Market Segmentation

Katherine Blumhardt, Jacinda Myre & Maricia Stafford

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Table of Contents

Executive Summary 3

Company History 4

Company Situation 4

SWOT Analysis 5

Target Consumer 6

Media Budget 7

Media Plan Objectives 9

Execution 11

Appendix 18

Reference 19

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Executive Summary

As the second largest pizza company in the world, Domino's has established itself as a

household name across the United States as well as internationally. During this

pandemic of 2020, American’s rely on the conventionality and safety of known brands.

We aim to reach millennial families in six specific counties during the COVID-19

pandemic and Domino’s is allocating a $50,000 budget to achieve this goal. Domino’s is

a leader in the pizza industry, as well as in delivery orders but there is room to expand

with its takeout business. With $50,000, a number of direct print marketing and direct

digital marketing will be implemented over the course of three months in Wayne,

Monroe, Washtenaw, Macomb, Oakland, and Livingston counties to try and reach the

target audience. We are allocating $34,000 of the budget to direct digital marketing and

$16,000 of the budget to print marketing. The direct digital channels will include email,

mobile, display ads, search engine, and social media marketing. The direct print

channels will include mailers and promo swag. By utilizing these different channels,

Domino’s can create sales growth, establish brand loyalty, and increase awareness.

Company History

Domino’s Pizza is the second largest pizza restaurant chain in the world, the number

one in pizza delivery, and the second largest for carryout. The company has come a

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long way since its humble beginning. In 1960, brothers Tom and Jim Monaghan

borrowed $500 to purchase DomiNicks, a local pizzeria in Ypsilanti, Michigan,

(Boyer, 2007). Eight months later, Jim Monaghan traded his share of the restaurant for

a Volkswagen Beetle. In 1965, Tom renamed the business “Domino’s Pizza, Inc.” (Our

Heritage, 2008; Spiller, 2020).

By 1978 there were 200 franchises in operation. Domino’s opened its 1000 stores

five years later.In 1983, Domino’s opened its first international store in Winnipeg,

Canada (Figure CA-5). This paved the way for a global expansion of 1,000

pizzerias overseas—in Europe, Australia, South America, Africa, and Asia—by 1995. In

2015, Domino’s had 7,330 international stores. (Domino’s Annual Report 2015; Spiller,

2020).

After 38 years of ownership, Tom Monaghan announced his retirement and sold

Domino’s Pizza to Bain Capital, Inc., in 1998 (Domino’s Founder to Retire..., 1998). A

year later, the company named David A. Brandon Chairman and Chief Executive Officer

(Domino’s Pizza, Inc., 2008). The company went public in 2004 (Spiller, 2020).

Company Situation

Positive Negative

Internal Strengths

● Strong Brand Equity

● Technological Leadership

● Product Innovation

Weaknesses

● Quality Perception

● Promotion Failure

● Operational

Uniformity

● Health Alternatives

● High Turnover

External Opportunities

● Expansion

○ Nationally

○ Internationally

Threats

● Economy

● Competition

● Healthy eating

trends

● Financial stress

(Spiller, 2020)

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SWOT Analysis

Positives

Strengths

● Strong Brand Equity - Largest pizza brand in the world

● Technological Leadership - Pioneering in digital technology has been vital to

Domino’s long-term success.

● Product Innovation - Recreated its core pizza formula from scratch and came up

with a new recipe.

Opportunities

● Expansion - The world pizza market continues to grow over the next several

years giving Domino’s an opportunity to expand globally as well as nationally.

Negatives

Weaknesses

● Quality Perception - Past quality perception has left Domino’s consumers with a

bad taste. Not until about 10 years ago did Domino’s decide they needed to

make changes to their recipe, nutritional value and quality.

● Promotion Failure - In 2014 Domino’s partnered with MLD to run a promotional

event. Due to high digital traffic and lack of technology capability, many fans

were left disappointed when Domino’s failed to fulfill their bargain.

● Operational Uniformity - 97% of stores are owned and operated by different

franchise owners. This makes it difficult for all franchises to get on the same

page when implementing new operational and promotional improvements.

