INTRODUCTION TO DELL - YOURS IS HERE

Dell Inc. (formerly Dell Computer) is an American multinational computer technology corporation based in Round Rock, Texas United States that develops, sells, repairs and supports computers and related products and services. Bearing the name of its founder, Michael Dell the company is one of the largest technological corporations in the world, employing more than 103,300 people worldwide. Dell is listed at number 51 in the Fortune 500 list. In 2012 it was the third largest PC vendor in the world after HP and Lenovo. Dell sells personal computers, servers data storage devices, network switches, software,computer peripherals ,HDTVs,cameras, printers, MP3 players and also electronics built by other manufacturers. The company is well known for its innovations in supply chain management and electronic commerce particularly its direct-sales model and its "build-to-order" or "configure to order" approach to manufacturingdelivering individual PCs configured to customer specifications. Until a few years ago Dell was mainly a pure hardware vendor, but with the acquisition of Perot Systems .Dell entered the market for IT services and additional acquisitions in storage and networking systems allow the company to offer complete solutions for enterprise customers compare to their original portfolio of computers only. Dell is the sixth largest company in Texas by total revenue, according to Fortune magazine. It is the second largest non-oil company in Texas behind AT&T and the largest company in the Greater Austin area. From its early beginnings, Dell operated as a pioneer in the "configure to order" approach to manufacturingdelivering individual PCs configured to customer specifications. In contrast, most PC manufacturers in those times delivered large orders to intermediaries on a quarterly basis. To minimize the delay between purchase and delivery, Dell has a general policy of manufacturing its products close to its customers. This also allows for implementing a just in time (JIT) manufacturing approach, which minimizes inventory costs. Low inventory is another signature of the Dell business modela critical consideration in an industry where components depreciate very rapidly.

Dell has one simple concept: to sell computer systems directly to customers. Dells customers are global wide and range from individuals, small businesses, large businesses, and institutional organizations, such as schools and hospitals. The mission statement for Dell is to be the most

successful computer company in the world at delivering the best customer experience (htttp:\\www.dell.com). Since Dell is a global wide company, its direct approach is relevant across product lines, regions and customer segments According to Kraemer (2006), Dell is aiming to combine the cost advantages of horizontal specialization with close coordination of vertical integration. In the early 1990s, Dell shifted gears and tried to distribute its products through retail outlets, later realizing how unprofitable this approach was. It decided to focus on improving customer service and support by allowing customers to place and custom configure orders directly. This resulted in a unique strategy, synonymous with Dell, customization. Nearly one out of five standards-based computer systems sold in the world today is a Dell. Some of the brands of DELL are- Inspiron, Studio, XPS, N series, Power Edge, Force 10, Adamo, Studio XPS, Vostro etc. Its major competitors are- Hewlett Packard, Acer, Toshiba, Gateway, Sony, Lenovo, IBM, Samsung and Apple. Some of the major acquisitions of DELL in the past few years are as follows:1) ALIENWARE IN 2006 2) PEROT SYSTEM IN 2009 3) KACE NETWORK IN 2010 4) FORCE 10 IN 2011 5) COMPELLENT IN 2011 6) QUEST SOFTWARE IN 2012 7) GALE TECHNOLOGIES IN 2012 8) SONIC WALL IN 2012 9) CLARITY SOLUTIONS IN 2012 10) WYSE IN 2012.

CUSTOMER RELATIONSHIP MANAGEMENT

Customer relationship management (CRM) is used to define the process of creating and maintaining relationships with business customers or consumer. A long-term relationship with the customer insures their repeat business. It costs more money to gain new customers than it does to retain current ones. Dells goal is to provide customers with their technological, as well as customer service needs. There are three types of software that facilitate Dells CRM: marketing automation software; custom designed Web pages containing purchase data; and a system that benefits the sales, marketing, financial and management segments of Dell. The Companys business strategy is based on its direct business model. The Companys business model seeks to deliver a superior customer experience through direct, comprehensive customer relationships, cooperative research and development with technology partners, computer systems custom-built to customer specifications and service and support programs tailored to customer needs Dell Direct Model. The direct model is based on the principle that delivering custom-built computer systems is the best business model for providing solutions that are truly relevant to end-user needs. This concept, together with the Companys flexible, build-to-order manufacturing process, enables the Company to achieve faster inventory turnover and reduced inventory levels and allows the Company to rapidly incorporate new technologies and components into its product offerings. In the same way that the Companys computer products are built-to-order, service and support programs are designed to fit specific customer requirements. The Company offers a broad range of service and support programs through its own technical personnel and its direct management of specialized service suppliers. These services range from online support to onsite customer-dedicated systems engineers Dell is the first company, which starts the direct selling model to end users in computer market place. The Company develops and utilizes direct customer relationships to understand end-users needs and to deliver high quality computer products and services tailored to meet those needs. For large corporate and institutional customers, the Company works with the customer prior to the sale to plan a strategy to meet that customers current and future technology needs. After the sale, the Company continues the direct relationship by establishing account teams, consisting of sales, customer service and technical personnel, dedicated to the Companys large corporate and institutional customers. The Company also establishes direct relationships with small-to-medium businesses and individuals through account representatives, telephone sales representatives or Internet contact.

