BUSINESS STUDIES Marketing Report – Dominos Pizza Australia Pty Ltd: Biggest Loser ‘Good Choice’ Range Executive Summary Domino’s Pizza Enterprises Limited (CEO: Don Meij) is a private company which operates in the quinary sector with the prime function of being the best pizza delivery organisation in Australia. Originally found in 1960 in the USA, it now has over 700 franchises nationally and is still expanding to new markets in Europe. With the mission statement of, “sell more pizza, have more fun”, Dominos has truly become a global brand with product extensions such as the Biggest Loser ‘Good Choices’ range. This report, by Elle Consultants, aims to provide a comprehensive investigation on how Dominos has used marketing to achieve its prime function by examining the current situational analysis, marketing objectives, target market and by analysing the marketing strategies employed through the marketing mix whilst describing the implementing, monitoring and controlling of these strategies. Situational Analysis The fast food industry that Domino’s (DMP) belongs to is a very competitive market which is highly dynamic. Therefore, it is essential for a situational analysis to be conducted regularly with a SWOT analysis and product life cycle. This ensures the business can maintain a competitive edge whist maintaining a clear perception of the businesses current position. 2.1 SWOT Analysis

A SWOT analysis details the position of DMP in the internal and external environment (Figure 1).

2.2

Figure1‐SWOTAnalysisonDomino’sPizzaEnterprisesLtd

Product Life Cycle Domino’s offers a diverse range of products. Some of the products are already established whilst some are new. An example of a relatively new product range is the Biggest Loser ‘Good Choice’ range introduced in February 2010 (figure 2). 400 200 100 3. Marketing Objectives Domino’s marketing objectives are closely aligned with their financial and overall business objectives. This allows increased communication between sectors and hence permits synergy to occur which strengthens Domino’s total marketing position. Domino’s marketing objectives are as follows: Increase market share by 7% in the next twelve months.

Maximising the quality of customer service by introducing customer feedback forms and

introducing online polls to measure consumer satisfaction.

Expanding into existing markets by increased geographic representations through introducing 12 more Domino’s franchises, both domestically and internationally (in Europe) by October 2011.

Expanding into one new product range by increasing diversity in the product mix by December

2010.

Increase net profitability by 10% by January 2011.

Sales($‘000)

Time

Exponentialgrowthduetointensivemarketing

SeasonofBiggestLoserfinishesandhencelessemphasisonmarketingtheproductwhichleadstoareductionofsales

ReformationandrenewalofproductasnewseasonofBiggestLoserbeginsandintensivemarketingrecommences

February2010April2010August2010February2011

Figure2‐Domino’sBiggestLoser‘GoodChoice’rangeproductlifecycle

HighdemandofsalesduetocombinedmarketingfromBiggestLoserandDomino’s

4. Target Market Domino’s utilises many strategies to select a viable market segment. By adapting the market segmentation approach, demographics, geographics, psychographic and behavioural considerations must be implemented in order to successfully achieve the marketing objectives (Figure 3).

Therefore, by adapting the market segmentation approach, Domino’s is able to have low pizza costs allowing products to be accessible to the target market of all income and age brackets, communities and urban area families (figure 4 & 5).

Figure3‐TargetMarketofDomino’s

Target Market Common Qualities of DMP that appeal to the Target Market

Communities Active participation Sponsorship Employment & Training

Families Low pricing Convenience i.e. delivery

Young Teenagers to the Elderly Wide variety and selection of products Easy accessibility i.e. in close proximity

to transport 5. Marketing Strategies The marketing mix of product, price, place and promotion are a significant aspect to DMP as the firm has complete control over these elements. These factors are constantly altered and modified to be able to accomplish marketing objectives.

Figure4‐TargetMarketdistributionofDomino’s

Figure5‐DMPqualitieswhichappealtospecifictargetmarkets.

