Video Title: Domino’s Pizza: Managing Marketing Information
Run Time: 6:17
Classroom Application: Instructors will find this video useful in the study of marketing techniques. Domino’s used information gathered through marketing research and tested with experimental design to greatly improve their product. The company then employed marketing techniques to create a new brand perception. Providing students with such knowledge can help them to appreciate and better understand the role of marketing in brand perception and company success.
Synopsis
Domino’s Pizza, based in Ann Arbor, Michigan, has been a pizza delivery company for over fifty years. Through marketing research techniques, the company determined they had a problem: customers did not like their pizza. The company found a solution to their problem: use customer insights to create an entirely new pizza and brand image. Using experimental design, a new product was created. With a new marketing campaign, a new brand perception was developed. As a result, Domino’s Pizza is an entirely different brand than it was two years ago and is seeing much success as a result of their efforts.
Discussion Questions
1.Explain the role that marketing research played in the creation and launch of Domino’s new pizza.
Domino’s was a company that was successful for decades. It took a decline in sales and market share for it to realize something was wrong. Marketing research was completely responsible for discovering why the company was suffering. Not only did research identify that the quality of Domino’s pizza was the main reason for its decline, but it was used in every step of the creation and launch of the new pizza.
Defining the problem – Research clearly identified that customers did not like Domino’s core product. It wasn’t just an issue of having a product that didn’t excel. It was that customers thought its pizza was disgusting. It also identified Domino’s biggest strength – delivery and customer service.
Product development – Domino’s approached the process of re-formulating its pizza in a very methodical way, one that could be evaluated and analyzed so as to come up with the best possible combination. It started with dozens of options for crust, cheese, sauce, and other ingredients. Using the research process, it whittled those options down to its “top five.”
Concept/product testing – Domino’s utilized an experimental design that tested certain combinations, and extrapolated predictions for other combinations that weren’t tested.
Launch/promotion – Domino’s used data and material from its research to develop a groundbreaking promotional campaign based on honesty and transparency. “Our pizza stunk” was at the core of its promotion.
2.Are there more effective ways that Domino’s could have gone about its research process? Explain.
There may very well be. But based on the information in this video, it seems that Domino’s was extremely focused on the research process throughout the entire process. As Russell Weiner states, Domino’s “wants to be able to establish with a certain amount of statistical confidence that X-Y-Z is going to work.”
3.Why did it take so long for Domino’s to realize that customers didn’t like its pizza? Was it an accident that it made this realization?
In all likelihood, it was because they weren’t forced to confront the issue. Domino’s shot to the top based on a strategy of “30 minutes fast or free.” Its popularity skyrocketed because people loved the idea of being able to get hot pizza fast – and the possibility of getting the pizza for free if it wasn’t. No one (customers included) paid much attention to the quality of the pizza. Once the market caught up to it in terms of competitive options, people found that they could get good service elsewhere and get better pizza. Thus, it was hardly accidental. It was the most real problem of “losing sales” that woke Domino’s up.
Quiz
1.Which of the following did the video cite as an advantage of test marketing?
a.It is an inexpensive marketing technique.
b.It is one of the fastest marketing techniques.
c.It provides an opportunity to see how a product performs in the market.
d.It is a marketing technique that is guaranteed to produce the desired results.
Answer: c
Explanation: The advantage of test marketing is that it allows you to see how a product performs in the market before a full-scale release. The disadvantages are that it is a slow and expensive marketing technique, and it also gives the competition an opportunity to see what your plans are before a product is fully released.
2.Which of the following best describes “the problem” that research testing revealed for Domino’s Pizza?
a.Customers were not pleased with their delivery time.
b.Customers were unhappy with their customer service.
c.Customers disliked the taste of their pizza.
d.Customers felt the price of their pizza was too high.
Answer: c
Explanation: Research testing revealed that customers were pleased with Domino’s delivery services but did not like the taste of their pizza.
3.Which of the following words does not describe Domino’s Pizza’s new marketing efforts?
a.honest
b.self-critical
c.apologetic
d.transparent
Answer: c
Explanation: Domino’s Pizza’s new advertisements were honest about the poor quality of their old pizza recipe and offered transparency into how the company reached that conclusion and what they had done to fix the problem.
4.Which of the following most accurately describes “the solution” Domino’s found to their problem?
a.to use customer insights to create an entirely new pizza and brand image
b.to use research methodologies to change their pizza slightly and create an entirely new brand image
c.to return to the use of earlier Domino’s pizza recipes and to continue their current marketing strategy
d.to focus on the positive aspects of their business (good customer service and delivery times) and promote them in their marketing
Answer: a
Explanation: “The solution” Domino’s found for their problem with the pizza was to use customer insights to create an entirely new pizza and brand image. Domino’s used experimental design to create a new pizza. They then used marketing techniques to market themselves in a way that created a new brand. By admitting their former mistakes to the public and providing transparency on the process used to fix those mistakes, Domino’s was able to completely change their brand perception.
5.Which of the following most accurately describes Domino’s goal for the next five to ten years?
a.to become the number one pizza delivery company in the United States
b.to become the number one pizza delivery company in the world
c.to have the number one pizza in the United States
d.to have the number one pizza in the world
Answer: d
Explanation: Currently, Domino’s Pizza ranks as the number one pizza delivery company in the world. Their goal for the next five to ten years is to have the number one pizza in the world.