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Running head: SALES PLAN PHASE THREE 1
Dell Sales Plan: Phase Three
Michele Morehouse, Heather Jordan, Nina Hewitt, Jeffrey Dickey & Thelma Dade
University of Phoenix
MKT/445
Faith Werner
January 18, 2010
Running head: SALES PLAN PHASE THREE 1
Dell Sales Plan: Phase Three
Overview
As vice president of sales for Dell Computer Corporation, the assignment was to prepare
a sales plan for the CEO of the Dell Computer Corporation. Key sales matrix performance
indicators are sales per employee, sales calls per employee, and rate of sales per calls. Additions
need to be made to the original sales plan, which are preferred customers and competitive
intelligences. Reassessing the market environment and situation analysis will occur because of
the changes in the market. The goal is to develop a plan for ongoing customer relationships,
evaluate incremental opportunities, and identify sales performance measurement tools that
enable us to gauge Dell Computer Corporation’s future performance.
Product Life Cycle
Through the changes that result of the Dell Mini 10v adaptions and improvements the
growth stage is no longer the current stage for this product’s life cycle. The Dell Mini 10v has
undergone the maturation stage and is entering the declining stage of the product life cycle. The
Dell Mini 10v is being succeeded by the Dell Mini 11 or the Mini 1110 known as Argos (Mobile
Magazine, 2009). The declination stage is the time to introduce new version of the Dell Mini
netbooks.
The declination stage occurs when sales decline (Quick MBA, 2007a). A company like
Dell has several options as how to handle this situation. Dell could maintain the Dell mini 10, but
add new features. Reducing the cost of the Dell Mini 10 could create a possible loyal market
segment (Quick MBA, 2007a). Another option is for Dell to jump start a whole new version of
the product through a new life cycle of a new product version.
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The next generation of Dell Mini netbooks is the Mini 1110 Argos. The Dell Mini 10v
and 10 is cheaper in comparison by $200, but the Dell Mini 11 starting price is $499 (Dell Mini
Netbooks, 2010). Unlike the 10.1” of the Mini 10 the display of the Mini 11 is 11.6” that comes
with the option of High Definition (HD) display. The Mini 10 does not offer the option of HD
display, but rather edge to edge display. Other features are different for size, mobility, and
purpose. The purpose of the Dell Mini 11 Argos is to be the ultra mobile companion. The Dell
Mini 11 are very thin and light with 250GB hard drive and 2GB RAM (Mobile Magazine, 2009).
The declination phase will allow Dell to introduce the Dell Mini 11 Argos as a way of
rejuvenating the mini netbook target markets. A marketing campaign will be aimed at drawing in
new customers, while retaining the current market. The new marketing campaign purpose is to
aid attracting consumers to the newer Dell mini model to jumpstart the product life cycle of the
Dell Mini 11.
The declination phase depicts the final situations, in which the Dell Mini 10 netbook goes
through before the reins switch over to the Dell Mini 11 market (Mobile Magazine, 2009). The
declination phase of the Dell Mini 10 will be a slow moving declining phase because the
products are still fairly new in a long-term market, whereas a short-term market aspects a product
to go through a product life cycle more rapidly. The result of the declination phase of the Dell
Mini 10 netbook is a direct result of the release of the Dell Mini 11 netbook.
SWOT Analysis
The original plan consists of a SWOT Analysis, concept of the product and strategies of
plans of how to sell the Mini 10v. The netbook, notebook, and laptop innovations can draw in
Running head: SALES PLAN PHASE THREE 1
customers. As the netbooks approach the declination stage the sales will decrease. With growth
comes a change in creating the next generation of netbooks.
Interpreting the customer feedback from the old Mini 10v introduces the next generation,
Dell Mini 11. Using the right research can help with continuing the sales of the netbook
products. Using the qualitative approach will help with deciding on the different focal levels
(Dell, 2010a).
