Marketing Management of Domino’s Pizza.

Marketing Management of Domino’s Pizza
Student Name: Student No:
Module Name:
Module Code: Tutor:
Assignment Title: MBA Marketing Management (25%)
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Contents
Introduction......................................................................................................................................1
PESTLE factors...............................................................................................................................1
Political Factors...........................................................................................................................2
Economic Factors:.......................................................................................................................2
Social Factors:.............................................................................................................................2
Technological Factors:.................................................................................................................3
Legal Factors:..............................................................................................................................3
Environmental Factors:................................................................................................................4
Porters 5 Forces model....................................................................................................................4
Threats of new entrants (Low).....................................................................................................5
Bargaining Power of Buyers (Low).............................................................................................5
Bargaining Power of Suppliers (Low).........................................................................................5
Threat of Substitute Products (High)...........................................................................................6
Competitive Rivalry (High).........................................................................................................6
SWOT analysis................................................................................................................................6
Segmentation, targeting and positioning.........................................................................................8
Segmentation...............................................................................................................................8
Targeting......................................................................................................................................9
Positioning.................................................................................................................................10
Marketing mix strategies...............................................................................................................10
Product.......................................................................................................................................10
Pricing........................................................................................................................................11
Placing.......................................................................................................................................11
Promotion..................................................................................................................................12
Search Engine Optimization..................................................................................................13
Domino’s pizza social media strategy...................................................................................13
Email Marketing and SMS Marketing...................................................................................14
Domino’s Advertising...............................................................................................................15
Conclusion.....................................................................................................................................15
Recommendations of future marketing strategies.........................................................................16
References......................................................................................................................................17
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Introduction
Marketing includes every resource and set of activities necessary to direct and aid the passage of
goods from producer to consumer. Porter's Five Forces model is a strategic management tool
used to examine an industry's competitive environment to discover the levers that drive its
profitability. Managers might employ Porter's Five Forces model to position Domino's Pizza,
Inc. more effectively for competitive advantage and long-term profitability in the Restaurants
sector. (Goyal, 2020).
This study examines pestle variables and Porter's five forces to see what factors lead to Domino's
success. My assignment included conducting a SWOT analysis of Domino's pizza and
segmentation, targeting, and positioning. Additionally, I devised tactics for Domino's pizza
market mix. Domino's requires more major endeavors in the future, so I submitted a few
recommendations.
PESTLE factors
Pestle stands for Political, Economic, Sociocultural, Technological, Legal, and Environmental
(Perera, 2017). These six macroenvironmental elements affect an international business's
performance and profitability. It helps organizations devise methods to combat their negative
influence and discover faster growth if they are aware of their impact. To retain the firm's market
position and share, managers must be aware of these aspects (Greer, 2018).
Pestle Analysis Source: https://prezi.com/
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Marketing Management of Domino’s Pizza
Domino's, the world's most famous pizza company, offers take-out and door-to-door delivery.
The pizza maker's global network has grown to approximately 8,000 locations. The restaurant
aims to satisfy the craving for authentic Italian flavor in their pizza by offering a treasure trove of
freshly grained ingredients. To keep up with Domino's, several of the world's top pizza
franchises, including Pizza Hut and Papa John's, have been competing with the company. The
PESTLE framework is used to examine various external factors that Domino's must consider to
compete in the mass market.
Political Factors
There are political implications when the legal system is guided by a predetermined set of
standards and regulations, as Custer and Brown outline (2012). This political context can have a
range of effects on the business process. For Domino's Pizza, the United States does not have
any stringent policies or considerations that could adversely influence the company's business.
It's worth mentioning that the most crucial laws are those governing remuneration. As a result, it
maintains staff motivation.
Economic Factors:
Economic fundamentals indicate that the US economy's per capita income and gross domestic
product have increased in recent decades as consumers increased their spending to satisfy their
desires. On the other hand, Domino's has a 53 percent domestic market share and a 47 percent
foreign market share. Investors' fears about Domino's expansion were alleviated by the fact that,
according to a case study, the company's revenues had been progressively declining since 2005.
Additionally, the restaurant's raw material costs have grown due to the high inflation rate, which
has a direct impact on how things are priced. Additionally, the company's progress is aided by
the strength of the US economy.
