Domino's Analysis Report

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A Market Analysis for
Domino’s Pizza Inc.
S&P Marketing
By: Shawndell Pullam
Full Sail University
Project & Portfolio II: Business and Marketing
November 22, 2020

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EXECUTIVE SUMMARY
S&P Marketing will analyze Domino’s food service industry and the business
components on to manufacture guest emotions to create another revenue stream. During this
analysis S&P Marketing will dissect the following segments, dine-in, takeout and delivery. This
report will highlight the Objectives, Findings, Conclusions and Recommendations and be
presented by a presentation.
OBJECTIVE
The objective is determining how Domino’s will continue to be the number 1 pizza chain
in the United States. The data in this report will show how to increase guest frequency by eating
healthy and the importance of building a dine-in business.
RESEARCH METHODOLOGY
The data was gathered by using desk research on the internet. S&P Marketing used
quantitative and qualitative strategy composed from a STEEPLE and S.W.O.T analysis method.
This research was gathered during the month of November in 2020. S&P Marketing used
historical data to analyze sales patterns and current data for trends. The report is currently
missing consumer interviews and surveys.
RESEARCH AND KEY FINDINGS
Domino’s is a pizza chain with over 17k locations located in 5,701 cities worldwide.
Domino’s mission statement is to be the best pizza delivery company in the world (Domino’s,
n.d.). Currently they are accomplishing that mission. However, from 1960 to the mid 2000’s,
technology has shifted the delivery business from a blue ocean to a red ocean. Domino’s need to

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plant locations in or near every neighborhood in order for their concept to be effective
(Domino’s, n.d.). Accumulating a lot of debt came with achieving that goal. Currently, Domino’s
debt to asset ratio is 3.47 (yahoo, n.d.).
Domino’s concept is comprised of three segments, Dine-in, Carryout and Delivery. Their
Dine-in business is the least profitable of the three. Domino’s footprint is between 1,000 to 1,300
square feet (Domino’s, 2010). A footprint this size limits how many guests can dine-in at one
time. The majority of their locations only offer carryout and delivery options.
Domino’s Carryout business consists of guest placing and picking up their order.
Domino’s locations are not normally positioned on prime real estate locations. They are located
off of major intersections. This strategy is cost affective for their franchisees and their bottom
line. However, for this strategy to be effective Domino’s has to have loyal guest that are willing
to search for their locations. According to Domino’s (n.d.), one of the advantages of picking up
your order is that you save money.
Their delivery component in 2018 was 31% of their total sales (Lock, 2020). Since the
pandemic, delivery has increased by 20%. Their technology from placing orders and tracking
delivery is industry leading. Not to mention, having a lot of locations throughout the
communities help with their speed of service. One technology they have been focusing on is
drone delivery (Reid, 2016).
Their target market are tech savvy
Men & Women between the ages of 18-29
who live in low-income communities. They
enjoy spending time with friends and
family and are very price conscious
IStock, n.d.

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(Venngage, n.d.). The current frequency of this consumer is once a week and the benefit are
quick service without having to cook.
Newer innovative companies such as Grubhub are emerging in the food delivery
business.
These companies
will oppose more of
a threat to Domino’s
delivery business.
In the past, the only
food delivery option
was pizza. Now, your
favorite restaurant
delivers without the
company acquiring any debt. According to Yahoo (n.d.), Grubhub revenue has an average yearly
increase of 27% in the last two years. Grubhub has also been partnering with some of the biggest
food chains such as Burger King, Pizza Hut, Chick-fil-a, KFC, Taco Bell and Chop’t just to
name a few (Grubhub, n.d.). Domino’s has to continue investing in technology and increasing
their delivery speed to maintain their delivery market share.
Domino’s strengths are the reason why they are the number 1 pizza chain in the market.
They revamped their recipe in 2010 and launched a “We did it” campaign. At that point they
realized that they were an ecommerce company that sells pizza. According to these findings,
Domino’s has a great understanding on their target market and how to communicate with their
guest. They understand what their guest wants from them, and that’s quality/speed at a price.
However, the market landscape is evolving and to remain number 1 several things such as
Topcashback.com, 2020

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developing newer markets, healthier options, creating a dine-in, and brand emotions must be
addressed.
CONCLUSIONS
As innovation moves forward, every concept that sells food will be competition. Certain
technology will allow everyone to be able to deliver, which is Domino’s core competency. This
innovation will cause Domino’s to modify their mission statement. Being the best pizza delivery
company will no longer be sufficed. This level of competition is called “share wallet”. Domino’s
will have to answer one question. If every restaurant can deliver food at a reasonable price and
the service is fast. Why should they order from Domino’s? Findings show that manufacturing an
emotional connection with guest is a valuable asset for the future.
Joorney. (2019). Domino’s Pizza Franchise Business Plan

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RECOMMENDATIONS
One way of accomplishing emotional connection is by creating an dine-in concept where
the focus is guest experience. This will give Domino’s the time with their guest to bond and
showcase their brick and mortar dine-in experience. These dine-in concepts can create another
revenue growth stream in middle class markets as well.
Another recommendation is to revamp the menu and recipe again. When Domino’s
modified their recipe in 2010, they saw tremendous sales increase. Trends are indicating that
millennials are becoming more health conscious and they are willing to pay more for staying
healthy. Some of the menu changes will include gluten free, keto thin crust, plant-based meats
and organic beverages. Reports states that this blue ocean market is underserved and have been
trending up 20% year over year. Healthier eating consumers has a higher weekly return usage
which create more revenue. Not to mention, the marketing benefits Domino’s could create that
would centered healthy living campaigns. This would create more emotional connections
focusing on living longer with a slogan like “We Care”.
These recommendations will not be easy; however, data and research are stating that
consumer behavior patterns indicate change is coming. A suggestion is to take the best market
and conduct a qualitive research analysis focusing on surveys and interviews. This research will
take six months to complete. While the analysis planning phase is being created, the food
Research and Development team could be exploring cost efficient healthier menu options and
have ready for the tasting analysis phase. After the completion of this qualitive analysis,
Domino’s will have to decide how aggressive they will react to this healthier eating trend.

