Marketing Management- 1

Domino’s
This document contains marketing plan for Domino’s as a
part of Marketing Management-1 course under the guidance
of Prof. Joffi Thomas

Submitted by
Section B Team 4

Alpa Agarwal PGP/14/064

Anuj Gupta PGP/14/074
Gaurav Singh PGP/14/084
Magill Thomas Kunnath PGP/14/094
Prachi Chouhan PGP/14/104
Sandeep Tripathy PGP/14/114
Vishal Madan PGP/14/124

09-Sep-2010
Table of Contents
Table of Contents...................................................................................................2

Executive Summary...............................................................................................4

Company:.............................................................................................................. 6

Excellence in operations management............................................................7

Robust supply chain........................................................................................7

Financials.........................................................................................................8

Rationale for choosing product category............................................................8

Domino’s strategy:...........................................................................................11

Situational Analysis: ........................................................................................14

Company....................................................................................................... 14

Customer.......................................................................................................15

Competition:..................................................................................................15

Context.......................................................................................................... 18

Marketing Objectives........................................................................................22

Segmentation................................................................................................... 22

Targeting.......................................................................................................... 23

Positioning........................................................................................................ 24

Marketing Action Plan.......................................................................................25

Product.......................................................................................................... 25

Price.............................................................................................................. 31

Place.............................................................................................................. 32

Promotion:.....................................................................................................33

Implementation:...............................................................................................35
 Activity schedule:.........................................................................................35

Budget .......................................................................................................... 36

References:.......................................................................................................38
Executive Summary
Domino’s pizza stores are operated by Jubilant FoodWorks Limited, a food-service company. In
January 1996, the company opened their first Domino's pizza store. In September 14, 1996, the
company was converted into a public limited company and the name was changed to Domino's Pizza
India Ltd. In the year 1998, The Company was formerly known as Domino’s Pizza India Limited but
changed its name to Jubilant FoodWorks Limited (JFL) in September 2009.

Domino’s has built a niche in the home delivery arena and has built a branding strategy around it. In
the year 2004, they launched '30 minutes or free' campaign which promised a quick and fresh delivery
of pizzas at the customer’s door step. Presently Dominos uses occasion based segmentation as the
most important way to segment the market. For family celebrations and small parties the emotional
component of “Khushiyon Ki Home Delivery” and the implicit feeling that it is not just food but
happiness which is getting delivered makes it an attractive option for family celebrations.

Domino's is aiming to heighten its presence in India, and is placing a particular emphasis on
affordability and customer service, which it argues are of specific importance in the fast-growing
market. Two major areas where the company has strived to be highly competitive are service and
price, both of which are becoming essential elements for success in the country.
The substantial changes taking place within Indian society itself have been key contributors to
Domino's success- rising income levels, especially among young consumers, as well as the rapid
expansion in the size of the middle class, and the notable increase in the number of women now
pursuing full-time careers. With global exposure and changing demographics, Indian consumers are
not very different in terms of their expectations from service brands
The company was the largest pizza chain in India and one of the fastest growing multi-national fast
food chains between 2006-2007 and 2008-2009, in terms of number of stores. As of March 11th,
2010, the company operated 300 stores in India located in 20 states and union territories, as well as 5
stores through a sub-franchisee, DP Lanka in Sri Lanka, all in Colombo. It operates pizza stores
located in dedicated outlets, in food courts, in shopping malls and in institutional campuses.
The plan deals with the changes that can be brought about in the existing product, pricing and
communications mix to ensure a better market penetration as well as increase in market share. To
drive future sales following things we could consider, new product dimensions: e.g. offering combo
packs, different pricing policies to attract different customers or create new market segments, e.g.
combo packs could be sold at prices the consumers deem economical, introduction of new products,
like doughnuts, juices - This may require the development of new competencies and communications
mix accordingly.

In order to achieve the marketing objectives following action plan is proposed,

 Market development and Price:

• Open a total of 80 new stores (a growth of 15% y-o-y) in 30 Tier II cities in year 2010-11.

• In the first 6 months, launch one store each in the following 20 Tier II cities; introduce dine-in
facility along with the regular home delivery service in these cities with the rationale that the
consumers in Tier II cities actually prefer to go out and have pizzas for a pleasurable
experience rather than ordering for a home delivery.
 • Differential Pricing, opening of Dominos outlets in tier 2 cities will not only increase the
target customer base but will also lead to reduction operational cost in these cities. Therefore
charging proportional to the cost in these cities would help increase the customer base. The
potential customers in tier 2 are mostly middle class and the lower prices will definitely
attract more customers.

 Product:

• Introduce Combo meals in the existing stores in the first 6 months. For new stores in Tier II
cities, launch standard pizzas. After evaluation and feedback from consumer for the combo
meals, launch combo offers in Tier II cities as well (later half of the year).
1) Place:

• Pizza on the run, the takeaway outlets should be opened up on highways where we can cater
to the needs of the travellers passing through them and who want food to quench their
hunger on the run.
• Dining experience for tier II cities, Empirical evidences collected from various tier II cities
like Indore, Hyderabad, Cochin, and Trivandrum etc. show that the booming culture of
nuclear family accompanied with the increase in income has created a need for dining
experiences. Domino’s needs to establish outlets with a reasonably good dining area to
provide the customers their most valued outputs like good quality inexpensive pizza along
with the leisure.
• Working till late, hungry kya? The last orders at Domino’s are taken till 11 p.m. for
home and office workers and online customer too. Extension of order taking timings from
11 p.m. to 12. This will act as an encouraging move to cater to a specific need.
2) Promotion:
a. Discount cards will be initially launched only in metros because consumers in Tier II or Tier
III cities are not heavy users of Pizzas. After its successful implementation we can then
introduce it in non-metro cities. An advertising campaign would be used to promote
discount cards in non-metro cities by highlighting its popularity among the metro consumer.
For targeting small parties, we will first target and promote the offerings in multinational
companies where small teams celebrate special occasions by ordering Pizzas.
Company:
Domino’s pizza stores are operated by Jubilant FoodWorks Limited, a food-service company. The
company was formerly known as Domino’s Pizza India Limited but changed its name to Jubilant
FoodWorks Limited (JFL) in September 2009.

