Dominos Pizza
Dominos Pizza
Dominos Pizza
0 DOMINO’S PIZZA
3.1 History
headquartered just outside Ann Arbor, Michigan, United Stated. It was founded
by Tom Monaghan. There are currently about 8,500 corporate and franchised
stores in all 50 states and 55 countries. It was the second-largest pizza chain
behind Pizza Hut in the United States when it went public in 2004 for just under
$15 a share.
Domino’s Pizza began in 1960 when Tom Monaghan and his brother James
bought "Dominick's Pizza", a small pizzeria in Ypsilanti, Michigan. The deal was
secured by a $75 down payment and the brothers borrowed $500 to pay for the
store. Eight months later, James quit the partnership and traded his half of the
business to Tom for a used Volkswagen Beetle. With Tom as the sole owner of
the company, Dominick's Pizza became Domino's Pizza. In 1968, a fire destroyed
lawsuit by Amstar, maker of Domino sugar, the company expanded, and in 1978,
At the prospect of potentially losing the right to use the Domino's Pizza brand
name, Tom Monaghan hired Group 243 to create an alternative identity. Later
they became agency of record for the company and remained so for over a
decade. During that time, the agency, led by President Janet Muhleman and her
then husband Robert Cotman designed the store interiors, the pizza box, and the
Indy race car, created and produced all of the advertising, and managed
recruitment for the franchise. When Group 243 was hired, Domino's had fewer
than 100 units. They marketed the brand until it reached over 5,000. In the 1980s,
even more, and as of September 2006, it has 8,238 stores which totaled US$1.4
billion in gross income. Monaghan retired in 1998 and sold Domino's Pizza for
nearly 1 billion dollars, but retained a 27% non-controlling stake in the company.
Over 37,000 stores worldwide now operate under the Domino’s brand, with the
opening of a store in Huntley, Illinois as the 8,000th store. All international stores
are franchised. The Domino’s Pizza store in Tallaght, Dublin, Ireland, became the
Although the franchise is typically delivery and carry-out only, there is one dine-
Domino’s menu has a two category that is Domino’s delivery and take-out menu
and dine in menu. In Domino’s delivery and take-out menu it has Domino’s Pizza
Extravaganza, Classic Chicken, Seafood Delight and BBQ Chicken. In Top Secret
sauce it has new menu that’s Tuna Temptation, Vegie Festa and Classified
Chicken and in Spicy sambal sauce it has Flaming Tuna, Spicy Sambal and new
menu is Spicy Sausage. The last menu of category is Side Orders, that it has
Chicken Wings BBQ/Hot and Spicy, Chicken Lasagna, Garlic Twisty Bread,
BreadStix, Banana Kaya Dessert, CinnaStix and Icing, Nestle Drumstick Kit Kat,
Coca-Cola and the new menu is Spaghette Bolognese and Nestle Milo.
While, in dine in menu category it also has a same category with Domino’s
delivery and take-out menu but it different is, it has desserts, beverages, set deals
looked to appeal to a wider base, launching new marketing vehicles and products
that adhere to the sensibilities of both younger and older consumers. This past
year Pizza Hut has experimented with its brand by replacing “Pizza Hut” on take-
out boxes with “The Hut,” and by pushing the quality of its product and natural
solutions at home. The marketer has also introduced an extensive series of social
Domino’s caused a stir late last year by taking jabs at Subway with TV spots
Domino’s eventually removed the comparison ads but continued to take shots at
Subway, featuring Domino’s CEO Dave Brandon “oven baking” the cease and
desist in a follow-up spot. Domino’s also produced ads directly addressing the
recession through “The Big Taste Bailout” and “Taste Stimulus Package”
starring six team members from the corporation’s research and development
departments.
Televisyen (TV)
With the televisyen, it remains a firm battleground, accounting for about 92% and
94% of Pizza Hut’s and Domino’s paid media, respectively, according to TNS
responsive in the market place, with ads discussing the recession and the value it
delivers. Pizza Hut, by comparison, promoted more of its quality and menu range.
