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E-Marketing Strategy of Dell Inc. In Nepal
1. Introduction
1.1. Overview and History
Dell Inc. was founded by the name of PC’s Limited by Michael Dell in May 1, 1984 at the age of 19, with $1000 and a game-changing vision for the technology industry. At the year 1985, Turbo PC was introduced with an Intel 8088 processor, 10 megabyte hard drive and a 5.25- inch floppy drive as its first computer system.
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| Dell Headquarters |
By the year 1988, the company’s value was raised to $30 million and the market capitalization was increased from $1000 to $85 million. The year 1989 was also a very important year in the history of dell because the dell introduced their first laptop in the market. By the year 1995, the dell had expanded the worldwide operations in Europe, Asia, Japan and the Americas and later in 1988, the sales, manufacturing and support centre was opened in Xiamen, China and the manufacturing sites were also launched in various parts of the world like Ireland, Brazil and the United States.
The year 1999 was the year where all the hard work had paid off as Dell became the number one PC seller in US market, and they were the major maker for business in the field of PCs worldwide. This was not enough for the evolution of dell in the PCs market so in the year 2001, it became the top computer systems provider worldwide and also was a leader in Intel-based server shipments in US.
The company was first named as Dell Inc. in the year 2003. The year 2006, is considered as a dreadful year in the history of dell because it had lost its ranking as number 1 to another PC manufacturer Hewlett Packard (HP). In the year 2009, dell launched a new business called Dell services and also entered in the smartphone market with the mini 3i from china mobile and immediately launched a five inch tabled called streak the following year i.e. 2010.
In the year 2011. Dell reported a record revenue and bought more firms in enterprise solutions and services and the company also promised $1 billion for the development of Dell data and solution centres around the word and research Centre on Israel and the US. At the same year, the company falls to the number 3 behind HP and Lenovo as the world’s largest manufacturer of PCs. The dell also announced to use some cash from its cash stockpile in order to pay dividends in a bid to boost shareholder value in the year 2012.
In the year 2013, Dell announced a leveraged buyout by silver lake partners, which was partially funded by Microsoft. Dell has now branches in more than 5 continents and a combined workforce of over 100,000 employees which had made Dell one of the largest and the successful multinational company in the field of IT.
2. Management Summary
Dell Inc. was established in 1984 and is one of the world’s largest computer system corporation today. The company founded the concept of customizing and selling PCs direct to the customers according to their requirement and budget which became popular and as a result it tends to be the one of the world’s popular multinational IT Company. The company provides services like build to order computer systems, direct selling, and toll free technical support and on site services. The company also designs and customize products according to the customer’s requirement and also offers extensive selection of peripherals and software. The popular products that are manufactured by dell are desktop PCs, Servers and Networking, Storage, Mobility, Software and Peripherals and also provides services like application services, financial services, cloud based services, security services, etc.
The primary objective of Dell is to provide the high quality, relevant technology and customised system to the customers. The Dell strategy in Dell marketing communication is to simplify information technology for customers which means making quality products and make information technology affordable for millions of customers across the world. They also provide customer choice where the customer can easily purchase systems and services via telephone, kiosks and its official website. Not only that, Dell also allows customers to purchase customer-built products and customer tailored services and they are also committed to being responsible in all areas of business. Dell also has classified their customers in different segment which includes large corporate, government, healthcare and educational accounts, as well as small-to-medium businesses and individual customers. It also stresses on the importance of its direct business model in providing direct and continuous feedback from customers which helps them to develop and refine their product and marketing programs for specific customer groups.
Dell also offers Dell Premier for easy ordering, tracking and control for large organizational customers which is secure, customizable and saves organization time and money. Dell also has a strong marketing policy to make its products available to small and medium business and consumers by advertising on television and internet and also advertises in a wide variety of print media. It also advertises by mailing a broad range of direct marketing publications like promotional pieces, catalogues and customer newsletter.
Dell also uses media channels and indirect channels to sell their products directly to the customers. The paid search through programs like Google AdWords is used to promote value through time limited offers related to phrase searched upon. It has also now start using the indirect channels to extend their business throughout the world. It has now started offering desktops and laptops through third party resellers to make it available easily to the customer as their retail strategy.
