DOMINO’S PIZZA

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TABLE OF CONTENTS

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1 Historical Background 4

2 Marketing Goals and Objectives 9

3 Market Analysis 13

4 Environmental Analysis – Global Business Environment 19

5 Environmental Analysis - Local Business Environment 22

6 Consumer Analysis 23

7 Strengths, Weaknesses, Opportunities and Threats Analysis

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8 Marketing Focus 26

9 Tables, Graphs, Diagrams and Pictures 30

10 Position analysis 32

11 References 36

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Historical Background

Early years In 1960, Tom Monaghan and his brother, James, purchased DomiNick's, a small pizza store in Ypsilanti, Michigan near Eastern Michigan University. The deal was secured by a US$75 down payment and the brothers borrowed $900 to pay for the store. Eight months later, James traded his half of the business to Tom for a used Volkswagen Beetle. As sole owner of the company, Monaghan renamed the business Domino's Pizza, Inc. in 1965. In 1967, the first Domino's Pizza franchise store opened in Ypsilanti. The company logo was originally planned to add a new dot with the addition of every new store, but this idea quickly faded as Domino's experienced rapid growth. The three dots represent the stores that were open at the time (1969).

International expansion On May 12, 1983, Domino's opened its first international store, in Winnipeg, Manitoba, Canada. That same year, Domino's opened its 1,000th store overall, and by 1995 Domino's had 1,000 international locations. In 1997, Domino's opened its 1,500th international location, opening seven stores in one day across five continents. From 2007 to 2012, Domino's gradually established a presence in India with at least 1,000 locations by 2012.

Sales of company In 1998, after 38 years of ownership, Domino's Pizza founder Tom Monaghan announced his retirement and sold 93 per cent of the company to Bain Capital, Inc. for about $1 billion and ceased being involved in day-to-day operations of the company. A year later, the company named David A. Brandon Chairman and Chief Executive Officer. The exterior of a Domino's Pizza store in Spring Hill, Florida.

In 2004, after 44 years as a privately held company, an employee of Domino's Pizza rang the opening bell at the New York Stock Exchange and the company began trading common stock on the NYSE under the ticker symbol "DPZ".

In a 2009 survey of consumer taste preferences among national chains by Brand Keys, Domino's was last — tied with Chuck E. Cheese's. In December that year, Domino's announced plans to entirely reinvent its pizza. It began a self-flogging ad campaign in which consumers were filmed criticizing the pizza's quality and chefs were shown developing the new product. The new pizza was introduced that same month, and the following year, Domino's 50th anniversary, the company acquired J. Patrick Doyle as its new CEO and experienced a historic 14.3% quarterly gain. While admitted not to endure, the success was described by Doyle as one of the largest quarterly same-store sales jumps ever recorded by a major fast-food chain.

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In 2012, Domino's Pizza removed the word "Pizza" from their logo, to emphasize their non pizza products. At the same time, Domino's introduced a new logo that removed the blue rectangle and text under the domino in the logo, and changed the formerly all-red domino to be blue on the side with two dots and red on the side with one dot.

Products : The current Domino's menu features a variety of Italian-American entrees and side dishes. Pizza is the primary focus, with traditional, specialty and custom pizzas available in a variety of crust styles and toppings. In 2011 Dominos launced Artisan style pizzas that offer a base blend of rich flavors to compliment chef inspired toppings. Additional entrees include pasta, bread bowls and oven-baked sandwiches. The menu offers chicken side dishes, breadsticks, as well as beverages and desserts.

From its founding until the early 1990s, the menu at Domino's Pizza was kept simple relative to other fast food restaurants, to ensure efficiency of delivery. Historically, Domino's menu consisted solely of one pizza in two sizes (12-inch and 16-inch), 11 toppings, and Coke as the only soft drink option. The first menu expansion occurred in 1989, with the debut of Domino's deep dish, or pan pizza. Its introduction followed market research showing that 40% of American pizza customers preferred thick crusts. The new product launch cost approximately $25 million, of which $15 million was spent on new sheet metal pans with perforated bottoms. Domino's started testing extra-large size pizzas in early 1993, starting with the 30-slice, yard-long "The Dominator".

Domino's tapped into a market trend toward bite-size foods with spicy Buffalo Chicken Kickers, as an alternative to Buffalo Wings, in August 2002. The breaded, baked, white-meat fillets, similar to chicken tenders, are packaged in a custom-designed box with two types of sauce to "heat up" and "cool down" the chicken. In August 2003, Domino's announced its first new pizza since January 2000, the Philly Cheese Steak Pizza. The product launch also marked the beginning of a partnership with the National Cattlemen's Beef Association, whose beef Check-Off logo appeared in related advertising. Domino's continued its move toward specialty pizzas in 2006, with the introduction of its "Brooklyn Style Pizza", featuring a thinner crust, cornmeal baked in to add crispness, and larger slices that could be folded in the style of traditional New York-style pizza.

In 2008, Domino's once again branched out into non-pizza fare, offering oven-baked sandwiches in four styles, intended to compete with Subway's toasted submarine sandwiches. Early marketing for the sandwiches made varied references to its competition, such as offering free sandwiches to customers named "Jared," a reference to Subway's spokesman of the same name.

