Marketing : Dell Pricing Strategy

Topics: Marketing, Product management, Dell Pages: 12 (3938 words) Published: January 11, 2011



Current STP of Dell

Segmentation divides customers into groups based on the underlying needs or characteristics driving their purchase decisions. Truly distinct customer segments respond to different value propositions and require different strategic approaches. When properly used, segmentation helps you allocate resources throughout all levels of your organization to create a value proposition that uniquely serves your target customer groups. In other words, if strategy is the art of allocating scarce resources, then segmentation—and the understanding it provides about your core customer groups—is part of the science informing that allocation. Levels of Market Segmentation

Through market segmentation companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively with goods and services that match their unique needs. Under micro marketing strategy Dell follows an Individual Marketing Segmentation. This is the ultimate level of segmentation which follows customized marketing or one to one marketing. Dells POD (Point Of Differentiation) lies in the customized products they offer too their consumers hence the consumers design the product themselves.

The segmentation followed by Dell is:-
* Home User
* Small and Medium businesses
* Public Sector
* Large enterprises
Dell follows Product Specialization. Since Dell gives its consumers the facility to customize their laptops to suit their needs, they are able to target more than one market segment. The two major market segments targeted by Dell are as follows: * Home Users

Dell focuses mainly on home users consisting mainly of individual users because of the following factors: Measurable-The size of the potential home users is increasing at a constant rate, likewise the purchasing power is also increasing. Substantial-Individual users segment has the highest potential number of buyers mainly due to the fact that there is a rising trend of an increasing number of people joining in the middle income group. Since the core of dell’s marketing strategy is customization, they are able to cater to the needs of this home user segment very effectively. Accessible- Dell’s purchases are mainly through its official website hence making it highly accessible by all consumers in this segment. Actionable – Dell has launched the Inspiron series for attracting and serving this segment. The target market in Dell focuses on individual users with low budgets, who appreciate the technology, rather than focusing only on the executives and managers with no budget limitations.

* Small and Medium Businesses

Dell's product strategy is to target the high-volume systems infrastructure needs of small and medium businesses

Measurable- In India, the Micro and Small Enterprises (MSEs) sector plays a pivotal role in the overall industrial economy of the country. It is estimated that in terms of value, the sector accounts for about 39% of the manufacturing output and around 33% of the total export of the country. Further, in recent years the MSE sector has consistently registered higher growth rate compared to the overall industrial sector and the labor intensity in the MSE sector is estimated to be almost 4 times higher than the large enterprises.] Substantial- This has proven to be a revenue-rich strategy for Dell. It has the strongest financial performance of the four vendors we examined. Actionable- Today, Dell's messaging is heavily targeted at IT management decision-makers. However, that messaging is consistent between Dell's corporate and product marketing so Dell's path to a stronger business technology (BT) orientation does not have to...
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