According to Whichfranchise Australia1 Dominos Pizza Enterprises is the largest fast-food store for a pizza chain in the whole of Australia in terms of networks sales as well as the number of stores in the country. In the whole world, Dominos Pizza Company is the biggest franchisee for the brand name of Domino Pizza. It has the benefit of special jumbo franchising rights for the brand and network in the home country of Australia and also in France, the Netherlands, Monaco, and France. Dominos Pizza Inc. is the owner of Domino’s brand.
The shares of the company are listed. Dominos Pizza Enterprises currently operates in five nations; it has over seven hundred and fifty stores and has employed approximately sixteen thousand employees; it is also estimated to be making about sixty thousand pizzas a year. The company is headquartered in Australia. The company franchises and hence gets a lot of revenue not just from the sales of pizza but also from the franchisees.
New Product Strategy
The new products to be marketed are pizza hut packed in different sizes. The products will have extra ingredients added to their preparations. To make them distinct from other pizza products, the new products will have different and attractive shapes and colors. The package will also be differentiated so that they will be very distinct from other company products. The products will be made and packed into different sizes and each size will have different color codes. The different color codes will be used mainly to target different market segments which include young children, teenagers, and adults. The young children’s products are not to have certain ingredients as may be prescribed by the company’s health consultants.
Key Target Market
The primary target for the Dominos Pizza Enterprises’ pizza hut is people who aspire for a comfy, environment oriented to the family for dine-in pizza. The company’s secondary aimed market needs delivery services for pizza or the approach of taking away. Dominos Pizza Enterprises has expanded into many countries and is still interested in expanding its operations to other countries. The company will be targeting the growing middle-class regions which are estimated to have a population of nearly 200 million worldwide.
The majority of these growing middle-income families have a family member of four and above. The boom in many of these target markets is due to the fact that many people are migrating from overpopulated areas to more rural-like settings. This implies that there will be demand for more family-oriented restaurants. In these regions, the population is divided into different ages most of the ages fall between 15 and 57 years meaning that the regions have high potential consumers of pizza hut.
Most enterprises like video and cinema halls are also coming up; these present Dominos Pizza Enterprises with an opportunity to avail pizza to those who visit the halls. The regions are expected to grow and therefore, there will be a rise in opportunities to serve the population. The Dominos Pizza Enterprises will concentrate on serving individuals; however, the company will also make deals on catering for groups whenever such an opportunity will arise.
Dominos Pizza Enterprises will segment its market in terms of age and socio-economic classes. There will be a specially packed pizza hut for children, teenagers, and adults; these will be differentiated by unique packaging for a particular segment. The pizza huts will also be made in different sizes to attract more customers from across the economic divide.
Dominos Pizza Enterprises will have different pricing strategies for the pizza products. The strategies to be used are as follows:
- Penetration pricing: this strategy will be used in cases where the enterprise will be entering new market segments. Prices will be set low to attract customers. After the product is fully positioned in the market, Dominos Pizza Enterprises will increase the pizza prices
- Price skimming: Dominos Pizza Enterprises is targeting to venture into a new market where it will enjoy a monopoly and competitive advantage. In this case, the company plans to charge relatively high and appropriate prices
- Economy pricing: the company will use this strategy where there is high competition for similar products. This strategy will be used mainly to keep the marketing and pizza processing as low as possible
- Optional pricing: the company will provide an optional price for those customers who will want catering services at their location of choice. The prices will be different from when the customers use the company’s facilities
- Promotional pricing: the company will apply the strategy of promotional prices, especially where there will be over-production. Customers will be offered free pizza huts where they will buy a certain number of pizzas
- Geographical pricing: this strategy will be important to the company due to its international nature. The cost of Pizza production will vary in different regions. This strategy of pricing will ensure the company does not incur losses due to geographical differences
- Value pricing: the company will use this strategy where its production and sales will be influenced by factors such as a rise in competition, global economic downturn, and other external and internal factors.
The pricing strategies used are as explained by Kurtz2
Placement and Distribution
Dominos Pizza Enterprises plans to use a different method of availing its products to the customers. The new product will be availed through the Dominos Pizza Enterprises stores are already established. In cases where the enterprise will be venturing into new markets, it will establish new stores. The pizza hut products will also be supplied to main restaurants that do not produce pizza huts. The company will use different distribution channel.
These will include direct sales team employed by the enterprise, wholesalers, consultants, internet, catalogue, and sales agents. The company will also have outlets where it sells pizza huts direct to its final consumers. The company will also carry a research to find out where most consumers will prefer getting their pizza huts. This is due to the reason that different customers prefer buying their pizzas at certain points.
