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.
Monday, March 1, 2010
Wednesday, February 17, 2010
Storytelling, Gurus, and Processes
I had the pleasure of reading three articles (Gladwell, Zaltman, Ulwick) that address the search for meaningful understanding of what people want. Each offers a critique (in their own way) of how direct research of customer preferences is insufficient. Malcom Gladwell (as always) teaches through masterful storytelling examples. Zaltman is a talking-head academic guru selling trademarked vapor proprietary research methods, a book, and is probably on the public speaking circuit. I immediately do not trust this guy. Ulwick offers a direct, simple, useful, applicable method - I would probably like this guy in person.
Gladwell has an outstanding written voice that explains complex ideas in the form of stories. In this chapter he exposed the conflict that often occurs between instinct (spontaneous and often accurate decision making) and quantitative research. He wove a tale of a musician that by experts opinion should be successful with consumers and by industry standard data-driven investigation should not be successful. I suspect that the typical readers are driven to feel sympathy for the artist and outrage that he never got his chance in the spotlight. I feel differently. I think Gladwell pulled an “Outlier” story to prop up the idea that instinct can dominate detailed investigation. Gladwell explicitly suggests that the music industry is less sophisticated than CPG firms in their research methods. I disagree. Music companies cannot spend vast sums of money researching single artists the same way a CPG company can for a new product idea because of the revenue at stake, the lifespan of the average artist’s successful career, and cost of more sophisticated research. If the industry has a test that can predict with 85% certainty whether a song will be a hit, they would at least rival the success rate of CPG firm product launches.
Zaltman has a “shotgun” approach. He applies elements of many disciplines into one comprehensive test. It emphasizes images selected by a survey participant and interviews to determine a form of mental map of how people thing about an organization or issue. I do not doubt that his qualifications are substantial (Harvard) or that his methods sound impressive on the surface. But the idea of condensing 20 images per participant and a host of qualitative answers in an interview format down into meaning insights sounds remote. The mental map created for PG&E appear fruity and blue sky to me. You could construct a similar map that would make similar sense in many different ways. It has all the features of Tarot card drawings and horoscopes in that people can see elements of truth in many configurations. Again, I don’t doubt that the questions he asks could be meaningful ones – I doubt the integration of these tests has any repeatable statistical significance. It appears to me a complex methodology designed to sell a lot of billable hours that can be carefully hidden off stage behind the curtains from an unsuspecting client.
Ulwick offers an approach that on-face makes a lot of sense to me. They are proposing a “begin with the end in mind” method, whereby research is directed at the *end-goals* of consumers rather than the *means* (product attributes) that get there. The outcome of this approach is essentially a spec-sheet set of constraints for engineers and designers (They love this) that gives them maximum flexibility in figuring creative ways of obtaining these goals. Most engineers will tell you that with a set of specs (and unlimited time/money) they can do just about anything. This approach has a particular weakness however: Most firms have specific resources/capabilities. A company that specializes in, say, yogurt cannot product crackers. So asking consumers for their end-product needs might lead to some unproductive research about product ideas they have no competitive advantage in solving.
So in a Blink: Gladwell makes me suspicious – he’s writing a book about spontaneous genius after all – so its straightforward that he would want to go after quantitative research that overrules expert-spontaneous opinion. Zaltman appears to be incorporating too many things at once to achieve meaningful conclusions. Ulwick offers a research method I immediately like, but I can see situations where it might not make as much sense where firms have narrow product constraints.
Gladwell has an outstanding written voice that explains complex ideas in the form of stories. In this chapter he exposed the conflict that often occurs between instinct (spontaneous and often accurate decision making) and quantitative research. He wove a tale of a musician that by experts opinion should be successful with consumers and by industry standard data-driven investigation should not be successful. I suspect that the typical readers are driven to feel sympathy for the artist and outrage that he never got his chance in the spotlight. I feel differently. I think Gladwell pulled an “Outlier” story to prop up the idea that instinct can dominate detailed investigation. Gladwell explicitly suggests that the music industry is less sophisticated than CPG firms in their research methods. I disagree. Music companies cannot spend vast sums of money researching single artists the same way a CPG company can for a new product idea because of the revenue at stake, the lifespan of the average artist’s successful career, and cost of more sophisticated research. If the industry has a test that can predict with 85% certainty whether a song will be a hit, they would at least rival the success rate of CPG firm product launches.