● Healthy Alternatives - Today more consumers are looking for healthy, nutritional

food options. Domino’s does not provide any healthy alternatives on their menu.

● High Turnover - Domino’s does not provide many promotion opportunities to its

store workers. There is a high turnover rate among employees.

Threats

● The Millennial Market - Millennials pose major challenges for the pizza market

due to relying on social media and mobile technology to communicate, reliance

on digital coupons, and resistance towards corporate brands.

● Economy - Since the pandemic lockdown, the economic growth and lack of

income growth in the middle class has taken a huge hit causing a reduction of

sales and profitability.

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● Competition - Increased competition from fast-casual chains, independents, and

take-and-bake options.

● Healthy eating trends - More people are consuming healthier food.

● Financial stress - Rising minimum wages and depleting labor force add to a

struggle for Domino’s to keep their operation staffed as their profit is squeezed by

stagnant pizza prices.

Given the various threats and weaknesses that Domino’s is currently facing, our goal is

to focus on reversing several of these through this campaign. We will primarily

concentrate our efforts on the promotion of Domino’s pizza to the millennial market.

Target Consumer

Domino’s will be targeting millennial families in six specific counties during the COVID-

19 pandemic and economic change. By targeting millennial families, Domino’s will focus

their efforts on the soon to be the largest and most diverse generation. This generation

is one of Domino’s biggest threats since they are greatly diverse, adaptable, and

resistant to corporate brands. This campaign’s mission is to take one of Domino’s

biggest threats and turn it into an opportunity and strength by building brand loyal family

members.

The total population between Wayne, Monroe, Washtenaw, Macomb, Oakland, and

Livingston Counties in Michigan is approximately 4,600,479 people (Census Reporter,

2020). Within these counties, 21.6% of the population are ages 23-38 that make up the

millennial generation (Dimock, 2019). There are an estimated 993,704 people in these

six counties who are identified as millennials. 68% of households in Michigan are

claimed as families with children under the age of 18 (figure 1).

Figure 1 (censusreporter.org, 2020)

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These counties fall into the Young Accumulators and Mainstream Families. They are

lower midscale, younger than age 55, own their homes, and vary in employment levels

(Claritas, 2020). Overall, this group of people own at least three pieces of household

technology, have a child, and are educated. They tend to watch network TV, browse

online, listen to country music, shop at Sam’s Club, and drive a Hyundai (Claritas,

2020).

Psychographically, millennials as a generation, embrace visible sustainability and are a

generation that wants to build stronger connections with brands that promote

sustainability into their corporate responsibility. Millennials focus on foods that benefit

them and are concerned with high quality ingredients (Fromm, 2016). They are willing to

spend more money to get fresh foods fast. Millennials enjoy convenience but are

cognizant of where their ingredients are being sourced from. In the food industry it is

important to hone in on marketing that hits these key points.

Media Budget

Figure 2

The media budget is $50,000. The chart (figure 2) indicates how much of the budget is

directed towards each media outlet. A more detailed budget is available in figure 3

including a $5,000 buffer should we exceed the $50,000.

Campaign Budget - $1,000

● Direct Mail - $12,500 ● Email - $5,000

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● Mobile - $10,000 ● Display advertising - $7,500 ● Interactive marketing - $5,000 ● Search Engine Marketing (SEM) - $2,500 ● Social media - $7,500

Our focus is based on the millennial behaviors listed below:

● 79% of millennials use social media more than once a day (Rivera, 2020)

● 87% of millennials use Facebook at least once a week (Rivera, 2020)

● 86% of millennials use YouTube at least once a week (Rivera, 2020)

● 71% of millennials use Instagram at least once a week (Rivera, 2020)

○ 80% of users follow at least one businesses account and over half of their

users use the app to discover new products and services (Rivera, 2020)

● 52% of millennials use Snapchat at least once a week (Rivera, 2020)

● 42% of millennials use both Twitter and Pinterest a week (Rivera, 2020)

● 78% of Twitter users live outside of the United States giving the opportunity to

expand Domino’s internationally (Rivera, 2020)

Figure 3 - Detailed Budget

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Media Plan Objectives

Our goal is to reach our target market during the COVID-19 pandemic. We plan on

fulfilling this through implementation of the following media objectives:

● An ad on social media sites including Facebook, Youtube and Spotify to have a

click through rate of 70%.

