Domino’s App Advertising Campaign Proposal
Team 11
Table of Contents Executive Summary Situation Analysis Problem & Opportunities Identification • SWOT • Objectives and Results of Primary Research • Target Audience Analysis • Communication Strategy
Creative Concept and Creative Sample Media Plan and Budget Plan Expected Result Bibliography
Exucutive Summary This report provides an analysis and evaluation of the current and prospective position of the Domino’s Pizza smartphone application. Domino’s Pizza is an international company best known for their signature pizzas. Domino’s is the number one pizza delivery service in the country. Domino’s Pizza mission is to maintain commitment to an inclusive culture that values the contributions of our customers, team members, suppliers, and neighbors. Domino’s is dedicated to providing the best of service, quality products and delivery excellence. Tom and James Monaghan founded Domino’s as a single store in 1960 in Ypsilanti, Michigan. Today, Domino’s operates in 10,566 stores in more than 70 countries around the world and has over 10,000 employees. Domino’s released their smartphone application in June 2011 to make ordering a quick and easy process for consumers, in hopes of boosting number of orders and overall profits. The Domino’s app caters to its tech savvy consumers. The app includes the company’s entire national menu and gives users the ability to order from each of its 5000 U.S. locations. The Domino’s app includes a Tracker feature, which allows users to follow their order from the “make-line,” into the oven, then out for delivery or ready for pickup. The app allows for credit and debit card payment, features coupons, and remembers your previous orders for lightening fast re-ordering. Methods used for analysis of Domino’s smartphone application include a consumer survey, situation analysis, and problem and opportunity identification. After conducting a consumer survey, results show that most consumers are aware of the Domino’s app, however they are not using the app. The result of the research also demonstrates the consumers’ irritation of food ordering process when they are concentrated on the personal task or own entertaining time. As a conclusion of these results, we have developed a creative concept, media plan, and the expected result. Our communication objective is to get current Domino’s users to place an order using the app. Our creative concept appeals to our target audience of 18-24 year old smartphone users by implementing a social media contest on Vine that will be promoted through Facebook, Twitter, Instagram, and YouTube. This campaign will be during a period that is time-sensitive to our target consumer. Our expected results are that number of orders via the app will increase and that Domino’s popularity on social media sites will increase.
Situation Analysis Brand Analysis
Domino’s Pizza, Inc. is an international company best known for their most popular product: pizza. The company’s Classic Hand Tossed, Crunchy Thin Crust, Artisan, Inspired and Handmade Pan pizzas, have dubbed Domino’s as a leading player in the pizza industry domestically and abroad. On average, over 1.5 million Domino’s pizzas are sold each day throughout the Domino’s system. Domino’s, founded in 1960, pioneered the pizza delivery business and still dominates to this day with 22.5% share of the pizza delivery market based on consumer spending.1 Domino’s leads the pack as the number one pizza delivery company. Deliveries cover approximately 15 million miles per week in the United States alone.1 The company operates with over 4,939 stores2 located in all 50 states and total 10,255 stores in more than 70 international markets.1 95% of Domino’s is franchise-owned, and there are 1,100 independent franchise owners in the U.S. market. (website) In 2012, Domino’s had global retail sales of over $7.4 billion in 2012, comprised of over $3.5 billion in the U.S. and nearly $3.9 billion internationally. In the fourth quarter of 2012, Domino’s had global retail sales of nearly $2.4 billion, comprised of approximately $1.1 billion in the U.S. and $1.3 billion internationally.1 Domino’s ranked on top five companies in terms of online transaction, following companies such as Amazon and Apple. 40% of Domino’s sales in the U.S. are completed by digital ordering channels, such as online or mobile.2
Competition Analysis
The U.S. and international pizza delivery and carryout segments are highly competitive. Domestically, Domino’s competes against regional and local companies as well as national chains Pizza Hut®, Papa John’s® and Little Caesars Pizza®. Internationally, Domino’s competes primarily against Pizza Hut® and country-specific national and local companies. Competition resides on the basis of product quality, location, image, service and price. On a broader scale Domino’s competes with quick service and other international, national, regional and local restaurants. In addition, the overall food service industry and the QSR (Quick Service Restaurant) sector in particular are intensely competitive with respect to product quality, price, service, convenience and concept.1 The industry is often affected by changes in consumer tastes, economic conditions, demographic trends and consumers’ disposable income.1 Domino’s competes within the food service industry and the QSR sector not only for customers, but also for personnel, suitable real estate sites and qualified franchisees.