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The company introduced its American Legends line of specialty pizzas in 2009, featuring 40% more cheese than the company's regular pizzas, along with a greater variety of toppings. That same year, Domino's began selling its BreadBowl Pasta entree, a lightly seasoned bread bowl baked with pasta inside, and Lava Crunch Cake dessert, composed of a crunchy chocolate shell filled with warm fudge. Domino's promoted the item by flying in 1,000 cakes to deliver at Hoffstadt Bluffs Visitor Center near Mount St Helens.

In 2010, shortly after the company's 50th anniversary, Domino's changed its pizza recipe "from the crust up", making significant changes in the dough, sauce and cheese used in their pizzas. Their advertising campaign admitted to earlier problems with the public perception of Domino's product due to issues of taste. Since the companies stock low in late 2009, the company's stock had grown 233 percent by late 2011. Even as the economy has suffered and unemployment has risen, Dominos has seen its sales rise dramatically through its efforts to rebrand and retool its pizza.

Domino's serves Coca-Cola products, and as of January 2012 is the only "Big Four" pizza chain to do so. Rivals Papa John's Pizza and Little Caesars sold Coca-Cola in the past (Pizza Hut, due to its previous ownership by PepsiCo, has a lifetime contract to sell Pepsi products.), but both switched to Pepsi in 2012 and 2007, respectively. Domino's Pizza in Mexico switched to Pepsi in November 2012.

In September 2012, Domino's announced it was going to roll out a pan pizza on September 24, 2012.Following this move, the Deep Dish pizza was discontinued after 23 years of being on the menu.

Corporate governance Domino's management is led by J. Patrick Doyle, CEO from March 2010, formerly president of Domino's USA. Previous chief executive David Brandon, made athletic director of the University of Michigan in January 2010, remains chairman.]Among 11 executive vice presidents are Michael Lawton, CFO; Asi Sheikh, Team USA; Scott Hinshaw, Franchise Operations and Development; and Kenneth Rollin, General Counsel. Domino's operations are overseen by a board of directors led by Brandon. Other members of the board are Andrew Balson, Diana Cantor, Mark Nunnelly, Robert Rosenberg and Bud Hamilton.

Charitable activities In 2001, Domino's launched a two-year national partnership with the Make-A-Wish Foundation of America. That same year, the company stores in New York City and Washington D.C. provided more than 12,000 pizzas to relief workers following the September 11 attacks on the World Trade Center and The Pentagon. Through a matching funds program, the corporation donated $350,000 to the American Red Cross' disaster relief effort. In 2004, Domino's began its current partnership with St. Jude

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Children's Research Hospital, participating in the hospital's "Thanks and Giving" campaign since it began in 2004, raising more than $1.3 million in 2006.

Advertising and sponsorship Arie Luyendyk's Lola-Chevrolet which won the 1990 Indianapolis 500 for Doug Shierson Racing. In the 1980s, Domino's Pizza was well known for its advertisements featuring The Noid. That concept was created by Group 243 Inc. who then hired Will Vinton Studios to produce the television commercials that they created. The catchphrase associated with the commercials was "Avoid the Noid."

Due to a glitch on the Domino's website, the company gave away nearly 11,000 free medium pizzas in March 2009. The company had planned the campaign for December 2008 but dropped the idea and never promoted it. The code was never deactivated though and resulted in the free giveaway of the pizzas across the United States after someone discovered the promotion on the website by typing in the word "bailout" as the promotion code and then shared it with others on the Internet. Domino's deactivated the code on the morning of Tuesday, March 31, 2009 and promised to reimburse store owners for the pizzas.

Domino's sponsored CART's Doug Shierson Racing, which was driven by Arie Luyendyk, and the team won the 1990 Indianapolis 500. In 2003, Domino's teamed up with NASCAR for a multi-year partnership to become the "Official Pizza of NASCAR." Domino's also sponsored Michael Waltrip Racing and driver David Reutimann during the 2007 season in the NASCAR Sprint Cup Series. Domino's Pizza sponsored The Super Mario Bros. Super Show! in 1989, and was briefly seen in the 1990 film Teenage Mutant Ninja Turtles. Furthermore, from 1998 to 2008 the company provided funding for the American cartoon sitcom "The Simpsons".

30-minute guarantee Starting in 1973, Domino's Pizza had a guarantee that customers would receive their pizzas within 30 minutes of placing an order, or they would receive the pizzas free. The guarantee was reduced to $3 off in the mid 1980s. In 1992, the company settled a lawsuit brought by the family of an Indiana woman who had been killed by a Domino's delivery driver, paying the family $2.8 million. In another 1993 lawsuit, brought by a woman who was injured when a Domino's delivery driver ran a red light and collided with her vehicle, the woman was awarded nearly $80 million, but accepted a payout of $15 million. The guarantee was dropped that same year because of the "public perception of reckless driving and irresponsibility", according to Monaghan.

In December 2007, Domino's introduced a new slogan, "You Got 30 Minutes", alluding to the earlier pledge but stopping short of promising delivery in a half hour. The company continues to offer "30 minute or Free" guarantee for orders placed in its stores situated in India.

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International operations Domino's Pizza has locations in more than 60 countries. In most cases, Domino's has master franchise agreements with one company per country, but three companies have acquired multiple master franchise agreements, covering a number of countries:

The rights to own, operate, and franchise branches of the chain in Australia, New Zealand, France, Belgium, the Netherlands, and Monaco are currently owned by Australian Domino's Pizza Enterprises, having bought the master franchises from the parent company in 1993 (Australian and New Zealand franchises) and 2006 (European franchises).