Another aspect of this sales plan was looking at the strengths and weaknesses of what has
worked and what should work. To advance the product and make room for the next one, there
should be an increase of promotions that can help Dell acquire more customers. The strengths of
the new product should include those of the Dell Mini 10v. There should be special previews and
feedback to make this product greater. The goal is to continue with satisfied customers, but to
increase the satisfaction with introducing a product that is better than the last.
Other companies are on the rise with netbooks, so now the strategy has to set Dell apart
from the others. The sales plan needs to create prime motivators to motivate the customers. The
plan is in the works with multiple options for customers to take advantage from to create the best
product to meet their needs. This kind of strategy can ensure that customers would rather choose
Dell minis over the competition.
Competitive Intelligence
Looking into the new generation of mini netbooks, other companies have begun to “climb
aboard” the band wagon in this newer technology. Competition has become fierce with both
national and international markets. With the new Samsung N210, N220, LG X300, Gateway
LT21 series, HP mini 5102, Alienware M11X and about another 100 plus more netbooks that
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have just been released in the UK as well as nationally, Dell needs to up its game (Netbook
Reviews, 2010). But to do this, the company will review the feedback on many of these special
products.
So far there have been many similarities between Dell’s mini netbook 10v and the newer
products from competitors. New market innovations for customer acquisition can be brought
toward the company’s attention to increase competitions of specific issues with each netbook
introduced (Netbook Reviews, 2010).
Reassessment of the Market Environment and Situation Analysis
Because of the change in the Mini 10v life cycle, Dell’s market strategy concerning the
Dell Mini 10v will need to be reevaluated in terms regarding the market environment and
situation analysis. As the Dell Mini 10v life cycle matures and starts to decline in sales, the
internal and external elements affecting the Mini 10v should also be reassessed. Internal
elements are the Mini 10v’s market share and the growth in the portable personal computer
market need to be subjected to strengths, weaknesses, opportunities, and threats (SWOT)
analysis as part of the internal audit (Jobber & Lancaster, 2003). Objectives, strategies, and
tactics concerning the marketing of the Mini 10v need to meet goals determined by market
potential analysis. Objectives may be to retain market share in the portable personal computer
market by introducing an updated version of the Mini 10v. Marketing strategies may include
added additional features to the Mini 10v without increasing the price to extend the life cycle.
New tactics to use for marketing the Mini 10v may include using value added packaging (VAP)
or putting the Mini 10v in value added packages for large customers who buy other Dell
products. An analysis of customer purchasing attitudes, needs, and trends should be reevaluated
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to determine how well the Mini 10v has been accepted by Dell customers and how the
competition was affected. Analyzing competitor’s current marketing strategy and performance of
similar products will help the decision makers decide on what to do nest in regard to the Mini
10v. Discovering what the competition may be doing next can also give insight, in which Dell
needs to focus future marketing strategies. The external factors affecting the market
environment and situational analysis should be reassessed.
External factors pertaining to political, economic, socio-culture, and technology (PEST)
can be analyzed using the PEST analysis (Quick MBA, 2007b). Recent censorship and
regulation of the Internet in China pertain to political factors that may affect the sale of the Mini
10v. Because China’s government can regulate Internet users, sales of the Mini 10v may decline
sharper in that geographical region. The recent downturn in the world economy may greatly
shorten the life cycle of the Mini 10v. The economy should be a major consideration of the
reevaluation of the market environment because of the fact that many consumers may be cutting
back on purchases. Socio-culture changes in the market environment may change the pace, but
targeted market segments of the Mini 10v could be changing faster. Because of rapidly changing
technology the market segment interested in product like the Mini 10v may be considering other
similar products offered by the competition. The sociological norms of today’s business people
can change more rapidly than the general society to keep up with technology that may offer their
business a competitive edge (Quick MBA, 2007b). Technology factors that affect market
environment are changing every year; therefore many new technological products like the Mini
10v have a very short life cycle. The fact that competitors will be coming out with better and
cheaper portable personal computers will need to be factored in to the market environment
analysis and the situational analysis pertaining to the Dell Mini 10v.
