Group 7_Dell Pricing Strategy

7/31/2019 Group 7_Dell Pricing Strategy

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PRESENTED BY GROUP NO. 7

The Power to Do More

7 Roshn i Das i ja

19Sneha Gupta

31

Tanmaykumar Kusar i

43Sandesh Rane

55Swaminathan V


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Content

Introduction

Market Share

SWOT Analysis

Marketing Mix4 Ps

Ansoff Matrix

1

2

3

4

5


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Introduction to DELL

Established in 1984

Founder Mr. Michel Dell

Head Office Texas USA

World wide presence

Industry LeaderTop 3

Ranked 41 in Fortune 500 list

Revolutionised Computer Sales concept Rides on the R&D of others

Perfected the credo - Cut out the middleman.


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Quotes

Its amazing to me that our competitors think thecustomer is the dealer.

Michael Dell

When we sale these products we make money.When our competitors sale these products they loosemoney

Michael Dell

DELL is to the computer industry what Dominos is tothe pizza business.TIME magazine


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Three Golden Rules of DELL

Disdain inventory

Always listen to the customer

Never sell indirect


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Case Summary

Dell is the industry leader in direct sale of personal

computers to consumers.

Since its start Dell has looked to over simplify its business for itscustomers. Offering a huge range of products and services,

which can all be accessed by the consumers from home orfrom the office very easily.

Dell revolutionized the way people buy computers.

Markets its direct sales model.

No intermediaries

No warehousing

Reduced price

Total customization of computers


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Market share Personal Computers

Dell HP Lenovo Acer

2009 12.20% 19.30% 8.10% 13.00%

2010 12.90% 17.90% 9.70% 12.00%

2011 12.10% 17.20% 13.00% 11.20%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

World PC Market Share

Source : Gartner


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Group No. 7 Source : Gartner

DELL HP Lenovo Acer HCLQ4 2010 13.00% 15.80% 9.60% 10.70% 7.80%

Q1 2011 16.70% 12.10% 9.70% 11.90% 7.10%

Q2 2011 16.70% 11.20% 12.10% 10.40% 6.60%

Q3 2011 15.00% 13.30% 12.10% 10.80% 5.60%

0.00%

2.00%

4.00%

6.00%

8.00%10.00%

12.00%

14.00%

16.00%

18.00%

Indian PC Market Share

Market share-Personal Computers


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The Promising Numbers


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SWOT Analysis

Weaknesses

1) Huge range of Products from manySuppliers

2) Dell lacked solid dealer/retailerrelationships.

3) Less investment in R&D

4) High dependency on suppliers.

For example, in 2004 Dell had torecall 4.4 million laptop adaptersbecause of a fear that they could

overheat, causing electric shocks orfires

Source: http://www.reuters.com


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SWOT Analysis

Opportunities

1) Introducing a wide range of Products Dell now competes against iPodand other consumer electronics brands.

2) Invest more in R&D

3) Assembled PC market


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SWOT Analysis

Threats

1) Competition in PC market Globally

2) Exposed to Fluctuation in the World currency markets

3) New entrants to the market pose potential threats.


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Marketing Mix 4 Ps


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Product Mix

Dell provides a wide variety of both business classand home/consumer class products and services

Desktops, Laptops, Servers, Mobiles, Notebooks,

Printers, LCDs, Home Theater Systems

IT Services, Business Consulting, Financial Services


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Promotion

Dude, You are getting a Dell Uses TV adds & magazines

Uses B2B customers to attract B2C &vice versa.

Customers attracted to DELL site via numerous web

links Always on Top ofGoogle Search

Promotion through retailers Wall Mart, Best Buy

Exclusive stores


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Need of Pricing Strategy

The ability of price to affect consumer decisionand its flexibility makes pricing strategiesimportant in meeting Dells objectives in acompetitive environment.

The main objective of Dell is to produce the lowprice and profitable laptop for the customer


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Pricing Strategies

Direct Business Model

Build to Order Manufacturing

Market Penetration Pricing

Strong Promotional Pricing


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Place

Worldwide presence

Factories at Key Locations

Key Suppliers to close to factory locations


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NEW

PRODUCT

Product Development:(existing markets, new products)

Using the base of existing product togrow others

Medium Risk

Product Diversification:(New markets, new products)

Seeking to create or develop newproduct, line or range

High Risk

Market Penetration:(existing markets, existing products)

Trying to take a greater share of existingmarket with an existing product.

Low Risk

Market Development:(new markets, existing products)

Finding or creating new market bytargeting new parts of the market.

Medium RiskEXISTING

MARKET

ANSOFFs MATRIX

NEW

EXISTING


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Dell enters into Smartphone market

What make one of the largest producer of PCs inworld to make foray in this market. Is a decisionto fortify the existing customer or attack a newsegment?

Its not a complete diversification, it could beslight different production package with newInnovation.

Exactly not a new innovation because as of nowAPPLE, RIM Blackberry and others already hadhold on this section.


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So for this new decision Dell is using 2nd quadrant ofAnsoffs Matrix PRODUCT DIVERSIFICATION as ittrying to attract new market where everyone wantsto move up the value chain and therefore ready to

own a Smartphone. But here risk could be high.

So the execution will directly effect the impact ofrisk, proper execution can lower down the risk.

DELLs USP (service) can also play as a risk loweringfactor.


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DELL is well known for its online retailing and

service, so if it will use its strategies in more

fine manner than they can make there

Smartphone a compelling device.

Now the point is that, what make dell to

outperform their competitor: The main essence

depends on FINAL DESIGNING.


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ANY QUESTIONS??

Thank You

Documents

Group 7_Dell Pricing Strategy