Marketing Intelligence - Domino's Pizza


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The wide range of product diversity in our world has resulted in a cluster of options and opportunities from which customers can choose. In order to be perceived by consumers, companies have to apply various marketing concepts and ideas to distinguish themselves from their competitors. Marketing Intelligence can be understood as a way of gathering and analyzing relevant information as far as a company’s decision making and market opportunities are concerned. It determines the intelligence needed, collects it by scanning the environment and delivers it to marketing managers who need the information. These evidences are necessary for shaping a company’s strategies and decisions. The aim of this project is to examine a variety of strategic Marketing Intelligence concepts employed by the world’s largest pizza chain Domino’s Pizza with specific emphasis being attributed to its Sales strategies.

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Marketing Intelligence - Domino's Pizza

  1. 1. EGE UNIVERSITY FACULTY OF ECONOMICS AND ADMINISTRATIVE SCIENCES Sales Management Term Project Proposal Asst. Prof. Dr. İpek Kazancoglu Presented by: Gamze Saba 13080002866 Barış İştipliler 13080002898 Ana García ERASMUS Std. TOPIC: Marketing Intelligence for Sales Management, Domino's Pizza Case Study
  2. 2. 2 TABLE OF CONTENTS Page Nr INTRODUCTION 3 PART 1: LITERATURE REVIEW 3 1.1 What is Marketing Intelligence? 3 1.2 What are the differences between Marketing and Sales? 4 1.3 Integrating Marketing and Sales 5 PART 2: FIELD RESEARCH 6 2.1 Practical Insights: Domino’s Pizza 6 2.2 Analysis of the Evidences 10 PART 3: CONCLUSION 15 SOURCES 16
  3. 3. 3 INTRODUCTION The wide range of product diversity in our world has resulted in a cluster of options and opportunities from which customers can choose. In order to be perceived by consumers, companies have to apply various marketing concepts and ideas to distinguish themselves from their competitors. Marketing Intelligence can be understood as a way of gathering and analyzing relevant information as far as a company’s decision making and market opportunities are concerned. It determines the intelligence needed, collects it by scanning the environment and delivers it to marketing managers who need the information. These evidences are necessary for shaping a company’s strategies and decisions. The aim of this project is to examine a variety of strategic Marketing Intelligence concepts employed by the world’s largest pizza chain Domino’s Pizza with specific emphasis being attributed to its Sales strategies.
  4. 4. 4 PART 1: LITERATURE REVIEW 1.1 What is Marketing Intelligence? Market Intelligence is one of the popular intelligences in business. Cornish, S. L. (1997) defined marketing intelligence as “the process of acquiring and analyzing information in order to understand the market (both existing and potential customers); to determine the current and future needs and preferences, attitudes and behaviour of the market; and to assess changes in the business environment that may affect the size and nature of the market in the future”. Marketing and sales effectiveness is especially applied in manufacturing, technology, insurance, and financial markets. It contains all activities to create demand, such as lead generation and marketing communications. “Marketing Intelligence’s main use is to identify successful new product developments early in the process to create company growth and maximize revenues by finding a balance between costs and prices of products” (Cornish, S. L. a, 1997). Especially software companies focusing on it become successful players in the market. 1.2 What are the differences between Marketing and Sales? Marketing and Sales are both activities aimed at increasing revenue and productivity. Strategic business and sales channel alignment are also required for optimum success. They are working together so closely that people generally do not realize the difference between Marketing and Sales. In small organizations, also with the effect of cost restrictions, the same people typically perform both sales and marketing tasks. Still, marketing is different from sales and as the organization grows, the roles and responsibilities become more specialized among the two.
  5. 5. 5 Marketing contains the measures used to reach and persuade a firm’s prospects that are suitable for the company. It consists of brand marketing, advertising, viral marketing, public relations, and direct mail. On the other hand, the sales process contains interpersonal interaction. It is usually done by a one-on-one meeting, cold calls and networking. It concerns the prospect or customer on the personal level rather than a general approach. When comparing both marketing and sales, the compotents of the two become visible. The seven most used activities and tools for collecting Marketing Intelligence data in product software industries are the following ones (Cornish, b, 1997):  Product testing  Industry intelligence  Sales/service  Trade shows  Channels  Qualitative methods (small “focus groups” and personal interview)  Aggregate data Table 1: Cornish, S.L., b, “Strategies for the acquisition of market intelligences and implications for the transferability of information inputs.”
