Distribution Channels In Marketing For Dell Corporation

Supply Chain for Computer Products

Discuss about the Distribution Channels in Marketing for Dell Corporation.

Supplier – Customers – Manufacturing – Storing – Merging – Packaging & Delivery

The supply chain integrates all the features like supplier, manufacturer, transport, wholesalers, retailers, clients and all other that join the above. This supply chain has the objective of fulfilling customer needs by improving the value of products and services.

Supplier- the work of the supplier is to supply the computer products to the manufacturing company upon the company's request. For instance, in the case study "Dell Corporation" the supplier is requested to deliver the necessary inputs after a customer has placed an order. The organization occasionally reaches its suppliers in every two hours' time for delivery to be done as it serves many customers and hence the orders the company gets are high. The supplier delivers primary materials that the company processes to generate the parts the need in making the clients products. These parts are processed in such a manner that each necessary part bears a name.

Customers – the customers play the role of giving the manufacturing company orders on the type of goods they need and their specifications. Many computer manufacturing companies, starting with Dell have incorporated customers in their supply chain before product so that they may produce products that suit the client's expectations. This helps in ensuring that the computer companies manufacture products that are in demand and will sell well in the market. It also prevents the production of products that would otherwise stay long in the market without selling like that which Mr. Dell referred to in the case study.

Manufacturing- the manufacturers are given customer orders by the information technology specialists who run the company internet services. The IT managers receive customer order either via phone calls, Emails, and or the manufacturing organization website. The manufacturers then undertake the accurate procedure to generate an end product fitting the customer requirements. There are many manufacturing departments with a computer company, and hence each is committed to producing a specified part.

Storing- the store department stores the final output produced by different manufacturing department within the organization (Carpio & Lange, 2015). The store is structured in a way that it keeps all similar parts under the same unit. This helps in facilitating the fast combination of these parts to generate the final output. The stores are mostly put up next to the manufacturing plants to enable easy fast and ferrying.

Store and Non-store Based Distribution Channels

Merging department- the merging department combines the different parts made by the manufacturing plant to come up with the final product. This final product meets all the customers' requirements.

Packaging & Delivery – the final product(s) from the combining sector is packed ready for delivery. The customers are then conducted and alerted that the product has been packed and ready for delivery. Many companies prefer a customer to establish a pickup station for their products. Others deliver the customer's order(s) to the doorstep.

Store distribution channels are channels that manufacture goods before customers place their orders. The produced goods are then kept the firm's stores awaiting purchase. This channel constitutes of wholesalers, retailers, and distributors who intervene after a product is processed by the producer to foresee its delivery to the end users (Mols, 2013). The store based channel is classified by ownership and the type of merchandise offered. Under ownership basis, we have independent retailer stores, owned by a single proprietor (Carpio & Lange, 2015). Chain stores; these are owned by one or more partners under the same ownership to undertake distribution of goods and products (Wilkinson, 2013). Also, there is a franchise that formed through an agreement between the franchisor and a franchisee. Here the franchisee pays a certain fee to the franchisor in return.

Leased department is also a type of store distribution channels in which shops are established in other shops. The owner of a store allows another party to store and sell their products and goods at a certain fee. Another type of the store distribution channel is the consumer cooperative stores (Mols, 2013). These are owned by the owners of the organization with a view of producing goods or commodities at a reasonable price.

By the commodities offered there are departmental stores, convenience stores, hypermarkets and specialty stores. They all offer a large variety of commodities under the same roof.

On the other hand, non- store distribution channels are channels that have established a direct relationship with their clients (Crittenden & Wilson, 2015). This type of business is growing steadily in many parts of the world. They are classified into;

Direct selling- the manufacturer of goods or commodities has no fixed location. He only needs to make contacts with his customers to sell his products (Mugica, et al., 2017). This channel is preferred because it is highly interactive and thus the producer can access what the customer need are direct.

Advantages of "Dell Model" Sales

Mail order- in this format commodities are communicated to the clients via a catalog or letters. This type of distribution is fit for specialty products (Grant, 2016). The customer places an order for the desired goods with the merchant through a phone call or a website. This avails the internet and online payments making shopping simple as people or organizations shop without traveling to the manufacturers.

Telemarketing- this channel advertises its products on the television. The advert gives the product details, its future regards, warranty, price and the directions to use. The contacts through which the clients can reach the manufacturer and place and order for the commodity.