3. E- Marketing Planning
Creating a maintainable competitive advantage and improve performance by capitalizing on technology and enterprise resource is an objective of an E-marketing. An E-marketing strategy is required to achieve the definite objective of business strategy via marketing activities such as marketing communications and marketing research.
SOSTAC framework (developed by PR Smith in 1990) along with various process and stages are involved in a marketing strategy from the development to implementation and monitoring is the planning done in E-marketing Planning.
SOSTAC FRAMEWORK
The SOSTAC framework includes the six core areas or stages of E-marketing which as listed below:-
1. Situation Analysis
2. Objectives
3. Strategy
4. Tactics
6. Control
The above mentioned Stages of SOSTAC frame are described with detail below.
3.1. Stage 1: Situation Analysis
This is the first stage of SOSTAC named as Situation Analysis which delivers a detail about a current overview and market situation of a Company or an Organization along with the proper analysis of the competitors. It also give an overview of Marketplace opportunities along with customer insight towards the company. There are various methods which helps to analysis the current situation are listed below:-
i. Market Trends
For understanding and managing the proper analysis of the recent market situation and identification of the require changes on the basis of market analysis, the Market Trends is useful in e-marketing planning.
ii. Competitor Analysis
Competitor analysis provides a clear idea about the customer behavior and the market analysis for the required changes in comparison with the competitor of the company.
iii. SWOT Analysis
Creating a decision for every single situation in business or marketing, SWOT analysis is the far better method which define the present status, weakness of the company including the internal factor. It also helps to monitor the current status & opportunities including the contingency plan within the company. Basically, SWOT includes Strength, Weakness, Opportunity and Threats.
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| SWOT Analysis |
3.2. Stage 2: Objective
The core assignment and effort which emphasis the effective marketing communication for achieving and improving the market condition of the company is included in objective section. For analyzing and identifying the core goals and SMART objective of the company the 5Ss method play an important goal in e-marketing planning. The 5Ss includes Sell, Service, Sizzle and Save. SMART objectives includes the Specific, Measurable, Actionable, Relevant and Time-related Objective.
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| 5S method |
3.3. Stage 3: Strategy
Satisfying or Fulfilling the objectives for improving the company status and aiming the target with the strong plan can be refer as a strategy. The strategy can be defined or distinguished with the help of STOP and SIT methods which stands for Segment, Target market, Objective & Proposition and similarly, SIT stands for Sequence, Integration and Target. It also determines the commitment and investment and product positing.
3.4. Stage 4: Tactics
The strategy plans or method for identifying the tools and its usage can be referred as Tactics.it also identify the budget and resources of the company or an organization for achieving the aim of the company towards the e-marketing. 4P’s or Marketing Mix methods are used for finding the tactics in e-marketing which includes
Product - It contains product variety, Quality, Design and Features.
Price - Similarly, it includes Discount, Allowances, Payment period and Credit terms
Promotion - includes sales promotion, Advertising, Sales force, Public relation, Direct Marketing.
Place - Place generally includes Channels, Assortments, Locations, Inventory, Transport, coverage.
3.5. Stage 5: Action
This stage includes implementation of the strategies and tactics defined previously for assigning the deadlines and responsibility for the individual task. The responsibilities, roles and the certain location of an organization or company are needed to be distinguished and allocated. The marketing communication plan is also redefined in this stage on the basis of the stakeholder’s interest and need.
3.6. Stage 6: Control
The proper tracking of the progress on the basis of the competence of various tasks aimed to complete of objective through the combination of the traditional techniques such as marketing research to achieve the views and option of the customers is includes in this stage. The various kind of survey are carried out to get the certain information on the status and quality of the marketing. The generation of daily report will help to improve the strategies for improving the current marketing status of the company.
4. E-Marketing Strategy
Talking about the recent, Dell has become the second Personal Computer (PC) supplier worldwide on the basis of the reliable cost or price and the better quality of the products which has been only possible by the proper utilization of its manpower including the staffs, member, distributors & suppliers etc. The case study provided deals with the strategy of E-marketing for the DELL depending upon the SOSTAC framework.
