Dell to ditch most rebates by 2008
Dell has been known for rather generous rebates over the years, but the
company now plans to move away from its model of ever-changing price
cuts. An article on Yahoo News says Dell will ditch 70% of its product line
promotions and 80% of single-product rebates for both consumers and
small businesses over the next 12 to 18 months. The move is presented as
a step to streamline pricing and make shopping simpler for customers. Dell plans to lower standard list prices as it moves away from rebates and promotions. Dell Senior VP
Ro Parra claims the new pricing scheme will thereby "provide far more
transparency" than the current rebate-based system.
According to Yahoo News, the pricing model change is a response to a
series of disappointing financial quarters and market share losses for
Dell. The streamlined pricing will complement a $100 million investment
the company made to improve service and support earlier this year, as
well as a new change in warranty policy that will see Dimension desktops
and Inspiron laptops covered for a year instead of 90 days by default.