IMC 616: Direct Marketing Plan for Domino's Pizze

Domino’s Proposal to Increase Carry Out Business in Columbus, Ohio

Stephanie Marchant

West Virginia University


Stephanie Marchant

Founded in 1960, Domino's Pizza (Domino’s) is the recognized world leader in

pizza delivery, with a significant business in carryout pizza. It ranks among the world's

top public restaurant brands and had global retail sales of over $7.4 billion in 2012.

(Domino's Pizza Announces Third Quarter 2013 Financial Results, 2013)

Domino’s also competes in the carryout market, which together with pizza

delivery comprise the largest components of the U.S. pizza industry. Although Domino’s

primary focus is on pizza delivery, it is also favorably positioned to compete in the

carryout segment given its strong brand identity, convenient store locations, and

affordable menu offerings.

It also had an advanced tracking system that allowed customers to see every

step of the pizza-making and delivery process, right down to seeing the name of the

person who was putting their pizza in the oven. As such, the company was able to

successfully utilize social media, often a tricky tool for most companies. The Domino’s

Pizza Tracker certainly played a big role in helping the company achieve this status, as

it boosted its online ordering profits by 23% since its inception. (Anderson, Marold, &

Sauber, 2011)

Although pizza is a favorite meal for all Americans, young and old, and more than

95% of population eats pizza, there are variations in consumption based on age,

household size, and income. A recent survey reports that 21% of people in the 18-24

year old age category purchase pizza more than three times a month, compared to only

7% of those over age 65. (Baier & Spiller, 2012)

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Stephanie Marchant

Group One: Age 18-24

Pizza is a $30 billion-per-year industry, and college kids spend millions on pizza

every school year. College students have choices on campus and expect a steady flow

of offers and discounts in exchange for their patronage. (Le & Pashut, 2011) There is a

Domino’s located conveniently to the campus of Ohio State University (OSU).

For this reason a campaign to increase carry out business targeting the students

is a logical choice. All three tests would run from February 15th through April 30th

because there are two final exam periods during these months during which students

likely to order pizza while studying.

Test One:

Collaborate with Buck I.D. to promote discounts valid only for carry out orders

from the Domino’s location near the campus of OSU. Buck I.D. is an OSU identification

card that students and faculty members can use as a debit card and display at local

area merchants to purchase items and receive discounts. (Information for Merchants,

2013) A promotion could be created specifically for Buck I.D. holders that would require

using their card at the campus location of Domino’s.

Selling to college students as a group may result in significant revenue, but

individually, they don't have much disposable cash. Even if they aren't financially

strapped from tuition, many students are on a limited budget. They're price sensitive so

it is important to offer a great product at a price that doesn't cut into their minimal

savings. (Williams, 2010) Partnering with Buck I.D. provides a convenient solution for

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Stephanie Marchant

managing money and a way for parents to add additional funds that can be allocated to

use with participating merchants, rather than vending machines.

Measurement would involve tracking how many Buck I.D. participants visited the

Domino’s location as a result of the promotion through the Buck I.D. website and

comparing it to previous Buck I.D. traffic before the campaign starts.

Test Two:

Develop a social media campaign. Students can follow on Twitter, Check In with

FourSquare, and sign up for mobile updates to receive promotional codes to use for

discounts for carry out service from Domino’s. A social media campaign is perfect to

target college students because they have more time to be online to read about the

latest updates with friends or what upcoming social events are being planned.

Based on their weekly class schedule, college students get into a routine and

create a habit of when they check social media sites on a laptop, tablet, or smartphone.

They can like, follow, or share their check-ins with friends to promote the latest

promotions from Domino’s. Students are interested in what products and services their

friends are interested in and pay more attention to what they post online because it

comes from a person, not a direct brand, and a friendly face is more relatable than a

logo. (Williams, 2010)

Measurement would involve tracking how many visitors used the promotional

codes distributed through these social media channels to determine the success of the

test.

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Stephanie Marchant

Test Three:

Use inserts on Thursdays in the OSU campus publication, The Lantern, and also

distribute through campus mail to students residing in OSU dormitories. It is difficult to

reach out to college students on campus unless a partnership with the university is

created. (Peters, 2013) The Lantern provides coverage of the OSU community of more

than 60,000 students and 40,000 faculty and staff. The paper generally prints and

distributes 15,000 daily papers but has bonus circulation for special issues. (Media Kit,

2013)

By distributing full page, four color flyers in The Lantern and through campus mail

on Thursdays, students will be reminded about the convenience of the Domino’s

location near campus as they prepare to study as well as gather with friends on the

weekend. Email blasts could be incorporated to distribute the same message

electronically to individuals who have opted in for promotional offers from the

publication. The print or electronic flyer would need to be presented to qualify for the

discounts.

Measurement would involve tracking how many flyers were presented at the

Domino’s location as a result of the promotion during the test period.