Their TV strategies differed significantly. Pizza Hut bought a broader and slightly
older demographic. For example, 38% of its network buy was on the 25- to 54-
year-old skewed CBS, with 19% spent on the younger-leaning Fox. That
contrasted with Domino’s, which bought only 11% of its airtime on CBS, but
network into cable with 37% of its TV budget, up from 30% the year prior.
In terms of programming, both had heavy buys in reality shows, with Pizza Hut
placing slightly more of its schedule in football programming than Domino’s did.
Domino’s targeted Hispanic media with specific creative and spent 13% of its TV
dollars on Univision and Telemundo. This was much higher than Pizza Hut,
was a large spender in local, placing nearly three times more than Domino’s in
Domino’s Facebook page, while not enjoying as many fans (370,610 at last
count), appeared to have more interaction from the fans itself. It also built an
added to your newsfeed and essentially informs your friends on exactly what type
of pizza you ordered and what stage that the pizza is in the delivery process. It
In case you didn’t pick it up, Domino’s was the victim of two renegade
employees who uploaded a prank video allegedly showing them doing all sorts of
nasty and gross things in the kitchen of a store. Within just a few days, the video
went viral and was viewed over a million times - a nightmare scenario for any
marketer. Many other companies would have been paralyzed or would have tried
to fight through the traditional media route. Kudos to Domino’s, who responded
Operations Patrick Doyle gave a very sincere and apologetic message that went a
long way to limiting the damage and trying to undo the issue through social
media. The company also set up a Twitter account, “@dpzinfo,” to refute the
Mobile Ordering
Domino's Pizza, the world leader in pizza delivery today announced the launch of
a new version of its mobile ordering Web site. The enhanced version is optimized
for the Apple iPhone, Palm Pre and phones that support the Google Android
operating system. "Domino's Pizza was the first pizza company to launch web-
based mobile ordering more than two years ago," said Rob Weisberg, Domino's
Vice President Multi-Media. "Since that time, we've been regularly enhancing our
site to allow an even better user experience and decreased ordering time."
which means there’s no need to install it. By visiting Dominos.com on the Safari
browser, users are served an ordering system designed specifically for iPhones or
an iPod Touch. They can then create an order by tapping “Express Ordering” or
“Create Your Own Pizza.” Other notable features of this web app include its pizza
tracker.
looking to entice more value-focused customers to order its pies through a new
pricing strategy. In a webcast of the 7th Annual Cowen & Co. Consumer
Conference, David Brandon said in recent years the company lost a number of its
"single pizza customers" - those who place an order for just one pie and are
Brandon said to bring those customers back to Domino's, the chain is now
implementing a "barbell" pricing strategy. In that model, some products are priced
lower to appeal to customers searching for a good deal while other more premium
products cost more for those customers who are less price-sensitive. The company
did not offer any specifics on whether it has lowered its prices on some of its
menu items, but Brandon did say the chain's new hot sandwiches, which are
According Brandon, "The burger guys have their 99 cent offering," and "We feel
like we have to be in that space and in that game" by offering some lower-priced
alternatives like the hot sandwiches. Brandon also said the chain is moving away
from offering limited-time-only deals and will instead add items to its menu that
predetermined period of time, perhaps specifying that late deliveries will be free
of charge. For example, Domino's Pizza had a commercial campaign in the 1980s
and early 1990s promising, "30 minutes or it's free." This practice was
by hurried delivery drivers. Now, pizzerias will commonly state to the customer
the actual delivery time. In early 2008, Domino's introduced the "You Got 30
Minutes," which is not a promise or guarantee, but a goal that Domino's claims to
strive for.
4.0 COMPARISON ANALYSIS
Domino’s faces several headwinds moving forward. Rising food and energy
prices, the housing slump and a weakening job market are taking a toll on
restaurant spending in its core domestic market; the company saw a 1.7%
decrease in comparable sales in the U.S. in 2007 after a 4.1% decrease in 2006 as
consumers reduced their spending on pizza. Rising food costs, especially the cost
of wheat and cheese, have also cut into operating margins. Domino's margins are
wheat (used to make dough) and cheese, two key ingredients of any pizza. Over
the past few quarters the prices of these key inputs have risen significantly; in
February 2008 a bushel of wheat cost $11.21 compared to $4.35 a year earlier.
