Dell Computers: Executive PC Launch

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Dell Computers: Executive PC Launch

Table of Contents

Recommended Marketing Mix
A Five-Year Projection Based on the Assessor and Perceptor Models
Effects of Compaqs Repositioning on Dell
Opinion in Whether to Launch the Executive PC or Not
Reference

The Perceptor Model

The position of a company in the industry, relative to its competitors, can be determined by the use of various market analysis models. The preceptor model, which involves a structured trial and repeat process used to estimate market share for a new product, can be utilized to assess the position of Dells Executive PC in the product space. Essentially, consumer preference is influenced by two primary attributes, flexibility and performance, which serve as the basis of competitive positioning. Up to 50.0% of consumers prefer high-performance brands, a clear sign that the Executive PC is competitively positioned in the computer market (Benedetto, n.d.). Based on the following calculations, Dells projected share of the market is 50%.

Brand position for Dell = 1
Size of the segment relative to the market = 0.5
Projected market share 1 X 0.5 =0.5
Expressed as a percentage = 50.0%

Recommended Marketing Mix

The advertising marketing mix is recommended because it guarantees better returns while enabling the company to derive maximum benefits from the initially proposed budget. Using the assessor model for budgeting gives a range of 5.0% to 90.0% market share of the potential customer base (Benedetto, n.d.). The distribution approach would yield a wider 0.0% to 90.0% range for the same amount of money, rendering it a less preferred model. The market share estimates are expansive as they span from 0 to 90% in the case of the assessor model, as opposed to the preceptor model, which gives 50.0%.

A Five-Year Projection Based on the Assessor and Perceptor Models

The following worksheet presents a five-year projection of Dells Executive PC based on market shares derived from the preceptor and assessor models. The market share is presumed to be constant throughout the five years. Notably, the figures, as presented in thousands of units or dollars, indicate that the company will record increasing sales consistently until the end of the fifth year. However, the sales may vary significantly depending on the model used to project the sales.

Table 1: Five-Year Projection

Model	Exponent/Market share	Year 1	Year 2	Year 3	Year 4	Year 5
ASSESSOR MODEL	0.8	108800	121600	134400	147200	160000
PRECEPTOR MODEL	0.5	68000	76000	84000	92000	100000

Effects of Compaqs Repositioning on Dell

Compaq may adopt a strategy giving it a competitive advantage in the market, which will significantly affect Dells performance. For instance, Compaq may gain a larger share of the market by introducing a high-performance product. If Dell loses 20% of the market share to Compaq in the second year, the effect will be felt throughout the subsequent years, as shown in table 2. Essentially, Dell will record a reduction in sales due to the fall of the exponent value by 0.2, as shown as well in table 2. The figures, also expressed in thousands of units or dollars, indicate that the company will have reduced sales if Dell does not adopt a countermeasure strategy. However, the company could protect its position by intensifying product marketing campaigns. Besides, it might be necessary to increase the budget allocation for consumer and trade advertising to cope with the market competition.

Table 2: Five-Year Projection

Model	Exponent/Market Share	Year 1	Year 2	Year 3	Year 4	Year 5
ASSESSOR MODEL	0.6	81600	91200	100800	110400	120000
PRECEPTOR MODEL	0.3	40800	45600	50400	55200	60000

Opinion in Whether to Launch the Executive PC or Not

Dell should launch the Executive PC because a ready market for high-performance computers already exists. In addition, the company has positioned itself as a competitive player in the industry. Hence, the management must adopt a strategic approach for the certainty of creating user awareness of the superior aspects of the Executive PC. Particularly, the marketing team must emphasize the new designs unique capabilities, as it is apparent that customers are interested in powerful machines.

Reference

Benedetto, C. A. (n.d.). Dell computers [Case study].