Overview of Dell E-Marketing strategy
Product: Desktops / Laptops
Business Model: Direct Business Model
Environment: Nepal
4.1. Situation Analysis
4.1.1. SWOT ANALYSIS
4.1.1.1. STRENGTH
Dell is the world largest PC maker having on-site product service. Dell uses direct to customer business model with latest technology in Nepal. Dell has Low operating cost and directly supplies to customer and it provides the products on the basis of customer’s specification. Low inventory cost and official Distribution Channel partner in Nepal. According to the survey done amongst 20 people, more than 85% of the people have shown interest in customizing their PCs which proves the strength of this process. Talking about the official distribution Channel partner in Nepal, Generation Next Pvt. Ltd. And Neoteric Nepal are the two authorized channel part of Dell.
4.1.1.1. Weakness
Dell Lack of propriety technology and the relationship between the deals and retailer is worst. It focus on corporate and government institutional customer. Dell doesn’t utilizes the distribution channel. In context of Nepal, Dell has got the poor customer services and lack of authorized service center.
4.1.1.2. Opportunities
Dell has got direct model which allows users to request according to their specification required. The usage of PC and Laptop are getting increased day by day in Nepal and never get decreased which means that there is a very high possibility for Dell to raising the E-Business in Nepal.
4.1.1.3. THREATS
Globally, new rivalry that exits in the PC markets which is affect the market of dell. Price difference is getting lower among the various brands and identical price of the product makes the user to choose the other brands instead of Dell. We can also say that the growing demand of smart phone has always been a threat for dell because the availability of smart phones are low compared to laptop and PCs.
4.2. Strategy
1. Search Engine Optimization (SEO)
2. Product Positioning
The strategy refers how the objectives achieved in e-marketing, and consists of the procedures and steps for marketing a brand using the internet. Email marketing, Search Engine Optimization (SEO), social medium, Online Advertisement are the some of the general marketing of Dell. The strategy carried out for e-marketing are listed as follows:-
1. Search Engine Optimization (SEO)
The process of affecting the visibility of the website in the search engine for increasing the number of visitor within the website using the keyword phases used the user in the search engine for searching the individual product using the internet.
2. Product Positioning
The core purpose of product positioning is to create the customer familiarity and it is for the newly introduced product and services.
The process of sending the commercial or business message to the group of people with the help of email is termed as Email marketing. It also help to build the relationship with the user and clients of the company.
The process by mean of which the promotion of the services and the product provided by the company via website, blog etc. to attack the customer on the brand and the company can be termed as online advertising.
For maintaining the all the above mentioned strategy, tactics related to developed in this stage. The implementing all the statics the budget are allocated.
1. Search Engine Optimization (SEO) Tactics
The most popular training in Nepal is search engine optimization for dell, which will be handed over the IT training center and the budget allocated for this task is Rs.24, 000.
2. Email marketing tactics
For handling all the mails related to the company will be properly handled by Customer Relation Department (CRM).
3. Online Advertising Tactics
The advertisement of dell are placed in various blogs and website for the promotion of the products and services. The services of Google and Facebook Ads will be used for advertising the dell product in the local website of the Nepal by tracking the IP address. The budget of Rs. 70,000 is allocated for the price of the online advertise in Google and Facebook.
4. Product positioning Tactics
Dell introduces the new products and services according the specifications and requirement of Customers.
4.4. Actions
4.4.1. System
ERP system, BI analysis system, HR management and Online Help desk are the some of the key system required for the success of the company by incorporating the tactics.
4.4.2. Resources
Estimated budget with proper roles and responsibilities of the team are required for the successfully implementation of tactics mention above. The budget allocation is primary resource for the company. The yearly budget allocation for dell are listed in the following table accordingly.
Roles and Responsibilities
i. Marketing Director
Managing director is responsible for the tactical plan, control and co-ordinate of the E-marketing campaigns.
ii. Vice President of Marketing
Plans and controls the market environment including the proper relationship between the customers.
For setting the prices and analyzing the trends of the services and product of the company.
iii. Marketing manager
Plans and controls the market environment including the proper relationship between the customers.
iv. Marketing Analyst
v. Social Media Specialist
Responsible for the online and print communication in e-marketing.
Marketing Analyst provides the information and insights related to customers, competitor and markets.
v. Social Media Specialist
Responsible for the online and print communication in e-marketing.
vi. Graphics Designers and programmer
4.5. Control
5. E-Business Strategy
5.1. The Business Model
Design and finalize the various advertisement and managing the online support website such as Search Engine Optimization (SEO) is done by graphic designers and programmer.
