Struggling Domino's Tries The Customization Route

No. 2 chain offers choice of sauces, flavored crusts, price promos.

(Monday, June 04, 2007) - Pizza selection has never been more democratic. Looking to reverse a downward sales trend, Domino's Pizza is testing new offerings that allow consumers to not only select their favorite toppings, but also what sauce goes on the pie and how the crust is flavored.

The No. 2 chain in the quick-serve pizza category had sales slip from $3.3 billion in 2005 to $3.2 billion last year, per Technomic, Chicago. Earlier this year, category leader Pizza Hut began a direct attack on Domino's in its ads. Tombstone frozen pizza has directly tweaked Domino's in its ads. And Kraft's DiGiorno rising crust pizza has positioned itself as tasting just like delivery pizza.

"Pizza Hut has moved up in the consumers' mind in taste and new product offerings with direct head-to-head comparative ads against Papa John's and Domino's," said Arjun Sen, president at the Restaurant Marketing Group, Centennial, Colo. "Domino's needs to define what it clearly stands for in the minds of pizza consumers."

Domino's rolled out "High-rising pizza" in some markets, partially in response to frozen pizza competitors. The tall, flavored crust on the edge is available in garlic parmesan or cheesy cheddar flavors.

Domino's has had a deep dish offering since 1990. "[But] it's not something we've actively promoted on TV," said Tim McIntyre, a rep at Domino's, Ann Arbor, Mich., adding the chain will be putting "more activity" behind deep dish.

Consumers can now choose among four different sauces for their pizza: four cheese, garlic parmesan, sweet marinara and original. This addition was inevitable, said Jeff Davis, president, of the restaurant marketing research firm Sandleman & Associates, San Clemente, Calif. "You can choose crusts and toppings so sauce is a natural. This allows Domino's to address different palates."

To try to steal some share away from burger fans, Domino's also is testing a cheddar bacon melt pizza. "The No. 1 order in quick service restaurants is a hamburger and bacon cheeseburgers have high appetite appeal," said Davis. "They are going after that crowd."

As part of its ongoing strategy, the chain is testing new price promotions. Its 10/5 deal offers a large pizza with unlimited toppings for $10 and medium pie for $5. Amazing 8's offers two medium pizzas with unlimited toppings for $8.

But such deals are part of the chain's problem, said Darrin Tristano, evp at Technomic. "As a whole the category was flat. The independents have been doing better than the chains whose unit volumes are slipping because they're lowering their prices to sell pizzas. When that happens not only does profitability suffer, their top-line sales suffer."

Domino's spent $169 million on media last year, down 3%, per Nielsen Monitor-Plus. JWT, New York, is lead agency.

View all Domino's Pizza Press Releases

This article has been read 187 times.

Printer Friendly