  6. 6. 6 These strategies can also be applied in other sectors such as Fast Moving Consumer Goods (FMCG), automotive, electronics, home furniture and so on. Marketing efforts start with the process of the eight contacts that studies demonstrate it takes to go through a prospect or potential client to the close of the sale. When marketing is planned successfully you can begin to move that prospect from a cold to a warm lead. When the prospect hits the "warm" level it becomes much easier for the sales professional to close the sale. 1.3 Integrating Marketing and Sales Based on the literature review, Dewsnap and Jobber (2000) propose that marketing and sales integration in consumer packaged-goods companies has a positive effect on brand- related and trade-related measures of business performance. It does not matter what side you are on, the truth is that both departments need one another. Marketers can help the sales department when it understands what it is they need to be successful. A sales person goes through several phases in order to court a prospect into a client or customer. If thoses phases are understood, marketing gets better at creating marketing materials that will work for them, both in efficiency and effectiveness. Rouziès, Anderson and others (2005) stressed the importance of sales’ and marketing’s integration by stating that “clearly, coordinating the sales and marketing functions can improve the effectiveness of activities undertaken by the functional areas.” In order to obtain a competitive advantage in a highly competitive environment, some important actions should be taken. For example, one could begin by dividing the prospect lists according to segmentation of the marketing department and database them into categories of cold, warm, and hot leads according to suitable action. Afterwards special strategies can be created on how to proceed with each individual group. Kotler, Rackham and others (2006) empasized that if the organization does not align incentives carefully, marketing and sales groups also run into conflicts about seemingly simple things, for instance, which products to focus on selling. A company’s Cold Lead Strategy may consist of sending direct mailing or approaching them with a special promotion whereas its Warm Lead Strategy may consist of attempting a
  7. 7. 7 follow-up call, sending out letters or scheduling a special seminar or training session to get all of the warm leads together.
  8. 8. 8 PART 2: FIELD RESEARCH 2.1 Practical Insights: Domino’s Pizza In the framework of this paper we conducted an interview with Mr. Tekin Eroğlu, the Regional Manager of Domino’s Pizza in the Bornova area in İzmir, Turkey. Domino’s Pizza, founded in 1960 in the USA, is the world’s largest pizza chain with more than 10 000 company owned and franchised stores in 70 countries (cf. Domino’s International). It occupies a leading position in Turkey as well. Mr. Eroğlu is in charge of four of the chain’s franchises in the Bornova area and his main responsibilities include the management of Operations, the Supply Chain, Human Resources as well as Marketing. When it comes to the company’s goals and the criteria according to which they are defined and analyzed, he says that the organization has various missions such as daily sales quotas, sales volumes via call centers as well as online services such as the Turkish food ordering website The criteria employed for evaluating those criteria vary depending on the region the organization operates in and the customers served. Mr. Eroğlu mentions that in the Bornova region the online ( orders are higher than in other districts since this is a student residential area in which there is a higher tendency towards using the internet. Local Store Marketing (LSM) objectives are shaped by the company’s national campaigns. Generally, there should be a 3% increase in sales for each period. Our interviewee points out that the benchmarks and forecasts are defined according to the last day’s and last year’s sales as well as to the month’s specifications such as the season. Changes in the regional structure are said to be effective. Mr. Eroğlu mentions the example of a new Domino’s Pizza franchise having been opened in Osmangazi and that, contrary to expectations, the Özkanlar store’s sales increased by 22%. This can be related to the fact that the overall service quality and efficiency of Eroğlu’s franchises increased.