Zaltman has a “shotgun” approach. He applies elements of many disciplines into one comprehensive test. It emphasizes images selected by a survey participant and interviews to determine a form of mental map of how people thing about an organization or issue. I do not doubt that his qualifications are substantial (Harvard) or that his methods sound impressive on the surface. But the idea of condensing 20 images per participant and a host of qualitative answers in an interview format down into meaning insights sounds remote. The mental map created for PG&E appear fruity and blue sky to me. You could construct a similar map that would make similar sense in many different ways. It has all the features of Tarot card drawings and horoscopes in that people can see elements of truth in many configurations. Again, I don’t doubt that the questions he asks could be meaningful ones – I doubt the integration of these tests has any repeatable statistical significance. It appears to me a complex methodology designed to sell a lot of billable hours that can be carefully hidden off stage behind the curtains from an unsuspecting client.
Ulwick offers an approach that on-face makes a lot of sense to me. They are proposing a “begin with the end in mind” method, whereby research is directed at the *end-goals* of consumers rather than the *means* (product attributes) that get there. The outcome of this approach is essentially a spec-sheet set of constraints for engineers and designers (They love this) that gives them maximum flexibility in figuring creative ways of obtaining these goals. Most engineers will tell you that with a set of specs (and unlimited time/money) they can do just about anything. This approach has a particular weakness however: Most firms have specific resources/capabilities. A company that specializes in, say, yogurt cannot product crackers. So asking consumers for their end-product needs might lead to some unproductive research about product ideas they have no competitive advantage in solving.
So in a Blink: Gladwell makes me suspicious – he’s writing a book about spontaneous genius after all – so its straightforward that he would want to go after quantitative research that overrules expert-spontaneous opinion. Zaltman appears to be incorporating too many things at once to achieve meaningful conclusions. Ulwick offers a research method I immediately like, but I can see situations where it might not make as much sense where firms have narrow product constraints.
Sunday, January 31, 2010
The Mortensen Urban Dweller Persona
Applying Pruitt & Adlin's suggestions, I gathered data for the phase1/phase2 planning/gestation steps built a list of facts that are broadly useful in understanding me and people like me. Phase 3-5 are not applicable in this case, so I will progress into an examination of the implications of these facts for my persona.
What a marketer needs to know about a person like me as I would be before or after MBA school...
...I'm a young, single, heterosexual, professional with high discretionary income and no dependents.
...I have a high appetite for risk-taking, travel, nightlife, unique cuisine.
...The most valuable thing to me is free time.
...I own a passport.
...Immediate family live in another state.
...I have a gym membership.
...I drink more than 10 drinks per week outside the home, often with meals.
...I have a graduate degree.
...I live in a US top 20 sized city within 2 miles of the downtown financial district and within 2 miles of work.
...I am a frequent business traveler.
...I am liberally inclined.
...I do not possess any firearms.
...I do not take part in organized religion.
...I did not grow up within 100 miles of where I currently live.
...I am 29 year old, and will never turn 30!
Implications of these features for the Urban Dweller persona:
The 3 most important facts about me from the list above are 1) free time is hugely important to me, 2) high discretionary income, and 3) single without dependents. This leads to the important insight that I am willing to spend extra to save time. I am willing to have a smaller home to save time and live closer to activities and people I enjoy. This means I choose apartments closer to where I work and shop. I take cabs frequently. I shop infrequently and often through online shopping channels. Because of these things, I am rarely exposed to few children and families in my immediate environment . People like me live close together around other people like me.
