TABLE OF CONTENT

1. INTRODUCTION

2. SECTION ONE
A. Brand Quality Of Domino's Pizza: Mike Schallehn’s CCI Model
B. Strength Of Domino's Pizza’s Products & Services: The Expectancy Disconfirmation
Paradigm (EDP)
C. Efficacy Of Domino's Pizza’s Marketing Communications Mix: The Communication Mix
Model.
D. Domino’s Pizza's Media Involvement: The Aida Framework.
E. Domino's Pizza’s Meaning And Relationship With Customers: The Expectancy
Disconfirmation Theory

3. SECTION TWO
A. Preliminary
B. Characteristics Of The Target Maret: Nigeria.
C. Strategies Chosen By Domino’s Pizza To Enter Nigeria

4. CONCLUSION
5. REFERENCES
 EXECUTIVE SUMMARY
Overview
Pizza is becoming one of America’s staple foods- with each person consuming about 30 pounds
every year. In turn, this has made Domino’s Pizza - founded in 1960 by Tom Monaghan and James
Monaghan - the largest pizza company in the world based on global retail sales, with more than
17,000 locations in over 90 markets around the world as of December 29, 2019 (Domino’s Pizza,
Inc., 2019). They have their shops in over 80 countries in the world via franchising.

Objective
In this report, we examine the strategies Domino's Pizza has implemented in order to be successful in
the United States. Specifically, the report studies the brand quality of Dominos, the strength of
Domino’s products and services, the efficacy of its communication marketing mix, its media
involvement, and its meaning and relationship with customers. It applies business models in studying
those features.

Further, it recommends the best entry strategy through which Dominos can follow to expand into
Nigeria. This strategy is chosen with the economic conditions in Nigeria and the prospective needs of
Nigerian customers in mind. The strategies chosen are licensing and franchising, business format
franchising in particular. The disadvantages and advantages of both strategies are enumerated.

Conclusion
The report recommends the Ansoff Matrix, which is a business expansion framework that can help
Dominos determine what to do next, just in case the franchise model starts to fail.

References
Domino’s Pizza, Inc. (2019). Annual Report: Domino’s Pizza Inc. UNITED STATES SECURITIES

AND EXCHANGE COMMISSION.

https://www.sec.gov/Archives/edgar/data/1286681/000119312520042675/d796357d10k.htm
INTRODUCTION

Although Domino’s Pizza is the largest pizza company in the world based on global retail sales,
having over 17,000 locations in over 90 countries worldwide as of December 29, 2019, it only
began as a small pizza shop in Ypsilanti Michigan, a suburb of Ann Arbour in 1960. Dominik DeVati, an
Ann Arbour restaurateur, opened DomiNick’s doors, with locations in Ypsilanti and Ann Arbour (Turner,
2020).

The Company is primarily a franchisor, with approximately 98% of Domino’s stores currently
owned and operated by independent franchisees (Domino’s Pizza, Inc., 2019). Domino's Pizza’s
franchise segment consists of a network of franchised stores in more than 90 international
markets. On December 29, 2019, they had 10,894 international franchise stores. During 2019,
this segment accounted for $241.0 million, or 7% of our consolidated revenues. The principal
sources of revenues from those processes are royalty payments generated by retail sales from
franchised stores (Domino’s Pizza, Inc., 2019).
 SECTION ONE

Figure 1. A brief historical outline of Domino’s Pizza, Inc.

Figure 1 briefly depicts the successful historical timeline of Domino’s Pizza (Domino's Pizza) in
the USA. Withal, the decisions Domino's Pizza has taken in the USA to make a successful pizza
brand has to be investigated. The subsequent subsections ascertain the success of Domino's Pizza
by employing models and theories to test the quality of their brand; strength of their products and
services; efficacy of their marketing communication mix; and their meaning and relationship
with customers.

BRAND QUALITY OF DOMINO'S PIZZA: MIKE SCHALLEHN’S CCI MODEL

Schallehn, M (2014) develops a model of brand authenticity. The key antecedents in their model
are consistency, continuity and individuality of a brand.
In August 2012, Domino's Pizza changed its name to simply Domino's. At the same time,
Domino's introduced a new logo that removed the blue rectangle and text under the domino in
the logo and changed the formerly all-red domino to be blue on the side with two dots and red on
the side with one dot (Peterson, 2012). This was done because the company wanted to "expand"
menu choices rather than simply rely on their traditional pizzas; thereby, ensuring continuity,
consistency, and individuality of Domino's Pizza’s brand.