Social Factors:
Domino's has a diverse clientele as a multinational firm despite its Western origins. Domino's
serves people from all socioeconomic backgrounds, from the very wealthy to the middle and
lower classes. Domino's is catering to a diverse range of cuisine, cultural trends, and values by
introducing local cuisines. The site's menu has been expanded to include a variety of additional
desserts and sides. The National Restaurant Association reports that 45 percent of adults love
dining out at their favorite restaurants despite the economic slump. According to a Rasmussen
Reports poll, 40% of respondents consume pizza weekly or more frequently.
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Marketing Management of Domino’s Pizza
Social Factors of Domino’s Source: https://prezi.com/
Technological Factors:
Custer and Brown (2012) assert that the food industry must modernize its technologies to remain
competitive and provide superior services. Domino's has been experimenting with various ovens
and cooking processes to stay current. This is a significant effect, and Domino's is also pursuing
other technology areas, including the internet and social media. However, it must determine how
to deal with modern technological advancements. Domino's currently engages with 1.2 million
Facebook users and 20,000 Twitter followers with a strong social media presence. Additionally,
Domino's must maximize its social media presence to express its brand successfully.
Technological Factors of Domino’s Source: https://prezi.com/
Legal Factors:
Domino's locations ensure that they adhere to all applicable legal and regulatory requirements to
guarantee the restaurant business operates smoothly. It makes every effort to minimize small
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Marketing Management of Domino’s Pizza
legal, regulatory, or compliance issues that may arise from order processing and transactions on
mobile applications and websites. As a result, all Domino's franchisees are solely responsible for
purchasing products.
Environmental Factors:
Increased inflation and a weakening of the world's economies affect business procedures. Due to
the current economic condition, Domino's sales increased by 11% in the first seven weeks of
2008 compared to the previous year's same period. Another direct effect of a business's remote
location on its economy is the effect of market segment effects on Domino's purchasing patterns.
Additionally, as individuals have grown more environmentally conscious, they have begun to
pick recyclable packaging. As a result, Dominos needs to focus on this industry and retain
clientele.
Environmental Factors of Domino’s Source: https://prezi.com/
Porters 5 Forces model
Michael E. Porter established the Porter Five (5) Forces Model in 1979. When assessing a
company's competitive position and strengths, this model considers the threat of new entrants (as
well as competition among existing firms) and the danger of substitute products or services being
offered (Bargaining power of buyers and bargaining power of suppliers). These factors influence
the rivalry in every industry (Goyal, 2020). This is detrimental to the industry's overall
competitiveness if these factors have a detrimental effect on profitability.
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Marketing Management of Domino’s Pizza
Porters 5 Forces model of domino’s Source: colleenthomas. com
Threats of new entrants (Low)
Entering the local fast food business requires less capital investment than entering the
international market. As a result, businesses seeking to expand their global presence may find
this to be a capital-intensive endeavour. The manufacturing line may benefit from scale
economies and bulk purchasing. On the other side, the primary source of profit is the volume of
sales generated by customer orders. It is easier for local fast-food restaurants to get into the
market than for global corporations. Domino's Pizza is a minor danger to new entrants because it
operates worldwide (Petzer et al., 2006).
Bargaining Power of Buyers (Low)
In the fast-food industry, purchasing power is influenced by the quality, pricing, and creativity of
menu items. Domino's consumers enjoy pizza, sandwiches, and other fast food items. The
corporation concentrates on inventing new menu items to keep customers coming back for more
(Mhlanga, 2018). The company has an advantage over its competitors because of its emphasis on
product innovation and the speed with which it delivers its cuisine. Furthermore, Domino's
Pizza's price structure is designed to consider consumer purchasing trends and affordability.
Bargaining Power of Suppliers (Low)
The businesses that supply Domino's Pizza with raw ingredients are among the company's
suppliers. Competitive pricing is standard practice for Domino's Pizza and other multinational
fast-food chains. Suppliers benefit from the company's global market position by wanting to
retain long-term relationships with it. Having a supply arrangement with a third party that offers
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Marketing Management of Domino’s Pizza
affordable prices for cheese, for example, demands this. As the price of cheese continues to rise,
Domino's Pizza and its supplier are both concerned. A seven-year contract has been reached
between the company and the employee (having no changes due to price fluctuation). It's clear
from this analysis that suppliers don't have much-negotiating leverage (Tiong et al., 2011).
