Dell goes retail

After stunning the computer world with the success of its direct-order personal computer business, Dell Canada has quietly begun distributing through mass merchandise retailers.Last week, Richmond Hill, Ont.-based Dell introduced a new clone-buster pc line, Precision, to be sold through Price...

After stunning the computer world with the success of its direct-order personal computer business, Dell Canada has quietly begun distributing through mass merchandise retailers.

Last week, Richmond Hill, Ont.-based Dell introduced a new clone-buster pc line, Precision, to be sold through Price Club and Business Depot.

The move represents a significant change in strategy for Dell, which has distributed directly to the end-user since incorporating in Canada in 1988.

But it is only one of a broad array of initiatives the company began rolling out late last month in anticipation of the knock-down market share battle widely predicted to be shaping up in the pc industry.

Paul Rubin, Dell’s vice-president of marketing, says that since leading name-brand manufacturers such as ibm and Compaq have begun setting their sights on the low end of the pc market, any company that desires to remain in business will have to be more competitive than ever.

‘This is the big war,’ says Rubin. ‘A lot of players are not going to be here a year from now.’

Noting companies positioning themselves solely on price, brand identity or product technology are not likely to survive the upcoming pc battles, Rubin explains Dell’s strategy is to wage battle on several fronts simultaneously:

- Price – It has slashed prices between 12% and 19% on its Performance line, which features customized products aimed at the office.

- Service – It has announced expanded service and support programs and introduced service guarantees covering hardware compatibility, response times and on-site service.

- Products – It has launched two new product lines, Dimension, which is similar in design to Performance but with less choice and less service support, and Precision, which is a pared-down computer targetted at the most price-sensitive pc buyers for the home and office.

- Distribution – It has introduced its first retail distribution of a Dell product with the decision to sell Precision through Price Club and Business Depot.

Rubin says the broad variety of the initiatives ‘demonstrates the depth of our commitment to giving customers what they want,’ adding Dell began formulating it new marketing approach earlier this year after reviewing the results of a ‘wide-ranging research study conducted in January.’

Rubin says the study, conducted by Mardyne Consultants of Toronto, indicates, among other things, that Dell is the fourth best-known pc manufacturer in Canada behind ibm, Apple and Compaq.

The study also placed Dell neck and neck with ast.

Such results are impressive considering Dell is only the 25th largest manufacturer in Canada.

As well, its 1991 share of the pc desktop market in Canada was under 3%, according to Evans Research, a Toronto high technology research firm.

But Dell has managed to build a name for itself in a relatively short time by positioning itself as a leader in the afterservice market.

Recently in the u.s., computer publication PC Week awarded Dell eight service recognitions in a row.

Rubin says Dell will continue to spend its marketing dollars promoting its service levels, adding he does not intend to launch advertising support for Precision, which does not come with Dell’s traditional service program.

Dell will, however, support Dimension, which will be available for delivery in September, with direct mail advertising.

‘We are not going to advertise Precision,’ he says. ‘If our retail partners want to advertise it, that’s up to them.’

Rubin says Dell’s decision to develop the Precision line and sell it through mass merchant outlets is less an immediate priority than a long-term strategy.

‘A year or so from now, mass merchants will be a bigger channel than they are today,’ he says.