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Stephanie Marchant

Group Two: Families with Children

Among households with children, 20% purchase pizza more than three times a

month, compared to 12% of those households with no children. Research also indicates

that households with annual income of $100,000 and beyond are more likely to prefer

pizza from independent, local pizzerias, while households with children are more likely

to visit a pizza chain. (Baier & Spiller, 2012)

Test One:

Promote the convenience and value of Domino’s healthier meal options available

from the Domino’s location through direct mail to middle class families in the Columbus,

Ohio area. A list could be purchased from InfoUSA using demographic, geographic and

psychographic filters to identify consumers in middle class neighborhoods within a 5

mile radius of a Domino’s location. The campaign would encourage families to place

orders to pick up on the way home from work so a family can enjoy a nutritional dinner

together and take a night off from cooking. Promotional codes would be offered for

complete family dinners.

The country has also been on a large push for a “healthier” lifestyle, and so the

fast food industry in general must always be perceptive of this shift in attitude. As a

result, Domino’s now offers healthier options on their menu, and made a point to

emphasize the use of “fresh” or “organic” ingredients. (Le & Pashut, 2011) Seventy-six

percent of consumers surveyed by the National Restaurant Association reported that

they are trying to eat healthier meals in restaurants compared to two years ago.

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Although research also reports that 84% of surveyed consumers consider pizza as

indulgence and they do not care if it is healthy or not. (Baier & Spiller, 2012)

Measurement would involve tracking how many promotional codes were used

during the test period for family dinners and comparing it to other carry out orders to see

if the consumer saw value in the larger orders over just pizza.

Test Two:

Build a direct mail campaign leveraging the database of frequent delivery

customers to offer them incentive to carry out instead. Using the data collected from the

Domino’s pizza profiles created on their website, identify those customers in the

Columbus, Ohio area and the store associated with their location. Create and mail a

six-page menu including coupon offers that would be most appealing to these targeted

customers. The pieces would be customized with the customer’s name and preferred

Domino’s location to reinforce the relationship and encourage more sales at that

particular location.

Measurement would involve tracking how many customers redeemed the

coupons during the test period compared to the number of delivery orders from the

same customer.

Test Three:

Create a loyalty campaign for frequent carry out orders encouraging families to

get to know their pizza maker on a first name basis. Customers could earn Pizza Points

that add up for free meals, Domino items, and be entered for a chance to win a tailgate

party for a local sporting event.

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Food retailers find that as much as 65% - 95% of their sales go to members of

loyalty programs (53% of food retailers offer loyalty programs with 3/4 of program

customers using their loyalty cards at least weekly and 88% at least once a month).

(Loyalty Programs, 2013) The greatest value is the ability to identify individual

customers and to measure and understand their individual behaviors. This consumer

behavior far outweighs the value of providing consumers the opportunity to build a

reward opportunity for carry out purchases at local Domino’s locations.

Measurement would involve tracking how many consumers redeemed Pizza

Points and which items did they prefer from the choices available.

Groupon Test

Groupon differs from other couponing sites in the sense of the approach taken to

advertise the businesses featured on their site. The creators of this e-coupon site have

taken into consideration that people are enjoying many products and services in a group

setting. It’s beneficial to the consumer to find and purchase discounts for these

products for not only themselves, but for friends and family as well. Many other coupon

sites only allow access to one coupon per person, but Groupon makes it easy and

convenient for one person to obtain multiple coupons for multiple people.

Groupon is an effective form of small-business marketing. Unlike traditional

advertising, it introduces Domino’s to thousands of local customers with no upfront

costs. It is important to structure a campaign that makes financial sense and attracts a

steady stream of carry out customers each month. Groupon delivers young, educated,

and affluent decision-makers who return to and spend more at the places they love.

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With Groupon, Domino’s locations throughout Columbus can track the success through

the Merchant Center and Impact Report. Being able to review customer feedback and

calculating the offer’s profitability are all visible through its dashboard.

Domino’s franchise owners could offer a limited time offer for a discount valid for

carry out service from their location(s) but set a specific discount and the amount they’re

willing to give away. Groupon would promote the offer and receives a 5% finder’s fee

once consumers purchase the deal. Domino’s participants have full control over the

minimum and maximum number of deals they’re willing to offer. If the deal doesn’t

appeal to consumers then there is no financial loss to Domino’s. (Grouponworks, 2013)

The intention is not to gain a lot of profit from the deals made; rather the intent is

to drive traffic to the business once the deal is over.

Data Collection Opportunities

There are at least five primary opportunities where Domino’s can capture data to

further increase sales and market share: partnering with the Buck I.D. program, email,

mobile, social media, and customer pizza profiles.

Buck I.D. Profile.

The data collected during the registration process for the Buck I.D. also provides

intel on where the student lives, their purchase behavior, and how often the parents refill

their accounts. Being able to communicate with the parents of OSU students could

provide additional marketing opportunities.

