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Marketing Mix of Dell

In: Business and Management

Submitted By rabiab25
Words 4714
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| Marketing Mix Analysis | Apple Computers vs. Dell Computers | | Jeremy Milliorn - ProductWill Moss - Price Peggy Harris - PlaceNader Khader - Promotion | |

This paper describes the elements of the Marketing Mix of Dell Computers and Apple Computers. We will provide details found during research of these elements including Product, Price, Place and Promotion as they relate to manufacturing, marketing, sales and distribution of the products available at each company. |

Table of Contents Introduction 3 Target Market 3 Competitors 4 Product 6 Price 10 Place 14 Promotion 17 Table of Figures 21 Works Cited 22

Introduction This paper will introduce the Marketing Mix for Dell and Apple Computers. We have researched the two companies and will describe both similarities and differences in the way they approach the marketing of their products. Both companies offer computers and laptops. Dell offers computers that are designed handle day to day operations of a business or home user while Apple is more attractive to the world of graphic design. There is some overlap due to the fact that Apple is found in educational environments covering classroom activities while the offices of the same campuses might employ Dell.
Target Market Dell Computers marketing efforts are aimed at work oriented and business friendly users. Prior to a re-structuring, it focused on individuals and families. Television commercials and promotional literature often displayed a “punky” looking teen persuading a friend and his parents to assist him with purchasing a Dell, "Dude! Get a Dell!” According to (Rusa, 2006) Rusa, A. (2006) Softpedia (:Dell's New Marketing Strategy. Retrieved on September 20, 2007, from http://news.softpedia.com)
Dell Computer Company recently secured a business deal with Google. From this point on Dell Computers will be Equipped with the Google Toolbar and Google Desktop as part of their standard software installations. This will assist Dell as High schools, universities and colleges gain more focus as part of Dells Target Market.
Target markets for Dell include businesses and other concerns where productivity is most important. Processor speed is not as important in financial calculations and word processing in these environments. Dell has an offering for gamers that seek a high end machine that contains components that are combined to provide blazing speeds and virtually flawless graphic rendering. These can include dual-core and quad-core processors, up to 4 Gigabytes of memory and a large hard drives that boast a 3 Gigabyte per second access time and platter speeds of up to 7200 rotations per minute. Dell presents their product as a low price leader capable of anything the customer may need. Target markets for Apple include environments where graphic design, video and audio editing are in demand. The price of Apple computers indicates that they also target end users with a higher measure of disposable income. The market has included students in elementary through primary grades where Apple has offered free computers in classrooms. Their hope of creating future customers is apparent in their firm ranking in the computer marketplace with a loyal client base.
Apple presents their product as highly advanced and innovative yet easy to use. With this in mind, Apple Computers Target Market includes middle income individuals searching for a better user experience. These tend to be people who like to have fun with technology. This might be people who take pleasure in activities such as editing digital photos or video. Professionals in media and design are also a part of Apples Target Market group along with children that often utilize the internet. Ten percent (10 %) discounts are offered to students for Apple Computers. Artists are also offered minor discounts.
Competitors
The competitors of Dell and Apple include Hewlett Packard, Compaq, Gateway and Lenovo. An indirect competitor is found in the form of a strengthening core of vendors that provide parts to do-it-yourself users and small business that build and upgrade custom computers for home users and for small office and home office users.

