Marketing Intelligence - Domino's Pizza
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EGE UNIVERSITY
FACULTY OF ECONOMICS AND ADMINISTRATIVE SCIENCES
Sales Management Term Project Proposal
Asst. Prof. Dr. İpek Kazancoglu
Presented by:
Gamze Saba 13080002866
Barış İştipliler 13080002898
Ana García ERASMUS Std.
TOPIC: Marketing Intelligence for Sales Management, Domino's Pizza Case Study
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TABLE OF CONTENTS
Page Nr
INTRODUCTION 3
PART 1: LITERATURE REVIEW 3
1.1 What is Marketing Intelligence? 3
1.2 What are the differences between Marketing and Sales? 4
1.3 Integrating Marketing and Sales 5
PART 2: FIELD RESEARCH 6
2.1 Practical Insights: Domino’s Pizza 6
2.2 Analysis of the Evidences 10
PART 3: CONCLUSION 15
SOURCES 16
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INTRODUCTION
The wide range of product diversity in our world has resulted in a cluster of options
and opportunities from which customers can choose. In order to be perceived by consumers,
companies have to apply various marketing concepts and ideas to distinguish themselves
from their competitors. Marketing Intelligence can be understood as a way of gathering and
analyzing relevant information as far as a company’s decision making and market
opportunities are concerned. It determines the intelligence needed, collects it by scanning
the environment and delivers it to marketing managers who need the information. These
evidences are necessary for shaping a company’s strategies and decisions.
The aim of this project is to examine a variety of strategic Marketing Intelligence
concepts employed by the world’s largest pizza chain Domino’s Pizza with specific emphasis
being attributed to its Sales strategies.
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PART 1: LITERATURE REVIEW
1.1 What is Marketing Intelligence?
Market Intelligence is one of the popular intelligences in business. Cornish, S. L.
(1997) defined marketing intelligence as “the process of acquiring and analyzing information
in order to understand the market (both existing and potential customers); to determine the
current and future needs and preferences, attitudes and behaviour of the market; and to
assess changes in the business environment that may affect the size and nature of the
market in the future”.
Marketing and sales effectiveness is especially applied in manufacturing, technology,
insurance, and financial markets. It contains all activities to create demand, such as lead
generation and marketing communications. “Marketing Intelligence’s main use is to identify
successful new product developments early in the process to create company growth and
maximize revenues by finding a balance between costs and prices of products” (Cornish, S. L.
a, 1997). Especially software companies focusing on it become successful players in the
market.
1.2 What are the differences between Marketing and Sales?
Marketing and Sales are both activities aimed at increasing revenue and productivity.
Strategic business and sales channel alignment are also required for optimum success.
They are working together so closely that people generally do not realize the
difference between Marketing and Sales. In small organizations, also with the effect of cost
restrictions, the same people typically perform both sales and marketing tasks. Still,
marketing is different from sales and as the organization grows, the roles and responsibilities
become more specialized among the two.
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Marketing contains the measures used to reach and persuade a firm’s prospects that
are suitable for the company. It consists of brand marketing, advertising, viral marketing,
public relations, and direct mail.
On the other hand, the sales process contains interpersonal interaction. It is usually
done by a one-on-one meeting, cold calls and networking. It concerns the prospect or
customer on the personal level rather than a general approach.
When comparing both marketing and sales, the compotents of the two become
visible. The seven most used activities and tools for collecting Marketing Intelligence data in
product software industries are the following ones (Cornish, b, 1997):
Product testing
Industry intelligence
Sales/service
Trade shows
Channels
Qualitative methods (small “focus groups” and personal interview)
Aggregate data
Table 1: Cornish, S.L., b, “Strategies for the acquisition of market intelligences and
implications for the transferability of information inputs.”
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These strategies can also be applied in other sectors such as Fast Moving Consumer
Goods (FMCG), automotive, electronics, home furniture and so on.
Marketing efforts start with the process of the eight contacts that studies
demonstrate it takes to go through a prospect or potential client to the close of the sale.
When marketing is planned successfully you can begin to move that prospect from a cold to
a warm lead. When the prospect hits the "warm" level it becomes much easier for the sales
professional to close the sale.
