Marketing Communications

Executive Summary

Dell is a company that was coined into existence by Michael Dell back in 1984. At this point of inception, the company was initially known as Dell, Inc. and later changed to Dell Computer Corporation in June 1989. It was at this point that the company was in a position to expand its business activities outside the United States to Europe, where it managed to net over fifty million in sales turnover. It was in 1993 that Dell formulated a couple of marketing communications strategies, which will be later discussed in depth. Apple Inc. was brought into existence in the garage of the owner, Steve Jobs. This was back in 1976, when Jobs, with his close pal, Steve Wozniak, who were both high school dropouts, started working in Hewlett-Packard and Atari respectively, which were specialized in computer design. It was at this point that Wozniak designed the Apple 1, in 1976. Therefore, Apple was born. It was an uphill task for the duo since they were not taken seriously up until 1977 when Apple 2 was born. It became famous for its inception and from thereafter, their sales increased. Their success in business, until the death of its founder, depended on their communications marketing strategies that will be further discussed in subsequent chapters of this paper. This is a brief history of the two companies that will be the subject of study in this paper.

Introduction

The research paper delves into the quality of marketing communication efforts extended by Apple and Dell computer companies. It is a comparative analysis research. Market review of the industry will be elaborated in details giving their performance and the competition from Apple among other competitors. A literature review is also discussed giving various information concerning Dell Company and the market industry as a whole. Apple is the main competitor and it is in this part that they have both been compared. A conclusion, Critical Analysis, and Discussion are made. Recommendations to Dell Company on its subject will be clearly stipulated at the end of the paper.

Market Review

The overall performance of the personal computer manufacturing business is dependent on very many factors, some within a specific organization itself, while some factors are those that affect the industry in general. These factors are paramount to the success or failure in personal computer manufacturing. The PC market has many factors attributed to its success, among which the current macroeconomic condition is a major issue. The current economic times are considered as one of the longest-lasting periods of recession, which has lasted for over a whopping twenty-one months, and the views of whether it is about to end are really not clear. This has generally affected the PC manufacturing industry in terms of its attractiveness. This has caused the purchase of the computer gadgets to slump down since the individuals buying the computers only do so with the portion of their disposable income, which keeps decreasing with the passage of every single day. Considering the current levels of economic recession, people are purchasing less and less of the computer electronics with each passing day. Regardless of the recent changes in computer applications, many of those, who had earlier versions of computer gadgets, are forced to replace them with more versions that are current. This is a positive trend on the sale and distribution of computers globally, though putting into consideration the current economic recession has not contributed well to the growth of the computer industry in general. This has greatly affected the consumers’ purchasing power, and a report by Mintel Oxygen forecasts a further decline in the purchase of these gadgets down to 14%, as compared to the previous year’s growth of 8% (Mintel Oxygen). This economic condition is expected to last for quite a long time.

The industry generally has many players, and ninety percent of the industry revenue has five major players (Hewlett-Packard, Dell, Apple, Acer, and Lenovo). These are the companies that can be considered to be the big five players in this industry that are accountable for almost the whole industries sales. The number of competitors is few and there are slim chances of a new computer producing company can entering the industry and surviving to a growth level. This has affected the industry as a whole. Shading more light on the demographics of the computer users, it is clear that the most users of the computers are middle-aged, from 18-35, who have so many things to do with the computers, which include work, checking emails, playing music, watching movies and as well as using the internet services. This explains why the skewness of most of the computer owners is in this age bracket.

The pace, at which the technology is changing, is also a key factor in affecting the industry. Computers are the fast-changing application of gadgets and a computer manufactured cannot be better than the one expected in the future. Since they are fast-changing to conform to the consumers’ needs, and hence, upgrading into more complex versions.

The number of rivals is also a key issue in this industry. It has very few players, who take the lion’s share and those that cannot beat this competition are left to do the personal consultancy work. In the US alone, over one thousand and five hundred companies net average revenue of about seventy billion dollars. The rivals are the five. Their rates of purchase are wholly dependent on consumer preference. This is supported by the Ibis computer industry report, which bulwarks the issue as discussed (Pickton 2001).

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Most people, who purchase computers, are households. This is inclusive of the low and high-income earners, who dominate the market and account for 63-65% of the households. Reports show that this number is gradually increasing, but not at a rate that would create a huge impact on the industry in general. In addition to these, there is the factor of economies of scale in this industry. This is one of the major determinants of the cost implication on computer products. It affects the pricing of the product, which will be felt by the consumer. It also acts as a barrier to those willing to get into the industry. Another important and very closely related issue is the experience curve effects that have significant implications on the costs. This is also an important factor and should not be overlooked since it is a driving force that cannot be assumed.

