Transcript presentation - Drexel University

Bringing Domino’s Pizza to Germany
By:
Christine Wagner
Amit Patel
Sevilya Kamalova
Stephanie Polesinski1
“Get the Door. It’s Domino’s!” ®
World leader in pizza delivery
• Began in 1965 in Ypsilanti, Michigan
• Operates in 55 countries
• Over 8,000
• Domino’s Pizza International, Inc. opened its first store in 1983
Winnipeg, Canada
• 3,230 stores internationally
• Worldwide conventions, local group meetings, one-on-one
meetings, franchisee advisory boards, open communication and
publications that promote best practice sharing, positive energy
and strategic planning
• “One Brand – One System”
• Consistent product line
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• Currently trading – DPZ $19.85
Strategic Analysis - Economy
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Europe's largest economy and second most populous nation
Fifth largest economy in the world in PPP terms
Population of 82,400,996 as of 2006
Slightly smaller than Montana
largest demographic age group accounts for 2/3 of
population : 15-64
United States is Germany’s third largest importer and exporter
Per capita income level of $31,400 – mainly middle class
GDP (PPP) of $2.585 trillion as of 2006
Services are responsible for 70% of the GDP by sector
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Strategic Analysis - Economy cont.
• Between 2001-2005 the average growth rate was 0.7%
and had high unemployment
• Government initiated many reforms
• 2.2% growth in economy in 2006
• Agricultural products produced:
• potatoes, wheat, barley, sugar beets, fruit, cabbages, cattle,
pigs, and poultry
• Since the end of the second World War, the number of
German citizens entering colleges and universities has more
than tripled
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Strategic Analysis – Government and Politics
The Federal Republic of Germany
Basic Law
• Protection of rights
• Civil law
• Bundesverfassungsgericht
Parliamentary
• Bundestag
• Bundesrat
Multi-party system
• CDU and CSU
• Social Democrats, Alliance ‘90/Greens
Executive Branch
• Chancellor - Angela Merkel
• President - Horst Koehler
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Strategic Analysis – Environmental
Religion
• 67% Christian (Protestant/Roman Catholic)
• 3 million Muslims, 100,000 Jewish
Family
• 13.705 million out 38.124 million households are single
person households.
• Female population (42% of total)
Education
• 99% literacy rate
• Considerable earnings by the age of 20
• Large college student population in Berlin
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Strategic Analysis – Environmental cont.
Attitudes toward time
• Temporal orientation
• Construction restrictions
Language
• 27 different languages
• English is understood by most
• Turkish (Berlin)
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Strategic Analysis – Challenges/Competition
Advantage: Domino’s is already present in European
countries of France, England, Greece, and Ireland
Disadvantage
Solution
In 2005, the amount spent by
consumers on snacks bought from
bakers and butchers was over 60% of
sales through chain fast food outlets
Germans have strong emphasis on the
highest quality ingredients - “Made
Fresh, Arrives Fresh” Guarantee
Learning curve in Germany is steep
and costly
Lack of familiarity with the foreign
market
Large amounts of capital in other
foreign markets
Pizza Hut and local competitors
Focus on customer service, delivery, and
quality products
Intense market research
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Marketing Strategy – Entry Mode
Master Franchising - manager for all franchises
operating in country/region
Must have’s
• track record of success
• strong knowledge of the target market
• substantial financial resources
Responsibilities
• build stores
• sub-franchise
• operate the supporting distribution system
• meet agreed upon store growth targets
• payment of royalties
• maintenance of organization’s operating standards
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Marketing Strategy – Entry Mode cont.
Sub-Franchise – continued growth in Germany after master
franchise is opened in Berlin
• used in markets where Domino’s Pizza is currently operating
• allows for the division of duties to sub-franchisees
• cost is relatively low
Expand based on relative size and economic benefit
Germany – large cities and college population
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Marketing Strategy – Product
Products
•pizza
•bread sticks
•cheese sticks
•buffalo wings
•Buffalo Chicken Kickers ®
•CinnaSticks ®
Innovations
•Domino's HeatWave®
•3-D car-top design
•sturdy, corrugated pizza box
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Marketing Strategy – Product cont.
World Leader in Pizza Delivery
Customer Service
Adaptations
• toppings:
ham, beef, mushrooms, sauerkraut, onions, salami
• health conscious adaptations:
white meat chicken, fresh ingredients, salads, wraps
• product line will remain the same, possible additions
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Marketing Strategy - Distribution
Where
• Berlin
- 2 – 3 shops
- capital city of the 16 German states
Why
• Target Market
• Universities
How
• Franchising
• Distribution Channel Design
• Future endeavors
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Marketing Strategy – Pricing
Competitive pricing
• Charging customers the same price as major competitors
• Easy to apply, information available
Penetration pricing
• Offering lower prices than existing competition in order to gain
market share
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Marketing Strategy – Pricing cont.
Cost of raw food x factor
a) 100 % / 50% = 2
b) Dough $1.00
Tomatoes - $0.10
Cheese $0.50
TOTAL $1.60
x factor 2
PRICE $3.20
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Advertisement Regulations
• Marketing communications
should not condone or
encourage poor nutritional
habits.
• Products and prices should not
be presented in marketing
communications in a way that
suggests affordability.
• Should not ecourage children
to eat at bedtime or frequently
throughout the day
• Market strategy should not
create urgency to buy product
• Ads should not seem to
encourage children to eat/drink
a product to take advantage of
promotional offer
• Strategy should not encourage
children to eat more then they
should.
• Market Communications
should not give misleading
impression of nutritional or
health benefits.
• Products cannot be targeted
directly at children.
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Regulations Example
A TV ad for the Nissan Note showed a family getting ready to go away in
the vehicle, and remembering everything except the baby.
The viewers, who were from Barking & Dagenham NHS and Upminster
Clinic and had a professional interest in the oral health of children,
complained that the ad was irresponsible because they believed that one
scene depicted a baby’s feeding bottle containing fruit juice, which was
harmful to the dental health of children.
After an investigation it was soon found out that the case of (Physical
Harm – Children) the bottle did contain milk.
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Marketing Strategy - Promotion
• Ways to work around regulations
– Create comical but vague commercials to
reach certain target segment
– Convey product ideas to parents
– Rely on word of mouth
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Marketing Strategy - Promotion
• Types of Promotion:
– Sponsor local sporting/theatrical events
– Use car top signs
– Purchasing Specials
• Employ a “push” marketing strategy:
– Promotional Events / Tools
– Have great Public Relations
– Why not “Pull”?
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Marketing Strategy - Promotion
• Company centralized in most populated
city in Germany
• Emphasize fresh product
– Due to local agriculture channels
– HeatWave bags keep pizza warm on arrival
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Conclusion
Looking Forward
Online ordering option
• Available in US, England, and Ireland
• Germany is the EU leader in sophisticated e-commerce
• Allow customers to build their order online, and have it
transmitted to the nearest location, which will which will
increase the delivery speed and quality that Domino’s is
known for
• Timeline – within one year of establishment in Germany
We expect huge success for Domino’s in Germany!
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