Elements Used to Market Goods & Services

Dell Incorporated is one of the most successful companies in the world. In 1994, Dell was a struggling PC maker. Like other PC makers, Dell ordered its components in advance and carried a large amount of component inventory. If its forecasts were wrong, Dell experienced major write-downs based on lower of cost or market price adjustments. Then Dell began to implement a new business model. Its operations had always featured a build-to-order process with direct sales to customers, but Dell took a series of steps to sell direct to customers though its website. The results were spectacular. Over a four-year period, Dell's revenues grew from $2 billion to $16 billion. This represents a 50 percent annual growth rate. During the same four year period, earnings per share increased by 62 percent per year. Mary Hayes of Information Week (1998) notes that once personal computers became a commodity, price wars ensued bringing revenues for most PC manufactu

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s that over the phone or via the World Wide Web, customers select what they want from hundreds of different components to configure the computer of their choice. This strategy limits the amount of technical support and helps make this business strategy successful. Dell will not begin to build a PC until the consumer has paid in advance for it (Agrawal, Mercer, Kumaresh, 2001, p. 62). Distribution: Before Dell became the dominant company in the personal computer business, PC companies competed in retail outlets such as Best Buy, CompUSA, and Circuit City. PC manufacturers including IBM, Hewlett Packard and Compaq did not own stores and did not control the channels of distribution. Retailer stores would order and stock the products they thought would sell. Retailers would customize computers by loading software, or by bundling personal computers with peripheral equipment and selling them as a bundled package. Dell's business model sidesteps middleman, making Dell the world's largest direct-sale computer vendor. Summary: Dell created a new business model based on a unique marketing mix by switching from the traditional distribution channel. Dell offers customers a custom computer with the latest technology at a competitiv
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Approximate Word count = 2212
Approximate Pages = 9 (250 words per page)

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