From its inception the computer industry has been characterised by fast paced change\ud
and future uncertainty. The rapid growth and profitability experienced by companies in the 70’s and 80’s have been replaced by:\ud
• Growth, in terms of profitability, is slowing rapidly.\ud
• Competition has intensified as entry barriers and boundaries drop. Product segments have shifted from large scale computers to PCs and workstations.\ud
• Profit margins have been squeezed. The advent of the direct selling manufacturers with their lower costs brought with them ‘Price wars’, which still continue as prices drop constantly, squeezing margins.\ud
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The traditional three tier structure came under threat when Michael Dell pioneered the direct selling model for PCs. It was since copied by other companies most notably Gateway 2000. Even established companies like Digital and IBM experimented with it before returning to the indirect dealer channel. However, now it is not as straightforward as direct and indirect. All the players in this fiercely competitive market are looking to other channels to increase their customer base and consequently their market share.\ud
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One of the major trends in the computer industry at present, is the rapidly increasing home consumer market. This customer market is expected to account for up to 50% of the PC market in the next couple of years.\ud
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This research seeks to investigate the changing market and marketing channel in this industry. Exploratory interviews were completed with the primary distributors in Ireland who were willing to partake in the study. The purpose of these was to fill in gaps in the literature, and also as a basis for the survey questionnaires in the next two stages of the research. These stages consisted of (1.) a home consumer survey with a structured questionnaire and, (2.) a business consumer survey with a structured questionnaire. These were then analysed according to the research objectives using the statistical program SPSS for windows. Following that several conclusions were made, leading to recommendations to the industry and for further research