○ With millennials families staying safe at home throughout the day, it is the

perfect time to increase our awareness with advertising on social media

platforms. Utilize Google Analytics to track the rate of growth during this

pandemic.

● Increase customer engagement on Domino’s app and social media pages.

○ Utilize social media statistics to create a growth plan for likes, follows,

shares, hashtag and app usage. To increase engagement, create contests

on all social media platforms using hashtags and shares to win a prize.

● Build relationships with consumers by increasing the customer lifetime value by

20%.

○ 81% of consumers say they expect businesses to both understand them

and know when the right moment to approach them (12 Proven Tactics…,

2019). By personalizing a message on the Domino’s app, consumers will

feel like they have a trusted relationship. Along with the messages,

creating a rewards program to allow consumers to get incentives.

● Increasing offline sales by promoting Domino’s in grocery stores like Kroger,

Meijer and local markets with signage and coupons.

○ Groceries stores are the main source for families to shop for food during

the pandemic. Domino’s can print coupons on the back of local grocery

store receipts to give families deals on their items. With only essential

places open, advertisements can be placed on paper ads for shoppers to

look at.

○ Coupons can include back to school promotion. Since school is to be

determined for fall, stores have a cash back coupon for families. If you

spend $20 dollars on school supplies, you get $5 bucks back for a future

purchase at Domino’s.

We aim to reach millennial families in six specific counties during the COVID-19

pandemic and Domino’s is allocating a $50,000 budget to achieve this goal. Domino’s is

a leader in the pizza industry, as well as in delivery orders but there is room to expand

with its takeout business. With $50,000, a number of direct print marketing and direct

digital marketing will be implemented over the course of three months in Wayne,

10

Monroe, Washtenaw, Macomb, Oakland, and Livingston counties to try and reach the

target audience. We are allocating $34,000 of the budget to direct digital marketing and

$16,000 of the budget to print marketing. The direct digital channels will include email,

mobile, display ads, search engine, and social media marketing. The direct print

channels will include mailers and promo swag. By utilizing these different channels,

Domino’s can create sales growth, establish brand loyalty, and increase awareness.

Media Strategy

Digital: 86% of Americans who use the internet at least occasionally using a

smartphone, tablet or other mobile device – 92% go online daily and 32% go online

almost constantly (Kumar & Perrin, 2019). With digital being an effective marketing tool,

there are numerous ways for Domino’s to differentiate their marketing efforts to

consumers. Domino’s took advantage of this and over the past 5 years, the company

has built an impressive, digital experience by transforming their menu and integrating

digital into their advertising. Listed below are the digital marketing tactics to target our

demographic. More detailed explanation can be found in Appendix 1.

● Email marketing: 99% of consumers check their email every day and it is the

preferred way to receive updates from brands (Riserbato, 2020). Users want

emails from brands/stores that they agreed to receive. During this pandemic, it is

important for Domino’s to increase their reach to users while millennials families

are on a stay-at-home order.

● Mobile marketing: In 2018, over half of Domino's sales were placed on mobile

devices from apps for iPhone and Android, Slack, Twitter or “One Tap” feature

which allows mobile customers to repeat an order without entering information

(How Digital Marketing…, 2018). As stated above, 86% of Americans are on a

smartphone and during this pandemic, the percentage most likely increased.

● Display ads: Facebook, YouTube and Spotify will have banners displaying

Domino’s and their current deals. An average U.S. user sees approximately 63

display ads per day (Muhammad, 2018).

● Interactive marketing: It is estimated that, as of 2018, there were 2.2 billion

mobile gamers in the world (Iqbal, 2020). In 2011, Domino’s placed a game on

app stores called “Domino’s Pizza Hero”. The app was a separate app from the

Domino’s ordering app. Instead of an app, a website will be created to display

games consumers can play on any device.

● Search engine marketing (SEM): Google is one of the top search engines

people use. Google captures almost 85% of mobile traffic which is great but

Domino’s competitors are also competing for the same traffic (Forsey, 2018). For

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Domino’s to be one of the top pizza searches we will use Google Ads to help

track what keywords are being used by users to find Domino’s.