Threat of Substitute Products (High)
Substitute products pose a big threat to Domino's Pizza. Domino's Pizza offers an array of
alternatives, including other companies that sell the same fast food items available at Domino's
stores (Ibrahim, 2012). Decisions on whether to switch from one company to another are
influenced by the expense of doing so and the ability of the new company to meet the customer's
needs. Low switching costs mean that customers who move from Domino's Pizza to a competitor
offering comparable items are more likely to transfer to a competitor offering similar products.
Furthermore, other fast-food firms have replicated Domino's Pizza's high-quality standards (Hitt,
Ireland & Hoskisson, R.2012).
Competitive Rivalry (High)
Competitive rivalry in the fast-food market is considerable because of the large number of local
and foreign enterprises engaged in the sector. Domino's Pizza's market share could be
significantly impacted by some of the most prominent fast-food companies. When it comes to
Pizza, Domino's
SWOT analysis
SWOT Analysis of Domino's
Domino's
Strengths
 Domino's is a well-known and well-loved brand name.
 Beyond pizza, Domino's offers a wide range of other items.
 Food that is safe to eat and served quickly is also important.
 In terms of online and mobile ordering, it is the market leader.
 Advertising and marketing activities for Domino's contribute to
strong brand equity (Forbes, 2021).
 Domino's employs more than 120,000 people worldwide.
Domino's
Weaknesses
 Foods heavy in fat and calories are considered undesirable by
many health-conscious individuals.
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Marketing Management of Domino’s Pizza
 To keep its market share, Domino's has to battle intense
competition (King & Gupwell, 2019).
 Domino's is most known for its pizza, but it also serves many side
dishes.
Domino's
Opportunities
 Improving Domino's home delivery service should be a priority.
 Domino's could benefit from introducing locally specialized flavor
enhancers and pizza toppings (Mihalec, 2020).
 Another requirement is to expand product reach across existing
markets by increasing the capacity of the distribution network.
 Increasing presence in emerging markets, such as India and China.
Domino's
Threats
 Competition from many small competitors selling a wide variety of
pizzas might hurt business for Dominos.
 Reducing the amount of sugar and fat in the diet.
 Changes in government regulations and laws can have an impact
on global operations.
Advantages and Disadvantages SWOT
The SWOT analysis can be used to conduct structured brainstorming sessions. As a result, when
an issue or process is approached using the SWOT analysis, it can be conceptualized in phases or
a life cycle. For example, the strategic planning process consists of several stages or phases
(GURL, 2017).
Advantages
It's critical to remember that the SWOT analysis, like the brainstorming session, is merely
gathering ideas about an issue or problem. Consider the strategic strategy or the company's
competitors when determining whether a brainstorming session makes sense. If this is the case,
the organization must next determine whether to facilitate the meeting using the SWOT analysis
or another tool.
SWOT analysis can evaluate a business, a department within a business, a person, or a team.
Additionally, the analysis can be used to aid in the accomplishment of a range of project
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Marketing Management of Domino’s Pizza
objectives. SWOT analysis can evaluate a product or brand, acquisition or partnership, or the
outsourcing of a business function (Valentin, 2001). A SWOT analysis can also examine a
particular supply source, a business's procedures, the market for a particular product, or the use
of a particular technology, among other things.
Disadvantages
Strengths, weaknesses, opportunities, and threats (SWOT) analysis generates four lists. There
isn't a way to prioritize the importance of one aspect vs. another in any list provided by the
program. Therefore, determining the true impact of any one component on the target is
challenging.
According to the SWOT analysis, every aspect of a problem can be categorized into one of four
categories (Teoli, 2019). There appears to be just one effect on the problem being studied for
each of these attributes. It's possible that one aspect can serve as both an advantage and a
disadvantage. Increased sales, for example, maybe a result of placing a chain of businesses on
well-traveled roadways. It's tough to compete on pricing without a huge sales volume because of
the high running costs associated with high-visibility venues.