Due to demographic changes over time, people like me are a growing segment. The demographic transition that comes with greater wealth has led more people to choose to have smaller families or remain single voluntarily because it allows more free time. Perhaps as a bioproduct of increased urbanization, more people are choosing to rent apartments in good locations rather than larger homes farther from work.
There is an international component here to observe. The features that define me are very similar to what groups of people exist in other countries, particularly in countries who have migrated the farthest along the demographic transition. Countries like Korea, Japan, UK, France, Germany all have large segments like me in greater % than we would expect in the United States. The US has an overall population density of about 83/sq mi versus about 1200 for South Korea. We would expect more single urban dwellers with habits like mine to exist in a country like that.
The travel component is also key. I am a mobile member of the workforce that has lived in several major markets between growing up, studying, and career. The messages that appeal to me are different than people who live where they grew up and will have families in the same markets they currently live. Themes of legacy, family, stability, the home are certainly important to me, but they are less important to me than consumers who stay close to their immediate family. Advertising messages that work on others might not appeal to people like me the same way.
Summary:
A team that designed a product for a customer like me would need to know what kind of tradeoffs I tend to make so they can optimize the perfect design for me. They need to concentrate on the time-saving aspects of products that will enable an Urban Dweller like myself (who never has enough time) to live life that has more risk, excitement, travel and fun. People like me will be willing to pay or give up other things to achieve those goals.
What a marketer needs to know about a person like me as I would be before or after MBA school...
...I'm a young, single, heterosexual, professional with high discretionary income and no dependents.
...I have a high appetite for risk-taking, travel, nightlife, unique cuisine.
...The most valuable thing to me is free time.
...I own a passport.
...Immediate family live in another state.
...I have a gym membership.
...I drink more than 10 drinks per week outside the home, often with meals.
...I have a graduate degree.
...I live in a US top 20 sized city within 2 miles of the downtown financial district and within 2 miles of work.
...I am a frequent business traveler.
...I am liberally inclined.
...I do not possess any firearms.
...I do not take part in organized religion.
...I did not grow up within 100 miles of where I currently live.
...I am 29 year old, and will never turn 30!
Implications of these features for the Urban Dweller persona:
The 3 most important facts about me from the list above are 1) free time is hugely important to me, 2) high discretionary income, and 3) single without dependents. This leads to the important insight that I am willing to spend extra to save time. I am willing to have a smaller home to save time and live closer to activities and people I enjoy. This means I choose apartments closer to where I work and shop. I take cabs frequently. I shop infrequently and often through online shopping channels. Because of these things, I am rarely exposed to few children and families in my immediate environment . People like me live close together around other people like me.
Due to demographic changes over time, people like me are a growing segment. The demographic transition that comes with greater wealth has led more people to choose to have smaller families or remain single voluntarily because it allows more free time. Perhaps as a bioproduct of increased urbanization, more people are choosing to rent apartments in good locations rather than larger homes farther from work.
There is an international component here to observe. The features that define me are very similar to what groups of people exist in other countries, particularly in countries who have migrated the farthest along the demographic transition. Countries like Korea, Japan, UK, France, Germany all have large segments like me in greater % than we would expect in the United States. The US has an overall population density of about 83/sq mi versus about 1200 for South Korea. We would expect more single urban dwellers with habits like mine to exist in a country like that.
The travel component is also key. I am a mobile member of the workforce that has lived in several major markets between growing up, studying, and career. The messages that appeal to me are different than people who live where they grew up and will have families in the same markets they currently live. Themes of legacy, family, stability, the home are certainly important to me, but they are less important to me than consumers who stay close to their immediate family. Advertising messages that work on others might not appeal to people like me the same way.
Summary:
A team that designed a product for a customer like me would need to know what kind of tradeoffs I tend to make so they can optimize the perfect design for me. They need to concentrate on the time-saving aspects of products that will enable an Urban Dweller like myself (who never has enough time) to live life that has more risk, excitement, travel and fun. People like me will be willing to pay or give up other things to achieve those goals.
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