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The Pizza Turnaround Case Study
By Ari Morris and Mike Gordon
Table of Contents
Content History of Domino’s Inc. Key Figures Situation Analysis Research conducted by company Goals Objectives Target Audience Tactics Messages Slogans Execution Evaluation Media Coverage Personal analysis PR contact interview Current information Citations Appendix A Appendix B Appendix C Appendix D Pages 1‐3 4‐6 7 8 9 10‐12 13 14 15‐18 19 20‐22 23 24‐25 26 27‐28 29‐30 31‐32 33‐34 35
History of Domino’s Inc.
1960: Tom Monaghan and his brother, James, purchase "DomiNick's," a pizza store in Ypsilanti, Mich. Monaghan borrowed $500 to buy the store. 1965: Tom Monaghan, the sole owner of company, renames the business "Domino's Pizza, Inc." 1967: The first Domino’s Pizza franchise store opens in Ypsilanti, Michigan.
1983: Domino’s 1st international store opens in Winnipeg, Canada. 1983: The 1,000th Domino’s store opens. 1989: Pan Pizza, the company’s 1st new product, is introduced.
History of Domino’s Inc. (continued)
History of Domino’s Inc. (continued)
2001: CinnaStix were introduced 2001: “Get the Door. It’s Domino’s.” Advertising campaign 2003: Domino’s became the Official Pizza of NASCAR 2007: Domino’s introduced online and mobile ordering 2007: Domino’s launches its “You Got 30 Minutes” campaign with CP+B 2009: Introduces new pizza recipe
J. Patrick Doyle, CEO Patrick Doyle's role as David Brandon's successor was already in place by the Domino's board. The company had previously identified Doyle as the company's next CEO, if Brandon chose to leave. Doyle’s duties as CEO began in early January 2010.
Founded in 1960, privately held Domino's Pizza, Inc., is the largest pizza-delivery company in the world, operating more than 9,000 units throughout the United States and in 58 other countries. Domino's was built on simple concepts, offering only delivery or carry-out and an extremely limited menu: for more than thirty years, the company offered only two sizes of pizza, eleven topping choices, and--until 1990--only one beverage, Coca-Cola. Domino's Pizza’s vision illustrates a company of exceptional people on a mission to be the best pizza delivery company in the world.
MISSION STATEMENT Domino's Pizza strives to be the leader in delivering off-premise pizza convenience to consumers around the world. As a team united throughout the world, this is accomplished by the following:
1. Being fanatical about product quality and service consistency; 2. Providing product variety to meet all customer needs; 3. Placing team member and customer safety and security above all other concerns; 4. Creating an environment in which all team members feel valued, because they are; 5. Building and maintaining relationships that reward franchisees and other partners for their contributions.
Situation Analysis (continued)
Domino’s burst onto the scene in the early 1980s and saw a steady rise in popularity, receiving overwhelmingly positive feedback from the American public in its early years. Its recipe was simple and streamlined. However, annual customer feedback reached a plateau. The pizza was not bad, but it was not great either. When asked what the overall image of Dominos Pizza was, most customers had the same sentiment: “Your customer service is the best in the business, but the pizza is just ‘okay’.” The company’s initial advantage was its business model of pizza delivery. In the more modern era, this creates little value and enthusiasm among customers. It was this sub-par feedback that prompted CEO, Patrick Boyle, to make a change. It is important to note that there was no specific instance that sparked the campaign, but more of a need to “change the formula” and the way business was done.
The new strategy focused on the customer with regards to their wants and needs. This resulted in a bold advertising initiative that significantly bolstered interest in the brand and what it had to offer.
For our case study, we will be focusing on Domino’s from 2009 to the present. In the end of 2009, Domino’s scrapped its 49-year-old pizza recipe for a totally renovated pizza during the Pizza Turnaround campaign. Domino’s launched the campaign with the assistance of Crispin Porter + Bogusky (CP+B).
Situation Analysis (continued)
Sam Crispin, who later became partners with Chuck Porter and Alex Bogusky, founded CP +B in 1965. The agency’s headquarters are located in Coconut Grove, Florida, with additional offices in Boulder, Los Angeles, and London. Domino’s selected CP+B as their national creative advertising agency in September 2007. The company selected CP+B because they are recognized for their breakthrough, category-changing campaigns. CP+B has also worked for other companies such as Burger King, Volkswagen, Nike, Miller Lite, and Coke Zero.
The Domino’s Pizza Turnaround campaign is unique due to the fact that there was no concrete incident that led to the ultimately revamped pizza. As stated previously, Domino’s consistently received positive customer feedback in the customer service category in terms of delivery, but struggled with the most important aspect of all: quality of the product. Years of perfecting speed and efficiency eventually began to sacrifice the overall quality and taste of Domino’s pizza. Domino’s fell behind its competitors essentially because customers felt that its pizza tasted “more like the box than pizza”. This prompted the franchise to make a significant change. In early 2008, CEO Patrick Boyle felt that something needed to be done in order reshape the image of Domino’s. The solution: start from scratch and make a brand new pizza. Customers were the primary source of inspiration for the new plan. The majority of the research conducted was through communication with customers. Domino’s created focus groups that allowed loyal customers to speak truthfully about their thoughts on the pizza. Initial feedback was not positive. The following were the primary issues customers had with the pizza:
· The cheese used was not real. · The crust felt like cardboard. · Not enough tomato sauce was present on the pizza. The objectives of the research were to gather substantial feedback from customers, asking what the pizza currently lacks and what they look for in a pizza. Additionally, how can the brand present the new pizza as being believable and an actual improvement based off of customer suggestions without sounding “phony”. The latter was a primary concern of the developers of the campaign. It is often difficult to persuade an audience by simply claiming that the product is now “better”. The so-called “new and improved” ad campaigns came across as cliché to the public. This persuasion was done through the use of various social media channels and focus group testimonials.