Segmentation, targeting and positioning
Segmentation
Companies benefit from segmentation, which helps them achieve a competitive edge, and
focusing on a specific target market helps them minimize overall costs (Maricic, B, & Dordevic,
2015). Focusing on middle-class, young clients has helped Dominos gain traction in the Indian
fast food sector. Dominos has a specialized market of students and working adults who have
little time to prepare and are willing to try.
Demographic segmentation
It is common for marketers to correlate demographic characteristics such as age, gender, and the
consumer's desires because they are so often used in this type of marketing. To categorize
markets, the following demographic factors were considered.
Age:
Below 15 years — 0%
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Marketing Management of Domino’s Pizza
15 — 20 years — 20%
21 — 30 years — 40%
31 — 40 years — 25%
Above 40 years — 15%
The company's target market is bachelors, youngsters, and professionals who don't have time to
cook and want to eat as soon as possible.
Gender:
They aimed to appeal to both genders. Income is another way to break down the market into
smaller subgroups. Sixty percent of those in the upper-middle class have an annual income of 35
percent of the population is classified as middle class, and 30 percent as lower class 5% of the
lower class are Self-employed (upper-level people), officers, executives, junior officers, and
Executives are all examples of occupations. As a result, they've reworked their menu and
introduced new items, including spicy paneer and pizzas in three different sizes.
Geographic segmentation
Geographic segmentation refers to segmenting a market according to its geographical location.
South Asia is a critical geographic segmentation characteristic for marketers to consider when
segmenting their markets. In this region, rural and urban markets are mainly divided. Domino's
intends to open 20-25 new outlets in these cities per year to capture the whole market. At
Domino's, there are around 2,100 staff, all young and enthusiastic.
Targeting
Middle- and lower-class Americans make up Domino's customer base. The company's tagline
reads, "best quality at the best pricing." Domino's has developed a pricing strategy that is both
uniform and consistent. As a result, the company can maintain its margins while attracting new
clients. They are designed for families who want to eat out once or twice a week and for
elementary and high school youngsters (Dhar, 2011). Expenditures that aren't necessarily take up
many college freshman's expenditures. Domino's has launched a new online ordering option for
customers who like to consume pizza at home with their families or friends. It employs a
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Marketing Management of Domino’s Pizza
differentiated targeting technique to cater to the market's tastes and interests. Dominos has thus
far successfully presented itself as a Pizza brand with competitive pricing and a diverse menu.
Positioning
Domino's marketing and advertising techniques have successfully achieved the desired benefit
level. Dominos has the following two notable advantages:
They start manufacturing pizza as soon as consumer orders it so that they can offer the freshest
pizza possible. Domino's distinguishes itself from its competition because it has a significant
number of local outlets that enable it to maintain high standards of pizza quality.
Marketing mix strategies
Product
Domino's has become synonymous with pizza in the general public due to its product and
marketing abilities. Domino's offers a wide selection of pizzas. Depending on the region, you can
choose from several pizzas, including the New Yorker Range (the priciest), the Premium pizza
(the priciest), and the Traditional pizza (the most affordable). Domino's Pizza offered a guarantee
that customers would receive their pizzas within 30 minutes of placing their orders, or the
company would pay for the delivery of the pizzas. In 2000, there was a hefty $3.1 million
guarantee. In 2009, Promoting Age ranked Domino's commercial as "among the fastest
developing cash earners in the café industry." Domino's had to keep up with its growth and
rivals, notably Pizza Cottage, which had more than 4,100 units compared to Domino's 2,400.
Domino's spent 249 percent more on publicizing and media than it had the previous year in the
previous year. Domino Pizza stopped using this strategy in 2020 and came up with a new one
that said that if a customer was dissatisfied, he could choose between another pizza or a discount.
By 2021, Domino's Pizza's advertising approach had run its course, and the company had added
chicken wings to its menu. They also expanded into the African market by opening a new store
in Cairo. The Domino's Pizza website was launched in 2010. The group estimated global deals at
4 billion dollars in that year.
Dominos' fundamental offering is satisfying an innate desire for pleasure and happiness (Bhasin,
2014a). Domino's is committed to product quality and value for money. Another significant
factor in Dominos' success has been its superior dining experience (Halzack, 2014). Each staff
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Marketing Management of Domino’s Pizza
member at a Dominos restaurant is committed to "customer mania," a degree of service that
ensures a pleasant customer experience. This has provided them with a competitive edge for
gaining new clientele.