The company was the largest pizza chain in India and one of the fastest growing multi-national fast
food chains between 2006-2007 and 2008-2009, in terms of number of stores. As of March 11th,
2010, the company operated 300 stores in India located in 20 states and union territories, as well as 5
stores through a sub-franchisee, DP Lanka in Sri Lanka, all in Colombo. Their Domino's pizza stores
in India are generally located in neighborhood markets in urban areas. Out of 300 stores in India 234
stores also had the dine-in facilities, as opposed to their global strategy, where the main focus has
been on home delivery. It also operates pizza stores located in food courts in shopping malls and in
institutional campuses.It is currently based in Noida, India. Below is a map of India showing the cities
in which it operated pizza stores.

Brief History

In January 1996, the company opened their first Domino's pizza store. In September 14, 1996, the
company was converted into a public limited company and the name was changed to Domino's Pizza
India Ltd. In the year 1998, they extended master franchise agreement with Domino's International to
whole of India and Nepal. In the year 2004, they launched '30 minutes or free' campaign. In the year
2005, the company entered into master franchise agreement for Sri Lanka and Bangladesh.
In the year 2009, the company launched 'Pizza Mania'. Also, they began to offer pasta and choco lava
cake to their customers as a side item. In September 24, 2009, the company changed their name from
Domino's Pizza India Ltd to Jubilant Foodworks Ltd.

The company's Master Franchise Agreement with Domino's International requires them to open 25
stores each, in 2011 and 2012 and they continue to evaluate various new locations for further
expansion. They are also exploring the possibility of opening stores in the New Delhi and Mumbai
airports on sub-franchise or sub-lease basis.

Business Model
The Indian counterpart of Domino’s operates domino’s stores consistent to a Master Franchise
Agreement with Domino's International that provides the domestic arm with the exclusive right to
develop and operate Domino's pizza delivery stores not only in India but in neighboring countries
such as Nepal, Bangladesh and Sri Lanka. Among other strengths of the company the most prominent
ones are the operations management and a robust supply chain.

Excellence in operations management

Domino’s operating discipline and standardized internal processes have contributed significantly to its
sustainable growth. Its operational success is based on its employee training programs which cover
every aspect of a store’s operations, including receiving an order, pizza preparation, baking, cutting,
routing and delivery. As a result, it has been able to ensure that the average delivery time for an order
is only 22.50 minutes. Domino’s operations have been ranked no. 1 in the Domino’s global operations
among the countries with 100 or more stores in 2006 and 2007 and amongst the top three in 2008.

Robust supply chain

JFL operates four regional supply chain centers, or commissaries, located in Noida, Kolkata, Mumbai,
and Bangalore. The commissaries primarily take care of manufacturing of dough (base of the pizza)
and store the other ingredients like a warehouse. The primary raw materials used in the preparation of
pizzas, such as cheese, vegetables and meat are sourced and supplied to the stores by its
commissaries, except for a few stores, which procure vegetables locally from vendors within their
geographic proximity. This helps them to ensure consistent quality and ensure timely delivery of raw
materials to the stores. The company has centralized purchasing, sourcing, warehousing and
distribution of its raw materials enabling better negotiation of prices with its suppliers and reducing
the storage requirement at its stores. The company has a dedicated fleet of hired trucks at its disposal
to ensure timely delivery of raw materials to its stores. These trucks are refrigerated to ensure the
ingredients are supplied in a temperature controlled environment, which is monitored during transit to
ensure quality and minimize wastage. Thus, the supply chain management enables the company to
reduce costs and maintain the quality of its offerings.

Financials
The company incurred net losses up to FY05 and carried accumulated losses totaling Rs 73.3 crore at
FY09. However, since FY06 the company registered revenue CAGR of 42.4% for FY06-09. The
growth in the revenues was mainly on account of opening of new stores across key cities in India. In
FY09, the company reported net sales of Rs 280.6 crore, up 33% from last year’s sales of Rs.211.2
crore. A significant portion of growth in revenues was contributed by new stores opened in the year.

2007 2008 2009 6MFY10 2010E 2011E 2012E

Net Sales 1,386.8 2,111.6 2,806.1 1827.4 3662 4754 6308
(Million Rs)
Net Profit 55.8 77.6 67.4 121 169 361 500
(Million Rs)
.
The company managed to keep its operating margin at an average level of 12.8% despite the growth
in numbers of outlets and in the last six months the same has improved by 400 bps due to emphasis on
operation efficiency, cost consciousness and robust supply chain management. Net profit for FY09
was Rs 6.7 crore, down 13.7% due to higher interest costs due to significant debt funded capex. The
sales are expected to grow by 30% in 2010 with net profit growth of 152% over the corresponding
FY09

Rationale for choosing product category

The food services industry in India is growing rapidly and offers opportunities across a variety of
cuisines such as fast food restaurants, home delivery and food courts. The home delivery segment is
fast gaining popularity with value sales increasing significantly over the last couple of years.

Monthly spends on food bought from outside or ordered in

Population Strata
Monthly Spends Tier 1(Towns with 3 Tier 2 (Towns with 1-3 Tier 3 (Towns with <1
million+ population) million population) million population)
Avg (in Rs) 670.6 691 351.3
Upto 50 13 13 20
51-100 12 13 17
101-200 19 17 22
201-300 12 11 13
301-600 18 23 14
601+ 26 23 14

Key Growth Drivers in the Food Service Industry

Set forth below are the key drivers of growth in the food services industry in India.

1. Changing demographic profile

Today India’s demographic profile is changing at a faster rate than ever before. This has led to the
growth of the food services industry. The food services industry not only serves as a meal option, but
it has also become a lifestyle choice. The quick and convenient option that the food services sector,
especially the quick service restaurants industry offers has been instrumental to the higher demand of
the eating out or ordering-in food habits.

2. Steady rise in income levels

Growing income levels as well as aggressive marketing campaigns by the QSR chains is improving
the penetration of QSR industry on the whole. This has led to a higher spending capacity which
provides a huge opportunity for penetration for the food services sector. Considering the rising
consumer spend and approximately 80% of the population eating out at least once in a month, the
food services industry is expected to grow at a fast rate in coming years.