Product
When discussing marketing strategies the basics are summed up by the four P’s, and of those who have never heard of this still can probably identify that product must be one of them. This is simply because when you go to purchase something it is the product you receive in exchange for your money. Without a core product you do not have a something to price, place or promote. To clarify the product is most scrutinized by the consumer, copied by the competitor and most crucial to the proprietary business or creator. The product differentiation between a Dell desktop or laptop and an Apple desktop or laptop relates directly to their differentiation in target markets. Dell offers customizable desktop and laptop computers allowing pricing to be dependent upon components included. Apple on the other hand has multiple base choices and few upgrades within these choices to expand their variety.
Apple products run on Apple created operating systems, and since the same company that produces the computer creates the software for every Mac, total integration and streamlining are innate. And this is one way they target the market of the tech-savvy. Whereas, Dell computers usually come equipped with Microsoft based operating systems but are capable of running Unix, and Unix-like operating systems, such as Linux and Solaris, which are all PC based operating systems. The variety of software products available for Dell is not limited to specific compatible components, as is true with Mac, but to only what exists in the market place. Software available for Apple products must be Mac compatible limiting many programs, many that are less recreational and more business oriented.
Apple laptops, formally known as MacBooks, with varieties such as MacBook Pro, higher end, MacBook Air, thin, light and compact, and MacBook, the common needs version, reach their target market of more electronic savvy customers through reliable and aesthetically pleasing devices. MacBooks can run various software types, including Microsoft’s office for the student or business user to a wide variety of media applications for the media rich consumer. MacBooks come with built-in video cameras that are integrated with software to allow easy video conferencing and detailed editing, ideal for graphic design or video editing whether professional or personal. To optimize these functions MacBooks use high quality video cards for dynamic video display. To accomplish such rigorous processes, Intel processing chips are used to provide the fastest speed for processing multiple jobs simultaneously, another key component to heavy media use and gaming success. Designed with security in mind, Mac’s operating system is not plagued by constant attacks from viruses and malware. And thus, Macs are not inundated by continuous security dialogs requiring consent to do normal tasks allowing you to safely go about your use without interruption. Also incorporated are easy-to-use parental controls that let you manage what your kids can do on the computer, and even when. These features roll over into their desktop selection as well, which is comprised of iMacs, computers integrated with the monitor, Mac mini, very small desktops, or the Mac Pro, which looks like the more common tower designed desktop. (Apple.com)
Dell computers are designed to be affordable and customizable for whatever the end user’s desires are. Applications are limited to what is requested by the customer, keeping price controllable. Package deals are available for large-scale orders expanding deliverability of the product. Dell does most their business online or via phone and are built to order. If purchased this way the product configuration is your decision not theirs, enabling customers to feel more at ease with their purchase and limits Dell’s need for sales staff to convince the buyer. Many low-end needs and small budget customers like this because you can avoid feeling buyer’s remorse. Dell’s product therefore can vary drastically, allowing no two computers to necessarily to be exactly identical. When building your Dell laptop you can begin by limiting what you want with whatever criteria you deem most important. Choices can be narrowed by choosing model like XPS, Inspiron, or Studio Laptop, to what operating system you want to run, your memory needs, the optical drive requirements, your processor desires, hard drive size, or by other consumer interests like weight, screen size, or price. These limiting selections can be done in conjunction with each other to let the customer see options as they go. Also, the customer has the ability to build a desktop or laptop as they go choosing each part along the way and watching their selections modify the price in real-time. For example I can pick the Inspiron base model, then I can decide on what size hard drive I want, say a 250 Gigabyte hard drive; right then the other choices will show add 50 dollars for 320 G or subtract 30 dollars for 120 G, and if I decide to change to one of those options my running total on the website reflects these changes. The same holds true for desktops but with one addition and that is the Gaming model, which offers top of the line computational speeds, memory, liquid cooling systems, and more to maximize the gamer’s experience.
The difference in the product delivered to the market place by Dell and Apple seem miniscule considering both are computers that can be used for similar functions on a day-to-day basis. Yet, talk to a graphic designer and they would never consider anything other than a Mac, whereas talk to a programmer and it has to be PC, get into that question with those who know the details of components desired and Dell comes out a favorite. Both products have drawbacks that end users often use as decision-making tools. Dell can overwhelm the average consumer at times asking for decisions on elements to incorporate in the computer that the customer knows little about, this is where the customer service aspect plays a large role, and phone ordering may be more ideal. And Apple’s Macs come with everything the overly tech-savvy customer could want but also provides more than the average user needs or knows how to use. This again is where customer support is crucial to educate their consumers on different abilities available to provide a better user experience. Apple’s other drawback, yet possibly a good business decision, is when they do have problems more often than not the customer needs to visit a Apple store for service, yet Dell is a PC just as all other computers are, and therefore can be fixed by most any service center. Dell’s computers are easily adaptable to changes and upgrades of components but take some knowledge to accomplish. But Macs are less limited in upgrading internal features yet, the features that are designed to be upgraded or expanded usually can be performed with no knowledge of what you are actually doing.
Ultimately product differentiation is what sets Apple and Dell apart. It is this product differentiation that leads to the variety seen in the other 3 P’s of pricing, promotion, and product placement. It is these simple product variations that have Apple customers often referring to themselves as cult like, and Dell customers being more the random anybody. This is how their target markets are directly intertwined to the products they provide, and why product development is critical to success.

