 | |
| Type | Public (NYSE: DPZ) (BMV: ALSEA) |
|---|---|
| Founded | 1960 |
| Headquarters | Ann Arbor, Michigan |
| Key people | Tom Monaghan, Founder David Brandon, Chairman & CEO |
| Industry | Restaurants |
| Products | Pizza |
| Revenue | ▲ $1.437 billion USD (2006) |
| Employees | 145,000 |
| Website | www.dominos.com |
Domino's Pizza, Inc. (NYSE: DPZ) is an international fast food pizza delivery corporation headquartered just outside Ann Arbor, Michigan, United States. It was founded by Tom Monaghan. As of 2006, it had 8,000 corporate and franchised stores in more than 54 countries[1]. It was the second-largest pizza chain in the United States when it went public in 2004 for just under $15 a share[2].
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[edit] History
Domino’s Pizza began in 1960 when Tom Monaghan and his brother James bought "Dominick's Pizza", a small pizzeria in Ypsilanti, Michigan. The deal was secured by a $75 down payment and the brothers borrowed $500 to pay for the store. Eight months later, James quit the partnership and traded his half of the business to Tom for a used Volkswagen Beetle. With Tom as the sole owner of the company, Dominick's Pizza became Domino's Pizza. In 1968, a fire destroyed the company headquarters and commissary. Although Domino's faced numerous other obstacles in the following years, including a 1975 trademark-infringement lawsuit by Amstar, maker of Domino sugar,[3] the company expanded, and in 1978, the 200th Domino’s franchise opened.
At the prospect of potentially losing the right to use the Domino's Pizza brand name, Tom Monaghan hired Group 243 to create an alternative identity. Later they became agency of record for the company and remained so for over a decade. During that time, the agency, led by president Janet Muhleman and her partner Robert Cotman designed the store interiors, the pizza box, the Indy race car, created and produced all of the advertising, and managed recruitment for the franchise. When Group 243 was hired, Domino's had fewer than 100 units. They marketed the brand until it reached over 5,000. In the 1980s, Domino’s decentralized its operations by opening the first international Domino’s in Winnipeg, Manitoba, Canada. In the following years the company expanded even more, and as of September 2006, it has 8,238 stores which totaled US$1.4 billion in gross income.[4] Monaghan retired in 1998 and sold Domino's Pizza for nearly 1 billion dollars,[5] but retained a 27 percent non-controlling stake in the company.
Over 8,000 stores worldwide now operate under the Domino’s brand, with the opening of a store in Huntley, Illinois as the 8,000th store. All international stores are franchised. The Domino’s Pizza store in Tallaght, Dublin, Ireland, became the first in Domino's history to hit a turnover of $3 million (€2.35 million) a year[6]. Although the franchise is typically delivery and carry-out only, there is one dine-in Domino's with a full buffet in Clovis, NM.
[edit] Products
Until the late 1980s, Domino's kept its menu very simple. Most stores sold only one type of crust (Classic Hand Tossed, also referred to as regular crust) in two sizes (large and small) and only one choice of beverage (Coca-Cola Classic). Later, competition from other delivery chains forced Domino’s to add Ultimate Deep Dish and Crunchy Thin Crust, get rid of the small size (although the small size is now returning nationwide[7]), and add medium and extra-large sizes (available at most locations), a choice of several beverages, and side orders such as bread sticks and chicken wings (Domino's was the first national pizza chain to sell chicken wings).
In the late 1990s, Domino's saw its take-out and delivery orders shrink with the introduction of Little Caesars' Hot-N-Ready Pizza special. To combat falling sales, the company's then-Vice President, Ken Calwell, introduced the "555" Deal coupled with vigorous advertising and marketing techniques. When a customer ordered the 555 Pizza Deal, they were able to obtain three medium pizzas for the price of $5 apiece, hence the name 555. In some areas, this offer has become the "5.55" deal, an increase of $1.65.
The Oreo Dessert Pizza was first introduced in Ann Arbor, MI and was only available for a limited time. The crust which was layered with vanilla sauce was then covered with Oreo cookie crumbles, and finished with icing on top.[8] The farcical, almost ridiculous, nature of the television commercials for the product often led the product to be lampooned by satirists such as Stephen Colbert and Jon Stewart on their respective television shows.
Domino’s has also introduced numerous innovations in the pizza industry including the now standard use of corrugated cardboard delivery boxes, the modern belt-driven pizza oven, modern and centralized ingredient logistics, and the Heat Wave, a portable electrical bag system that uses patented magnetic induction technology to keep the pizza hot during delivery.
[edit] Franchisees
The rights to own, operate and franchise branches of the chain in Australia, New Zealand, France, Belgium, the Netherlands and the Principality of Monaco are currently owned by Domino's Pizza Enterprises, having been sold off by the parent company between 1993 and 2007. The master franchises for the UK and Ireland were purchased by Domino's Pizza Group (now publicly traded as Domino's Pizza UK & IRL) in 1993.[9]
[edit] Controversies
[edit] Political issues
Tom Monaghan is one of the founders of Domino's, and while he is no longer involved with the running of the corporation, the company has been singled out for criticism, from certain quarters because of Monaghan's financial support of Christian pro-life religious and political organizations, such as Operation Rescue and the Thomas More Law Center. Depending on one's perspective, these organizations are benevolent, charitable organizations that serve to help the needy and defenseless.