(Figures in percentages) Average no. of times ordered-in = 5

3. Growth of middleclass
India houses a strong 300 million middleclass population. As the middleclass has been the largest
consumer of the food services industry, the increase in the middleclass would lead to higher growth in
the food services industry.

4. Younger population
The growth of the QSR industry is also fuelled by the higher younger population. Over 65% of India’s
population is below 35 years of age, which provides for a greater penetration opportunity. Further, the
21 to 40 year olds constitute the majority among those who eat out regularly. A breakup of people
who eat out based on their age is shown below.

Age group profile of those who eat out

5. Rising urbanisation
The proportion of households ordering in or eating out is more prevalent in the cities and towns than
in the rural areas. Specifically, the average spends on ordering in the Tier 1 or Tier 2 towns is double
the average spends in the Tier 3 towns. Around 29% of India’s population is in urban centres, and this
statistics is expected to increase. This rising urbanisation is anticipated to lead to higher spending on
the food services industry.

6. Increase in nuclear families

Number of nuclear families in India is increasing due to job displacement. Approximately 1.5-2% of
joint families give rise to nuclear families every year. Going out and ordering in are more prevalent
food habits among the nuclear families than the joint families in India.

7. Increase in number of working women force

Participation of urban Indian woman in the workforce increased from 14% to 17% between 2000 and
2005. This would also help the growth of the food services and QSR industry. 51% of the population
among those who eat out at least once in a month belong to the female population of India.

Domino’s strategy:
Domino's constantly strives to develop products that suit the tastes of the consumers and hence
delighting them. Domino's believes strongly in the strategy of 'Think global and act local'. Thus, time
and again they have been innovating with delicious new products such as crusts, toppings and
flavours suitable to the taste buds of Indian Consumers. Further providing value for money and
affordable products to the consumers has been an important part of their efforts. Their initiatives such
as Fun Meal and Pizza Mania have been extremely popular with consumers looking for an affordable
and value for money meal option.
Domino’s Brand Positioning of Khushiyon ki Home Delivery (Happiness Home delivered) is the
emotional benefit offered to the consumers. All their efforts, whether it is a new innovative and
delicious product, offering consumers value for money deals, great service, country wide presence or
delivery in 30 minutes or free form a part of their branding strategy which is discussed at length
further.
Domino’s has a very clear vision of the market. The market for the fast food is basically classified in
three domains namely, Home delivery, Dine-ins and Take away. All these sectors of domains have
different set of Target customers; they fulfil different set of demands and are characterized by
different sort of required values.
Dine-ins for instance is more about providing a complete experience fitting the occasion and food
taste sometimes become secondary. Ambience has more value than taste in case of Dine-ins. Pizza
Hut is a leader in this category. Take away on the other hand are basically run by their location,
swiftness and affordability. For instance, a take away counter outside a railway station would earn
more than a similar one situated somewhere in residential area. Hence, convenience is the driving
factor.
But, it is the home delivery market, that Domino’s has built a niche in and has built a branding
strategy around it.
Domino's is aiming to heighten its presence in India, and is placing a particular emphasis on
affordability and customer service, which it argues are of specific importance in the fast-growing
market. Two major areas where the company has strived to be highly competitive are service and
price, both of which are becoming essential elements for success in the country.
The substantial changes taking place within Indian society itself have been key contributors to
Domino's success- rising income levels, especially among young consumers, as well as the rapid
expansion in the size of the middle class, and the notable increase in the number of women now
pursuing full-time careers. With global exposure and changing demographics, Indian consumers are
not very different in terms of their expectations from service brands
Domino’s strategy is to continue to drive profitable growth by pursuing our core values — namely
delivering superior food, service experience (in home delivery as well as in store) and value for
money. They believe that these are the key drivers for our differentiated proposition to the customers.
In order to achieve the aim, they intend to follow the key business strategies described below:

Penetrate further into existing cities

Domino’s seek to increase both sales and profits by increasing our penetration and presence through
new store openings in existing cities where we operate stores. The Technopak Report 2009 estimates
that only 2% of the monthly expenditure on food bought from outside or ordered-in by households in
India is spent on pizzas and pastas on a monthly basis. They intend to utilise this opportunity for
further penetration by increasing our sales and the number of pizza stores in existing cities. They
opened 60 stores in fiscal 2009 of which 44 stores were opened in existing cities.They seek to
capitalise on the lack of penetration in Indian towns and cities by leveraging their operational
proficiency and brand to grow the business operations.

Expand presence by entering into new cities

They plan to expand their presence by entering into new cities and towns where they currently have
no operations. To minimise additional capital expenditure and ensure quality control, they plan to
open new stores in cities and towns which would be located within less than one day travel distance
from the existing commissaries. Domino’s envisage that their future growth would be driven by the
new stores in Tier 2 and Tier 3 towns and, therefore, the back-end production facilities will play a key
role for their success in these cities.

Leverage their strong brand awareness

The strength of Domino’s brand makes them a favoured choice of consumers seeking a convenient,
quality and affordable meal, particularly in the food delivery segment. They intend to continue to
leverage and build the brand and enhance their reputation as the leader in pizza delivery in India by
employing consumer relevant, innovative and creative marketing strategies to increase the store traffic
and sales. They seek to leverage the strong brand by continuing to introduce innovative, consumer-
tested and profitable new product varieties and value promotions as well as through marketing
affiliations with other brands. Furthermore, they intend to increasingly focus on positioning and
promoting the brand in India as an affordable, quality option for consumers.

Expand using new distribution channels

Domino’s continuously strive to explore opportunities to increase their market presence in the regions
they operate. Traditionally, the pizza stores have generally been located in neighbourhood markets in
urban areas. India’s rapidly developing and expanding infrastructure network of airports and metro
stations offer a distinct new channel for growth. They are also exploring the possibility of opening
stores in various airports on sub-franchisee or sub-lease basis. They have also opened pizza stores in
certain corporate campuses and food courts and are exploring opening additional pizza stores in food
courts located in shopping malls.