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Ongoing Customer Relationships and Evaluating Incremental Opportunities
Dell has already shown that they are indeed a company in which it has become a
company to increase customer relationships. In their website, Dell.com, Dell has an automatic
representative there to help with any questions that a person may have in purchasing either his or
her new product or update an old one. Dell has customer service readily available and customers
can chat with customer support representative. There needs to be a comfortable environment for
both the consumer and the employee. Another tactic would be to make promotional offer and
possible customer rewards that can have a continued level of customer loyalty. People need to
believe that they are important and Dell . When a company shows that, it appreciates their
customers, there should be a level of showing that (Dell, 2010b).
In with handling customers as special groups within the company, Dell continues to make
efforts in ensuring that every need is being met by each individual. Dell’s website shows how
they treat their customers:
“As a preferred customer, you will enjoy:
Enhanced customer focused sales and customer care support
High availability & responsiveness
Solution selling team with specialist dedicated to the needs of your company like servers,
storage, networking, software, peripherals and financing
Access to a preferred customer care phone support
Providing value and benefits
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Access to product sneak peaks, demos, webinars and events
Customized, relevant deals, pricing, and access to preferred customer only online deals
that reward loyalty
Access to great options from Dell Financial Services to enable cost management and
help customer manage cash flow”
(Dell, 2010b)
Sales Metrics
For Dell to arrive at a clear idea of where there business is heading during the decline
stage of the product life cycle for their mini laptops, the company will need to formulate a way
of measuring success and indicators of success. Success can be corner stone for the company as
an increase in sales during other stages of the product life cycle, but in this decline stage the
company will need to amend their sales metrics scorecard to account for the decline in numbers.
The concern is for Dell to properly gauge what the appropriate decline should be. This will
determine on how other companies have done compared to Dell during other product life cycle
stages and what part of the market share Dell has held in other stages (Net MBA, 2007). This
type of sales performance measurement tool is benchmarking.
Benchmarking
In terms of benchmarking the company could also focus on how many mini netbooks are
being produced in the market. During the decline stage of the product competition in the market
will dissipate, meaning that less companies will continue in producing and marketing the mini-
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laptops. As competition drops off, even though sales of the Dell Mini 10 netbooks will happen,
Dell may see boosts in sales of their Dell Mini 10 netbooks (Net MBA, 2007).
Performance Indicators
Another way of measuring success for the Dell Mini 10 netbooks is through sales
metrics. This kind of measurement falls into three different categories. The first type is made up
of key performance indicators. Typical forms of these indicators are sales per employee, sales
calls per employee, rate of sale per lead per employee, etc (McClure, 2003). It makes sense for
Dell to work with their most expensive marketing investment and figure out their sales numbers
per unit of the investment. Dell may look at their investments and decide that banner ads and
other online ads are their most expensive investment. From that place the company can find
sales numbers per ad click-through. As their product continues in the declination stage, they
may see the ratio of click-through to sale fluctuates.
Customer Feedback
Another form of internal sales metrics is made of customer feedback. For Dell, whose
business is done mostly online, the company can produce an incentive-based program that
questions leads as they are exiting the website why they are or are not making a purchase. Dell
can create quantitative measurements to gather information from online shopper satisfaction
websites (Dellaracos, Xiaoquan, & Awad, 2008). These website can offer Dell a myriad of
information regarding why customers are or are not loyal, therefore enhancing Dell’s customer
relationship management in reference to the Dell Mini 10 netbook, and the Dell brand. The last
set of sales metric Dell can use to increase their success during the decline stage of the product
Running head: SALES PLAN PHASE THREE 1
life cycle is comprised of sales metrics that deal with the sales team, or in Dell’s case their
website.
Ad-Tracking
Ad-tracking is a market research tool that measures the effectiveness of a brands
performance. Ad-tracking allows Dell to track and test the results of their sales performance.
With ad-tracking Dell can identify exactly where website hits are coming from. This helps Dell
eliminate any unnecessary advertising (Segal, 2009). The measurements could be ratios of how
many customers end up on the website compared to how many actually make a purchase of a
mini laptop.