STRENGTH OF DOMINO'S PIZZA’S PRODUCTS & SERVICES: THE EXPECTANCY

DISCONFIRMATION PARADIGM (EDP)

Postulated by Oliver LR (1997), EDP implies that consumers purchase goods and services with
pre-purchase expectations about the anticipated performance. Whenever a customer's
expectations are exceeded, there is a positive disconfirmation between expectations and
performance, resulting in satisfaction. In contrast, when service performance falls short of
expectations, there is a negative disconfirmation between expectation and perception, resulting in
dissatisfaction (Yuksel Atila, 2018).

Utilising the EDP theory proves that Domino's Pizzas products and services are of high quality
as a majority of Domino’s customers have been giving positive feedbacks.

EFFICACY OF DOMINO'S PIZZA’S MARKETING COMMUNICATIONS MIX: THE

COMMUNICATION MIX MODEL.

The communications mix involves all the tools you use to communicate with your customers or
potential customers. This could be through advertising, social media, product packaging, direct
marketing, websites, events, exhibitions – the list goes on.

Marketing communication tools used by Domino's Pizza

A. Advertising
 Domino's Pizza’s stores in the contiguous United States currently contribute 6% of their
sales to fund national marketing and advertising campaigns. These funds are administered
by Domino’s National Advertising Fund Inc. (“DNAF”), their consolidated not-for-profit
advertising subsidiary. The funds are primarily used to purchase media for advertising,
and also to support market research, field communications, public relations, commercial
production, talent payments and other activities to promote Domino’s brand (Domino’s
Pizza, Inc., 2019).

B. Direct Digital Marketing

In direct digital marketing, targeted communications are delivered electronically to

specific recipients. The most common channels are email, websites, and mobile apps.

In the early summer of 2001, Domino's Pizza rolled out its new Domino's Pulse POS
system in 600 corporate stores and 100 franchise stores. They believed that utilizing
Domino’s Pulse with its integrated technology solutions throughout their system provides
them with competitive advantages over other concepts. They intend to continue to
enhance and grow our online ordering, digital marketing and technological capabilities.
Also, in their 2019 annual report, Domino's Pizza stated that they had the “intention to
continue to enhance and grow online ordering, digital marketing and technological
capabilities” (Domino’s Pizza, Inc., 2019).

C. Public Relations (PR)

Gürel, Emet (2016) defines public relations as “a business function and administrative
tool that serves to establish mutual communication, understanding, acceptance, trust and
cooperation between an organization and its target groups and to make this environment
permanent.”

As stated in the advertising section above, Domino's Pizza currently contributes 60% of
its sales on funding national marketing and advertising campaigns. The funds are
primarily used for advertising, but they also support other sections such as public
relations.
 D. Sales Promotion

During 2019, Domino's Pizza’s U.S. stores segment accounted for $1.27 billion, or 35%
of our consolidated revenues (Domino’s Pizza, Inc., 2019). Directly operating Domino’s
stores contributes significantly to their ability to act as a credible franchisor. They also
use their company-owned stores as test sites for technological innovation and sales
promotions as well as operational improvements.

E. Sponsorship

In 2018, Domino’s commitment funded 20 grants toward supervised agriculture

experiences for grades 7-11. Domino's understands there would be no pizza without
farmers, which is why it committed $1 million to the National FFA Organization in 2017.
FFA is an intra-curricular student organization for youth interested in agriculture.
Domino’s is proud to support these students and the future of agriculture education in the
U.S.

In addition, Domino’s donated more than $442,000 in monetary and $96,000 in in-kind
gifts to hundreds of local organizations in 2018 (Domino’s Charitable Giving, 2018).
Domino's Pizza is focused on finding ways to give back and make their communities
better; in turn, this popularises the brand more.

DOMINO’S PIZZA'S MEDIA INVOLVEMENT: THE AIDA FRAMEWORK.

While Domino's Pizza recognises that the dissemination of information via social media could
harm their business, brand, reputation, marketing partners, and financial conditions, they still
frequently use social media to communicate with consumers and the public in general. The
company states in its 2020 annual report that “failure to use social media could lead to a decline
in brand value” (Domino’s Pizza, Inc., 2020).

AIDA, an acronym for Attention, Interest, Desire, and Action, describes the stages that
individuals go through when making a purchase decision. In digital marketing, sales strategies,
and public relations campaigns, the AIDA model is often used. Using this model to quantify the
quality of Domino's social media posts, this report determines that Domino's records tangible
requests through posts on Instagram, Facebook, and Telegram. Recently, Domino’s Pizza CEO
Ritch Allison told CNBC’s Jim Cramer that “more than 75% of orders are now being placed
through digital channels, up from 70% prior to Covid-19” (Clifford, 2021).

