Running head: DIRECT/INTERACTIVE MARKETING PLAN FOR …€¦ · DIRECT/INTERACTIVE MARKETING PLAN FOR DOMINO’S 2 Direct/Interactive Marketing Plan for Domino's Pizza Increasing

Running head: DIRECT/INTERACTIVE MARKETING PLAN FOR DOMINO’S 1

Direct/Interactive Marketing Plan for Domino's Pizza

Julieta Randall

IMC616 – Direct Marketing

West Virginia University

Prof. Susan Jones

April 19th

, 2016

DIRECT/INTERACTIVE MARKETING PLAN FOR DOMINO’S 2

Direct/Interactive Marketing Plan for Domino's Pizza

Increasing market penetration of the largest pizza delivery companies in the Quick

Service Restaurant industry such as industry Domino's Pizza has been done successfully in the

past. In fact, Domino's has been doing data collection since the early 80's, producing

sophisticated direct marketing and branding plans that have helped shape its winning status.

What this test presentation wants to do is to turn around already penetrated markets in the greater

and suburban Boston areas among millennials within the 18-24 range and families with children

by: increasing the ways it collects customer information, changing their behavior in terms of

mobile app ordering, targeting coupon use via Groupon, and pushing the frequency of carryout

without hurting the status that deliveries have in the first place. With a budget of $300,000 and a

three-month testing period, this test plan will carefully test interactive direct marketing

techniques that produce results, to be presented within four months after the testing period.

Pizza Lovers: Customer Profiles

Figure 1: America's Favorite Pizza - Retrieved from Csnews.com (2014)


The fast-food & quick-service restaurant industry—SIC Codes 5812 and NAICS Codes

722513—is a highly competitive market. Pizza, the most recognized comfort food in America, is

very important market within this segment. In a study survey among 500 respondents by

Culinary Visions Panel as presented by Convenience Store News (2014), it was found that "men

are more likely to order meat toppings, while women favor various cheese toppings." More so, it

was also found that, when it comes to vegetable pizza toppings, 18-34 year-olds "prefer green

pepper, onion and mushroom" and definitely/would probably order four-cheese, garden, dessert,

and breakfast pizzas; in contrast, 35 to 54 year-olds actually "favor mushroom, onion and olives,

while mushroom, onion."

Mobile and social media connected, Millennial preferences take into consideration:

takeout ("more than half of Millennials spend their food budget on takeout orders," according to

an NPD Group's research), spending on snacks, on-the-go easy packaging, and opting for value

with value meals or discounts (Kelso, 2012). In addition, new research coming from ordering

service GrubHub found that "college students outpace larger state schools in late-night ordering,"

and Babson College, Boston was included in this list of late night ordering hubs.

Domino's Pizza

Based out of Ann Harbor, MI, Domino's Pizza was founded in 1960 and is considered the

second-largest pizza chain in the United States after Pizza Hut and is "the largest International

QSR chain in the country (Domino's Pizza India Ltd.:, 2012, p. 41)." The publicly owned

company since 2004 runs 11,600 company-owned and franchises in the US and over 75

countries (Domino's Pizza, Inc. SWOT Analysis, p. 3). Their menu offers not only pizza, but also


"pasta, oven baked sandwiches, wings, boneless chicken, salads, breadsticks, cheese sticks, and a

variety of dessert items."

The brand was named a "Megabrand by Advertising Age magazine in 2009" and was also

"ranked number one in customer satisfaction in a survey of consumers of the U.S. largest limited

service restaurants, according to the annual American Customer Satisfaction Index (Sauber et al,

2012, p. 300)." Even though the 30-minute free delivery promise hasn't been the rule in over 20

years, the concept is still well-incepted in the customers' minds. This branding recognition

factor—and the ubiquitous quality of the product—creates an advantage when applied to the

mobile and online ordering, tracking, and delivery or carry-out process.