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REFERENCES
Canadian Consumer Trend Reports. (2018). Appendix A of Healthy Eating. Technomic Inc.
https://info.technomic.com/rs/561-ZNP-897/images/2018-CA-Healthy-
Eating-Consumer-Trend-Report-Infographic.pdf
Domino’s. (2010). Annual Report.
https://ir.dominos.com/static-files/9a709686-fd64-451a-86b5-8ce23511a49a
Domino’s. (n.d.). About Pizza. Retrieved on October 31, 2020, from
https://www.dominos.com/en/about-pizza/carry-out-pizza/
Domino’s. (n.d.). WHAT WE’RE ABOUT. Retrieved on October 31, 2020, from
https://biz.dominos.com/web/public/about#start
Edison Trends. (2020, May 19). Appendix B of Healthy Eating.
https://trends.edison.tech/research/on-demand-food-delivery-sales-2020.html
Grubhub. (n.d.). About Grubhub. Retrieved on October 31, 2020, from
https://www.grubhub.com/?utm_source=google&utm_medium=cpc&utm_campaign=N
ational+%7C+All+%7C+Brand&utm_term=grubhub&efkwid=4961869853&gclid=Cj0K
CQjwufn8BRCwARIsAKzP695gkFpXMmIcvq3jCcmNRCPhPgciPmoSmC0tnI7elm8q0
jV0RaRZnbwaAgDLEALw_wcB&gclsrc=aw.ds
Grubhub. (n.d.). Skip the drive-thru. Get your favorite chains delivered. Retrieved on October
31, 2020, from https://www.grubhub.com/food/chains
IStock. (n.d.). Family Eating Pizza Pictures, Images and Stock Photos. Retrieved on
November 10, 2020, from https://www.istockphoto.com/photos/family-eating-
pizza?mediatype=photography&phrase=family%20eating%20pizza&sort=
mostpopular

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Joorney. (2019, March 22). Domino’s Pizza Franchise Business Pan.
https://www.joorney.com/franchise-business-domino-s-pizza/
Lock, S. (2020, Mach 4). Consumer spending on pizza delivery in the U.S. 2004-19. Statista.
https://www.statista.com/statistics/259168/pizza-delivery-consumer-spending-in-the-
us/
Reid, R. (2016, November 16). Domino’s delivers world’s first ever pizza by drone. CNBC.
https://www.cnbc.com/2016/11/16/dominos-has-delivered-the-worlds-first-ever-pizza-
by-drone-to-a-new-zealand-
couple.html#:text=Pizza%20delivery%20by%20drone%20a,20%20miles%20north%20o
f%20Auckland
Topcashback. (2020, April 9). 7 Easy Ways to Save Money on Your Food Deliveries. CNW.
https://www.caribbeannationalweekly.com/cuisine/7-easy-ways-to-save-money-
on-your-food-
VENNGAGE. (n.d.). Domino’s Market Segment. Retrieved on October 31, 2020, from
https://venngage.net/p/193315/dominos-market-segment
Yahoo. (n.d.). Domino’s Pizza, Inc. (DPZ). Retrieved on October 31, 2020, from
https://finance.yahoo.com/quote/DPZ/financials?p=DPZ
Yahoo. (n.d.). Grubhub Inc. (GRUB). Retrieved on October 31, 2020, from
https://finance.yahoo.com/quote/GRUB?p=GRUB

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APPENDICES
Appendix A.
Healthy Eating
© 2018 Technomic Inc. | info@technomic.com | 312.506.4060
Canadian Consumer Trend Reports
Healthy
Eating
30%
strongly agree that
their definitions
of health have
changed over the
past two years
70%
at least somewhat
agree eating out is a
treat, so they order
what they want,
regardless of health
33%
say they are very
satisfied with their
eating habits
30%
strongly agree
that health is very
important in their
decision of which
restaurant to visit
“I consider______ items to be slightly
or much more healthy”
See the top performers in the full r eport
81% 79% 79%
Low
Sugar
72%
Low
Fat
66%
Low
Carb
Healthy Claims Lifecycle
See the supporting data, operator r esponses and more in the full report
What makes an item
healthy to you?
See full quotes and many mor e responses about the changing
health definitions of Canadian consumers in the full r eport
“Full of nutrients” “Low-fat” “Low in sugar”
“Has healthy ingredients” “Low-calorie”
“Well-balanced” “High-fibre” “Vegan”
“All-natural” “Not heavily processed”
What the heck is
“healthy”anyway? Intro Growth Mature
Grass-fed
Milk-fed
Diet
Vegetarian
Gluten free
Decaf
Low fat
Organic
Natural
Vegan
No sugar
Skinny
Free range
Fat free
Lighter fare

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Appendix B.
Consumers Spending Per Order