DOMINO'S PIZZA’S MEANING AND RELATIONSHIP WITH CUSTOMERS: THE

EXPECTANCY DISCONFIRMATION THEORY.

The Kano model was developed in 1984 by Noriaki Kano. It was formulated to define a model
that could categorize and prioritize customer needs and provide the customer with on-growing
satisfaction (Južnik Rotar & Kozar, 2017).

A study by Ponnam, Abhilash et al (2011) attempted to integrate the Kano methodology in

investigating the Indian fast food industry, including Domino’s Pizza. It discovered that most fast
food companies in Indian (Domino’s included) are well satisfied.

SECTION TWO

PRELIMINARY
Before Domino's Pizza attempts to expand to Nigeria, it is pivotal that it understands the nature
of the Nigerian market. The quick-service food market in Nigeria is competitive, with strong
local and international players, some of which have been around for scores. Chicken Republic,
Tantalizers, Sweet Sensation, Mr Biggs are all long-standing brands. However, it might be
surprising to discover that pizza is still a relatively outlandish meal in Nigeria as there is no
major pizza eatery in the country. Pizza is still largely a foreign concept that Nigerians see
mostly in movies and TV shows. This implies that there is a larger number of people in a densely
populated Nigeria who just have not eaten pizza before. This further means that Domino's Pizza
will be the first pizza company to bring world-class pizza into Nigeria. This gives Domino's
Pizza the advantageous edge of being the powerhouse of pizza delivery. In turn, competition is
mitigated.

Nonetheless, characteristics of this target market, Nigeria, have to be considered, as well as the
needs of the potential consumers.

CHARACTERISTICS OF THE TARGET MARET: NIGERIA.

Ezimma Nnabuife et al (2018) pinpoint challenges affecting companies from doing business
smoothly in Nigeria. Below, these challenges are listed and how these challenges might differ
from the ones in the home market/country of origin of Domino's Pizza (the USA) is explained.

Challenges Affecting Doing Business in Nigeria Ezimma Nnabuife et al (2018):

1. Starting a business in Nigeria can be cumbersome requiring two times as many

procedures and three times the amount of time as in developed economies of the world
such as the home country of Domino's Pizza, USA.

2. Obtaining construction permits in Nigeria involves manual submission of several

documents, higher fees and longer procedures than in the USA where the acquiring of
construction permits is less daunting.

3. Power outages are the major obstacle to running businesses smoothly in Nigeria as most
industries especially the ones at the infant stage cannot really afford the cost of daily
diesel for the efficient running of their businesses. This is so different in the USA where
the power supply is very stable.

4. Tax payment and policies are very cumbersome in Nigeria. It is essential to review tax
policies to make the procedure less cumbersome. Comparatively, the USA has one of the
best tax payment systems and policies in the world.
PROSPECTIVE NEEDS OF THE CUSTOMERS IN NIGERIA
As illustrated above, pizza is a new dish to most Nigerians, so there might not be any pressing
need when Domino's Pizza enters Nigeria. Nonetheless, since most Nigerians have heard about
pizzas in the media, there is a probability that Nigerians might develop a need to ingest a pie of
pizza for the first time. However, this probability is relatively low. To increase the chances and
make pizza more widely accepted in Nigeria, Domino's Pizza may have to focus on two
strategies: sampling and localising the menu.

Domino's Pizza may have to give away a tremendous amount of pizza so people could try out the
product and satisfy their curiosity at laissez-faire. When they enjoy it, they then come back and
buy it.

Domino's Pizza may also have to localise its menus to attract customers. For example, meat pie,
suya, chicken, yam and potato, bread and butter, and so on, are popular local meals in Nigeria.
Domino's Pizza may become innovative by tweaking their menus to include pizzas with names
like Suya Pizza, Bread and Butter Pizza, Chicken Breast Pizza, Yam and Potato Pizza, etc.

Lastly, it is pertinent that this report turns attention to the popular maxim that claims Nigerians
are careless about quality and care more about quantity, whatever the price. Just as this might be
the need of many Nigerians, it is not for all. Hence, Domino's Pizza is advised to contraindicate
this advice and continue moulding high-quality pizzas at a reasonable price.