The company is also impacted by the price of corn, beef, poultry and other
While, Domino's is also affected by the price of oil which has risen four-fold
since 2001 with the price of gas rising more than two-thirds since last year alone.
Oil is used to produce food, as well as to transport it all over the world. More
importantly, the company covers over 10 million miles per week in pizza
diesel to fuel the delivery fleet of its domestic supply chain. Intense competition
in the pizza delivery category limits the company's ability to pass rising food and
energy costs onto customers; because of this, increased costs shrink margins and
hurt profitability.
Although, in order to meet these challenges and revive sales growth the company
is launching a new marketing campaign under the slogan “You Got 30 Minutes"
with the hope that this national advertising effort will help take market share from
smaller, local pizzerias. The company is also trying to offset a weak U.S. market
Strengths
The strengths of Domino’s it has in their product. Domino’s strengths are it has
fast delivery that it is cool online Pizza Tracker. The Pizza Tracker function was a
featured during the launch of the optimized versions of Domino’s mobile sites.
“You can track the order using the Pizza Tracker, which gives you updates in real
time as to what stage of the process your pizza is in, from making to baking and
customers follow the progress of their order online or via their handset from the
time they click the “Place Order” button or hang up the telephone until the
The other strengths are it has also offer a best topping. Some of its toppings cater
to the people that love to eat meat, like the MeatZZa feast. Then there's the
Hawaiian feast for the people who love to have a sweet tasting pizza. There's no
doubt that Dominoes have some of the best toppings in America, but if we were to
nominate Dominoes for best toppings, then it's only fair that we list the Dominoes
minutes or the order is free. Domino's commits to deliver hot, fresh, great-tasting
pizzas to their customer's doorstep within 30 minutes, or get a free regular pizza
voucher on them. Example, Domino's Pizza is the first in Malaysia to extend this
kind of service commitment to customers. Thanks to the effort put in by all their
expectations, they endeavor to ensure our order arrives hot and fresh and
delivered safely within 30 minutes. This effort involves intensive training from
Weaknesses
The weakness of Domino’s is slow growing and declining same-store sales. The
company operates in three segments: domestic stores, domestic supply chain and
according to percentage same store sales growth, Domino’s domestic same store
Because these royalties are a percentage of total revenues, same store sales are an
important metric of Domino's performance. Increases in same-store sales translate
The other weakness of Domino’s is underwhelming flavor that it has overly sweet
sauce. Its okay if the customers like to eat a sweet sauce but if the customers don’t
like to eat a sweet sauce, they will eat at Pizza Hut and this problem can be a
Opportunities
outside of the United States. In addition to developed markets like the U.K.,
Canada, South Korea and Australia, Domino's operates in fast growing emerging
markets like India and Turkey. The company's international operation give it
access to a rapidly growing global middle class and has consistently posted strong
Beside that, Domino’s also has an opportunity to leverage supply chain and
distribution system to introduce new products such as two new products were
added to the menu: cheesy bread and Cinna Stix, the latter cinnamon breadsticks
being the first dessert item to be offered by the chain. The 7,000th Domino's
opened its doors. In addition, a new advertising campaign was launched featuring
the tag line, "Get the Door. It's Domino's." The corporation ended 2001 with net
income of $36.8 million on revenue of $1.26 billion, while system wide sales
totaled $3.78 billion, an increase of 6.8 percent over the preceding year.
Threats
John’s International and Kfc. Domino’s is the second largest pizza chain behind
Pizza Hut with a clear distinction of providing fast delivery. Although, Domino’s
has their own strategies to compete with other competitor such as it has
advertising strategy like online ordering that a customers can easy to order the
pizza. It also launches a new marketing strategy such as consumers can now track
orders from their iPhones with recent addition of popular Pizza Tracker and also
implemented a new pricing. But it’s still has a threats from their competitor
especially Pizza Hut because it’s very familiar than Domino’s Pizza.
The other threats is pizza delivery, by its nature, can pose risks for those engaged
neighborhoods. In the U.S., pizza delivery persons have been subjected to assault,
robbery, and sometimes raped or killed on the job. The United States Bureau of
Labor Statistics, which categorizes pizza delivery drivers and taxicab drivers as
"drivers-sales workers," ranked it the fifth most dangerous job category. All of