  9. 9. 9 In terms of competitive advantages when compared to rivals, Mr. Eroğlu points out the quality and the variety of his products. There are several types of dough varying in volume and taste (e.g. cheese). Domino’s Pizza is the only company of its kind serving sauces with its pizzas for free. Furthermore, they operate with the “open-kitchen” system which makes it possible for the customers to witness the preparation of their pizza. In terms of marketing, Turkey is one of Domino’s operating countries in which the “30-minute guarantee” is implemented. This means that if the customer does not receive his pizza within that time frame, he receives a voucher for a free regular pizza that he can redeem at his next order. Mr. Eroğlu summarizes his franchises’ strengths in as the “product-service- image” chain. We are also interested in finding out about the role of the internet when applying marketing strategies. Our interviewee tells us that especially throughout the last two years, his franchises have made effective use of the internet on both the national and regional base. He points out the example of this year’s “social pizza” campaign where customers can create their own pizzas online. This activity has had a considerable positive impact on the company’s sales volume with last month’s sales having risen by approximately 9% in April 2013. In the current month of May 2013, he estimates that sales will be affected by about 15% since there is a national campaign that has been launched with a highly aggressive price of 13.90TL. Afterwards, a rise of about 10% is expected by our interviewee. The marketing department tries to analyze the brand awareness on social media and other popular web sites such as eksisozluk and then tries to shape the company’s strategies according to their findings. When asked about the extent to which Local Store Marketing (LSM) activities are used to increase sales, Mr. Eroğlu tells us that they make use of social media tools such as FourSquare. Whenever a customer “checks-in” at one of their stores, he is given a portion of cinnamon bread for free. We learn that apart from the B2C sector, Domino’s Pizza also implements LSM strategies in the B2B sector, for example by sending out fax and SMS promotions to firms. As far as the company’s threats are concerned, our interviewee says that every change in image towards the USA or fast food can affect Domino’s Pizza’s sales. He mentions the example of Burger King and its 25% drop in sales caused by the alleged usage of horse
  10. 10. 10 meat. Social, political and health trends thus play an important role as far as a company’s image is concerned and may affect sales considerably. Mr. Eroğlu states that the market he operates in is a dynamic one and that he and his team should “be ready for all kinds of surprises”. As main competitors in the İzmir region he mentions Little Caesars, pizza pizza and Pasaport Pizza. The relationship between Mr. Eroğlu’s sales and marketing departments is characterized by close cooperation, also with other departments. There are monthly meetings organized by higher authority in which the executives of the operations, sales, marketing and finance departments come together to discuss their respective missions and objectives with management. The management then provides feedback and advice. As the local sales authorities, they also give them short briefings and hold presentations. In terms of the marketing data used by Mr. Eroğlu’s team it can be said that they do not have access to the national campaign’s data and strategies. But they are informed about the latest data and main points concerning nation-wide campaigns in form of briefings serving as a guideline to their own regional campaigns. When it comes to the regional LSM activities, Mr. Eroğlu’s team derives its own data through the implementation of their campaigns and by analyzing the achieved results and then taking decisions based on the obtained information. The campaigns should be implemented during certain seasons of the year, so the team uses its sources efficiently, for example by trying to define the right times to implement their campaigns. The positions of the rivals previously mentioned and the extent to which Domino’s Pizza reaches its sales volume goals are also relevant. The environment is so dynamic that the company cannot allow itself to wait for the perfect data to shape its local strategies. That is why, as a local store manager, Mr. Eroğlu has to take quick decisions and act in multiple unexpected ways e.g. by implementing Guerilla Marketing campaigns. As an example, he mentions that this month’s sales volume has somewhat stagnated. In response to this stagnation, his local Domino’s Pizza franchises have started to communicate with their local and national partners such as Turkcell, BEKO and Kipa in order to create new campaigns. He says that the result of these agreements to compensate stagnation will be perceptible within a few days from execution of our interview.
