Running Case with Real Data Dell Direct Dell Inc. is the world's number one direct-sale computer vendor and competes with Hewlett-Packard in that segment. Dell offers network servers, workstations, storage systems, and Ethernet switches for enterprise customers, in addition to a full line of desktop and notebook PCs designed for consumers. It also sells handheld computers and markets third-party software and peripherals. Dell's growing services unit provides systems integration, support, and training. Michael Dell, the flamboyant founder and chairman of Dell, started college at the University of Texas as a pre- med student but found time to establish a business selling random-access memory (RAM) chips and disk drives for IBM PCs. Dell bought products at cost from IBM dealers, who were required at the time to order large monthly quotas of PCs from IBM. Dell then resold his stock through newspa- pers and computer magazines at 10 to 15 percent below retail. By April 1984, Dell was grossing about $80,000 a month-enough to persuade him to drop out of college. Soon he started making and selling IBM clones under the brand name PC's Limited. Dell sold his machines directly to con- sumers, rather than through retail outlets as most other man- ufacturers did. By eliminating the retail markup, Dell could sell PCs at about 40 percent of the price of an IBM. Michael Dell renamed his company Dell Computer and added international sales offices in 1987. In 1988, the company started selling to larger customers, including government agencies. That year Dell Computer went public. In 1996, Dell started selling PCs and notebook computers through its Web site. This channel of order confirmation and shipping and handling is still the bread- and-butter means of addressing Dell's consumer and enterprise customers' requirements. In 1997, Dell entered the market for workstations and strengthened its consumer business by separating it from its small-business unit and launching a leasing program for consumers. In order to diversify its revenue sources, in 2001 Dell expanded its storage offerings when it agreed to resell systems from EMC. To grow its services unit, Dell acquired Microsoft software support specialist Plural in 2002. Despite its success at grabbing PC market share, Dell continues to attack new markets. It has put increasing emphasis on server computers and storage devices for enterprises. Furthering its push beyond PCs, Dell has introduced a handheld computer, a line of Ethernet switches, and consumer electronics such as digital music players and LCD televisions. It originally partnered with U.S. PC Shipment Estimates for Q3 2008 21% 6% 9% Dell Hewlett-Packard Apple Acer Toshiba Others 9% Deil-Financials-US. Dollars in millions) 70,000 60,000 - 50,000 40.000 Net revenue Gross margin 30,000 20.000 10.000 Feb 07 Feb 06 Jan 05 Jan 04 Lexmark to develop a line of Dell-branded printers, and it some 70 percent of HP's operating profit. In the case of has formed additional partnerships to quickly grow its printers, the printer cartridges is where HP has the biggest printing line. On the services front, Dell has mirrored its margins, and Dell seems to be focused on making inroads straightforward approach to hardware sales, embracing a into this market, over which HP has had a strong hold. fixed-price model for offerings such as data migration With such an intense competition for market share and storage systems implementation. Dell is currently and customer patronage, Dell is conducting a survey of looking to international revenue to supplant sales in the recent purchasers of Dell PCs and notebooks. Dell wants PC-saturated U.S. market. Sales inside the United States to understand their consumers primary usage of their were about 53 percent of consolidated net revenue in computers for Internet and other usage. Based on that, fiscal 2008 Dell wants to understand the satisfaction that their Dell has thrived as downward-spiraling prices and consumers are deriving from Dell products. Dell wants to commoditization washed over the PC industry, benefiting the estimate their customers' probability of repeat buying of company's customers and bashing its competitors. Instead of Dell products and the extent to which their current battling the tide by attempting to erect proprietary systems, customers will recommend Dell to their friends and as HP and IBM often did, Dell used its low-cost, direct- family. Finally, Dell wants to understand if there is any sales model to ride the wave. In 2008, Dell announced correlation on any of these identified usage factors and Partner Direct, a global program that brought their existing the underlying demographic aspects of the classification partner initiatives under one umbrella. Dell intends to expand of their customers. the program globally. Continuing their strategy and efforts of better meeting customers' needs and demands, they began Question: offering select products in retail stores in several countries in NOTE: Rename this file with your name. Maximum 500 and minimum 300 words are the Americas, Europe, and Asia during fiscal 2008. These allowed for all the answers collectively. Over writing would result in disqualification and actions represent the first steps in their retail strategy, which zero marks consequently. will allow them to extend their business model to reach 1. How can dell make use of exploratory research to understand how household consumers buy customers that they have not been able to reach directly. personal computers and related equipment? of late, with all the brand equity Dell has built up, Dell 2. Describe one way dell can make use of descriptive research Inc. is pushing into consumer products. Dell has recently made a move into manufacturing flat-screen TVs. With 3. Define management decision problem facing dell. TVs that use the newest technology, Dell is now diversify- 4. Define appropriate marketing research problem. ing even further. The latest battle in the PC business isn't in computers but in printers. Dell is now waging war on HP's 5. Formulate three research questions with one or more hypotheses associated with cach. vaunted imaging and printing division, which produces NOTE: Rau Maximum 500 and minimum 300 words are allowed for all the answers collectively. Over writing would result in disqualification and zero marks consequently. 1. How can dell make use of exploratory research to understand how household consumers buy personal computers and related equipment? 2. Describe one way dell can make use of descriptive research. 3. Define management decision problem facing dell. 4. Define appropriate marketing research problem. 5. Formulate three research questions with one or more hypotheses associated with each