Domino’s Case Study
Domino’s Pizza, Inc. is the largest American, pizza delivery company in the world, which was founded in 1960. It is operating more than 5,700 units throughout the United States and in 58 other countries.
Domino’s was structured on simple concepts, as offering only delivery or carry-out and an extremely limited menu: for more than thirty years. The company offered only two sizes of pizza, eleven topping choices, and- until 1990- only one beverage, cola.
The company added salads, breadsticks, and other non-pizza items to its menu in recent years to stave off its rivals like Pizza Hut and Little Caesar’s, but has otherwise held its focus on the basics of providing quality pizza and pizza service.
The 1980s were a decade of phenomenal growth for Domino’s Pizza, and the company was prepared for it. While Monaghan had always feared that formal budgeting systems promoted bureaucracy, he decided to design a company-wide budgeting procedure, with the advice of Doug Dawson, which Domino’s continued to use as training tools for potential franchisees.
New accounting methods were implemented by Dawson and then he moved on to the path of becoming vice-president of marketing and corporate treasurer. John McDevitt, a financial consultant Monaghan met in 1977, was instrumental in Domino’s surge.
International franchising is one of the most popular ‘firm entry’s’ strategies in the global marketplace. Franchising is well known among services especially in the fast-food chain industries like McDonald’s, Kentucky Fried Chicken (KFC), Pizza Hut, etc. Franchising helps ‘Small Medium Enterprises’ (SME) to open and operate the business effectively. Apart from that, international franchising activities are increasing aggressively and are becoming widely used by firms as one of their top business approaches.
Domino’s Pizza is one of the big companies in the fast-food sector that ventures into international franchising.
Domino’s Pizza first started to expand their business by opening up in a new market outside the United States in 1983 at Winnipeg, Canada.
Since then, Domino’s Pizza has a strong presence in the global marketplace as it increasingly expanded its business operations in more than 70 international markets (Dominosbiz, 2014).
The success of the International Franchising strategy adopted by Domino’s Pizza is a result of good management along with the alliance between its international franchisees as well as good business systems. It is also by carrying out its objectives to become the most successful pizza maker and deliverer in the world.
Economic Times recently stated that localization is the reason for Domino’s success in the region. This localization can be seen in Domino’s business choices.
The pizza toppings available in a country are chosen to fit the tastes of the inhabitants, and, franchises also have their say in what they want to offer their customers. In Domino’s Indian stores, half of all available products available are localized.
A franchise can make decisions about the products it offers all by itself; it doesn’t have to seek permission by the American headquarters. Domino’s attaches more sentiment to relationships within itself than to structure and processes. This is also the reason why not everything has to happen by the rules all the time.
Domino’s Pizza’s mixed- marketing strategy has always been closely related to its customer’s differences in cultural and religious beliefs. Domino’s is successful in making “localized recipes” to suit the local tastes and customs.
Domino’s follows a structure of 4 Ps’. The first element of the Ps’ is the ‘Product’. Domino’s Malaysian outlets use all kinds of ingredients except for pork and non-halal product which is the same in India due to religious reasons beef and pork are prohibited. In India only, Domino’s offers a wide variety of vegetarian menus and prefer spicy in terms of tastes. Such differences are made to respect Hindu and Muslim religions.
Also, with diversified menus including desserts, drinks and side dishes, Domino’s has established itself to be known for perfect outing dinners or lunches. Inclusion of Pizza choices like ‘chicken tikka masala’ and ‘paneer do pyaza’- Domino’s has been successful to invade Indian hearts through the route of Indian spics within their food products.
For the ‘Pricing’ element, Domino’s Malaysia does not use the price discrimination strategy compared to Domino’s India due to the large market. Price in Malaysia is standard all over the nation while in India, Domino’s implemented a ‘barbell’ pricing strategy that attracts more consumers who focused on the value of the product.
For the ‘Place’ element, Domino’s Malaysia prefers a location in big cities and highly populated areas such as Kangar and Allor Star. Most of the branches are located in different buildings while others operate in the area where shopping complexes are located. Whereas in India it focuses on large offices, institutional centres, and public areas where it is convenient for its staff and customers. Also, Dominos has opened its store near college campuses as a national survey indicated that 48% of the student population prefers to order food than cook independently. Using this information to its advantage domino’s has become a go-to ordering franchise within the Gen Z and millennials.
For the ‘Promotional’ element, both Domino’s Malaysia and India share a similar approach of offering several discount coupons to attract its customers. Besides using traditional ways of promotional strategies such as printed media, Domino’s has a strong online presence from using social media and keeping the internet as its preference for promotion.
Conclusion: By the strategies adopted by dominos regarding the four P’s not only did its sales doubled but it was able to compete against other brands such as the Pizza hut that have recently expanded in India. Dominos has a reputable name for its services and the quick delivery it offers to its customers now.
By Sneha Rastogi
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