Domino’s Pizza, Case Study Example

Introduction

In April 2009, two Domino’s employees in Conover, North Carolina, shot a video in one of the restaurant’s kitchen and posted the video on YouTube. In the video, the two employees were spotted doing gross things and using vulgar language while making sandwiches. One of the employees placed cheese in his nose (Park, et al., 2012). He then applied nasal mucus on sandwiches that were awaiting delivery. While this was going on, the other employee was providing a commentary. The video spread rapidly in the social media sites, especially through twitter. In a period of forty-eight hours, there were more than half a million views for the URL. The video prompted heated reactions from users of social media and customers.

Two days later, Domino’s President, Patrick Doyle, posted another video apologizing about the incidence. Domino’s created a Twitter page to address the incident and respond to the comments from angry customers (Park, et al., 2012). The apology video spread rapidly in social media. The prank video, posted by the two employees, was removed from YouTube due to copyright claims, but its copies or aliases still circulated in the YouTube community. Domino’s filed a lawsuit that required the two employees to face felony charges.

Company Background

In 1960, James Monaghan and his brother, Tom, purchased a small pizza hoard in Michigan, which was formally called DomiNick’s Pizza (Smith, 2013). The brothers were required to pay $75 as down payment. They borrowed $900 and acquired full ownership of the store. After eight months, James sold his shares to his brother, who became the sole proprietor of the store. In 1965, Tom named the store Domino’s Pizza, Inc. In 1967, the first franchise store for the businesses opened in Ypsilanti, Michigan (Smith, 2013). In 1969, the logo of the company had three dots, which represented three new stores. The growth of the company was rapid since by the end of 1978, the number of stores had risen to 200. The company faced setbacks in 1975 when the company that provided Domino’s with sugar, Amstar Corporation, filed a lawsuit alleging unfair competition and trademark infringement. In 1980, the New Orleans Law Courts ruled the case in favor of Domino’s Pizza. In 1983, the company opened an international store in Manitoba, Canada. This marked its 1000^th store (Gasparro, 2012). In 1985, a new store was opened in Lupton, United Kingdom. In the same year, the company opened a new store in Tokyo, Japan. By 1997, the number of international locations had reached 1500.

Current era

In 2004, the company started trading in the “New York Stock Exchange.” In 2003, 2010, and 2011, the company was named as “Chain of the Year” by the Pizza Today Magazine. The number of stores worldwide had risen to 8283 by the end of 2006 (Gasparro, 2012). Gross income of the company was $1.4 billion. With the improvement of technology, the company introduced online means of ordering in 2007. A survey carried out in 2009 showed that Domino’s was ranked last on basis of customer’s taste preferences. The company got to business through self-criticizing on their pizza’s quality. This was a move towards developing new pizza tastes. The arrival of Patrick Doyle as the new CEO changed the state of the company in 2010 (Gasparro, 2012). The company marked the highest growth at this time. In 2012, Patrick suggested the removal of the word “Pizza” from the logo. This was necessary to emphasize on non-pizza products.

Menu

Domino’s menu comprises a variety of side dishes and Italian-American entrees. The primary product is pizza, which is made with traditional specialty. Custom pizzas are available in varieties of toppings and crust styles. Some additional entrees at all stores include oven-baked sandwiches, bread bowls, and pasta. The menu also offers breadsticks, chicken side dishes, as well as desserts and beverages. Before 1990, the menu was relatively simple to ensure efficiency in the delivery process. The earliest menu consisted of one pizza, which came in two sizes, eleven toppings, and a soft drink (Smith, 2013). The menu has gone through several improvements since then. In 2010, the company unveiled a new taste of pizza with cheese as one of the ingredients.

Marketing Strategy

In the early 1980s, this company was well known for advertising since most of the advertisements featured in The Noid. This concept, which was created by the 243 Group Inc., produced television commercials for Domino’s. This move set the company ahead of Amstar Corporation. The company opened a website that gave away almost 11,000 free pizzas in April 2009. The company has also participated in several sponsorships. For example, the company sponsored the Doug Shierson Racing in 1990 and the Nascar Sprint Series in 1995.

With the technological improvements today, the company has combined social media with new digital-marketing technologies (Henry, 2010). It has incorporated online marketing to reach to different online customers. This is combined with consistent pricing strategies, which have worked well in maintaining sales momentum in the last two years. The executives of Ann Arbor referred to Domino’s pizza as “New and inspired pizza” in 2009. The support of Domino’s products by Ann Arbor has been the main driver of the company’s growth of sales.

References

Gasparro, A. (2012). Domino’s Sticks to Its Ways Abroad. Wall Street Journal 259 (89), 10.

Henry, J. (2010). Domino’s Pizza. International Business Journal. 445(1), 1-14.

Park, J., et al. (2012). Managing Bad News in Social Media: A case Study of Domino’s Pizza Crisis. Daejeon: Graduate School of Culture and Technology Press.

Smith, A. (2013). The Oxford Encyclopedia of Foods and Drinks in America. Volume 1. Oxford: Oxford University Press.