1.3 Integrating Marketing and Sales
Based on the literature review, Dewsnap and Jobber (2000) propose that marketing
and sales integration in consumer packaged-goods companies has a positive effect on brand-
related and trade-related measures of business performance. It does not matter what side
you are on, the truth is that both departments need one another. Marketers can help the
sales department when it understands what it is they need to be successful. A sales person
goes through several phases in order to court a prospect into a client or customer. If thoses
phases are understood, marketing gets better at creating marketing materials that will work
for them, both in efficiency and effectiveness. Rouziès, Anderson and others (2005) stressed
the importance of sales’ and marketing’s integration by stating that “clearly, coordinating
the sales and marketing functions can improve the effectiveness of activities undertaken by
the functional areas.”
In order to obtain a competitive advantage in a highly competitive environment,
some important actions should be taken. For example, one could begin by dividing the
prospect lists according to segmentation of the marketing department and database them
into categories of cold, warm, and hot leads according to suitable action. Afterwards special
strategies can be created on how to proceed with each individual group. Kotler, Rackham
and others (2006) empasized that if the organization does not align incentives carefully,
marketing and sales groups also run into conflicts about seemingly simple things, for
instance, which products to focus on selling.
A company’s Cold Lead Strategy may consist of sending direct mailing or approaching
them with a special promotion whereas its Warm Lead Strategy may consist of attempting a
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follow-up call, sending out letters or scheduling a special seminar or training session to get
all of the warm leads together.
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PART 2: FIELD RESEARCH
2.1 Practical Insights: Domino’s Pizza
In the framework of this paper we conducted an interview with Mr. Tekin Eroğlu, the
Regional Manager of Domino’s Pizza in the Bornova area in İzmir, Turkey. Domino’s Pizza,
founded in 1960 in the USA, is the world’s largest pizza chain with more than 10 000
company owned and franchised stores in 70 countries (cf. Domino’s International). It
occupies a leading position in Turkey as well.
Mr. Eroğlu is in charge of four of the chain’s franchises in the Bornova area and his
main responsibilities include the management of Operations, the Supply Chain, Human
Resources as well as Marketing.
When it comes to the company’s goals and the criteria according to which they are
defined and analyzed, he says that the organization has various missions such as daily sales
quotas, sales volumes via call centers as well as online services such as the Turkish food
ordering website yemeksepeti.com. The criteria employed for evaluating those criteria vary
depending on the region the organization operates in and the customers served. Mr. Eroğlu
mentions that in the Bornova region the online (yemeksepeti.com) orders are higher than in
other districts since this is a student residential area in which there is a higher tendency
towards using the internet. Local Store Marketing (LSM) objectives are shaped by the
company’s national campaigns. Generally, there should be a 3% increase in sales for each
period. Our interviewee points out that the benchmarks and forecasts are defined according
to the last day’s and last year’s sales as well as to the month’s specifications such as the
season.
Changes in the regional structure are said to be effective. Mr. Eroğlu mentions the
example of a new Domino’s Pizza franchise having been opened in Osmangazi and that,
contrary to expectations, the Özkanlar store’s sales increased by 22%. This can be related to
the fact that the overall service quality and efficiency of Eroğlu’s franchises increased.
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In terms of competitive advantages when compared to rivals, Mr. Eroğlu points out
the quality and the variety of his products. There are several types of dough varying in
volume and taste (e.g. cheese). Domino’s Pizza is the only company of its kind serving sauces
with its pizzas for free. Furthermore, they operate with the “open-kitchen” system which
makes it possible for the customers to witness the preparation of their pizza. In terms of
marketing, Turkey is one of Domino’s operating countries in which the “30-minute
guarantee” is implemented. This means that if the customer does not receive his pizza
within that time frame, he receives a voucher for a free regular pizza that he can redeem at
his next order. Mr. Eroğlu summarizes his franchises’ strengths in as the “product-service-
image” chain.
