Essay, Pages 13 (3227 words)
Started in 1960 by James and Tom Monaghan as a small pizza store in Ypsilanti, Michigan, Domino’s Pizza has grown to more than 10,000 corporate and franchised stores in 70 countries. Domino’s Pizza is recognized as the second largest pizza chain in the United States after Pizza Hut, and the largest worldwide.8 Domino’s had global retail sales of over $7.4 billion in 2012, comprised of over $3.5 billion in the U.S. and nearly $3.9 billion internationally. In the third quarter of 2013, Domino’s had global retail sales of nearly .
8 billion, comprised of $849 million in the U.S. and $935 million internationally.
9 Focus on Technology
From April 2011 to April 2012, Domino’s reached an impressive $2 Billion in US digital from its apps on platforms such as Kindle Fire, Android, Windows 8 phone, and iPhone – which now cover nearly 95% of the U.S. smartphone market. Digital sales, which include mobile and computer ordering, now make up 40% of all Domino’s sales, an increase from 30% in 2012.
9 Problem Statement
Building on the success of Domino’s product rebranding and technological innovations, the company’s goal is to implement effective strategies that will increase its percentage of sales driven through the company’s mobile apps and online website.
Strengths of the Organization
Domino’s Pizza is the second largest pizza chain in the United States and the world leader in pizza delivery, with more than 10,000 corporate and franchised stores in over seventy countries (Corporate). Furthermore, Domino’s Pizza has been the recipient of Pizza Today magazine’s “Chain of the Year” award three times back to back in 2010 and 2011 (Corporate).
Over the years, Domino’s has launched many industry innovations to keep them at the top of the ladder, namely the HeatWave bag, Domino’s Tracker, and the Domino’s Pizza app (Corporate). This company has maintained great name brand recognition and a strong distribution system (Corporate). Additionally, Domino’s has maintained its status as a socially responsible company by continuing its tenth annual Thanks & Giving Campaign for St. Jude Children’s Research Hospital (Press).
Weaknesses of the Organization
Despite its many strengths, Domino’s Pizza also has some weaknesses. Domino’s has a history of past indiscretions with some of its employees. In 2009, two Domino’s employees damaged the brand by pulling a prank that showed them violating health code sanitation standards (Clifford, 2009). Moreover in 2010, a North Carolina woman found a racial slur on her Domino’s receipt (ABC, 2010). Domino’s has long since repaired its public image but now it must be extra careful to maintain customer loyalty.
Opportunities in the Environment
An opportunity for Domino’s pizza is social media exposure. This exposure can generate more attention from the target market as they are the most likely to be represented on social media websites.
Threats in the Environment
Some threats for Domino’s Pizza include the fact that some of their products, specifically their sandwiches and desserts, may not seem healthy especially to a health-conscious consumer. As of now, economic setbacks such as wage increases have affected Domino’s Pizza because some British employees have been complaining about poor wages (Karphal, 2013). Competitor, and current industry leader Pizza Hut, offers many of the same products as Domino’s. The company must determine the most effective method to set its products above its competitors.
The pizza restaurant industry is continuing to rise at a rate of about 1.6% (Barrett, 2012). Pizza Hut, Domino’s Pizza, and Papa John’s rank first in sales and unit counts among all the different chains (Barrett 2012). The pizza industry is a $40 billion industry that makes up approximately eleven percent of all restaurants in the nation (Franchise, 2013). Ninety-three percent of Americans eat at least one pizza per month in the nation (Franchise, 2013). The trend with Americans now is to move toward take out and fast delivery food options rather than dining out (Franchise, 2013). Additionally, one of the best benefits of the pizza industry is its customization for consumer preferences and high versatility (Franchise 2013). The biggest pizza franchises, Pizza Hut, Domino’s, Papa John’s, and Little Caesars lead in the US pizza industry (Franchise, 2013). However, Pizza Hut leads the pack with a larger percentages of total sales (about 14.68% of all U.S. pizza sales) compared with the rest (Barrett, 2012).