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Social Media.

Domino’s social media strategy is a broad ranging program that encompasses

Facebook, Twitter, and FourSquare. Focusing on these social media networks where

the majority of their target customers are likely to be found and filling them with content

and connections will expand the reach for the Domino’s locations in Columbus, Ohio.

These outlets can be used to encourage customers to share their pizza experiences

and reward them for doing so with points that can be accumulated for merchandise.

Domino’s could also integrate Facebook Connect, which would make students’

purchases of pizza online part of their news feed on their Facebook profiles. This could

encourage friends of those consumers to also visit the same Domino’s. (How to

Leverage Social Media Sites for Sales Purposes, 2013)

Email Addresses.

As customers register with Domino’s to receive promotions or as they create

pizza profiles, the email addresses provided could be used for a variety of special deals,

promotional offers, and coupons to new menu item introductions and menu suggestions

for special occasions (e.g., lunch, family gathering, gift) to just a simple reminder to

order from Domino’s.

Mobile Marketing.

Mobile commerce will change the face of retail as we know it. Although, mobile

marketing at Domino’s is a small proportion compared to online marketing via the

Internet, the company reports that it is growing at an average rate of 20% per month.

(Le & Pashut, 2011)

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Using text messages to reach customers who opt in to that option along with

email as their two primary choices for direct marketing is one way to complement email

in loyalty marketing efforts and, equally important, drive traffic back to their Domino’s

location of choice. (Kahn, 2011)

Pizza Profiles.

To place an order, the customer is required to set up an account online with a

keyword attached to their favorite orders and the delivery address. An option for credit

card or cash upon delivery allows the consumer payment flexibility. To place the order

for delivery through their mobile phone, the customers can send their chosen word in a

text message to 61212. Data collected from loyal customers enhances the database for

the local Domino’s and their collective and individual marketing campaigns. Knowing

where they live, their purchase behavior, and preference to carry out or delivery orders

would be valuable information for future marketing efforts.

The buying patterns, demographics, and psychographics compiled from the data

that Domino’s is able to collect through these tests are crucial part of future marketing

campaigns in the Columbus, Ohio market. Taking advantage of this house list allows

Domino’s to develop a personalized relationship with its customers which, in turn,

fosters loyalty to the brand and the preferred location. Knowing how, where, what, and

when to communicate with its customers is the desired outcome from these tests.

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References

Anderson, A., Marold, D., & Sauber, M. (2011). Domino's Pizza: Growing Sales With

Technology. In S. Jones, & J. Kelly, The IMC Handbook: Readings and Cases in

Integrated Marketing Communications (pp. 293-308). Racom Communications.

Baier, M., & Spiller, L. D. (2012). Contemporary Direct and Interactive Marketing.

Chicago: Racom Communications.

Domino's Pizza Announces Third Quarter 2013 Financial Results. (2013, October 15).

Retrieved from Dominos.com: http://phx.corporate-ir.net/phoenix.zhtml?

c=135383&p=irol-newsArticle&ID=1864393&highlight=

Grouponworks. (2013, October 14). Retrieved from Groupon:

https://www.grouponworks.com/

How to Leverage Social Media Sites for Sales Purposes. (2013, January 23). Retrieved

from KIrfan: http://www.kirfan.com/how-to-leverage-social-media-sites-for-sales-

purposes/

Information for Merchants. (2013, October 16). Retrieved from Buck I.D.:

https://buckid.osu.edu/merchants.asp

Kahn, M. (2011). Mobile Marketing and the Mobile Decade to Come. In S. Jones, & J.

Kelly, The IMC Handbook: Readings and Cases in Integrated Marketing

Communications (pp. 196-201). Racom Communications.

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Le, T., & Pashut, T. (2011, November 26). Domino's: The Turnaround. Retrieved from

UCLA Department of Economics:

http://www.econ.ucla.edu/sboard/teaching/tech/Dominos.pdf

Loyalty Programs. (2013, October 19). Retrieved from CRM Trends:

http://www.crmtrends.com/loyalty.html

Media Kit. (2013, October 14). Retrieved from The Lantern:

http://thelantern.com/blog/classifieds/images/MediaKit.pdf

Peters, L. (2013, August 21). Marketing & College Students: It's Not About Where, But

When. Retrieved from Socialnomics:

http://www.socialnomics.net/2013/08/21/marketing-college-students-it

%e2%80%99s-not-about-where-but-when/

Reichheld, F. F. (1996). The Loyalty Effect: The Hidden Force behind Growth, Profits

and Lasting Value. Cambridge: Harvard Business School Press.

Williams, G. (2010, September 23). Five Tips for Marketing to College Students.

Retrieved from Entrepreneur: http://www.entrepreneur.com/article/217344

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IMC 616: Direct Marketing Plan for Domino's Pizze

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Transcript of IMC 616: Direct Marketing Plan for Domino's Pizze