Dell Goes Back to its PC Roots Essay

Dell is a computer company that made its name by first selling personal computers directly to customers through their website, catalogs, and over the phone. As time passed, Dell expanded into related product lines while battling aggressive rivals such as Hewlett Packard and Apple, striving to be the number one consumer brand in the United States. Despite considerable research and marketing investment, Dell’s strategy to expand into other related product lines did not succeed, and the company was forced to regain its focus on PC sales. This case includes the steps taken by Dell to uphold its legendary PC roots. Key Marketing Issues †¢Brand – A name, term, design, symbol, or other feature that identifies one marketer’s product as distinct from those of other marketers. Dell is shining up its brand by improving customer service, which is especially important as PC sales grow more slowly throughout the industry and competitors dig in to defend market share. †¢Early Adopters – People who adopt new products early, choose new products carefully, and are viewed as â€Å"the people to check with† by later adopters. Dell is not looking to pioneer revolutionary new lines for early adopters, but has gone back to their PC roots, emphasizing related home office products. †¢Innovators – First adopters of new products. †¢Line Extensions – Development of a product that is closely related to existing products in the line but is designed specifically to meet different customer needs. Over the years, Dell has expanded into related product lines while battling rivals, hoping to obtain larger revenues. †¢Product Line – A group of closely related product items viewed as a unit because of marketing, technical, or end-use considerations. Over the years, Dell has expanded into related product lines while battling aggressive rivals, hoping to derive an ever-larger portion of revenues and profits from a wider mix of products for use beyond the home office. †¢Product Mix – The composite, or total, group of products that an organization makes available to customers. Dell has returned to its PC roots, emphasizing computers and laptops, inkjet and laser printers, networking equipment, and related products for home office use, after the failure of their consumer electronics strategy. †¢Product Life Cycle – The progression of a product through four stages: introduction, growth, maturity, and decline. Dell introduced the Dell Digital Jukebox and Dell Music Store to compete with Apple’s iPods and iTunes store. However, Apple had so much momentum that Dell was forced to discontinue its own brand of music players. Personal Case Analysis I learned that Dell first made is name selling personal computers directly to customers through its website, catalogs, and phone orders. With a long history of marketing technology-based products, Dell has become a well-known U.S. brand. Despite considerable research, Dell’s attempt to enter the lucrative $100 billion world of consumer electronics did not succeed. Although Dell faces intense competition from other consumer electronics companies, they never stop looking for new ways to shine up its brand by improving customer service, an especially important step as PC sales grow more slowly throughout the industry and competitors dig in to defend market share. Case Questions 1-Why would Dell not pioneer revolutionary new products for innovators and early adaptors the way its competitor Apple does? According to wsu.edu, an early adaptor is a person who quickly adopts something new-usually a technological innovation. Our text defines innovators as first adopters of new products. Today Dell has gone back to its PC roots, emphasizing computers and laptops, inkjet and laser printers, networking equipment, and related products for home and office use. Because of its’ failed attempts to launch new products, the company is not looking to pioneer revolutionary new lines for innovators or early adopters. Instead it adds new features to products with a proven market, finds ways to make production more cost effective, and seeks to distribute both Dell and non-Dell products as efficiently as possible. 2-In what stage of the product life cycle do personal computers appear to be? How does this explain Dell’s attempt to expand into consumer electronics? According to answers.ask.com, a product’s life cycle describes the stages products experience when introduced to the market. There are four general stages including: introductory stage, when marketers raise awareness of the product; growth stage, when increase in market share is sought; mature stage, when producers of the product have maximized market share and minimized costs and the decline stage, when competitors entering the market erode market share and profits begin to decline (anwers.ask.com). The stage that Dell’s personal computers appear to be in is the maturity stage. With a long history of marketing technology-based products, Dell has become a well-known U.S. brand. Their management saw the brand as a strength to exploit in marketing new flat-screen televisions, tiny digital music players, and other non-computer products. Dell launched its consumer electronics items just as major technological developments were roiling the industry and changing how consumers buy and use such products. Dell was caught in the crossfire of intense competition. At the start of the consumer electronics initiative, the company introduced the Dell Digital Jukebox and the Dell Music Store, putting it on a competitive collision course with Apple’s popular iPods and iTunes store. Dell discontinued its brand and has been reselling products made by Samsung and other manufacturers. This allows Dell to satisfy customer demand for certain for consumer electronics without incurring the high cost of research and development. 3-How far can Dell widen its product mix without hurting the company’s credibility? For example, what might be the impact of new products such as Dell motorcycles or Dell frozen pastries? According to enotes.com, the product mix of a company, which is generally defined as the total composite of products offered by a particular organization, consists of both product and individual products. A product line is a group of products within the product mix that are closely related, either because they function in a similar manner, are sold to the same customer groups are marketed through the same types of outlets, or fall within given price ranges. Over the years, Dell has become a popular U.S. brand, which was viewed as a strength to emerge into the market of new flat screen televisions, digital music players, and other products. Although Dell did a considerable amount of research and development to make these products a success, the strategy did not succeed. For this reason, Dell should not attempt to widen its product mix, because it has been proven that doing so will hurt the company’s creditability. Dell motorcycles or Dell frozen pastries would definitely hurt the company’s creditability, because they are known as a number one computer company. Dell should continue to develop and emphasize computers, printers, and other home office related products to maintain its creditability. Conclusions For Dell to continue to successfully market to its consumers and uphold its legendary PC roots and name brand, they must develop the optimal product line by understanding buyers’ goals. The product life cycle is also an important concept to make sure the introduction, alteration, and termination of a product are timed and executed properly, helping to better maintain profitable products and drop unprofitable ones. Although Dell does not pioneer revolutionary new products for innovators and early adopters the way its competitors does, they stand strong in the PC market. Line extensions, however, are used to successfully take market share from competitors.