1. U.S. Security And Exchange Commission Form 10-K. Feb 28, 2013 <Secfilings. nasdaq.com> 2. dominosbiz.com
Market & Environment Analysis Despite advertising campaigns and efforts put forth to keep up with technological trends, global markets and economic conditions affect Domino’s financial conditions. An economic downturn could result in a reduction in the demand for Domino’s products, slower adoption of new technologies and increased price competition. Domino’s will continue to combat these issues through research & development, strategic planning, and advertising.
Digital Environment In 2012, Domino’s reached the unprecedented $1 billion mark in U.S. digital sales during a one-year time period from April 2011 to April 2012. Its emphasis on new technology has helped drive the emergence of Domino’s ordering apps for Kindle Fire, AndroidTM and iPhone® – which now cover over 80% of the smartphone market.4
Advertising Efforts Together with domestic franchisees, the Domino’s Pizza® brand has been supported with an estimated $1.4 billion in advertising spending in the United States over the past five years.1 Domino’s advertising expense has been decreasing past three years; It was approximately $30.2 million, $28.5 million and $27.6 million during 2010, 2011 and 2012.1 In recent years, Domino’s has been recognized as a Megabrand by Advertising Age magazine and “Chain of the Year” three times by Pizza Today, the leading publication of the pizza industry.
3. Domino’s Pizza 2011 Annual Report 4. “Revolutionary Domino’s Tracker Updated For Handmade Pan Pizza Customers.” The Wall Street Journal Online. April 17, 2013. 5. Dominosbiz.com
External Information: Trends influencing the industry “Chipotle of Pizza” – all new kinds of pizza places are springing up, everyone is trying to be the more dignified, higher quality boutique pizza place, traditional cheap pizza might potentially lose its grip on industry. Here are the reasons, provided by Forbes, why the dominance of fast-food pizza would end: 1. Aging diners have more money — and more refined tastes: Consumers have more disposable money, and their tastes become more sophisticated. 2. Investors are buying in: 900-unit chain Buffalo Wild Wings bought a stake in one next-wave pizza upstart, year-old PizzaRev. When established chains start to buy in, you know they sense a new trend in motion — and they want to make sure they’ve got a piece of the action. Savvy ‘Shark Tank’ investor Mark Cuban bought into natural-pizza startup Naked Pizza in 2010.Some big names in pizza are investing in building their own better-pizza concept, as with longstanding chain Pizza Inn’s two-year-old entrant, Pie Five. The new chain — which promises a 5-minute, custom-built gourmet pizza — has grown to 10 restaurants in Texas, is expanding to Utah, and has deals for 40 more units. Uber-chef Wolfgang Puck is in the game, too, with three Wolfgang Puck Pizza Bar units so far. 3. Seasoned restaurant executives are involved. The founders of many upstart chains have deep restaurant industry expertise — or are building quickly on the success of one artisanal-pizza chain to start others.A former Morton’s exec. recently took control of 6-unit Go Roma in Chicago, and a co-founder of Seattle’s MOD Pizza is a former Seattle Coffee Co and Starbucks SBUX -0.29% exec. Another MOD co-founder, James Markham, is on his third pizza startup now, having gone on to found Pieology in Los Angeles and Project Pie in Las Vegas. 4. The industry is noticing. In February, the National Restaurant Association announced it had formed a Pizza Industry Council to help better serve the growing numbers of pizza operators. This marked fast-casual pizza’s arrival as an emergent, increasingly important niche within fast food. Sure, it’ll be a while before artisanal, organic pizza overtakes top chain Pizza Hut, which has over 13,000 restaurants worldwide. But a growing segment of diners are gravitating toward more mouth-watering choices — especially in major markets — and are opting to vote with their palates instead of their wallets on where to pick up a pie.
6. Tice, Carol. “Goodbye, Pizza Hut -- Why Better Quick-Serve Pizza Is the Next Big Dining Trend.” Forbes. 25 Apr. 2013
Problem & Opportunities SWOT Analysis
Strength Domino’s, Inc has built strong brand equity because of its prompt delivery services. Domino’s was widely known for its “30-minutes or less” delivery system. After the company ended the delivery time guarantee campaign, the brand still remains strongly positioned as a speedy delivery pizza restaurant chain. Domino’s Pizza has opened and operates more than 10,000 franchised and company-owned stores in the United States and over 70 international markets. Domino’s is also known for its easy access. Domino’s launched a mobile application that consumers can order via their mobile/tablet devices. The digital approach to consumers has increased the numbers of sales via online platforms. Domino’s was the first pizza company in the world to offer Facebook pizza ordering services with a live Pizza Tracker. The company’s pizza ordering mobile application has succeeded, and among the online sales, one-thirds came from mobile devices.
Weakness Domino’s weakness is the low brand loyalty. Even if the company has the strong brand identity of speediness, their numbers for repeat orders are low. The mobile application or online ordering platforms enable consumers to easily repeat orders by saving the address or card information on their account; however the actual usage of the mobile application’s is very low among potential consumers. Domino’s also has confused their customers with their new advertising campaign of the “slowdown.” The company has positioned their brand as a fast delivery food chain and created a technological tool for ordering pizza in a more convenient and faster way. However, with this campaign they are trying to convince their customers that they will take more time in order to make more delicious pizza. The mobile application also needs further development because its ordering services do not cover all regions in the States.
Opportunity Due to the growth of the online food ordering industry, Domino’s mobile application can be key in increasing the company’s total sales. Since the numbers of ownership of smart devices, such as smartphones, tablets, PCs and laptops, are constantly increasing, the online food ordering services have become more crucial for the food delivery industry. The Millennials generation, ages 18 to 34, is the leading group of smartphone users. This generation is the most tech-savvy and is the largest group who frequently seeks “Me Time”.
Threat Threats, detrimental for Domino’s, would be the biggest trend in the food industry— eating healthily. Consumers are highly concerned with their well-being and they do not want to eat unhealthy, high-calorie foods. In terms of the mobile application, most smart device users are unwilling to download a corporate application on their devices. Rather than downloading several brands’ mobile applications, such as Domino’s and PizzaHut, consumers are more likely to download one food ordering application, such as Grubhub.
Major Challanges From SWOT
Objectives and Results of Primary Research
The major challenges that Domino’s faces is the low usage of the app, the brand parity, and the growth of professional online food ordering companies like Grubhub, and the increases in needs of healthy foods.
Survey
Among various pizza brands and other online food ordering companies, Domino’s does not differentiate themselves with other mobile application services. Even though the Domino’s mobile application offers a Pizza Tracker, which allows the customers to check the each process from pizza making to delivery, many consumers do not know of these services because they have never used it.
Objective: To define the priority of the communication strategy, 96 surveys were conducted with the members of desired target market group to find out the major challenge that Domino’s app is facing in current market. 1st question, ‘have you heard of Domino’s pizza app?’ was asked to demonstrate the consumers’ awareness of the app, and the 2nd question, ‘If yes, have you ever used it?’ was to ask to demonstrate the actual usage of the app among the consumers who knew about it.
The most crucial challenge Domino’s must overcome in order to increase the sales via mobile devices, is that the company’s mobile application should create services that lead users to download it and use it in a regular basis. The professional food ordering mobile application offers easy access and simple instructions, and it provides more diverse menus. To convince customers to download the Domino’s application specifically, Domino’s have to encourage current consumers to try the services of the mobile application, which is user-oriented, user-friendly, and creative.
Results:
Opportunity Identification Positioning Strategy:
Re-establish Domino’s brand image as Quickeasy Brand promoting its convenient app. Domino’s app will position itself as a solution for our target consumers who do not want any interruption during their ‘me-time’. (term BBDO defines as, seeking relaxation and entertainment in order to indulge or pass the time). Domino’s app will secure the consumers’ emotional pleasure during their own time by providing delivery service that minimizes the effort of food ordering process. •
33.3% of participants knew about the app, but only 6.9 percent of them had an experience of using it.
Objectives and Results of Primary Research
Target Audience Analysis
In-Depth Interview
Target Audience Profile
Objective: To find out how target consumers define their Me-Time, and what distracts them from having a personal valuable time. 15 in-depth personal interviews were conducted with the members of desired target market.
