Market Analysis of Dominos on St. Maarten - Report Example

Market Analysis of Dominos on St. Maarten Table of Contents Table of Contents 2 Introduction 4 History and overview 4 Vision and mission: 4 Core Values: 4 Key factors to marketing success 5 Environmental analysis 5 Political and legal factors 5 Social factors 5 Economical factors 5 Environmental 6 Technological 6 Buying Behaviour 6 Buying decision 6 Buying process 7 Response cues 8 Evaluate option 8 Social aspects 8 Competitor analysis 8 Competitive environment 9 Effect of trends 9 Organisational performance 9 SWOT analysis 10 Organisational strategies 11 Segmentation 11 Positioning 12 Perceptual mapping 12 Marketing mix 12 Product 12 Price 13 Place 13 Promotion 13 Future challenges and recommendation 13 Conclusion 14 References 15 Introduction The report is focused on the discussion regarding the marketing strategies followed by Dominos Pizza Inc. within different market segment of St. Maarten. The main motive of this study is to analyse the success factors of the marketing strategies of Dominos Pizza Inc. that have assisted the organisation to secure a competitive position within the constituent country of the Netherlands. The discussion will be conducted through three major parts. The first part will evaluate the brief introduction and market success story of the organisation within the chosen market segment. The next section will illustrate different internal as well as external factors that have influenced the marketing success of the organisation. Finally, the last part will detail the possibilities of various future challenges to recommend suitable solutions to sustain the current competitive position of the organisation. History and overview Dominos Pizza Inc. is one of the leading multinational pizza delivery chains headquartered in Michigan, USA. The organisation had started its operation as a small pizza store in the 1960. The organisation is well-known for its diversified product line as per the tastes and preferences of consumers from different regions. Currently, it is operating as the second largest franchise pizza delivery organisation worldwide. It owns 11,250 stores across 75 countries of the world. The organisation has demonstrated 44% of growth in their net profit within the last three years (Domino’s Pizza Group plc. 2013). Vision and mission: Vision of the organisation is focused on providing the best quality of pizza to create a strong reputation within consumers. Their mission is concentrated on increasing selling quality and capacity to improve the ultimate experience of consumers (Domino’s Pizza Group plc. 2013). Core Values: Providing best quality of product in an affordable pricing. Ensuring best treatment for each consumer. Continuous learning and improving the production procedure and employee skills (Domino’s Pizza Enterprises Limited. 2014). The organisation possesses four major outlets in St. Maarten. According to a survey of Daily Helard, the organisation operates as the leading pizza delivery chain within St. Maarten. The improved product quality and distinctiveness in the delivery system are the main reasons behind its achievement. The further discussion will evaluate different factors of marketing process that influences their competitive marketing position (Dominos Pizza Inc. 2012). Key factors to marketing success It is essential to analyse the changing factors within the external market environment to assess the key marketing success factors of the organisation. Environmental analysis The PESTLE framework will assist in detailing the effects of political, socio-economical, environmental, legal and technological factors on the marketing decisions of the organisation. Political and legal factors The political structure of St. Maarten is very open regarding the commercial and investment right of international organisations. They provide liberal trade investment policy to foreign companies. The legislation of the country provides similar legal rights to the local and international organisations. This political and legal environment has assisted the organisation to create a strong and competitive position within the local market. The foreign trade investment policy has also influenced them to increase their market share in St. Maarten (Stevis & Assetto, 2001). Social factors The social communities of St. Maarten consists a huge number of immigrants that results in a mix culture representation of the population. This cultural collaboration results in variation of tastes and preferences within the population of the country. The wide product varieties of the organisation have assisted the management to generate a huge customer database within the market (Stevis & Assetto, 2001). Economical factors The population of St. Maarten represents a huge portion of European Union market. The GDP of this country has secured the 13th rank in the world. The disposable income of consumer is also rapidly increasing within different market segment of St. Maarten. The different price and product ranges of the organisation have played an important role in attracting population from different income background. This process allows them to increase their market share within St. Maarten (Hahnel, 2015). Environmental The government of St. Maarten has announced the plan for limited energy usage. They are also very active on handing different environmental issues regarding excessive paper usage. The organisation has indulged in proper and limited utilization of oil and gas in their regular production activities. They have also initiated paper box recycling procedure to support environmental protection activities (Stevis & Assetto, 2001). Technological The development in technologies has enabled the population of St. Maarten to adopt various digital communication procedures. These processes are allowing the population to keep up with their busy schedule. The organisation has introduced interactive mobile application and internet websites to simplify their communication with the population of St. Maarten (Martin, 2013). Buying Behaviour The product purchase decisions and procedure of consumers play an important role in the marketing procedure of the organisation (Solomon et al., 2012). Buying decision There are four different buying decisions such as complex, dissonance, habitual and variety seeking (Prasad & Jha, 2014). (Source: Prasad & Jha, 2014) In terms of the fast food consumption, the consumers of St. Maarten generally follow the dissonance and variety-seeking buying decision. The dissonance decision making process influences them to select the affordable and easily available alternatives. Due to the presence of a huge number of varieties in the market, the consumers also seek for differentiation in the product and price offerings (Prasad & Jha, 2014). Buying process (Source: Solomon et al., 2012). The buying process of consumer involves the identification of particular need of products which motivate them to search for product related information. After this step, consumers prefer to evaluate the products as per the price, and availability which influences their purchasing decision. Finally, the last step allows consumers to analyze and compare the product quality, sales procedure and pricing of the product (Solomon et al., 2012). Response cues The innovative sales schemes, product diversity and proper advertisement procedure can be considered as important elements to influence the responses of consumers. Prior experiences, public reviews and word-of-mouth also play an important role in the decision making process (Sakkthivel & Porkodi, 2013). Evaluate option Ease of access to the sales person and customer care, timely service, online ordering facility and desired taste and quality are the important phenomena to evaluate the options regarding fast food and pizza available in the market (Sakkthivel & Porkodi, 2013). Social aspects Consumer generally prefers to consume pizza in a sharing basis. Hence, product choices of family members and friend groups play a significant role in the consumer buying behaviour (Sakkthivel & Porkodi, 2013). Competitor analysis Porter five forces analysis of competitors (Source: Dominos Pizza Inc., 2012) Competitive environment According to the five forces analysis, it can be said that the organisation face a huge competition within the marketplace of St. Maarten in terms of product offering, differentiation, servicing, pricing and technological advancement. The organisation has not only faced competition from the existing rivals, it also experienced threats due to the easy access of market to the new comers (Dominos Pizza Inc., 2012). Effect of trends The trend of healthy and low fat food consumption has extensively affected the fast food industry. The introduction of internet has also allowed the consumers to easily access the offerings of different competitors (Dominos Pizza Inc., 2012). Organisational performance The organisation has implied blue ocean strategy within their product delivery process to attract a sound portion of the market. They have introduced a product delivery trend that assists them to fulfil consumer demand within the span of 30 minutes. They have also introduced various healthy food options in terms of toppings, baking procedure and production ingredients (Dominos Pizza Inc., 2012). SWOT analysis (Source: Dominos Pizza Inc., 2012) The organisation has utilized its strengths of diversified product line and proper maintenance of production to eliminate the threats of competitors within the local market. The standardized production facility and quick delivery procedure has also assisted the organisation to streamline the franchise management system. The organisation has introduced new topping and flavour options to fulfil the demand of consumers regarding product differentiation and health content. Organisational strategies (Source: Dominos Pizza Inc., 2012) According to the analysis of Porter’s generic strategy model, the organisation is following the cost leadership and product differentiation strategy. The management of the organisation prefer to offer lucrative discounts and competitive pricing structure for all the segment of the consumers (Dominos Pizza Inc., 2012). Segmentation The market segmentation procedure of Dominos generally considers the wide section of the market irrespective of age, cultural backgrounds, occupation and family income. The organisation has mainly segmented the service locations in terms of class 1 and class 2 cities, metros and small towns. The product offering of the organisation influences them to target lower middle class, middle class, upper middle class and high class of consumers. Due to the fast life and demand for processed food, the organisation has witnessed success in attracting all the segments (SparkPeople, 2015). Positioning Perceptual mapping The wide product range and affordable pricing policy has assisted the management of the organisation to secure a competitive position in the market (Domino’s Pizza Enterprises Limited, 2014). Marketing mix Product Dominos Pizza Inc. has introduced various ranges of products that includes Country Special Pizza, , Zesty Chicken