How Domino's Pizza Stayed On Top By Admitting That Their Pizza Sucked
Nov 21, 2013 20:24
Since 2008, Domino's Pizza has experienced massive international store growth, beating the growth rate of competitors like Pizza Hut and Papa John's Pizza. Founded in 1960 by two brothers, who borrowed $900 to pay for their first store and used a Volkswagen Beetle to deliver their first pizzas, today there are more than nine thousand stores around the world.
But it wasn't always like this. In 2010, strong competition, harsh criticism over the taste of its pizzas, and low consumer satisfaction levels left the future of the company looking bleak. That's when the management decided to adopt a surprising market strategy... by admitting that their product was awful.
The first thing they did was spend millions creating a new pizza from the crust up, testing dozens of cheeses and sauces before determining the final ingredients of its new pizza. They then carried out blind taste tests with 1,800 random pizza consumers to see which recipe was the most appealing.
When it was finally time to market the new pizza, the company implemented an honest marketing campaign by apologizing for their crappy pizzas in the past. They even developed mobile apps with great user experience, allowing customers to design their own pizzas, and revamped the company's online tracking system to minimize delivery time.
And the gamble really paid off big time. Not only did the company posted a 14.3% increase in revenue towards the end of the first quarter of 2010, the company's stock has risen by a whopping 400%.
[The Fool]
But it wasn't always like this. In 2010, strong competition, harsh criticism over the taste of its pizzas, and low consumer satisfaction levels left the future of the company looking bleak. That's when the management decided to adopt a surprising market strategy... by admitting that their product was awful.
The first thing they did was spend millions creating a new pizza from the crust up, testing dozens of cheeses and sauces before determining the final ingredients of its new pizza. They then carried out blind taste tests with 1,800 random pizza consumers to see which recipe was the most appealing.
When it was finally time to market the new pizza, the company implemented an honest marketing campaign by apologizing for their crappy pizzas in the past. They even developed mobile apps with great user experience, allowing customers to design their own pizzas, and revamped the company's online tracking system to minimize delivery time.
And the gamble really paid off big time. Not only did the company posted a 14.3% increase in revenue towards the end of the first quarter of 2010, the company's stock has risen by a whopping 400%.
[The Fool]
