and corporate reputation: Evidences from Dell Computer Corporations. International Refereed Research Journal, 3(3), 26-33.

Hair, J. F., Wolfinbarger-Celsi, M., Money, A. H., Samouel, P., & Page, M. J. (2011). Essentials of business research methods (2nd ed.). New York: NY: M.E. Sharpe, Inc.

Hughess, P. (2013). Storage and data management services: Vendor profile. IDC, 1(243115), 1-7. Web.

PC leaders continue growth and share gains as market remains slow, according to IDC [Press release]. (2015). Web.