· Domino’s created a live Twitter feed, #newpizza, that allowed customers to
voice their thoughts on the brand and the pizza. Upon completion of the new pizza, the page also gathered feedback from customers on what they liked or disliked about the new pizza.
· The Domino’s Facebook page served as basically an extension of the Twitter
feed. It allowed for more in-depth feedback from customers, but also gave Domino’s an opportunity to promote and advertise the campaign more extensively.
· Focus groups gave customers the opportunity to share their honest opinions
about the pizza. Dominos learned quite a bit from the direct feedback of loyal customers. Pizza alone would not change people’s perceptions of the brand. The term “new and improved” held little weight with customers. Wholesale changes needed to occur. Dominos acknowledged that despite having confidence in the new pizza formula, the damaged image of the company would struggle with credibility of the new product. A new expectation needed to be created. The majority of participants stressed that they wanted Domino’s to be great again or to be the pizza they used to be.
CAMPAIGN Upon completion of all the research and customer feedback, the implementation and goal of the campaign needed to be set. Domino’s was overwhelmingly successful with the Turnaround Pizza campaign because of one crucial reason: they listened. Customers were surprised to find that Domino’s had actually taken into account their harsh criticism of the pizza. Instead of taking it personally, they used the criticism to craft a better pizza recipe based solely off of what the customers desired.
To prove its credibility, Domino’s hired a documentary film crew to capture real focus group participants voicing their honest opinions about the pizza. The footage was shown to Domino’s management and captured their responses. Domino’s employees read complaints about the product from online forums, twitter feeds and blog posts. Domino’s stressed the importance of showing that it had listened to its customers. This established the brand’s credibility.
The overall goal of the campaign was to create an entirely new and innovative pizza recipe from scratch that satisfied that wants and desires of customers. This was an incredibly bold decision since it essentially reconstructed its core product. This included changes to the crust, tomato sauce and cheese. From the beginning of the campaign, Domino’s strived to create a pizza that was truly “of the people”. Simply put, Domino’s guaranteed that by listening to its customers, it would produce a product that would without question be enjoyed and successful.
Domino’s also hoped to retain many of its lost customers. Buyers who previously made the switch to another brand sited poor pizza taste as the primary reason they chose to explore alternate options.
Domino’s Pizza Overall Campaign Objective:
Domino’s Brand Tracking Study discovered that “Speed” and “Best in Delivery” were no longer key factors for consumers when purchasing pizza and that “Taste” was now the number one driver. Due to the change in key factors, Domino’s wanted its consumers to give Domino’s a second chance by purchasing the new pizza. Domino’s hoped enough customers would give Domino’s a second chance in order to have its same-store sales increase by two percent by the following year.
In addition to improving its sales, the company wanted to change consumers’ views on the company’s product and overall brand. Domino’s was asked to focus on brand perception, especially in the areas of taste and awareness by market share. By introducing the new pizza recipe, Domino’s hoped to make consumers more aware of the new and improved product. Domino’s also wanted its customers to have confidence in the company, which it was really lacking in 2009. After the campaign, Domino’s hoped the customers would know that Domino’s is a quality pizza company who really cares about their customers.
Domino’s Pizza crafted their research with three specific objectives in mind. First, the company wanted to understand its place in consumer and food culture. Domino’s also wanted to understand how people felt about the brand and product quality overall. Finally, they wanted to figure out ways to make the new and improved pizza a believable and persuasive product.
Domino’s target audience for the campaign was its current customer base. Domino’s really wanted to focus on consumers who have tried Domino’s pizza in the past and have been disappointed. Domino’s realized that its current customer base was slowly diminishing due to its poor product and really wanted to retain loyal customers. The Pizza Turnaround campaign was designed to convince people to give Domino’s a second chance.
Domino’s target audience is very broad due to Domino’s diverse consumer base; however, they do focus on consumers between the ages of 18-35. In addition, they focus on targeting couples where both the husband and wife are working because Domino’s provides a quick and easy meal for working individuals.
Domino’s used several different tactics throughout their Pizza Turnaround campaign. These tactics included both changes to their actual product and their social media sites.
The most important change that Domino’s made was its complete product change. Since the overall campaign objective was to change consumers’ views about the product, they made key changes in their recipe.
Crust: Added butter, garlic, and parsley Cheese: Shredded instead of diced mozzarella, with a hint of provolone Sauce: Sweeter, with a red pepper kick (40% more herbs)
After spending two years testing dozens of cheeses, fifteen sauces and nearly fifty crust blends, Domino’s finally found a new recipe that they were ready to introduce to their customers. Domino’s wanted to make sure that their product was better than the majority of “new and improved” products.
Domino’s decided to launch a new website to jumpstart the campaign called PizzaTurnaround.com. The website served as a reference point for all media related to the campaign efforts. The website also helped to drive traffic to the company’s Twitter account by hosting a live Twitter feed on the right-hand margin.
Domino’s launched a second website where the company allowed customers to submit pictures of their delivered pizzas online. This tactic was used to increase two-way communication between Domino’s and its consumers. With the launch of this website, Domino’s hoped to build trust and a better relationship with its customer base.
