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Dell Inc.'s year started off with a bang. In January, the direct-to-buyer computer maker hired former National Football League marketing guru Shawn Dennis as VP-global branding to shake up its image. Then the following month Fortune named Dell "America's most admired company." Add in record revenue of $52.8 billion over the last four quarters, and the brand couldn't have looked in better shape. Or could it?

Unfortunately, recent developments haven't been as kind to Dell. Customer service studies show that its once incomparable customer service standards have plummeted to the point where it's now just considered above average-and the company has acknowledged the decline. Meanwhile, competitors such as Hewlett-Packard Co., Acer Co. and the wide-awake Chinese giant Lenovo threaten to dilute the brand in the U.S. and abroad.

"Dell currently leads on the value attribute, but HP is seen as more creative and complete when it comes to solutions," said Rob Enderle, principal analyst for the Enderle Group. "IBM is seen as more trustworthy and is even more solutions-focused than HP is, and Gateway has re-emerged with what may eventually prove to be a stronger value message.

"Dell remains the company to beat in the segment but is blessed with competitors who are incredibly focused on Dell's business, especially Lenovo, which is still tied to IBM's hip."

Meanwhile, Dell's foray into entertainment devices such as flat-panel TVs and MP3 players hasn't bolstered its brand as much as it had hoped. "There are higher margins in the peripheral, storage and server sectors, and a lot of opportunity for those sectors to grow, so it's no mystery why Dell has made a big push in those areas," said Michael Thibodeau, managing partner and creative director of branding agency Verse Group. The downside, however, is that as Dell moves into more and more offerings, the brand becomes diluted and confuses customers, Thibodeau said.

Added Enderle: "Dell needs to build up these subbrands because a single brand probably will simply not be able to maintain a concise value once it covers so many products."

Dell's marketing focus for the near and long term appears to be in worldwide markets, especially since the U.S. PC sector shows only shallow, incremental growth and narrowing margins, Thibodeau said.

Dell's Dennis, sticking to her NFL roots, has called optimizing the global brand the company's new "game plan." She said Dell's business outside the U.S. is growing rapidly and that since joining this team she's been asking "How do we grow our brand to the next level, and, more tactically, how do we scale our global marcom efforts?"

Dell CEO Kevin Rollins has set a goal for the company to reach $80 billion by 2009-an unprecedented level of growth for a mature company in the computing industry. So Dennis and her branding team will have their work cut out for them.

-Roger Slavens

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