Você está na página 1de 19

EFFECTIVENESS OF

SALES PROMOTION
CAMPAIGNS

1
TABLE OF CONTENTS

1. INTRODUCTION

2. HISTORY

3. MODELS USED

4. STRATEGIES

5. COMPETITOR

6. DOMINO’S V/S PIZZA HUT

7. NEW PROMOTIONAL ACTIVITY

8. SUCCESS FACTOR OF DOMINO’S PIZZA

2
INTRODUCTION

India's retail revolution

Cheese (paneer) is ubiquitous in India's northern cuisine. Tomatoes and all


kinds of sauces are prevalent everywhere. Combine these ingredients into
one gooey, oily, tasty dish that you can eat with your hands - as Indians
traditionally do - and you have a hit.

It's estimated that 80% of Indians are vegetarians, so pizza suits that Indian
cultural aspect too. Both chains are scrupulous about keeping "veg" from
"non-veg" in their kitchens and invite people in to see the separate prep
areas. There are even pizza options for India's 5.2 million Jains, followers of
a religion that prohibits eating onions or garlic. And stores in heavily
Muslim areas don't offer pepperoni.

Mix in another aspect of Indian culture, and you begin to see why both
chains are excited about their growth prospects. "Indians are great
socializers," says Pizza Hut's Allen. "That plays right into what Pizza Hut
stands for as a brand." Indeed the chaos at Pizza Hut is a deliberate
marketing strategy. "We call it 'customer mania,'" says Jain. "All the crew
members do a dance during peak hours every day. It's a very local thing. It
kind of breaks the ice in what otherwise can be a standoffish atmosphere.
Customers just love it."

That's certainly true for Praveen Jaya - ram, 32, who occasionally eats at a
Pizza Hut in Bangalore on Sunday evenings with his wife and 4-year-old
son. "It's friendly here," he says over a $6.25 four-course meal for two that
includes a chicken tikka pan pizza, garlic bread, tomato soup, and mango ice
cream. "Once or twice a month eating here is okay," he says, acknowledging
that local dining options are much cheaper. But being able to afford a night
out at Pizza Hut is a mark of success in increasingly affluent India.

For its marketing strategy, Domino's has revived a practice abandoned in the
U.S. in 1993: the 30-minutes-or-free-delivery guarantee. "I have a Pizza Hut
across the road, so I have to do it in terms of brand visibility," says Alok
Pandey, Domino's regional manager for southern India. But, he admits,
traffic, monsoon rains, and new neighborhoods spreading out like tendrils
make meeting the delivery cutoff a challenge. Sometimes, Pandey says, he

3
has to give away as many as 70 pizzas in a weekend (about 2% of total
orders).

Meanwhile, the Pizza Hut across the street has counterpunched with an offer
of its own: 50% off for a delivery that takes more than 30 minutes. Ladies
and gentlemen, let the slugfest continue.

More on India
Apart from local adulteration practices - plenty of chili flakes, ketchup, and
other condiments - these pizzas at Domino's and Pizza Hut taste the same as
in the U.S. What's different is the intensity of the competition. Pizza Hut has
134 locations across India (and 13,000 worldwide); Domino's, 149 (8,500).
Both are adding about 50 stores a year - quadruple the average in other
markets.

In up-and-coming neighborhoods like this one in Bangalore, home to a large


number of tech workers, the stores are often across the street from each
other, something executives at both companies confirm is unusual. Another
Bangalore location, Commercial Street, also has Pizza Hut and Domino's
facing off. Bangalore alone has 20 Domino's outlets, with five more planned
by the end of this year. By comparison, McDonald's (Charts, Fortune 500)
has just three in Bangalore and 105 in India.

The two pizza chains have been in India for about a decade, but the battle
started getting feisty only in the past few years when Pizza Hut, a division of
Yum Brands (Charts, Fortune 500), began a push to double its outlets and
Domino's (Charts) began adding in-house seating.