Assessing Behaviors
Tracking the behaviors of customers allows Dell to tell the difference between real
changes in the environment and processes. Control charts are quality control chart tools that
enable Dell to process behaviors that will allow them to modify or change future sales
performances to better meet the needs of the customer. Customer satisfaction is essential to the
growth of Dell (Kotelnikov, 2010). The customer behaviors that are a result of customer
satisfaction do to superior customer service will help Dell train the salespeople to better meet the
needs of a customer.
Surveys
Surveys are used to prove the need and demand of a company. Through the use of a
series of surveys Dell can collect data that reveals the sales performance in correlation to the
consumers and the Dell Mini 10 netbook. Dell will use e-mail and web surveys to collect the data
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(Asian Market Research, 2010). Upon completing a Dell purchase online, Dell will ask the
customer complete a short survey in relation to his or her shopping experience. Existing
customer periodically to help improve sales performance will receive email surveys only by
choice if him or her are signed up to receive news from Dell. The surveys will enable Dell to
collect data essential to gauging future performances.
Competitive Analysis.
A competitive analysis is a statement that correlates the business strategy to the
competition. A competitive analysis helps determine strengths and weaknesses of the
competitors within the market and industry (Entrepreneur, 2010). If Dell performs a competitive
analysis with their 13 competitors, they can implement strategies that will give them a distinctive
competitive advantage. The 13 competitors that Dell has are Acer, Asus Eee PC, Gateway, HP,
Lenovo, LG, MSI, News, Packard Bell, Samsung, Sony, and Toshiba (Netbook Reviews, 2010).
If Dell can target the specific areas of improvement, which are strengths for the competitor, Dell
can come out on top. Through identifying prime customer motivators, Dell can motivate
customer to do business with them. Customer motivators will include sales specials, and rewards.
If Dell identifies key assets and skills, they can implement these skills to help with their sales
performance (Entrepreneur, 2010). The competitive analysis will show what HP or Sony do that
Dell may not do to help increase customer satisfaction as a direct result of changes made to past
sales performance efforts, which better meet the needs of the customer.
Dell Sales Budget
The annual sales budget for Dell in fiscal year 2009 was $10.7 billion in sales that
generated 61.1 billion in revenue (Dell, 2010c). The Dell Mini 10 and 10v netbook is only going
Running head: SALES PLAN PHASE THREE 1
to be a portion of these sales. Because Team D plans on a 10% increase in revenue the planned
sales for fiscal year 2010 must be projected 10% higher than the end earnings for 2009 fiscal
year. Appendix C shows the fiscal year 2010 Dell Sales Budget in comparison with the 2009
Dell Sales Budget. Dell in 2009 spent $7.7 billion in research and development whereas the
forecast for 2010 research and development will spend $8.1 billion (Dell, 2010c). Dell
significantly increased spending for training and materials in 2010 because with the economic
recession by $37,500. Training costs in 2009 were $60,000 whereas Dell will spend 2010 is
$97,500. Dell is expanding business into retail stores to secure a customer base through
demonstrations of the products and services to potential consumers. $2.5 million was spent in
2009 securing four new retail spaces worldwide. Dell will open five new retail stores in 2010 in
the United States, United Kingdom and Japan spending $3.3 million. Service support is essential
to secure customer loyalty by providing him or her with a technical support system in the case
that a product encounters any problems. The support services for 2009 spent $2.2 million
whereas Dell will spend $2.3 on new warranty and extend warranty contracts (Dell, 2010c). Dell
spent $811 million for advertising and promotions whereas Dell will increase advertising by 10%
resulting in $892 million for 2010 (Mac Rumors, 2009). The total sales plan budget for fiscal
year 2010 is $11.4 billion.