DELL CUSTOMERS
DELL targets two types of customers:1) RELATIONSHIP CUSTOMER- such as large corporations, government and education sectors. These customers provide the largest portion of profit and are therefore supported by dedicated sales representatives or account managers. A large share of Dell's business stems from long-term corporate relationship accounts for which Dell has developed tailored customer-specific web sites such as "Premier Pages" with predetermined custom specifications and budgets, giving them access to product design, order status and product support and service information. 2) TRANSACTIONAL CUSTOMER- price-sensitive customers looking for low cost, more reliable, quality service and added value products. These are mainly individual customers who are more likely to access, choose and buy online as a mean to fulfill their product requirements and customer needs. To obtain stable demand in this segment, Dell used the latest technology products to target buyers who had regular upgrade purchase patterns, required little technical support, and paid by credit card.

SEGMENTATION Segmentation is the backbone of the Dell Computers operations. Based on segmentation, company takes its positioning and modifies its offerings for each segments customers. Michael Dell says, An Important element of virtual integration with customers is segmentation. The finer the segmentation, the better able Dell is to forecast what customers are going to need and when. Then coordination of flow of strategic information comes to stage all the way back to suppliers, effectively substituting information for inventory Dell's Market Segmentation Dell mainly uses customer segmentation in its market strategy along with the product segmentation where it is targeting several market segments and designing separate products or offers for them. On one hand, geographically, Dell has segmented the market into the US/Americas, EMEA and Asia Pacific-Japan where each area has different pricing and marketing strategies. On the other hand, demographically, there is no age, gender or race bias but income, occupation and education play a role in deciding the customer needs and hence the product offer. It is also worth noting that from a behavioral view, Dell focuses on the benefits sought by consumers such as low price and good quality and service. It also carefully selects customers with relatively predictable purchasing patterns and low service costs, allowing itself an opportunity to develop a core competence in targeting and keeping a specific database for target customers. DELL company modifies its offering for each segment customers:Dell utilizes database software, which is effective and efficient with customer relationship management. These particular databases store tables of data that can be mined for information about clients and used to generate promotional campaigns. The databases would include customer information, their interests, and products. The customer database helps increase profits because the database contains client information that helps determine effective and efficient ways to target and segment the customers. Asoftware that Dell uses is a transparent online system called Premier Pages, which are custom- designed Web pages containing purchase data. This system also has a paperless ordering process, with the customers existing technology configurations already captured. Dell states that the idea behind Premier Pages was to gain less information about customers they already know about them and more to create a real win-win situation. The process of knowing the customer begins when the customer orders a PC. The PC is built after the customer orders it. This means that Dell has to have a direct relationship with the customer. Dell is using the Dell South Africas implementation of an enhanced CRM system with the help of IS Partners, an information systems company. ProClarity offers in-depth analytical abilities,

resulting in positive and negative areas of business being clearly highlighted. Sales are also broken down by region, with an overview of each sales team, enabling Dell to measure trends and successes. Sales, marketing, financial and management segments benefit significantly from this software. The Dell staff has easy access to the detailed demographic information about customers, customer sales history and trade relationships. Sales management can track activity within accounts, and lapsed quotes can be acted on. The marketing department can track customer activity, product sales, and marketing mixes. In addition, Dell deployed the e-Business software i2 Supply Chain Planner, i2 Collaboration Planner, and i2 Factory Planner to meet it supply chain needs. This new i2 technology was used to coordinate the build-to-order processes from order placement to customer support. By using the software Dell is able to profile customers, target them using their medium of preference, and also measure the results. Dell integrated the supply and demand side of the business by using unique software that would eliminate inventory overages. The i2 system enables Dell to pull material into its factories every two hours based on real time customer orders. This system tracks backlog numbers, stock status, and supplier commitments. It lets the supplier know what parts to deliver to which factories and be assembled to meet customer demand.

SEGMENTATION ACTS AS A BACKBONE FOR EFFECTIVE CRM:1) Eliminates the need to support an extensive network of wholesale and retail dealers

2) Avoiding dealer mark-ups 3) Avoids the higher inventory costs associated with the wholesale/ retail channel and the competition for retail shelf space 4) Reduces the high risk of obsolescence associated with products in a rapidly changing technological market 5) Allows the Company to maintain, monitor and update a customer database that can be used to shape future product offerings and post-sale service and support programs. 6) Better customer loyalty 7) Greater customer satisfaction 8) Higher-sales and marketing performance 9) Improved marketing efficiency

MICHEAL DELL on segmentation said- An important element of virtual integration with customers is segmentation. The finer the segmentation the better able Dell is to forecast what customers are going to need and when. Then coordination of flow of strategic information comes to stage to all the way back to suppliers, effectively substituting information to inventory.