The master franchises for the UK and Ireland were purchased in 1993 by the British publicly listed Domino's Pizza Group, which acquired the master franchise for Germany in 2011 and Switzerland, Liechtenstein, and Luxembourg in August 2012 by buying the Swiss master franchise holder, with an option to acquire the Austrian master franchise as well. The master franchises for India, Nepal, Sri Lanka, and Bangladesh are currently owned by the Indian company Jubilant FoodWorks.

Marketing Goals And Objectives

MISSION:-

Its mission statement is

“Exceptional franchisees and team members on a mission to be the best pizza delivery company in the world.”

It implement this mission statement by following a business strategy that-

(a) Puts franchisees and Company-owned stores at the foundation all thinking and decisions;

(b) Emphasizes ability to select, develop and retain exceptional team members and franchisees;

(c) Provides a strong infrastructure to support stores

(d) Builds excellent store operations to create loyal customers.

(e) Grow leading position in an attractive industry

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(f) Leverage strong brand awareness.

Believe that the strength of Domino’s Pizza brand makes one of the first choices of consumers seeking a convenient, quality and affordable meal. They intend to continue to promote brand name and enhance reputation as the leader in pizza delivery Leading industry publication Pizza Today magazine named Domino’s Pizza" Chain of the Year" in 2003In 2007 it launched the campaign, “You Got 30 Minute,” which built on the Company’s 30-minute delivery heritage .In 2007 and 2008, each domestic stores contributed 4% of their retail sales to advertising fund for national advertising in addition to contributions for market-level advertising .Intend to leverage strong brand by continuing to introduce innovative, consumer-tested and profitable new product varieties (such as Domino’s Brooklyn Style Pizza and Domino’s Oven Baked Sandwiches), complementary side items.

Expand and optimize domestic store base .Plan to continue expanding base of domestic stores to take advantage of the attractive growth opportunities in U.S. pizza delivery. They believe that scale allows expanding store base with limited marketing, distribution and other incremental infrastructure costs. Additionally, franchise-oriented business model allows expanding store base with limited capital expenditures and working capital requirements. While they plan to expand traditional domestic store base primarily through opening new franchise stores, they will also continually evaluate mix of Company-owned and franchise stores and strategically acquire franchise stores and refranchise .Company-owned stores.

Continue to grow international business.They believe that pizza has globalappeal and that there is strong and growing international demand for delivered pizza.

They have successfully built a broad international platform, almost exclusively through master franchise model, as evidenced by their 3,726 international stores in more than 60 countries. They have significant long-term growth opportunities in international markets where they have established a leading presence. In their current top ten international markets, believe that store base in total for these ten markets is approximately half of the total long-term potential store base in those markets. Store-level economics of business model, the growinginternational demand for delivered pizza and the strong global recognition of the Domino’sPizza brand. International stores have producedpositive quarterly same store sales growth for 60 consecutive quarters.Segment overview

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VISION:-

The vision of the domino’s pizza is to being the number one in pizza. Domino’s pizza provides 30 minutes home delivery of pizza and produce the best for the less . They make effort to make them number one in pizza and now they have 227 domino’s pizza in India and 9000 all over world.

Training of personnel

Fast food restaurant managers are responsible for ensuring that the restaurant runs smoothly. Responsibilities include personnel and employee supervision, food preparation and sanitation, customer service and other duties as they arise. Fast food restaurant managers should be organized, perform well under pressure, enjoy working with food and have strong customer service skills. Education and Training.

Fast food managers generally have a high school diploma or GED and may have additional food service education. Managers working in a chain restaurant complete a training program specific to their company and receive several weeks or months of on-the-job training.

Personnel Functions

Fast food managers are responsible for hiring, scheduling, training and supervising employees. Depending on the size of the restaurant, they may also manage and train assistant managers and crew leaders. In some restaurants, managers are responsible for payroll, periodic employee reviews and disciplinary action.

Food Preparation and Management

Managers oversee all aspects of food preparation, including cold prep, cooking, storage and disposal of food. They also ensure that orders are being completed timely and served properly. They may also inventory and order food and supplies.

Customer Service

Fast food managers ensure that the restaurant and its employees are providing good service to customers, including completing and serving orders quickly, being courteous and efficient and keeping the restaurant, restrooms and parking areas clean. Managers also respond to customer comments and complaints.

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Work Schedule

Fast food managers may work any shift, including evenings, weekends and holidays. Mangers may work long hours to compensate for staffing issues, and must sometimes change their work schedule on short notice.

Earnings

Earnings vary based on experience, restaurant chain and location. According to the Bureau of labor Statistics, as of 2008, the median annual wage for fast food and limited service restaurant managers was $41,320.

Sales objective-

The objective was to introduce Domino’s new pizza and increase Domino’s same-store sales by two percent in 2012. Additionally, from a consumer standpoint, the goal was to move brand perception, specifically taste, awareness of the new and improved pizza and market share, as measured by the Domino's Brand Tracking Study and NPD/Crest.They make aware customers by sales promotional activities and advertising.

Domino’s Pizza (Domino’s) is a US-based pizza delivery company. The company principally operates 9,351 company-owned and franchise stores, located in 50 states in more than 65 countries. In addition, the company operates in 16 regional dough manufacturing and supply chain centers in the US and six outside the US.

