Dell Case Study

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1. Should Dell maintain the status quo and continue with one mainstream product, or should it expand the product line?

In my opinion, they should change their strategy and accordingly expand their product line. The reasons behind this are numerous, but the main one is grounded in the existence of customers with different needs at the market. So, there is “no one size fit all approach” in contemporary marketing. And due to the fact that Dell is known as company which is focused on customers and their wants, which are apparently starting force for every activity within the company, the need for recognition of these differences is immense in order to maintain and preserve their brand image. Another incentive for doing so lies in the fact that it would be easier for company to offer “desired” set of attributes to each segment. Because it is difficult to satisfy all of these tradeoffs when you have one broad target group comprised of people who value different things differently. The conclusion is that they should improve their segmentation and adopt product line toward it.

1. How should the new product or products be configured? What features should be incorporated to enhance Inspiron’s positioning in the market?

It all starts from clear definition of target group. So first thing they should do, is to question themselves who are their primary target groups and what do they want. If this process is performed well, there is great chance for maximizing potential of the product. Following this, I propose them to use Conjoint analysis because it is great tool that could help companies in these situations when they are not sure about feature they should incorporate product. Conjoint analysis is a statistical technique used in market research to determine how people value different attributes (feature, function, benefits) that make up an individual product or service. Its objective is to determine what combination of a limited number of attributes is most influential on respondent choice or decision making.

1. How should pricing be set to maximize profit contribution, accounting for direct product costs as well as operating expenses?

Well this decision is in high correlation with the previous one. So, according to the target customers’ preferences product should be developed. Following that, all costs should be taken into account and margins should be calculated. In my opinion they should develop their pricing strategy and position INSPIRON as product that offers you best value for money and support this by strong promotional campaign. In such way they could obtain good margins and still justify them with great performance of the notebook and at the same time be perceived as “good value for money charged” by customers. This could lead to the satisfaction of all parties and thus increase chances for success.