  11. 11. 11 The company program used for numerical data storage and analysis is called PULSE. This program has been specifically designed for the needs of Domino’s Pizza. Mr. Eroğlu explains its vast functionality and reporting possibilities. It provides the company with the required data for every variable, ranging from customers to streets, districts, cities, regions and nations. The information retrieved from this system can be used when creating instant events such as “Every large pizza for only 13.90TL for Özkanlar district customers for the duration of 3 hours”. The role of the local personnel in the sales process and the implementation of marketing strategies is not to be underestimated either. Even though the products are mostly sold in a vendor-based scheme, the store managers and employees may act as a mobile sales force achieving to close high volume sales through their networks in the neighbourhood. In some cases, such sales can be arranged by simply going to the doctor’s and learning that there will be a major event throughout the next following days. The sales force can then arrange an order of for example 100 pizzas for the next day. Store managers can furthermore decide to start fax or SMS campaigns by the morning, which shows the personnel’s degree of flexibility when it comes to implementing their own local campaigns and sales operations. Mr. Eroğlu stresses the point that the local work force is always aware of the company’s objectives. When these objectives are attained or when an employee performs particularly well, he or she is gratified in order to maintain a high level of motivation. Possible ways of remuneration include extra payments and social activities such as excursions, picnics or bowling. These means of gratification are meant to motivate employees and maintain the chain’s goal achievement. They also contribute to the maintenance of good relationships with the work force and create a friendly work environment as well as a healthy platform for feedback. 2.2 Analysis of the Evidences The interview with Mr. Eroğlu has provided us with an insight into Domino’s Pizza’s Marketing Intelligence procedures in the Bornova area. We have learned about how the stores he manages acquire and analyze information in order to understand the market, which is part of the definition we provided in the first part of this paper. A considerable part
  12. 12. 12 of information is acquired through online service pages such as which enable the company to obtain information about the location, frequency and consistency of orders placed, among other relevant data. The company program PULSE plays an important role in the storage and retrieval of the data acquired. Furthermore, we can say that both existing and potential customers are attracted according to their specific environments as the examples of the “social pizza” online campaign and the “check-in” cinnamon bread offer have shown. These offers are especially attractive for younger customers who make use of the internet and new technologies. These means of targeting are fitting for the Bornova area, which has a large student population. Current needs and preferences of customers can also be understood from interactive campaigns as the “social pizza” one previously described as it directly reflects what the customers are looking for and may also provide the company with ideas for future offers and campaigns. The company also directly obtains feedback about customer needs and preferences by making use of its team’s network as employees have the flexibility to arrange individual orders and offers to their contacts and acquaintances which best match their demands and expectations. Attitudes and behaviours of the market are versatile and highly depend on social, political and health trends as well as on the perception of the USA and fast food in general. We have learned that Domino’s Pizza needs to take quick decisions in order to keep their leading position in the market. Mr. Eroğlu said that whenever there is a need for compensating sales stagnations, the company may arrange promotions and special deals with their national and local partners. This is part of the assessment of changes in the business environment which is another considerable aspect of Marketing Intelligence. Since Marketing Intelligence contains all measures and activities aiming at creating demand, especially the company’s intensive marketing communications can be mentioned in this regard. Domino’s Pizza’s “product-service-image” chain is part of the company’s branding and its “30-minute guarantee” represents an additional attractive promise to the customer. The company is also active in the B2B sector where it markets customers through fax and SMS campaigns. New product developments such as different types of dough and consistency as well as an aggressive price promotion contribute to the brands continuous growth and revenue maximization, nevertheless finding a balance between the products costs and prices.
  13. 13. 13 The marketing and sales components described in the first part of this paper also become visible in our field research example. Through our interview, we have gained the impression that especially product testing, industry intelligence, sales and service, channels, qualitative methods and aggregate data are part of Domino’s Pizza’s tools for collecting Marketing Intelligence data. The “social pizza” activity can be perceived as a kind of product testing since it provides Domino’s Pizza with valuable insights into customer product expectations. The industry intelligence aspects are represented by the company’s business environment analysis and moves to react to changes and competitor strategies. Sales / service is a fundamental pillar of the company as reflected in the “product-service-image” chain expressed by our interviewee. In gastronomy the personal contact with the customer is indispensable and it will considerably shape the customer’s level of satisfaction and the company perception resulting from it. In the case of Domino’s Pizza, this sales force – customer relation is not only bound to the in-store experience but it also extends to the home delivery service as well as any encounter with the sales force throughout promotion or in personal life. The channels are the multiple ways through which the company reaches its existent and potential customers. Face-to-face encounters on the street through promotion, advertising on flyers or newspapers, online marketing and TV ads are part of these channels. The participation of customers in online campaigns such as the “social pizza” can be understood as a kind of qualitative method since it helps the company gather important customer information as it would also be the case in focus groups or personal interviews, with the difference that the customer here feels more anonymous since he is free to express his wishes from his computer where he feels unobserved and relaxed. All gathered information as well as aggregate data is collected and saved in the company program PULSE. The case at hand has also shown how closely marketing and sales cooperate in the daily operations of Domino’s Pizza. They do not only cooperate within each other but also with all other departments, which is shown by the monthly meetings and feedback rounds being organized by Mr. Eroğlu and his team. The integration of departments positively affects the brand success and overall performance of the company. The sales force needs to be informed about the ongoing marketing campaigns in order to appropriately serve the customer and Domino’s Pizza’s marketers depend on the sales force in order to gain first hand information concerning customer feedback, among other aspects. If both sides work
  14. 14. 14 together, as it is the case in our example, the overall efficiency and effectiveness of company processes will be increased. To reach such an important level of cooperation between departments, the implemented monthly meetings and briefings are of utmost importance. We can say that Domino’s Pizza pursues both cold lead and warm lead strategies in the forms of sending out faxes and SMS as well as the employees’ flexibility to create their own special promotions in some assigned districts as a cold lead strategy and providing the “30-minute guarantee” and organizing customer-based offers as warm lead strategies.