Price

Figure [ 1 ]: Dell Inspiron starting at $499 The four P’s that are crucial to targeting the right market are product, place, price and promotion. While all four P’s are important a lot of the stress is put on the price, this is because it does not matter how great the product is if it’s not priced correctly. Your company might have the best product, but if is overpriced no one will buy it. The same is true for under pricing. If you under price a product too much, the customer will not take the product seriously. This is why it is so important to price your product correctly. It is true that Apple and Dell both sell computers, but to whom they sell to and for what purpose is very different and that is why their pricing strategies are different. For all the differences in terms of product and price between the two companies there are also quite a few similarities.
Figure [ 2 ]: Dell XPS starting at $799 Across the board Apple computers cost more than Dell computers. Apple’s lowest pricing laptop ranges from 900-1000 dollars where as Dell’s lowest start off at about 500 dollars. After that most of Apple’s laptops shoot up to around $1500 where as the bulk of Dell’s are around 800-900 dollars. The same is true for the desktops. Dell has desktops that are actually less than 400 dollars and increase to over 1,000 dollars. Apple on the other hand starts off at around $1200 (Apple.com, Dell.com). By just looking at the prices one might think that Apple is over charging or being unfair in their pricing of merchandise. That is not necessarily the case. Apple computers are in extremely high demand right now so they are able to charge a higher price. They have a very faithful group of followers, better known as Mac Heads, who want to buy an Apple computer no matter what. They have made it so that by owing an Apple computer you are automatically cool and you have stuck it to the PC man. They also have advertisements like the PC guy and Mac guy commercial that make PC’s look dumb and Apple’s look smart and cool. By marketing their product this way and by having a somewhat middle to upper class target market, they are able to charge a much higher price. As for Dell someone might think the opposite of a Mac. One may think that if Apple is so cool and great and cost quite a bit then Dell must not be a very good computer because it is cheap. The reason Dell is so much cheaper is because they target and really try to cater to affordable priced computers. Apple has pretty much abandoned the low price computer so Dell is trying to fill that niche.
Figure [ 3 ]: iMac starting at $1199 One of the reasons why Dell’s are able to sell at such a low price is that the bulk of their sells are done either online or through the phone. This means that they do not have to spend additional money to keep a store open with employees in it. Dell is able to save a lot of money by doing online and telephone orders because it allows them to have low inventory. Another reason why Dell’s sell for less is that they allow the customer to build their own computer (Dell.com). This means that if a customer does not want all the bells and whistles on their computer they do not have to have it. Dell simply offers a basic setup and then allows the customer to add on different things according to their preferences. Adding on obviously makes the computer costs more, but it is still cheaper than most computers and creates goodwill with the customer. Also Dell has many different basic models for the customer to choose between. On the other hand Apple only offers a few different models and they are all loaded up. They come with a lot of different programs and new technology, and that is why they come with a higher price tag. This works great though because Apple targets the kind of tech savvy, artistic consumer who wants all the extras and does not mind paying for them. Dell on the other hand targets the average person who wants a computer, student, or office worker and allows them to buy at a lower price without having to pay for add-ons they do not want. So basically Apple and Dell base their prices off of their customers’ needs and wants.
Figure [ 4 ]: Apple Macbook starting at $1299 Both Dell and Apple strive to help out their customers with prices by offering rebates and discounts. Dell is really big into marking down their computers. For example right now they are offering 25% off all their 19 inch screens. They are also offering 35% off of their refurbished computers, which once again shows how Dell is trying to create affordable options for people who want computers. Someone who might not be able to afford a new computer could probably afford a refurbished one at 35% off. Dell also offers rebates on a variety of different models (Dell.com). Apple does not mark their products down as much as Dell but they do offer other discounts. Some examples of their current discounts are free shipping with purchases over 50 dollars and rebates of 100 dollars for buying a qualified printer with the computer. They also offer a credit card with no interest for 90 days and education discounts (Apple.com). It makes a lot of sense of offer an education discount because usually you will be selling your product in large quantities. For the most part Dell and Apple have very different pricing strategies with few similarities, but that is because they target very different customers. Apple has an almost cult following that does not really care about the price, where as Dell tries to give affordable options to the everyday kind of guy as well as business man. It will be interesting to see how these two companies pricing strategies change in the future. There are already some rumblings about how PC’s, including Dell’s, are more powerful and have more features for the price paid compared to an Apple (Silverman, par 8). Maybe someday in the future Apple will have to start lowering their prices. Only time will tell, but for now though both companies pricing strategies are very compatible with their target markets.

