Per the report we’ve just seen, Domino’s pizza is starting over from scratch, and making an entirely new pizza recipe for their main product. This is a pretty bold move for any company. Changing your core product is dangerous territory- your new product could be a) worse or b) your customers revolt.
Remember NEW COKE in the early 1980’s? Yeah, it could go like that. On a national scale, $Millions$ are invested in advertising a new product with branding, packaging, TV spots, and changing a manufacturing line over. And then it falls flat, and things go back the way they were. At the end of the day, the New Coke recipe got sold to Wal-Mart for a rumored 100 grand to be their house brand cola.
I don’t know what will happen here, but I suspect after thousands of taste surveys, Domino’s corporate saw that their product would have to evolve to customer tastes, or see their market share shrink even further. One point in the press release speaks volumes:
“· Sauce - Sweeter, bolder tomato sauce with a medley of herbs and a red pepper kick.
Cheese - Shredded cheese made with 100% real mozzarella
and flavored with just a hint of provolone.”
This sauce line in the press release is key- in telling us who took Domino’s market share, and who Domino’s expects to claw business back from, with this new pizza recipe campaign: PAPA JOHN’S.
Papa John’s has both a very sweet sauce, and a brand that grew fast nationwide in the 1990’s. I doubt the pizza market grew larger; as Americans we already loved eating pizza, and frequently. I think Papa John’s stole customers by the household from both Domino’s and Little Caesars.
Little Caesars was forced through the exact same reinvention that Domino’s is about to attempt, just a few years ago (I think). But Little Caesars took the opposite tactic: they sweetened the sauce, but primarily cut costs. They cut costs in ingredients, store operating costs like labor, and advertising. There are no more ‘Pizza Pizza’ commercials, as Little Caesars now shoots for the low hanging fruit. With a $5.55 price point for a large pizza, Little Caesars is targeting the budget conscious customer. They completely left the higher cost market segment (premium pizza) where Domino’s and Papa John’s are competing. As if to say, ‘good game, but we’re going back to the minor league to play now.’
Little Caesars did this by reducing the options on the menu. Papa John’s or Domino’s are both examples of ‘full service’ pizza restaurants: many toppings are available, in multiple sizes, and various sides are offered. Instead, Little Caesars reduced the options, and pretty much gives customers two choices: large cheese or large pepperoni. And on a crust not too different from corn bread. On the flip side, their pizza is ready as soon as you walk in the door- impulse purchase food. But lots of menu options are gone, including the awesome sandwiches they once sold.
The current Domino’s recipe is not too different in quality from the new Little Caesars, at a price point above Little Caesars but below Papa John’s. But it must not have been a happy medium with customers, since they are trying to drive themselves up market to compete. For consumers, Domino’s ‘better ingredients’ equals ‘better competition.’ I hope it works out, and the new recipe tastes great. At the next office pizza party, there may be a new contender to choose from, a new 50th anniversary Domino’s.
So what should we expect from this new product roll out from Domino’s? First, FREE PIZZA! Expect to be bombed with vouchers to come in and try it. Papa John’s does it with pretty much every new product they roll out, and they are the two ton gorilla of pizza marketing. It works or they wouldn’t do it. Second, I think they will be doing a tour of colleges and sports events with free samples to taste. Customers want a reason to switch, because we already like our pizza. And third, acceptance will be decided by the internet, public opinion will start with tweets and wall updates… and turn into a tidal wave decision. I really doubt Domino’s customers will revolt though, it sounds like a better pizza.
Look for new pies after December 27th. Really that means in time for the new year. The marketing machine should be running full steam just in time for the Super Bowl. Pizza marketing companies are thinking about that right now: Domino’s just showed their super bowl hand, how are we going to respond? I can’t wait.
Update:The source article at consumerist.com was pulled. Not sure what to think. No retractions, nothing.
Update 2: The original press release is under an embargo. The link should work once its lifted.
We got the news here
New source
here while it lasts.
That was no fun. 