Both chains claim to be leaders: Pizza Hut for casual dining, Domino's for
delivery. But there's quite a bit of crossover. Domino's has been renovating
its takeout storefronts to add eat-in tables and now does up to 40% of its
business in some locations that way. Pizza Hut claims as much as 50% of
sales from delivery in some stores, and ten of its outlets are takeout only.
Pizza Hut boasts 30% year-over-year sales growth in India; Domino's says
its is 55%. (Neither chain breaks out sales figures for India.)

It's still early rounds, but the pizza fight is shaping up something like this:

Left jab, Pizza Hut: "We've been voted India's favorite food brand for each
of the last four years, over any other brand," says Graham Allen, who runs

4
the international division of Yum Brands, which also owns KFC and Taco
Bell.

Counterpunch, Domino's: "Productwise we have no match. We are clearly


the market leader," asserts Domino's India CEO Ajay Kaul. "A Pizza Hut
across the road does not in any way dampen our spirits. Our competition is
elsewhere, from traditional Indian food."

Right hook, Pizza Hut: "We don't have any competition," says Anup Jain,
Pizza Hut's marketing director in India. "They [Domino's] are not a
restaurant player. You eat out of a box. At Pizza Hut you get table service.
You get to order appetizers, salads, and dessert as well. Everyone can copy
our product, but they cannot copy our culture. Delivery actually follows
eating out as a habit. We go and create the market first. We introduce the
concept of pizza, and then consumers bring it home. It's great for
competition to follow. I think they want to follow us."

Uppercut, Domino's: "We have some real die-hard Domino's eaters who'll
travel any distance to find us," says Kaul. "There's no doubt that Domino's is
better than anyone else in the market."

Who will emerge as heavyweight pizza champ is anyone's guess. But the
stakes are high. For Pizza Hut, India is one of the company's three highest-
priority markets. Its projections call for 300 stores by 2012. "While it's
relatively small now," says Allen, "we see it as a huge opportunity."

Domino's is equally enthusiastic: Kaul says he wants 500 Domino's outlets


in India by 2010. A recent McKinsey Global Institute study projected that
India's middle class, currently at 50 million, will grow, amazingly, to 583
million by 2025, and that India's masses of young people will spend more
outside the home than their parents' generation. They're the chains' target
population. Urban centers are also key to success, and India has 35 cities
with more than one million people, compared with just nine in the U.S.

It's not all that surprising that pizza is big business in India. The product
itself is similar to India's native cuisine. Unlike Chinese and Japanese,
Indians eat leavened bread (naan), and a popular traditional version slathers
it in butter and garlic - not unlike garlic bread, the most often ordered side
dish at both Domino's and Pizza Hut franchises in India.

5
DOMINO’S PIZZAS

In the kitchens of a Domino's in


Bangalore (top) and a Pizza Hut: Both
chains say pizza sales in India are hot.

Domino's, across the street from a Pizza


Hut in Bangalore, also offers air-
conditioned dining - and chili flakes
galore.

Domino's Pizza India Ltd. was incorporated in March 1995 as the master
franchisee for India and Nepal, of Domino's Pizza International Inc., of
USA. Moreover, the company holds the master franchisee rights for Sri
Lanka and Bangladesh through its wholly owned subsidiary. Mr. Shyam S.
Bhatia and Mr. Hari S. Bhartia of the Jubilant Organosys Group were the
promoters of the company.

6
Since inception, Domino's Pizza India Ltd. has proceeded to become one of
the largest and fastest growing international food chains in South Asia. The
first Domino's Pizza store in India opened in January 1996, at New Delhi.
Today, Domino's Pizza India has grown into a countrywide network around
220 outlets in 42 cities and is the leader in the fast food delivery segment.

Ever since it was established, Domino's Pizza India has maintained its
position of market leadership with its constant product innovation and
maintenance of stringent service standards. More importantly, it has
established a reputation for being a home delivery specialist capable of
delivering its pizzas within 30 minutes to its community of loyal customers
from its entire chain of stores around the country. Customers can order their
pizzas by calling a single countrywide Happiness Hotline - 1800-111-123. In
fact, Domino's was the first one to start this facility for its customers.

Domino's is committed to bringing fun and excitement to the lives of our


customers by delivering delicious pizzas to their doorstep in 30 minutes or
less, and all its strategies are aimed at fulfilling this commitment towards its
large and ever-growing customer base.