5.1 Product

Domino’s presently has a wide product mix which extends into healthy products such as the Biggest Loser ‘Good Choice’ Range. The product strategy for this range has both tangible and intangible aspects for its consumers and conversely indicates product differentiation against its competitors. Positioning of the product range in comparison to other competitors has the highest positioning in the minds of consumers. Due to the immense understanding of their consumers and the increasing social trend of obesity in Australia, Domino’s achieves a competitive edge over its competitors as a healthier alternative is available. Thus, the Biggest Loser ‘Good Range’ range gives the illusion that diverse selection of products in the range from pastas, sandwiches and salads to complimentary sides of chicken wings and chocolate mousse are made specifically to suit the needs of customers which momentously exceeds the demands of its consumers.

The Domino’s and Biggest Loser brand is highly identifiable around Australia. The recent introduction of the product was highly successful as these two branding symbols are highly popular. This is highly useful in achieving their objective in increasing market share as many established and new consumers would already have a relationship with the two brands. This also portrays a highly sophisticated product to the consumers which is appealing to consumers. Also, Domino’s is able to achieve its marketing objective of introducing a new product range before December 2010 and can extensively increase net profitability. 5.2 Price There are a number of different pricing methods and strategies that Domino’s applies to the Biggest Loser ‘Good Choice’ range in order to meet marketing goals. Domino’s utilises a method that is a combination of competitive and market based pricing. Since the Biggest Loser ‘Good Choice’ range attracts a higher price as it is a relatively new product. Domino’s adopts the market skimming strategy which gives an image of exclusivity of the product. The price is an indicator to the consumers of the quality of the product. The strategic implementation value packs and combos for this product range also notably appeals to consumers and encourage the purchase from this range (figure 6). Thus, consumers associate the healthy range as a high quality product which makes the product highly desirable. The high efficiency of the firm enables the excellent quality of the product to be created at low prices. This advantages Domino’s as the sales revenue will significantly rise and overall will increase net profitability.

5.3 Place Before opening a store in any area, DMP undergoes an intense market research to ensure the feasibility of the area. This is through primary and secondary research of the geographic area and to ensure a suitable location close to target markets. For the business to be successful in a particular area, DMP utilises the primary research of participant observation and the secondary research of statistical analysis. This allows the business to have an overall image of the area and helps conclude whether the business has an opportunity to break into the area productively and efficiently. Consequently, DMP also needs to be located in highly congested urban areas to be able to fulfill the criteria of the prime function of, “specialising in pizza delivery”. If the business is not situated close to urban areas, the service would be deficient. On the whole, the business needs to be located in urban areas to achieve the marketing objective of increasing customer service. This will also help the organisation to be close to suppliers which would lead to increases in efficiency, as transport for delivery would be a limited expense and nevertheless maximize net profitability.

Figure6‐BiggestLoser‘GoodChoice’Rangevouchers:anexampleofstrategicpricing

5.4 Promotion Domino’s needs to undergo many activities which attract the attention of consumers and the broader society to the Biggest Loser ‘Good Choice’ range.

Domino’s uses mass media and a very accessible website to promote the new product range. Television and radio are the predominant forms of advertising for the Biggest Loser ‘Good Choice’ range. Whilst the Biggest Loser series was appearing on television, the commercials were on a high rotational appearance during the time slot. This is due to the viewers being predominantly health conscious individuals. Conversely, this allowed Domino’s to promote the product directly to the target market in a limited amount of time reducing the expenses spent on advertising. This allows Domino’s marketing objective of increasing net profitability by 10% by January 2011 more achievable.