Increase sales at existing stores

They seek to increase the frequency of orders at our existing stores by continuing to adopt innovative
and targeted marketing tools. They also intend to focus on product innovation and value promotions
in order to increase the sales as they believe that their continuous focus on product innovation helps
drive frequency as every new product launched, increases awareness of brand and food products.
They are also evaluating enhancing sales at our existing pizza stores by increasing dine-in space at our
existing pizza stores and improving our store environment. We periodically refurbish our stores and
intend to continuously upgrade our facilities and general pizza store ambience.
We are also looking to integrate other distribution channels with our pizza stores’ operations, such as
the web and mobile technology, to expand our sales. In August 2009, we launched on a pilot basis, an
online ordering facility for residents in Bangalore and depending on its success, we intend to
gradually provide this service for our customers in other locations. We intend to increase our focus on
improving our food products and customer service at our pizza stores, particularly our responsiveness
to customer complaints and suggestions. We also seek to improve our performance based on
suggestions from our customers and are increasingly inviting customers to complete questionnaires to
rate their Domino’s experience, including on food quality, customer service, delivery time.

Solidify people process

One of the key factors for their growth has been their employees’ commitment to our vision. They
believe that to sustain the future growth, they will need to continue to train and empower their
employees to act as partners in our business. Therefore, they have launched the “Domino’s
University” scheme, which provides employees the ability to enroll into selected universities for
which we will bear a portion of the fee. They also provide their middle management the option to
undertake executive MBA programs at the Institute of Management Technology, Ghaziabad. Further,
as they expand their business into new towns and cities, their ability to successfully train the existing
and new employees will play a crucial role. As a result, they have invested in a Human Resource
Information System (“HRIS”), an integrated software system to assist with the recruitment, training,
appraisal and performance management of their employees. They are also developing new training
mechanisms, such as an automated video training manual for the employees.

Ad campaigns as a part of Branding Strategy

Home Delivery: 30 min guaranteed

Pasta Italiano and Mexico Wrap

Situational Analysis:

Company

Jubilant FoodWorks Limited holds the Master Franchisee Rights for Domino's Pizza for India, Nepal,
Sri Lanka and Bangladesh. Until Sep 24, 2009, the company was known as Domino's Pizza India
Limited. Domino's Pizza opened its first store in India in January 1996, at New Delhi. At present
Domino's Pizza India has grown tremendously and has a countrywide network of more than 300
stores with an employee base of over 9,000 people. According to the India Retail Report 2009,
Domino’s Pizza was the largest Pizza chain in India and the fastest growing multinational fast food
chain between 2006-2007 and 2008-2009 in terms of number of stores.

Over the period since 1996, Domino's Pizza India has remained focused on delivering great tasting
Pizzas and side dishes, superior quality, exceptional customer service and value for money offerings.
Company established a unique reputation for being a home delivery specialist capable of delivering
pizzas within 30 minutes or else FREE to a community of loyal consumers from all the stores around
the country.

Domino's believes strongly in the strategy of 'Think global and act local'. Thus, time and again it has
come up with innovative delicious new products such as crusts, toppings and flavours suitable to the
taste buds of Indian consumers. Further providing “value for money” and affordable products to
consumers has been an important part of company’s efforts. Initiatives such as Fun Meal and Pizza
Mania have been extremely popular with consumers looking for an affordable and value for money
meal option.

Company has relied heavily on the emotional benefits to consumers by positioning the brand as
Khushiyon ki Home Delivery (Happiness Home delivered). Consumers can order their pizzas by
calling the single Happiness Hotline number 1800-111-123 (in most cities of Domino's Pizzas
Presence) and 44448888 (in NCR, Mumbai and Bangalore)

Customer
The main customer group targeted by Dominos is young working professionals who are usually
pressed for time. This segment of customers consists of Bachelors who do not like to cook at home,
Bachelorettes who likes to have a change from their usual minimalist menu and young couples.

Apart from this main group of customer others who normally order Pizza are college students staying
in hostels, and families with kids. But with the latest campaigns showing a joint family ordering and
enjoying pizza Dominos is trying to expand the its customer base and position Pizzas as a family
meal.

Competition:
The competitors of Domino’s are not only other domestic and international pizza chains like Pizza
Hut, Pizza Corner, Smokin’ Joes, Papa John’s etc, but also other local quick service restaurants and
McDonalds, KFC, Subway etc.

Home Delivery/ Take Away(HTDA) Segment

• Over the years, Domino’s has established itself as a pizza delivery expert and thereby creating
a new market and acquiring a significant market share which it still manages to dominate.

• In the overall HDTA segment, Domino’s has 39.2% market share share followed by Pizza
Hut and Pizza Corner who account for 34.5% and 10.7% respectively.

• HDTA is Rs 1053 million industry and is expected by 11.13% to reach Rs 1,170.2 million in
2010
45

40

35

30

25 Domino's
20 Pizza Hut

15 Pizza Corner

10

0
2006 2007 2008 2009 2010
Full Service Restaurants(FSR) segment:
• FSR is a Rs. 3046.6 billion industry in 2009 and is expected to grow by 16.4% to reach Rs
3546.9 billion in 2010.

• In 2009, Domino’s was in No. 2 position in FSR segment at 13.4% share (after Indian Hotels
Co. Ltd which was marginally ahead with 14% market share) followed by ITC hotels and
East India Hotels.

• In India, casual dining FSR is dominated by the Pizza food industry. Among the top 5 casual
dining brands in India, Barbecue Nation is the only one which is not a Pizza FSR.

• While Pizza Hut operates on a franchise model, Domino’s has expanded through brand-
owned outlets.

• In Pizza industry, food service value is expected to increase by a CAGR of 13.1% in 2010.
Context

SWOT ANALYSIS

STRENGTH WEAKNESS
65% market share in the pizza home Increasing competition from organised and
delivery segment. unorganised sectors like pizza hut, smoking
joes etc. has dwindled down the profits for
Changing demographics like rising income 2009 and eroded its net worth.
levels, growth of middle class nuclear
families and increase in number of working Agricultural raw materials used in pizza tend
women, ensures the company’s growth. to show prices fluctuations as a result of
seasonality, weather, and demand in local
Strong brand equity supported by heavy and international market which resulted in
advertising & marketing campaigns Strong weakening bottom line and margin.
and effective supply chain and distribution
network help them in prompt delivery and
to pioneer the QSR segment.

