Dell Revamps Pricing Structure
Dell Inc. outlined plans Thursday to simplify pricing and reduce the number
of mail-in rebates for consumers and small business as part of the computer
maker's recent $100 million initiative to improve customer service.
Beginning next month, Dell said it hopes to reduce the number of promotions
per product line by 70 percent and the number of promotions for any single product
by 80 percent within the next 18 months.
Ro Parra, senior vice president of Dell's Home and Small Business Group, said
the new system should make it easier for customers.
"They told us what they wanted and we're delivering what they asked for,"
The move comes as Dell shares have hovered near a 52-week low following several
analyst reports questioning its future growth prospects and tough competition
from Hewlett-Packard Co. and other computer makers.
While Dell saw its revenue grow by 6 percent in the first quarter, HP's jumped
10 percent. During the same period, worldwide PC shipments grew from 13.8 percent
to 14.9 percent for HP, according to research firm Gartner. Dell, meanwhile,
saw its share slip to 16.5 percent from 16.9 percent last year.
Shares of the Round Rock, Texas, gained 13 cents Thursday on the Nasdaq Stock
Market to $22.51. The stock price has ranged in the past year from Wednesday's
close of $22.38 to $41.99.
The plan announced Thursday will take effect in August, beginning with a reduction
in mail-in rebates for Inspiron laptops and Dell televisions. Rebate cutbacks
for Dimension desktops will come later in the year, followed by other electronics
and accessories, software and services.
Part of the plan, Parra said, will involve doing away with paper-based rebate
forms in favor of system for customers to file for their rebates electronically.