● Social Media: Domino’s used Facebook and Twitter to reinvent their image on

social media. The company sought feedback from their consumers whether it

was negative or positive. Domino’s launched its “Think Oven” initiative to find

insight from customer opinions and brainstorming. The ideas were submitted on

Facebook and the ideas with the most attention were rewarded with a prize and

implemented with the company (How Digital Marketing, 2018). Currently

consumers can order pizza from many social media sites like Facebook

Messenger, Twitter, Google Assistant and more. Now that more social media

sites are emerging like Tik Tok, Snapchat and Instagram, Domino’s should

appeal to those users since our demographic uses these platforms.

Print: Not all consumers have the access to the internet. Our marketing strategy

includes using print marketing to reach those consumers by direct mail and/or

promotional items. Data shows that 79% percent of consumers read or scan advertising

mail and find direct mail more convenient than going online (8 Engaging, Marketing

Pring…, 2019). 16k spent on mailers and promo swag

● Direct mail: To target all of our consumers, using direct mail can increase our

awareness to our demographic. Some consumers may throw it away thinking it is

junk mail unless it is a product and/or service they are interested in. Direct mail

has a median ROI of 29% (13 Reasons Why Direct…, 2020). Mail is not the first

marketing tactic companies think of but with there being less mail, this is the

perfect opportunity to advertise. Domino’s can send a flyer to millennial families

along with the promotional items below. On the flyer, a QR code will be available

for consumers to scan and access the Domino’s website. This information can be

tracked since it will be a unique tracking site.

■ Promotional items will be sent to consumers using

discountmugs.com.

● Hand sanitizer

● Stress balls

● Magnets

Execution

Our overall theme and call to action is to promote family unity during this covid pandemic. This will be executed through the purchase of Domino’s pizza combined with family games provided by Domino’s, ultimately creating a family pizza/game night. To connect with our millennial families during this time of uncertainty, we have reintroduced icons from their childhood. These retro icons bring back familiarity and comfort to times when life seemed a little more carefree.

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Due to high levels of stress, many millennials tend to suffer from anxiety and depression. As a result, we tend to hold onto things that remind us of our childhoods. Now that millennials are contributing to the economy as consumers, companies are taking notice and are using things from the past to reel us in with their marketing strategies (Redding, 2019).

We are reviving “The Noid” and “Donny Domino” (figure 4) for a limited time. “The Noid,” was created in 1986 and “Avoid the Noid,” was very popular in Domino’s delivery. “The Noid” became so popular that a Saturday morning cartoon was created in 1988 as well as a video game in 1989 (Wikipedia, 2020).

Figure 4

Print Material

Direct Mailers:

● Coupons/Promos

○ Family Pizza/Game night flyers that include “The Noid”. Games such as

mazes, crosswords, and word finds are printed on the back. If the games

are completed, they can be utilized as coupons. New flyers (figure 5 and

6) with additional games/coupons will be attached to the pizza box when

consumers receive their orders.

Bring in completed mazes for 10% off!

Figure 5: Front of Noid Mailer Figure 6: Back of Noid Mailer

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Promotional SWAG:

● Magnets

○ An effective way of capturing customer attention are refrigerator magnets.

These magnets will have pictures of either “The Noid” or “Donny Domino”

with the Domino’s Pizza web address, phrases like “Surviving 2020 with

The Noid” and a code printed on the back for 10% off. All customers need

to do is order through their app and type in the promo code. The promo

code can be used up to 5 times before it expires. Since these will only be

available for a limited time, they will be considered collectibles.

● Stress ball

○ Staying at home while working and raising a family can be stressful.

Squeezing stress balls with “The Noid” printed on is a way to relieve some

of these tensions. It's also a helpful reminder that dinner can be easy by

calling Domino’s.

● Hand Sanitizer

○ America is on high alert regarding our health. Mini bottles of hand sanitizer

will be included with orders for a limited time with “Donny Domino” or “The

Noid” on the label.

