Discussion

Dell Direct and Not-So-Direct

Case Summary:

Dell computer is a Texas base business that was founded in 1984 by Michael Dell. In the beginning Dell would sell directly to its customers vice indirectly to receive a higher profit margin; to compete with other competitors such as Apple and Hewlett-Packard who were using direct and indirect channels to gain more of the segment market. Therefore, Dell looked to take a few new approaches to advance their product line. With direct channels not working very well in other countries, they thought a more viable option to gain market shares internationally was to open up retails stores. Such a decision has paid off for Dell with more than 50,000 retailers worldwide. In addition, to the success of their worldwide stores, Dell’s top priority is to keep selling directly to its customers.

Key Marketing Issues

* Distribution – Trying to get their product out to as many consumers as possible without losing profit margins.

* Products – Having too much inventory in parts and product sitting in warehouse becoming obsolete if they only used indirect channels.

Personal Case Analysis

It’s my opinion Dell started off with a great business model and products. Using the direct channel enabled Dell to have much more of a customer contact per say in allowing consumers to go online and build a computer to their specific needs vice buying a computer from a retail store already built with hardware they may or may need at a much higher price. However, Dell has been on a downward spiral because lately they have been putting out bad product after bad product that cannot compare to its competitor Apple, and Hewlett Packard. Also, they are now having problems trying move away from being a PC manufacture to a strategic supplier and taking the company back to being a private business.

Case Questions

1. Is Dell using intensive, selective, or exclusive distribution for its market coverage? Why is this appropriate for Dell’s products...