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8Marketing Strategy for Domino’s Pizza

Marketing Strategy for Domino’s Pizza

Executive Summary

Domino’s is considered one of the major chains of pizza chains across the globe and is the top contender the strongest fast food chains. The company’s brand has a close competitor in the Pizza Hut. Nonetheless, Domino’s has long overtaken Pizza hut to becoming the most sold brand of pizza within the market. In comparison to the other competitors such McDonalds and KFC, the Domino’s has a long way to go and ensuring that it maintains the desired competitive advantage. The reports aims at undertaking internal analysis of the company through SWOT; recommendation for the new product development; and the target market

Introduction

Domino’s Pizza currently operates in more than 60 countries globally. The Fast Food also owns a properly knitted network and franchise stores. Moreover, it is one of the leading and the most popular delivery company in the United States. Currently, the fast food has about 8773 global outlets and 10,500 people globally. Two brothers from Michigan founded Domino’s Pizza Inc in 1960 after purchasing DomiNick’s store and after five years, they converted the name into Domino’s Pizza. In 1983, the fast food went international. Domino’s not only relies on the call-ins and walk-ins, the fast food also uses internet in assisting their sales (Jham, V., & Tandon, 2012, 47). In a mid of the rising level of technology, the company is integrating various social platforms to ensure that it reaches every segment of the market. The customers could place their orders on their favourite pizzas online and have it delivered at their convenience. Moreover, the company also offers coupons or specialized deals on specific menu items, which continually tend to attract the customers. It also offers various kinds of pizzas and different styles of crusts. Through the years, Domino’s tried to increase products through offering better ingredients which make pizzas and introduced menu items including Oven Baked Sandwiches and Bread Bowl Pastas. The international sales of Domino’s have increased even as the domestic sales decreases. The global sales indicate Domino’s independency on the US sales. The fast food reported revenue of $1425 million and netted $54 million.

SWOT Analysis

Strengths

Weaknesses

  1. Huge popular name of the brand and high brand loyalty

  2. Variety of produced products

  3. Hygienic food, quick, and reliable services

  4. Leader in online pizza selling and mobile ordering

  5. Strong brand equity which the company supports with heavy advertising and marketing campaigns (Bhasin, 2014)

  6. Global franchise operations; the company has more than 3500 in more 60 countries

  7. Efficient and effective logistic management which enable the company to maintain the goodwill and promises

  8. Allowing the customers to design the pizza that they want

  1. The supplied food has high fat and high calories which are considered inappropriate for the health

  2. Difficulty in franchise management

  3. High staff turnover associated with inadequate training and development

  4. The delivery services are limited considering the coverage area

  5. The price of the products are high with similar menu of the other pizza restaurant

Opportunity

  1. Improved efficiency and delivery of services in the homes

  2. Introduction of new flavour additives; introduction of the pizza toppings considered region specific could be great stride for the organization

  3. Domino’s could further strengthen its distribution network to ensure that institutional market penetration within the existing markets at the maximum optimum level

  4. Growth presence within various emerging markets especially India and China

  5. Having promotions within the special seasons and festivals

  6. Inclusion of the take away counters to enable people feel more comfortable

  1. High level of competition from various fragments of competitors

  2. Changing consumer needs and habits towards healthier food choices

  3. The rising costs of vegetable and raw materials have negative effect on the price

  4. The competitors offer highly priced pizzas and compared to low prices of Domino’s reflecting poor quality

  5. Competitive advantage by Pizza Hut that offers dine-in facility

Analysis of SWOT Analysis

Within the Domino’s, there are several features from the SWOT analysis that make it stand out from the major companies within the pizza industry. Domino’s has an extremely strong brand image with an ability of retaining the customers because of its image. The customers are constantly seeking for the services that meet their specific needs; as a result, the company has been on the forefront customizing its services through allowing the potential customers to recommend their pizza shapes. Nonetheless, with the decline in the global economy, most customers are forced to hold their spending which could result in low organizational images. Accordingly, the Domino’s could utilize various opportunities associated with growth in the emerging markets and fast food industry within China and India to its advantage. However, the rising number of markets also attracts new competitors, which could be a threat to organizational development. To some extent, the Domino’s competes with both companies within the fast food industry such as McDonald and Pizza makers like Pizza Hut and Papa John’s Pizza (Brands, 2010). Fast foods such as McDonald enjoys strong brand image in every part of the world while Papa John’s Pizza competes directly with each other. Recently, the level of competition from the Papa John’s Pizza increased to Domino’s considering it rising level of popularity. The largest competitor for Domino’s is the Pizza Hut. Like Domino’s, the Pizza Hut also enjoy various benefits associated with strong and effective brand image. Considering the opportunities for Domino’s, in a short term, the company could focus on creation of more coupons for the customers in a bid to increase the level of customer attraction. The company could also offer special times or reasons which might assist in combating tough competition and declining level of sales. Improvement in the online ordering procedures, development of new products which are customer specific in nature, and focus on the improvement in their pizza delivery, services to increase institutional customer base, which would in turn lead to increment in the market share. Development of products that are specific to a given location of the store is important and making additional menus could help meet the ever-changing needs, tastes, and preferences of the customers.