Pressure from rivalries or competitors is also a major factor but varies amongst the industry, when an analysis is made between two companies. If the competition is weak, the rival company may be able to increase their prices and eventually earn more profits in revenue. If the competition is strong, the company at a disadvantage will be forced to reduce their prices in order to beat make revenue through selling at a lower price, hence diminishing profit margins. This is also a factor that cannot be assumed in the computer industry as a whole. This is an overview of the computer manufacturing industry.

Literature Review

Communication is a process, by which a common set of symbols is used to exchange different meanings amongst a group of people. Dell, as a computer manufacturing company, has various avenues for letting their target market segments know about their latest technological innovations and creations. This is done through appropriate channels. The success of a company is wholly dependent on the way they market and advertise their products in this case, or service if a company is in the service providence industry. Dell is a very successful company that has integrated various marketing efforts to achieve industrial success (Fill 2009).

Dell’s slogan is simply “Dell, Yours is here”. This slogan puts the company in a position as if it is really addressing the consumer by telling him or her that his gadget is there, with them. Dell uses a variety of media channels to let the whole world know about their products. First of all, Dell makes use of television in order to attract new clients. This has been done by the use of their slogan; though it really does not provide the necessary feedback. The company also frequently makes use of catalogs, as a direct means of marketing. This is where the sales representatives are engaged in a conversation with the target market in search of a direct answer.

The company has also made use of an advertising campaign that targets the doctors, business personalities and teachers at the same time using the slogan “The power to do more”. This is a very strong and efficient advertising tool since it broadens the company’s image. It is so intended that this shift the consumers’ attitude about the company from being just another PC maker to its full spectra of services (itbusinessedge.com)

Dell also uses the internet to let their target clients know about their latest products, as well as offers that would impress the client. As such, Dell has a facebook account that serves to notify. They post all their latest offers, as well as the latest products. This is an efficient way of advertising since there are easier chances of getting a response from the consumers. It also has a website, where the target customers can gain access to the company products and possibly provide feedback.

The company also makes the use of television adverts using the slogan “Treat yourself well”. This slogan serves to trigger the clients’ thought of treating him or herself well by purchasing one unit of PC manufactured by Dell. Dell also makes the use of newspapers, where they advertise their latest products and services. This is an effective channel of advertising beneficial to the company

Dell has also used a lot of product advertisements through advertisements. It has created so many advertisements that emphasize on the quality of their products, as well as their cheap pricing. Dell has also targeted their clients through emails. Here, there is personal contact with the client. In addition, it has been promoting larger services like consulting services to a large number of the corporate target markets and hence, sparking competition with companies like Apple and IBM. Dell also has a retail strategy that allows mass product distribution alleys. The companies’ marketing efforts have been directed towards low prices and very distinguishing features of their products (Fill 2009).

Dell has an integrated marketing mix that leads to durable brands. With the product, they focus majorly on providing the benefits that make changes in the needs and demands of their target market. This is different from other companies that are out to avail their products and services as the primary objective, leaving customer satisfaction a secondary goal. Dell as a company avails its products and services to both the business class as well as the home or personal consumer classes. It majors its production on the demands that its target market requires. If it is the business niche of the market, Dell produces Computers that are hard enough to support voluminous business information processing, like the Dell Precision workstations, Inspiron, as well as Latitude notebooks. If it is the home class of the target market, it makes products relevant to them. This is a marketing strategy that Dell has in place to make sure that the clients benefit the most by changing his life and making it easier.

On the issue of pricing, Dell is like any other company and has constraints, so they have to maintain a balance on the pricing of their products as not to make losses and close down. It is for this reason that it aims to produce low price personal computers that the customer will reap the most benefits (Smith & Taylor 2004).

Cheap pricing reflects affordability in the target market. Hence, motivates populace to buy Dell products. It is on this ground that Dell is beating the competition with their pricing strategy, but at the same time, providing the best electronics that leaves its factory premises. As a result, it gradually gains a share of the market. On the placement issue, Dell makes sure that their products are effectively distributed. Dell has also managed to establish shops in areas around the world to make sure that their products are on the shelves of the local stores. This promotes the consumers’ trust in Dell and this reflects in an increase of the clientele base. Dell also has promotion strategies in place for its products. It has been marketing its electronic products in the televisions, radio stations, promotional materials that include catalogs, brochures to internet services like emailing the target customers. These are the Four P’s Dell has in place.