OPPORTUNITY THREAT
Growing presence in emerging markets, Changing consumer habits towards healthier
particularly in India, China because of their food choices. This is the pressing issue for
favourable demographics particularly the pizza industry on a whole
reflects on the rising growth graph.
Intensive competition from a
Leverage supply chain & distribution system fragmented number of small competitors
to introduce new products. like smoking joe’s, pizza corner and papa
john’s. If not curbed properly this can
adversely affect the company’s market share

Wage increase in India will reduce its

profit margin

OVERVIEW OF THE FOOD SERVICE INDUSTRY

SOCIAL ENVIRONMENT

The food services industry in india is on a growth trajectory since the last decade. This growth can be
attributed to several reasons, the biggest being the change in Indian demographics.
• Change in Demographic Profile
The changing demographic profile of India has led to the growth of particularly the QSR sector. This
industry doesn’t serve as a meal option to satiate hunger but it is more a lifestyle choice.

• Rising income levels

The growth has further picked up mainly because of the rising income of the target market and the
extensive marketing adopted by QSR companies to rule the organised sector. The average real per
capita income growth has been registered as 6.1% for the tenth plan(2002-2007)

• Growing middle class

The middle class in india is the largest consumer group for food industry. With a population of
300 million, the middle class segment is bound to rise penetrating the market share.

• Younger population
About 65% of the population of India is below 35 years and the median age is 24 years. Based on the
reasoning that the eating out group majorly consists of people from 20-40 years, the QSR is bound to
grow.

• Increase in nuclear families

Approximately 1.5-2% of joint families give rise to nuclear families every year. QSR industry relies
more on them because members in the nuclear tend to eat out more due to inherent constraints like
one cooking member.

• Increase in number of working women force

The number has risen from 14% to 17% from 2002 to 2007 also; the 51% population is of the females
who eat out regularly. The QSR industry can leverage on this fact and increase opportunities.

ECONOMICAL ENVIRONMENT

In the affluent and middle classes, while the expenditure on food compared to other products and
Categories as a percentage share of consumption expenditure has dropped, the total expenditure on
food has increased across all the classes. Food expenditure was earlier concentrated around the basic
food items like food grains, vegetable oils, and sugar which just qualified as the basic meal option but
the rising income has made it both available and affordable to spend on fruits and vegetables, eggs,
meat, beverages and processed foods. The size of the Indian food industry estimated at US$ 200
billion in the year 2006-07, which is estimated to reach US$ 300 billion by 2015.

LEGAL ENVIRONMENT

Prevention of Food Adulteration Act, 1954

The Company is required to comply with the Prevention of Food Adulteration Act, 1954 (the “PFA
Act”) to serve any food product in India. This Act is considered to be a consumer protection
legislation, which has been created to prevent, curb and monitor the adulteration of food products and
to punish the offenders.

The Food Safety and Standards Act, 2006

Food Safety and Standards Act, 2006 (“FSSA”) can be expected to replace the PFA Act. The FSSA
was enunciated on August 23, 2006 with a view to consolidate all the laws relating to food and to
base the Food Safety and Standards Authority of India (“FSSAI”) for the conceptualisation of science
based
standards for food articles and to regulate their manufacture, storage, distribution, sale and import,
to assure availability of safe and wholesome food for human consumption.

The Shops and Establishments Act

Under the provisions of local shops and establishments legislations which exists in the states where
Establishments are set up; establishments are required to be registered. Such legislations aims to
regulate the
working conditions of the workers employed in establishments including and fixing of working hours,
rest intervals, overtime, holidays, leave, termination of service, maintenance of shops and
establishments and other rights and obligations of the employers and employees.

The Standard of Weights and Measures Act, 1976

The Standard of Weights and Measures Act, 1976 (“Weights and Measures Act”) introduced
standards relating to weights and measures used in trade or commerce. The purpose of this Act is to
provide better protection to consumers by ensuring accuracy in weights and measures.

Consumer Protection Act, 1986

The Consumer Protection Act, 1986 (“COPRA”) provides better protection to the interests
of consumers and makes provisions for the establishment of authorities for the settlement of consumer
disputes. The consumer has the right to file a complaint against a trader or service provider in cases of
unfair trade practices, restrictive trade practices, defects in goods, deficiency in services, price
charged being unlawful and goods being hazardous to life and safety when used.

Trademarks Act, 1999

The Trademarks Act, 1999 (the “Trademarks Act”) provides for application and registration of
trademarks in India. The purpose is to grant exclusive rights to marks such as a brand, label, heading
etc. and to help seek relief in case of any infringement of the same.
Marketing objective analysis

As suggested by the Ansoff Growth Matrix, our strategy would be one of Market Development and
Market Penetration and to some extent that of Product Development. This would entail the
following:

• Maintain or increase the market share of current products – this can be achieved by a combination
of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated
to personal selling
• Secure dominance of growth markets

To drive sales, we could also consider the following:

• New product dimensions: e.g. offering combo packs.

• Different pricing policies to attract different customers or create new market segments, e.g. combo
packs could be sold at prices the consumers deem economical.
• Introduction of new products, like doughnuts, juices - This may require the development of new
competencies and communications mix accordingly.

The plan deals with the changes that can be brought about in the existing product, pricing and
communications mix to ensure a better market penetration as well as increase in market share.

In view of the current position of Dominos Inc, this plan seeks to achieve the following objectives:
Marketing Objectives
• To Increase Dominos market share from 41% to 45% in pizza home delivery segment in
India.
• Launch 3 new products to attract new set of customers and retain old customers.

• Open dine in restaurants in tier 2 cities and introduce differential pricing in these cities.

Segmentation

Demographic segmentation –
In demographic segmentation, Dominos divided the market into groups based on variables such as
age, gender, etc; these demographic variables are popular with marketers and they are often associated
with the consumer’s needs and wants They are also easily measurable.
Another segmentation process is by breaking the market into ages as follows
Age:
Below 15 years - 0%
15 - 20 years - 20%
21 - 30 years – 40%
31 - 40 years - 25%
Above 40 years - 15%

The companies target audience was the bachelors, youth and the professionals who have no
time to prepare food and prefer to grab the food as fast as possible.
Gender -- they targeted both genders.(mainly male because many males will not like to prepare
food when they are single).