Year Ending September 2012 (cite pmq)
Consumer Behavior Analysis
Domino’s target audience is the age group of consumers 18-49 years old, both males and females. According to the pizza restaurant industry, the core pizza consumer is around the ages of 18 to 44 years old, with 75 percent to 77 percent of this age group being a pizza restaurant consumer (Barrett, 2012). Of this age, nearly half (47%) of people consider an online ordering option important when it comes to making decisions about buying pizza (Barrett, 2012). Moreover, among this percentile are the consumers aged 25-34 (57%) and those with three or more children (55%; Barrett, 2012).
Fortunately for Domino’s, its emphasis on new technology has helped to push the introduction of Domino’s ordering apps for iPhone, Android phones, Windows 8, and the Kindle Fire, which now cover nearly 95 percent of the US smartphone market (Corporate).
Domino’s three main competitors are Pizza Hut, Papa John’s, and Little Caesars. In fact, its biggest competition currently is Pizza Hut. Pizza Hut currently leads the industry with about 15% of the market and its stores account for 11% of all pizzerias in the US (Barrett, 2012). Likewise, Pizza Hut’s product offerings do not differ substantially from Domino’s. It also offers its product at very competitive prices. Papa Johns and Little Caesars’ product offering differ slightly from Domino’s in the sense that they do not offer pastas or sandwiches like Domino’s. Little Caesars is the only pizza restaurant that does not offer the delivery option. Furthermore, even in social media ranking, namely Facebook, Twitter, YouTube, and Instagram, Pizza Hut leads in each category. Information from each of the 4 most popular American pizza brands in respect to their popularity shows the following:
As demonstrated in the chart above, Pizza Hut leads the pack with 10.9 million likes, Domino’s takes second place with about 8.8 million likes, Papa John’s is third with about 2.6 million likes, while Little Caesars is fourth with 1.6 million likes. An article entitled “Top American Pizza Brands in social media” illustrates more in detail the different pizza brands and how consumers view each their respective Facebook pages. With respect with the other social media websites, Instagram and YouTube, here are the results:
As you can see here, Pizza Hut again leads in this social media category with 3,213 YouTube subscribers and 19, 753 Instagram followers. Domino’s trails behind Pizza Hut with only 3,179 subscribers and 5,695 followers. Papa Johns was not accessible on these sites so they do not have any representation in the above chart. Lastly, with Twitter, here are the results:
Pizza Hut boasts 650,300 followers; Domino’s has 428,049 followers; Papa John’s has 169,296 followers; and Little Caesars has 25, 209 followers. It is important to analyze the findings of each of these pizza company’s social media rankings because the target age group are continuously on these sites to find information about each brand before they make a decision. According to Andrew Merrill, he states that 70% of all consumers research online before making purchases or choosing service providers while 30% of consumers make purchasing decisions based on branding campaigns (Merrill, 2013). It is important to ensure that Domino’s has a significant presence online as it has globally.
Domino’s target audience is males and females ages 18-49 skewed slightly female with a focus on mothers and heads of household responsible for making the dinner decision for their family.
Domino’s Pizza was long recognized for its inferior taste and quality. In a 2010 interview with Gayle King of The Gayle King Show on Oprah Radio, CEO, Patrick Doyle, acknowledged the inferiority of Domino’s taste and quality. Since that time, Domino’s Pizza has made a consorted effort to move the brand and image into a more favorably light. Offering many of the same products as its competitors – pizza, breadsticks, chicken wings, Domino’s Pizza must continue to find new, innovative ways to set itself apart from competitors and drive more consumers back to the Domino’s brand.
Our creative Domino’s campaign is comprised of three parts, which will span the months of October to December 2014. According to the Domino’s website, its busiest days of service, apart from Superbowl Sunday, fall on Halloween, Thanksgiving Eve, and New Year’s Eve/ Day (Corporate). With this in mind, we will conduct a series of mini campaigns within the larger one in order to achieve a greater awareness of the ease and benefit of ordering online. The three parts of the campaign are as follows: 1) increase online advertisements about the app technology through Facebook and YouTube; 2) create a national pizza game with the primary goal being to drive sales through the app; 3) generate a global competition in which interested contestants must create a short YouTube commercial showing the benefits of ordering with the app technology. The first part of our campaign will help to make the public aware of the benefits of ordering online, whether on the computer or with a phone/iPad/Kindle app. According to a YouTube article, in the US, online video ads when combined with television ads create a 35% rise in brand recall, a 53% increase in message recall and a 31% rise in likeability over television alone (YouTube, 2012).
