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Domino’s: The story of Pizzas and Perseverance

- 6 min read By Gurudev Prasad

10 January, 2018

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Both Domino’s and Pizza Hut opened their first outlet in India in 1996. Pizza at that time was an alien concept for many Indians. For a newly liberalized economy that envied the unbridled freedom of the American way of life and aspired for American brands (like Coke, Ray Ban, Levis, etc), Pizza was seen more as a slice of American life rather than an Italian dish.

So, both Pizza Hut and Domino’s had a tall task ahead of them- of building the ‘pizza’ category in this country. Interestingly, both took a different route. Today, twenty years later, performance wise they both are at a different place and may be the route they took made a lot of difference to how far they have travelled and where they have eventually landed.

While Domino’s focused on building a ‘delivery first’ brand, Pizza Hut started off as a fine dine brand. For Pizza Hut- the place was as important as the pizza. The ambience, activity and pizza – all three formed the package. “Ring the bell if you had a good time” was the perfect culmination of this ‘sum total’ of your experience at Pizza Hut.

Domino’s on the other hand, was almost a contrast to Pizza Hut. The Pizza was the hero, not the place. More importantly, rather than celebrating the experience (like Pizza Hut), Dominos started to harp on the promise of predictability- the 30 minute delivery.

Interestingly, when both started out- Pizza itself was a novel idea for most Indian consumers. So, Pizza Hut’s pitch of being an occasional indulgence (eating out in a fine dine was definitely an indulgence in 90s) with the entire razzmatazz of experience made sense. Consumers, dressed in their best outfits flocked to Pizza Huts to bite into that experience.

But it was double whammy for Domino’s – which apart from building the category of pizzas was trying to build a category of “in- house’ consumption (outside food was mostly an eating out occasion back then). I am sure it would have been tough for the brand, to resist the temptation of copying at least some bits of the ‘experience model’ of Pizza Hut.

But Domino’s stuck to its guns and that’s the greatest lesson one can learn from Domino’s- the lesson of perseverance. The brand stayed true to its conviction that the ‘pizza consumption’ landscape will eventually change- that the biggest driver of consumption will not be indulgence/ experience but sheer convenience.

Consumption patterns don’t change over night. It takes time- often years. But Domino’s kept at it. The “30 minutes or free” promise was a masterstroke. In a country that’s generally lenient on time, a measurable promise of on-time delivery with a clear penalty clause (free pizza/s) was unheard of. Such was the power of this promise that many people actually tried ordering pizzas for the first time, just to check if the brand could really honor its commitment.

Brands can also learn a lesson from Domino’s on how to own a strong positioning through powerful story telling. Domino’s is one of those rare brands that has been both consistent and credible in its brand narrative, since the time of its launch. Over last two decades, through its advertising- Domino’s has beautifully reinforced its brand promise and gave us some of the most memorable tag lines- ta-ra-ra-ra-ra-ri, pizza aaye free, Yeh hai rishton ka time, khushiyon ki home delivery. It would be fair to say that though the product (pizza) was a western offering, the carefully crafted, emotionally engaging narrative gave the brand an Indian soul and a widely mainstream appeal.

It’s the result of such consistent messaging that today brand Domino’s is synonymous with pizzas and the 30 minute delivery promise. There are very few brands in India that are so sharply positioned, and I am not talking just about the pizza category.

Compared to the elaborate menu of Pizza Hut, Domino’s has a lean menu. That doesn’t mean that the brand doesn’t innovate. Rather, Domino’s has been very ‘cleverly’ innovative. Every innovation has been conceptualized to tap on to a specific gap or a business opportunity. Be it garlic breadsticks, as a side product, ‘Pizza Mania’ range – quality pizzas at affordable prices to drive trials; Peppy Paneer Pizzas to cater to vegetarian tastes; Chocó lava cake as an add-on dessert, exotic Italian pizzas as a premium gourmet offering or more recently the Zingy Parcel – an anytime, anywhere delicious snack option.

Of course, not all of them have struck gold. But the ones that have worked- have become strong supporting cast for the hero dish of pizzas.

The greatest lesson that brands can learn from Domino’s is the lesson on scaling up the business without losing the quality and efficiency of delivery.

The numbers speak for themselves-

Present in over 230 cities, Domino’s is the country’s largest food service chain with a network strength of more than 1,000 Restaurants

With 150 Restaurants being opened in each of the past three years

Empanelled as an official (IRCTC) catering partner for delivering pizzas to passengers, this facility is available at 135 stations across India

With a team strength of 27000+, Domino’s India on an average sells four hundred thousand pizzas every day, or more than 120 million pizzas a year

Over 98% of all pizzas are delivered within the 30-minute delivery deadline.

According to a recent Euromonitor report- Domino's, which trailed McDonald's just four years ago, is now more than double the size of the US burger chain with 16% share in the country's Rs 1 lakh-crore chained food service industry. The same report pegs Pizza Hut at 4.4% market share.

The pressure on Pizza Hut is quite evident. As a consumer, I have lately seen most of their stores to be sparsely occupied. Their communication on mass media also reflects this desperation- new ads, new celebrities, new crusts and new dishes that sometimes border on bizarre (remember Birizza!). Realizing that Domino’s model is more viable commercially, Pizza Hut is trying to shrug off the image of a fine-dining restaurant in India and strengthen their delivery format-that is obnoxiously named as PHD (Pizza Hut Delivery).

Having said that, I am completely aware that not all’s fine with Domino’s.

Their Same Stores Sales Growth (one of the most important growth metric) is declining. The brand’s tech credentials are weak- over 70% of the orders are still on call. Their transition to online ordering has been slow, personally, I have tried ordering through their site and I have to admit that the whole experience was quite clunky. Their tech integration looks more like an afterthought than something that’s baked in their DNA.

The rising appetite of Indian consumers to experiment and increasing number of alternatives available today (hyper local, aggregators, cloud kitchens, etc) is making it even more competitive for Domino’s.

But for a brand of Domino’s size (around 70% market share of organized pizza market), it’s almost unrealistic to expect that the momentum of growth will continue at the same pace. It is bound to face challenges. It will be interesting however to see how the brand will tide over this phase. 

Here’s hoping Domino’s delivers happiness. Always.

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