We are also interested in finding out about the role of the internet when applying
marketing strategies. Our interviewee tells us that especially throughout the last two years,
his franchises have made effective use of the internet on both the national and regional
base. He points out the example of this year’s “social pizza” campaign where customers can
create their own pizzas online. This activity has had a considerable positive impact on the
company’s sales volume with last month’s sales having risen by approximately 9% in April
2013. In the current month of May 2013, he estimates that sales will be affected by about
15% since there is a national campaign that has been launched with a highly aggressive price
of 13.90TL. Afterwards, a rise of about 10% is expected by our interviewee. The marketing
department tries to analyze the brand awareness on social media and other popular web
sites such as eksisozluk and then tries to shape the company’s strategies according to their
findings.
When asked about the extent to which Local Store Marketing (LSM) activities are
used to increase sales, Mr. Eroğlu tells us that they make use of social media tools such as
FourSquare. Whenever a customer “checks-in” at one of their stores, he is given a portion of
cinnamon bread for free. We learn that apart from the B2C sector, Domino’s Pizza also
implements LSM strategies in the B2B sector, for example by sending out fax and SMS
promotions to firms.
As far as the company’s threats are concerned, our interviewee says that every
change in image towards the USA or fast food can affect Domino’s Pizza’s sales. He mentions
the example of Burger King and its 25% drop in sales caused by the alleged usage of horse
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meat. Social, political and health trends thus play an important role as far as a company’s
image is concerned and may affect sales considerably. Mr. Eroğlu states that the market he
operates in is a dynamic one and that he and his team should “be ready for all kinds of
surprises”. As main competitors in the İzmir region he mentions Little Caesars, pizza pizza
and Pasaport Pizza.
The relationship between Mr. Eroğlu’s sales and marketing departments is
characterized by close cooperation, also with other departments. There are monthly
meetings organized by higher authority in which the executives of the operations, sales,
marketing and finance departments come together to discuss their respective missions and
objectives with management. The management then provides feedback and advice. As the
local sales authorities, they also give them short briefings and hold presentations.
In terms of the marketing data used by Mr. Eroğlu’s team it can be said that they do
not have access to the national campaign’s data and strategies. But they are informed about
the latest data and main points concerning nation-wide campaigns in form of briefings
serving as a guideline to their own regional campaigns. When it comes to the regional LSM
activities, Mr. Eroğlu’s team derives its own data through the implementation of their
campaigns and by analyzing the achieved results and then taking decisions based on the
obtained information. The campaigns should be implemented during certain seasons of the
year, so the team uses its sources efficiently, for example by trying to define the right times
to implement their campaigns. The positions of the rivals previously mentioned and the
extent to which Domino’s Pizza reaches its sales volume goals are also relevant. The
environment is so dynamic that the company cannot allow itself to wait for the perfect data
to shape its local strategies. That is why, as a local store manager, Mr. Eroğlu has to take
quick decisions and act in multiple unexpected ways e.g. by implementing Guerilla
Marketing campaigns. As an example, he mentions that this month’s sales volume has
somewhat stagnated. In response to this stagnation, his local Domino’s Pizza franchises have
started to communicate with their local and national partners such as Turkcell, BEKO and
Kipa in order to create new campaigns. He says that the result of these agreements to
compensate stagnation will be perceptible within a few days from execution of our
interview.
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The company program used for numerical data storage and analysis is called PULSE.
This program has been specifically designed for the needs of Domino’s Pizza. Mr. Eroğlu
explains its vast functionality and reporting possibilities. It provides the company with the
required data for every variable, ranging from customers to streets, districts, cities, regions
and nations. The information retrieved from this system can be used when creating instant
events such as “Every large pizza for only 13.90TL for Özkanlar district customers for the
duration of 3 hours”.
The role of the local personnel in the sales process and the implementation of
marketing strategies is not to be underestimated either. Even though the products are
mostly sold in a vendor-based scheme, the store managers and employees may act as a
mobile sales force achieving to close high volume sales through their networks in the
neighbourhood. In some cases, such sales can be arranged by simply going to the doctor’s
and learning that there will be a major event throughout the next following days. The sales
force can then arrange an order of for example 100 pizzas for the next day. Store managers
can furthermore decide to start fax or SMS campaigns by the morning, which shows the
personnel’s degree of flexibility when it comes to implementing their own local campaigns
and sales operations.
Mr. Eroğlu stresses the point that the local work force is always aware of the
company’s objectives. When these objectives are attained or when an employee performs
particularly well, he or she is gratified in order to maintain a high level of motivation.
