Is it really a “game changer” or just pure hype?
Domino’s recently launched its Chef’s Best pizza range to much fanfare with its eight new pizza varieties loaded with premium toppings.
Aside from orchestrating a massive advertising and promotion blitz for Chef’s Best pizzas, Domino’s CEO Don Meij even proclaimed it a “game changer” and a premium pizza range that will “revolutionize the Australian pizza industry” because of its unbeatable value. Meij’s basic argument: With ingredients this good and prices so low, who can resist these pizzas?
Only annual sales will tell whether the Domino’s Chef’s Best pizza range becomes a financial success. But what about its impact on the brand and the industry? Will it allow Domino’s to steal customers away from gourmet pizza providers? And will the pizza market shift into a more competitive gear as rivals launch counter campaigns against Chef’s Best?
Is it really a revolutionary product?
Based on our interviews with 5 food industry and brand marketing veterans, some believe that Domino’s intention was not really to release a “revolutionary” product in the sense of being the first of its kind – there have already been gourmet pizza brands like Crust in the market for years. Rather, it launched a product that would link the word “quality” in the same breath as Domino’s.
“A move to quality product is always a good strategic move; the customer knows the quality and what they are prepared to pay. Any strategy that will move a brand away from being price driven is a long term winner,” said Steve Hansen, founder of Chooks Fresh & Tasty now under Quick Service Restaurant Holdings (QSRH), and current King of Strategy at Think DONE Management Consultancy.
Offering premium pizzas becomes even more compelling for fans when the price point is kept low, or at least lower than what would have been expected given the ingredients found in the Chef’s Best pizzas. The Shiraz Lamb & Tomato pizza, for example, is topped with swanky ingredients like shiraz braised lamb shank, capsicum and mint yogurt sauce mixed with familiar staples like red onion, mushroom, tomato, and mozzarella. The fact that there are eight such premium varieties in the Chef’s Best line only adds to the value perception.
“From first glance one would think that the range has been changed with upgraded quality which would indicate higher food cost,” said Hansen. “Range would appear to be different to direct competitors in the takeaway market.”
“They have a good variety of all the proteins and have a fancy Vegetarian option too,” said Merrill Pereyra, managing director at Healthy Habits, and former regional manager for McDonald’s Greater Asia.
“I am sure that the Domino's regular customers are very happy with the extension to the menu. And the inclusion of a range of ingredients and flavours made popular by the ubiquitous cooking reality TV shows is strategically timely,” said Melissa Webber, owner and creative director at Holy Cow! Design and Advertising, which has handled visual strategy and branding for QSR clients like Mad Mex.
Too much hype for its own good?
But some in the panel feel Domino’s went too far with the use of its marketing buzzwords such as “revolutionary” and “game changer”. Expectations became so high for Chef’s Best both before and after launch that it disappointed some fans when the actual product released, hurting the credibility of the pizza brand.
“Strategically, Domino’s have made a terrible mistake. I guess they have achieved publicity that could be seen as a positive. [But] they have underestimated the intellect of the consumer, hence the obvious backlash,” said Costa Anastasiadis, one of the founders of the decade-old Crust brand, considered a pioneer in the gourmet pizza segment. Crust is now under RFG.
“The idea strategically was probably a good one. However, the execution and hype towards consumers and the disappointment was not a good move,” said Nigel Patient, brand strategist at Head Mark, which has handled brand and marketing campaigns for franchise retail giant Foodco Group.
Webber said that the anticipation generated by the teaser campaign was not justifiable given the announcement itself, which was essentially just a new pizza menu.
“Unfortunately, Domino's claims of 'game changer' and 'revolutionary' seem to have had a negative impact on consumers and left them feeling misled and disappointed. In addition, these feelings also seem to have translated to many customer experiences upon ordering from the new 'Chef's Best' range – Domino's Facebook page is full of customer complaints calling their claims false and misleading after a disappointing dining experience after ordering from the new menu,” said Webber.
Webber added that given the resources spent to promote Chef’s Best only to elicit vocal hostility from current and potential customers, “sadly the campaign does not appear to have been a strategic success for Domino's so far.”