Domino’s created a contest entitled “Green Graffiti Contest” where they hoped to draw traffic to their Twitter account.
In 2010, Domino’s hosted a “Pizza Proverbs” contest at their third website, PizzaProverbs.com. This contest was used to help pizza eaters partake in Domino’s company branding.
Although the Domino’s brand had previously been damaged through information spread on Twitter and YouTube, Domino’s decided to take this opportunity to re-establish their brand through these social networking tools. Dominos took its Twitter account (@Dominos) and used it to interact with its customers on a regular basis. Domino’s frequently replied to customers who mentioned them on Twitter in order to increase the flow of two-way communication.
Domino’s decided to use YouTube to their advantage instead of letting the website hurt their brand. Domino’s created various videos about the campaign to post on YouTube which they also placed on their PizzaTurnaround.com website.
Domino’s took the same video footage from the YouTube videos and shortened them into TV advertisements, to further spread their message. These television spots included customers making negative comments about Domino’s pizza as well as Domino’s CEO, Patrick Doyle, apologizing for Domino’s lack of effort.
Domino’s Pizza wanted their customers to feel that the company was capable of embracing negative comments in order to improve their company. Domino’s was admitting to failure during the campaign yet wanted the customers to realize that they actually cared and wanted to fix their pizza in order to have loyal customers. Domino’s tried to humanize their brand by focusing on the message “We listened.” They wanted customers to realize that they are able to face their criticism head on instead of running from it.
Domino’s also wanted their customers to feel that their pizza had actually improved. Typically, the public is skeptical when it comes to “new and improved” ad campaigns so they wanted their customers to feel that they were being authentic.
“Did we actually face our critics and reinvent our pizza from the crust up? Oh Yes We Did.” Oh Yes We Did. We Listened.
Domino’s set up a documentary-style YouTube video in December 2009 featuring Patrick Doyle, Domino’s Chief Executive Officer, acknowledging his company’s lack of success and vowing to make a better pizza for his customers. Patrick Doyle called this an apologetic ad campaign, hoping to renew the trust between the company and its customers. By admitting to the brand’s negative perceptions, Domino’s was able to take on a new start with its customer base.
In addition to the video featuring Patrick Doyle, the video featured real customers in a focus group setting who complain about the poor tasting pizza. These clips of blunt, honest feedback provided the basis to make the campaign believable.
The comments included some of the following complaints: •
Had a few slices of Domino’s Pizza, haven’t had it in a few years. It was alright but the crust seemed a bit lacking.
• • • • • •
Pizza was cardboard Mass produced, boring, bland pizza Processed cheese Domino’s tasted like cardboard. Microwave pizza is far superior. Doesn’t feel like there’s much love in Domino’s pizza. Totally void of flavor
The campaign’s focus was to be believable and credible. These values were the reason that no actors or narrators were used in any part of the campaign. All aspects of the campaign relied on real customers and real employees of Domino’s Pizza. Specifically in “The Pizza Turnaround” Documentary, we hear from Karen Kaiser, Marketing Director, Meredith Baker, Product Manager, Brandon Solano, Head Chef, Phil Lozen, Public Relations, and Roxane Swamba, Pizza Chef. The four and a half minute video could be found on Domino’s YouTube channel (dominosvids).
To follow up with the focus group participants, Domino’s employees made surprise visits to the group participants who had previously bashed the pizza. The reactions to the customer’s new pizza tasting were filmed and shown in clips on the company’s website and seen on various TV ads. This tactic was to further assure customers that Domino’s is a company who is as responsive as they say they are. In December 2009, Domino’s Pizza chefs Sam Fauser and Brandon Solano visited participants and posted reactions to the Pizzaturnaround.com website.
The TV ads were placed during times of high viewership in order to create mass awareness about the campaign. The ads were shown during the NFL Playoffs, American Idol, and Primetime premieres.
Not only did the company launch its campaign on television, but they had a strong Internet presence as well. Domino’s created forums where customers could voice their opinions and show pictures of the pizzas they received. Through constant feedback from customers, Domino’s was able to adjust their strategies based on the consumers’ opinions. Complaints were sent to the forums as well as on Twitter feeds and blog posts.
All traffic about the campaign was directed to Pizzaturnaround.com. The website features videos about the campaign as well as real-time feeds that show user comments about the campaign from YouTube, Twitter, and Facebook. The feeds are left unfiltered, showing both bad and good comments. This tactic is to help Domino’s support their honesty efforts throughout the campaign.
Domino’s held a Green Graffiti Contest where 60 Domino’s Pizza logos were “blasted” onto sidewalks in and around Miami with the help of a high-pressure water sprayer. Until February 24, the first 250 people who submitted a photo of themselves with a GreenGraffiti sidewalk Domino’s logo, to Domino’s Twitter account @dominos had the chance to win a large, one-topping pizza. Occurring later in 2010, Domino’s “Pizza Proverb” Contest allowed customers to submit 100 character words of wisdom for a chance to have it printed on the new Domino’s pizza box. Domino’s gave participants examples such as: “Give a man a pizza and he’ll eat for a day. Teach him to order online and he’ll eat for a lifetime.” “Life is what happens between slices.” Nearly 8,000 proverbs have been submitted online as of October 2011.