Possible ways of remuneration include extra payments and social activities such as
excursions, picnics or bowling. These means of gratification are meant to motivate
employees and maintain the chain’s goal achievement. They also contribute to the
maintenance of good relationships with the work force and create a friendly work
environment as well as a healthy platform for feedback.
2.2 Analysis of the Evidences
The interview with Mr. Eroğlu has provided us with an insight into Domino’s Pizza’s
Marketing Intelligence procedures in the Bornova area. We have learned about how the
stores he manages acquire and analyze information in order to understand the market,
which is part of the definition we provided in the first part of this paper. A considerable part
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of information is acquired through online service pages such as yemeksepeti.com which
enable the company to obtain information about the location, frequency and consistency of
orders placed, among other relevant data. The company program PULSE plays an important
role in the storage and retrieval of the data acquired.
Furthermore, we can say that both existing and potential customers are attracted
according to their specific environments as the examples of the “social pizza” online
campaign and the “check-in” cinnamon bread offer have shown. These offers are especially
attractive for younger customers who make use of the internet and new technologies. These
means of targeting are fitting for the Bornova area, which has a large student population.
Current needs and preferences of customers can also be understood from interactive
campaigns as the “social pizza” one previously described as it directly reflects what the
customers are looking for and may also provide the company with ideas for future offers and
campaigns. The company also directly obtains feedback about customer needs and
preferences by making use of its team’s network as employees have the flexibility to arrange
individual orders and offers to their contacts and acquaintances which best match their
demands and expectations. Attitudes and behaviours of the market are versatile and highly
depend on social, political and health trends as well as on the perception of the USA and fast
food in general. We have learned that Domino’s Pizza needs to take quick decisions in order
to keep their leading position in the market. Mr. Eroğlu said that whenever there is a need
for compensating sales stagnations, the company may arrange promotions and special deals
with their national and local partners. This is part of the assessment of changes in the
business environment which is another considerable aspect of Marketing Intelligence.
Since Marketing Intelligence contains all measures and activities aiming at creating
demand, especially the company’s intensive marketing communications can be mentioned in
this regard. Domino’s Pizza’s “product-service-image” chain is part of the company’s
branding and its “30-minute guarantee” represents an additional attractive promise to the
customer. The company is also active in the B2B sector where it markets customers through
fax and SMS campaigns. New product developments such as different types of dough and
consistency as well as an aggressive price promotion contribute to the brands continuous
growth and revenue maximization, nevertheless finding a balance between the products
costs and prices.
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The marketing and sales components described in the first part of this paper also
become visible in our field research example. Through our interview, we have gained the
impression that especially product testing, industry intelligence, sales and service, channels,
qualitative methods and aggregate data are part of Domino’s Pizza’s tools for collecting
Marketing Intelligence data. The “social pizza” activity can be perceived as a kind of product
testing since it provides Domino’s Pizza with valuable insights into customer product
expectations. The industry intelligence aspects are represented by the company’s business
environment analysis and moves to react to changes and competitor strategies. Sales /
service is a fundamental pillar of the company as reflected in the “product-service-image”
chain expressed by our interviewee. In gastronomy the personal contact with the customer
is indispensable and it will considerably shape the customer’s level of satisfaction and the
company perception resulting from it. In the case of Domino’s Pizza, this sales force –
customer relation is not only bound to the in-store experience but it also extends to the
home delivery service as well as any encounter with the sales force throughout promotion or
in personal life. The channels are the multiple ways through which the company reaches its
existent and potential customers. Face-to-face encounters on the street through promotion,
advertising on flyers or newspapers, online marketing and TV ads are part of these channels.
The participation of customers in online campaigns such as the “social pizza” can be
understood as a kind of qualitative method since it helps the company gather important
customer information as it would also be the case in focus groups or personal interviews,
with the difference that the customer here feels more anonymous since he is free to express
his wishes from his computer where he feels unobserved and relaxed. All gathered
information as well as aggregate data is collected and saved in the company program PULSE.
