Domino's Pizza Entering Foreign Markets
Summary
TLDRMoving into foreign markets can be challenging if you don't get local input. Domino's faced issues when they expected other cultures to adapt to their methods but learned to adapt themselves. In England, marketing confusion arose from language differences, while in Japan, pepperoni was initially misunderstood. Domino's adapted menus with regional preferences, like spicy chicken in India. Expansion included understanding cultural nuances and developing master franchises, such as in Mexico, where the brand thrived despite economic challenges. Consistency, local partnerships, and adapting to local customs have driven Domino's global growth, making it a leader in the delivery pizza business across over 50 markets.
Takeaways
- đ Expanding into foreign markets requires adapting to local cultures rather than expecting them to change for the business.
- đ Marketing slogans can have different meanings across cultures, as seen with Domino's 'One call does it all' slogan, which was misunderstood in the UK.
- đ Domino's has steadily expanded internationally since 1983, reaching over 50 markets with over 3,000 stores outside the US by 2006.
- đ Domino's aims to be the leader in the delivery pizza business, not just the pizza business, in every market it enters.
- đŻđ” Cultural adaptations are crucial, as seen in Japan, where there was no word for 'pepperoni,' leading to misunderstandings until it became the top pizza topping.
- đ Domino's menu adapts to local tastes, with unique toppings like squid, tuna, sweet corn, and lamb in various countries.
- đŻ Consistency in operations is emphasized across all Domino's stores worldwide, ensuring a similar experience regardless of location.
- đ§âđŒ The company seeks franchisees with operational capabilities, not just financial resources, and provides extensive training and support.
- đĄ Innovative strategies like adjusting pricing in Mexico during an economic downturn helped Domino's become the top restaurant chain in the country.
- đ€ Community engagement, such as feeding children in orphanages, has been a part of Domino's strategy to establish a positive brand image in different markets.
Q & A
What key mistake did Dominoâs initially make when expanding to the UK market?
-Dominoâs initially used the U.S. marketing slogan 'One call does it all,' not realizing that in the UK, 'a call' meant a personal visit, confusing customers who thought they had to physically go to the store.
When did Dominoâs begin its international expansion, and what was the first market they entered?
-Dominoâs began its international expansion in 1983, with the first store opened in Winnipeg, Canada.
What unique challenges did Dominoâs face when entering the Japanese market?
-In Japan, there was no word for 'pepperoni,' which led to confusion as customers thought it referred to a small pepper, causing returned pizzas. Eventually, 'pepperoni' became the number one topping in Japan, with the Japanese word for it simply becoming 'pepperoni.'
How does Dominoâs Pizza ensure brand consistency across different international markets?
-Dominoâs maintains brand consistency by operating stores in a uniform manner worldwide. For instance, the storefronts, internal operations, and even the way pizzas are made are similar across different countries.
How does Dominoâs Pizza adapt to cultural differences in different countries?
-Dominoâs adapts its menu and operations to align with local cultures. For example, they replaced pepperoni with spicy chicken in India due to Hindu reverence for cows, and in the Philippines, they select store locations based on Feng Shui principles.
What was Dominoâs international growth strategy after 1985?
-After 1985, Dominoâs growth accelerated through the sale of master franchises in countries like Mexico, England, and Australia, allowing large public companies to run the operations in those regions.
What role does local marketing play in Dominoâs international expansion?
-Local marketing is crucial, especially in smaller countries where Dominoâs doesnât have the budget for television advertising. They rely heavily on print and other cost-effective marketing techniques tailored to the region.
What innovative strategies helped Dominoâs thrive in the Mexican market?
-Dominoâs in Mexico grew significantly by lowering prices during an economic downturn and positioning pizza as an affordable family meal. Additionally, they created innovative marketing strategies like setting up stores in high-traffic areas like subway stations.
How does Dominoâs support its franchisees globally?
-Dominoâs supports franchisees through commissaries delivering supplies twice a week, providing regular training and consulting visits, and helping with administrative tasks such as marketing and accounting.
What is Dominoâs core strategy for success, both domestically and internationally?