Domino’s was also very responsive when they allowed customers to submit pictures of their delivered pizzas online. The company ran a TV commercial showing a picture of a delivered pizza that Bryce from Minnesota posted on ShowUsYourPizza.com. The photographed pizza wasn’t as beautiful as Domino’s had wanted it to be so they surprised Bryce at his house. The company delivered him two good-looking pizzas, $500 in Domino’s gift cards, and a handwritten letter from Patrick Doyle. The company then filmed Bryce’s reaction and placed the video on their YouTube channel in September 2010. On the website ShowUsYourPizza.com, Domino’s made three promises to their customers: • We will only photograph real, honest-to-goodness pizzas. That means fresh from our own ovens, with exactly the same ingredients we deliver to your doorstep. Nothing else added. • Our employees will make the pizza we shoot. Not an art director or model maker or food stylist. A Domino’s employee trained to make pizzas the only way they know how: by hand. • We will not artificially manipulate our pizzas when photographing them. No tweezers, no steam guns, no model knives cutting perfect perforations in the cheese. The only thing that will touch the pizzas we shoot is the pizza-maker’s hands and a standard Domino’s pizza cutter. Each time Domino’s set up a new “assignment”, they awarded eight winners with a $500 check just for sharing a picture of their Domino’s pizza.
Domino’s monitored all of their online conversations through Burrelles Luce and Nielsen BuzzMetrics. These tools were able to gain feedback from over 150 million blogs, user groups, and social networking sites across the globe. Domino’s then made sure social media specialists were responding to all consumer feedback.
The Domino’s Pizza Turnaround Campaign experienced tremendous results from their efforts. In the first quarter of 2010, Domino’s increased their sales by 14.3 percent in the United States. This increase in sales what the highest ever-recorded jump in fast food history. In addition to the company’s individual improvement, it has also had higher sales increases than their competitors. In the last two years, while Domino’s domestic sales have increased by 12.9 percent, Papa John’s has only increased by 5.7 percent and Pizza Hut at 2 percent. As of May 2011, Domino’s had yet another quarter of both rising profits and revenues.
In the first month of the campaign, Domino’s stock rose by 44% and rose 75% in the first quarter of 2009 Their stock has risen over 150 percent since the campaign began.
According to Domino’s Chief Marketing Officer Russell Weiner, more than two-thirds of consumers have said they’ll be back and the advertising itself has scored off the charts. “We are in a dramatically different place with our customers than we were prior to doing it,” said Patrick Doyle, CEO.
In the second quarter 2010, Domino’s Brand Tracking Study showed a 10% increase in taste perception and a 45% increase in top-of-mind awareness. Also, Domino’s copy testing results were amazing. Millward Brown named the Pizza Turnaround campaign among the most effective campaigns they had ever tested. Domino’s was in the top one percent of all ads tested in the last five years. According to Millward Brown, breakthrough scores were 77% better than the QSR (Quick-service restaurant) norm and Domino’s persuasion was 176% better than before the campaign.
In terms of social media, Domino’s Facebook page now has over 4 million fans, when it had just over 400,000 fans in 2010.
Despite sales and social media improvements, there are still several customer complaints seen on the Pizzaturnaround.com website. For example, there are complaints saying that their delivered pizza is burnt, soggy, or greasy.
An independent taste test was held in February 2010 where Domino’s swept the competition with their new pepperoni, new sausage, and new extra cheese pizzas, beating Papa John’s and Pizza Hut. The blind taste test consisted of nearly 1,800 pizza consumers from eight different United States markets who chose Domino’s pizza by a wide margin.
Media Coverage (continued)
The Pizza Turnaround campaign over 2 billion free media impressions including, CNN, MSNBC, The Colbert Report, Huffington Post, Mad Money with Jim Cramer, ABC World News, Fox News, Oprah Radio, The Tonight Show with Conan O’Brien, Time, and The New York Times.
In February 2010, Gayle King invited Domino’s CEO, Patrick Doyle, to her Oprah Radio show to share how impressed she is with the new pizza recipe. In the interview, Gayle takes callers who agree with her opinions about the new pizza recipe. Gayle claims she was sold on the new pizza once she saw the brush painting garlic on the crust.
Bazaar Voice, a social commerce site, held a Pizza Throwdown in February 2010. The Pizza Throwdown was a taste-testing contest between Pizza Hut, Domino’s and Papa John’s pizzas. The pizza taste-test included participants who were first asked which pizza they thought they liked the best. Papa John’s was the clear winner, with 60% of the vote. The participants were then blindfolded and asked to give feedback on the pizza’s sauce, crust, cheese, and overall taste. Domino’s won the taste challenge with 50 percent of the vote.
Media Coverage (continued)
Below are the results based on a 5-point scale: Domino’s: Sauce Crust Cheese Overall 3.9 3.9 3.3 3.8
Pizza Hut: Sauce Crust Cheese Overall Papa John’s: Sauce Crust Cheese Overall
3.2 3.1 3.1 3.2
3.1 3.0 3.0 3.0
Washington DC’s local Fox news show also held a Pizza Taste Test in January 2010. The taste test was between Papa John’s, Pizza Hut, Domino’s, and a local pizza shop called Potomac Pizza. The four news anchors from the show agreed that Domino’s made great improvements in their pizza recipe.
Jim Cramer of CNBC’s “Mad Money” told its viewers in January of 2010 to buy Domino’s Pizza. Cramer admits to previous bashing the company, telling its viewers to purchase Papa John’s pizza instead. At the time, Domino’s was selling an average of one million pizzas per day.
