Analysis of the current Dominos ecommerce and marketing strategy from an external standpoint identified missed opportunities and prospective areas for improvement relating to their ecommerce structure. Specifically it was identified that Dominos had the potential to leverage the established business structures of eBay and utilise them with speed and efficiency to create an innovative solution to fill a gap in the market place. Utilisation of an eBay store would grant Dominos first mover advantage in an extremely competitive industry with high buyer power that is heavily dominated by discounting offers.
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This innovation can target not only existing customers but also actively engage in the pursuit of a new customer base. In a marketplace dominated by traditional bricks and mortar business structures the online store allows Dominos to market to a wider consumer base and generate a point of difference. With comparatively low overall financial outlay, a successfully established online business that customers are directed towards and the ability to harness the proven business structures of eBay, the Dominos eBay Store is capable of meeting the market in rapid succession following approval. Table of Contents
Contents Introduction The purpose of this report is to present and critique the potential of Domino’s pizza establishing an eBay store in order to increase overall customer awareness of brand and generate income. An assumption is made that eBay would be conducive to a partnership of this nature and that non-monetary vouchers for foodstuffs does not breach the limitations of eBay listing guidelines. Without direct access to Dominos marketing strategy and brand research conducted by the Dominos group the report is limited to review of strategy and business operations from an external perspective.
It is identified that the Pizza Industry specifically and the Fast Food Industry as a larger whole is highly competitive. Dominos currently enjoys large market share and positive representation of brand, however incremental evolution of the business is required in order to ensure stability in this volatile marketplace before growth can be considered. The process of analysing the potential of this innovation was multi-faceted and considered the existingmarketing and ecommerce strategies of Dominos.
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Clearly establishing the gap in the Market in light of the Industry standard practice, competitor activity and customer expectations reveals that value perception of the Dominos brand can be positively impacted from both a customer and business perspective. Moving from the industry standardtraditional bricks and mortar business structure to the dynamic online marketplace would grant Dominos first mover advantage in a marketplace that all direct competitors are yet to capture.
Utilisation of the exiting information structures within the business limits business transformation requirements and significantly mitigates both financial outlay and time investment required to implement the innovation. Inclusion of a Rich Picture in the Appendices visually highlights the incorporation of the innovation into the Dominos ecommerce strategy. History Currently Dominos, via the letterbox and newspaper insertion of vouchers, invests heavily on residentially centralised marketing localised to the immediate vicinity of the franchise outlets.
Although geographically targeted to those residence with the most convenient access to the stores there is little manner in which to track customer engagement and follow through. This method of distribution also limits customer exposure to the frequency the store engages in the circulation campaign. Existing Dominos electronic marketing populates the majority of its clientele database with data entered directly by the customer engaging with the online ordering interface (Image 1).
Severely limited in scope it requires the customer to both be already committed to purchasing from Dominos and amicable to receiving electronic marketing. Further, this method of data collection requires Dominos to trust that the information being entered by the Customer is complete and accurate with limited ramifications on the Customer for inaccurate or incomplete information. Image 1 – Dominos Customer Interface Market Gap Analysis Overview
Currently eBay has millions of daily users and unique domains within 8 countries in the Asia Pacific Region that Dominos already has a recognized presence in. See Appendix 1 (EBay 2014) and Appendix 2 (Dominos 2014). By partnering up with an established and successful ecommerce business and utilising a focused marketing strategy Dominos, with an already established presence in the majority of countries in this region, is presented with a portal for advertising and brand exposure in addition to the ability to sell voucher deals.
Existing strategy is geared towards the evening dinner market and is utilised predominately by customers who ring up or go online to order when they are hungry. This innovation creates a limitless potential for exposure to new customers and an exponential sales increase via creating the option of purchasing a voucher at any time to utilise at their convenience. Marketplace Background Dominos online sales currently make up 15% of their profit margin with a growing trend and is forecast to become accountable for more than 50% of their profit margin. (Dominos 2013, p.8) Examination of the pizza industry with Porters Five Forces reveals High buyer power, threat of substitute products and rivalry, Medium threat of new entrants and Low supplier power (Appendix 3). This highly competitive and volatile marketplace makes it essential to create a point of difference and establish and maximise perceived brand value. Immediate Benefits With society become increasingly mobile and demanding of instant gratification (Muther 2013) Dominos needs to be able to meet and embrace this emerging culture. Successfully harnessing the clicks and mortar (Baltzan et al.2010, pg. 123) structure of an EBay store would allow Dominos to leverage what could effectively be described as a Customer to Customer relationship in a Business to Customer (Baltzan et al. 2010, pg. 125) interface. The EBay store would feature all the benefits of a pureplay (Baltzan et al. 2010, pg. 125) business whilst deferring the majority of hosting and data management costs to EBay. With the online store able to host multiple auctions the customer is able to access an auction at their convenience and leisure irrespective of time of day or location.
A customer currently residing outside the established distribution catchment of vouchers could conceivably purchase a voucher for a store in a town that they were visiting in a week at 11. 00pm at night. Dominos would also benefit from increased accuracy and completion of their clientele database as it is in the Customers best interest to ensure that shipping details, a mandatory requirement for any EBay account, and email addresses, required to create an EBay account, are up to date (Image 2). Image 2 – eBay registration requirements Value perception
Customer Given that value perception is the perceived value that a customer rates a good or service, “it is therefore vitally important for a company to use a customer focused strategy to obtain a competitive advantage over its competitors by making the target market value your good or service higher than your competitors”( Rahikka et al. 2011, p. 359). By implementing eBay as a Business to Consumer portal it targets a much larger consumer base. It also empowers existing customers. This enables customers to bid on bargains at their leisure.
With this new option of buying discounted pizza in advance it gives the consumers new options for buying pizza deals and using them at their convenience. This new business strategy will change the customer perception of Domino’s Pizza from a bricks and mortar fast food outlet that provides a quick service when you’re feeling hungry to an online fast food outlet that can be brought any time of the day in advance at discounted prices. Business Incorporating a business partner such as eBay grants Dominos instant access to millions of new customers, in the established eBay customers.
It also gives them more access to their existing customers as their existing customer base are known to be regular eBay users (Domino’s 2013). The benefits of this are increased brand exposure using eBay as a portal to advertise their products and brand names. The new customer base generated from this will result in increased traffic to their website which promotes the brand name and creates growth for the business. With this proposed innovation the company will be the first to utilise an already successful business with a huge customer base.
It also creates a larger awareness by people bidding on their deals at different times of the day not just when their hungry. The innovation also creates pre-sales, a significant advantage for Dominos as they can secure payments weeks in advance opening up potential investment funding opportunities which no other competitor in the industry have been able to secure. This grants Domino’s another first to market advantage in line with their digital advancement strategy (Domino’s 2013).
A value chain analysis in light of the balanced scorecard (IntraFocusUK 2012) of the innovation reveals that the perception of an increased level of personal interaction as Dominos engages directly, rather than anonymously, with the customer would assist in a positively accumulated switching cost via both increased brand loyalty and customer perception. It will also give Domino’s pizza a competitive advantage over competing fast food companies for the short term until rival competitors replicate similar strategies.
Information and Communication Technology Strategies As this collaboration with EBay is the first within a vast and already successful environment, having a clear strategy is imperative to ensure it is successful. This introduction does not change the existing business process rather it works as an additional tool to enhance customer engagement, loyalty and awareness. A key focus within the innovation will be on customer relationship management (CRM). Taylor (2010, p. 1) defines CRM as a process by which businesses seek to exploit information relating to