-Dominoâs core strategy focuses on convenience and offering a great product. This approach, combined with adapting to local markets while maintaining operational consistency, has been key to its global success.
Outlines
đ Adapting to Local Cultures in International Expansion
This paragraph highlights the challenges Domino's Pizza faced when entering foreign markets due to cultural misunderstandings. The company's initial strategy of using its U.S. marketing slogans failed in countries like England, where 'a call' meant an in-person visit, confusing the locals. Domino's international expansion began in 1983 in Canada, and by 2006, it had over 3,000 stores worldwide. The company's focus is on leading the pizza delivery business globally by maintaining operational consistency across markets, despite cultural variations. They learned that adapting to local preferences was crucial for success, as seen in Japan, where the misunderstanding of 'pepperoni' led to adjustments.
đ Global Expansion through Master Franchises
Domino's international growth accelerated with the introduction of master franchises in 1985. Large public companies, like those in Mexico, England, and Australia, played key roles in expanding the brand. Domino's Ann Arbor headquarters also serves as a global training hub, where managers from around the world learn how to operate stores. The company's enthusiastic culture is reflected in training events, where employees are motivated through shared goals. Mexico stands out as a strong market, with innovative master franchisee Alberto Tirado introducing the concept of franchising. His leadership in Mexico led to creative solutions, such as lowering pizza prices during economic downturns and implementing large-scale community initiatives like feeding children in orphanages.
Mindmap
Keywords
đĄForeign Markets
đĄCultural Adaptation
đĄMaster Franchise
đĄMarketing Strategy
đĄLocalization
đĄFranchise Support
đĄConsistency
đĄPepperoni
đĄTraining
đĄCommunity Engagement
Highlights
Domino's initially struggled to adapt to foreign cultures, realizing after significant costs that local adaptation was crucial for success.
In England, Domino's failed to understand that 'a call' referred to a personal visit, causing confusion with their 'One call does it all' slogan.
Domino's international expansion began in 1983 with a store in Winnipeg, Canada, and by 1995, they had opened their 1,000th international store.
Domino's set a goal to be the leader in the 'delivery pizza' business globally, focusing not just on pizza, but on delivery excellence.
Domino's operates in over 50 markets, with a consistent store design and operational structure worldwide, from Latin America to Japan.
In Japan, Domino's initially faced challenges with the word 'pepperoni,' as it had no Japanese equivalent. Customers thought it referred to a small pepper, but 20 years later, pepperoni became the number one topping in Japan.
Menu adaptations around the world include squid, tuna, sweet corn, and lamb in various markets, with pepperoni replaced by spicy chicken in India to respect cultural preferences.
In the Philippines, Domino's selects store locations based on feng shui principles to ensure prosperity, while the UAE requires special maps due to the complex street naming system.
Marketing approaches differ based on the market; smaller countries may rely on local print marketing rather than TV due to cost-effectiveness.
Domino's looks for franchise operators who can adhere to corporate guidelines, with a significant focus on training. Managers from around the world are trained in their Ann Arbor headquarters.
In Mexico, Domino's master franchisee Alberto Tirado played a key role in educating the market on the franchise concept, as it was still new in the country.
Domino's Mexico's innovative strategies include operating a commissary that delivers twice weekly to stores across the country, from Tijuana to Cancun.
After Mexico's economic collapse, Domino's successfully shifted its strategy by lowering prices and targeting families, leading to Domino's becoming the number one restaurant chain in the country.
Domino's in Mexico has successfully implemented initiatives like serving 20,000 pizza slices in subway stations and hosting events to feed children in orphanages across the country.
The master franchise model, introduced in 1985, allowed Domino's to expand quickly into markets like Mexico, England, and Australia, partnering with large companies for growth.