The Pizza Turnaround campaign was extremely ingenious in many ways yet also had its weaknesses. Primarily, Domino’s did an excellent job with its social media tools used throughout the campaign. It is without question that the campaign would not have been nearly as successful without the used of its PizzaTurnaround.com website, YouTube, and Twitter. These sites were extremely vital to the campaign as they allowed for two-way communication between Domino’s and its customers. The two-way communication throughout the campaign allowed Domino’s to continually receive feedback and respond to its customers in order to have an effective campaign.
In addition to being extremely involved and responsive with social media, the campaign was a great example of turning a negative into a positive. It was very bold that the company was able to publicly admit their flaws in order to save their business. Most companies are hard at work trying to cover up their flaws while Domino’s was able to make an entire campaign out of theirs.
Domino’s also did a great job of showing compassion for their customers throughout the campaign. It was a brilliant tactic to show the Domino’s chefs surprising the previous focus group participants with the new pizza. Domino’s also showed they cared for their customers by replying to complaint tweets on Twitter. The company still appears to be responsive on their Twitter account to this day.
Our main problem with the campaign is the lack of current information provided by Domino’s. Their PizzaTurnaround.com website has not been updated since the campaign was in effect. The website does contain valuable information from when the campaign was in effect, yet no current feedback about the new pizza recipe or its sales information.
PR Contact Information Chris Brandon Public Relations Chris.firstname.lastname@example.org Chris Brandon attended the University of Kansas and graduated with a degree in Journalism in 2002. Brandon was previously the account manger for NASCAR from January 2003 to December 2006 in New York City. He has now served as the Domino’s Public Relations spokesperson since January 2007.
How do you think the company was handled overall , specifically, what aspects of the campaign do you feel worked? From its original concept all the way to implementation, I don’t think it could have gone much better. Everything we set out to accomplish with the new pizza was accomplished. I think the very fact that we were so honest about our original pizza and showed we were willing to listen were vital to the campaign’s success. When did it become apparent that Dominos needed to make a change? There was actually no single incident that prompted us to really say, “oh ok, we need to do something here”. The campaign actually started in early 2008. The CEO at the time, David Brandon, just felt that a core change needed to be made. From that point forward, it was all about doing the research. What was the idea behind focus groups/surveys? Along with social media, the focus groups definitely were a primary focus because we could get instant direct feedback. We figured it would be a great opportunity to really just let the public express their thoughts on how we can make a better overall product. How did Dominos use social media to its advantage? I think for the first time, you really saw a company reach out to its customers in order to make a better product. We set up the Twitter feed specifically so that people could start sending us their feedback on the new pizza and how it tasted. The results were overwhelmingly positive. Facebook, too, served more or less the same purpose, but definitely allowed people to elaborate a little more. In general, social media allowed us for more of a two way communication with the customer. Without question, social media will continue to play an active role in our brand awareness.
PR Interview (continued)
What was the most common form of criticism the pizza received and how did you use it to your advantage? The list goes on and on, but we definitely got fake cheese, and cardboard crust most often. It was clear to us that if that many people are commenting about specific areas of the pizza, then we should probably fix them. In developing the new pizza formula, a significant amount of time was spent on what ingredients would be added to the crust. As for the cheese, we decided to go with a whole variety of several different cheeses. How do you think the campaign benefited Domino’s overall and why? I look at it in terms of two things: sales and the brand. In terms of sales, millions of people tried the new pizza, and results showed that they continued to come back for more, which is always a good sign. At the start of the campaign, we were slightly concerned because we knew we were taking a huge risk. The plan to start from scratch was so bold. It was basically a “blow up the bridge” type of strategy. In terms of the brand, we really feel it did wonders for us. Many people hadn’t tried our pizza so we gained new customers, but I think more importantly, people rediscovered the brand and pizza that they once knew and loved.
Domino’s continues to build off the tremendous success they experienced with the Pizza Turnaround campaign. Tests done in 2010 ranked Domino’s ahead of Papa John’s in taste comparison. Three out of five people chose Domino’s over Papa John’s nationwide. As previously stated, the social media aspect of the campaign played a crucial role in its success. Domino’s still uses Twitter and Facebook to allow for honest comments and feedback from customers on a daily basis, thus increasing the brands credibility and integrity. As of February 2010, there had been 10,000 “Turnaround” related tweets and over 80,000 new fans on Facebook.
SIMILAR ISSUE TYLENOL CYANIDE CRISIS
In 1982, Tylenol made headlines for all of the wrong reasons. Seven people in Chicago were reported dead after taking the extra-strength capsules. It was reported that an unknown suspect put 65 milligrams of cyanide into Tylenol capsules, 10,000 more than what is necessary to kill a human. Officials believed the tampering occurred once the bottles had reached the shelves. Immediately after the incident, Tylenol’s market share dropped from 37% to 7%.
Johnson & Johnson was responsible for dealing with this crisis, in what is now considered to be a textbook case. They first re-called the product. Despite not being the individuals who tampered with the product, they still took ownership and responsibility for what occurred. It is important to note that Tylenol acted quickly, but more importantly, acknowledge that something had gone wrong and needed to be fixed.
While this example is much more serious than the Domino’s campaign, each brand executed swiftly and effectively upon recognizing that a problem occurred. In this case, Domino’s became aware that pizza sales were suffering and recognized the customers’ dislike for the product. As a result, Domino’s took action, acknowledged that its pizza was not the best and acted accordingly in order to produce a better pizza.