Domino's constantly strives to develop products that suit the tastes of its
customers, thereby bringing out the Wow effect (the feel good
factor). Domino's believes strongly in the strategy of 'Think local
and act regional'. Thus, time and again Domino's has been
innovating toppings suitable to the taste buds of the local populace
and these have been very well accepted by the Indian market.

7
HISTORY

Like most corporate success stories, Domino's started out small - with just
one store in 1960.

Domino's Pizza originated as a small pizza store owned by Dominick Di


Varti at the Michigan University campus in the US under the name
'DomiNick's Pizza'. The pizza store was bought by two brothers who were
students at the University, Thomas S. Monaghan (Tom) and James S.
Monaghan (James) in 1960..

It was re-christened Domino's Pizza in 1965. However, in 1978, the 200th


Domino's store opened, and things really began to cook. By 1983 there were
1000 Domino's stores, rising to 5000 in 1989.

Today, Domino's Pizza is the recognized world leader in pizza delivery


operating a network of company-owned and franchise-owned stores in the
United States and international markets. Domino's Pizza's Vision illustrates
a company of exceptional people on a mission to be the best Pizza Delivery
Company in the world.

so, there are more than 8,500 stores in the United States and 55 international
markets.

Domino's rolls out Breadsticks, the company's first national non-pizza menu
item in 1992.

And in 1993 ,it’s the time when company discontinues the 30-minute
guarantee and re-emphasizes the Total Satisfaction Guarantee.For
understanding the of DOMINO’S PIZZA Company’s sales promotion
strategy we prepare a Questionnaire for company representative.

MODELS USED BY DOMINO’S

8
DOMINO’S MASTER FRANCHISE MODEL

Industry analysts believed that Domino's master franchise model was one of
the reasons for its success in international markets in light of the global
economic slowdown in 2008...

How Domino's International Bucked the Trend

The strong performance of Domino's international master franchises in the


midst of the global economic slowdown was a widely debated topic among
analysts. While some analysts believed that the recession had helped the
growth of these chains due to the 'trading down factor' of people preferring
to eat at hom=e rather than dine out at expensive restaurants, others believed
it was a combination of aggressive marketing and the franchise model that
had helped the company buck the trend...

Promotional and Advertisement Campaigns

The pizza delivery business had traditionally been promotion driven.


Coupons and discounts were offered by all pizza delivery chains to woo
customers. Since its inception, Domino's had been known for its unique
promotions that included fast delivery and innovations to cater to a varied
palette...

The '30 Minutes' Promise

In the year 1973, Domino's began a guarantee scheme that its pizzas would
be delivered in 30 minutes or less of ordering failing which the customer
would receive the pizza free..

Use of Technology

At DPG, online sales accounted for over 70 percent of its total sales in 2008.
DPG planned to further exploit the increasing potential of the online
medium as one of the promotional and distributional channels in the
downturn, "This is the 10th year we have had an e-commerce platform. We
were the first to it back in 1999. We do a number of different activities
online to increase sales but there are other things we will be launching this
year."...

9
Future outlook

Domino's forecast flat same store sales for domestic and international
markets combined in the fiscal year 2009.

The company reported that it was not sure whether the increase in sales in
international markets would be sustainable due to the adverse foreign
currency movements that would impact the royalties from franchises...

e.g-1996
Domino's launches its web site on the Internet (www.dominos.com).
The company reaches record sales of $2.8 billion system-wide.

STRATEGIES
POSITIONING WAR

When Domino's entered the Indian market, the concept of home delivery
was still in its nascent stages. It existed only in some major cities and was
restricted to delivery by the friendly neighborhood fast food outlets. Eating
out at 'branded' restaurants was more prevalent...