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Results: Constant Gamer (21)
“I get stressed from hunger, but I’m too busy to order or even think about food until I’m finished playing.”
Sorority girl (19)
“The most effort I would put into while I am doing something on my computer is sending a text.”
Freshmen (18)
“I get so stressed when school starts. I have so much to get ready for”
19 to 24 years old College students and recent college graduates Lives in urban or suburban area Smartphone or tablet owners Heavy digital media users Values easiness, convenience, relaxing time and customization Respects each other’s own space and hobbies Independent and Individualistic
Target Audience characteristic and behavior Our Target Audience is aware of Domino’s pizza and mostly holds positive or neutral attitudes towards the brand due to its well-established brand equity. However, they are mostly vulnerable and switchable customers because when they consider food delivery services, there are too many choices and Domino’s doesn’t stand out. In other words, they are not loyal to Domino’s Pizza. 97% of our target audience owns cell phones and 80% of those are smart phones. This indicates that these groups of people are highly exposed to media all the time. Other Portable devices such as laptops and tablets are also contributing to the relentless exposure of media to this audience. Accordingly, they are exposed to various kinds of information tailored to their interest. Their personal interest is the most important factor to them while using media. Their perceived benefit from ordering delivery food is saving time and it offers them the convenience of not having to make a phone call order that requires more effort and time. They appreciate the quick and easy process of ordering food that minimizes interruptions during their personal time. They also appreciate the convenience of ordering their dinner on the way home or outside of home.
Communication Strategy Objective “Encourage current consumers to use Domino’s app to place an order” Rationale
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According to the forth quadrant of FCB Grid, a product or a brand that requires low-involvement and provides emotional pleasure could assure overall satisfaction of the consumer. Since Domino’s app is simple enough and give instant satisfaction from ordering food with a few tabs from user’s thumb, the communication message of the creative execution will focus encouraging a trial of the app to target consumers.
Creative Concept & Sample Creative Concept (theme) Our creative concept is centered on the idea that the Domino’s App is easy to use, simple, and very fast. To emphasize how fast and easy the app is to use, we will run a campaign on the social media platform, Vine. Vine allows users to record six-second looping videos and share them with their followers. Vine is taking the social media community by storm with an estimated 40 million registered users, as of August 2013. Vine incorporates the hash-tag (#), “re-vines,” likes, and comments, making it very easy for videos to quickly go viral. Vine is an excellent platform to run our campaign on because it embodies the “fast factor” of using the Domino’s app. Participants will be asked to “vine” themselves ordering Domino’s using the Domino’s app. These Vines will show that Domino’s app users can, in fact, order a pizza in only six seconds. The incentive to participate in this contest is that participants will win a free one-topping pizza after they post their Vine. When a participant posts their Vine, all their followers will see it, learn about the contest and its incentive, and hopefully participate themselves. Since the Vine community is so large, it should be fairly easy to get a lot of participants and because of Vines popularity, our contest will appeal to our target audience. The objective of this contest is to encourage current consumers to use the Domino’s app to place their orders. After learning about the contest, participating in the contest, or watching a participant’s Vine, consumers will be persuaded by the app’s quickness and the “cool” factor (that everyone is doing it) to use the app for their future ordering needs. Our current consumers will learn about the contest and app through our social media pages. In order to promote our Vine contest, we will produce a commercial to be run on YouTube. We will post the commercial, along with other statuses, pictures, and links on all of our social media sites including Facebook, Twitter, Instagram, etc. Our target audience consists of 18-24 year old smartphone users. Using social media outlets such as YouTube, Twitter, Facebook, and Vine is appropriate because this is the demographic who is the most active on these sites. Our target audience will learn about the contest and be prompted to participate through these social media websites.