Final Thoughts
Dell Computer Corporation is a global vendor of personal computers and is one of the
largest companies in America; however, Dell presently is number three in the Personal Computer
industry behind Hewlett-Packard and Acer (Moritz, 2010). Dell realized the decline in sales of
the Dell Mini - 10v mobile mini – netbook, and it was no longer in the growth stage of the
product’s life cycle. Dell Computer Corporation had to reassess the market environment and
Running head: SALES PLAN PHASE THREE 1
situation analysis realizing several changes have occurred in the market. According to MINYX
(2009), “the Merlion Company announced the laptop Dell Inspiron 1110 Argos in November,
2009, for the first time in Russia.” The three key performance indicators used by Dell were sales
per employee, sales calls per employee, and the rate of sales per sale lead per employee
(McClure, 2003)
References:
Asian Market Research (2010). What are Surveys? Retrieved January 17, 2010 from
http://www.asiamarketresearch.com/glossary/surveys.htm
Running head: SALES PLAN PHASE THREE 1
Dell (2010a). Min 10 and 10v Netbooks. Retrieved January 14, 2010 from
http://www.dell.com/us/en/home/notebooks/laptop-inspiron-10/pd.aspx?refid=laptop-
inspiron-10&s=dhs&cs=19
Dell (2010b). Preferred Customer. Retrieved January 16, 2010 from
http://www.dell.com/content/default.aspx?itemtype=&s=bsd&l=en&cs=04sp1&c=us
Dell (2010c). Financials Statements and Supplementary Data. Retrieved January 13, 2010 from
http://i.dell.com/sites/content/corporate/financials/en/Documents/FY09-10K-Sec3-
All.pdf
Dellarocas, C., Xiaoquan, Z., & Awad, N. (2007). Exploring the value of online product reviews
in forecasting sales: The case of motion pictures. Journal of Interactive Marketing.
Retrieved January 13, 2010 from
http://www3.interscience.wiley.com/journal/116839384/abstract
Entrepreneur (2010). Competitive Analysis. January 17, 2010 from
http://www.entrepreneur.com/startingabusiness/businessplans/article25756.html
Jobber, D., & Lancaster, G. (2003). Selling and Sales management (7th ed.). Essex, England:
Financial Times Prentice Hall.
Kotelnikov, V (2010). Customer Satisfaction. Retrieved January 17, 2010 from
http://www.1000ventures.com/business_guide/crosscuttings/customer_satisfaction.html
Krol, C. (2004). Dell sees continued success with DM. B to B, 89(12), 8. Retrieved from
MasterFILE Premier database
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Mac Rumors (2009). Apple’s Advertising Budget. Retrieved January 13, 2010 from
http://forums.macrumors.com/archive/index.php/t-810821.html
McClure, B. (2007). Doing More With Less: The Sales-Per-Employee Ratio. Investopedia.
Retrieved January 14, 2010, from
http://www.investopedia.com/articles/stocks/04/110304.asp
MINYX. (2009). New Dell Laptop 1110 Argos. Retrieved January 16, 2010 from
http://phonestechnology.blogspot.com/2009/11/new-dell-laptop-1110-11z-argos-11.html
Mobile Magazine (2009). Dell Mini 11 Netbook Available with Windows Vista. Retrieved
January 14, 2010 from http://www.mobilemag.com/2009/04/06/dell-mini-11-netbook-
available-with-windows-vista/
Moritz, S. (2010). Dell Falls Behind in the PC Race. The Street. Retrieved January 16, 2010
from
http://www.wikinvest.com/wikinvest/api.php?action=viewNews&aid=805378&page=Sto
ck%3ADell_%28DELL%29&comments=0&format=html
Netbook Reviews (2010). Netbook Reviews. Retrieved January 16, 2010 from
http://www.netbookreviews.net/
Net MBA (2007). Product Life Cycle. Retrieved January 14, 2010, from
http://www.netmba.com/marketing/product/lifecycle/
NPD Group. (2009). DisplaySearch. Retrieved December 11, 2009 from
http://www.displaysearch.com/cps/rde/xchg/displaysearch/hs.xsl/090831_mini_note_pc_
netbook_shipments_grow_at_twice_rate_notebook_pcs_q2_09.asp
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Quick MBA (2007a). The Product Life Cycle. Retrieved January 13, 2009 from
http://www.quickmba.com/marketing/product/lifecycle/
Quick MBA (2007b). PEST Analysis. Retrieved January 17, 2010 from
http://www.quickmba.com/strategy/pest/
Segal, H (2009). The Complete Guide to Ad-Tracking Programs. Ad-Tracking. Retrieved
January 17, 2010 from http://www.ad-tracking.com/
Appendix A
Chart One: Notebook and Mini-Note Share of Portable Computer
Running head: SALES PLAN PHASE THREE 1
Note. Adapted from "Mini-Note (Netbook) Shipments to Double Y/Y to More Than 30M Units
in 2009, While Notebook Shipments Flatten", by Anonymous, DisplaySearch.com.