  15. 15. 15 PART 3: CONCLUSION In conclusion, as it can be understood through the paper and the case study of Domino's Pizza, there is a direct connection between the marketing intelligence and the sales management and this positive correlation between these two functions, forces the companies to take their actions in the way to dynamize their marketing intelligence to increase their sales management performance. Therefore, to create this dynamism and adding value, they try to show both local and national (and global) efforts at their best; from store personnel to region-wide management, from national strategies to global ones. Since the competition increases in nearly every market in which all of the barriers are being lowered, we think that the usage of marketing intelligence in the sales management will be one critical issue for the companies that want to survive in this environment and increase their market share to boost their operational effectiveness.
  16. 16. 16 SOURCES - Interview with Mr. Tekin Eroğlu, Regional Manager of Domino’s Pizza Bornova (İzmir, Turkey), May 10, 2013. - Cornish, S. L. (a), Product Innovation and the Spatial Dynamics of Market Intelligence: Does Proximity to Markets Matter?, Economic Geography, Vol. 73, Issue 2 (April 1997), pp: 143-165. - Cornish, S.L. (b), Strategies for the acquisition of market intelligences and implications for the transferability of information inputs, Annals of the Association of American Geographer, Vol. 87, Issue 3 (September 1997), pp: 451-470. - Dewsnap, Belinda and Jobber, David. The Sales–Marketing Interface in Consumer Packaged-Goods Companies: A Conceptual Framework, Journal of Personal Selling & Sales Management, 20, 2 (Spring 2000), pp. 109–119. - Domino’s IP Holder LLC, Find a Domino’s – International, 2008,, online on May 10, 2013. - Glance, Natalie et al., Deriving Marketing Intelligence from Online Discussion, Proceedings of the eleventh ACM SIGKDD International Conference on Knowledge Discovery in Data Mining, ACM, 2005. - Jenster, Per V. and Soilen, Klaus Solberg. Market Intelligence – Building Strategic Insight, Copenhagen Business School Press, 2009. - Kotler, P., Rackham, N., & Krishnaswamy, S. (n.d.). Ending the war between Sales & Marketing. Harvard Business Review, 84(7-8), 68–78, 187, online on March 7, 2013: - Lewis, Barbara R. and Mitchell, Vincent W.; Defining and Measuring the Quality of Customer Service, Marketing Intelligence & Planning, Vol. 8 Issue 6, 1990, pp. 11 – 17. - Prescott, John and others, Proven Strategies in Competitive Intelligence, Wiley, 2001. - Rouziès, D., Anderson, E. et al. Sales And Marketing Integration : A Proposed Framework, The Journal of Personal Selling and Sales Management, Vol. 16, No. 1 (Winter, 1996), pp. 1-20, published by M.E. Sharpe, Inc., online on March 7, 2013: - Trim, Peter R.J., The strategic corporate intelligence and transformational marketing model, Marketing Intelligence & Planning, Vol. 22, No. 2, 2004, pp. 240-256, Emerald
  17. 17. 17 Group Publishing Limited, online on March 7, 2013: