ATAL BIHARI VAJPAYEE- INDIAN INSTITUTE OF INFORMATION TECHNOLOGY AND MANAGEMENT,

GWALIOR

Analysis of Service Package and characteristics of Domino’s Pizza

Submitted By:

Shipra Tiwari

(2013MBA-027)

EXECUTIVE SUMMARY

This report is based on services offered by dominos and also to test the quality of service dimensions of Domino’s. India's quick service restaurant market worth $13 billion is growing 25-30 percent a year on the back of changing and busy lifestyle, fast emerging middle class population and surging disposable income, the industry will continue to grow at a pace in coming years. It now accounts for roughly half of all restaurant revenues in the developed countries and continues to expand there and in many other industrial countries in the coming years. But some of the most rapid growth is occurring in the developing world; where it's radically changing the way people eat. Domino's Pizza India Ltd. has proceeded to become one of the largest and fastest growing international food chains in South Asia. The first Domino's Pizza store in India opened in January 1996, at New Delhi. Today, Domino's Pizza India has grown into a countrywide network around 411 outlets in 95 cities

This report provides extensive research and rational analysis about service concept of Domino’s. And evaluation of current service marketing mix and evaluation of customer gaps in different service quality dimensions.

INTRODUCTION

Domino’s vision: Exceptional people on a mission, to be the best pizza delivery company in the world. Jubilant Food Works Ltd. (formerly Domino's Pizza India Ltd) was incorporated in March 1995 as the master franchisee for South Asia Pacific, of Domino's Pizza International Inc., of USA. Moreover, the company holds the master franchise rights for Sri Lanka and Bangladesh through its wholly owned subsidiary. Mr. Shyam S.Bhartia and Mr. Hari S. Bhartia of the Jubilant Group are the promoters of the company. Since inception, Domino's Pizza India Ltd. has proceeded to become one of the largest and fastest growing international food chains in South Asia. The first Domino's Pizza store in India opened in January 1996, at New Delhi. Today, Domino's Pizza India has grown into a countrywide network around 411 outlets in 95 cities.

STRATEGIES

POSITIONING WAR

When Domino's entered the Indian market, the concept of home delivery was still in its nascent stages. It existed only in some major cities and was restricted to delivery by the friendly neighborhood fast food outlets. Eating out at 'branded' restaurants was more prevalent.

GOING PLACES

Domino’s has selected their store locations wisely with focus on shopping malls, multiplex complexes, metro stations, highways, offices spaces not only in Tier-1 but has also extended their foot print in Tier-2 and Tier-3 cities reaching out to a larger consumer base.

LOCALIZING THE MENU

Since its entry into India, Domino's introduced new toppings for Pizzas to cater to the local tastes. Different flavours were introduced to cater to local population.

BRAND BUILDING THROUGH ADVERTISING

Domino's and Pizza Hut initially restricted their ad strategy to banners, hoardings and specific promotions. In August 2000, Domino's launched the 'Hungry Kya? (Are You Hungry)' sequence of advertisements on television. In 2009 Domino’s rolled out a new campaign 'Khushiyon ki Home Delivery', to promote the home delivery service of its latest offering. The campaign has been created by Contract Advertising and positions the home delivery of pizza and pasta as a very convenient service.

PRICING AND PROMOTION WARS

Through its 'Fun Meal for 4’ pack the Domino’s Pizza India offers four pizzas at the rate starting at Rs 156. This has helped the specialty food franchise to enhance the strength of its customer base. Domino's has introduced price cuts, discounts to attract the customers. They offer comeback value to their customer.

Core Competencies of Dominos

Dominos core competencies have evolved over time. Their unique sets of strengths have helped the Company dominate the pizza food service industry, and a leader in the home delivery / take away.

VALUE CHAIN

Dominos competitive advantgse-

global leader in pizza take

away/home delivery

Unique Supply chain

model : Better quality &

consistency

unique global model:allows

flexibilty at the regional

level

level Leaner Stores : Better

operating margins

focussed on the core

competency of delivery

It is important to consider how a customer need drives Dominos to create the product. The customer need that drives the entire value chain is the need for a dependable take away restaurant, reasonably priced hot quality food and variety that suits the local palette.

Dominos has focused on these key customer needs throughout the value chain, and has not allowed any digressions in this area. Its global operational model allows for lean stores, well-trained staff and flexibility at a country level to customize menus to suit customer tastes. Operational requirements have prompted the use of technology to make the customer experience more enriching, it has a history of firsts – they were the first to use TV as a distribution channel, an online tracking system that allows customers to track the pizza order and a proprietary point of sale system. A combination of the Company level strategy and the Operational Strategy has resulted in Dominos having a reputation for reliability and consistent pizza quality) – these strategies have ensured that Dominos continues to meet its customer needs.