Localizing the menu


Since its entry into India, Domino's introduced nine new toppings for Pizzas
to cater to the local tastes. Different flavors were introduced in different
parts of India

Pricing and Promotion Wars

Domino's sold a 12" Pizza for Rs 265.Commented Pankaj Batra (Batra),


Manager (Marketing), Tricon International said, "Indians are value-, not
price-sensitive.
We need to offer comeback value to our customer." The high price was
attributed to the high quality of ingredients used. For instance, Domino's
sourced its Peperoni and Jalapeno needs from Australia and Spain
respectively. However, with competition increasing from Pizza Hut,
Domino's introduced price cuts, discounts and freebies to attract the
customers...

Brand Building Through Advertising

10
Domino's and Pizza Hut initially restricted their ad strategy to banners,
hoardings and specific promotions. In August 2000, Domino's launched the
'Hungry Kya? (Are You Hungry)' sequence of advertisements on television...

Going Place

By March 2000, Domino's opened 37 outlets all over India. Between April
2000 and February 2001, Domino's set up 64 more outlets in India...

Some other Special offer in dominos pizzas

The Dominos Pizza franchise constantly keeps on inventing ways through


which it can make a greater impact on the fast food market. That is how the
fast food franchise came up with 'Fun Meal for Four' offer. Through this
method, the pizza franchise is able to produce more variety in the food
delivered to its customers at their door steps.

Through its 'Fun Meal for 4’ pack the Domino’s Pizza India offers four
pizzas at the rate of Rs 180. This means charge of one pizza will be just Rs
45. This has helped the speciality food franchise to enhance the strength of
its customer base.

Yet another strategy employed by the fast food franchise to spread their
market is to portray their advertisements in an old-fashioned background.
This quasi-environment is sure to make a positive impact on the semi-urban
crowd who are not much familiar with the brand.

The speciality food franchise has set apart Rs 50 crore for its promotional
activities in 2007-08. The fast food franchise is willing to work harder in
order to improve its growth rate in Indian market. The speciality food
franchise expects to increase its pizza delivery at a rate of 45 per cent by the
end of the coming financial year.

Domestically speaking, while rival Pizza Hut commands the largest portion
of all quick-serve pizza sales, Domino's leads the pizza delivery business
with a 20% market share. Part of its success in expanding has been its focus
on delivery service, meaning its restaurants tend to be smaller with less start-
up and maintenance costs than other types of restaurants. Domino's
continues to focus on franchising to expand its chain, with nearly 100 new
units opening in the US during 2006. Its stable number of company-owned
restaurants, meanwhile, account for a little more than 25% of sales.

11
More of Domino's competitors include: McDonalds, Wendy's, Papa John's
International and California Pizza Kitchen.

As with any of the large fast-food chains, Domino's spends a hefty amount
on advertising to maintain and increase its market share. The company's
franchisees each contribute a percentage of their sales to fund both national
marketing efforts and local advertising. Domino's also places a lot of
emphasis on product development to steal customers away from other
pizzerias. The chain introduced its Brooklyn Style Pizza in 2006. In the past,
Domino's has included catchy phrases in its commercials such as "Get the
Door" as well as attractive models in order to grab the attention of
customers.

Competitor
Pizza hut

Pizza Hut is one of the flagship brands of Yum! Brands, Inc., which also has
KFC, Taco Bell, A&W and Long John Silver’s under its umbrella. Pizza Hut
is the world’s largest pizza chain with over 12,500 restaurants across 91
countries.
In India, Pizza Hut has 137 restaurants across 36 cities, including Delhi,
Mumbai, Bangalore, Chennai, Kolkata, Hyderabad, Pune , and Chandigarh
amongst others. Yum!
Is in the process of opening Pizza Hut restaurants at many more locations to
service a larger customer base across the country.

Product
Pizza Hut sells pizzas in four different sizes: personal (an individual
serving), small, medium and large, though most stores have done away with
the small size. A variety of toppings are available, plus "specialty" styles,
including Meat Lovers, Pepperoni Lovers, Cheese Lovers, Veggie Lovers,
Double Cheeseburger, Supreme, Super Supreme and the newly introduced
Pizza Mia. The pan pizza has a thicker crust than most other commercially
available pizzas.

