Business Foundation Of Domino’s Pizza Essay

Question

Discuss about the Business Foundation of Domino’s Pizza.

Answer:

Introduction

Domino’s pizza is one of the most popular pizza chain as well as the fast food firm delivery for different varieties of pizza. In the current days, Domino’s has become equivalent to quality, freshness as well as effective service. It is identified that this fast food firm has persistently been growing by leaps as well as the bounds. According to the history, Domino’s is the second largest franchised pizza chain in the Australia and the history of Domino’s is relevant to its rival Pizza Hut. The boxes for the pizza are specially designed to keep everything fresh and hot. With its presence across 5 different continent and more than 70 countries, the firm has generated a market leader position (Dominos.com.au 2016). Domino’s pizza comes in different size, the varieties include Country special, Mexican Green Wave Pizza, Zesty Chicken Pizza, Chicken Camembert Pizza, and the firm offers many other popular items. The firm best meets the needs and demands of the target market. Therefore, to keep the satisfied customers in the grip, Domino’s is supposed to launch a new product called “Butterscotch Mousse Cake”, which can be served as the dessert.

SWOT Table:

Strengths

Weaknesses

· Brand recall

· Excellent channel network

· Fast service and deep menu

· Low cost alternatives

· Healthier alternatives

· Effective supply chain management

· Large number of franchises

· Decreasing sales volume in the urban markets

· High employee attrition rate

Opportunities

Threats

· Market expansion

· Health conscious eatables

· Restaurants

· Increasing competition level in the market

· Changing eating habits of the potential customers

· Increasing cost of raw materials and operational process

Table 1: SWOT analysis of Dominos

(Source: Syed 2016

Findings:

Strengths Brand recall

As per the article by Wu, Tsai and Peng (2013) the business strategies of Dominos always focuses on the effective utilization of aggressive marketing strategies so that they can able to create major affect the mind of the customers. For instance, Dominos promotional strategy of “delivery in 30 minutes otherwise free” has able to create huge impact on the mind of the potential customers. As a result, whenever they are looking to purchase any pizza, they often recall the name of Dominos.


Excellent channel network:

Dominos has able to create strong network for capturing the world market in an effective way. Presently, Dominos have more than 10000 franchises and company owns outlets in more than 65 countries (Pepitone 2013). As a result, it often helps organization to capture the attention of the global market through the introduction of new products.

Fast service and deep menu:

As per the article by David (2012), Dominos always has tried to develop services that is faster than the expectation of the customers. In fact, the superior quality of provided services has allowed organization to emerge as one of the prime name in the pizza market. Furthermore, Dominos have tried to set the price range of different products in such a way so that it can able to grab the attention of the customers in an effective way.

Low cost alternatives:

Dominos always focuses on the effective utilization of the economic pricing strategy to gain competitive advantage in the market. However, Dominos have made conscious effort regarding the maintenance of superior quality of services and ambience level provided to the customers. It has helped to develop strong brand image in the world market.

Healthier alternatives:

Recently, Dominos have tried to develop products for the health conscious people for gaining competitive advantage in the market (Manikandan and Subramani 2015). For that reason, Dominos is trying to develop a separate segment of products with lesser level of fat and crusts in order to achieve sustainable growth in the market.

Effective supply chain management:

From the beginning, Dominos have focused on the effective utilization of supply chain procedure for achieving competitive advantage in the market. For instance, Dominos supply within 30 minutes have helped to gain huge amount of popularity in the market, which eventually has helped to develop strong brand name. Thus, it is expected that it will help to increase the profit level of the organization.

Weaknesses:

Large number of franchises:

As mentioned earlier, Dominos have developed large number of franchise operation system for fulfilling all the requirements of the business process (Kumar 2016). As a result, it often faces difficulties to maintain coordination among different among the franchises, which directly create adverse impact on the business processes.

Decreasing sales volume in the urban markets:

As highlighted by Ganesan and Chandramohan (2013) people living in the urban areas are becoming more health conscious. As a result, it is actually creating challenges for Dominos to maintain their revenue level at the expected rate. In addition, it is also inducing Dominos to invest more on market research perspectives, which is eventually increasing difficulties for sustaining its position in the market.