Therefore, we will increase advertisements on all the social media websites more, namely Facebook and YouTube because they require some cost. Facebook ads require $350 for three months of advertising. Facebook allows the user to target the specific audience based on age, sex, interests/hobbies, language, etc. YouTube ads, on the other hand, will be ads placed in the videos. These ads are known as in-video overlay ads (Kim, 2012). These ads play before or during the video and viewers have the option to skip the ad (with no cost to the owner) or to watch the advertisement (with cost to the owner). The cost of these ads are anywhere from $0.10 to $0.30 each. We expect the first part of this campaign to run for all the three months. The second part of our campaign will involve the creation of an app game within the existing Domino’s app. This game, which will run from October 30th -November 30th, will allow players the ability to win a free pizza if they win the game. The rules of the game are that three times a week (Monday, Wednesday, and Friday), consumers will have to guess the correct pizza toppings in the correct quantity, crust, and size selected by a different Domino’s executive or employee.
If the consumer chooses the correct type of pizza, they will win that pizza for the day or have the option to change the toppings only. In the event that there is more than one winner for the day, each of their names will be placed in a raffle and only one name will be selected for the free pizza prize. Only players who have the Domino’s app will be able to play this game. The third part of our campaign involves a global competition that will involve all the different global Domino’s pizza restaurants. In this part, interested participants will be given the ability to design a creative commercial using the Domino’s app to order a pizza. The video must be 2-5 minutes in length and the participants must like Domino’s Facebook page, follow its Twitter and Instagram page, and subscribe to its YouTube page in order to participate. They must tweet their video to Domino’s main Twitter page. This competition will be open for the first two weeks in December. After that time, each video will be assessed according to creativity, length, and content. The winner will be announced in the third week of December. The winner of the global competition will win the ultimate prize of having Domino’s cater to their next party or event. This will go hand in hand with two of the biggest days in Domino’s busiest selling days. Domino’s will provide its pizza, sides, drinks, and desserts to the winner. The number of pizzas will be limited to 10 boxes, with the selection of each type of sides and desserts, and 10 2-liter drinks.
Domino’s Pizza objective for the 2013 marketing campaign is to increase mobile app sales by 7%. This will be achieved through commercial advertisement and social media interaction which will make the customer aware that no matter the consumers’ location, they are able to order lunch
or dinner in less than a minute. Another objective is to increase the quantity of loyal customers by 5%. In 2009, Dominos received a bundle of feedback from their customers that the pizza was not authentic or fresh and tasted disgusting. The most common complaint was that “the pizza crust taste like cardboard” (Fera 2013). This objective could easily be achieved mainly through commercial advertisement or special offers from local stores.
Domino’s Pizza will use tradition and nontraditional media to attract new and old customers encouraging them to try our new and improved products. For the convenience of the customer we encourage them to order Dominos products mainly through their website and mobile app. In order to increase sales we need to aggressively advertise through the company’s website, social media and television commercials. A. Our strategy to market our mobile app is to first make it known to the customers that we developed an app on any smartphone device for free. By making customers aware of this mobile app, it could increase Dominos product sales. The company needs to innovate a creative commercial showing how easy it is to download and utilize their mobile app. Once Dominos feel comfortable that they reached enough of their target customers, the company can then offer hot deals for the customer if they order pizza and other products through the mobile app only. Even if the customer prefers to order on Dominos website, the mobile app allows the customer to keep track of when the order should hit the front door of their house no matter where they are located. The quicker a customer can order lunch or dinner, the faster the order is delivered to the customer. The Dominos mobile app is built for that particular customer who is always on the go and needs to place a quick order with the ability to check the process of the placed order anywhere. B. In order for Dominos to increase the quantity of loyal customers by 5%, they need to aggressively explain to consumer that they have redeveloped and revamped their products to the satisfaction of their customers wants for quality pizza. This could be expressed though commercial advertisement and social media. Commercial advertisement will express to the customers that Dominos listened to the feedback of previous customers and have currently re-innovated their pizza product to consumers’ satisfaction.
