“A lot of people are wondering right about now how Dell is going to pull itself out of the drink, particularly in the consumer segment of the PC market. The company gets about 15% of its PC business from consumers, compared with an industry average of about 42%,” market researcher Roger L. Kay writes for BusinessWeek.
“Given that Dell must expand its presence in the consumer segment, it really has two main choices: traditional third-party retail, such as Best Buy and Circuit City, or ’boutique’ company stores, such as those run by Apple,” Kay writes. “The University of Chicago Business School recently published a paper on whether it’s better to sell through a boutique or against competitors on retail shelves. In the course of their research, professors Christopher K. Hsee and France Leclerc discovered that if a product is perceived as above average, competitive comparison is detrimental… On the other hand, a product perceived as below the mean does better offered against others.”
“The results of Apple’s company stores speak for themselves, but Gateway tried the same thing and got creamed. Why go to the Gateway store for ho-hum products when the selection at Best Buy next door is much broader and the shopper can compare prices? Taking the company-store route requires premium products and a readiness to spend on high-end locations and pricey leasehold improvements, not to mention high fixed costs,” Kay writes.
“So, here’s a radical suggestion for raising consumer awareness without abandoning the efficiencies of the direct model: Open high-end nightclubs in the best locations in major-league cities like New York, Los Angeles, London, and Tokyo. That’s right, bars—hip, adults-only establishments, complete with velvet ropes, beefy bouncers, and limos idling out front. You get the idea,” Kay writes.
Kay writes, “Then, outfit tables with Dell computers, monitors, and other gadgets, and run a multimedia floor show at the same time. Charge big bucks for the drinks to discourage punks and build cachet for the brand. Think Studio 54 gone ultra high-tech. No product for sale (how gauche!). But use the venue to showcase sexy products, to associate the Dell name with exclusivity and cool. Generate buzz.”
Full article here.
You can’t make this stuff up. Is Kay completely insane or is this supposed to be a joke? Dell is a run-of-the-mill PC box assembler that offers nothing unique. It’s just another box that runs Windows; there simply is no exclusivity. A high-end, high-tech nightclub outfitted with Dell PCs makes absolutely no sense, as the first question out of any informed patron would be, “So, where are the Macs?” High-end tech just doesn’t equate with Dell. Neither does “cool.” People just aren’t going to buy the suggestion. We have a much better, more realistic suggestion for Dell: Shut it down and give the money back to the shareholders.
On the other hand, if they did offer the PCs for sale in the clubs, getting people drunk enough just might be Dell’s best option…
Related articles:
Beleaguered Dell slashes forecast for notebook shipments by 20-percent – March 13, 2007
BusinessWeek: Beleaguered Dell pulling out the pink slips? – March 08, 2007
Beleaguered Dell: Shut it down and give the money back to the shareholders – March 02, 2007
Beleaguered Dell’s earnings drop 33% – March 01, 2007
Beleaguered one-trick pony Dell faces unclear future – February 14, 2007
Biting words on Apple come back to haunt Dell – February 10, 2007
Dell faces investor lawsuit over ‘illegal Intel kickbacks’ – February 02, 2007
Michael Dell is no Steve Jobs – February 02, 2007
BusinessWeek: Welcome back, Michael Dell – don’t get too comfortable – February 01, 2007
Rollins out as beleaguered Dell’s CEO, replaced by Michael Dell immediately – January 31, 2007
Total eclipse of Michael Dell goes off as predicted – January 10, 2007
SEC starts formal probe of beleaguered Dell – November 16, 2006
Apple does it again: New Macbook Pros much cheaper than Dell – October 25, 2006
Dell feels the heat from Apple – October 04, 2006
The Motley Fool: ‘Intel to Dell: you guys stink’ – September 28, 2006
Beleaguered Dell’s OS-limited PC sales ‘declining rapidly below expectations’ – analyst – September 21, 2006
Fortune compares Mac vs. Dell: ‘you’ll get more for your money with Apple’ – September 11, 2006
AP: Time to think different, Apple Mac beats Dell on price, software compatibility, and more – August 23, 2006
Dell profit falls almost in half; announces informal SEC probe – August 18, 2006
Dell cannot compete with Apple’s new Mac Pro price or feature set – August 15, 2006
Bear Stearns: Apple’s new Mac Pro, Xserve pricing well below comparable Dell systems – August 09, 2006
Dell warns of earnings miss; shares plunge 15% – July 21, 2006
Survey shows big jump in consumer interest in buying Apple Mac; Dell takes steep slide – July 06, 2006
Dell warns 1Q earnings will miss mark; shares tumble – May 08, 2006
Apple passes Dell in market value – May 02, 2006
InformationWeek: Apple Mac run Mac OS X, Windows, and Linux; Dell and HP should be concerned – May 01, 2006
Dude, you got a Dell? What are you, stupid? Only Apple Macs run both Mac OS X and Windows! – April 05, 2006
Apple Mac is #1 in European education market, pushes Dell down into second place – February 03, 2006
Steve Jobs emails Apple team: Michael Dell not the best prognosticator, Apple worth more than Dell – January 16, 2006
Fortune: Michael Dell reiterates he’d love to sell Apple’s Mac OS X if only Jobs would license – January 22, 2007
PC box assemblers like Dell and others wish Apple would license Mac OS X – August 31, 2006
Michael Dell say’s he’d be happy to sell Apple’s Mac OS X if Steve Jobs decides to license – June 16, 2005
Fortune: PC makers realize Mac OS X is superior to Windows, they’re wooing Steve Jobs for licenses – May 26, 2005
Computers don’t belong in “nightclubs”, period. Kay is just trying to concoct a place he could get into.
Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell Beleaguered Dell
I would not be caught dead at a Dell nightclub, but then I have taste.
-c
Hi, I’m Michael Dell. I built my computer company by selling cheaper than anyone else. That’s not working so great for me anymore. Anybody got any idea how I can save my sorry ass? Anyone?
I think McDonalds should open hash bars.
Is it April 1st already?
That has to be the most delusional idea I’ve heard in a long, long time…..Wow.
Dell sucks, M$ Sucks…
I want LEOPARD!!
I’m smelling a delay with no announcements coming…
Maybe Summer 2007 🙁
Wow, what a cool bar that would be. You can go in and hang out with a bunch of computer geeks. That’s just what all of the “beautiful” people would want. </sarcasm>
They are “beleaguered” in investor’s eyes. I’d like to be that beleaguered myself making money hand over fist.
It would bring a whole new meaning to the saying “I went to a bar and caught a virus.”
Maybe Dell should open up their own line of retail stores (not nightclubs) and simply offer everyone free drinks on the house. Then once they get everyone liquored up really good, they can then talk them into buying their PCs!
Top pickup line heard at Nightclub Dell: “Hey baby, got any protection?”
MacBill you are invited to join us in 2007, If you buy a new TV today and it’s not HDTV compatible you’ve made a poor decision. Eventually you have to let old technology go (see ‘Floppy Disc Drives’). Apple is an innovator and this product will fit nicely between my HD DVR and my upconverted DVD player. I have an HD Camcorder and this is a very inexpensive way to show my HD movies on my HD TV. The sooner I can move my 1000+ CD’s, my 10000+ HQ Photos and my HD video to my 1 Terabyte HD and I can access them wirelessly in my living room I will be a very happy camper!
And what would those Dell boxes do? Crash and piss people off. Even with Macs, what would people use them for in the middle of a nightclub? How many people really want to check their email all night long (and won’t soon have an iPhone)?
Best place to start would be a name change. Dell is dull and boring. Rename and re-strategize or go bye bye.
Analyst brainstorming session to help the poor beleaguered Dell.
• Maybe when you turn on the computer “The Fonz” should greet you with “hey!”
• Every Dell purchase also comes with pack of cigarettes, cause, everyone knows cigarettes are cool.
• Every computer has guitar plug in jack, like the VW’s.
and, of course..
• Open high-end nightclubs in the best locations in major-league cities like New York. Then, outfit tables with Dell computers, monitors, and other gadgets.
Anyone care to add to the list?
Um, this might work with the pocket protector crowd in Redmond. But then, the hookers would be ignored and get bored while the geeks checked their anemic stock prices.
Excellent plan, if it were a PR freebie.
I go in for a Dull night out. I stare at the scantily-clad ladies. I eat and drink myself to a standstill. All at Dull’s expense.
Then… I crawl down the street and spend shedloads of dosh at the nearest Apple store.
Apple’s Retail Stores succeed because of the high end products that they sell by a knowledgable sales staff…. and it’s cash and carry. Gateway’s Retail business model initially started out by taking orders and shipping to the customer. That doesn’t work !
People want to walk in and walk out with the product THAT DAY.
Dell proved that you can’t make money selling $400 boxes.
My advice … give the shareholders their money back.
Maybe Roger Kay’s boss should get a copy of this article sent to him by email. I’m sure BusinessWeek will love to see the great ideas their writers are coming up with!
Given that Dell must expand its presence in the consumer segment
—
That’s a disastrous assumption.. everything wrong about this article stems from this foolish assumption. Take some basic business courses and come back later.
@Jimbo von Winskinheimer
Yeah, a horrible thought:
Waking up with a bad hangover and a Dell laptop in your bed and thinking to yourself that the laptop looked a lot better last night. Worse yet, you find out that the laptop has an STD.
A place for people to go crash along with their computers. Dell can go to hell. That’s the best place for them.
“There’s no such thing as an Ugly PC – there’s just not enough vodka!!” Michael Dell
“……But use the venue to showcase sexy products, to associate the Dell name with exclusivity and cool. Generate buzz…”
Sexy products ?? … huh ??
Generate Buzz ?? …. Someone PLUEEZE tell me how you can do that … when the “Bee” is already dead ??
MDN MW = “death” …. I kid you not !
I think this story was published 13 days too early!