12
In addition to pizza, also sold is garlic cheese bread (not in all locations),
plus a number of side dishes including bread sticks, cheese sticks, cinnamon
sticks, mozzarella sticks, onion rings, chicken wings

V/S

Pizza Hut and Domino's both sell pizza, but there the similarity ends. For
true pizza lovers, there is just no comparison between the two, with
Domino’s pizza miles ahead in terms of quality, choice and presentation.
Pizza hut is for many, the poor man's choice when it comes to pizza and will
continue to be for as long as they continue on the same road.

You can be certain that if there is a Pizza Hut and Domino's outlet in the
same locality, Domino’s pizza will be the busier of the two, having built a
solid reputation for tasty pizza along with all the sides they have on offer.

pizza hut basically serves up average pizzas that you could find in any
small pizza joint.

There are people who buy pizza on the strength of the special offers
available that day or week, but others are more particular, putting taste ahead
of economy.

People who choose to eat pizza for the taste rather than the convenience will
happily pay a little bit more for better quality. Domino’s pizza offer the kind
of quality that Pizza hut can't which is why it is the main player in the pizza
world.
Even the Domino’s website is superior to that of Pizza hut.

13
The contrast between the two pizza giants is stark with Domino’s clearly
winning the battle for the pizza loving public according to our survey..

The main difference comes down to the most important factor and that's
taste and choice. Domino’s have established themselves as the company of
choice for most who eat pizza regularly with other varieties and the only
way Pizza hut can hope to compete is by making more of their special offers
to attract people on the basis of cost with variety.

But still difference occur when it come to taste and preference, different
people give different choice, opinion .Only the market share and sales can
tell exactly who are the true winner.

DATA of Domino’s and Pizza hut

MARKET SHARES in (2006)

PIZZA CHAIN MARKET SHARE

Domino’s 47
Pizza hut 22
Others 31

PIZZA PRICE COMPARISION

COMPANY PRICE RANGE (Rs.)

Domino’s 40-270
Pizza Hut 75-350

WHAT MAKES DOMINO’S PIZZA BETTER THAN ITS


COMPETITORS

• Varity of Pizza’s
• Good ambience
• Services offered
• Quality of pizza’s

14
• Location of the Outlet
• Waiting time in the outlet
• Door step services
• Low pricing

Target to age group/class

Domino’s target audience is a consumer who belongs to age group of 14 to


35 years from the Economic Class A or B and preferably one who has been
exposed to the western culture as well as the western style of eating. They
are people who are upwardly mobile and don’t mind to pay for convenience.
In this category teenagers are the most affected by western culture and its
eating habits.
The age group has been restricted to the range of 14 to 35 years as this age
group accounts for about 70% of the total sales volume of pizzas in India. As
far as the socio Economic class is concerned, since Domino’s pizzas are
priced from about Rs.80 onwards [most of them falling in the range of Rs.
125 – 200] only consumers from the SEC category A or B would be to
afford the pizza regularly. However, Domino’s have now come out with
pizzas ranging from Rs.59 onwards to target the ever-increasing middle class
consumers.
Domino’s has also segmented the market geographically by deciding to
initially cater to only the metropolitan cities and urban areas. They have left
out the rural areas due to the low level of awareness regarding western
dishes as well as typical Indian patter of eating.

30 min campaign

 This is a campaign in which Domino's offers its customers free Pizzas


if they are not delivered in 30 minutes from the time of order.
 They have a store in a radius of 3 kms in major metropolitan cities.
Anything which is far away from 3 kms doesn’t fall in this category.
 Scheme is to be announced at the time of order taking.

But it also act as a weaknesses of Domino’s pizza because hungry customers


who want to skip cooking for the night can look forward to a hot Domino's
pizza in under an hour - make that half an hour. Domino's latest special offer
promises a hot and piping pizza delivered to your door under 30 mins, or it's

15
free.
But 30 minutes is a very short time for a typical Dominos Pizza local
delivery, but it's the latest special offer from Dominos in an effort to outdo
the competition. Still, there are some cities where it must be really tough to
make a Dominos
Pizza local delivery, the cities where traffic congestion is a natural way of
life. Can a Dominos pizza local delivery survive the daily traffic jams?
so country like INDIA ,traffic jams are certain that delivery with in 30 mins.
Is not possible task for the company.

