A study on Direct marketing with special reference to Domino’s and its Direct Marketing Strategies to success.

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International Journal of Research and Development - A Management Review (IJRDMR)

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ISSN (Print): 2319–5479, Volume-6, Issue–1, 2017 51

A study on Direct marketing with special reference to Domino’s and its Direct Marketing Strategies to success.

Ms. Vikashita Mohanty & Ankita Amat, Gandhi Institute for Technology ABSTRACT: Domino’s is now a common household

name and is a favorite brand of all age group may it be kids, youths or adults. It has reached to this position by invariably engaging in various innovative direct marketing strategies. Domino’s has proved time and again that a strong promotional strategy and innovative marketing strategies can sway the market share into their kitty. Other factors being there this paper aims to study the direct marketing strategies of Domino’s. Domino’s has come up with various strategies of innovative marketing and most importantly they have achieved this by being honest and timely in their dealings. In this paper we shall review the various marketing strategies of Domino’s in details and would try to deduce the critical factor that leads to the success story of Domino’s all over the world. This paper is based on secondary data analysis. The paper has accessed data from the various articles, magazines on Domino’s. The official website of Domino’s is also accessed from time to time to check the updating frequency of the website and also the content on the website. Thus, the paper intends to throw light on the various direct marketing measures that are responsible for the success of Domino’s.

INTRODUCTION

Domino’s Pizza, Inc., now branded simply as Domino's, is an American pizza restaurant chain founded in 1960. The corporation is headquartered at the Domino's Farms Office Park in Ann Arbor, Michigan On December 9, 1960, Tom Monaghan and his brother, James, took over the operation of Dominick’s, an existing location of a small pizza restaurant chain that had been owned by Dominick DiVarti, at 507 Cross Street (now 301 West Cross Street) in Ypsilanti, Michigan near Eastern Michigan University. The deal was secured by a $500 down payment, and the brothers borrowed $900 to pay for the store. The brothers planned to split the work hours evenly, but James did not want to quit his job as a full-time postman to keep up with the demands of the new business. Within eight months, James traded his half of the business to Tom for the Volkswagen Beetle they used for pizza deliveries.

By 1965, Tom Monaghan had purchased two additional pizzerias; he now had a total of three locations in the

same county. Monaghan wanted the stores to share the same branding, but the original owner forbade him from using the DomiNick's name. One day, an employee, Jim Kennedy, returned from a pizza delivery and suggested the name "Domino's"Monaghan immediately loved the idea and officially renamed the business Domino's Pizza, Inc. in 1965.

The company logo originally had three dots, representing the three stores in 1965.Monaghan planned to add a new dot with the addition of every new store, but this idea quickly faded, as Domino's experienced rapid growth. Domino’s Pizza opened its first franchise location in 1967 and by 1978, the company expanded to 200 stores.In 1975, Domino's faced a lawsuit by Amstar Corporation, the maker of Domino Sugar, alleging trademark infringement and unfair competition. On May 2, 1980, the Fifth Circuit Court of Appeals in New Orleans found in favor of Domino's Pizza.

On May 12, 1983, Domino's opened its first international store, in Winnipeg, Manitoba, Canada. That same year, Domino's opened its 100th store, its first in Vancouver, Washington. In 1985, the chain opened their first store in the United Kingdom in Luton. Also, in 1985, Domino's opened their first store in Tokyo, Japan. In 1993, they became the second American franchise to open in the Dominican Republic and the first one to open in Haiti, under the direction of entrepreneur Luis de Jesús Rodríguez. By 1995, Domino's had expanded to 1,000 international locations. In 1997, Domino's opened its 1,500th international location, opening seven stores in one day across five continents. In 2004, after 44 years as a privately held company, Domino's began trading common stock on the New York Stock Exchange under the ticker symbol "DPZ".Industry trade publication Pizza Today magazine named Domino's Pizza "Chain of the Year" in 2003, 2010, and 2011. In a simultaneous celebration in January 2006, Domino's opened its 5,000th U.S. store in Huntley, Illinois, and its 3,000th international store in Panama City, Panama, making 8,000 total stores for the system. In August 2006, the Domino's location in Tallaght, Dublin, Ireland, became the first store in Domino's history to hit a turnover of $3 million (€2.35 million) per year. As of

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September 2006, Domino's has 8,200+ stores worldwide, which totaled $1.4 billion in gross income.

By 2014, the company had grown to 6,000 international locations and was planning to expand to pizza's birthplace, Italy; this was achieved on October 5, 2015, in Milan, with their first Italian location. CEO Patrick Doyle, in May 2014, said the company would concentrate on its delivery model there.

In February 2016, Domino's opened its 1,000th store in India.

INNOVATIONS

In 2007, Domino's introduced its Veterans Delivering the Dream franchising program and also rolled out its online and mobile ordering sites. In 2008, Domino's introduced the Pizza Tracker, an online application that allows customers to view the status of their order in a real time progress bar. The first Domino's with a dining room opened in Stephenville, Texas, giving the customers the option to either eat in or take their pizza home. Since 2005, the voice of Domino's Pizza's US phone ordering service has been Kevin Railsback.

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-critical ad campaign in which consumers were filmed criticizing the then-current pizza's quality and chefs were shown developing a new pizza. The new pizza was unveiled that same month. The following year, 2010 and Domino's 50th anniversary, the company hired J. Patrick Doyle as its new CEO and experienced a 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.

In 2011, Domino’s launched billboard advertising in New York's Times Square which displayed real time comments from customers, including good, neutral and bad comments.