They believe that pizza has globalappeal and that there is strong and growing international demand for delivered pizza. Theyhave successfully built a broad

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international platform, almost exclusively through master franchise model, as evidenced by their 3,726 international stores in more than 60 countries.They have significant long-term growth opportunities in international markets where theyhave established a leading presence. In their current top ten international markets, believethat store base in total for these ten markets is approximately half of the total long-term potential store base in those markets. Store-level economics of business model, the growinginternational demand for delivered pizza and the strong global recognition of the Domino’sPizza brand. International stores have produced positive quarterly same store sales growth for 60 consecutive quarters

SEGMENT OVERVIEW

It operates in 3 buisness segments:-

Domestic stores- Domestic stores segment consists of domestic franchise operations, which oversee network of 4,558 franchise stores located in the contiguous United States, and domestic Company-owned store operations, which operate network of 489 Company-owned stores located inUnited States;

Domestic supply chain-.Domestic supply chain segment operates 17 regional dough manufacturing and food supply chain centers, one supply chain center providing equipment and supplies to certain of domestic and international stores and one vegetable processing supply chain center.

International segment- International segment oversees network of 3,726 international franchise stores in more than60 countries. International segment also distributes food to a limited number of markets from six dough manufacturing and supply chain centers in Alaska, Hawaii and Canada (four).

PRICING OBJECTIVE-

Pricing objective refers to one or more methods companies use to price their products or services (Bygrave&Zacharakis 2010). Based on the strategic formulation using the Ansoff Matrix, we have concluded that the company would adopt a a market penetration strategy to grow its business by increasing market share within existing markets and segments, there are several pricing strategies applicable to assist the penetration strategy. The first pricing strategy is penetration pricing which set the price low in order to attract customers and gain market share. This pricing strategy could be used several of the products to attract more customers and make customers perceive great value because the pricing is close to the cost of the products. But the price will later be raised

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if the target market share is reached. Another pricing strategy is the loss leader by adopting which the Domino’s Pizza shops sell a particular product at cost or even below the cost to increase the sale of other products. This pricing strategy could be mix used with the promotion strategy because a seemingly extreme low price of a pizza could be very attracting to the customers and could easily be understood as and also associated with a kind of promotion.

In term of marketing objectives, the Domino’s Pizza Malaysia’s plan is to increase the number of the franchise stores from 63 to 120 in the next three years and increase the net profit by 120% and the customer awareness by 30.

Market Analysis

Domino’s is the #2 pizza company in the world and is recognized as the world’s leading pizza delivery company.

Their expertise and passion for delivering hot and fresh pizzas has earned them numerous awards and the loyalty of millions of pizza lovers around the world. 

Their marketing execution is an essential process in their success. Marketing is the management process which is responsible for indentifying potentially profitable products and then selling them to customers, this involves the 4Ps of Price, Product, Promotion and Place

In the past few years, Domino's has reinvented its brand by rolling out several successful marketingcampaigns and redesigning its pizza, helping to rake in $264.9 million in sales in its 2012 fiscal year.

The 2012 sales marked a 25.7 per cent increase over its 2011 fiscal year.

Total network sales increased by 7.9%

For the first time since FY 2006, both domestic and international revenues grown on a yearover year basis in FY 2011. Management believed some of those growth was a shorter effect generated by increased marketing and its revamped pizza product, but management also expected some of the growth to be sustaining.

Strong Network Same Store Sales growth of 6.5% was the result of innovative pizza promotions across both Australia/New Zealand and European markets. This growth was particularly significant given it is on top of the 11% Same Store Sales growth achieved in the previous full year.

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Gearing ratio

We administered a survey to determine consumer perceptions of a loyalty program. Behavioral and demographic data were collected. The total number of survey respondents was 221. For the purpose of comparison, we divided the groups into several subgroups as defined below.

There are certain limitations of our survey data that derive from our market research capabilities. Our sample is neither as large nor as random as we would have liked. We solicited survey responses by emailing friends and family, posting the survey on Facebook, and encouraging others to propagate this distribution. This population is not representative of the typical Domino’s market, which is much more diverse. More thorough market research should be conducted if Domino’s would like to gain more confidence in these results.

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LOYALTY GRAPH

Despite it’s ranking as #1 in pizza delivery in the U.S. and #2 in overall sales in the QSR pizza category, only 6% of survey respondents said they were most loyal to Domino’s pizza, placing it behind top competitors Pizza Hut and Papa John’s. The largest group of respondents, 42%, seemed to feel most loyalty towards local brands.

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WHY NOT DOMINO’S-

Despite it’s aggressive, “Oh Yes We Did” marketing campaign aimed toward rebranding Domino’s as a tasty, high quality pizza, survey respondents still rank “does not taste good” and “low quality” as the primary reasons they do not order Domino’s pizza. This suggests that even though Domino’s had positive results from their widely promoted recipe change, there is still a long way to go in convincing consumers that they are in fact making better pizza.

Some of the Domino’s pizza values are:-

(a) Treat people as you’d like to be treated.

(b) Produce the best for less

(c) Measure, manage and share what’s important.

(d) Think big and grow.

(e) Incentive what you want to change.

(f) Set the bar high, train, and never stop learning.

(g) Promote from within.