Place

Dell was the first computer company to provide direct marketing to their customers. The idea of a computers being sold directly to the user was revolutionary at the time. To offer this service in a totally online experience made it radically different from any offerings in existence. Making goods available, in the right quantities, in the right locations, when customers wanted them, caused Dell to become a success in the world of e-commerce as well as making them a strong competitor in the world of computer sales. In this new shopping environment where customers were presented with a variety of choices, we see an example of how Dell Computers dealt with new clients in a new and innovative way. For the first time, home users could visit the online store, shop for and purchase their computers from the convenience of their living rooms, and have their purchases delivered to their doorsteps. The computers were available in stock configurations offering a variety of setups designed to meet different levels of productivity. As the option to customize with more any computer system to include extra memory, more technologically advanced components such as DVD-RW and graphic intense video adapters. Dell also includes the option to purchase monitors, and printers and other peripherals as well as a service contract that varies not only in the length of time of the contract, but also in the level of service that a customer may request. The technical support that is provided can be conducted solely by phone or it can be carried out in the form of a service call conducted by a qualified technician at the location where the computer has been deployed. This can be in-home or at the customer's office. Dell recently expanded their sales locations to include WalMart and BestBuy. This may have been to improve a perceived decline in online sales. Their brand recognition provided a boost to the image of the stores they used and the new partnerships with brick-and-mortar establishments turns out to be a winning solution for all parties involved. Dell gathers information from customers via organized events and customer panels which is then used in research and development. Dell has partnerships with a wide variety of hardware, software, and components vendors. This allows Dell to provide a broad range of combinations to choose from. The parts are assembled in configuration centers as orders are received and shipped via ground and air shipping companies such as UPS. Apple handles the task of placing its products in the market by offering those products worldwide. This is accomplished through online stores, retail stores, direct sales and third parties. Apple divides its global market into four segments. The three geographical segments are Americas, including North and South America, Europe, including the Middle East and Africa and Japan. The fourth segment is retail. As of the end of their fiscal year in September of 2007, Apple owns 174 retail stores in the US and 23 stores in Canada, Italy, Japan, and the UK. Whereas Dell is mostly occupied in combining components from other companies in the assembly of their products, Apple is responsible for the design, development, and marketing of components that are created specifically for their brand. This proprietary design has made it difficult for Apple to compete with Dell on the ground. More software and peripherals are currently available, however, the lack of compatible software and peripherals has presented a problem for people who would rather not deal with the challenges this presents. A possible solution to these challenges is presented in the agreement between Apple and Intel, a major manufacturer of processors for PC’s. In an effort to escape the rising costs of processors bought from their former source. To the dismay of many of Apple’s loyal customers, Apple computers now have the capability to run either the Mac Operating System or the latest offering from Microsoft in the way of an Operating system. The 2001 introduction of a Mac version of Microsoft Office also helped to make the decision to purchase an Apple Computer for those who wanted to have the compatibility with non-Mac productivity software. The ability of each of these companies to meet the demand of their customers and deliver what their customers want where each customer lives is the reason they each hold their on to their own piece of the computer market.

Promotion

Unlike Apple, Dell Computer offers discount sales along with markdowns for new products. Dell also has free shipping and multi-purchase offers. The main difference between Apple and Dell is the amount of items available. Apple Computers are integrated as a one piece working module. Dell Computers offer the monitor separated from a standalone tower. With Dell Brand Computers the monitor can be updated without sacrificing the entire computer. Digital media cards can be installed when needed into the tower. Apple Computers have always been considered more expensive. Apple simply has a combination of higher profits and low market shares. Apple has lowered it's laptop prices in order to compete with Dell. Apples' latest Profit Margin: 15.13% with an operating margin of: 19.28%. Dells' latest Profit Margin is: 4.82% with an operating margin of: 5.91%. [source: Yahoo Finance] As of January 13, 2006 Apple officially had passed Dell financially. Dell Computer Company reported earnings totaling $ 71.97 billion dollars. Apple computer Company reported earnings of $72.13 billion dollars. As of July 27, 2007 Apple doubled Dells earnings for the period. Apple outperformed Dell with a massive $ 127.81 billion dollar earned in comparison to Dells' $ 63.65 billion dollar earning. On December 6, 2007 Apple tripled Dells' earnings with a staggering $ 165.66 billion dollar earning period versus Dells' $ 54.42 billion (dollars). May 1, 2008 Apple quadruples Dell by earning a registered 158.66 billion (dollars) versus $ 38.97 billion (dollars) earned by Dell. Apples' ads infer through conversations that Apple is better and more convenient. Apple is definitely a more expensive option than Dell. Apples' current promotional plan includes effective communication with a tablespoon of comic relief. The price of a Dell Laptop Latitude is $ 1038 (dollars) while the Apple Mac is priced at $1182 (dollars) including a $183 (dollar) charge for Apple Care. Dell Computers have available 80 gb hard drive while Apple Computers have 120 gb hard drive. Connectivity for Dell consists of usb 2.0, serial and pc card. Connectivity for Apple consists of usb 2.0 with isight camera with ichat, firewire. The warranty on a Dell consist of a three (3) year limited warranty plus three (3) year onsite service.
Apple Computers has a warranty lasting three (3) years that is included in the price. The operating system for Dell is Windows XP Professional. Apple Computers' operating system is Mac OS x 10.s (Leopard). The size of a Dell Desktop is 1.26" (inches) thick it measures 13.27" (inches) x 9.37" (inches) and weighs 5 lbs (pounds). An Apple Desktop weighs 5.1lbs (pounds) and is 1.08" (inches) thick it measures 12.78" (inches) x 8.92" (inches).