The company will use a range of product mix that will effectively position the new product in the market. The promotional strategies to be used in positioning the product in the market include:
- Advertising: the company will pay for advertisements to appear in the local print media, radios and televisions. It will also make use of billboards, brochures and print tee shirts to be issued free during certain occasions.
- Personal selling: the company’s sales representatives will engage on one-on-one direct sales to the customers. To this effect, the company will employ representatives on permanent basis.
- Sales promotion: the company will use various methods to promote the sales of the new pizza hut product. Customers will be give free samples on entry into new markets. The company will also give customers free pizza huts a given number of purchases, discounts and coupons. This will be aimed at increasing the number of customers who buy pizza huts.
- Direct mailing: the company will establish a data base of all possible customers and send them direct mails. These will include big hotels existing both domestically and internationally. The company will also collaborate with other advertising firms to help send direct mails to potential customers.
- The company will design some stickers and pay motorist to stick them at strategic points on the body of their vehicles.
Retail Market for pizza huts
The retail marketplace will comprise of appointed retailers who will sell straightly to the consumers. The retailers will have been trained on the company’s facilities about how the products should be placed in the stores. The stores will operate as independent business entities subject to company’s operating retail policies. The retailers will package the new product according to the approved company style. The retailers will also be required, as a company policy, to wear gloves and hair nets when handling pizza hut products.
The company has several operations in numerous countries; it still plans to start operations in other nations. To ensure that marketing of pizza huts does not cost the company a lot of money, it will empower its branch offices to design marketing plans within the countries of operations. This will also ensure that appropriate marketing strategies are designed depending with the geographical and demographical demands in those regions.
However, the international marketing will be within the company’s operational policies. During marketing process, priority will be given to branches that are newly established in other countries and where pizza hut products are the pioneering pizzas in the market segment. As a form of international market, the company will organize competitions in different countries where customers will be required to win tickets to visit a country of choice as tourists. This is expected to help the company establish its integrity as the international company of choice for pizza products. International marketing process will also make use of the internet.
The company website will be used to display pizza hut prices to the international customers. The information on the website will indicate prices and the exact locations where the products can be found or purchased from. There will be sections according to countries of operation. This will require potential customers to just click on the country in which he or currently reside in and get all the information regarding the company’s products. Emailing potential customers will also form part of the company’s internet advertising. The international marketing strategy is supported by the arguments of Mühlbacher3.
The activities of the company are likely to be affected by political factors in various countries of operation. The company understands that the political environment in various countries different. It is also understandable that different countries have different tariffs and tax plans; the countries have also different commercial policies some of which may not be favorable to the company’s operations. The company is likely to experience high taxes in some protective nations.
The products of the company are also going to compete with other fast food products produced in the home countries of operation. The global financial exchange rates are also factors that are likely to have either positive or negative impact on the company’s financial performance. Since the enterprise will be operating in different countries whose currencies fluctuate differently, our operations in some countries are likely to experience revenue slow down.
The success of the company will depend on several factors. These factors include; reduced cost of raw materials used in making pizza huts, favorable government policies, good road networks, availability of security to enable the company operate until late night and high number of pizza hut consumers. It is also important to note that the success of the company will also depend on the global economic recovery. Fast foods are considered as luxury by many of the consumers; this implies that during economic downturn the company is likely to experience low sales hence reduced profitability. The more the global economic recovery the more opportunity the company has to perform better financially.
Market Entry Mode
The market entry mode is derived from the arguments of Doole and Lowe4.
- Exporting: the company will use this mode to get into the foreign market. This will be geared towards penetrating the foreign market.
- Piggybacking: the company will use the services of other companies already established as exporters to help the company product penetrate the overseas markets.
- Licensing: the company will license some firms in foreign countries to operate pizza production under the name of the enterprise.
The advantage of the entry modes is that they will enable the company to penetrate a large market with its pizza hut products. The disadvantage is that the modes are costly.
Doole, I., and Lowe, R., International marketing strategy: analysis, development and implementation, Cengage Learning EMEA, London, 2008, p. 231.
Kurtz, D., Contemporary Marketing, Edition 13, Cengage Learning, Boulevard, 2008, p. 233.
Mühlbacher, H., International marketing: a global perspective, Cengage Learning EMEA, London, 2006, p. 617-686.
Whichfranchise Australia. Domino’s Pizza Australian Franchise, 2010. Web.
- Whichfranchise australia., Domino’s Pizza Australian Franchise, 2010. Web.
- Kurtz, D., Contemporary Marketing, Edition 13, Cengage Learning, Boulevard, 2008, p. 233.
- Mühlbacher, H., International marketing: a global perspective, Cengage Learning EMEA, London, 2006, p. 617-686.
- Doole, I., and Lowe, R., International marketing strategy: analysis, development and implementation, Cengage Learning EMEA, London, 2008, p. 231.