Badm 321: Marketing - Marketing Channels and Supply-Chain Management

BADM 321: Marketing

11 April 2016

Marketing Channels and Supply-Chain Management

“From unconventional PC startup to global technology leader, the common thread in Dell’s heritage is an unwavering commitment to the customer”. This paper deals with Dell and their marketing channels and supply-chain management.

According to an article from Marketing Career Educations (2016):

The choice of marketing channel is one of the most critical an organization can make, and affects all other forms of the marketing mix. Once a company has committed to a distribution model, it may be hard to change. Distribution types include: Intensive distribution – products are sold at the majority of retail outlets, Selective distribution – the producer relies on a few intermediaries, such as specialist retailers, to carry their product and Exclusive distribution – the producer relies on very few retailers (common with luxury brands).

In the beginning Dell used exclusive distribution by going directly to the customers because they wanted to be different from other computer marketers, according to Marketing Chapter 15, Case 15.2 (Pride and Ferrell 517). By doing so, it helped minimize inventory costs and reduced the risk that parts and products would become obstacles before the customer could even place an order.

Thirteen years later, Dell tried using selective distribution, this method uses only available outlets in the geographic area to distribute their products. Due to profits lowering, Dell decided to try a different method. After 23 years, Dell is using the intensive distribution to sell their products, but ultimately selling directly to the customer remains their top priority (Pride and Ferrell 517).

Intensive distribution is appropriate for Dell because it has given them the ability to sell their products in more than 50,000 retailers worldwide, making it more convenient to their target market and has helped them become one of the top-selling brand names for computers on the market today.

Dell’s preference for direct channels has no affect when it comes to physical distribution because, although Dell prefers to sell directly to their customers, it still works hard at maintain its supply and demand to its 50,000 retailers. With Dell’s current distribution there is potential for issues within the channel conflict, these could be with horizontal conflict which usually happens between firms; since Dell deals mostly within themselves this may cause issues on how to resolve the conflict. The same applies to vertical conflict as well.

Michael Dell has come a long way compared to where he started in 1984, with $1,000 dollars and a vision. His vision is now worth more than $22 billion dollars.

Works Cited

Company Heritage. (2016). Retrieved April 10, 2016, from http://www.dell.com/learn/us/en/uscorp1/about-dell-company-timeline?c=us 

Forbes The World's Billionaires. (2016). Retrieved April 10, 2016, from http://www.forbes.com/profile/michael-dell/ 

Pride, William M., and O. C. Ferrell. Marketing. 17th ed. Mason, OH: South-Western, Cengage Learning, 2014. Print.