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COMPANY ANALYSIS

When asked how many more times per year they would order Domino’s pizza given several different loyalty program methods, the “status program” had the strongest increase overall. The average increase in order frequency per year was 2.07 per person.

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Interestingly, when we only looked at how the infrequent Domino’s consumers would respond to the loyalty programs, their average order frequency increase per year was 3.13, much higher than the overall average.

HOW ARE CONSUMER’S ORDERING!!!

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Frequent Domino’s consumers prefer to order online. Domino’s current online ordering system is fun and easy to use making the ordering process painless. This is a possible opportunity of Domino’s to maintain its status as an industry leader in the future as more and more pizza orders begin to be placed online.

COST BENEFIT ANALYSIS

COST 1,177.10

BENEFITS 501.34

ONGOING EXPENSES 219.01

INVESTMENT(SHORT N LONG TERM) 51.70

TOTAL COST 1177.10+219.01+51.70=1447.81

NET BENEFIT 501.34-219.01-51.70=230.63

Environmental Analysis - Global Business Environment

Domino’s business comprises of three segments - domestic stores, domestic supply chain and international. In this section we will analyze the business of Dominos in Indian market only and not take the international factors in consideration. Unemployment rate, layoffs, recession, interest rates are some of the major factors in India that have influenced the sales of Dominos pizza in the country.

High unemployment rates in India during the great recession of 2009 affected the sales of Dominos pizza in the country adversely. Number of sales per month and salaries of the Dominos employees, both declined to a record low. The slow economic recovery caused many Indians to seek low -priced dining as a result of which sales at McDonalds increased by 5%. However the situation was not as worse for Dominos as it was for other restaurants. During recession, people switched from luxury restaurants to more casual dining. This eventually led to an increase in the number of sales for Dominos pizza also.

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In Million $

As the stocks hit a rock bottom in 2009, chain spent millions in a “brutally honest” advertising campaign that offered the money-back guarantee and embraced social media and e- commerce to engage consumers. That was a very new proposition (and too risky at that time) but it worked mainly because it was delivered in a marketplace where trust and willingness to purchase the pizza had evaporated.

In late December,Domino's announced its inspired new pizza Reinvented from the crust up,the new hand tossed pizza featured new sauce, cheese and garlic seasoned crust . The reformulation was one of the biggest moves in the company's 50year history, and was inspired by its toughest consumer critics. Dominos transparent approach to talking about this bold change garnered much attention from the media and public in general , with the press highlighting the company's open and honest treatment in its advertising.

Even in a period of recession, Dominos did not lose touch with its consumers and potential customers. Dominos launched a number of campaigns during that period , for instance, Mea Culpa campaign, which turned out to be a huge success. In this marketing campaign, Dominos was able to build a lot of equity with consumers by displaying the advertisements that showed transparency and candor. Dominos also offered tempting deals at a time when unemployment rate was very high. Pizza hut and Papa John, unable to bear heavy losses at such a time, lost a large set of consumers to Dominos. Dominos was later able to recover the monetary losses that were incurred at that time.

Political and legal

Restaurants including food chains and outlets like Dominos come under the Hospitality industry and are liable to follow the rules and regulations that exist for the hospitality industry. Economic liberalisation has given a new impetus to the Indian hospitality industry.

The raft of legislation governing the hospitality industry can be divided into three sections: The first governs the construction and commissioning of hotels, restaurants, guest houses and other establishments. The second governs the operation, maintenance and management of establishments, and the health and safety of occupants. The third set of rules governs taxation, employment and other contractual relationships. This includes laws on income tax, service tax, expenditure tax, excise duty, luxury tax, entertainment/ amusement tax, as well as laws on pension, gratuity and provident funds, and other employment laws.

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From a regulatory perspective, the hospitality industry can be split into six categories. Each category needs a specific set of approvals and must fulfill specific regulatory requirements. Dominos Pizza comes under category number 5 (restaurants, food chains, local and international and the outlets).

To enter into the Indian market, Domino’s took the franchise route. Domino’s pizza shares 50% of the pre-tax revenue generated by regional dough manufacturing and supply chain centers with its domestic franchisees who buys all of its food from Domino’s. As a result, Domino’s strengthens its relationships with its franchisees allowing its business to earn ongoing amounts of profits and earnings with reduced cost structure.

Apart from initial investment the royalty fees for Dominos Pizza franchise is 5.5% of Store's weekly Royalty Sales, 4% as advertising fund which is reduced for non traditional or transitional stores., 1.5% audit expenses, 1500$ for transfer, 1000$ for training per session. There are other charges like charges for Testing and Evaluation, Indemnification, Costs of Enforcement which vary place to place and under circumstances. 415$ per year after one year is the charges for Annual Software Enhancement Fee. For Dominos Cost of equity is 9.73% (risk free rate 3.14% and risk premium 6.19%) , Cost of debt is 4.01 % (with marginal tax rate of 36.42%). In India however the Royalty and charges mentioned in dollar may vary.

DemographicsTalking about India, Domino’s pizza India inc. ltd. started its operations in 1996 by opening its first store in India in the capital city. Dominos gradually established a presence in India ,currently running 576 pizza outlets in 123 cities (as per the data on 31st March 2013). The master franchises of Dominos in India are currently owned by the Indian company Jubilant Foodworks.

