Wednesday, 23 April 2014

Dell's Distribution Strategy in India

Dell was founded in 1984 by Michael Dell, a college student who sold build-to-order PCs from his dormitory room. Three years later, the fast-growing company opened its first international division, in the United Kingdom.

Today, despite intense competition from tech leaders like Apple, Lenovo and Hewlett Packard, Dell has ambitious marketing plans for future growth in overseas markets like India.

The PC market in India showed some growth in 2013 but 2014 is not expected to be as strong. Dell is the second-largest PC marketer in India, with an estimated market share of 13.2%. The largest PC marketer, Hewlett Packard, has an estimated market share of 28.5%, more than double Dell's share.

To increase share and boost brand availability outside of major urban areas, Dell's distribution strategy in India relies on two key elements:
  • Targeting consumers, the company is doubling the number of Dell-brand stores in small cities and villages. These smaller markets are where Dell expects growth to be strong in the coming years, because PC ownership is not as widespread as in major urban areas. In addition, Dell is assembling laptops to keep in inventory, so distribution centers can ship laptops to the stores very soon after customers place their orders. In the past, Dell's build-to-order process minimised inventory costs--now, customers will receive orders more quickly, which in turn should increase customer satisfaction.
  • Targeting businesses, including partners, Dell is using a roadshow approach to bring its experts and products to major commercial centres like New Delhi and Mumbai. The objective is to increase support for channel partners, expand market coverage and demonstrate its ability to provide full solutions to commercial customers.