Sunday, April 28, 2013

Dominoes Brand is Regained!!


Dominoes Pizza is a well known delivery pizza franchise that has faced much scruitny in the past 7 years. Customers have appreciated the speedy delivery and convenience that Dominoes has delivered. But what the company gained in speed and convenience lacked in taste and appearance. Consumers in the past have said that "their pizzas suck", "Tastes like cardboard", and other phrases. Customers were not happy with the taste of Dominoes pizzas. I will be discussing what Dominoes has done to change their reputation in a positive sense.
In 2008, Dominoes could not properly compete against other major pizza chain such as Pizza Hut and Papa Johns. Both Pizza Hut and Papa Johns have effectively positioned their brand to consumers by staying current with food trends. For example, Pizza Hut has incorporated Tuscani pasta entrees, stuffed pizza rollers, Hershey's Chocolate dunkers, and other delicious menu items. From years 2009 to 20011, there has been a revenue increase of approximately 21%. These new menu items appealed to consumers and the consumers has thanked Pizza Hut by purchasing their menu items. For Papa Johns, they were the first pizza chain to implement online and text ordering. Papa Johns has recognized that our society has become more reliant on technology. Papa Johns strives to reach their customers through various forms of electronic channels as the technology industry rapidly continues to grow. Papa John's menu items may be standard in comparison to other pizza chains, but Papa John is known for using 100% fresh ingredients in all of their pizzas. The dough is hand-made and the toppings are USDA approved. When strategizing in a highly competitive market such as the pizza industry, Dominoes had to be careful and critical in their actions.

To start off their reinvention campaign, Dominoes has implemented the oven baked sandwhiches into their menu. In my opinion, this was a risky tactic because these sandwhiches would indirectly compete in the sandwich making industry; competing against profound franchises such as Subway and Quiznos. Dominoes aggressively competed against Subway by pricing their sandwich at $4.99, competing against their $5 footlong. Dominoes created a buzz from this new menu item by performing a national test taste against Subway's $5 Footlong. Dominoes had actually won this taste test; further proving that implementing the oven-baked sandwiches was a good idea.

In 2009, in response to customer complaints, Dominoes had created a new recipe, crust, cheese, and sauce. In their advertisements, customers would be placed in a room and they would talk negatively about Dominoes pizzas. Midway through the customer's comment, a Dominoes representative would burst into the room and have the customer try their new pizza. The customer would be shocked and become a believer that Dominoes is becoming a force to be reckoned with. Russell Weiner, the chief marketing officer of Dominoes says, "The self-deprecating ads from Domino’s were supported by a money-back guarantee on the pizza and were followed by advertisements that showed company employees going after previous critics and “holdouts” that had yet to try the new pies."  Dominoes could not advertise that their new pizzas and new and improved. Their strategy were to advertise members of Dominoes board of directors speaking negatively about the company and have critics phiscally taste their new pizzas. This was a guerrilla-style tactic that proved to be an effective strategy.

In closing, the first quarter sales of Dominoes had shocked not only industry experts, but also Dominoes employees on all levels of the corporation. Gary Stibel, the founder and CEO of the New England Consulting Group mentions, “They engaged consumers with disruptive honesty,” Stibel says. “Once they had gotten people’s attention with disruptive honesty, they delivered a meaningful message: We taste better. They didn’t say, ‘We taste better than your favorite pizzeria,’ because they probably don’t. They said, ‘We taste better than we used to,’ which is not that difficult a statement to make.” This is textbook marketing that shall be remembered. What Dominoes was able to realize was that they need to change as their sales were dramatically decreasing. They incorporated new menu items and was honest to consumers by saying that their pizzas suck. Now that their menu items are up to date to current market trends, Dominoes is developing into a dominant force in the pizzas delivery industry.

3 comments:

  1. As a pizza connoisseur I feel obligated to comment on this post. I for one feel I am the only one who thought Dominos pizza tasted better before they changed their recipe. Do you think this change in recipe will be a lasting or long term positive for Dominos? Or will they start to "fizzle" a few years down the road and be back where they started?

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  2. That is a great question. I believe it comes down to execution. If Dominoes can effectively respond to current trends in the market place and continue to satisfy their new customers, then this will allow Dominoes to compete against the big dogs of the delivery pizza industry such as Papa Johns and Pizza Hut. If they return to their previous strategies, then Dominoes will fall. That's just looking at a broad view of their future success. As far as their recipe goes, I believe that this is just a short term advantage that they have implemented into their strategies. Any pizza company can change their recipe, improve the taste of their pizzas, or any other product modifications. But at the same time, Dominoes has received much bad publicity due to the poor taste and appearance of their pizzas. This new recipe gives Dominoes an opportunity of redemption and restore the reputation of serving good pizza. As I mentioned before, it comes down to the execution of strategies for Dominoes. Do you think this creates a temporary or sustained competitive advantage for Dominoes?

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  3. I suppose Im a little biased since I dont really like their "new" recipe; but I would say its definitely a temporary advantage. They do seem to be improving, but then again its not hard to improve on what they were before. I havent personally tried their online ordering but my friend said they have a pretty cool online ordering process. I know they do feedback online and you can do it by store I think and describe your experience directly to the people who made it/delivered it. That for them I think is a better means to create a more sustained competitive advantage. I know Papa Johns was first in the online area, but if Dominos can differentiate themselves in that regard I think it will have a more lasting effect than just spicing up their recipe.

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