BMA604 CB-Brand Analysis Brief: Dominos Assessment 2 Answer
BMA604 Assessment 2 CB-Brand Analysis Brief (Domino’s)
1. Brand Overview
Dominos is an American Pizza restaurant chain founded in 1960 by James Monaghan, Tom Monaghan and Dominick DiVarti (Domino's, 2019). It operates in three industries, including food delivery, franchising and restaurants. The company is headquartered at Domino’s Farms Office Park, Ann Arbor, Michigan. In 2008, Dominos become the largest pizza seller in the world in terms of sales. As of 2018, Domino’s has stores across more than 16,000 locations. The total number of employees associated with the company-owned stores and franchises include 14100 and 290,000 respectively. Domino’s first international store was opened in Canada in 1983. Domino’s turned into a public company in 2004, when it started trading common stock on the New York Exchange. The company has managed to collect total revenue of US$2.47 billion in FY 2017- 2018 (AnnualReports.com, 2019).
Domino’s menu is set based on the demands of customers of a particular region. For example, presently, Domino’s menu in the United States features a wide range of Italian-American dishes. The main product of the company is pizza which comes with different tastes and variety. Domino’s sales it’s healthy, hygienic and delicious pizza at a reasonable price, which is a key success factor for the company (Thyne et al., 2019). Domino’s attracts a huge number of customers with its branded products portfolio. However, external environmental factors, including government policies, changing tax structures in developing nations, price wards, and product substitutions, often create challenges for Dominos to maintain high growth of business in the domestic and international market. Developing products as per the needs of the specific market is a major factor influencing customers’ purchase behavior. This report is purposed at discussing consumer behavior theories in relation to the selected food company. The study also highlights how the application of consumer behavior theory in the company may impact on the behavior of consumers.
2. The Target Market
Domino’s segments its offering based on three key variables, including demographic, behavioral and geographic factors. The company utilizes a differentiated targeting strategy in order to serve the market on the basis of preferences and taste. Since Dominos has a diverse customer base, it possesses a broad group of the target audience. However, the company mainly targets consumers belonging to the age group of 18 years and 35 years (Thyne et al., 2019). Dominos also focuses on targeting couples who have a busy working life and less time to prepare food at home. The company provides a quick and easy meal to people who go through a busy working schedule on a daily basis.
Domino’s geographic segmentation allows them to prepare a food menu based on the specific needs and demands of the market where it operates. The company mainly focuses on customers of urban areas since the demand for pizza in rural areas is not so high (Saad & Badran, 2017). Since Domino’s pizza can be purchased at a low cost, people belonging to medium to low-income group prefer its wide range of pizza. In behavioral segmentation, Dominos targets a young audience who prefer junk food. The company prepares delicious pizza in order to target a huge number of teenagers.
3. Identification and Major Impacts of Relevant Theories/Concepts
a. Identification of relevant consumer behavior theories
According to the discussion made by Schütte & Ciarlante (2016), consumer behavior can be defined as the behavior consumers demonstrate in purchasing products. It is important for the organization to identify consumer behavior in order to develop a deep understanding of what consumers need in terms of product or service features. Consumers’ actions and motives determine the economic viability of the organization. Consumers’ purchase decisions play a major role in determining the sales and profits of a firm. Implementing consumer behavior theories in the organization could facilitate Domino’s to understand consumer purchase behavior.
Maslow’s hierarchy of needs
Maslow’s hierarchy of needs theory is relevant to the particular scenario since this theory provides valued input to the consumer behavior concept. With the application of this theory, the company identifies the significance of motivation and needs in influencing customers’ purchase intention to a great extent (Parsons, Maclaran & Chatzidakis, 2017). The theory of consumer decision-making starts with the evaluation or acknowledgement of a need, which underlies the importance of considering the hierarchy of needs theory developed by Maslow.
Maslow’s hierarchy of needs is based on the assumption that each individual possesses five needs, such as physiological needs, safety needs, social needs, esteem needs, and self-actualization needs (Soni & Soni, 2016). One of the main reasons behind the selection of this theory is that it plays a key role in developing various models, which are utilized in defining consumer behavior (East et al., 2016). Consumer needs, want and desire largely depends on the individual’s motivation level, which can be determined through Maslow’s hierarchy of needs. Consumer decision-making is based on several factors, most of which may not be evaluated through the application of a single motivational theory. However, Maslow’s hierarchy of needs sheds light on five types of needs of the individual.
By applying this particular motivational theory, Domino’s managers can easily identify the needs and demands of customers, based on which product or service can be developed further in order to influence customers’ purchase intention to a great extent. As discussed by Grace, Lee & Sirgy (2016), theories of motivation are useful for marketing managers since they provide knowledge and insight into the motives of customers. In the selected scenario, Domino’s managers can identify consumers’ motives as well as their changing needs. Through the application of this motivational theory, Domino’s management can identify factors that can motivate their customers to purchase their products. Maslow’s theory will provide a framework for the management of Domino’s to understand whether the products can fulfill the needs of the target market.