So far Dominos has flourished in India and has seen 21% same store sales growth compounded annually over the last 5 years. As a matter of fact, same store sales growth rose to only 6.8 % globally in the international market as a whole in 2011 . Dominos says it has potential to open 1000 outlets in India.

It is estimated that 75% of Indian population is vegetarian so Pizza suits India’s cultural aspects too. Dominos is scrupulous about keeping “veg” from “non-veg” in its kitchen and invites people in to see the separate areas. There are even pizza options for India’s

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7 million Jains, followers of a religion that prohibits eating garlic or onions. And stores in heavily Muslim areas don’t offer pepperoni.

Environmental Analysis: Local Business Environment

Suppliers: Indian operations of Dominos are ranked number one for the past three years. Dominos delivers an average of one million pizzas per days and over the last two years they have opened stores in 15 new cities. The domestic supply chain of Dominos consists of vertically integrated supply system. Automatic delivery of raw materials cuts out lots of “back of store” activities and helps in keeping down the food costs. Raw materials like wheat, baby corn, tomatoes and spices are got and then sent to the commissaries (Delhi,Bangalore,Mumbai, Kolkata) in refrigerated trucks.

Wheat is bought from Jalandhar (Punjab), cheese from Karnal (Haryana), tomatoes from Bhubaneshwar (Orissa), Spices from South India, Baby corn from Nepal, Exotic vegetables from Sri Lanka, Pepperoni from Australia and Jalapeno from Spain.

Social/Cultural: Though there is no particular target group of dominos pizza, Dominos generally tries to open its outlets in the heavily populated areas or nearby the colleges. Dominos also started the Pizza Societies in colleges for the promotion purposes and to attract more customers from the colleges. Dominos has recently also focused majorly on the middle class population of the country and has released many offers and products that are easily affordable even by the low to medium income groups. Pizza combo in 44 Rs. is one such offer being floated recently and Veg singles combo in just Rs. 200 for four people has been a huge success earlier.

CompetitionDomino’s main competitor is Pizza hut but main focus of Pizza hut has always been providing the ambience at dine in stores rather than delivery of pizza. Therefore its mission is somewhat different from that of Domino’s. Dominos pizza has leveraged the four C’s or consumers viewpoints in every new product and promotion. It has emerged as a leader in pizza delivery by providing the best pizza at relatively low prices and in relatively less time. Quick home delivery service provided by Dominos has been a major contributing factor to its enormous growth. 30 min Pizza delivery feature of Dominos has been a huge success all over India. Dominos has also been renovating its takeout storefronts to add eat in tables and now does 40% of its businesses in some locations

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that way. Dominos is the 14th largest QSR (Quick Service Restaurant) by U.S. Revenue, and it is #1 in the pizza category.

Consumer Analysis

Domino’s target market segmentation is the consumer who is looking for inexpensive pizza quickly. Customers are very price sensitive; higher prices have historically led to decreased sales. Domino’s main focus is on delivery and carryout customers instead of dine-in stores. Demographically, Dominos appears not to have a specific target. Instead, it seems that Dominos targets markets with the greatest number of people. It follows that Dominos has sought to become a leader in online pizza orders, so it can reach the greatest number of consumers possible while also improving its ability to meet customer demand.

Dominos has emerged as a leader in pizza delivery by providing the best pizza at relatively low prices and in relatively less time. Quick home delivery service provided by Dominos has been a major contributing factor to its enormous growth. 30 min Pizza delivery feature of Dominos has been a huge success all over India.

Besides focusing on providing the best quality pizza at affordable prices, Dominos has also focused on providing agreeable after-sales services. They re-deliver the pizza if for some reason the consumer is not satisfied by the services. Their likable after sales services are a part of their innovative marketing moves. There have been instances when dominos has gone beyond anyone’s expectations in order to please its customers. In 1993, a woman was injured when a Domino’s delivery driver ran a red light and collided with her vehicle, the woman was awarded 15 million dollars by Dominos.

Domino’s approach to selling its services to the customers in the minimum time has also been very innovative. Dominos uses geographic information software to locate its stores in optimal locations. The majority of domestic stores are located in and around highly populated large or mid-sized cities or near college campuses. In FY 2009, Domino’s posted a 92% on-time delivery rate and had an average time of 12-15 minutes for pizza order-taking and production. In the past,besides the 30-minute delivery guarantee Dominos also marketed its use of the HeatWave insulated delivery bag to keep delivered pizzas hot.

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Dominos implements creative strategies to attract the new customers. It effectively markets its services by reaching its potential customers through television, internet (Social networks), games, sponsorships, charity and other such means. Offers like “buy one get one free” attract the attention of even those who have not bought Domino’s pizza before. Floating free coupons on the recharge websites has also proved to be a very effective marketing move. Customers also love the coupon codes that Dominos sends along with the pizza.

From time to time, Dominos brings in something out of the box and surprises its customers. Pizza Tracker has been one such service, using which customers can track their pizza online while they wait for it to arrive at their doorstep.

Dominos achieved significant online orders through its website, successfully reaching that growing segment of the market. It has also been able to effectively reach the customers with no internet connection/knowledge by providing the option of ordering the pizza via phone. Today, Dominos has positioned itself well to reach the customers who value quick service pizza.