Apple uses the slogan “Think Different”. It has an image of a bitten apple. This slogan is used symbolically. It is bitten to show that there is someone, who has already eaten the apple and there is still more left. This biting represents the portion of those, who already have products of their company and the unbitten represents those left out and are welcome to have a portion. This is a marketing tool and it has worked for many consumers (Aaker et al. 2009). The company is best known for its famous products that include the Macintosh, the iPod, the iPhone, and the iPad. It is also well renowned for software that includes the iTunes media browsers, the Mac OS X operating system, the iWork suite, as well as many more. Apple, as a company, needs to market its products and services to their target consumers. It has seen a lot of success in the past years.

The first thing the Apple does is that it creates a brand that its followers form a community, which one feels proud to be associated with. When other computer companies’ are cutting down on their pricing, the Apple, on the contrary, is making an upmarket and highly-priced computer gadget that those, who have them swim in some pride for associating with such an expensive brand. This brand creates a positive image within the users even if its price is highly elevated. The target market ends up saying that Apple electronics are worth every dime spent. This is because of its quality (Egan 28).

Apple also focuses on a customer’s friendly experience. With creative engineers and software designers in the workshop, they create products that are exquisite, very delightful and friendly as well. It has made use of attractive features that include the touch screen interface, voice active prompts that thrill the target market and hence, a marketing tool. This is accompanied by exemplary packaging that wows the customers. Steve Jobs looked at some of the best finishes, like those of Italian cars. He decided to apply the same principle on his products, which actually added value to the product and company as well. It is at this point that I can say the computers are designed to sell right from the design down to the packaging.

Apple also satisfies its clients with the wide applications developed in their factories. This provides the customers with satisfaction and gratification in whatever the Apple product they buy. This also ensures customer loyalty and the clients trust that the Apple community increases, which ensures repeat purchases (Smith & Taylor 2004).

Apple has a branding strategy that is centered on emotions. The brand it creates is about personality, lifestyle, as well as aspirations. It is about simplicity and removing of all lives complications on the clients’ part because it is built and centered on the consumers’ life. Apple has succeeded in effecting a good product mix. Since its inception, Apple was a computer company up until it developed the iPod. It extended its brand to portable media playing electronics. It was a risky business but turned out to be beneficial to the company because it unearthed a new segment of consumers. It was after this that Apple produced the subsequent applications, which also turned out to be a huge success. Within the first year of the iPod, Apple opened a chain of stores to retail its products, thereby improving its product distribution channel. However, over the years, Apple has increased its product base to meet the various client needs, which have turned out to be a huge success as well. It is, therefore, evident that Apple’s product mix strategy is on point. This is closely related to product differentiation, where it has managed to differentiate their products from basic computer manufacturing to highly derivative computer electronics that are better than the generic computer electronics. Apple has also improved on the distribution of its products by availing chain of stores that deal in their electronic products.

Conclusion, Critical Analysis, and Discussion

It is quite clear that Dell and Apple are companies serving in the same industry but each executes its operations using different modes of action. The first difference is on the issue of product pricing. While Dell is out to make standard products that are cheap, Apple on the other side is placing a high price tag on their products. This is a distinguishing difference. Secondly, Apple has a better product mix strategy that Dell. This is evident from the fact that Apple has many high-class products as compared to Dell. This makes Apple have a competitive edge over Dell and other competitors, which accounts for its success. On the product quality, Apple is miles ahead of Dell. Apple has used technologies that include the touch screen interface in the production of its products. This is a thrilling experience for the users of Apple, who feel proud to be associated with Apple. Both companies have more or less the same marketing strategies because they both use the same modes of advertisement. On issues regarding the product placement, the companies use the same principles too. They both lay emphasis on having distributor chains in places, where their impacts are felt (Rossiter & Bellman 2005).

Recommendations

As the international brand manager of Dell, there are some recommendations I would like to put forth for consideration. These recommendations will add a competitive edge to this company if acted on appropriately. Well, first, has to improve on the product mix. This involves product differentiation into versatile electronics. This will be successfully achieved by improving the quality of products and embrace new-age technologies in their products. On the same note, I do recommend that the prices of items be reasonably increased to create that better brand quality, but pending the upgrade of the computer electronics.