Recommendation

  1. Target Market

The major target of the Domino’s is the lower middle class and middle-income class earners. Offering quality products at reasonable price is organizational motto. Throughout the branches, the company came up with uniform and consistent pricing policy to assist in keeping the base price in check and assisting the company in attracting the customers. The major factor contributing the tremendous success of the organization is affordability, which also attract many customers. In a mid of the rising level of technology, the products would be focusing on the customers ordering pizzas through the social media. Domino’s pizza in the market would sell pizza to not specific target market and sell to anyone eating gluten free pizza and larger menus that have healthier choices (Llanas, 2015, 47). Such product makes Domino’s good choice for anyone considering the taste of pizza uncompromised with the healthy ingredients.

  1. New Product Description

Currently, the organization produces pizzas, which are round dough, sauce, toppings, and cheese. With the current competition in the market and the ever-changing needs of the customers, it would be important if Domino’s Pizza focus on more than the simple pizza pie and delivery of the orders. The new product would involve preparation of hand-tossed, thick-crust, Chicago-style, and stuffed crusts, and meat for the lovers, such pizza would pose a remarkable innovation considered a better pizza that would offer the customers new taste and opportunity to meet the pizza desires. Contrary to the other pizzas, the company would improve the delivery process.

  1. Customer Value Preposition

The customers value of the company is “hot, fresh pizza delivered in your door in 30 minutes or less.” The development of the new product would not interfere with organizational customer value proposition but strengthen various company practices. The company ranks the best due to its value proposition; locations, services, and ability to deliver the promotional extras that ensure the pizza meet the ever-changing needs of the customers (Dean, 2010). The value proposition of Domino’s offers the customers that have strong appeal and exclusivity. The customers knew that they can acquire the pizza despite the quality and delivered to their doorstep in an agreeable amount of time. Just like the McDonalds, people value the speed and services over the quality of the products. The company could leverage on provision of efficient, effective, and reliable services to cope with the rising rates of competition.

  1. Justification of the Choice of New Product Using At Least One Strategy

The customers are seeking the services that meet their specific needs. Domino’s Pizza could be the first place that comes around in the mind for the best pizzas within the market (Merrett, 2014). The new product would offer good taste to the customers and ensure improvement in the organizational sales. The table below represents the SWOT analysis for the justification of the new product.

SO (Strengths/Opportunities)

ST (Strength/Threats)

  1. The major strength of Domino’s is the global presence and customer loyalty that assist in increasing the market share (S1,O1)(S3,01)

  2. Constantly introducing new innovative products in all the stores, the company could continue increasing its revenue through expansion in other countries (S8,O3)

  3. The Domino’s is known for its quality and fast services globally, to upgrade the services according to the needs of the customers, the Domino’s needs to integrate technology (S2, O4)

  1. The major threat of the company is competition from major pizza suppliers such as McDonalds and Papa John’s Pizza. The company should innovate and diversify its products to retain the current market position. (S8,T3)

  2. Political and economic instability in some countries affect the operations of the company. However, with the company’s strong brand image, it could shift its operations elsewhere it seems to have strong potential growth (Datamonitor, 2000, 122). Another method of changing the market strategy is to reduce their prices to penetrate other markets. (S3, T1)

WO (Weaknesses/Opportunities)

WT (Weaknesses/Threat)

  1. Since Domino’s occupy large market share in the US market, it needs to take advantage of the market expansion to increase the market share in the foreign markets. (W1, O1)

  2. If the organization experiences difficulties in operating in international markets, it could take advantage of its products and adapt them to meet specified needs of the customers (W3, O2) (Melton & McIntyre, 2009, 188)

  1. When experiencing political and economic stability outside the local market, it could extend is product line production varieties of pizzas (W1,T1) (W2,T1)

  2. To prevent the threat associated with the cost of raw materials, the company could diversify its products (W2,T2)

References

Retrieved July 30, 2016, from http://www.marketing91.com/swot-analysis-of-dominos/SWOT analysis of Dominos — Dominos SWOT analysis.Bhasin, H. (2014).

Brands, R. (2010, May 16). Building a better Pizza: How much can Innovation sell Pizza? — Innovation Consultant, Innovation Books. Retrieved July 30, 2016, from http://www.innovationcoach.com/2010/05/building-a-better-pizza-how-much-can-innovation-sell-pizza/

. New York, NY: Author. Domino’s Pizza, IncDatamonitor. (2000).

Dean, G. (2010, March 9). Dominos Pizza – Beyond the Dough | Marketography. Retrieved July 30, 2016, from https://marketography.com/2010/03/09/dominos-pizza-beyond-the-dough/

(01), 39-63. 16, Asian Case Research JournalJham, V., & Tandon, S. (2012). Domino’s Pizza India Ltd.: Driving Business Growth through Consumer Engagement.

. Edina, Minnesota: ABDO Publishing Company. Tom Monaghan: Domino’s Pizza innovatorLlanas, S. G. (2015).

. Hoboken, NJ: Wiley. lessons from Domino’s Pizza, where deliverymen become millionairesHire the American dream: How to build your minimum wage workforce into a high-performance, customer-focused team :Melton, D., & McIntyre, T. (2009).

Retrieved July 30, 2016, from http://www.cmo.com.au/article/549347/domino_pizza_mogul_puts_product_creation_marketing_consumers_hands/Domino’s Pizza Mogul puts product creation and marketing in consumers’ hands — CMO Australia.Merrett, R. (2014, July 7).