SWOT ANALYSIS

Strengths :Domino’s Pizza Inc. currently operates in more than 60 countries across the globe. It owns a well-knitted network of both company owned as well as franchise stores worldwide. It is one of the leading and most popular pizza delivery companies in the USA. The 8773 global outlets are spread across all the USA’s states and the 60 countries of the world. Currently about 10,500 people are employed at the Domino’s Pizza Inc.

The Domino’s Pizza Inc. reported an increase of 0.6 % in its operating profits during the fiscal year 2008 a compared to the previous year. The operating profit has been $195 million during 2008. An increase of 42.5% in net profit has been reported during the year 2008 over the previous year. The net profits during the fiscal year 2008 were worth $54 million.

Domino’s Pizza Inc. strong brand equity gives it a competitive advantage over other industry players. The intelligent marketing strategy of heavy advertising is a key

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strength to make its brand image retained and differentiated in the minds of its customers

Domino’s Pizza Inc. efficient and effective supply chain management enables it maintain its goodwill and promises. Its extensive distribution channels add to its plus points. In the global era of e-commerce and online shopping it has enabled to keep pace with the technology by offering online menus, click order placement services etc. it has been reported that in UK, 21.8% of the domino’s pizzas have been delivered through online orders placed .

Weaknesses :

A major weakness for Domino’s is that they have experienced a decline in their store sales. Over the past two years the revenues have declined and this can affect their brand image and their profits. Part of these losses was due to the decline in the number of domestic franchises that were open in 2008. Domino’s hopes to turn these numbers back around in the next couple years.

(a) High fat and high calorie food not good for health conscious people.(b) High staff turnover due to lack of training and development.(c) Menu not elaborated and modified as compared to other chains (d) Weakening bottom line (e) Its ambiance is not upto its competitors

Opportunities :

(a) Improve efficiency and home delivery service.(b) Introduction of new flavor additives and pizza toppings that are region specific

can be a good stride for Domino’s.(c) The distribution network should be further strengthened so as to ensure market

penetration in the existing markets at maximum optimum levels.(d) Growing presence in emerging markets, particularly in India, China.

Threats :

(a) The major threat to Domino’s Pizza Inc., like all other fast food restaurants, is the increasing consumer awareness about the he harmful health implications associated with high calorie fast food items. The researches in the health sector about the fast food products being saturated with fats, oil, sugars and sodium etc pose a threat to Domino’s.

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(b) In addition to this there are other researches showing the potential harmful effects associated with the artificial additives, flavors and preservatives added to these fast foods

(c) Intensive competition and franchise management which vary with currency fluctuations pose a threat to the company.

(d) Domino’s operations in countries like India, where there is unruly traffic system, are greatly affected to reach its claim.

(e) There are constantly new businesses being formed in the pizza and fast food industries. Some of their emerging competitors are Pizza Hut, Papa John’s, and McDonalds.

(f) A final threat is the increase of labor and food prices. Minimum wage has a major impact on their business. All of Domino’s supplies have also increased in price and this has hurt their profits by increasing their operating costs.

Marketing Focus

What it is : Domino's Pizza is an American restaurant chain and international franchise pizza delivery corporation headquartered at the Domino Farms Office. It mainly serves home delivery of Pizza, with a promise of delivery within a certain time limit.

Who will buy: Family , students

Reasons for consumer demand ( reasons of differences with competitors)

(a) Varity of Pizza’s (b) Good ambience(c ) Services offered

(d) Quality of pizza (e) Location of the Outlet (f) Waiting time in the outlet (g) Door step services (h) New ideas / approaches : ‘You Got 30 Minute’ campaign

How it leads :

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(a) Better communication with customers.

(b) attractive offers

(c ) Compensation if the customer is not satisfied

(d) Taking feedback, revising its taste periodically

There forty per cent of business comes over the internet.Dominos has built up a terrifically valuable database of location-specific customers – a mine of information that can be used to great effect when promoting special offers, new products and reinforcing brand awareness. Put simply, Dominos knows where you live and the ever-expanding size of their customer database has great commercial value.

Location : Franchised stores open at the main marketplaces in cities, Mobile services offered to customers far away from stores, taking orders on phone, internet.

Product’s appeal to customer : with its regular enhancements in intangible offerings to the customers, it has a firm hold on its market. Some special features are :

(a) Introduction of real time tracker on internet

(b) Compensation for any drawback in services

(c) regular enhancements in technology for better taste and service

(d) product diversification and customization (e) regular new offers to customers

Customers’ responses to its technological advancements :

I will have to admit, I haven’t had a Domino’s pizza since I was in college.  Last night we were looking to get some dinner and my wife was checking out the Domino’s website.  She was impressed with all of the different offerings that were now available ranging from pizza of course to sandwiches, pasta, wings, bread bowls, etc.  We have both seen the new commercials in regards to them changing the recipe and basically starting over from scratch – thank you.  That is one reason I haven’t had a Domino’s in such a very long time, I just wasn’t impressed with their pizza.

The other neat thing was that below the tracker messages were being displayed so that we could see who was prepping our order, who was delivering it – along with when they left, and at the end (displayed in picture above) that ‘MMM, IT’S THERE – We hope

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you’re enjoying your meal!’.  Very cool and it was neat to watch.  We were amazed at how quickly the turnaround was and couldn’t believe the service.

