Dell Environment

Topics: Marketing, Market economy, World population Pages: 43 (12044 words) Published: July 29, 2013
Chapter Two

The Global Marketing Environment

After studying this chapter, you should be able to:

1 2

Understand the nature of the marketing environment and why it is important to marketers.

Describe the major components of the social environment and how trends in the social environment affect marketing.

3 4 5 6 7

Understand how the economic environment affects marketing.

See how the political/legal environment offers opportunities and threats to marketers.

Appreciate the importance of the technological environment to marketers.

Understand differences in the competitive environment.

Know how changes in the institutional environment affect marketers.

Michael Dell founded Dell Computer Corporation with $1,000 when he was a college student at the University of Texas at Austin in 1984. Today, Dell is the world’s leading direct computer systems company with annual revenues in excess of $24 billion. The company has over 33,000 employees, with sales offices in 34 countries around the world. Dell serves customers in more than 170 countries and territories. Why has Dell been so successful? The major reason is that Michael Dell revolutionized the computer industry by introducing the direct model. Prior to Dell, most personal computers were sold through various middlemen—wholesalers and retailers—to the final customer. Dell did not think these middlemen added much value, so he developed a model to bypass them. The basic direct model aims “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.” So, if you go to the Dell Web site, you can select from various options to create the exact PC you desire. The computer will then be shipped directly to you. You can also check the Web site to follow your PC throughout the assembly process and keep track of it throughout the shipping process.

Dell now sells PCs to business customers, government agencies, educational institutions, and consumers. The company is enhancing the direct model by applying the Internet to its entire business. Over $35 million worth of PCs are purchased from Dell’s Web site each day, accounting for about 43 percent of total sales. Approximately 40 percent of technical-support activities and 50 percent of orderstatus transactions are conducted over the Internet. Dell maintains 44 country-specific Web sites to meet the needs of customers in different international markets. The company’s objective is to deliver faster, better, and more-convenient service to customers over the Internet. But Dell is not just an Internet company. Many of its customers are large corporations, educational institutions, and government agencies. A field salesforce is used to initiate and develop relationships with these customers. Dedicated account teams, consisting of sales, customer-service, and technical-support representatives, serve the largest customers. Global account teams provide multinational customers with a single point of contact and offer global marketing programs. Still, although these customers receive personal attention from Dell, more and more communication and interaction is being accomplished over the Internet. Sources:, December 22, 1999; Dell Computer Corporation, Form 10-K, 1999.

Chapter Two

The Global Marketing Environment


The Dell example illustrates how the marketing environment affects a firm’s operations. The marketing environment consists of all factors external to an organization that can affect the organization’s marketing activities. These factors are largely uncontrollable, although marketers can influence some of them. All marketers face the difficult task of identifying the important elements of the marketing environment for their organization, assessing...
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