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Dell Computer: Winning the war - Business & Finance - according to Miller-William's research report
Dell Computer is winning the battle for new customers, thanks to a new marketing strategy, research shows.
San Diego-based research firm Miller-Williams Inc.'s recently released "Value Scoreboard Report, Personal Computer Industry Q42001," analyzes how current and prospective PC buyers make their buying decisions as well as how they evaluate such leading companies as Apple Computer, Compaq, Hewlett-Packard and IBM. The study, which gauges market demand (as opposed to projecting market size), indicates customer demand will grow slightly this year.
The study groups PC buyers into four categories: socials, reasoners, believers and worriers. Socials rely on personal interaction when making purchases. Reasoners prefer to gather their own data before making a purchase. Believers base their decisions on prior purchase preferences. Worriers -- the largest buyer group at 41 percent -- need help making their purchase decision, and their focus is on personal needs. Value drivers for buyers include customer focus, market anticipation, company image, price and integrity, and risk and time.
Miller-Williams conducted the study in November and December, selecting a random sample from its database. Of those invited to participate, it whittled the group down to 211 PC buyers or potential PC buyers. The scoreboard shows that Dell is doing many things right. Its prebuilt PC strategy appeals to two buyer groups and is eating away at a group considered to be an HP stronghold. Historically, Dell has always appealed to reasoners. "They've captured their unfair share of that market," said Miller-Williams President and CEO Gary Miller. "And what they have done now is start to go after the socials."
The proposed HP/Compaq merger has clouded the buying issue for consumers, the study indicates. "The [merger] creates uncertainty. Dells capitalizing on that and going after HP's core group," Miller said. IBM is doing well in certain categories. Researchers were surprised that less than 1 percent of IBM's customers were believers. They expected more brand-loyalty for Big Blue. However, Miller noted that IBM has become an expert at targeting itself at certain customers. The IBM brand means something different today than it did years ago, Miller said. "They've realized they don't have to meet the needs of everyone. They just have to meet the needs of their core groups."
Meanwhile, Apple Computer's stronghold is among the believer category. "If you're an Apple buyer, you are a staunch supporter of Apple," Miller said.
Despite economic uncertainties, the study found buyers are willing to purchase new machines in 2002. Dell's strategy is key because while growth this year will be positive, it will come largely from PC owners replacing old machines. For PC companies to win, they must both keep their existing customers loyal and get "defect" customers by stealing them away from competitors.