Income based segmentation

In its early days Dominos targeted the Upper Middle class and Working professionals with lots of
disposable income. Their pizzas were priced quite high.

Later they decided to target lower income consumers also by introducing lesser priced pizzas. Pizzas
priced as low as Rs 20 were introduced to attract low income consumers and to increase sales
manifold. At the same time they ensured that the lower prices pizzas do not cannibalise their costlier
ones by ensuring that only the high priced ones are available in areas where people with high
disposable income live

Geographic segmentation
Geographic segmentation is basically using the spatial location to segment the market.
Geographic segmentation calls for the diff geographical units such as states, regions and rural/cities.
Dominos started of by entering the major cities as pizza was considered a meal of the wealthy and the
affluent. Later as the popularity and acceptance of pizza increased they moved to the smaller cities
and towns. Dominos intends to penetrate the small towns markets aggressively by opening up 20-25
stores annually.

Occasion Based Segmentation

According occasion based targeting restaurants try to get customers who are about to have food in
relation to some occasion. Examples for occasions are many.

• A group of bachelor friends may be going out for dinner.

• A group of colleagues may be having a working lunch or office party.
• A family may be going out.
• A family may be ordering food home to celebrate some small occasion.
• A couple may be ordering food home as they are too busy to cook.

Presently Dominos uses occasion based segmentation as the most important way to segment the
market. The reason for coming up with this are varied.
It was found that even though the youth and young working professionals is the main consumers of
pizza others like families and elders also ordered pizza. In small and medium towns people of all
varieties ordered pizza as a novelty or on special occasions. If there was an informal party at home
sometimes the chosen food was pizza.

It was also found that the main demographic segment which Dominos served, namely young working
professionals ordered pizza only when they were constrained for time or was having an informal
party.

These factors caused dominos to come up with the concept of occasion based segmentation.
According to this segmentation people order pizza only during certain occasions irrespective of their
demographic profile.

Targeting
Presently Dominos uses the occasion based segmentation to come up with its target audience. The
major occasions that it targets are

Small parties at home. When people celebrate small parties at home like a birthday or a career
promotion they find it convenient to order food home rather than spend time cooking it as the hosts
are already busy arranging for other things in the party.

The pressed for time occasion. When people are too pressed for time to cook a meal at home or are
just feeling lazy they tend to order pizza.
Family celebration. When the family wants to have some change from the normal cuisine or wants to
celebrate some small occasion they might order food home.

Professional working late in office. Home/Office delivered pizza is ideally suited for such
occasions as pizza is one of the least messy foods for having in office.

Positioning
Dominos uses the “Khushiyon Ki Home Delivery” and the “30 mins or free” campaigns to provide
value to customers in these targeted segments. For family celebrations and small parties the emotional
component of “Khushiyon Ki Home Delivery” and the implicit feeling that it is not just food but
happiness which is getting delivered makes it an attractive option for family celebrations.

Another part of its positioning strategy is the “30 mins or free” promise. This conveys the speed with
which they will deliver fresh hot pizza to the customer’s doorstep. The promise to deliver the pizza in
30 mins makes it attractive for people who are pressed for time. It also makes it attractive to
employees ordering pizza while working late in office as they know that they will get a hassle free
meal in less than 30 mins. This also makes dominos an ideal source for food during emergencies.
Marketing Action Plan

Product
Current Offerings

• Domino’s currently offers 19 varities of Pizzas, 11 types of side orders and 3 types of beverages.

• Apart from these, it provides 4 choices of crust and 15 types of toppings to suit the Indian palate.

Pizzas

Vegetarian Non Vegetarian

Simply Veg Simply Non Veg
1. Margherita 1. Cheese and Barbeque Chicken
2. Cheese and Tomato Pizza
Veg 1 Non Veg 1
1. Double Cheese Margherita 1. Barbecue Chicken
2. Fresh Veggie 2. Spicy Chicken
3. Country Special
4. Farm House
Veg 2 Non Veg 2
1. Peppy Paneer 1. Chicken Mexicana
2. Mexican Green Wave 2. Keema do Pyaza
3. Delux Veggie 3. Chicken Golden Delight
4. Gourmet
Feast Pizza Feast Pizzas
1. Veg Extravaganza 1. Meatzza
2. Non Veg Extravaganza
3. Cheese and Pepperoni

Side Orders

Vegetarian Non Vegetarian

1. Veg Mexican Wrap 1. Non Veg Mexican Wrap
2. Veg Pasta Italiano White 2. Non Veg Pasta Italiano White
3. Veg Pasta Italiano Red 3. Non Veg Pasta Italiano Red
4. Garlic Breadsticks 4. Chicken Wings
5. Cheese Jalapeno Dip
6. Cheese Dip
7. Choco Lava Cake
Toppings

Vegetarian Non Vegetarian

1. Black Olives 1. Barbeque Chicken
2. Onion 2. Hot ‘n’ Spicy Chicken
3. Crisp Capsicum 3. Ham and Keema
4. Paneer
5. Mushroom
6. Golden Corn
7. Pineapple
8. Fresh Tomato
9. Jalapeno and Red Pepper
10. Extra Cheese

Beverages

1. Coke
2. Fanta

3. Sprite

Choice of Crusts
Domino’s Pizza Menu

Discussion

Customizing offering to suit local tastes

• It took Domino’s around 4 years to realize that the menu with which they had entered India was
not enough to create a profitable company. It had to be adapted to the Indian palate for the
customers to embrace it.

• Hence in the year 2000, Domino’s did a major rejig to its menu and localized its offerings

• It introduced Pizza offerings such as one with Butter Chicken topping, to cater primarily to the
North Indian taste
• Similarly it also introduced a topping called Chettinad Chicken to appeal to customers in South
India

• It has continued to launch localized offerings such as Keema do Pyaaza Pizza, again mainly to
cater to the North Indian palate

Introducing products for the health conscious

• Domino’s recently launched the Wheat Thin Crust Pizza in order to adjust its offering to local
tastes and appeal to the health conscious customers who would like to reduce their guilt of
indulgence by opting for a wheat based crust

Launching products keeping the Indian Family in mind

• In the year 2006, Domino's announced the 'fun Meal for 4' offer in which it offered 4 pizzas
bundled together for the four Family members.