Data Collection: Crunching Numbers

Domino's Pizza has been collecting data since the early 80s starting with simple

collection of "ZIP codes, order frequency, delivery times" and more (Daley, 2016, p. 135). Other

data that can be accessed today can be: name, address, phone number, city, zip code, ethnic

background, household, education, purchase frequency, ordering preferences (online, mobile,

phone, or physical stores), psychographics, and food and flavor preferences. Their chief

information officer Kevin Vasconi practically says that they get their "hands on" anything and

"crunching" numbers later, but always being careful "custodians" of this data within which they

find insights based on zip code targeting, geo-targeting, time correlations, demographics, and

food preferences (e.g., vegetarianism) simply with purchasing behaviors (p. 136).

The problem with data collection is that it has become harder as consumers have become

more aware of situations such as data breaches or data mishandling. Either way, if we consider


mobile and social media marketing, we can see that this is where customers let go of such

restrains and opt-in regardless, opting out much later and after the fact. This is another advantage

to interactive mobile marketing.

Domino's Pizza collects big data online, via their mobile app and online versions of the

site, after phone conversations, and walk-ins, coupon and discount code redemption, and via

product surveys. E-mail CRM insights also provide numbers that can be crunched with users'

mobile, online, and phone ordering onto one merged file for each customer. The information

inferred from purchases can give insights to frequency and dates orders were placed, food

preferences, referral sites, creating sub-segments to target, and correlating most wanted items

related to a specific purchase with cross-selling recommendation techniques at the time of

purchase. To contrast this company, let's take on Pizza Hut who also have successfully used

analytics to target and personalize offers. According to Tieri's interview with Juliana Lim, Senior

Marketing Director at Pizza Hut (2012), they not only "segment customers on the basis of their

behaviors" and follow up on "customer behavior, adoption of consumer re-marketing and usage

of multichannel real-time technology across mobile, social, and in-store media," but they also

match "the right media—email, mobile, direct mail, web—to the right customers resulting in

better response." Some of the “big data” that Domino’s collects is gathered from:

Walk-ins: Point-of-Sale: Of course, walk-ins are the traditional way to process

customer's information, but sometimes creating satisfaction surveys on the back of

receipts (connecting a referral code with the store and time of service) as well as getting

coupons at the point-of-service/sale for a future visit (that also connect with the store) can

be helpful. Mothers with children who may usually shop together may be a good target


for these “satisfaction surveys” or direct advertising with coupons and receipts as they

tend to keep receipts due to budget concerns.

Carryout: Carryout orders are usually placed by phone, but are also done via the

internet, and mobile. According to Sauber et al (2013), the carryout market—producing

$13.8 billion of sales in the twelve months ended November 2009—and pizza delivery

comprise "the largest components of the U.S. QSR pizza industry" and Domino's is

"favorably positioned to compete in the carryout segment given its strong brand identity,

convenient store locations, and affordable menu offerings (p. 300)." As mentioned

before, millennials are apparently at the forefront of takeout preferences, who: order late

night, want value and convenience, and prefer easy on-the-go formats (Kelso, 2012).

Mobile: Mobile data has become quite profitable for the company, and considering how

"according to SmartBrief, only 22% of restaurants in the US have mobile apps," we can

see how Domino's Pizza can be ahead of the curb (Raymer, n.d.). The mobile app not

only lets create the order, find a store, use coupons/promotions, and login to account, but

also connects the “Pizza Tracker” feature with text messages, informing the customer

about the readiness of pizzas out for delivery, which can also benefit customers opting for

carryout (Brandau, 2009).

Online and E-mail Analytics: Incoming website traffic, QR code referral, coupon

redemption, Groupon referrals, and email response rates all comprise data that can be

unified to pursue particular segments for Domino's Pizza. It can go even deeper than that,

like: collecting birthdays, anniversaries, or emails in exchange for specials and

promotions. Online communicates and integrates with mobile, e-mail, and those who

opted-in to SMS messaging for the total understanding of the customer's data created.