High employee attrition rate:

It has been assessed that Dominos is facing challenges in retaining the employees due poor training structure and lesser opportunity to grow as a professional. Therefore, it is also creating challenges for Dominos for fulfilling all the business responsibilities in an effective manner.

Opportunities:

Market expansion:

Presently, Dominos is primarily targeting urban areas for fulfilling the business objectives. Therefore, it can expand the business in the rural areas as well for enhancing the business level in an appropriate way. Thus, Dominos can actually target different developing countries for increasing the sales level in an appropriate manner.

Health conscious eatables:

As mentioned earlier, people living in the urban areas are becoming more health conscious. Therefore, if Dominos can able to launch various products for the health conscious people, it will definitely increase the business level in an appropriate way.

Restaurants:

Dominos also needs to focus more on the development of high quality restaurants in the urban areas so that it can able to able to provide superior quality of ambience to the customers. It actually will help to increase brand recognition in the global market. Thus, it will eventually help to increase the business level of the organization.

Increasing competition level in the market:

For the past few years, fast food segments is facing huge amount of competition in the global market. Therefore, it is becoming very difficult for Dominos to achieve sustainable growth in the market (Park et al. 2012). Furthermore, major competitors like Pizza Hut are also focusing on the effective utilization of different strategies for capturing the market in an effective way. As a result, it is increasing threat level for that Dominos have to face for achieving competitive advantage in the market.

Changing eating habits of the potential customers:

As different governments and NGOs are raising awareness regarding the significance of developing healthy eating culture, majority of the people are now looking towards eating healthy foods only. Thus, it is increasing the threat level of Dominos for fulfilling all the business objectives in an effective way.

Increasing cost of raw materials and operational process:

Increasing cost of raw materials like vegetables and other food ingredients have raised the production cost in an effective manner. Furthermore, maintenance cost of machineries also has increased in a major way. As a result, Dominos is facing huge amount of threat to maintain economy-pricing strategy in an effective way.

Recommendation

Target market- When it comes to the target market of domino’s, the firm is seen to be segmenting the market based on the demographic as well as geographic factors. For example, the firm localized its menu when it entered the market of Australia. The target market of Domino’s should be the areas that are highly populated such as the large cities, downturn of the city, Airport areas, shopping mall, movie theatre. These markets could be effective for launching the new product. In addition, these markets are segmented based on the demographic as well as geographic factors.

Demographic segmentation- When it comes to demographic segmentation, Domino’s targets the teenagers, college students, and the young adults ranging from 21 years to 35 years. The firm should focus on the middle class, upper middle as well as high and middle-income families. In addition to this, as Australia is economically developed, the Domino’s also focuses on the sub-urban areas of the country. The product should be based on the culture and trends. For example, in Australia people are fond of meat such as beef and chicken; thus, it could offer the proposed dessert with heavy chicken pizza.

Figure 1: Market Segmentation

(Source: Kotler et al. 2015)

Geographic segmentation- The organization Domino’s targeted the highly populated the countries such as Australia and large Asian countries like India while launching the new product (Wilson and Gilligan 2012). As the strategy, the firm initial should focus on the tower II cities and gradually it could move on the large metro cities.

Behavioral segmentation- When it comes to behavioral segmentation, the fast food chain is seen to be targeting the first time users as well as regular user or existing potential customers (Hassan and Craft 2012). Therefore, while developing this new product namely “Butterscotch Mousse cake” the firm considers the potential customers with the new buyers.

New product description-

Product: “Butterscotch Mousse Cake” is one of the newest items of Domino’s, which would be served as dessert items with the heavy chizz and chicken pizza. This is a new cold dessert, which would be embraced by Domino’s lovers. The product consists of layers of rich, fluffy butterscotch cream, delicious dark chocolate cake, which topped with the crunchy dark chocolate morsels. Though Domino’s introduced many dessert items such as ice cream, soft drink and different flavored ice cream. However, the proposed item would be a new one to the customers.

