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Read the Domino's case in your text. Answer the following questions: 1. Concept testing can have 3 purposes, according to your text. Which one of the three was the primary focus of Domino's concept test? Explain your thinking. (3 marks] From the text the primary focus of Dominos concept test was to understand customer value the reason being is that their customers haven't had a pleasant experience with Dominos and have had many complaints regarding their pizza where it doesn't taste good, tastes like cardboard and they prefer their competitor' s pizza more. So, then they decided to completely revamp their pizza to meet their CUStO mers W8 nts . 2. What format of concept statement (as discussed in your text) did Domino's use in their concept test? Why was this arrangement necessaryi? (4 marks) 3. What is the key advantage of the format of concept statement you discussed above? What is the key disadvantage? Explain your thinking (4 marks] 4. According to your text, which response situation (as discussed in your text] did Domino's select? Explain your thinking. (3 marks) Case: Domino's29 By 2009, Domino's had a track record of nearly 50 years of fast, dependable pizza delivery and claimed to be the "World Leader in Pizza Delivery." From a single pizza store in Ypsilanti, Michigan in 1960, founder Tom Monaghan grew the busi- ness to over 8,000 stores by 2006, about 10 percent being company owned and the remainder franchised. This total included about 3,000 international stores in over 70 countries. Domino's is one of the leading companies worldwide in online trans- actions as well since instituting online ordering in 2007. It had also launched a line of oven-baked sandwiches in 2008, immediately launching it into the number one position in sandwich delivery. But not all was well within Domino's. Their promise of easy ordering and 30-minute delivery might have been their ticket to success in the early years, but by 2009 it was clear that customer were demanding something more: better taste. Customer testing at the time, including focus groups, alarmed Domino's manage- ment, who heard customers complaining that the "pizza was cardboard" or that it tasted "wet and flavorless." Lost-buyer analysis suggested that the main reason Domino's lost customers was because of the menu, and the pizza in particular. In 2008, Domino's tried an ad campaign stressing the many years of reliable deliv ery service: the slogan "You got 30" reminded viewers of the 30-minute delivery promise. When the campaign failed, it was clear that action was required. Domino's senior executive J. Patrick Doyle viewed the negative customer com- ments and the failed ad campaign as a new product challenge. Domino's initi- ated the "pizza turnaround," led by Doyle and two other senior managers, Russell Weiner and Brandon Solano. The goal of the pizza turnaround was not just to im- prove the flavor of Domino's pizza. The CEO at the time, Dave Brandon, said that "incrementally better" would not be good enough. According to Doyle, the goal was to completely reformulate the flagship product from the ground up so that it could actually beat competitors in a taste test. The new product team started by rethinking an unstated assumption: Domino's was viewing good quality and quick delivery as trade-offs. As Doyle said, "There is no reason that we can't deliver terrific food and do it in the same amount of time." To achieve this, however, required Domino's to rethink their platform for pizza innovation. Traditionally, pizza product development had been very incre- mental: new toppings, for example. But at this point, the success of the oven-baked sandwiches in the previous year was fresh in the minds of the new product team. Not only were the sandwiches a radical, new-to-the-firm innovation for Domino's, they were also developed in record time and were successful. It was the success of the new sandwich line that emboldened the new product team to undertake the radical innovation needed with pizza. It was decided to take on the challenge of completely rethinking the pizza prod- uct. Based on early consumer research, Solano says the company began asking,"Could we make a better cheese? Dough? Sauce? What made a sauce better? What characteristics of cheese made it better?" This led to further consumer tests of dif- ferent combinations of attributes. Solano explains the process: We had three components (three crusts, three sauces, two cheeses) yielding 18 pizzas. We tested many of these combinations and modeled the ones we did not test. We had a win- ner coming out of this . . . it was the product with all our new components. We did it! Further testing confirmed that the favored product was viewed as not just better and different, but much better. Cost was also a consideration, according to Weiner: "The pizza had to be significantly better, but it could not cost more or take longer to make [at the store]. There were financial and operational parameters." The new products team knew that they would need to make the case to top management. Internally, they knew there would be opposition from some man- agers who felt the product was just fine. Solano said that they would need to be prepared to face senior management, but that unlike many other companies, they could informally "walk right in and talk about what we just learned." When R&D personnel were shown the customer complaints, they were alarmed and rec- ognized that this time, product development could not be "business as usual." Weiner also noted that they would need to convince franchisees. He said, "We did research pretending we were the franchisees . . . for example, the sauce is spicier. [Franchisees might ask], could that make people sick after eating a lot? . .. So we did a road show with franchisees. They did a blind taste test; most of them liked the new better." A major part of the launch campaign was a four-and-a-half minute promotional "pizza turnaround" video, launched on the website www.pizzaturnaround.com and also available on YouTube. The video showed extremely negative customer comments and clips from focus groups, then went into detail on how the company completely redesigned the crust, sauce, and toppings. The video emphasized that some companies might hide customer criticism, but Domino's acted on it to im- prove the product. Doyle noted that it might have been risky to talk about nega- tives in their rollout promotional campaign, but as Weiner said, "we .. . did a lot of testing to get the right balance of negative to positive [comments]. If we were too negative we got a poor result and if we were too positive we got a poor result." The pizza turnaround was a stunning success. Taste was improved to the point where Domino's claims that three out of five people prefer Domino's to competi- tors. Soon after launch, new customers increased by 30 percent and repeat pur- chase was up by 65 percent, indicative of excellent customer loyalty. These figures translated into an increase of 14.3 percent in quarterly same-store sales, even dur- ing a U.S. economic slump. What do you think caused the crisis within Domino's that led to the pizza turn- around decision? Comment on how the new product team at Domino's used at- tribute analysis to test various improved-pizza concepts. In your opinion, how important was this analysis to the team in selling the pizza turnaround internally? What else did the new product team do to boost their chances of success? What can be learned in general from this case about the use of analytical attribute ap- proaches for concept testing? How could other concept testing approaches pre- sented in this chapter have been used to guide the new product team