Customer involvement theory
Besides motivation, involvement is also an internal state of mind that consumers experience when purchasing a product. It helps an individual analyze and rationalize his/her selection. Agencies and external sources may induce consumers’ involvement. It is an embodiment of time and enjoyment delivered by consumers during the selection of a particular product or service (Weisstein et al., 2017). Involvement theory highlights that there are both low and high involvement purchases. Through the application of this theory, the company can understand the extent to which consumers are involved in the process of purchasing a product or service. For example, while purchasing pizza from Domino’s, consumers do not involve them in purchase decision-making. On the other hand, when consumers purchase a laptop, then they are highly involved in the decision-making process. Hence, this theory has been selected in order to help Domino’s management to identify their customers’ involvement level in purchasing food products. With the application of this theory, Domino’s could understand consumer purchase behavior. Low involvement or high involvement of customers in purchase decision-making largely depends on the life of the product (Schultz, 2018). If the life of the product is short then the consumers are not highly involved in decisions. Without considering much investigation of the products or services, consumers purchase products of a short life. On the other hand, customers show high involvement when it comes to purchasing a product that possesses a long life. Through the implementation of consumer involvement theory, Domino’s managers can understand the psychology and behavior of the target audience.
Unlike other consumer behavior theories, consumer involvement theory enables organizational managers to determine the simple, insightful and quick assessment of consumers’ purchase intention as well as decision making (Haji Akir, 2015). Without spending much time in applying consumer behavior theory, Domino’s can quickly identify the involvement level of its customers in purchasing products. Another reason this theory has been selected is that the particular theory will help the management of Domino’s to identify the degree to which customers are emotionally involved in the purchase decisions. Therefore, it can be assessed that the consumer involvement theory is cost effective and time-saving marketing concept that can be easily applied by the organization to identify the extent to which customers are involved in purchase decision making.
Domino’s can apply both Maslow’s motivational theory and consumer involvement theory to deepen their understanding of factors motivating customers towards purchasing a product or service and identify the level of customers’ involvement in purchasing their wide range of food products.
b. Application of theories in marketing the brand
Maslow’s hierarchy of needs:
As shown in the below diagram, Maslow discusses five needs of individuals through a pyramid, where the bottom of the pyramid demonstrates the basic needs. Five needs within each individual include physiological needs, safety needs, social needs, esteem needs, and self-actualization needs.
Figure: Maslow’s hierarchy of needs
(Source: Lee & Hanna, 2015)
Physiological needs are the basic needs or food, water, clothing, air and shelter. Safety needs include emotional safety, protection, environmental and physical safety. Social needs are affection care, love and belongingness. Esteem needs can be classified into two categories, including internal esteem needs and external esteem needs. Internal esteem needs include self-respect, competence, confidence and freedom (Spangenberg & Lorek, 2019). On the other hand, external esteem needs are power, recognition, attention and administration. In the selected case scenario, the marketing team of Domino’s needs to focus on promoting how their pizza and other food products successfully satisfy the physiological needs of customers. Among five needs, physiological needs are relatable to the case scenario since Domino’s targets customers with its wide range of food products.
Since Domino’s pizza fulfils the physiological needs or basic needs of people, it may not be difficult for the organizational management to engage customers. The physiological needs are lower order needs, which are mainly satisfied externally. As far as the physiological needs are concerned, Dominos needs to ensure that the customers can purchase pizza or other foods of the company at a low price (Bouzenita & Boulanouar, 2016). Sometimes, people involving in busy work schedule do not have time to prepare food on their own, due to which they prefer Domino’s food. If the prices of the products are low, a huge number of people belonging to the middle to the low-income group can easily purchase foods from Dominos and fulfill their basic physiological needs in an effective manner.
Safety needs can be ensured by preparing food with fresh raw materials. It is important for the company to produce safe and healthy food so that healthy of consumers are safe. Safe and hygienic food of the company could attract a huge number of customers. If customers are provided with safe and hygienic food at a low cost, they will be satisfied and their purchase intention is likely to be influenced to a great extent (Fallatah & Syed, 2018). Suppliers of the company must supply fresh materials to prepare safe and hygienic food items. As far as social needs are concerned, the management of Dominos needs to organize social events for customers. In order to fulfill the esteem needs, managers need to ensure that customers’ queries are resolved on top priority. Moreover, customers’ suggestions about product development need to be considered and implemented so that customers can realize that they are given adequate importance. Domino’s needs to follow these steps in order to implement Maslow’s hierarchy of needs in the business and influence customers’ purchase decisions to a great extent.
Customer involvement theory:
Customer involvement theory can be applied in the organization in order to segment consumer into different groups, including low, moderate and high involvement groups (Hegner, Fenko & Teravest, 2017). Consumers belonging to these different groups can be targeted with diverse promotional strategies developed and implemented by the marketers. As shown in the diagram below, customers’ involvement can be segmented into four categories, such as high involvement/emotional, high involvement / rational, low involvement / emotional and low involvement / rational.