Digital Material

Email:

● Coupons/Promos

○ Millennials value discounts. “A millennial’s desire to pay less for a product

also trumps his/her loyalty to a brand.” (What is a Millennial?, 2018)

Coupons and promos will be sent to consumers via email, varying from a

flat rate price of $5.99 per item of any large pizza, bread twists and a

dessert or 50% off a large pizza online only when consumers sign up for

Domino’s reward program. Flat rate pricing can increase customer

volume, which leads to high profitability when the cost of goods is low

(Davidson, n.d.).

○ Digital coupons are used more within millennials to find a deal on food.

48% of millennials use digital coupons. 64% of millennials search for

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coupons on their smartphones (Littleton, 2017). In the appendix, you will

find 4 coupon deals we will send to our target market

● Game Interactions

○ Included in the emails will be a game interaction advertisement. Users can

click on the ad and another screen will pop up to play digitally. The games

will include a crossword puzzle, pizza trivia, a memory game & I Spy.

Once on the home screen of “Domino’s Game Quest,” users will be able

to choose 1 out of the 4 games to play. When users hit a certain high

score, consumers will receive a coupon for their next purchase.

○ 7 out of 10 millennials play a mobile game at least once a month for an

average of 9.7 hours a week (Partis, 2019). With our target audience

being millennials with children during the COVID-19 pandemic, creating

games can distract either the parents or children.

■ Variety of crossword puzzles and pizza trivia for parents

● These games were chosen to improve mental health.

Crossword improves mental health and during this time, it is

important to encourage positive thinking (Bhagat, 2018).

■ Variety of memory games and I Spy games for children.

● These games were chosen for children to develop their

cognitive skills. Memory games give space to critical thinking

and that helps children nurture their attention to detail

(Wynne, 2019).

● Mobile App

○ Domino’s mobile app will have specials displayed within the app as well as

direct texts with coupons to entice the target market to buy their pizza.

These coupons will also direct users who have previously purchased from

Domino’s to buy again but this time add a side to their order. The main

messaging will be either a percentage off if they buy online, a buy-one-

get-one (BOGO) deal for family nights, or a mix & match deal at $5.99

each to encourage additional sides like chicken wings, bread sticks,

deserts or pasta. These coupons will appeal to the market by encouraging

them to stay home and get affordable dinner delivered.

Display Ads:

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● YouTube banners will advertise Family Pizza/Game night and directly link to

online games posted on various social media channels. “64.2 million people born

between 1981 and 1996 will watch streaming video or video downloaded onto a

device at least once a month this year.” (Fitzgerald, 2018) This makes it

imperative for ads to be displayed on YouTube.

Search Engines:

● Google Ads

○ Domino’s Google ads will drive new customers to their website and entice

viewers with meal deals for those already looking for pizza delivery. This

ads copy will vary by county to better appeal to each marketing

demographic. For example, if one county has more millennial families then

family discounts will be included but if the county has more single

millennials then appetizer coupons will be included. Domino’s Google ads

will be search based ads that are dynamic and will put forth the headers

that perform the best with the matched audiences. There will be multiple

ads rotating depending on the coupons running and the six counties the

target markets live in. These ads will also appear in Google’s affiliate sites

as well. Certain headers will perform better in different counties. Dominos

would be competing against other pizza delivery companies like Papa

John’s, Pizza Hut, Round Table and Little Caesars. To drive new

customers to the website, the messaging needs to be engaging, affordably

priced, and highlight fast delivery during COVID. The copy would look like

“Domino’s Large Pizza 11.99 Each | Fast Delivery | Dinner Made Easy”,

“Domino’s | 19.99 Combo Deal | Just For You”, “Domino’s All 3 Topping

Pizzas 7.99 Each | Friday Family Nights Made Easy”

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○ Mobile, Desktop & Display Ad Samples (figure 7)

Figure 7

● Bing

○ Domino’s Bing ads will parallel the Google ads messaging but will target

the users on the other search engines. This will allow Domino’s to target

viewers who don't use Google as their main search engine. Bing ads will

show up in Yahoo, AOL and Microsoft sites. This will contribute to a well-

rounded digital marketing strategy in order to encompass all six counties

no matter what search engine or internet browser consumers are using.

