Take an existing a Brand:  Take the Dell Optiplex range of business computers. These are known to be competitively priced and a great choice for a reliable business PC.

They come with 3 years on-site warranty and have a good reputation.

You can find this range of computers in small offices, banks, and even large corporate clients use them.

I have hundreds of them in my customers fleet. About 6 or 7 are old Optiplex GX150’s running Windows 2000. The customers just don’t want to upgrade them as they just keep working.

Other clients plan to use their more modern Optiplexes for a minimum of 5 years before replacing. Something that sounds reasonable to me.

Path to Destruction

Step1) Get the geniuses in Dell Marketing on the case. Task them with finding out how to sell more Dell computers. The marketing geniuses come back with PEOPLE WANT CHEAP.

Step2) Create a new value brand called Vostro Hey people will think because it’s a Dell Business computer it must be good (after all those other Dell business computers have a good name).

Step3) Market the living crap out of anything that moves introducing this amazing new Value range.

Step4) Customer perceptions start to shift because you tell them maybe a business Desktop PC should be a sub 300 pound commodity.

Step5) Sit back and relax as you look at the Value sales numbers. Gee how smart are we. People just lap this up.

Meanwhile back in the real world….

Dell are essentially stealing their own customers and down selling them a product we both know has no margin and ultimately must be inferior in one form or another. The more Dell argue that the Vostro is fit for purpose, the more they shoot themselves in the foot about the higher priced Optiplex or Latitudes.

I spoke to an insider at Dell about this issue. They were even more depressed about Vostro than I was. Try making targets when the products are minus margin they said.

This story ends for Dell when their Optiplex and Latitude customers become their Vostro customers. 

If I end up with a choice of supplying Value Vostros I would rather reposition my business in the market of say HP’s business range of computers. I will drop Dell in a heartbeat.

The customers will always ask for cheaper products. Sometimes the customer need to be protected from themselves. Only time will tell if a value Vostro will still be working in 2013.

If you are from Dell and wish to comment on this topic please use the comments.

Likewise  if you are a Dell Reseller feeling the pain  - use the comments.