Dynamic Marketing Communiqué

How did this pizza company revolutionize online delivery experience for customers and the whole industry? [Monday Marketing Marvels]

June 15, 2020

Over 400 million pizzas delivered in 2019.

Over 11,000 operating stores in more than 80 countries.

This brand became the world leader in the pizza delivery industry.

DOMINO’S PIZZA

Domino’s was founded in 1960 by brothers Tom and Jim Monahgan.

It grew over the years and became the second largest pizza company in the world, right below Pizza Hut.

But when Pizza Hut’s parent company, Yum!, experienced a major decline in profitability in 2017, Domino’s Pizza claimed the #1 spot, becoming the largest pizza company in the world.

It wasn’t always as easy as it sounds though.

Domino’s has experienced its fair share of challenges.

In the mid 2000s, Domino’s Pizza faced a brand and sales problem.

“Cheap.”

“Tastes like cardboard.”

“Recipe was unoriginal.”

The stock price hit an all-time low of USD 3.00 per share in 2008, from USD 27.80 per share in January 2007.

Since then, the company sought better ways to improve existing branding approaches and create innovative marketing strategies for their products.

What did Domino’s do?

  1. Listened to Criticism and Focused on Product Development

    Domino’s Pizza went through a complete overhaul of its ingredients and menu. There was a vast improvement on the quality of their products.
  2. Innovation in Food Delivery Process

    Innovation played a vital role in making a significant impact not just to the company itself, but also to the entire food delivery industry.
  • The company pioneered using patented insulating pizza bags to keep pizzas oven-hot and crisp during delivery.
  • The company was also the first to create a sturdy, folded pizza box that keeps moisture from weakening the box and cheese from sticking to the top.
  1. A Digital Marketing Strategy: “Think Oven”

    It was the rise of digital marketing in the 2000s.

    Domino’s took advantage of this new marketing landscape and launched the “Think Oven” campaign.

    The goal of the campaign was to engage with customers and have them create and suggest innovative solutions that impact the brand.

    “Participants were encouraged to submit ideas on a Facebook page. The ideas that garnered the most amount of attention were rewarded with a monetary prize, and actually implemented with executive approval.” – Online Marketing Institute, “How Digital Marketing Crowned Domino’s the King of Pizza”
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Domino’s Pizza in the Digital Age

Through the “Think Oven” campaign, Domino’s was able to come up with a new business idea…

—to create an e-commerce aspect of the business that sells more pizza.

To make this happen, the entire corporate structure of the company was changed—beginning from the top down—to focus on digital sales and advertising.

Domino’s became the first pizza company to launch an online tracker and voice recognition app.

They also developed the “AnyWare Platform” where customers can place their orders through different online platforms, apart from their delivery hotline and website.

  • Domino’s Mobile App
  • Slack
  • Facebook Messenger
  • Twitter
  • Google Assistant
  • Alexa
  • Smart TVs using the Domino’s Tracker Technology – Customers were able to place their commonly requested orders without missing a moment of their favorite show, movie, or game.

…and more!

You can even order pizza just by tweeting a pizza emoji (🍕) and tagging the Domino’s Twitter account!!!

By signing up for “Tweet Ordering” in your Pizza Profile at Dominos.com, you can start ordering by sending them a direct message with #Easyorder or sending a pizza emoji to @Dominos.

Of course, much like most brands, Domino’s also has its own loyalty program that gives rewards to its loyal customers.

All the improvements and hard work that the brand did helped them maintain their sales even during a time consumers were financially struggling.

2008-2009 were terrible years for most businesses because of the Great Recession in the US. So it’s an amazing feat for the company to have just recorded 1.45% lower sales in 2009 versus 2008.

That says a lot about the success of Domino’s Pizza’s marketing strategy!

By 2018, its stock price skyrocketed to USD 299.43 per share.

Domino’s continued to grow. As of 2020, the stock price per share is currently at USD 376.41.

See how big the difference was from USD 3.00 per share back in 2008?

Domino’s Pizza generated revenues of:

  • USD 1.6 billion for 2010
  • USD 2.0 billion for 2014
  • USD 2.8 billion for 2017
  • USD 3.6 billion for 2019

Domino’s Pizza’s Earning Power: Valens Research vs. As-reported numbers

Domino’s Pizza makes for a great case study that we come back to regularly. One great reason?

The company has proven itself to be a phenomenal earning power generator.

So, how well has Domino’s Pizza been growing its business in the past years?

The research doesn’t lie—nor do the results. Earning power (the blue bars) continues to show results much higher than what traditional databases show.

The blue bars in the chart above represent Domino’s Pizza earning power (Uniform Return On Assets). These numbers have been positive, going over 30% eleven times for the past 16 years.

The global ROA average is just 6%

The orange bars are the company’s as-reported financial information. If you relied on these numbers, you won’t see the 47% Uniform ROA (return on assets, a measure of earning power) for 2019. You’d just see the company report less than that, at 34% as-reported ROA.

That’s what you’ll see in Yahoo Finance, Google Finance, and most other databases.

The company’s stock price also performed better than the rest of the stock market over the decade, which we can see in the blue line in the chart below. Their returns have been well above the market.

The numbers show that they have been doing well and making a profit.

For the past 5 years, Domino’s Pizza built an impressive digital online experience that competes well with many traditional e-commerce brands.

The company propelled itself ahead of its competitors.

Domino’s is dedicated to making and delivering great pizza with high-quality ingredients.

By constantly updating and improving their menu, the growing needs of Domino’s customers are satisfied.

No wonder they’re now hailed as the king in the industry!

About The Dynamic Marketing Communiqué’s
“Monday Marketing Marvels”

Too often, industry experts and the marketing press sing the praises of some company’s marketing strategy.

…Only for the audience to later find out that their product was a flop, or worse, that the company went bankrupt.

The true ROI in marketing can’t be separated from the business as a whole.

What good is a marketing case study if one can’t prove that the company’s efforts actually paid off?

At the end of the day, either the entire business is successful or it isn’t. And the role of marketing is always paramount to that success.

Every Monday, we publish a case study that highlights the world’s greatest marketing strategies.

However, the difference between our case studies and the numerous ones out there, is that we will always make certain that the firm really did generate and demonstrate earning power worthy of study in the first place (compliments of Valens Research’s finance group).

By looking at the true earnings of a company, we can now rely on those successful businesses to get tips and insights on what they did right.

We’ll also study the greatest marketing fails and analyze what they did wrong, or what they needed to improve on. We all make our mistakes, but better we learn from others’ mistakes—and earlier, rather than later.

Hope you found this week’s marketing marvel interesting and helpful.

Stay tuned for next week’s Monday Marketing Marvels!

Cheers,

Kyle Yu
Head of Marketing
Valens Dynamic Marketing Capabilities
Powered by Valens Research
www.valens-research.com