www.displaysearch.com/cps/rde/xchg/displaysearch/hs.xsl/071309_mini_note_netbook_s
hipments_to_double_y_y_to_more_than_30m_units_in_2009.asp. Copyright 2007 - 2009
DisplaySearch - The Worldwide Leader in Display Market Research and Consulting.
Table 2: Notebook PC and Mini-Note ASP and Growth
Region Q2’08 Q1'09 Q2'09 Y/Y
Mini-Notes/Netbook PC $506 $373 $361 -29%
Notebook PCs $867 $775 $781 -10%
All Portable PCs $849 $704 $688 -19%
Note. Adapted from " Mini-Note PC (Netbook) Shipments Grow at Twice the Rate of Notebook
PCs in Q2’09", by Anonymous, DisplaySearch.com.
www.displaysearch.com/cps/rde/xchg/displaysearch/hs.xsl/090831_mini_note_pc_netbo
ok_shipments_grow_at_twice_rate_notebook_pcs_q2_09.asp. Copyright 2007 - 2009
DisplaySearch - The Worldwide Leader in Display Market Research and Consulting.
Shipments
Category Q2’08 Q1'09 Q2’09
Mini-Note 5.60% 17.80% 22.20%
Notebook PC 94.40% 82.20% 77.80%”
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Appendix B
Sale and Profit Forecast per Billions
New and Repeated Customer per Thousand
0
2
4
6
8
10
12
14
1ST 2ND 3RD
SALES
PROFIT
0 50 100 150 200 250 300
1ST Qtr
2ND Qtr
3RD QTR
4th QTR
Repeat Customers
New Customers
Running head: SALES PLAN PHASE THREE 1
Appendix C
Dell Sales Budget
2009 2010
Research and Development Total Cost Quantity 10% Per Unit Subtotal
Research, Development & Engineering 663,000,000
Payroll
76,500 - 40,000.00 306,000,000
Contractor Fees
5 - 35,000 175,000.00
Infrastructure
4 - 3,000,000 12,000,000
Administrative 7,102,000,000 1 710,200,000 - 7,812,200,000
In-process Research and Development 2,000,000 1 200,000 - 2,200,000.00
Research and Development Total 7,767,000,000.00 8,132,575,000.00
Training and Performance
Training 30,000 4 - 15,000 60,000
Materials 30,000 1500 - 25 37,500.00
Training Total: 60,000 97,500.00
New Retail Stores
US 1,300,000 2 - 600,000 1,200,000
UK 550,000 1 - 750,000 750,000
Japan
2 - 675,000 1,350,000
Dubai 600,000
Networking Total: 2,450,000 3,300,000
Service Support
Warranties 2,121,000,000 - 212,100,000 - 2,333,100,000.00
(Include Online Support Coverage)
Service Support Total: 2,121,000,000 2,333,100,000.00
Advertising
Advertising 811,000,000 - 81,100,000 - 892,100,000
(Television, Internet)
-
-
Advertising Total: 811,000,000 892,100,000
Estimated Sales Plan Total $10,701,450,000.00 $11,361,172,500
(Dell, 2010c)