Not only was the real-time Domino’s Tracker tool impressive, but I will have to say I am now onboard with the new recipe – great decision to dump and start over.  The new pizza formula was fantastic and so was the cheesy bread and cinna stix.  I would definitely have to give Domino’s five out of five stars for not only the food, but also the experience.  Very impressed and love the tracker feature

PROMOTION :

Domino’s Pizza said a combination of new digital-marketing technologies and social media, coupled with consistent menu pricing strategies, will help maintain the sales momentum the pizza chain has enjoyed over the past two years. However, they also underscored the importance of marketing innovation over that time.

*A mobile-optimized website for online ordering, new audible formats for the chain’s popular Pizza Tracker, smart-phone and table apps for ordering.

*Television advertising remains the drug of choice for most fast-food businesses although Dominos has also joined the flood of companies seeking to establish and build an effective social media presence through Facebook, Four Square and other social network sites.

*A case in point is that a Domino’s iPhone app already delivers 3-4% of online sales.

*Pizza Hero game for the iPad launched in November.

*The brand also has grown its Facebook and Twitter fan base by more than 400 percent in the past 12 months.

*Last year, Domino’s integrated social media into its national “Pizza Turnaround” advertising campaign, setting up the Times Square Tracker, which shares all tweets — positive and negative — customers write about Domino’s when they order online.

*Beginning in 2010, Domino’s also reformulated its required franchisee contribution to the national marketing fund. Instead of a 6-percent royalty — split between a 4-percent contribution to Domino’s for national ads and 2 percent required to be spent on local and co-op advertisements — the company required a 5.5-percent contribution that funded only national ads. Franchisees could continue to spend additional funds on local ads, but none was required to do so.

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* Domino’s didn’t consider changing its $5.99 price point for national promotions, they believed that the brand could advertise its brand attributes better by keeping its prices consistent.

*Dominos is also targeting core groups of consumers. They have sponsored the setting up of Pizza Societies at numerous universities in the UK (how long before the idea takes root in schools?). And this is a business fully aware of the importance of changing demographics. Pizza eating is less popular among people aged 55 and over, but younger generations have become used to the Dominos model and as this group ages, the commercial opportunities are sizeable.

Marketing Focus on Product Upgrades :

According to the company’s official, for the near future Domino’s will continue to focus its advertising on new products aligned with the corporate goal of continually improving its offerings, as reflected in current commercials for the chain’s new Stuffed Cheesy Bread.

They would keep the emphasis on the brand and its products, rather than fall back on marketing tie-ins, because they considered that “borrowing equity” from some other brand and not emphasizing Domino’s strengths.

PRICE :

*Price discrimination has been successful for the business. The Two for Tuesday promotion has been so effective that Dominos now sells as much pizza on a Tuesday (traditionally the quietest night of the week) as it does on a Saturday.

*Price discounting mid week help to smooth the pronounced ups and downs of daily sales during a normal week.  Two for Tuesday generates extra revenue and grows volumes – all helpful to franchisees with large fixed overhead costs.

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Financial Information

If Dominos follows current Marketing Strategy ,the company is expected to grow by 25% provided consumer characteristics ,environmental and competition remains fairly constant.Since The company’s most of the business comes from the delivery of the Pizza,it can concentrate on opening new outlets specifically to cater for Pizza delivery.

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Dominos Expected Growth

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Position Analysis

(a) Domino’s has positioned itself well to reach the customer who values quick-service pizza. Domino’s uses geographic information software to locate its stores in optimal locations.

(b) The majority of domestic stores are located in and around highly populated large or mid-sized cities or near college campuses.

(c) Domino’s created the 30-minute delivery guarantee and also marketed its use of the HeatWave insulated delivery bag to keep delivered pizzas hot.

(d) Domino’s has achieved significant online orders through its website, successfully reaching that growing segment of the market.

(e) Domino’s revamped pizza has been very successful and has generated significant sales growth since being introduced.

Advertising Examples and Other Promotional Materials

Domino's Pizza is the recognized world leader in pizza delivery operating a network of company-owned and franchise-owned stores in the United States and international markets. Domino's Pizza's Vision illustrates a company of exceptional people on a mission to be the best pizza delivery company in the world. The following promotional schemes were used in India in 2013:-

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(a) Get Rs100 Off on order of Rs400. Offer valid for a limited period of time. Coupon code is required.

(b) Get dip free on purchase of garlic bread on Dominos. Offer valid for a limited period of time. Coupon code is required.

(c) Get deal 50% off on Second pizza after apply the code on Dominos. Offer valid for a limited period of time. Use coupon to get the offer.

(d) Get flat 25% off on Rs.350 after apply the code at Dominos. Offer valid for a limited period of time. Coupon code is required.

(e) Get Free choco lava cake on a minimum bill of Rs. 350. Valid for online order only.

(f) Get Free garlic bread on minimum Order of Rs. 400. Offer valid on all pizzas

(g) Get 50% discount on the second pizza. Not valid on simply veg and simply n-veg pizzas. Valid for online order only.

(h) Get 30% off on minimum order of Rs. 350. Valid for online order only.

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Demographics, Consumer Statistics and Budgets

Dominos most of the units are located in USA and is expanding in other countries with specific focus on developing economies.

Dominos Pizza in the Society

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Dominos Expenditures

A Typical Dominos Menu Card

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REFERENCES

1. Dominos Pizza Annual report 2012

2. Personal sources

3. Internet

4. Personal Experience

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