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‘30 minutes’ is all it takes to lay your hands on the supremely tasty Domino’s pizza (take you pick)... Well aware of this fact, last Sunday, I walked into one of Domino’s ‘sit & dine’ outlets in one of the prime locations in Delhi. And there I happened to share the table (for lack of empty seats) with one Naina Ahluwalia, an architect by profession and one ‘big’ Domino’s ‘order-at-home’ fan ( I disovered these details later as we conversed). She was already busy with her ‘chicken tikka pizza’ slice by the time I ordered mine, and as the conversation went, I asked her how her experience was so far... “The pizza is one of the best ever I’ve had, anywhere. However, the ambience is far from the best and I am also feeling claustrophobic in here...” “Also, the pizzas were ready almost precisely 30 minutes after we’d placed the order,” she added. That was it! Too much for a huge Domino’s fan. I cancelled my order... and walked away. But as I walked out, I had only one thing in mind – “I have to speak to Ajay Kaul about this...” Clearly, as the lady opined, in the ‘sit & dine’ category, Domino’s still cuts a sorry figure; with Pizza Hut (from the stable of Yum! Brand) being the clear leader in this case.
The next day, I caught up with Ajay Kaul, CEO Domino’s India and after explaining the whole incidence, questioned him as to why Domino’s makes its customers wait for ‘exactly’ 30 minutes?! The Quick Service Resturant (QSR) chief casually gave his explanation, “That’s an exceptional incident and is happening only in those stores that are 2-3 years old. Visit our latest stores and you’ll realise that it’s actually much better...”
What more. He also revealed strategies that Domino’s was mulling over – starting from penetration to pricing – to get ahead in the competitive times. Domino’s had laid out plots to adopt all the ‘Ps’ and was also chalking out big plans for India. Thankfully, this experience wasn’t anywhere similar to the one at the outlet adn I pretty much liked the person I spoke to this time round! :-)
Industry experts estimate that more than 25,000 pizzas are sold per day in the country and in the QSR category, the pizza market is brimming with sizzling hot opportunities. But at the same time there is the pressure of inflation that is hitting their bottom lines hard. Like most players (Yum! Brands for example, which responded to inflation by hiking its prices, both for KFC and Pizza Hut), everybody expected Domino’s to follow the rule of increasing its price. But shockingly, this QSR agent reverted to a strategy of rolling out pizzas that are easy on the pocket! Yes, during August 2008, this pizza-maker unleashed pizzas for just Rs.35 (lowest in the branded pizza segment). It therefore becomes obvious that Domino’s is hoping to rope in even those consumers who could not previously afford pizzas which were priced above Rs.100. However, the million-dollar question here is: when its rivals are battling with market forces, finding ways to reduce costs, how did Domino’s manage to push its price southwards? “The concept was finalised eight months ago and pre-planning enabled us to absorb the increase in ingredients’ costs. This nano model can be a substitute to dosa, chole batore,” replies a belligerent Ajay.
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Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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