Figure 2: Butterscotch Mousse Cake as the dessert by Domino’s

(Source: Dominos.com.au 2016)

Price: As the target country is economically developed, the firm would not have to be worried about the price. However, since it is a desert item, firm should rely on the “economy pricing” strategy.

Figure 3: Marketing mix of Domino’s

(Source: Muhamad et al. 2012)

Promotion: In order to promote the product in the market and gain popularity, Domino’s offers 40% discount on the first purchase

Place: When it comes to place the product, it has maintained a direct channel with the customers. The orders are taken by call and online apart from outlet orders.

Customer value proposition-

Among different customer value proposition, the Domino’s for the current product should focus on one of the significant points such as “All benefits”.

1

All benefits

Defined

By launching this new product, Domino’s could offer a series of benefits. As the new product is a desert items, it type of pizza lovers including Veg and non-Vegetarian and meat and chizz lovers could also try this new item. In addition, the firm is offering 40% discount on the first purchase of the item.

Customer

The customers would purchase this item as the product is developed based on trend and culture of people. Domino’s lovers often look for the delicious dessert item that satisfied their appetite. In addition, 40% discount on the first purchase is a lucrative option hardly offered by the fast food firms

Require

As the product is supposed to be launched in the existing market, the firm is already aware of the needs of customers and strategies of competitors.

Potential pitfall

When it comes to desserts, the competitors such as McDonald’s also offer such desert items. Thus, Domino’s should not rely on only on the new customers.

Justification of the choice of new product using one strategy

The new product should be effective for the firm and it could bring large amount of benefits to the firm as the firm gained popularity due it fresh and healthier products which strength of Domino’s. The new product would largely embraced by Domino’s as it has high brand recall which is the major strength. This means, when the customers think of buying pizza, Dominos first come in their mind. On the contrary, as the sales volume is decreasing in the urban areas due to the market saturation with existing products. Therefore, it is necessary to launch a new product in low budget.

References

Baker, M.J. and Saren, M. eds., 2016. Marketing theory: a student text. Sage.

David, F.R., 2012. Strategic Management: A Competitive Advantage Approach, Concepts and Cases.

Dominos.com.au. 2016. Domino's Pizza - Order Online for Pizza Delivery & Takeaway. [online] Available at: [Accessed 15 Dec. 2016].

Ganesan, M. and Chandramohan, S., 2013. An empirical study on challenges of service marketers in changing business environment. International Journal of Applied Services Marketing Perspectives, 2(4), p.667.

Hassan, S.S. and Craft, S., 2012. Examining world market segmentation and brand positioning strategies. Journal of Consumer marketing, 29(5), pp.344-356.

Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education.

Kotler, P., Keller, K.L., Manceau, D. and H?monnet-Goujot, A., 2015. Marketing management (Vol. 14). Englewood Cliffs, NJ: Prentice Hall.

Kumar, G.A., 2016. Franchisees Satisfaction Towards The Franchisors–A Study Of Domino's Pizza. Global Journal For Research Analysis, 4(8).

Manikandan, A. and Subramani, A.K., 2015. Customer satisfaction towards domino's pizza in Chennai–An empirical study. EXCEL International Journal of Multidisciplinary Management Studies, 5(6), pp.187-192.

Muhamad, R., Melewar, T.C. and Faridah Syed Alwi, S., 2012. Segmentation and brand positioning for Islamic financial services. European Journal of Marketing, 46(7/8), pp.900-921.

Park, J., Cha, M., Kim, H. and Jeong, J., 2012. Managing Bad News in Social Media: A Case Study on Domino's Pizza Crisis. ICWSM, 12, pp.282-289.

Pepitone, J., 2013. Domino's tests drone pizza delivery. CNNMoney, June, 4.

Syed, I., 2016. SWOT analysis and operation management decisions of Domino's pizza.

Wilson, R.M. and Gilligan, C., 2012. Strategic marketing management. Routledge.

Wu, C.T., Tsai, Y.H. and Peng, J.Y., 2013. Consumers' Cognition and Satisfaction Level Toward Pizza Hut. Journal of Applied Sciences, 13(21), p.4754.

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