Will Chef’s Best hurt the competition?
The panel was split on whether Chef’s Best pizzas will lure customers away from other gourmet pizza providers. Some foresee massive trial due to the huge publicity – both good and bad – and how the pizzas cost less than other competing pizzas in the premium category.
“Yes, people will move away to try this range. Today's customers want Value. You would pay nearly double this for a premium pizza elsewhere,” said Pereyra.
“Offering more variety and more choice to a loyal audience is usually well received and many existing customers will no doubt try the new range, thus directly affecting the trade of other gourmet pizza providers. The price point will also definitely attract new customers who wish to try something different, and perhaps those who would not usually order a pizza from Domino's Pizza,” agreed Webber.
But Webber warned that it will be an uphill battle for Domino’s to keep Chef’s Best trial buyers for good. She explained this applies most to takeaway pizza buyers, a group that is notoriously habitual with their orders and harder to convert into loyal repeat customers.
“Consumers lean towards food they have ordered before and are less willing to take a risk when ordering food remotely than they are in a restaurant environment, where they can generally view their menu selections. While this group may try a pizza from the 'Chef's Best' range, they will largely revert back to their regular vendor or regular Domino's pizza variety next time they order unless they receive an exceptional customer experience,” said Webber.
Patient agreed with this assessment that satisfaction will be a major determinant for loyalty. The cheaper price point will turn heads, no doubt, but he said gourmet pizza competitors will attempt to neutralize the price advantage with their own promotions.
“I guess those looking for a deal will be likely to try the product and if it’s good they would go back, that being said they are still getting offers and deals from competitors so it’s not necessarily a unique point of difference,” he said.
Meanwhile, Hansen was the least optimistic of all: “No I do not believe that this move will dent the gourmet pizza providers at all.”
“The real gourmet pizza providers have had quality products for a long time with prices to match, and their customers would not consider moving to the takeaway promoter just because they are saying they have a new range with quality, but at only $8.”
Hansen said gourmet pizza aficionados were willing to pay for “real quality” premium pizzas two decades ago for as much as $14, and it is not about to sway them away merely on price. “Cheap pizza is a quick and easy meal for Mum, Dad and kids at a [low] price, whereby the gourmet providers are generally restaurant style , with some takeaway but always a far superior product.”
Crust founder Costa minced no words in reminding Domino’s that it should just stick to its strengths, and not overextend just because a competitor like RFG expanded into the gourmet pizza market with the purchase of Crust and Pizza Capers.
“Dominos are threatened by the real quality other true gourmet pizza suppliers offer. There is a market for everything. Domino’s should be focusing on what they are good at: Middle of the range, affordable food for the masses.”
So will it be a real “game changer”?
With Domino’s insisting that Chef’s Best is a “game changer,” we could not resist asking the panel whether the claim rang some truth to it. Only one agreed that it was, with Pereyra saying: “This is a game changer only if this pricing can be sustainable.”
The majority though disagreed on multiple grounds.
"I too was taken in by Domino's teaser campaign promising a 'game changer' and a 'revolution' in the pizza industry. I imagined perhaps that Domino's had decided to install a new wood-fired pizza oven outside each Domino's store across Australia,” said Webber.
“Imagine my surprise when the game-changing revolution was simply a new pizza menu full of the same old 'gourmet' combinations that other pizza makers have been serving for years – all for a suspiciously low price point… A real 'game changer' in Australia would have been a return to traditional pizzas of a standard size and shape, with identifiable, natural ingredients and names that didn't have a
™ symbol after them…Meatza Pizza™, anyone?” added Webber.
“No game changer here, it would be like McDonald’s going out and saying we are the healthy burger people and expecting to win away the customer base of Grill’d or Jus Burgers,” said Hansen.
“I disagree it’s a game changer from a consumer point of view – perhaps an industry insider would say this but they aren't really focused on what changing the game would mean for a customer. It’s an operationally based comment,” said Patient.
“This is just another marketing strategy to gain some media attention. It's worked,” said Costa.
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