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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


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.


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


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


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


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.


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


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-


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


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


(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


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


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


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


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


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


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%”


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


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)


Appendix D

Product Life Cycle

Growth of Dell Mini 10 and

10V Netbooks (Enhanced Features )

Maturity of the Dell Mini 10 and 10V

has been reached

Decline of Dell Mini10 and

10v Netbooks Sales

Introduction of Dell Mini 10

and 10v Inspirion Netbooks