Dominos Pizza - Sandwiches and Pizza Reformulation

Possible Paper Title:
Dominos Pizza: The Insights behind the Sandwich Launch and Pizza Reformulation Initiatives
(Title length needs work)

I have been a fan of Dominos Pizza for a long time. Yes, I do know a few shops that make better pizza, but Dominos has been consistent enjoyable for a long time. I am a loyalist. I can even admit that I have had Dominos pizza as far away as Bangalore, India. In the last few years, Dominos has been making interesting changes. Some interesting and some that irritate me personally.

First, Dominos launched sandwiches: This struck me as a clever play to create a product that uses their dormant store resources (ovens, etc) during the daytime. This could make their stores quite a bit more profitable, even if these are only moderate successful. I am curious about whether this was A) An attempt to differentiate away from pizza (like Pizza Hut => The Hut & Wingstreet), B) A response to a specific customer insight or emerging trend, or C) An attempt to utilize store assets during non-peak times of day. Exploring this will be interesting, but it could lead to marketing/branding, customer insights, or operations directions. It will likely lead in several directions. I will need to follow this where ever it goes.

Second, Dominos began to reformulate their pizzas. This is a curious idea. My true interest with this is whether a reformulation could actually help a big chain. It has seemed to me (my opinion) that for a long time, that people just seem to like their local artisan pizza. In Berkeley, it was Fat Slice, Blondie’s, and Zachary’s. In Austin, its Home Slice, Austin Pizza, etc. The names change, but they’re normally pretty simple pizza formulations. Some people swear by New York pizza, presumably because of the water in the city. But Dominos has a huge number of stores, and has large amounts of resources to funnel into actual pizza R&D, testing, etc. They should be able to crush any local pizza shop. In fact, if they wanted, they could just buy a local pizza shop with a good formula and roll it out nationally. But they could have done that decades ago. This makes me wonder whether people operate under a cultural myth that big chain pizza is lower quality than the local guys. Perhaps it is a human bias that their lower prices mean lower quality. Perhaps competition with Pizza Hut over the decades has led to price wars fueling suspicions about quality. I’ll need to dig to get at the issue.

Some personal details on my experiences with the reformulation at Dominos:
I was against the reformulation from the start. In my case, I experienced the new pizza before I saw the ads explaining what was going on. My first experience: They had applied this oil/parmesan to the crust to presumably give it a more artisan feel. The effect – for me – was that I could not eat a single slice without my fingers getting extremely messy. The crust was a “handle” by which I manipulated my favorite pizza, and they had eliminated the function. As it happens, I didn’t like how it tasted like, but it is hard to distinguish between my annoyance and the taste. At the time, I assumed that the pizza shop had just accidentally given my pizza one of the promotional crusts that they offer from time to time. But when I ordered another one the following week, they had done it again. On the third pizza, I had finally seen the Dominos ads explaining their rationale – so I specifically asked the operator *NOT* to apply the oil/cheese to my crust. They complied. The sauce is different, but not tremendously. I didn’t have any strong opinion on the sauce.

Questions I’m interested in:
1. Was the Sandwich launch an attempt to differentiate away from bad pizza stigma?
2. Was it an insight into customer wishes/needs?
3. Was it a play to sweat the pizza-making assets at stores at lunch meals?
4. What was the story behind the Pizza Reformulation?
5. How much of Dominos pizza perception was real, how much was imagined?
6. Can a chain pizza establishment ever be perceived as higher quality than an independent artisan pizza shop?
7. Can large chains with their larger resources devise the perfect pizza? What would cause them to *not* choose to rollout the perfect pizza if they did? (cost, installed base, etc)
8. BIG QUESTION: If they change the sauce, ingredient, etc – Can it *ever* work? Or will tastes simple migrate away from whatever their new formulation is rolled out? Do people just hate pizza chains? Could consumers ever believe that a chain was better than the local restaurant?

While those above questions are nice puzzlers for the paper and indicate my direction…
These are the ones I can commit to inclusion in my paper:
1. What’s the story behind the sandwiches? What insight triggered it?
2. What’s the story behind the pizza reformulation? What insight triggered it?
3. What’s interesting about these stories?
4. What insight from these situations can be made use of by business managers of large chains?

Sources:

1. No B.S. Business Success in the New Economy. Dan S. Kennedy. Entrepreneur Press, 2009

Content: Contains good example about how Dominos took off because it had mastered *deliver* which could be took advantage of a key need that people had at the time. Because delivery mastery is an “enabler” rather than a differentiator, it could explain why the “taste” of the pizza has risen to the top of Dominos executives radar screens. This author is not in the slightest bit prestigious, but his example works well for what I might write about.

2. The Power of Saying 'We Blew It' By: Lencioni, Patrick. BusinessWeek, 2/22/2010, Issue 4167, p84-84, 1p; (AN 48068177)

Content: Does admitting a mistake actually work in business?

3. The Domino Affect: Time to Change. By: Sanson, Michael. Restaurant Hospitality, Feb2010, Vol. 94 Issue 2, p6-6, 1p; (AN 48000932)

Content: Trade publication. A magazine editors take on what they’re doing and how customer standards have changed. He talks about how “Its 2010. Everyone has tasted a really good pizza.” But he claims Dominos got where it is by other means.