Testing Segments: Millennials and Households w/Children

For the purpose of this plan, I will be focusing on the households with children target

(opting for: a direct mailing program with cooperative mailings, local food mart magazine inserts

such as Vons' and Costco’s, as well as a simple call-to-action ad placed on a free gaming app)

and the Millennial 18-24 year old customers (opting for: a small direct postcard program,

advertising on MBTA's brochure and website, and Spotify-sponsored half hour sessions). Both

targets will follow the 80/20 principle—i.e., that “approximately 20 percent of a company's

customers generate 80 percent of its profits"—so we will have to target medium-to-very loyal

customers that are already data-mined from the house lists, but also try to cast a wider net on the

Millennials and families with children (Spiller & Baier, 2012, p. 106).

Testing 18-24 Millennials. According to Sauber et al (2012), "Mintel surveys reports

that 21% of people in the 18-24 age category purchase pizza more than three times a month,

compared to only 7% of those aged over 65 (p. 301)." To test direct/interactive marketing

techniques, we will position ourselves in Boston, MA, particularly the greater Boston area—a

hub for Millennial college and university students—within the zip codes of 02118 (population:

27,873) and 02116 (population: 21,793) as well as Babson College Business school in Wellesley,

MA at 02457 (college’s population: 2,107). According to MyBestSegments (2016), the intended

targets will be the Urban Achievers and Young Digerati who are, among other things, into:

shopping at FedEx Office, reading comic books and New Yorker, rent, watch soccer, drive a

Toyota Yaris or Audi A3, travel to far countries, or watch Independent Film Channel.

1. Direct Mail: Postcard Coupon Code Invitation: Looking within the segment of 18-24

year olds, male and female, unique customers who have purchased three orders or more


in the last month, who either have purchased on a Friday/Saturday night (for girls) or

during home-based NBA Boston Celtics games (for the men), will be firmly targeted with

a direct mail postcard. Two populations will be sampled in the 02118 and 02116 zip

codes: Piece of the Pie Rewards Members and Non-members with a sample population of

13,000 and 2,000 respectively. The Babson College sample population will be 1000

testing non-members. The postcard will include a QR Code that directs to the website,

with a targeted message, such as:

For Men: -It is the season. Come Get Some Domino's! - Visit our website NOW and

receive a personal code to redeem free chicken wings with the order of a large pizza.

For Women: -Girls Night In! Visit our website NOW and receive a personal code to

redeem two extra cheese toppings and a small desert with the order of a large pizza.

2. Massachusetts Bay Transportation Authority: The MBTA can help us target segments

with in-car and display commuting advertising as well as brochures given at the point-of-

service. According to Emwemeka (2015), "based on a survey of 660 college-educated

residents in the Boston area between the ages of 20 and 37" it was found that they highly

depend on public transportation in the area. Demographically speaking, "66 percent rent

their current residence, while 32 percent own"; psychographics-speaking, they are loyal

to the area that they live in, and also use "other transportation options —84 percent use

Uber, 39 percent use Hubway, 27 percent use Lyft." Specifically, when asked how they

normally get around, "49 percent of respondents said they use the subway or Green Line,

24 percent use an MBTA bus or Silver Line and 13 percent use the commuter rail." Most

colleges offer their students monthly and semester passes. For example, Boston


University (BU) offers an MBTA student semester card with 11% discount for students.

Advertising inquiries can be reached at: www.mbta.com/business_center/advertising

Figure 2: Retrieved from www.bu.edu/parking (2016)

All of this gives us an insight and an opportunity for a direct marketing program

ad in the aforementioned stations and lines. In addition, placing a simple ad at the back of

the MBTA brochure that aims to have a call-to-action can look like this:

“Hungry and on the Run? Download the Domino's App and receive $5 dollars your

purchase of $10 or more!”

3. Spotify Free: Domino's has become

quite resourceful when it comes to

mobile marketing. Spotify is another

way that the company can place a

Sponsored Sessions ad. According to

Figure 3: Retrieved from www.mobilemarketer.com (2016)


Samuely (2016), “this interactive strategy has previously resulted in better retention rates

among individuals” who are free users, who are in a sizeable targeted pool, greatly

outnumbering paid users: 60 million total vs. 15 million paid.