Figure [ 5 ]: Dell Computer Banner
PROMOTION STRATEGY Markdowns and discounts offered by Apple are rare although there is a little known Apple Store website. At that website there are specific discounted rates that are included in the custom website price list. This website is exclusively available to schools and businesses. Apple surpasses its competition by consistently upgrading its visibility, usability and designs of their products. In the year 2007 Dell researched its familiarity or competitive association with American producers of common products. The results of this research prompted Dell to maneuver itself among the minds of Americans alongside premier brands such as Dove, Slimfast, Sunlight, Vaseline, etc. Dell also has an assortment of additional products including printers, cameras, televisions and many more technologies. Dell PROMOTIONS also include redeemable coupons that are available for limited time frames. These discounts are for itemized component parts and are available online. Dell Also Promotes through special offers, gift packages and daily deals available for it's customers. Apple Computers has extended it's e-doors to Japan at www:apple.co.jp/japanstore. Apple Computers are associated with promoting primary colors to differentiate from other systems. Apple focuses also on offering new features and services to gain customer loyalty. Apple does not allow cloning of it's product. That guarantees protection and tight control over manufacturing of their system.
CONCLUSIONS
Both Dell and Apple Computers are in high demand at many libraries. Both Apple and Dell systems have 1 GB memory. Another common trait shared by the two computer systems are LCD widescreen WXGA (128 ox 800). Both Dell and Apple have optical drives with DVD/CD-RW COMBO DRIVES. Dell Computer Company is owned by Michael Dell. Dell outsells Apple because it sells more machines. Apple makes a completely larger profit because its machines sell for completely higher prices. In my opinion both of these companies (Dell/Apple) provide a priceless service regardless of their price tags.

Table of Figures

Figure 1: Dell Inspiron starting at $499 10 Figure 2: Dell XPS starting at $799 10 Figure 3: iMac starting at $1199 11 Figure 4: Apple Macbook starting at $1299 12 Figure 5: Dell Computer Banner 18

Works Cited

Silverman, Dwight. “Tech Blog.” 6 Aug. 2008. Chron.com. 11 Nov. 2008. http://blogs.chron.com/techblog/archives/2008/08/the_price_difference_between_ macs_and_pcs_wid.html
Apple. 11 Nov. 2008. http://www.apple.com/mac/
Dell. 11 Nov. 2008. http://www.dell.com/
Apple Developer: http://developer.apple.com/business/macmarket/target.html
Apple.com: http://www.marketingapple.com/marketing_apple/2007/10/apple-adding-us.html
Datamonitor Company Profiles Authority: http://libproxy.lib.csusb.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=buh&authdb=dmhco&AN=5B0A0C20-9BB6-4284-A575-AC0F2261F45C&site=bsi-live
Apple.com ( 2007 ) HOMEPAGE.RETRIEVED ON SEPTEMBER 20, 2007, from http://apple.com
BODDIE, J. ( AUGUST, 2005 ) BEHIND APPLE'S STRATEGY: BE SECOND TO THE MARKET.RETRIEVED ON SEPTEMBER 20, 2007, from http://hbswk.hbs.edu/archive/4970.html.
Dell.com. ( 2007 ) HOMEPAGE. RETRIEVED ON SEPTEMBER 20, 2007, from http://dell.com
ONLINE PROMOTIONAL CODES. ( 2007 ) DELL FOR ME. RETRIEVED ON SEPTEMBER 20, 2007 from http://www.onlinepromotioncodes.com/Promo -Codes/dellforme.com/
RUSA, A. ( 2006 )softpedia:DELLSNEWMARKETINGSTRATEGY. RETRIEVED ON SEPTEMBER 20, 2007, from http://news.softpedia.com/news…...

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