Product value chain

Porter’s model which depicts Dominos operations as a collection of “value-adding activities”. The five primary activities are processes that are mainly concerned with the production of the products and services to the external customers. These are necessary to the business processes. The activities indicated as support activities are activities that are vital for the development of the appropriate transforming resources. These can be looked as value adding activities, for instance incorporating the use of technology such as being able to place orders by text message add to the convenience Dominos provides and increases the accuracy of order All these constitute the business processes of the organization.

Operations Strategy Implications

Dominos operations strategy mainly focuses on the providing high service quality to the customer:

1. Minimize operations cost: To minimize the operating cost by improving the efficiencies and process at the stores.

2. Strategic store locations to facilitate the delivery service: To leverage the strategic location of the store in order to facilitate quick service to the customer and maximize the revenue.

3. Production oriented store designs: To utilize the production oriented store design in order to facilitate efficient production and quick service to the customer.

4. Efficient order taking, production and delivery: To execute an efficient operational process that includes order taking, pizza preparation, cooking, boxing and delivery.

5. Use of Domino’s PULSE point-of-sale system: Use of Dominos PULSE system to improve operating efficiencies, provide corporate management with easy access to financial and marketing data and reduce time consumption and expenses.

6. Product and process innovations: To promote an innovative culture that increases both quality and efficiency.

7. A focused menu: To maintain a focused menu that is designed to present an attractive quality offering to customers, while minimizing order errors, and expediting the order taking and food preparation processes.

8. A comprehensive store operations evaluation program: To utilize a comprehensive store audit program to ensure that stores are meeting both as the expectations of the customers.

2.10 Major competitors

1. Pizza hut2. US pizza3. Papa John’s

Product & Service Design

Dominos has positioned and established itself as the pioneer in the pizza delivery service. They are giving different offerings for different segments like local favorites, Global favorites, Premium pizzas, kids’ corner and designer’s pizza .A fair degree of flexibility is available where customers can customize their pizza and can choose to purchase “combos” thereby providing better value for money. Additional items such as soft drinks accompany these choices. Dominos has successfully implemented this concept of mass customization by catering to customer’s individual needs through unique combinations. Dominos standard product and services offering is universal across the world – quality pizza delivery in approximately thirty minutes.

Failed Product and Product Re-design:

Dominos openly acknowledge shortcomings and use customer feedback to revise their strategy and approach. In an effort to design their product again, the company reconfigured its recipe. They tested several combinations of cheeses, sauces and crust to finally arrive at a recipe that was welcomed by the public. It is useful to note that the end customer was heavily involved in the process of the product being re-designed and influenced the outcome largely. This approach of using customer feedback can be credited the company witnessing an increase in sales following the redesigning of their product.

Operations Challenge of the Product/Service Mix

Additionally the thirty minutes delivery guarantee that was initially introduced but later cancelled due to a relatively high incidence of accidents and snatching of pizza on roads. This is an example of a service delivery challenge the company faced. Recognizing that the thirty-minute delivery was an attractive option for the customer, Dominos reintroduced the concept, however allowing itself some leeway and positioning it as a “gift” to the customer.

Process Design

Volume: high volume-trained staff following same standard procedures in massive quantity as it is efficient way to produce special equipment leading to continuous operations

Variety: the customers have a choice to select their own topping or can add more ingredients. Dominos moreover redesign operational strategies on the basis of customer feedback

Variation in demand: dominos has low demand in daytime but demand variation is high at lunch and dinner time.

Degree of visibility: when the customer comes for dine in or for take away kitchen is highly visible, but in case of delivery at door step visibility of production process is low

Assembly line approach

Dominos were the pioneers to use the assembly line approach to prepare pizzas and other items at high degree of consistency .They has chosen to use the assembly line approach to produce its pizzas, while at the same time they have retained the flexibility of a batch flow process.

The production process at a Dominos kitchen utilizes the consistency and efficiencies that comes from using an assembly line approach while retaining the flexibility that comes from adopting a batch type manufacturing process. Dominos calls “make line” to its assembly line. This make line methodology also facilitates dominos to produce higher volume in rush and peak hours

SERVICE TRIANGLE

CHARACTERISTICS OF SERVICES OF DOMINOZ

1. Intangibility: It is impossible for the service users to taste, feel, see, smile or possess a service before they buy it.

2. Heterogeneity: People based services are susceptible to heterogeneity or variation in quality.

3. Perishability: Unused service capacity of one time period cannot be stored for use in future periods.

4. Inseparability: The production of a service cannot be separated from its consumption by customers. Services are produced and consumed simultaneously.

COMPETITION

1. Dominos compete against regional and local companies as well as international brands, Pizza Hut and Papa John’s.

2. We generally compete on the basis of product, quality, location, image, service and price.3. We also compete on a broader scale with quick service and other international, national,

regional and local restaurant.4. The industry is often affected by changes in consumer tastes, economic conditions,

demographic trends and consumer’s disposable income.