Baertlein, L. (2011, May 05). Domino's profit up on new pizza recipe. Retrieved from h t t p : / / w w w. r e u t e r s . c o m / a r t i c l e / 2 0 11 / 0 5 / 0 5 / u s - d o m i n o s idUSTRE7447KZ20110505 Capp, S. (2010, March 07). Domino's 'pizza turnaround' represents about-face in marketing and product. Retrieved from h t t p : / / w w w. d m n e w s . c o m / d o m i n o s - p i z z a - t u r n a r o u n d - r e p r e s e n t s about-face-in-marketing-and-product/article/164636/ C e l e b r a t i n g 5 0 t h y e a r, d o m i n o ' s p i z z a g i v e s i t s e l f a m a k e o v e r. (2009, December 16). Retrieved from http://phx.corporatei r. n e t / p h o e n i x . z h t m l ? c = 1 3 5 3 8 3 & p = i r o l newsArticle&ID=1366561&highlight= Domino's new recipe helps pizza maker more than double its profits. (2010, March 02). Retrieved from h t t p : / / w w w. h u f f i n g t o n p o s t . c o m / 2 0 1 0 / 0 3 / 0 2 / d o m i n o s - p r o f i t more-than-_n_483198.html G r e g o r y, S . ( 2 0 11 , M a y 0 5 ) . D o m i n o ' s n e w r e c i p e : ( b r u t a l ) truth in advertising. Retrieved from h t t p : / / w w w. t i m e . c o m / t i m e / b u s i n e s s / a r t i c l e / 0 , 8 5 9 9 , 2 0 6 9 7 6 6 , 0 0 . h tml F a r h i , P. ( 2 0 1 0 , J a n u a r y 1 3 ) . B e h i n d d o m i n o ' s m e a c u l p a a d c a m p a i g n . R e t r i e v e d f r o m h t t p : / / w w w. w a s h i n g t o n p o s t . c o m / w p dyn/content/article/2010/01/12/AR2010011201696_pf.html Horovitz, B. (2010, May 07). New pizza recipe did wonders for domino's sales. Retrieved from h t t p : / / w w w. u s a t o d a y. c o m / m o n e y / i n d u s t r i e s / f o o d / 2 0 1 0 - 0 5 - 0 5 dominos05_ST_N.htm Lippert, B. (2010, January 03). Down on domino's. Retrieved f r o m h t t p : / / w w w. a d w e e k . c o m / n e w s / a d v e r t i s i n g - b r a n d i n g / d o w n dominos-101211 M a g a r y, D . ( 2 0 1 0 , J a n u a r y 0 4 ) . D o m i n o ’ s b o l d a d s t r a t e g y : we're no longer bad. Retrieved from h t t p : / / w w w. n b c m i a m i . c o m / t h e - s c e n e / f o o d - d r i n k / D o m i n o s - B o l d N e w - A d - S t r a t e g y - We - S u c k e d - 8 0 6 2 0 4 7 7 . h t m l
M c D e v i t t , C . ( 2 0 1 0 , J a n u a r y 2 9 ) . D o m i n o ’ s l e a r n s t w i t t e r, facebook lessons. Retrieved from h t t p : / / w w w. m s n b c . m s n . c o m / i d / 3 5 1 3 3 7 9 4 / n s / b u s i n e s s the_big_money/t/dominos-learns-twitter-facebook-lessons/ Parekh, R. (2010, October 18). Marketer of the year runner-up: domino's. Retrieved from http://adage.com/article/specialreport-marketer-of-the-year-2010/marketer-year-runner-dominos/146494/ Solorzano, B. (2009, December 17). Can domino's new pizza deliver on taste?. Retrieved from h t t p : / / w w w. c b s n e w s . c o m / s t o r i e s / 2 0 0 9 / 1 2 / 1 7 / b u s i n e s s / m a i n 5 9 8 9 576.shtml Stevenson, S. (2010, January 11). “Like cardboard". Retrieved from h t t p : / / w w w. s l a t e . c o m / a r t i c l e s / b u s i n e s s / a d _ r e p o r t _ c a r d / 2 0 1 0 / 0 1 / like_cardboard.html The ARF 2011 david ogilvy awards winners and case studies. ( n . d . ) . R e t r i e v e d f r o m h t t p : / / w w w. t h e a r f . o r g / a s s e t s / o g i l v y - 11 winners
Domino’s learns Twitter, Facebook lessons
When you change product and ask people about it, they actually tell you By Caitlin McDevitt
updated 1/29/2010 7:51:32 AM ET
Domino's Pizza recently launched the “Pizza Turnaround,” a campaign in which it sought feedback from customers on how to improve its pizza recipe. It was a selfdeprecating endeavor. The company paid to create a commercial featuring someone who says, "Domino's pizza crust to me is like cardboard.” But through admitting that its product wasn’t perfect, Domino's was promising to make it better. The campaign got lots of attention, so on the PR front, it seemed like it was relatively successful. But posts on Domino's Facebook wall tell a different story. Here’s a sampling of many negative reviews that have been accumulating since Domino's changed its recipe (all unedited): There’s even an opposition group on Facebook called “The New Domino's Pizza Still Sucks.” As TBM’s C-Tweet blogger Bernhard Warner pointed out earlier this month, when it comes to pizza, it’s hard to please everyone. And, to be fair, there are positive posts on the Facebook wall praising the pizza as well. Bill Smoot says: “This is the biggest change in Pizzadom in centuries! I ordered two pies for us to try, and they were both a huge hit. Way to go, Dominos.” But the majority of the wall posts about the new pizza are critical. It seems that the most common gripe is that there’s too much garlic on the new crust. Others say that the new sauce is too spicy. What’s most unsettling for the company is that these critiques come from the people who call themselves fans of Domino's on Facebook — surely some of its most loyal customers. Domino's doesn't seem very worried, though. Tim McIntyre, Vice President of Communications at Domino's, wrote over e-mail, "Please don’t ignore the fact that a lot of the feedback we’re getting is positive, and you can’t judge our success or failure just based on the tweets found on our web site or Facebook posts." He contends that the campaign's effectiveness will be measured in order counts and in-store sales, which won't be disclosed for a few months. If the sales don't come through and the "Pizza Turnaround" backfires, it won't be the first such campaign to flop. Companies take a big risk when they change the fundamentals of their formulas. In 1985, Coca-Cola introduced "New Coke," inciting what the company history now refers to as "a firestorm of consumer protest." Within months, an embarrassed Coca-Cola returned to its classic soda