• The offering was a result of a market research study conducted by Domino's in association with
AC Nielsen, on the key barriers and drivers to the consumption of pizza.

Adapting to the changing eating habits

• In the year 2007, Domino’s opened dine-in restaurants to pay heed to this hitherto' ignored
segment

• This became evident when the company opened three restaurants in New Delhi and is planning to
open as many as 45 more such outlets across India by the end of 2007

• This is also a part of a carefully planned strategy, it tested the waters for the past two years in
different cities across India, through 30 such stores.

• Domino's internal research shows that people in Tier 1 & Tier 2 cities are increasingly dining out,
particularly during weekends

Future Offerings as part of the Marketing Plan

We plan to continue the current offerings and introduce the following:

1. Deserts (Doughnuts, Danish pastry)

 Rationale: The current desert offering from Domino’s is only Choco Lava cake which has been
received warmly by customer. Hence, the stage is ripe to provide other offerings in the category to
attract customers and increase ticket size. The proposed products can be easily delivered as the
current offering. The products can be developed by Domino’s in-house and outsourced in the
beginning or the testing phase. Then as they catch on, Domino’s can start producing them in-
house reducing dependence on outside suppliers.

2. Juices/Shakes

Rationale: The current beverage offering from Domino’s consists of only fizzy drinks such as
Coke, Sprite and Fanta. To increase variety of offering in this category would increase ticket size
because this product is bought along with the food items. Domino’s can take a cue from KFC
when it recently launched a variety of beverage offerings which are made in front of the customer
and go with the food offering.

It can also introduce natural juices to appeal to health conscious customers.

3. Innovative offering such as ‘Conizza’

Rationale: An altogether new offering which would stir up the market and focus attention on
Domino’s would be worthwhile to launch at this point of time because the market is stagnating. A
product such as ‘Conizza’ or pizza in a cone shape can be introduced. It would be easy to carry
around and innovative.

4. Combo Meals

Rationale: Currently, Domino’s does not offer any combo offers like its competitor Pizza Hut
does. For instance Pizza + Side Order + Beverage combos can be launched at no extra cost to
bundle the products and increase customer convenience in ordering pizzas.

Price
Differential Pricing:

Opening of Dominos outlets in tier 2 cities will not only increase the target customer base but will
also lead to reduction operational cost in these cities. Therefore charging proportional to the cost in
these cities would help increase the customer base. The potential customers in tier 2 are mostly
middle class and the lower prices will definitely attract more customers.

Combo meals: As of now, no combo meals are offered by Dominos Inc. Combo packs could be sold
at prices the consumers deem economical.
Meal for 2:
2 medium Veg/Non veg I pizza + Garlic breadsticks + Cheesy dip + 2 Coke(600 ml) for Rs 400 plus tax

+ + + =

Rs 400(veg)/475(non-veg)

Meal for 4:

2 large Veg/Non veg I pizza + Garlic breadsticks + Cheesy dip + 2 choco lava cake+ 4 Coke(600 ml) for Rs 400
plus tax

+ + + + =

Rs 700(veg)/825(non-veg)

Place
Domino’s Pizza stores are established in almost 50 countries and they have got more than 8,000 stores
worldwide. Currently Dominos operates 286 stores in India located in 22 states and union territories,
including in 59 cities across the country on a lease basis. Out of which four are commissary (Snack
pub) located in Mumbai, Bangalore, Kolkata and Delhi and the others are stores. The Domino’s stores
are centrally located and in a manner convenient for the people to walk in and also convenient for the
deliverers to do their job.

The distribution channel that the company follows is through takeaways, telephone ordering, and
online ordering. The pizzas are delivered to customers at their door step by bikes. They are carried in
a heat wave bag so that they can deliver hot and tasty pizzas promptly.

The suggestions made in terms of the place, one of the 4 P’s are as follows:

1. Pizza on the run

 The takeaway outlets should be opened up on highways where we can cater to the needs of
the travellers passing through them and who want food to quench their hunger on the run.
These outlets must be set up preferably near petrol pumps so a hurried customer must not stop
particularly for food. Another option could be locating them in the food mall which serves as
a conglomerate to passengers travelling in buses. Usually the bus owners collaborate with the
food malls on the commission basis.
Opening new stores in areas where the firm has little or no operating experience can result in
heavy initial cost in terms of opening, operation and promotion. But this option can be
implemented as the benefit of catering to a new need of existing customer in terms of revenue
generated will outweigh the substantial costs in the long run.

2. Dining experience for tier II cities

Empirical evidences collected from various tier II cities like Indore, Hyderabad, Cochin,
Trivandrum etc. show that the booming culture of nuclear family accompanied with the
increase in income has created a need for dining experiences. These newly transformed
customers with significant lifestyle changes are tempted to spend money on leisure in terms
of good food accompanied by a dining experience instead of ordering food at home.
Hence, to address the need of potential buyers from the tier II cities Domino’s needs to
establish outlets with a reasonably good dining area to provide the customers their most
valued outputs like good quality inexpensive pizza along with the leisure. This would target
the new entrants(buyers) in the market and ensure fulfilment through augmentation.

3. Working till late, hungry kya?

The last orders at domino’s are taken till 11 p..m for home and office workers and online
customers too. it will be a brilliant idea to extend our order taking timings from 11 p.m. to
12. This will act as an encouraging move to cater to a specific need.

Promotion:
Offers:

Fun-for-4-meal:
The fun meal for four includes four regular sized pizzas at Rs 180, which effectively means Rs 45 per
pizza. To bring excitement on the menu, DOMINO’S have been consistently innovating new products
at various stages. One such side item launched was called Calzone. It is a baked product that is stuffed
with Mexican flavour, select veg/non veg toppings and cheese.

Pizza Mania: Pizza Mania is the latest attraction in

the list by Domino’s. With Domino’s increasing its
presence in tier II cities with the requirements to
perform from day one, they wanted a product which
could easily make a niche in highly price sensitive
market. Most basic Pizza coming at Rs 39/- only
makes it possible for Domino’s to attract customers
who have never had a Pizza and want to try out.
They may well become loyal customers. It also targets the kids and Children who cannot afford the
big pizzas from their pocket money.

