Beware the Dell fine print
- 17 April, 2002 16:12
The ACCC is not the only organisation to take aim at Dell recently, with research company Gartner warning the vendor's customers not to be blinded by Dell's low-price marketing.
In a report released earlier this month from Gartner's Procurement Solutions Group, end users were told to be wary of a variety of marketing tactics used by Dell.
"Look at the way Dell advertised its 1999 PC, for example," said Andy Woo, PC analyst at Gartner. "They used an eyeball marketing strategy where they catch your attention by presenting you with an exceptional deal, but when you look at the specs, you see it's a fairly basic PC. Whether this constitutes a misleading act is up to individual interpretation."
The Gartner report claims that when Dell reconfigures a given PC, it can either add more expensive components, which drive up the price, or delete features such as extra memory to keep the price the same. Although Dell price changes are difficult to track because the company often changes its PC hardware configurations and prices daily, analysts have noted a general increase in the prices of Dell's most basic PC configurations.
According to Woo, customers should shop around and read the fine print carefully. "The message we want to pass on to end users is to not be too gullible and read between the lines."
Dell Australia marketing manager Rob Small dismissed the comments made by the Gartner report. "The thing that really concerns me is that people are accusing us of deliberately misleading customers. We are a very ethical company."
Small refuted Woo's claim that Dell was guilty of "eyeball marketing". "Attention-grabbing marketing that gets the reader in to look at an ad is actually quite clever. If you don't have everything included in what you're visually representing, well that's misleading. We don't do that. So if he is accusing us of that, he's doing so without attention to the facts.
"We have legal eagles that go through every single claim that we make, whether it's a marketing plan or a technology plan. Dell goes through a very stringent legal process to make sure there is nothing misleading. We've been doing that for eight or nine years."
Meanwhile, the ACCC will be taking Dell before the Federal Court on June 19, alleging that Dell breached Section 52 of the Trade Practices Act 1974 for failing to indicate that the delivery charges for its PCs were compulsory, thus failing to state the true cash price of its goods.
Small was reluctant to discuss the details of talks between Dell and the ACCC, but implied that Dell had no case to answer. "We wouldn't be doing as good as we've been doing around the world and in this country if we weren't highly ethical and passionate about customer service.