Friday, May 27, 2011

Why Domino's Still Doesn't Get It

In January 2010, I wrote that Domino's, after its widely-heralded "Pizza Turnaround" campaign doesn't understand marketing.

I said this because Domino's underwent a complete marketing overhaul and began marketing a new better tasting pizza, which is a very tough title to sell and a tougher one to own. First of all, taste is subjective. Secondly, taste at Domino's was always secondary- its pies were more about being made and delivered fast (in thirty minutes or less) and for a cheap price. However, after hitting rock bottom in late 2009 with a grossly embarrassing YouTube video courtesy of two idiot employees, Domino's chose to tout a new recipe with fresher ingredients after admitting past failures. But while they tried separating themselves from their past, Domino's forgot how they got there- with delivery.

In the short term things have been great. Sales shot up, the stock has been on fire, and Advertising Age honored them with the runner up position for marketer of the year in 2010. Although, with all due respect to AdAge, the award's meaning might equal that of a senior superlative in a high school yearbook. Call me skeptical, but I think the entertaining creative work and big bump in ad spending at networks and agencies when both are hurting from lean recessionary years had more to do with the nomination than the campaign's effectiveness.

Yet, despite their accolades, after a year or so long Pizza Turnaround campaign, Domino's started messing with its brand messaging by introducing a new chicken campaign. Now, Domino's is back with a different message for its carry-out business.- in response to growing competition from Little Caesars. With its new extended promotion called the "Early Week Pick Me Up" deal, Domino's is offering a three topping large pizza for $7.99, valid only Monday through Wednesday.

Aside from their lack of focus, this is an example of a strategically flawed promotion because Domino's loses twice in the end. First of all, the $7.99 price offered on Monday through Wednesday for carry-out pizzas repositions the perceived value of the rest of its menu. A Domino's pizza on Saturday or one that's delivered suddenly feels more expensive. Secondly, Domino's price and commitment to carry out pizza still cannot equal its rival's $5 Hot-N-Ready pizza, available for pick up any time of any day.

Either way, Domino's won't win. Especially without a strong brand position.

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