This is a simple square-format ad with targeted advertising, and in exchange for

listening to the full advertising content, they get half an hour of ad-free listening. Also,

shorter 9-to-11 second ads that require listening, with a call-to-action "click here for more

information" can be added. These ads target non-Premium Spotify free users, in the geo-

targeted Boston area for the purpose of this study. The Spotify program will be geo-

targeted to the intended areas.

Testing Households with Children. According to Sauber et al (2012), "among households

with children, 20% purchase pizza more than 3 times a month, compared to 12% of those

households with no children," they are more likely to visit a pizza chain. Counterintuitively

though, households of "$100,000 and beyond are more likely to prefer pizza from independent,

local pizzerias (p. 310)." This means that if we want to target this segment, the house lists and

response rented lists should consider households with young kids 3-13 years of age, who make

less than $100,000, within the 25-44 years old range, and with a purchasing behavior of 3 times a

month or more. The psychographics to target, according to MyBestSegments (2016) are: Midlife

Highlife (on the younger side of the spectrum who make a median household income of $87,372,

have kids, purchase Wine magazines, travel to the beach, and use “discount brokerage services”)

and Upward Bound (who are on the little older parents w/kids, with a median household income

of $86,901, who probably drive a Mazda SUV and order from zappos.com). Considering this

important piece of information, we can position a geo-targeted campaign aiming for Boston,


MA’s Belmont and Marblehead areas with the zip codes of 02478 (population: 24,864) and

01945 (population: 19,808).

Figure 4: Rating the Supermarket Chains. Boston.com (n.d.)

1. Direct Marketing: Postcards. Rewards members and non-members will be targeted with

attractive, family friendly propositions and discounts that appeal to their kids. Renting

response lists can be accessed and retrieved from Nextmarks.com going for those

families who belong to amusement parks in the intended target areas such as: Six Flags

New England or Water Country. The cost of retrieving such list is:

2. Cooperative Mailings: Valpaks is an excellent cooperative mailing program that gives

direct response advertisers the opportunity to connect with the consumer, reducing costs

in reaching these prospects (Spiller and Baier, 2012, p. 191). This testing program works

for client acquisition and conversion. The sample populations will be divided between

3. Local Super Market Coupon Inserts: According to Boston.com (Rating the Supermarket

Chains, n.d.), supermarkets such as Costco, Wegmans, Publix, and Fareway are popular

in the area. I would even add Vons, Target, and Walmart into the mix. This testing

program works for client acquisition and conversion.


4. Videogame App Ad: According to an Entertainment Software Association (ESA) report

(2013) entitled “Mom Gamers Study: A New Generation of Gamer,” it was found that

"among moms who play video games, 75 percent do so on a weekly basis, and more than

one-third (38 percent) play daily...on a variety of platforms, but smartphones and other

mobile devices are the most popular." There are a myriad of free videogame apps, such

as: Futurama: Game of Drones, Slide the Shakes, Faily Brakes, or Cooking Mama Let's

Cook Puzzle (Grannel & Saldana, 2016). Here, engaged mom gamers can be targeted

with Domino's Pizza ads with this copy:

Forgot Something for the Kids? How about a large pizza with 3 toppings for $8.99!

Call: (Insert Geo-Targeted Number here)

Increasing Mobile Sales: Millennials

SMS Marketing: Filling out the Domino's Pizza profile gives

the user the ability to sign up for EASY ORDER™ , email & text

ordering, have saved payments options, and sign up for "Piece of the

Pie Rewards". Measuring how many orders get fulfilled using SMS

can be easily measured by the marketing team with response lists and

rates retrieved from the phone records communications. This program

works for already acquired and converted clients, as a retention

method for continuous engagement.

Figure 5: Retrieved from www.dominos.com (n.d.)


Emoji Tweet: Signing up for easy order EASY ORDER™ also rolls with Twitter as

tweeting the emoji tweet of a pizza (or the hashtag #EasyOrder) to Domino's will result in

ordering the preferred pie of choice in seconds. According to Schuman (2015), "consumers must

also add their Twitter handle to their profiles." Measuring Twitter communications like these are

simple due to in-Twitter measuring analytics on the account's dashboard

(https://support.twitter.com/articles/20171990). Within this dashboard, organic tweet analytics,

metrics, engagement numbers as well as export lists can be produced and studied (Kohn, n.d.).

