3. DOMINO’S PIZZA
Introduction
History:
• Purchased in 1960 by the Monaghan Brother’s a pizza
store in Ypsilanti, Michigan named “DomiNick’s”
• James Monaghan sold his half of the business to his
brother Tom, in order to purchase a used VW Beetle.
• Tom Continued to use the name “DomiNick’s” till 1965,
later renaming the Company “Domino’s Pizza Inc.”
• Emphasis on Delivery from the beginning. Hired laid-off
factory workers to deliver pizzas to near by towns.
• Delivery service helped in gaining brand popularity and
advantage of others who did not have a delivery service.
4. Domino’s Today:
• Market leader in Online transactions and Pizza
delivery services.
• 2nd Largest Pizza chain in the US with an annual
sales revenue of close to 9 Billion Dollars in
sale.
• Pizza hut leads the charts with 14 Billion annual
sales revenue.
• Domino’s has close to 12,000 outlets
worldwide.
• One of the first food chains to institute online
ordering in 2007.
• First pizza chain to have an in-house IT System
to manage its online ordering and pizza
tracking.
5. Case Synopsis
• Though the chain grew over the years, it faced its
biggest decline in 2009.
• Sales had gradually fallen over the years
• Customers complained about taste and low quality of
Pizza.
• Pizzas felt like “Cardboard”, taste “Wet and
Flavourless”
• Negative customer feedbacks and focused group
studies revealed the brutally honest criticism about
Domino’s pizzas.
• J. Patrick Doyle took notice and initiated the “Pizza
Turnaround” Campaign.
• New product development team was created and the
old recipe was scrapped.
• The team started from scratch to formulate a new
recipe keeping in mind the customer feedbacks.
• The campaign was a success, 3 out of 5 people
preferred Domino’s new pizza over competitors
offering.
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2005 2006 2007 2008 2009
Domestic Sales (in Millions)
Domestic Sales
6.
7. 1) What Do you think caused the crisis within Domino’s that led to the
“Pizza Turnaround” Campaign?
____________________________________________________________________________
• Over reliance on Delivery Time:
- Obsession with speed created a mindless perception that they
mindlessly cranked out pizzas and that the employees were robots.
- Ad campaigns launched across regions promoted the 30 minute
promise.
- The Speed Culture removed an important component from the
experience – the Human Touch.
• Lack of innovation in their product offerings
- The Pizza recipe hadn’t changed in the last 40 odd years.
- Competitors where at a much higher level in terms of taste and
quality. (Pizza Hut took firm grip of the market)
10. 2) Comment on how the New Product team used Attribute Analysis to test
Various pizza concepts.
____________________________________________________________________________
• The new product team consisted of the head chefs, who signalled out the Determinant
attributes of that needed to be changed in the recipe.
- Crust: how to avoid making a cardboard crust.
- Sauce: how spicy should the sauce be.
- Cheese: what kind of cheese goes with what kind of toppings. “Its CHEESE”
• The new product team also consisted of operations and marketing HoD. The attributes that
they highlighted were:
- Cost: you got to make the new pizza better without paying more for it.
- Time: you can still make a better tasting pizza in the same time.
- Awareness: remind customers about the connection that you are trying to make.
11. 3) How important was this analysis to the team in selling the Pizza
Turnaround internally?
____________________________________________________________________________
• A new product team needs the Managements approval to go ahead with
concept testing.
• Its not always easy to convince the Management (IQ Meals).
• The team and the management must be on the same page.
• Customer feedbacks and focus group findings about Domino’s pizza played
a major role in convincing the Management.
• R&D shocked at the “Cardboard pizza” complaint.
• Attribute analysis helped recognize the areas of change. (Crust, sauce, cheese)
• Management agreed to go ahead with new product team’s concept of the
new pizza.
12. 4)What else did the new product team do to boost their chances of success?
___________________________________________________________________
• Major Risk.
- Scrapped the old recipe.
- Included Customers extremely negative feedbacks in their rollout
promotional campaign.
• www.pizzaturnaround.com
• Acknowledged the fact that Domino’s had erred.
• Connected to the customers on an emotional level.
• Reoriented their focus to bring back human touch into their pizza experience. (Open Kitchen)
• 30% increase in New Customers.
• 65% increase in Repeat Purchase.
• 14.3% increase in quarterly same-store sales.
15. 5) What can be learned in general from this case about
the use of analytical attribute approaches for concept
testing?
_______________________________________________________
• Use of attribute analysis helped the new product development
team by:
- Outlining the areas to improve upon.
- Improving on those areas in a timely manner.
- Improving on those areas in a cost effective manner.
- Helping in convincing the management that a change was
needed.
16. 6)How could other concept testing approaches present in this chapter have
been used to guide the new product development team? (Recommendations
too)
___________________________________________________________________
• Market Research to support concept testing.
- Acceptability of the new product in the market.
- Avoid committing the same mistakes again.
- Market preference before launch.
• Prototype Testing
- Inexpensive.
- Improved and increased user involvement.
- The users can thoroughly evaluate the prototype.
17. Sample Survey Results
1) Attributes highlighted by you guys:
- PIZZA :D
- Cheesy/ Greasy
- Cheap
- Delivery/ Midnight meal.
2) Changes you guys want:
- More pizza options
- Healthy pizzas
- Dine-in
Pizza
Taste
Price
Time