pizza, Mexican Green Wave Pizza, Seventh Heaven Pizza, Chicken and Prawn Pizza etc. The side products offered by the organisation are Calzone pockets, Stuffed Garlic Bread Sticks, Garlic Bread Sticks, Taco Indiana and Pasta Italiano. The product life cycle of the organisation is experiencing growth phase due to their continuous innovativeness (Morris, 2009). Price The organisation is committed towards providing best of the quality within affordable range. Therefore, the product range mainly follows price skimming and competitive pricing policy (Dominos Pizza Inc., 2012). Place The organisation has maintained a direct channel with their consumers. This process involves direct over the phone ordering or online ordering (Domino’s Pizza Group plc., 2013). Promotion Door step pizza delivery within 30 minutes is the main promotional activity of the organisation which assists them to differentiate from other competitors (Bell & Andrews, 2012). Future challenges and recommendation The analysis of the internal and external environment of the organisation has illustrated various competitive advantages of the organisation. On the other hand, the analysis of the competitors and industrial threats has highlighted different future challenges of the organisation. The threat of substitute products in terms of organic foods and low calorie processed food can create extensive market competition for the organisation. The shift of consumer preferences towards the healthy food products can be considered as another competitive parity for the organisation. The strictness of government legislation towards the selling of unhealthy fast food may hamper the market growth and share of the organisation. The increased tendency of obesity within the young generation can shift their buying decisions towards the low fat food items. The new range of product offering by different international organisations can reduce the consumer traffic of the organisation. The organisation needs to utilize its current financial gains and market position to create a competitive position in the different section of the market. The organisation needs to indulge in research and development procedure to understand the current food trend of the present market. Therefore, they need to indulge their R&D teams in introducing various innovative organic food options. The organisation need to introduce a new food section that includes organic food items and low calorie food products. The organisation also needs to diversify their current offerings towards low fat and health conscious food options. These options must include different healthy and low fat alternatives to their existing food offerings. The organisation must offer different discount schemes to their consumers to attract their attention towards the product line. They need to enhance their investments towards product promotion and advertising procedure. The promotional method needs to emphasise the food value of their new offerings. The management of the organisation need to make sure that their production and maintenance procedure is following the local government regulations. This process will allow them to improve their market reputation as well as product market share. Apart from the innovative product line and promotional campaigns, the organisation also needs to focus on exploring the untouched market. They can introduce their existing product line to various new global market places to eliminate the threats of product life saturation. The organisation can also create a separate department to organise and handle different family gathering and parties to improve their consumer relationship. Proper execution solutions and recommendation will assist the organisation to sustain their position in the current market. It will also help the management to increase their overall profit ratio. Conclusion The discussion of this report has analyzed different external and internal environmental factors of Dominos Pizzas Inc. This analysis has assisted to evaluate various successful marketing strategies and processes of the organisation. The further discussion has illustrated various future challenges of the organisation. Therefore, valuable recommendation has been made to improve the positioning. References Bell, D., & Andrews, P. (2012). Domino’s Pizza. Retrieved from http://www.iuc-edu.eu/group/mba_learning/2012%2013%20assignments/512004PDFENGcopyrighted.pdf. Domino’s Pizza Enterprises Limited. (2014). Annual Report. Retrieved from http://www.dominos.com.au/media/119859/annual-report-2014.pdf. Domino’s Pizza Group plc. (2013). Annual Report & Accounts. Retrieved from http://investors.dominos.co.uk/system/files/uploads/financialdocs/dominos_ar13.pdf. Dominos Pizza Inc. (2012). Global Footprint. Retrieved from: http://media.corporate-ir.net/media_files/IROL/13/135383/2012_Annual%20Report_single%20pages_8.5x11.pdf. Hahnel, R. (2015). Participatory Economics and the Commons. Capitalism Nature Socialism, 1-13. Martin, K. (2013). Toward a Cartography of the Commons: Constituting the Political and Economic Possibilities of Place. Retrieved from http://communityeconomies.org/site/assets/media/Kevin-St-Martin/Cartography_of_Commons.pdf. Morris, M. (2009). Work: Dominos Pizza. Retrieved from http://stthomassource.com/content/news/local-news/2009/12/14/work-dominos-pizza#skip. Prasad, R. K., & Jha, M. K. (2014). Consumer buying decisions models: A descriptive study. International Journal of Innovation and Applied Studies, 6(3), 335-351. Sakkthivel, A. M., & Porkodi, S. (2013). 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