Figure: Consumer involvement theory
(Source: Xie & Jia, 2016)
Expensive business purchase decisions belong to high involvement / rational. High involvement / emotional category involve business purchases which are emotionally attached such as jewelry or some special gifts. Low involvement / emotional products provide emotional or sensual gratification to customers (Fallatah & Syed, 2018). However, such gratification lasts for a short time. For example, candy, movies, birthday card etc belong to this category. Customers purchase low involvement / rational products out of their habit without spending much time in decision making. Dominos’ pizza belongs to this category. It is important for the managers of Dominos to promote the products in a way so that their existing customers stick to their brand. Since the involvement of customers in purchase decision-making is low, Domino’s needs to make continuous efforts towards attracting customers by providing coupons and other incentives. Customers should be given compelling reasons to try Domino’s products.
In some cases, Domino’s products can also be identified as low involvement / emotional products. A huge number of customers of Domino’s do not prefer purchasing pizza and the same range of food items from other companies since they are emotionally attached to the brand. The marketers need to develop a strong relationship with the customers in order to make them emotionally attached to the brand. Domino’s marketing team should focus on developing a strong positioning strategy. The product development team needs to focus on preparing new food items based on the current market demand so that customers can be satisfied. Lack of customer satisfaction often results in brand switching, which ultimately affects the growth of the brand in a particular market environment (Spangenberg & Lorek, 2019). The advertising challenges in this category are the promise of maintaining good food quality and providing an excellent experience. When customers’ involvement in the decision-making process is low, the company encounters challenges in retaining customers. Customers need to be given maximum benefits through the product or service offerings.
From the analysis conducted in this section, it can be assessed that the management of Dominos needs to focus on implementing Maslow’s hierarchy of needs and consumer involvement theory in order to identify consumers’ purchase behavior. While Maslow’s motivational theory focuses on the assessment of factors that can motivate customers to be associated with the brand, consumer involvement theory helps in identifying the extent to which consumers are involved in making decisions towards purchasing a particular product. The marketing team of the company needs to ensure that their products fulfill the needs of consumers. It is important for the company to develop a strong relationship with the customers to retain the growth of business in the competitive marketplace (Bouzenita & Boulanouar, 2016). Maslow’s need hierarchy can be applied to identify which type of need customers want to derive from the brand. Consequently, it will help the marketing team to develop marketing campaign towards attracting consumers to a great extent.
c. Results/benefits of using consumer behavior theories:
One of the key benefits of using Maslow’s hierarchy is that it helps the management of the organization to identify the needs of customers, based on which products and services can be developed (Harrigan & Commons, 2015). In a particular scenario, Domino’s needs to apply Maslow’s need hierarchy in order to assess factors that can fulfill customers’ demands. For example, the basic need that Domino’s food items fulfill is physiological needs. Hence, the marketing team can design the promotional campaign in a way so that the customers can rely on Domino’s food items in order to fulfill their physiological need.
By using consumer involvement theory, the company can identify the involvement of consumers in decision making. By applying the theory, managers can identify the effective method of promoting the brand in the market. Since the involvement of customers in purchase decision-making is low, Domino’s needs to focus on making continuous efforts towards attracting customers by providing coupons and other incentives. Customers should be given compelling reasons to try Domino’s products (Hegner, Fenko & Teravest, 2017). The application of this theory is likely to help Domino’s to analyze customers’ selection process. With the utilization of this theory, Domino’s could understand consumer purchase behavior, based on which business strategies can be developed in an effective manner. Therefore, it can be assessed that both Maslow’s hierarchy of needs and customer involvement theory are likely to play an important role in Domino’s in identifying consumer purchase behavior.
4. Future Trends
As discussed earlier, the application of theory is likely to play a significant role in influencing consumer behavior and marketing practice of the organization. Maslow’s hierarchy of needs is one of the most popular and applied motivational theories that facilitates organizations to understand the needs and demands of customers. Maslow’s motivational theory is useful for marketing managers since they provide knowledge and insight into the motives of customers. After the assessment of motives of customers, marketing managers can help the product development team to produce food items that can fulfill customers’ needs, contributing to the better customer base formation. Moreover, the marketing team can use information about customers’ needs in designing a promotional campaign. Through the application of this motivational theory, Domino’s management can make out factors that can stimulate their customers to purchase their products, which will result in better revenue generation. If Domino’s management applies this theory in the business, they will get a framework to understand whether the products can fulfill the needs of the targeted customers.
On the other hand, consumer involvement theory is likely to help organizational managers to determine the simple, insightful and quick assessment of consumers’ purchase intention as well as decision making. With the help of this theory, Domino’s marketing teams can quickly identify the involvement level of their customers in purchasing products. Customers purchase Dominos’ pizza, which belongs to low involvement / rational products, out of their habit without spending much time in decision making. In future, the implementation of involvement theory will help marketing and management teams of Dominos to identify the ways to attract customers towards the wide range of products. It is important for the management of the company to ensure that customers are given compelling reasons to try Domino’s products. Hence, it can be summarized that the application of both customer behavior theories will facilitate the marketing team to identify customer purchase behavior and develop strategies to improve customer retention in the business.