Social Media:

Many millennials use social media to stay up-to-date with their friends, news, and

favorite restaurants. We will be using some of the most popular social media platforms:

Facebook, Instagram, and Spotify to persuade our audience to purchase Domino’s

pizza. All platforms will look similar with the capturing of Noid as the primary theme.

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While staying at home, parents are looking for fun activities for their children to get out

of the house and have fun during these uncertain times. Domino’s will hold a contest

to“Find the Noid” to win a free item. Facebook and Instagram will be posting about the

contest while a Noid playlist on Spotify will be created with hits from the 80s and 90s.

● On social media, clues will be posted on how consumers can “Find the Noid”.

From March - June, every month Domino’s will place 10 sticker Noids to find

either near a Domino’s location and on boxes purchased at Domino’s. The

location will vary from landmarks around Ypsilanti and Ann Arbor. A landmark will

include the Ypsilanti Water Tower and the Nickels Arcade in Ann Arbor. Every

Thursday and Friday, clues will be released on Instagram and Facebook on

where families can find the Noid. The Noids will be color coded based on the

prize. Three green Noids will have the prize of a free large pizza, two blue Noids

will be a free 40 piece chicken wings, two red Noids will be a free chocolate lava

crunch cake and the last 3 rainbow Noids will be a free large pizza, 14 piece

chicken wings and an order of stuffed cheesy bread. To prove when families

have found a Noid, they must have the physical sticker and bring it in to

Domino’s to redeem their prize.

Appendices

Appendix 1: Media Strategy

Email marketing: Users who have recently visited Domino’s without purchasing any

items will be a part of the mailing list. The messages will be personalized for potential,

current and future customers. Commercial email is still an important channel, especially

for CRM purposes. However, spam laws limit its use in creating new customers. CAN-

SPAM is a law that establishes requirements for commercial messages, gives recipients

the right to have you stop emailing them and spells tough penalties for violations (FTC,

n.d.).

Mobile marketing: While consumers are on their smartphones, coupons will be

available to be used directly on their devices. Domino’s can track who are using the

coupons as well as the consumer’s location. Mobile coupons are an effective way to

track and micro target consumers. By consumers allowing push notifications from

Domino’s pizza app, they will be rewarded semi-weekly with promotional deals as well

as weekly coupons.

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Interactive marketing: It is estimated that, as of 2018, there were 2.2 billion mobile

gamers in

the world (Iqbal, 2020). In 2011, Domino’s placed a game on app stores called

“Domino’s Pizza Hero”. The app was a separate app from the Domino’s ordering

app. The game app is currently not on iPhone or Android, which most consumers use.

Creating a website with our 4 interactive games will attract more users. Users will have

a chance to play the pizza making app game three times a day. If users get a certain

high score, they will receive a coupon code or a free pizza with a purchase of $10 for

their next order. This gives Domino’s consumers an incentive to continuously play the

game and access the website. The website will be available for all devices to play

including: tablets, laptops and smartphones.

Display ads: Facebook: One of the most popular social media platforms. Although

some millennials may not use their Facebook, users still have a Facebook account to

communicate with their families. 75% of millennials admit online ads influence their

purchasing decisions (Pickard-Whitehead, 2020). Spotify: Millennials actively stream

music to help them get through the less desirable moments in their day. 46% stream

audio as they go in and out of other social media apps (Spotify, n.d.). Being one of the

top music platforms, it is vital to put display ads on Spotify. Youtube: The third most

utilized social platform among millennials (Pickard-Whitehead, 2020). Ads are usually

displayed before a Youtube video and/or next to the video. Users will be able to click on

the display ad to be routed to the Domino’s website.

Search engine marketing (SEM): Using the keywords below and Google Ads, we will

be able to see which words are getting the most attraction.

○ Pizza delivery

○ Domino’s pizza

○ Domino’s coupon codes

○ Domino’s online

○ Domino’s menu

Appendix 3: Marketing Creative Examples

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Front of Direct Mailer Back of Direct Mailer

YouTube Banner

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Email - Digital Coupon Instagram Post

Text Coupon App Coupon

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Appendix 4: Detailed Budget

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