The case at hand has also shown how closely marketing and sales cooperate in the
daily operations of Domino’s Pizza. They do not only cooperate within each other but also
with all other departments, which is shown by the monthly meetings and feedback rounds
being organized by Mr. Eroğlu and his team. The integration of departments positively
affects the brand success and overall performance of the company. The sales force needs to
be informed about the ongoing marketing campaigns in order to appropriately serve the
customer and Domino’s Pizza’s marketers depend on the sales force in order to gain first
hand information concerning customer feedback, among other aspects. If both sides work
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together, as it is the case in our example, the overall efficiency and effectiveness of company
processes will be increased. To reach such an important level of cooperation between
departments, the implemented monthly meetings and briefings are of utmost importance.
We can say that Domino’s Pizza pursues both cold lead and warm lead strategies in
the forms of sending out faxes and SMS as well as the employees’ flexibility to create their
own special promotions in some assigned districts as a cold lead strategy and providing the
“30-minute guarantee” and organizing customer-based offers as warm lead strategies.
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PART 3: CONCLUSION
In conclusion, as it can be understood through the paper and the case study of
Domino's Pizza, there is a direct connection between the marketing intelligence and the
sales management and this positive correlation between these two functions, forces the
companies to take their actions in the way to dynamize their marketing intelligence to
increase their sales management performance. Therefore, to create this dynamism and
adding value, they try to show both local and national (and global) efforts at their best; from
store personnel to region-wide management, from national strategies to global ones.
Since the competition increases in nearly every market in which all of the barriers are
being lowered, we think that the usage of marketing intelligence in the sales management
will be one critical issue for the companies that want to survive in this environment and
increase their market share to boost their operational effectiveness.
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SOURCES
- Interview with Mr. Tekin Eroğlu, Regional Manager of Domino’s Pizza Bornova (İzmir,
Turkey), May 10, 2013.
- Cornish, S. L. (a), Product Innovation and the Spatial Dynamics of Market Intelligence:
Does Proximity to Markets Matter?, Economic Geography, Vol. 73, Issue 2 (April
1997), pp: 143-165.
- Cornish, S.L. (b), Strategies for the acquisition of market intelligences and implications
for the transferability of information inputs, Annals of the Association of American
Geographer, Vol. 87, Issue 3 (September 1997), pp: 451-470.
- Dewsnap, Belinda and Jobber, David. The Sales–Marketing Interface in Consumer
Packaged-Goods Companies: A Conceptual Framework, Journal of Personal Selling &
Sales Management, 20, 2 (Spring 2000), pp. 109–119.
- Domino’s IP Holder LLC, Find a Domino’s – International, 2008, dominos.com, online
on May 10, 2013.
- Glance, Natalie et al., Deriving Marketing Intelligence from Online Discussion,
Proceedings of the eleventh ACM SIGKDD International Conference on Knowledge
Discovery in Data Mining, ACM, 2005.
- Jenster, Per V. and Soilen, Klaus Solberg. Market Intelligence – Building Strategic
Insight, Copenhagen Business School Press, 2009.
- Kotler, P., Rackham, N., & Krishnaswamy, S. (n.d.). Ending the war between Sales &
Marketing. Harvard Business Review, 84(7-8), 68–78, 187, online on March 7, 2013:
http://www.ncbi.nlm.nih.gov/pubmed/16846190
- Lewis, Barbara R. and Mitchell, Vincent W.; Defining and Measuring the Quality of
Customer Service, Marketing Intelligence & Planning, Vol. 8 Issue 6, 1990, pp. 11 – 17.
- Prescott, John and others, Proven Strategies in Competitive Intelligence, Wiley, 2001.
- Rouziès, D., Anderson, E. et al. Sales And Marketing Integration : A Proposed
Framework, The Journal of Personal Selling and Sales Management, Vol. 16, No. 1
(Winter, 1996), pp. 1-20, published by M.E. Sharpe, Inc., online on March 7, 2013:
http://www.jstor.org/stable/40471609
- Trim, Peter R.J., The strategic corporate intelligence and transformational marketing
model, Marketing Intelligence & Planning, Vol. 22, No. 2, 2004, pp. 240-256, Emerald
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Group Publishing Limited, online on March 7, 2013:
http://www.fearp.usp.br/fava/pdf/pdf193.pdf
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