But the fallback of their refurbished product is that most of their old customer are unaware of their changes which led them to other pizza companies. With that said, local Domino stores should offer a pizza launch for families in the neighborhood to try one of their favorite 1-topping medium size pizza. This allows the customer to taste the quality of Dominos refurbished pizza products. Building brand loyalty and changing the customers’ perspective of their products is very important to increasing sales. Dominos website, www.pizzaturnaround.com, is a great way for potential or old customers to review how much Dominos redeveloped their pizza product basically from scratch (Bodnar 2010). Many people were misguided by what other customers said years ago causing future customer discouragement from ordering Domino’s Pizza. C. As for our media objective, we strategize that we can have a nationwide contest which will allow consumers to make a commercial on how they eat their pizza. Unique videos will have the chance to be selected and run on Domino’s profile page. This can be implemented through YouTube, Vine, and Instagram. Social media is an important tool for Dominos to offer hot deals without the customer going to the company’s website. They can easily check current events and coupon deal that Dominos promote on a daily basis. Customers the utilize social media could encourage fellow followers on their network to purchase Domino’s Pizza products in order to experience the same great taste that they enjoy.
The media marketing plan proposed will be effective because consumer trends are being followed and aggressive advertisement are being carefully placed in the media targeting young adults and families frequently. To determine whether or not our media plan will work, each strategy must be implemented carefully and effectively to ensure that Dominos objectives are met. As we continue to implement our marketing and media strategy, we will analyze the customers’ interaction with the Dominos website and mobile app. This analysis will determine the overall performance of our media plan displaying if we need to revamp our plan or continue with the plan at hand. Implementing this media plan will help ensure Domino’s Pizza that they will remain the leader in pizza delivery while increasing sales.
Domino’s Pizza creative campaign based on fast delivery with the use of the Dominos website and mobile app. The campaign budget of $250,000 includes advertisement expenditures on: billboard, transit, contingency fund, social media, promotional items and search engine optimization. Billboard advertisement will consist of 8% of the budget because it seems more logic to focus on other advertisement tools even though billboards are great in certain areas. As for Maryland, displaying your business on a billboard is not the most effective advertisement tool since people have trouble viewing the billboard while driving. The amount for this medium is $20,000. For transit advertisement we consider this tool to be 12% of the budget coming up $30,000. Many working mother and young adults continuously take public transportation. This will be a great way for Dominos to spread their brand name throughout the nation. Social media is the most important part of the budget at 32% because it is the most convenient for communication between Dominos and the public. This part of the budget will equal $80,000. Every plan needs a backup plan just in case the initial strategy doesn’t execute the goals we need in order to successfully implement our media plan. The contingency fund for our Dominos media campaign will be 14% at $35,000. Search engine optimization is also a great way for Dominos to expand their brand name when people are searching other topics on the net. This medium would be worth 18% of the budget at the amount of $45,000. And last but not least the promotional item of the budget will equal $40,000 for 16% of the budget. This concludes the budget for our media campaign.
1. Bodnar, Kipp. (2010). B2B Social Media Lessons from Domino’s “Pizza Turnaround” Campaign”. Retrieved November 28,2013 from http://socialmediab2b.com/2010/01/dominos-pizza-turnaround-campaign/ 2. Alfs, Lizzy. (2013). What’s next for domino’s Pizza? CEO Patrick Doyle outlines some goals. Retrieved November 26, 2013 from http://www.annarbor.com/business-review/whats-next-for-dominos-pizza-ceo-patrick-doyle-outlines-some-goals/. 3. Domino’s Pizza Inc. (2013). Retrieved December 11, 2013 from http://topics.nytimes.com/top/news/business/companies/dominos-pizza-inc/index.html. 4. Inside Domino’s. (2013). Retrieved November 26, 2013