Appendix A (continued)
formula. More recently, PepsiCo revamped the packaging of its Tropicana orange juice, only to almost immediately change it back to the original design after customers revolted. While an outright switch back to the cardboard pizza that Domino's has already lambasted seems unlikely, it's possible that the chain could bring some elements of the traditional variety as options on the menu if the protests persist. Another high-profile apology is the last thing that Domino's needs. Not too long ago, its president regretfully addressed a YouTube fiasco that made a mess of the company's public image. Nearly a million people watched a video in which a Domino’s employee put gross things on pizza he was making. While the video prompted a lot of disgusted backlash, it didn’t seem as though there were that many customers complaining that Domino's was actually putting gross things on every pizza that it delivered. Unfortunately, in response to the “Pizza Turnaround,” now that’s exactly what many customers are saying. So Domino’s finds itself playing defense once again. To its credit, the company is very responsive to the negative feedback it’s getting on Facebook. Every few hours, there’s a post like this one: “You can ask the store to leave the crust seasoning off if you'd like, that might help.” The company’s Twitter feed is also actively apologetic. Domino’s tweeted recently, “So sorry you're pizza wasn't what you hoped for. Guarantee says 'If you're not completely satisfied...' " Truly engaging in social media necessitates this kind of imperfect back-and-forth. It requires that companies hand over some control over their brands to their customers publicly. There are enormous benefits to doing so. Endorsement of a product by a large group of strangers, or, better yet, people whom you know, is arguably much more valuable than a one-sided advertisement. But with the advantages of social-media engagement come the downsides. For example, when a customer rants about what may be an isolated incident of lousy service on that company's Facebook wall, everyone can see it. When a bunch of people don't like a new product or policy, they can rise up against it together. Domino’s may not have anticipated the new pizza backlash, but it should have. Customers have been using Facebook and Twitter as a customer-service forum since companies first presented themselves there. If it took Domino’s until now to realize that, maybe its pizza wasn’t so bad in the first place.
Domino’s Bold Ad Strategy: We're No Longer Bad
Pizza chain admits it wasn't great before, but touts new recipe
By Drew Magary |Monday, Jan 4, 2010 | Updated 4:00 PM EDT For the past few years, the fast food industry has taken its swipes for poisoning the nation’s arteries and turning us all into giant blobs of profusely sweaty humanity. Domino’s Pizza took it to a new level in the 1980s with a 30-minute or less deliver policy that meant we did not have to move to get food that was bad for us. Domino’s was the first big chain to base their entire business off of bringing food to your home. And it treated them well. Your scale? Not so much. Of course, millions of other restaurants now deliver as well, so it’s not enough for Domino’s, these days, to merely be a convenient source of pizza. And many frozen pizza brands, particularly DiGiornio’s, have taken the strategy of saying their product is just as convenient as delivery, but hotter and better tasting. All that has dug into Domino’s market share. Now, if you want people to order from you, your food has to be, you know, GOOD. And that’s what makes the new Domino’s Pizza Turnaround campaign such an intriguing development in the ad business. The chain realized that, in order to get more customers, they had to change their product. Now, usually when a company improves a product, they roll it out by saying, “Hey! It’s new and improved! You loved this crap before! Now you’ll double love it!” Not Domino’s. Rather than ignore the past, the chain has chosen to fully expose the old flaws in their product. For a very long time, Domino’s pizza has been
Appendix B (continued)
lousy, and they’re now ready to admit that. In the main video on their website, they include feedback from customers savaging the taste of their pies. “Cardboard.” “Flavorless.” “Bland.” All of this feedback is presented with stark music, as if you’re watching a war documentary. The head chef of Domino’s professes shock at the feedback. Apparently, he didn’t realize that Domino’s was juuust a step below Totonno’s. The rest of the movie is typical corporate rah-rah stuff, with Domino’s employees gathered around in circles and cheering before heading out to deliver your pizza. But the striking thing about this campaign is the stuff up front, where the company lays the honest truth out there for all to see. It’s striking to see a company acknowledge the reality of how crummy their product was, and make what appears to be a genuine effort to do something about it. So Domino’s has changed their pizza, and allowed customers to leave feedback on their site about it. Most of this feedback appears to be unfiltered. There’s plenty of negative comments about the new pies (many Americans, lest you’ve ever dined out in a strip mall, LIKE their food bland and flavorless). There are also plenty of positive comments as well. It leaves you curious about at least giving Domino’s new pizza a chance. And that’s precisely the point of the campaign. Maybe you will like it, maybe you won’t. But you need to know that it’s different. And hopefully an improvement. Hey, there are SIXTY PERCENT MORE HERBS in the sauce! That has to mean something! This kind of openness is welcome in this day and age. It’s almost enough to make me want to try the new Domino’s myself. If there weren’t a clearly superior Vace pizzeria right nearby.
