Dell Directs Online Sales in Germany

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Dell Germany plans to boost online sales to 75 percent of its total sales in three years, up from its current Web-based sales figure of 45 percent.

Mathias Schaedel, who took over as head of the German division last April, said Dell had established itself well on the various German markets, accounting for 10 percent of computer sales to government, ranking it fourth.

Dell delivers 5.2 percent of the large customer market, putting the company into sixth position. Growth in small- and medium-sized businesses is four to five times higher than market expansion as a whole, Schaedel said.

But he conceded the PC market in Germany is different from that of most other countries, which is perhaps one reason Dell has not done as well here as elsewhere. Schaedel is the third head of German operations in the last two years.

"A large number of consumers are interested in price first, especially when they're buying off the Internet," he said. "Quality and the desire to build their own PC follow far behind."

The large customer market is different, he said, and the Internet is about to make it more different still. Many German companies had personal relationships with bricks-and-mortar suppliers, a relationship the Web is changing.

"We're making it clear how advantageous a direct relationship between manufacturer and customer really is when it is done on the Web," Schaedel said. "It includes, for example, real-time information about order status and delivery, and service and support offers."

Dell's advertising focus is on the Web as well. It has banners on large portals, including Microsoft Network and T-Online -- Deutsche Telekom's Internet subsidiary -- as well as on 160 smaller Web sites.

"Outside the Web we advertise only in PC trade magazines, and there only with specific products and toll-free phone numbers," he said. "This has one great advantage: Success is directly measurable.

"Last year we did some image advertising on TV, but we've gotten away from that because we did not gain anything from it. One exception were spots we did with the German Post that didn't cost us anything. We also try to reach potential customers through direct mail."

Germany, Schaedel said, was "one of the most interesting markets in the world since it is not only one of the largest but one of the most innovative. So it is very important for us to play a leading role here.

"So we're going to focus even more on our core competencies -- notebooks, workstations, servers and Internet infrastructure. But you can't judge this market by the number of items you sell, not in terms of customer satisfaction anyway.

"Unfortunately too many companies on the German market are still fixated on the number of PCs they sell, and that focus can hurt the long-term success of any enterprise," said Schaedel.

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