Customers gravitate toward Dominos due to its distinctive features. Dominos differentiates itself
from Pizza Hut and the competition by offering a diverse menu of products, including pizza,
cakes, pasta, and desserts. At Dominos, customers may customize their pizzas by selecting the
bread dough and toppings. This enables clients to customize their pizzas according to their
preferences (Bhasin, 2014a). Another feature that distinguishes Domino's is its approach to
consumer orders. When a customer enters a Pizza Hut restaurant, employees immediately
approach them and hand them menus while waiting for their order to be prepared (Halzack,
2014). The objective is to grow the client base by attracting new customers who value superior
service. Domino's provides packaging for pizza orders that are picked up. For in-house eating,
Dominos provides pizza on hot pans and plates.
While Domino's is primarily concerned with food, Pizza Hut is mostly concerned with
experience and fulfillment. As a result, it is a location where a single individual can satisfy their
fundamental craving for pizza (Halzack, 2014). Dominos has continually differentiated its goods
to entice customers. Domino's distinguishes itself by offering a varied variety of options (Bhasin,
2014b)
Pricing
Domino's struggles to compete in the face of so many other options. "Exceptional people on
purpose to be the best pizza delivery company globally," yet, exceeds all obstacles. It's a great
value for the money, with excellent quality. Because of this, the pricing strategy has been
developed with ease but with a high degree of consistency. As a result, the base price remains
stable, making it more affordable to those in the lower and moderate-income brackets.
Because of its affordability, it has lasted for so long. And to stay up with its phenomenal success
and enviable reputation, the company regularly introduces new and innovative plans like buy one
pizza, get one free, or special discounts.
Placing
The majority of Domino's business is franchised, with 97 percent of the company's revenue
coming from franchisees. Around 17000 Domino's restaurants are currently in operation around
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Marketing Management of Domino’s Pizza
the world. Around 4000+ domestic franchise stores and 800+ franchisees operating multiple
outlets are found in the United States. Domino's has more than 7,000 locations throughout the
world. The country of India is the next most popular shopping destination outside of the United
States, with more than 1000 outlets. Dough manufacturing and equipment supply facilities, a
vegetable processing facility, and a press plant facility are all located in the United States.
Domino's provides the machines and other equipment, but the proportions remain consistent
throughout the world.
Over 30 countries conduct online orders for Domino's pizza, with the firm accounting for 95
percent of sales. Domino's has an incredible track record of expanding. If you're in the mood for
pizza, you've come to the perfect place, whether it's a mall or a bustling street. With the greatest
network of 17,000 franchises in 90 countries, it runs and expands worldwide chains and stores
flawlessly. As a result, it is reasonable to argue that 97 percent of Domino's locations are
franchised. India is one of the most sought-after vacation destinations.
Domino's has come a long way from it launched the world's first SMS pizza ordering service in
2007 to the launch of the app. In 2009, when this function was launched, users were able to track
their orders. As a result, Domino's Pizza has always maintained an open channel of
communication with its customers. Whether a customer dines in or places an order, their food
will be delivered in a box. Additionally, Domino's offers a 30-minute delivery guarantee, which
exempts the customer from any delivery charges if the order is not arrived by the stipulated
period. Thus, delivery drivers are considered heroes among the company's more than 27,000
employees! They conduct business via smartphone and tablet apps, as well as the internet, phone,
and in-person at their brick and mortar sites. Their network of retailers ensures that their products
are manufactured and sent within 30 minutes of receiving an order. As a result of maintaining a
differentiated targeting strategy for each country, the company has amassed a sizable customer
base.
Promotion
The digital marketing effort for Domino's Pizza was a success. As a result, Domino's e-
marketing strategy must be revised regularly to keep up with evolving marketing techniques
(Bhardwaj, 2014). They must maintain their image and continue to do an exceptional job as one
of the largest pizza brands in the leading pizza restaurant chain and online.
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Marketing Management of Domino’s Pizza
Domino's aggressively promotes and advertises its products. The majority of Dominos' promos
are advertised on the company's websites, mobile applications, and customized SMS messages to
individual consumers (Kalkat, 2017). In addition to print and radio ads, Domino's advertises on
television, claiming that it will bring pizza to your home within 30 minutes. The Dominos ads
also partnered with local celebrities to better connect with the audience (Praxedes, 2016).
