Zero level of distribution

Dell is a US multinational computer technology company that develops, sells, repairs, and supports computers and related
products and services. Named after its founder, Michael Dell, the company is one of the largest technological corporations in
the world, employing more than 145,000 people in the U.S.

Founded February 1, 1984; 35 years ago

Founder Michael Dell

Headquarters Round Rock, Texas

U.S.[1]

Area served Worldwide

Key people Michael Dell

(Chairman & CEO)

Jeff Clarke

(Vice-Chairman, Products & Operations)

Karen Quintos

(CCO)

 Personal computers
Products
 Servers

 Peripherals

 Smartphones

 Televisions

Revenue US$78.7 billion (2018)[2]

Number of employees 145,000 (2018)[2]

Dell distribution channel

Dell was established in 1980 by Michael Dell at the age of 19 when he decided to cut out the
middle man and directly connect himself with the customer supplying computers without the
expense of a distribution channel. Initially Dell was distributed directly to customers as they
were able to order a computer made to their individual selections, with a gross turnover of $73
Million in the first year of trading it seemed that Dell was going to be tough competitor in the
Personal Computer Market.
Manufacturers selling direct to the consumer as Dell did eliminates costs associated with
marketing and distribution as there is a reduction in the number of links between the product
being sold to the consumer and the consumer buying the product. Dell has used many different
channels to sell their PC’s over time such as computer stores, department stores, over the
phone, Ebay and of course their website. A computer is relatively easy to transport and can be
easily distributed from the manufacturer to the consumer. Whilst it may be a difficult purchase
for some consumers Dell has partnered customer service with their product and offered
consumers the ability to order a computer which is made to their specific selections known as
“Configuration To Order “. This removes the need for consumers to go into a retail outlet to
make a purchase. Consumers can call Dell during the purchase process or request sales
assistance online and receive a cal back within approximately 48 hours. As can be seen below
in the diagram the intermediary such as a retail outlet is removed in Direct Channel Marketing,
which occurs when purchasing directly from Dell’s website.

By removing the Intermediary in the channel process this enables Dell to

have greater control over their product and control the price as there is
no retail outlet attempting to price cut their product (Iacobucci, 2014).
This is a an essential marketing strategy for Dell as they target
consumers looking for the convenience of purchasing a PC which is
tailored to their needs at an affordable price with comparable quality to
the store brought product. A Direct Chanel is easy for the consumer
and fits with Dells’ consumer behaviour.
In 2001 Dell became the world’s number 1 computer systems provider. With years of
experience configuring PC’s to order Dell knows what their consumers want and have recently
developed a growth plan for the future which meant a change in their ability to distribute their
products sooner. Dell has developed “Smart Selection” which involves pre-building what they
think their consumers want to enable mass production of PC’s and enable them to ship within
24 hours. This enables Dell to compete with their competitors and reduce the wait time for
commercial consumers which was previously seven to ten days. With Dell now offering their
commercial companies the option to have their approved custom software image added by
allowing 48 hours for shipping. They have continued with their brand segmentation by allowing
commercial companies to also make purchases that are quick, convenient and have the ability
to be configured in a small way to their needs, building upon their position in the market and
continuing to collaborate with customers.

1 level of distribution