STRATEGIES CHOSEN BY DOMINO’S PIZZA TO ENTER NIGERIA

Licensing

The licensing strategy relates to the transfer of ownership. A company (known as the licensor)
grants permission to another company (known as the licensee) to use its intellectual property for
a defined period of period. During a license agreement, a company transfers the right to use its
products and services to another company.

Licensing becomes an attractive choice when the host country, Nigeria, in this case, restricts
imports or foreign investments or when the market is small and prospects technology feedback is
high. Withal, this is not the case as Domino's Pizza aims to mould pizzas and sell right in Nigeria
- not importing pizzas. Also, Nigeria is a small market. Diametrically, it is a gargantuan market,
one of the biggest in Africa. Finally, Nigeria’s prospective technology feedback is relatively low,
compared to the home country of Domino's Pizza where technology is highly developed.

Although licensing provides Domino's Pizza with the advantages of assessing a difficult market
like Nigeria, given a low capital risk and low commitment of resources, improved delivery and
service levels in local markets, because it has disadvantages such as: providing lack of control
over licensee operations, forcing the company to interact passively with the market, Domino's
Pizza might consider adopting an alternative entry strategy. Franchising, hence, seems like a
promise entry strategy Domino's Pizza can adapt, trying to enter Nigeria.

Franchising

Franchising is a form of marketing and distribution in which the franchisor grants an individual
or company, the franchisee, the right to do business in a prescribed manner over a certain period
of time, in a specified place (Ayling, 1986). There are two types of franchises: product
distribution franchises and business format franchises. Domino's Pizza might not be able to
embrace the former because it involves a supplier-dealer relationship in which the franchise
simply sells the franchisor’s products; however, does not provide them with a business system.
Domino's Pizza definitely will not be supplying baked pizza from the USA to its franchisee in
Nigeria. Thus, the company has to welcome a franchise model where not only the product,
service, and trademark of Domino's Pizza are used, but also the complete method to conduct the
business itself is adapted. The type of franchise model that performs this binary function is called
business format franchising.
“USA Today reported that the 10 most popular franchising opportunities are in these industries:
fast-food retail, restaurant, retail service, automotive, …”, Belu, Micheala & Caragin Andrea
(2008). Business format franchising seems to be the best entry strategy for Domino's Pizza,
aiming at expanding their fast-food retail to Nigeria.

Advantageous Effects of Franchising on Domino's Pizza’s Brand

1. Owning a franchise allows Domino's Pizza to go into business for itself, but not by itself;
thereby, reducing the cost of entry.
2. A franchise increases Domino's Pizza’s chances of business success because they are
associating with proven products and methods.
3. Franchises provide pre-opening support such as site selection, design and construction,
financing, training, and grand opening programs.
4. Franchises offer ongoing support including training, national and regional advertising,
operating procedures and operational assistance, ongoing supervision and management
support.

Advantageous Effects of Franchising on the Targeted Customers: Nigerians.

1. Consumers may be attracted to franchises due to a certain level of quality and consistency
which are required by the franchise contract.
2. The franchise model will enable Domino's Pizza to answer to the local demands of the
target market

Disadvantages of Franchising
The major disadvantages of franchising affect the franchisee, not the franchisor. Therefore,
Domino's Pizza has little to zero threat of implementing the franchise model as its entry strategy
into a difficult market like Nigeria.
CONCLUSION

Domino’s Pizza has been a major franchisor, with most of its international shops licensed to
franchisees. Hence, this report has no reason why Domino's Pizza should change its primary
entry strategy, which is the franchise model. However, just in case this franchise entry begins to
falter, Domino's Pizza still needs to assure its stakeholders that they will respond positively and
innovate fast. To achieve this, this report recommends the Ansoff Matrix. The Ansoff Matrix is
an expansion framework developed by a mathematician in 1957. This method isolates the
relationship between the product and the target market and calculates the risk of that combination
(Bartolacci, 2021). It’s a four-quadrant grid with new and existing products on the x-axis and
new and existing markets on the y-axis. The framework then has four strategies which include
market development, product development, diversification, and market penetration. By
understanding which of these strategies Domino's Pizza will pursue, the company will know
where to invest resources for success. For instance, should they focus on product innovation? Is
market research necessary? Or should they do both?

The Ansoff market expansion framework (and the others) can help Domino's Pizza determine
what to do next when it reaches a plateau in growth. The inflexion points in Domino's Pizza's
trajectory where the growth may flatten off or veer off are the points at which Domino's Pizza
would want to apply these strategies to strategize how to turn the trajectory around.

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