Automatic vending- this is a form of non -store distribution channel in which products are kept in a machine and dispersed to the clients upon depositing cash (Yadav, 2014). The vending machines are situated at busy and convenient places.

Electronic channels- this distribution channel is also referred to e-retailing. Products are availed to the customers through the internet. The clients then evaluate and select the products they need and purchase them from office places or home. This kind is becoming popular is it reduces the costs incurred as one does no need to travel to places.

1. The area of customer coverage is considerably large compared to when one is operating a store distribution.
2. The Dell model sales have an advantage in that the company produces products that have been specified by the customer hence the products will sell fast (Tena, 2015).

• The manufacturer produces products that bear the end users name. This makes customers increase confidence with the organization and feel valued.

1. The Dell model sales help them identify what types of products are selling most and thus can plan accordingly before making orders from their suppliers.
2. This type of sales reduces the burden of storage that the company could have incurred to accommodate the final products awaiting orders.
3. Reduced costs as one do not have to travel to the manufacturer to make a purchase.

1. There is fear of credit card abuse and mail fraud as both are related to the sense of detachment that not holding a prospective purchase comes with (Tena, 2015).
2. Customers who are not linked to the internet or have visual impairing/ hearing problems cannot use a mobile phone and the internet to place their orders.

• This type of sales is just limited to the literate people only. This makes the firm lose other potential customers.

A competitive advantage is a circumstance that provides a company with a favorable edge over its rivals and makes it better (West, Ford & Ibrahim, 2015). Dell Corporation has had a competitive advantage over its rivals through its way of manufacturing. The company embraces the culture of processing its products upon customer orders. However, the firm needs to come up with other tactics to maintain its position in the marketplace as many businesses have also turned to wait until customers place their orders so as to undertake to manufacture.

Dell Corporation can sustain its competitive advantage by adopting techniques such as;

Cost leadership- this will enable it to be able to produce and sell its products at a lower cost than its competitors (Johnston & Marshall, 2016).

Differentiation – through this strategy, the company will be able to distinguish its products and services by features that will fix it more than its competitors.

Focus- focusing will enable the company to dominate in areas where market niche arises.

Other ways that can enable Dell to maintain competitive advantage are through focusing on narrow target markets, developing customer intimacy, focusing on long-term success and limiting promotional channels (Steenkamp, 2017).

A channel strategy is a company's plan for moving a product via the chain of distribution until it gets to the end user (McGrath, 2013). Dell manufacturers have offered services for the direct channel by taking the final product directly to the customer. This channel can be improved by using strategies such as integrating the existing channel (West, Ford & Ibrahim, 2015).

By integrating we mean that Dell can increase its penetration to the rural areas (Steenkamp, 2017). This will help the company expand its market location. The company can also move to abroad countries and establish their offices through which manufacturing can be diversified all over the globe. 

References

Betancourt, R.R., Chocarro, R., Cortiñas, M., Elorz, M. and Mugica, J.M., 2017. Private Sales Clubs: A 21st Century Distribution Channel. Journal of Interactive Marketing, 37, pp.44-56.

Carpio, C.E. and Lange, K.Y., 2015. Trends in e-commerce for the food marketing system.

Crittenden, V.L. and Wilson, E.J., 2015. Success Factors in Non-Store Retailing: Exploring the Great Merchants Framework. In Proceedings of the 2002 Academy of Marketing Science (AMS) Annual Conference (pp. 82-82). Springer International Publishing.

Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.

Johnston, M.W. and Marshall, G.W., 2016. Sales force management: Leadership, innovation, technology. Routledge.

McGrath, R.G., 2013. The end of competitive advantage: How to keep your strategy moving as fast as your business. Harvard Business Review Press.

Mols, N.P., 2013. The Internet and the banks’ strategic distribution channel decisions. International Journal of Bank Marketing.

Steenkamp, J.B., 2017. Global Brand Building in the Digital Age. In Global Brand Strategy (pp. 111-147). Palgrave Macmillan UK.

Tena, M.E., 2015. Ad agency-client relationship models: advantages and disadvantages.

West, D., Ford, J. and Ibrahim, E., 2015. Strategic marketing: creating competitive advantage. Oxford University Press.

Wilkinson, I.F., 2013. Distribution channel management: power considerations. International Journal of Physical Distribution & Logistics Management.

Yadav, M.S., 2014. Marketing in Computer-Mediated Environments: Research Synthesis and New Directions (14-004) (Doctoral dissertation, Temple University).