In this stage of SOSTAC framework, data about the customer reaction towards the business model is concerned. Monitoring the performance of the company and ensuring the business model us functioning and monitored time to time. Finding out the measurement factor and process involved in measurement & control of the return of investment is the primary objective of this stage. The total number of sales and the number of customers are the main measurement factor. The measurement process is done for identifying the objective of the business is achieved or not.
5.1. The Business Model
The Direct Business Model is a marketing strategy which is firstly introduced by Dell and implemented by dell which combines direct sales and build-to-order production for providing the services and product directly to the customers. Dell direct business model provide continues feedback from the customers which helps to develop and refine the product. It also increase the percentage of the customer satisfaction, direct business model of dell is the prefect business model in developing states. On the comparison to the Nepal where internet has just arrived the e-marketing and online transaction is not reliable whereas the direct model is not so feasible. Talking about the implementation of Dell business model in Nepal, Slept techniques is applied to determine the effectiveness of this model in context to Nepal.
The Dell Direct Model
5.2. SLEPT Analysis Of the direct Model
5.1.1. Social Factors
The direct model depend upon the telecommunication means such as internet. In context of Nepal. In Nepal, only 30 % to 40% people are the internet user and among them smart phone are used for surfing the internet. In context of remote area, there are lack of internet and telecommunication which clearly indicates that the dell direct model is not a suitable in Nepal and lack of internet transactions make it difficult to utilize this model in Nepal.
In Nepal, online transaction are in low amount or limited also usage of online transaction is rarely used. In Nepal, there is not any cyber law about the online payment transaction and the cyber law are limited which address about online fraud and cyber-scams & software piracy. Depending upon this reason, implementing Dell direct model in the country like Nepal is a tough job.
5.1.3. Economic Factors
The current economic condition of Nepal is very worst because of the Earthquake took place recently which decreased entire economy of Nepal. The economic factor plays a vital role in the business area. Talking about the dell, in Nepal no manufacturing center are there which increases the cost by including the shipping cost which may added the extra cost to the price of the product. Nepal is a land locked country due to which it is not connect to the sea because of which water transportation lacks that results to increase rate in transportation which directly affects the price of the product accordingly. Depending on this reason, Dell direct model is hard to implement in Nepal.
5.1.4. Political Factors
In the context of Nepal, political factor causes the damage to the business. Although dell direct model allows to perform business directly between customer and retailer it is hard to deliver the product in time because of general strikes caused because of change of the government and aggressive political party. The strikes has indirectly decrease the sales rate. Sometimes the strike goes for many days which definitely harm both the customers and the company.
5.1.5. Technological Factors
There is absence of payment technology in Nepal, the dell direct model is not suitable in the Nepal business market. Internet have become the basic needs nowadays and laptops and smart phone usage are growing rapidly. But talking about the laptop poor battery performance people are using the smart phone for surfing the internet because of excessive amount of power cut in Nepal the usage of laptop is decreased as compared to the smart phone.
5.2. Alternative Model to Dell Direct Model
Channel partner model another model which can be implemented in Nepal replaced the dell direct model. The channel partner model consists the distributors, retailers, wholesalers and vendors where the product are distributed or sold using help of meditators where the certain amount of charge is being deducted. The partners cannot clams the product as their own in this product, in my point of view channel partner model is more suitable business model as compared to dell direct model in context to Nepal.
6. Conclusion
They said the good business is the one which takes the clients experience to the next level. The most and promising features of e-business is there is no boundary to it, any time any place and anyone can have that same opportunity. Dell has been the most success full international brand taking over the huge portion of international market. The choice and expectation of clients never stays the same. The choice of people changes. People used to love Hi5 and now they are spending their quality time over Facebook and nobody knows what hi5 is anymore. So the moral story here is, you have to upgrade your specification according to the client’s desire.
Dell has almost acquired 90% of the market here in Nepal and the reason is, its veracity and easily available along with the price consideration. In a country like ours, direct model is not much more suitable and as a result, there are several mediator to provide the same product to the client’s on behave of dell. The next blooming thing is the digital frontier and dell has been pushing the boundary to everyone to be prepared for that and they has successfully implemented the idea of DELL as a long-along-side companion.
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