A Case Study on Domino’s Pizza Inc. Taher Beawerwala

MKT - 618

Introduction: - History - Domino’s Today

Case Synopsis

Questions - Analysis

Recommendation

Current Financials

Campaign Video

DOMINO’S PIZZAIntroduction

History:• Purchased in 1960 by the Monaghan Brother’s a pizza

store in Ypsilanti, Michigan named “DomiNick’s” • James Monaghan sold his half of the business to his

brother Tom, in order to purchase a used VW Beetle.• Tom Continued to use the name “DomiNick’s” till 1965,

later renaming the Company “Domino’s Pizza Inc.”• Emphasis on Delivery from the beginning. Hired laid-off

factory workers to deliver pizzas to near by towns.• Delivery service helped in gaining brand popularity and

advantage of others who did not have a delivery service.

Domino’s Today:• Market leader in Online transactions and Pizza

delivery services.• 2nd Largest Pizza chain in the US with an annual

sales revenue of close to 9 Billion Dollars in sale.

• Pizza hut leads the charts with 14 Billion annual sales revenue.

• Domino’s has close to 12,000 outlets worldwide.

• One of the first food chains to institute online ordering in 2007.

• First pizza chain to have an in-house IT System to manage its online ordering and pizza tracking.

Case Synopsis• Though the chain grew over the years, it faced its

biggest decline in 2009.• Sales had gradually fallen over the years• Customers complained about taste and low quality of

Pizza.• Pizzas felt like “Cardboard”, taste “Wet and Flavourless”• Negative customer feedbacks and focused group studies

revealed the brutally honest criticism about Domino’s pizzas.

• J. Patrick Doyle took notice and initiated the “Pizza Turnaround” Campaign.

• New product development team was created and the old recipe was scrapped.

• The team started from scratch to formulate a new recipe keeping in mind the customer feedbacks.

• The campaign was a success, 3 out of 5 people preferred Domino’s new pizza over competitors offering.

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Domestic Sales (in Millions)

Domestic Sales

1) What Do you think caused the crisis within Domino’s that led to the “Pizza Turnaround” Campaign?

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• Over reliance on Delivery Time: - Obsession with speed created a mindless perception that they

mindlessly cranked out pizzas and that the employees were robots.- Ad campaigns launched across regions promoted the 30 minute promise.- The Speed Culture removed an important component from the experience – the Human Touch.

• Lack of innovation in their product offerings- The Pizza recipe hadn’t changed in the last 40 odd years.- Competitors where at a much higher level in terms of taste and quality. (Pizza Hut took firm grip of the market)

30 Mins Ad – USA

30 Mins Ad - India

2) Comment on how the New Product team used Attribute Analysis to test Various pizza concepts.____________________________________________________________________________• The new product team consisted of the head chefs, who signalled out the Determinant

attributes of that needed to be changed in the recipe.- Crust: how to avoid making a cardboard crust.- Sauce: how spicy should the sauce be.- Cheese: what kind of cheese goes with what kind of toppings. “Its CHEESE”

• The new product team also consisted of operations and marketing HoD. The attributes that they highlighted were:

- Cost: you got to make the new pizza better without paying more for it.- Time: you can still make a better tasting pizza in the same time.- Awareness: remind customers about the connection that you are trying to make.

3) How important was this analysis to the team in selling the Pizza Turnaround internally?____________________________________________________________________________

• A new product team needs the Managements approval to go ahead with concept testing.

• Its not always easy to convince the Management (IQ Meals).• The team and the management must be on the same page.• Customer feedbacks and focus group findings about Domino’s pizza played

a major role in convincing the Management.• R&D shocked at the “Cardboard pizza” complaint.• Attribute analysis helped recognize the areas of change. (Crust, sauce, cheese)

• Management agreed to go ahead with new product team’s concept of the new pizza.

4)What else did the new product team do to boost their chances of success?___________________________________________________________________• Major Risk. - Scrapped the old recipe. - Included Customers extremely negative feedbacks in their rollout promotional campaign.• www.pizzaturnaround.com• Acknowledged the fact that Domino’s had erred.• Connected to the customers on an emotional level.• Reoriented their focus to bring back human touch into their pizza experience. (Open Kitchen)• 30% increase in New Customers.• 65% increase in Repeat Purchase.• 14.3% increase in quarterly same-store sales.

2014 Ad - USA

2015 Ad – India

5) What can be learned in general from this case about the use of analytical attribute approaches for concept testing?_______________________________________________________

• Use of attribute analysis helped the new product development team by:- Outlining the areas to improve upon.- Improving on those areas in a timely manner.- Improving on those areas in a cost effective manner.- Helping in convincing the management that a change was needed.

6)How could other concept testing approaches present in this chapter have been used to guide the new product development team? (Recommendations too)___________________________________________________________________

• Market Research to support concept testing. - Acceptability of the new product in the market. - Avoid committing the same mistakes again. - Market preference before launch.• Prototype Testing - Inexpensive. - Improved and increased user involvement. - The users can thoroughly evaluate the prototype.

Sample Survey Results

1) Attributes highlighted by you guys:- PIZZA :D- Cheesy/ Greasy- Cheap- Delivery/ Midnight meal.

2) Changes you guys want:- More pizza options- Healthy pizzas- Dine-in

Pizza

Taste

Price

Time

Domino’s Pizza Financials as of 2015

The Pizza Turnaround

Questions ????

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