Creative Sample To go along with the Vine promotion, we will produce different graphics with the Vine logo. For example, one graphic we wi ll be using is a picture of a spinach pizza and the cheese is arranged in the shape of the Vine logo. Our followers and potential contest participants will see the graphic on Facebook, Twitter, or Instagram and be intrigued. A caption will accompany the graphic explaining the contest details and how to enter. One potential caption could be, “Win a free Domino’s pizza! Share a Vine video of yourself ordering with our quick and easy to use app.” We will also post examples of vines as a guideline to potential participants. We will not only be posting about the contest, but we will incorporate information about the Domino’s app as well. One potential post could be, “Have you placed an order using the Domino’s app? Try it free today!” YouTube, Facebook & Twitter Promotion Examples:
Media Plan and Budget Plan
Measures/Metrics
Expected Results 500 Uploaded Videos (Event Participants)
IMC Strategy Our integrated marketing communication (IMC) strategy follows the basic model of audience, brand, content, and delivery. In terms of audience, the segment we are trying to reach is the 18-24 year old college student who values their “Me Time”. This is the type of person that doesn’t like to disengage from whatever tasks they are performing and the mobile app has to reflect the values of quick and easy service. This leads me to the brand portion of our IMC. Our brand reflects what consumers in our target market want, the quickest and easiest service possible without interruption into whatever they are doing. The value of the Domino’s app will be made apparent with the lack of time commitment and frustration and offers. The key selling point is that you can essentially order Domino’s products without having to really switch focus from whatever else you are doing. Our content would include the fact that the app is so easy to use as well as have promotional ideas included, such as the 50% off promotion, ensuring that we have positive public engagement. Our delivery would be through social media. We would get interest through online commercials and launch our promotion through the increasingly popular Vine app.
1,000 Retweets (Vine Event Promotion)
750,000 Views on YouTube (YouTube Ad)
Media Plan Our media choices for our plan are going to be strictly social media. Youtube is one of the most viewed sites on the internet. Launching our promotion through Youtube has two advantages, it would keep costs low as well as reach a lot of consumers. The actual promotion would be through Vine, a popular app that is a hub of quick clips that can be posted by anyone who had downloaded the Vine app. These videos can be viewed through the Vine app or shared through other online sites (Facebook, twitter). This has the potential to exponentially increase viewership. The plan is to have the event start around the start of school because at this point in time, people are getting settled into their school life and are likely to order food. The ad would be created during the summer when everyone is home and launched at the start of school. More specifically, the production would be during the summer months of June and July, the promotion and release of the video would be in August, and the actual event would start in September.
5,000 Likes (Vine Event Promotion)
5.000 New Downloads 150% Increase in mobile and tablet order
BiblioGraphy
Budget Media and Production Cost The production cost would only account for 2.17% of our budget. The actual making of the commercial isn’t much of a problem. The company that we used charges a $5,000 flat fee for the production of the actual commercials which covers all the cost of actors and equipment. The advertising is where the trouble comes in. The other 97.83% accounts for advertising on Youtube. Youtube charges $.30 per in ad stream online, so reaching 25,000 people a day would cost $7,500. Over thirty days this totals $225,000. This is relatively inexpensive as commercials on t.v can cost up to two or three times that.
Production Cost Meida Buying Cost
$ 5,000 $ 225,000
U.S. Security And Exchange Commission Form 10-K. Feb 28, 2013. <http://secfilings.nasdaq.com/edgar_conv_html%2f2013%2f 02%2f28%2f0001193125-13-081957.html#FIS_BUSINESS> “Domino’s 101: Basic Facts.” About Domino’s Pizza. Dominosbiz.com. Web. 13 Oct. 2013. <http://www.dominosbiz.com/Biz-PublicEN/Site+Content/ Secondary/About +Dominos/Fun+Facts/> “Domino’s Pizza 2011 Annual Report” Domino’s, INC. Web. 5 Mar. 2012. 13 Oct. 2013. <https://materials.proxyvote.com/Approved/25754A/20120305/AR_117920/html/31.html “Revolutionary Domino’s Tracker Updated For Handmade Pan Pizza Customers.” The Wall Street Journal Online. 17 Apr. 2013. 13 Oct. 2013 <http:// online.wsj.com/article/PR-CO-20130417-906878.html> “Corporate Profile.” Domino’s Investor Relations. Dominosbiz.com. Web. October 13, 2013. <http://phx.corporate-ir.net/phoenix.zhtml?c=135383&p=irol-homeprofile> Tice, Carol. “Goodbye, Pizza Hut -- Why Better Quick-Serve Pizza Is the Next Big Dining Trend.” Forbes. Forbes Magazine, 25 Apr. 2013. Web. 13 Oct. 2013.