Tentatively, the cost of promoting this program on social media channels would be $48,000 with

targeted Twitter, Facebook, and Instagram ads analyzed by the Domino’s in-house marketing

team. These accounts have 1.03M, 10M+, and 628k followers respectively, but the geo-targeted

areas will be pinpointed with sponsored ads.

InstaSize – Photo/Video Formatting App: Placing ads on a Photo-formatting app such as

"Instasize" could be of great use for Domino's advertising. A free app often used by those who

want to frame their pictures and add effects and other features, it allows companies to advertise.

What happens is that just as the photo is ready to be exported, there is a second-to-three second

wait between options that gives a chance for a fast advertising bit. Clicking on the ad, even by

Figure 6: Tweet-to-Eat - Retrieved from ComputerWorld.com (2015)


curiosity, may help Domino's to gain access to those who are so mobile involved that would like

to—why not?—order a pizza to satisfy their Millennial whim. This method is to test client

retention.

Groupon

Associating with Groupon, the leader in e-commerce

marketplace offering local deals and promotions, would

be significant for the purpose of this campaign, not

exactly for profits but to get the word out (the program

referral doesn’t cost per se, but the commissions do and

can be up to 30% or more). The direct marketing

program association with Groupon should adhere to the

Boston, MA area, making sure that Domino's comes up

at come up organically at the top of the "pizza" searches. Promoted searches can be pushed on

Groupon’s site and mobile app with a budget of $19,000 in the geo-targeted zip codes of 02118,

02116, 02457, 02478, and 01945. The company can offer deals under the simple URL for better

indexing: The copy for this medium can be:

- www.groupon.com/local/GreaterBoston/Dominos

- www.groupon.com/coupons/stores/dominos.com

- Carryout Only $7.99 Large Pizzas Monday Through Thursday (men and women)

- Carryout Only $8.88 Three Toppings Large Pizza - Boston Celtics Game (Men)

- Carryout Only $6.99 Four-cheese Pizza (Women)

Figure 7: Coupon Retrieved from Groupon.com (2016)


Test Budget Chart: Millennials, Households w/Kids, Social Media, Mobile, and Groupon

Zip Code Sample Population Customer Method Frequency Cost

*02118 13,000 Rewards Program Postcard 15x $16,000

2,000 Non-members Postcard 15x $4,000

Thousands New Customers MBTA 3 months $11,000

Thousands New Customers Spotify Free 3 months $15,000

*02116 13,000 Rewards Program Postcard 10x $16,000

2,000 Non-members Postcard 15x $4,000



*02457 1,000 Non-members Postcard 10x $1,700



Total $118,200

Zip Code Sample Population Method Frequency Cost

*02478 4,000 families Rewards Program Postcard 20x $17,000

2500 families Non-members Postcard 20x $10,000

Thousands New Customers Valpak 10x $7,000

Thousands New Customers Inserts 3 months $8,000

Thousands New Customers Videogame App 3 months $10,000

*01945 4,000 families Rewards Program Postcard 20x $17,000

2500 families Non-members Postcard 20x $10,000

Thousands New Customers Valpak 10x $7,000

Thousands New Customers Inserts 3 months $8,000

Thousands New Customers Videogame App 3 months $10,000

Total $104,000

Reach Method Frequency Cost

Thousands Social Media Ads 3 months $48,000

Insta-size Ads 3 months $10,800

Groupon Mobile - Ads 3 months $19,000

Total $77,800

Millennial Boston Area

Households w/Kids

Mobile


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Running head: DIRECT/INTERACTIVE MARKETING PLAN FOR …€¦ · DIRECT/INTERACTIVE MARKETING PLAN FOR DOMINO’S 2 Direct/Interactive Marketing Plan for Domino's Pizza Increasing