[edit] 30 Minute guarantee
Starting in 1973, Domino's Pizza had a guarantee that a customer would receive their pizza within 30 minutes of ordering, or they would receive the pizza free. The guarantee was reduced to $3 off in the mid 1980s due to concerns over drivers breaking traffic laws and putting themselves and others at risk trying to fulfill the guarantee.[citation needed] To further reduce accidents and unsafe driving, Domino's didn't hold their drivers accountable for any lates.[citation needed] In 1992, the company settled a lawsuit brought by the family of an Indiana woman who had been killed by a Domino's delivery driver, paying the family US$2.8 million. In 1993, Domino's settled another lawsuit, this one brought by a woman who was injured when a Domino's delivery driver ran a red light and rear-ended her. The woman was awarded nearly US$ 80 million in damages. The guarantee was dropped that same year because of the "public perception of reckless driving and irresponsibility", according to Monaghan.[10]
In 2008, the company again advertised a 30 minute delivery time in the U.S.; the fine print in the material stated the time as merely an "estimate". However, in Brazil, Chile, India, Indonesia, Israel, Lebanon and Mexico, Domino's still guarantees delivery within 30 minutes, or the order is free but online orders are not available.
[edit] Advertising
In the 1980s, Domino's Pizza was well known for its advertisements featuring The Noid. That concept was created by Group 243 Inc. who then hired Will Vinton Studios to produce the television commercials that they created. Customers were implored to order from Domino's in order to "avoid the Noid."
In 1989, a man, Kenneth Lamar Noid, who thought the ads were a personal attack on him, held two employees of an Atlanta, Georgia, Domino's restaurant hostage for over five hours. After forcing them to make him a pizza, Noid surrendered to police. Noid was charged with kidnapping, aggravated assault, extortion, and possession of a firearm during a crime, but he was found not guilty by reason of insanity.[11] Contrary to popular belief, this incident did not cause Domino’s to pull the "Noid" campaign off the air; in reality, Noid creator and owner Will Vinton Studios asked for a larger amount of money for continued use of the Noid character, and Domino’s chose not to renew its contract.
In the first few years after the end of the Noid campaign, Domino's introduced their "Something for Nothing" campaign, often accompanied by an animated domino wearing sunglasses. Occasionally, a female domino with a blond ponytail would appear as well. This lasted until 1994. Following the introduction of buffalo wings to the menu, Domino's began using the "Gotta Be, Gotta Be Domino's" slogan, with the music set to the tune of Queen's "We Will Rock You". Some early commercials centering on the buffalo wings featured a buffalo with "wings" flying down to a football stadium. One of the ads featured NBC broadcasters Charlie Jones and Paul Maguire. The campaign lasted until 1996, after which the slogan was retired and the Domino's logo was revised to its current form.
In 2000, Domino’s introduced another advertising mascot for its North American customers, Bad Andy. His objective was to get Domino’s employees to break the rules set down by the company (his most famous was trying to get a worker to use a rolling pin to shape the crust, even resorting to stalking to get him to try it). The slogan that accompanied Andy was "Bad Andy. Good Pizza." It was not well received, and lasted only a little over a year.
In 2008, Domino's introduced yet another mascot for North America, "Pasta Dude". This was to introduce pasta dishes to its menu in competition with Pizza Hut who had also added pasta to its menu. It was a satirical take on blatant pandoring toward "urban youth culture". "Pasta Dude" is shown wearing a baseball cap backwards, a gold chain with a large, square "Domino's Pizza" medallion and sneakers. All the while he is rhyming about the new pasta line up and is shown doing various "Hip Hop Dance" inspired moves before being swatted by a spatula. Within a few weeks it was soon edited to remove a "questionable" dance move to prevent any bad press. The dance move in question looked as if "Pasta Dude" was depicting a sexual position. To be more accurate, "Pasta Dude's left hand looked as if it were placed on the small of an invisible partner's back, while his right hand slapping their bottom from behind.
[edit] Sponsorship and tie-ins
- Domino's sponsored the halftime reports for NFL Live!/NFL on NBC during the 1990s until NBC lost American Football Conference television coverage to CBS.
- As a product sponsorship tie-in, Domino's Pizza is also the Official Pizza of NASCAR. It sponsored the '00 Toyota driven by David Reutimann for Michael Waltrip Racing in the Sprint Cup.
- Domino's is a long-time sponsor of animated-series The Simpsons on the News Corporation-owned British Satellite Television channel Sky One.
[edit] Product placement
Domino's routinely uses the cross-promotional tactic product placement as one of its main advertising programs. examples include:
- In the movie Phir Hera Pheri, Baburao Apte was holding a Domino's Pizza box. The character was played by Paresh Rawal who incidentally also appeared in a Domino's Pizza commercial.
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