Identify and describe the business model used by Dell.2
Explain the different types of EC transactions used by Dell.6
Analyze the competitive advantages Dell has over its brick and mortar competitors.10
Relate this case study to supply chain management improvements12
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Identify and describe the business model used by Dell.
1. Online direct marketing model
Dell implemented an aggressive online marketing and offered competitive price through its online store. Through online direct marketing model dell offered services to the following groups; individual users, SMEs, medium and large business and Government, education and NGOs.
Sales to individuals are considered as business to consumer groups whereas the remaining groups are business to business. Dell introduced online catalogs which are suited to respective customer groups at its website. This offers unique and personalize options to customers. Direct marketing sends advertisement through e-mail, social media and interactive media.
Clients of Dell can browse through different products available through online catalogues. After selecting the correct product, customers can purchase online through credit card or cheque.
Online direct marketing offers some advantages to Dell. As compared with traditional business which sale products through physical store, Dell save huge amount of costs by selling online; directly to customers. Online direct marketing can also enhance relationship between Dell and its customers because Dell handles all after sales services such as warranty and on-site support.
2. Auction marketing model
Auction is a process of purchasing and selling of products or services by offering them up for bid and taking bids and sell the item to the highest bidder.
Dell also used auction marketing model to dispose of refurbished Dell products through dellauction.com. Auctions will help dell sell refurbished products at a better price and this are an important income channel for Dell. Auction off old computers is a better option to just dispose of because these cheap but working computers are still an asset to some lower income families or institutions who can’t afford to purchase new pc.
3. Affiliate program
Affiliate marketing is a practice of rewarding partners for each visitor or customer brought in through the rewarding partner website. This program is using one popular website to drive traffic to another website. Affiliate program now plays an important role in e commerce marketing strategies.
Dell provides affiliate partners the opportunity to link their website to dell.com. In return, Dell pays 2 to 4 percent on any successful transactions made from clicking the link at the associate’s website.
Since inception, affiliate marketing has grown rapidly around e-commerce website. Today, it is an integrated part of the overall online business plan. One of the main advantages of affiliate marketing is because of its pay for performance model. This means merchant only incur expenses when business is done. This reduces marketing and advertisement costs.
The advantages of affiliate marketing are that Dell can promote its brand to a wider range of customers thus generating more sales. Affiliate marketing also involves lower costs compared to other types of advertisement as Dell only pays its partner when a purchase is fulfilled. Affiliate marketing also brings benefits to both partners because traffic to Dell’s website may also visit its affiliate website and so forth thus generate sales for both partners.
Customization means to make something according to a customer’s individual requirements. Many implementations of customization are operational today. It enables customers to add or change requirements of a core product or build fully customized product from scratch.
Dell offered customization options to their...