Marketer of the Year Runner-Up: Domino's
Pizza Chain Sees a Gutsy Move Pay Off as Foes Become Fans and Store Profits Reach an All-Time Industry Mark
By: Rupal Parekh Published: October 18, 2010 NEW YORK (AdAge.com) -- "I seriously hated Domino's in the past," wrote Kris Johnson on the pizza chain's Facebook page. "Only had it a couple times and it made my stomach upset and it was average at best. I recently moved and tried Domino's again since there's not much for delivery where I moved to. We are totally turned around by the taste! We have ordered again since 2 more times and plan to order a lot more in the future. ... Way to turn things around Domino's, keep up the fantastic work!!!" The ability to persuade folks like the Facebook commenter to make the leap from non-fan to repeat customer is precisely what Domino's was banking on in December 2009 when it launched one of the boldest ad campaigns the restaurant industry has seen in years. Domino's stopped centering its ads solely on recessionary messaging, such as two-for-one pizza deals, and passed the mic to its harshest critics -- and permitted them to publicly condemn the taste of its core product. Then the chain took it one step further and sided with the haters. Domino's admitted in its ads that its pizza was gross. And it threw out its 49-year-old recipe, which had been compared to cardboard and ketchup, and replaced it with a reformulated sauce, new blend of cheese and a garlic-seasoned crust. Many observers balked at the approach -- with some even predicting the campaign would be brand suicide. But historic double-digit lifts in same-store sales later, the lesson for all marketers is that it's OK to acknowledge when something's broke so that you can assure consumers you'll fix it. Two months into the turnaround campaign, validation came in the form of a taste test that saw Domino's edge out the competition. Nearly 1,800 random pizza consumers from eight U.S. markets did a blind test, and in head-to-head comparisons participants selected Domino's pizzas as tasting better than both Papa John's and Pizza Hut by a wide margin. It didn't stop there. Rather than serve up the recipe change as a one-time stunt, the effort spearheaded a new platform of transparency for the brand. Under Chief Marketing Officer Russell Weiner and lead creative agency Crispin Porter & Bogusky, Domino's has rolled out a host of efforts under the transparency banner. Domino's promised that all national advertising would feature pizzas
Appendix C (continued)
actually made by its employees and vowed to never artificially manipulate pizzas when photographing them. In the wake of the makeover campaign, Domino's posted a 14.3% same-storesales gain -- a record for the fast-food industry, beating the highest-ever gain by McDonald's of 14.2%. And in the most-recent quarter, the chain, which opened its 9,000th store worldwide in March, saw revenue increase 14.5%, and quarterly profit was up a whopping 55.7% to $22.6 million. The majority of Domino's marketing efforts this year hasn't spoken at consumers, it has involved them. With "Taste Bud Bounty Hunter," consumers nominated people they know who haven't tried Domino's new pizza, and those who converted the most taste buds won a year of free pizza. In the "Show Us Your Pizza" effort, consumers could send in photos of real Domino's pies they ordered for possible use in a national ad campaign. Winners received $500. That every major media outlet, blogs and TV personalities have paid attention to Domino's tactics hasn't hurt either. After all, who wouldn't want to have Stephen Colbert taste-test their product on his show, only to say: "Is that pizza, or did an angel just give birth in my mouth?"
Domino's profit up on new pizza recipe
By Lisa Baertlein
LOS ANGELES | Thu May 5, 2011 6:03pm EDT
(Reuters) - Domino's Pizza Inc (DPZ.N) posted higher-than-expected quarterly profit on Thursday as its reworked U.S. pizza recipe drove sales, and costs for cheese and meats rose less than feared. Shares of the pizza delivery chain closed up almost 11 percent. Sales at non-U.S. restaurants open at least a year were up 8.3 percent in the first quarter. U.S. same-restaurant sales fell 1.4 percent from a year earlier, when they jumped a hefty 14.3 percent on the popularity of a reworked pizza recipe. The drop in U.S. same-restaurant sales was significantly less steep than many analysts had expected. "We certainly had a tall mountain to leap over," Chief Executive Patrick Doyle said. Ann Arbor, Michigan-based Domino's changed its U.S. pizza recipe last year to make it more flavorful. Doyle said many of the customers who sampled it back then continue to frequent the chain, expanding the company's domestic customer base. Doyle told Reuters that some analysts were expecting rising commodity costs to hit margins despite company assurances that they would not. "This level of commodity growth is not difficult for us to manage through, not when labor is tame like it is now," he said, adding that the company would not significantly raise prices if commodity costs stay in the current range. Net income for Domino's first quarter ended March 27 increased 10.6 percent to $27.1 million, or 43 cents per share, boosted by higher international royalty revenue and sales at established restaurants. Excluding gains from sales of restaurants to franchisees, profit was 42 cents per share, beating analysts' average estimate by 8 cents, according to Thomson Reuters I/B/E/S. "We attribute virtually all of the upside to better-than-anticipated U.S. same-store sales," said Janney Capital Markets analyst Mark Kalinowski, who had expected U.S. sales at established restaurants to fall 6 percent for the quarter. Revenue rose 2.1 percent to $389.2 million.
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