Search Engine Optimization
A well-developed SEO strategy is important for any business's success. The website's Domain
Score is 92, based on the results of the SEO audit. They've made an effective Meta Title by
including the relevant keywords in the title. Utilizing the appropriate keywords in the Meta
Description and making it obvious what they offer are also critical components of the page's
SEO. On the web page, H1 and H2 headings help viewers comprehend what the page contains
(Zilincan, 2015).
Kalkat, M. and Grant, B., 2017. How new strategies, different promotional tools and CRM are
useful for improving sales.
Praxedes, S.G.S.F., 2016. Domino’s Pizza Portugal: a case study on the price disclosure strategy
of a late entrant (Doctoral dissertation). Zilincan, J., 2015. Search engine optimization.
In CBU International Conference Proceedings... (Vol. 3, p. 506). Central Bohemia
University.
Search Engine Optimization Source: https://www.bluecorona.com
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Marketing Management of Domino’s Pizza
Domino’s pizza social media strategy
There were 234k Instagram followers, 7 million Facebook liked in January 2020, and 62.2k
YouTube subscribers of Domino's Pizza. In terms of social media, Domino's Pizza has a large
following. Domino's Pizza likes to play with people's emotions. People can have a personal
connection to Domino's Pizza when they participate in a marketing campaign using hashtags or
words often used by the public. Domino's social media marketing is noticeably more engaging
than its competitors (He et al., 2013). They have been able to successfully run campaigns on
social media platforms due to their use of Moment Marketing.
Domino’s pizza social media strategy Source: (Erica Swallow, 2012)
Email Marketing and SMS Marketing
Domino's does not rely heavily on email marketing as a marketing tool. Order confirmations and
remarketing are two common uses of email marketing. Promotional messages, such as order
confirmations can be sent to customers via SMS marketing.
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Marketing Management of Domino’s Pizza
Email Marketing and SMS Marketing (Juleon, 2017)
Domino’s Advertising
Google's pay-per-click advertising is highly effective. Google search adverts can target a specific
audience with a brand's products and services. Domino's pizza also uses Facebook, and
Instagram targeted advertising to enhance traffic to their website and app.
Dominoes Advertising (Hitesh Bhasin, 2017)
Conclusion
In the quick-service restaurant industry, Domino's has established itself as a market leader by
placing a high priority on the quality of its products and the whole customer experience. Due to
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Marketing Management of Domino’s Pizza
its continuing focus on technological advancement, the company has seen a significant increase
in global sales. The organization could weather the pandemic because of recent strategic
investments in digitization. Customers can access the company's products and services via
various mediums, including the company's mobile app and website. The company's supply chain
operations are significant in driving operational excellence inside Domino's system in the United
States and Canada.
Many aspects contribute to Domino's success in the QSR industry, including product quality,
marketing, and customer experience. With its current success as a springboard, the company is
looking to broaden its international reach. Domino's is well-positioned for greater success in the
QSR business, both domestically and internationally, in the future years.
Recommendations of future marketing strategies
 To begin, the corporation should expand its network in India and China to take advantage
of the upcoming opportunities in these two developing nations. Domino's outlets in India
and China make up less than 2% of the company's total locations (Globaldata). To
achieve the company's present expansion plans, it is recommended that the number of
locations is increased by more than 20% over the next three years.
 Domino's could also focus on customer loyalty by ensuring that all outlets serve the finest
delicacies and insisting on quality. If positive results are to be achieved, certain quality
criteria must be strictly adhered to. In light of the increased competition in the fast-food
industry, these two ideas have been put forth (Young).
 As a third option, Dominos Incorporation might leverage its clever advertising strategies
to target all of the market's players and competitors, rather than just Subways as a single
point of concentration. When well-established firms like McDonald's may devise
innovative strategies that affect the company's stability and growth in general, focusing
solely on one competition could have major ramifications for the organization
(Datamonitor).
 Fourth, Domino's has to boost its unique internet marketing and sales techniques. When it
came to online incentives, Pizza Hut outperformed Domino's even though both
companies had invested a similar sum in their online services section.
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Marketing Management of Domino’s Pizza
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