Choco lava:
Domino’s has come up with a totally different
product called Choco Lava which one can get just at
Rs 25/- along with an order of coke and pizza.
Domino’s considers choco lava as a supplementary
product which might catch the attention of those
who are looking for a new taste and experience with
pizza.

Pasta Italiano and Mexican Wrap:

Domino’s has come up with two truly international
dishes namely, Pasta Italiano and Mexican Wrap.
Truly affordable products give good value for money
and a new experience to the company. Such products
help the company to keep the interest of the
customers going.

Wheat thin crust Pizza:

 Domino’s has come up with a healthier option
namely, Wheat Thin Crust Pizza, for health
conscious customers. Domino’s Wheat Thin
Crust Pizza brings to the health-conscious, a
choice of the fibre-rich,very thin and light
crust. Available with its vast range of
toppings, the Thin Wheat Crust sits lightly on
the stomach and deliciously on the palate!

Future Promotion:
1. Discount cards: Introducing cards
which will carry each users identity. The consumers would be able to get these cards at a very
minimum price. These cards will carry points or credits which will increase with every
purchase of Pizzas. These credit points can later be used to obtain Domino’s goodies or
discount on future purchase.
2. Preferred order: Domino’s maintains a database of its customers who give Home Delivery
orders on phone. They can use this database to their advantage in form of customer
relationship. Every time a customer calls, his call can be diverted to a system which will pop
up the user’s name, preferred order, last order etc. The employee who attends the call can
them improvise and talk to the caller by his first name and can mention about his last order or
the most preferred order. He would also be able to confirm the address from his side. This
will certainly please the customer.
3. Collaborate with caterers who organise small parties at home: As a promotion strategy,
Domino’s can collaborate with new upcoming caterers who provide services for parties on
occasions such at birthdays and anniversaries. It will do two things; bring more business to
Domino’s and at the same time personify the association of Domino’s with parties at home
and office which is anyways their current and near future aim.

Implementation:

Activity schedule:
In order to achieve our marketing objectives we propose following action plan with time lines.
3) Market development:

We aim to open a total of 80 new stores (a growth of 15% y-o-y) in 30 Tier II cities in year 2010-11.
In the first 6 months we will launch one store each in the following 20 Tier II cities.
Patna, Bhopal, Srinagar, Visakhapatnam, Jodhpur, Vijayawada, Bhubaneswar, Salem, Aligarh, Bhiwandi,
Moradabad, Tiruchirappalli, Gorakhpur, Amravati, Cuttack, Rajpur Sonarpur, Bikaner, Warangal, Ulhasnagar
& Nanded

We will introduce dine-in facility along with the regular home delivery service in these cities. The
rationale for choosing the dine-in facility is that the consumers in Tier II cities actually prefer to go
out and have pizzas for a pleasurable experience rather than ordering for a home delivery.
Depending upon the sales in the first set of 20 cities we will launch 2 more stores in these cities in the
next 6 months. Also, one store each in the following 10 Tier II cities will be launched.
Ajmer, Durgapur, Gulbarga, Guntur, Bhatpara, Saharanpur, South Dumdum, Korba, Asansol, & Ujjain

4) Product:

Combo meals will be introduced in the existing stores in the first 6 months. For new stores in Tier II
cities standard pizzas will be launched. After evaluation and feedback from consumer for the combo
meals in we will launch combo offers in Tier II cities as well (later half of the year).
5) Promotion:

Discount cards will be initially launched only in metros because consumers in Tier II or Tier III cities
are not heavy users of Pizzas. After its successful implementation we can then introduce it in non-
metro cities. An advertising campaign would be used to promote discount cards in non-metro cities by
highlighting its popularity among the metro consumer.
For targeting small parties, we will first target and promote the offerings in multinational companies
where small teams celebrate special occasions by ordering Pizzas.

Budget
In order to meet the marketing objectives already stated, a proper budget has to be prepared.

1. Launching 3 new products

The additional expenses associated with launching new products will be:

a) Market research and R & D for getting the right product

This cost is assumed to be 10 lakhs for the 3 products.

b) Promotion of the new products

The total amount that will be spent on promotion of the new food products will be 5
crores.

c) Other expenses for the new products

• The net sales from Dominos was 475.52 Cr (Source: Capitaline).

• Assuming that 85% of the revenue is because of pizza and 260 is the average
price of a pizza, the no. of pizza sold = (475.52*10^7)*.85/260 = 746200620.

• Let us assume that 1 pastry or dough nut is sold for every 5 Pizzas sold and
pastry/dough nut costs Rs 10, the net expenses for pastry/doughnuts will be Rs.
149240123 i.e. 14.92 Cr

2. Opening new dine-in facilities in tier-2 cities

Additional expenses because of opening outlets in new cities will be:

 a) Market Research on the viability of the cities

A market survey will be done in roughly 50 tier-II cities in order to gauge the feasibility
and economical viability of the city. It will cost Rs. 2 lakhs per city i.e. 1 crore.

b) Expenses for opening new dine-in facilities

• The cost of setting up a new dine-in facility will be approximately 30 lakhs i.e. 24
crores for the new facilities.

• Since average employee cost per outlet is 26 lakhs, it will be .26*80 = 20.8 crores
for the 20 new outlets

• Similarly all costs are computed and listed below.

Head Expense in Rs. Cr

Market Research 1
Power consumption 6.2
Raw Materials 28.13
Selling and administration expenses 27.536
Misc Expenses 4.5
Vehicles for home delivery 4.9
New premises 24
Other Manufacturing expenses 8.15
Net 104.416
The net expenses for the year 2009-10 were Rs. 358.3 Crores.

Adding the above expenses, the net budget expense for the year 2010-11 should be 358.3 +104.416+
14.92 = Rs. 477.636 Cr

Assuming that the revenue from Pizza sale will increase by 5%, the net revenue from Pizza Sale = Rs.
496.146 Cr.
References:
http://www.capitaline.com/user/framepage.asp?id=1&treeid=1

http://investing.businessweek.com/research/stocks/people/board.asp?ticker=9515743

Jubilant Foodworks IPO prospectus Jan 2010

Source: Technopak Report 2009

International Monetary Fund, World Economic Outlook Database, April 2010