DMP also uses Shannan Ponton as a brand ambassador for the product range. This adds to the veracity and authenticity of the product range as Shannan Ponton is a well known celebrity. Nevertheless, by using celebrity endorsement, Domino’s is able to provide a healthy food alternative which does not have hidden ‘nasties’ which consumers are wary about. Letterbox drops are another source of promotion for the Biggest Loser ‘Good Choice’ range. These coupons are not only providing money saving opportunities but also providing visually appealing images of the products which leads to consumers using their discretionary income to ‘impulse’ buy this desirable product. A relatively need way of endorsing this product range is through the new electronic sources such as the iPod application and the online ordering system. The iPod application (figure 7) allows consumers to buy the Biggest Loser ‘Good Choice’ range ‘on the go’. This is an added convenience to the consumers and is very appealing as it can be downloaded for free.

Figure7‐DMPiPodandiPadapplication

The internet ordering system also provides another level of accessibility to consumers. Along with the phone system and the well known number of 1300 DOMINOS, consumers are constantly reminded of the business. This allows increases in sales and also fulfills the vision statement to be “number one in pizza” as Domino’s has gone well beyond the selling of pizza behind the counter. 6.0 Implementing, Monitoring and Controlling It is absolutely crucial for Domino’s to implement, monitor and control the businesses marketing to ensure effectiveness and efficiency of the business. Domino’s has implemented all marketing strategies and has fortnightly decisions made on the Biggest Loser ‘Good Choice’ range. This is to make sure that the product still maintains its competitive advantage over other fast food organisations. DMP constantly monitors the product range by checking and observing the progress of the product range. This is done successfully by interviewing managers and employees on any issues, problems or important changes needed to be placed into consideration on the Biggest Loser ‘Good Choice’ range. To control this range, Domino’s highly encourages its stores to establish a performance standard. The performance standard for Domino’s Australian stores is to increase monthly sales of the Biggest Loser ‘Good Choice’ range by 5%. This performance standard is compared to the sales analysis which evaluates the effectiveness of the marketing strategies put into place in the marketing mix (figure 8).

Month

Sales quota ($)

Actual Sales ($)

Difference ($)

February 2010 250 000 200 000 - 50 000

April 2010 370 000 400 000 + 30 000

August 2010 160 000 150 000 - 10 000

February 2011 205 000 210 000 + 5000

Revises in the marketing strategy is essential for the Biggest Loser ‘Good Choice’ range to be continually successful. Production modifications need to be considered with the new season of the Biggest Loser. Also, new product development may need to be considered as competitors may catch up and imitate current goods. Therefore, implementing, monitoring and controlling of the product range is significant for Dominos to be successful in fulfilling their marketing objectives.

Figure8‐BiggestLoser‘GoodChoice’range:SalesAnalysis

7. Recommendations

Domino’s Pizza Enterpises Ltd has clearly used marketing successfully to maintain a competitive advantage over its competitors. This can be demonstrated through the situational analysis, marketing objectives, target market, marketing strategies and implementing, monitoring and controlling. However, the following recommendations are suggested for Domino’s to be continually successful in marketing: Extending the product range further by offering more complimentary products such as home-

made gelatos. By pizza being associated closely with the Italian culture, gelatos are a highly complementary food product. This may help Domino’s reflect the Australian image of a multicultural country and provide a more diverse product differentiation.

To expand further in the market share, introduce allergy ‘friendly’ alternatives such as gluten free pizza bases.

Implement loyalty cards to maintain a consistent consumer base and to develop a deeper

customer relationship.

Use more celebrity endorsements to provide veracity to the Domino’s branding name.

Introduce more competitions for consumers to be actively involved with the business. This allows a constant interaction with consumers and allow for more opportunities with sales growth.

8. Bibliography

(1) Dhall, M (2007) Marketing at Domino’s Pizza Enterprises Ltd Business Studies update Leading

Edge. (2) Dhall, M (2006) Dominos and the fast food industry Business Studies update Leading Edge. (3) Chapman, S (et al) (2005) Business Studies in Action: Jacaranda: Milton (4) Domino’s Pizza Enterprises Ltd (2010) <http://www.dominos.com.au/> (5) Ozition (2010) Good Choice Reviews

<http://www.oztion.com.au/Community/topic.aspx?t=wine&tid=389019>