Archive for February 2010
Dominos Pizza
A month and a half ago, Domino’s Pizza launched an incredibly novel but 
inherently risky marketing effort. Approaching 50 years of business, Domino’s scrapped its legacy pizza recipe and, based on focus groups and customer feedback, reengineered its pie. The new recipe boasts a new sauce, 100% mozzarella cheese and garlic and butter crust. All key areas to focus on when designing a new pizza at least accord to consumer research featured in a February 2009 American Express Market Brief.
Turning the brand over to the customer
Reviews of new pizza via Twitter
While it’s definitely not novel or incredibly risky to re-engineer a product based on market research and advertise that you “listened”, it is extraordinary to have the chutzpah to publicly admit (via paid media spots) that the product they’ve been selling for years falls extremely short of your target customers’ expectations. Yet Domino’s did this and more. In an age when most marketers are reluctant to admit that the brand belongs to the customer—not the company, Domino’s embraced social media and allowed for open and apparently unfiltered reviews of the new product.
The new marketing campaign announcing the new pizza, “Oh, Yes We Did” launched in mid-December with TV spots depicting the evolution of the recipe. Along with the TV spots, Domino’s launched a micro-site pizzaturnaround.com, to tell the complete story about the inspiration behind the new recipe and to capture customer feedback. The content on the site is honest and raw. No sugar-coating. And while much of the early participants tested the transparency of what Domino’s was sharing from customers (apparently everything), since then the conversation has shifted back to the product. If I had to guess I would estimate that between 40 and 50% of the feedback was positive toward the new recipe.
At first blush, you might be tempted to argue that the risks of the new campaign far outweighed any benefits that could be received. The chance for failure was far too great. Change a product and then open up a corporate forum for your customers to bash you? Are you nuts? Marketing experts across the country questioned the intelligence of the decision. An advertising executive quoted in The Washington Post felt the line Domino’s was walking was dangerous.
“Two bad things can happen: You drive away the people who liked the old pizza better, and you don’t really make the new pizza better, which makes your [new] customers say, ‘You lied to me.’ Domino’s has to make damn sure they’re not making it 5 percent better. It better be 50 percent better.” Claudia Caplan
Prioritize properly
This is true. However, I still believe this move is more intelligent than most pundits give it credit. Here’s why: For years Domino’s had positioned itself as the king of delivery, offering free pizza if it wasn’t on your doorstep in 30 minutes. With all the focus on delivery though, Domino’s lost site on taste. According to reports cited on CBS as well as a presentation from Domino’s to
Domino's tied for last place in taste prior to launching a new recipe
investors—the chain tied for 6th in taste in a customer loyalty engagement index. Who were they tied with you ask? Chuck E. Cheese. Ouch.
Differentiating your offering from substitutes can be extremely useful in establishing a competitive advantage, provided you prioritize these differentiators properly. But Domino’s (until recently) didn’t. Putting all its effort into the delivery component, it forgot about the pizza. But in the pizza business, delivery speed just isn’t as important as taste. I’d be willing to bet that most people would wait 10-15 minutes longer, if it meant getting a more enjoyable product in the end. It doesn’t matter how quickly you can get it to your customers, in a competitive market they just aren’t going to order your food if it tastes significantly worse.
Focus on the customer
Domino’s decision to focus on taste is a move to align the product experience around what matters to the customer. Only time will tell if the new recipe resonates with consumers. If you believe Domino’s recent taste test results, you’d contend that they’re already making strides. Once it improves its taste perceptions with consumers, say in the top 3, delivery speed could once again become a meaningful competitive advantage for the chain, but not until then.
