Dell set to change consumer pricing

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Exactly, but its a bundle of problems...

Dells whole problem comes out of the issue that they never evolved their vision of the home computer consumer market to match what that market has evolved into. When Dell first started selling computers the home user wasn?t very savvy, internet speed was limited for most users and the full potential of what a computer could do was unrealized by most users. This meant what most home consumers wanted was simply a computer that was probably going to be reliable , had decent performance and that they could get telephone assistance for it because they knew they would need it seeing how they were bound to run into a lot of simple problems.

Now a days, many users understand that a home computer has the potential to do many things for them and are not opposed to attempting to do their own upgrading to achieve better performance. The desire for improved performance and new capabilities happens with significant frequency compared to a decade or more ago. Telephone helpline assistance has been reduced to an almost pointless exercise as a much larger number of computer owners now can handle the majority of simple problems that might be effectively handled by way of telephone, and a far greater number of the average computer owners problems that they cannot solve themselves are so complex that telephone assistance too often is pointless.

Every large city now has any number of well established custom building outlets often operating in chains, who will build for a consumer, or sell them the components to build for themselves a computer using the same name brand components that a Dell or other factory built computer has, but at about a 25%-40% cost reduction, and the parts can be specifically chosen to customer preference out of hundreds of options. For the less adventurous there are typically preconfigured systems offered at even cheaper prices made available through these outlets, and online ordering and delivery makes it easy to almost any location.

It is quickly getting to a point where the home consumer would be foolish, or just plain lazy and not care, to purchase a name brand computer sitting on the shelves of a Best Buy or Circuit City or order up a Dell. The problems encountered by a home consumer in exercising their options under a Dell warranty for example may be less satisfactory then the easy availability of taking your custom built computer back to the store where you bought it for a quick fix just a few blocks from home.

In the end, cost is the issue; as how in the world does one justify paying more for a product that has no advantage to another similar product? In fact, where the competing product is obviously better, and provides as good or better service, paying the same for a Dell would be ludicrous. Dell now finds itself in a position where the home consumer landscape has changed significantly enough that to continue selling their product in the same way they have; a preconfigured system and not easily upgraded, means a Dell is now definitively a low end option and pricing would have to reflect this. Unfortunately for Dell, this means that their recent price drop on their Dimension 5150 from $1049 to $999, doesn?t come close to cutting it as practically identical preconfigured systems can be purchased in any number of custom builder locations for about $850, and usually with better video, and are easy to upgrade. The Dell, to be really salable, should be going for about $750 if its going to be tricky to upgrade, or if you have to send it out of town for service.

Posted by: Cayble   Posted on: 07/11/06 You are currently: a Guest | Members login | Terms of Use

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