In 2015, Domino's unveiled a "pizza car" that can carry 80 pizzas, sides, 2-liter bottles of soda, and dipping sauces. It also has a 140-degree oven on board and is more fuel efficient than a standard delivery car.

Officially named the Domino's DXP, the car is a Chevrolet Spark customized by Roush Performance.

Once each car reaches 100,000 miles, it will be retired and returned to Roush, where it will be returned to stock form.

Domino's Pizza improved same-store sales growth by 9.9% in 2010 compared with 0.5% in 2009 with the launch of the pizza delivery company's “Oh Yes We Did” marketing campaign, said Russell Weiner, CMO of Domino's. The brand also received top honors in a consumer survey detailing the US's best-tasting pizza, Weiner said.

Domino's launched several TV ads and long-form commercials in 2010, depicting the company's recipe reinvention, which began in 2008 after Domino's placed sixth in a best-tasting pizza survey, explained Weiner at the Direct Marketing Association's All For One Event on June 21.

Prior to the marketing campaign, the brand spent two years creating a new pizza recipe by testing “scores and scores” of different combinations of cheeses, crusts, dough’s and sauces, he said.

Once the company decided on the a new recipe, it brought in advertising agency Crispin Porter &

Bogusky (CP&B) to help bring the new pie to market.

Weiner said CP&B began a process to merge Domino's brand tension with the cultural tension surrounding the recession.

“This was 2009,” he explained. “Politicians were lying.

Banks were going out of business. Consumers wanted someone to be honest and tell them the truth.”

The campaign features several different commercials that each highlights one stage of the company's recipe transformation.

The original spot depicts actual Domino's employees candidly discussing problems with the brand's original recipe. “This sauce tastes like ketchup,” says one employee. “This is void of flavor,” says another.

Regarding the new recipe, an employee states, “We're so proud of this pizza, we want everybody to try it.”

Tony Calcao, VP and group creative director of CP&B, said the agency and Domino's both agreed the campaign should not end with a spot that served only as an introduction to the new recipe.

“We had to prove we were listening and transparent,”

said Calcao. “When you went to the Domino's website, you saw a long form documentary, a four-minute piece that went more in-depth about the new pizza. We also had a real-time Twitter feed for what was going on. The only moderation we did was for profanity.”

The long-form commercial depicted four different consumers that had been critical of the old recipe in focus groups. Each of the consumers is brought a slice of the new pizza by Domino's head chef. The commercial documents their responses as they take their first bites.

The second step of the campaign featured a commercial urging consumer to send in photography of Domino's pizza via Facebook and Twitter. The company posted glamorous and unflattering portraits of its pies.

Consumers whose shots were selected were given cash prizes.

Domino's turned the photos into a third spot featuring Domino's CEO Patrick Doyle. In the spot, Doyle holds up unflattering photos and says, “We aren't going to deliver pizzas like this anymore.”

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The fifth stage of the campaign featured a spot in which consumers are secretly brought to the farms where Domino's ingredients are grown. The consumers unknowingly sit in a fake focus group room when the room's walls are lifted up and the consumers are revealed to be in a farm.

Domino's recently launched a new, similar campaign detailing the transformation of its chicken recipes.

Consumers are asked to tweet or post to Facebook, detailing their approval or disapproval of Domino's chicken. In the spot, Domino's chicken chef says,

“Imagine if your boss had your performance rated in front of the entire country.”

“Through all the ads our price point didn't change,”

Weiner said. “We kept the offer and continue to have it out. We know we have a good offer. By keeping it the same, we can spend the time in the ads talking about our brand. If your ads are always about the new price, you can't talk about the brand.”

When asked if he faced any internal backlash by launching such a controversial campaign, Weiner said,

“The Art of War says if you're fighting on an island, the best thing to do is blow up the bridge so your troops can't retreat, and they'll fight to the death. We blew up the bridge.”

Innovations at Domino’s – Reason for its success Honest marketing – While others stave off a direct confrontation with negative customer reviews, Domino’s wants to leverage on open communication and transparency. A couple of years ago, the chain took a bold approach to its traditional billboard advertising by posting ALL real-time customer reviews that directly came from its tracker app on a Times Square billboard.

By ‘all’, I mean ALL comments including good, bad and those in-between. It was a sort of tipping point for the brand as it had previously focused its marketing effort around ‘public self-improvement initiative’.

Was it a gamble? Yes. Was it powerful? Hell, YES.

It is perhaps the lesson learned from its own bitter experience back in 2009 when a video of Domino’s employees ‘abusing’ customers’ food became sensationally viral. Since then, Domino’s has embedded transparency in its core marketing and communication strategy. The campaign was quite a success as sales increased by double-digits in a year time.

Simultaneously, it has also vowed to employ un- retouched pictures of its pizzas for its ads.

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 then-CEO Tom 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 half an hour.

The company continues to offer the 30-minute guarantee for orders placed in its stores situated in Colombia, Vietnam, Mexico, China, and Turkey.

In Malaysia and Singapore, a refund is instead substituted with a "Free Regular Pizza Voucher".In India, the guarantee is for 300 ($5) and is valid for an order of less than four pizzas.

The Easy Order – As if Emoji tweet and app are not enough, Domino’s ‘Easy Order’ campaign from last year let you order a pizza to your doorstep only at a single push of a button. Available to a few selected customers, the physical button was synced with the app that has your address, payment and your order details using Bluetooth. Just when we thought it couldn’t possibly get any easier.

CONCLUSION

The study showed that Domino’s and its innovative strategies undoubtedly had a cutting edge over others and its simple yet unique strategies were pivotal in taking Domino’s to the pinnacle of success.

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