NEW PROMOTIONAL ACTIVITY


OFFERS BY DOMINOS

• With every order of pizza and coke/Garlic breadsticks get a domino’s


pasta for Rs. 39 instead of Rs 69.
• Pasta is available in 2 variants: cheesy white and tangy red veg Rs
69/- non veg Rs 79/-
• Get garlic bread for only Rs 30/- with any of the pizza mania
combinations.
• Dominos start providing coke/fanta/sprite.
• Dominos started pizzas mania which start from Rs 35 and we get the
toping according to our choice.
• Web coupons available at web site www.dominos.co.in
• Discounting coupons are being provided with every item purchased.
• Suggesting selling at a discounted price
• New schemes at regular interval of time according to the taste of the
INDIAN customer

LATEST IN DOMINO’S

• Kwality wall’s ice-creams in dominos- For the first time dominos start
offering ice creams .Selling ice cream in Domino’s is also a new sales
promotion strategy to attract more customer in a new perceptive
/innovative way.
• DOMINO’S is coming up with pasta mania.

In a new promotion with TiVo Inc., Domino's Pizza Inc. will begin taking
orders using only a TV set from customers who have broadband TiVo

16
service. When a customer forwards through a commercial for Domino's,
TiVo will flash a pop-up advertisement that asks the customer if she would
like to order a pizza, then direct her to a Domino's ordering screen.

Domino's TiVo promotion, enabling consumers to place orders on a TV


display, above, reflects ways marketers are using digital technology.

TiVo has set up a partnership with Amazon.com Inc. to sell general


merchandise and has sold movie tickets to its subscribers. This is the first
time TiVo has set up a partnership with a restaurant company to sell food
through the television, though it has had discussions with other chains, says
Karen Bressner, TiVo's senior vice president of advertising sales.

For now, Domino's has an exclusive deal with TiVo that runs for 40 weeks.
The companies wouldn't say how much Domino's spent on the deal.

The service will be available only to customers who have broadband TiVo
service, which accounts for more than 750,000 of TiVo's 3.6 million
subscribers. The ads also will appear on the main TiVo screen.

Customers will be able to select their crust, toppings, and sauces from an
ordering screen. Pizzas are expected to show up at the customer's door in
about 30 minutes, and the price will be the same as what is offered locally.

We found:

• The DOMINO’S Pizza gain a good market share rather than PIZZA
HUT
• The preferences of the people for Pizza are more with DOMINO’S
Pizza
• Youth consists of college/school students are more attracted towards
DOMINO’S Pizza due to good ambiances and freshness’ rather than
families
• The male respondents are more attracted towards pizza and females
for the pasta, garlic breads.
• The quality of DOMINO’S Pizza is better than Pizza hut
• Most of the people get to know about the offers through the dominos
pamphlets and the regular customers get messages and calls from
them .

17
• The study also shows that the Indian customers are not price sensitive
when they get good product, quality and services.

SUCCES FACTOR OF DOMINO’S PIZZA


• Domino's is a powerful global brand.

o "Mega Brand" as defined by Advertising Age


o Significant, ongoing investments in advertising result in broad
consumer awareness
• Domino’s are the #1 pizza delivery company
o Largest share of pizza delivery channel
o Reinforced by our well-known slogan, "Domino's Pizza: You
Got 30 Minutes™
• They have a large and growing international presence.
o Operate in over 60 countries
o #1 or #2 market share position in most of our top 10 markets

• They have a strong and proven business model with superior returns.
o Strong unit economics: focused on efficient operating model;
relative low cost to open;
o strong cash-on-cash returns
o Franchisees succeed because the business model works forming
solid partnerships
o High renewal rates
o Voluntary purchase from company supply chain system
o Geographically diverse franchise base with no significant
concentrations
o Superior return on assets; higher than the quick-serve restaurant
peer average

18
• They operate a profitable, value-added supply chain system.
o Ensures quality and consistency
o Leverages purchasing power
o Enhances franchisee partnerships through 50% profit sharing
o Allows stores to focus on sales and service
• Domino’s leadership team has a track record of success.
o Delivered strong results since 1999 change of control

19