Analyzing a Pricing Strategy- Dominos Pizza
Professor Amy Pinsk
May 1, 2011
Analyzing Pg. 2
The Dominos brand was founded in the United States of America in 1960 by Thomas and
James Monagham. Since then, that business has grown into a global network of over
9,379 pizza stores in more then 70 countries, involving over 200 franchises. Over its 50
year history, dominos has developed a simple business model focused on delivering
quality pizzas in a timely manner. Dominos Pizza Inc., completed its initial public
offering in 2004 and is listed in the New York stock exchange. (source: Dominos pizza
1. How well does the company create value for its market segments? Explain.
Domino’s vision is focused on “exceptional people on a mission to be the best pizza
delivery company in the world”. Dominos is committed to bringing fun, happiness and
convenience to the lives of our consumers by delivering delicious pizzas to their
doorstep in around 30 minutes or less . With domino’s main focus on the middle and
lower- middle class, they have always focused on a quality menu mix with affordable
pricing. These market segments are interested it buying quality pizza at an affordable
2. Does the company use different price offerings for different market segments?
Describe these and evaluate how effective they are.
Analyzing Pg. 3
Dominos keeps a policy of price consistency throughout all of its corporate owned
restaurants. Agreements have been made with franchise owners to keep that same pricing
consistency with limited flexibility. This is to keep in line with Domino’s national media
advertising and national quarterly promotions. With Dominos international, the foreign
markets are priced differently than the domestic market restaurants. This in due to the
different cultural driven recipes in those markets.
Dominos pricing policy has been very effective helping to keep the company as the
second largest pizza company in the world. Dominos may be losing some profit margin
in geographic areas of higher income, but the pricing consistency policies have helped to
create continuity of all Dominos across the nation. People taveling from the east coast
will know what to expect when they order from a Dominos in the west coast.
3. Explain how the company communicates both value and price.
In December 2009, Dominos introduced and launched its $10 large any topping pizza
reformulated with new sauce, new cheese mix and seasoned crust. This promotional
launch of better quality commitment increased Dominos first quarter revenues to nearly
record heights. Most of Dominos advertising stresses the company’s commitment to
value and convenience. Domino’s goal is to be the best and fastest pizza delivery
“In January and February, Domino’s continued its popular offer, which debuted last year
and includes two medium, two-topping pizzas for $5.99 each. In the last third of the Analyzing Pg. 4
quarter, the brand pivoted to advertising its chicken products with national TV
commercials.” (Brandau, NRN, 5-5-2011). This shows the diversity of Domino’s
product package mixing while keeping a low retail.
4. Give examples of how the company develops policies for price objections, price
increases, economic downturns, or promotions.
”The hugely successful pizza chain is using some of the emerging ideas from
behavioral economics to reshape the incentives for customers. “Domino’s Pizza has
become one of...