Transcripts
moving into foreign markets can be
challenging if you don't get local input
we expected cultures to change for us
and it took a few years and several
tries and embarrassingly several million
dollars to realize that we would be more
successful if we adapted to the culture
in England for example we tried to take
the u.s. marketing slogan which was one
call does it all and make it translate
to the UK what we didn't realise until
we got there was that a call in England
meant a personal visit the Brits didn't
understand why we were celebrating the
fact that all you had to do was come to
the store and and pick up your Pizza
Domino's conquest outside the US began
in 1983 in Winnipeg Canada by 1995
Domino's Pizza international opened its
1,000th store in 1997 came international
store number 1500 there were 3,000
stores outside the US in 2006 today
Domino's is in over 50 markets and is
set on growing into more country
our goal in all markets is to be the
leader in the delivery pizza business
not in pizza but the delivery pizza
business we've had successes with pizza
in every market in which we chosen to go
we operate our business in a consistent
manner throughout the world if you visit
a Domino's store in a Latin American
country you will see a storefront that
looks very similar to ours if you went
inside the stores you would see the way
that we operate is very consistent with
the way that we operate in the United
States pepperoni is the number one
topping worldwide what we discovered
when we entered Japan in 1985 it was
that there was no Japanese word for
pepperoni so the franchisee discovered
that he was getting a lot of pizzas
being returned to the store after
delivery because people thought
pepperoni meant some sort of small
pepper they didn't realize it was a meat
product 20 years later pepperoni is the
number-one topping in Japan and the
Japanese word for pepperoni is pepperoni
there are a host of unusual additions to
the standard Domino's Pizza menu around
the world like squid tuna sweet corn and
lamb
in India pepperoni was replaced with
spicy chicken with respect to the Hindu
reverence for the cow in the Philippines
site selection is based on feng shui
the belief that prosperity hinges on
building design and the placement of
equipment inside in the United Arab
Emirates special maps must be created
because all of their streets have three
different names which are used
interchangeably I'm in contact with all
the marketing managers or marketing
directors of each country and I'm
coordinating with them and supporting
their marketing calendars my focus is we
we are a brand we are one company no
matter if you are in UK and you are or
you're in France or in the Netherlands
we should all go to the same direction
try to be consistent with a brand and
work together
Domino's Pizza ma'am if we're in a small
country or in a country we're developing
to scale we generally don't have the
money to spend on TV which is a very
effective way of communicating our
message to customers and we have to use
local store marketing which is primarily
print vehicles because it's most cost
effective the search for qualified
operators doesn't vary much overseas
while having the capital to invest is a
must
Domino's still looks for people who are
capable of operating a business within
its corporate guidelines
I mean that's it talk about Pat it's
about a double Krusty say C Ponte Pizza
sea bass on exhale
Domino's international growth took off
after it began to sell master franchises
in 1985 some master franchisors our
large public companies which is the case
in Mexico England and Australia everyone
in the company is encouraged or in some
cases required to work in a store the
Ann Arbor Michigan headquarters or
Resource Center has a training store on
its lower level where managers come from
all corners of the globe for orientation
and training in recent years we created
that pizza store right here in our world
Resource Center so that not only are
they being immersed in pizza store
operations but they have access to all
of the resources we have but the core is
the fundamental operation of a Domino's
Pizza store and how to make it
successful people are very enthusiastic
about what it is that we do 3,000 people
will be together and will start cheering
who are we Domino's beats what are we
number
what's our goal sell more pizza have
more fun and sometimes will do this in
hotels and the walls will literally be
shaking
Mexico may be the strongest market
outside the US since getting started in
1990 they've grown to over 500 stores
due in large part to their innovative
master franchisee Alberto tirado his
pioneering efforts have brought a new
understanding of food and franchising to
his country there were no franchises if
they were only McDonald was been in the
market for two or three years so
teaching the people what's a franchise
what's the idea of franchise what kind
of support they have what kind of
royalties they have to pay is not that
easy the best master franchisees nurture
their stores and support them on many
fronts a commissary that we have right
now that visit every stores two times a
week we have a delivery company as well
as the commissary and we are delivery
stores from Tijuana to Cancun two times
a week another kind of support that we
do we give them out all types of
training our consultants visit every
store in the market at least every 45
days we also have an office here that we
help them with administration we have
them with accounting we have them with
marketing materials now where
franchisees have a complete year of of
advertising already paid with a 5% they
pay everything it's included in that no
Sega whoever grabbed Pizza the Domino's
Pizza Company ever decreasing tells us
also the choruses of Oris movie potatoes
todo esta semana Festa campus ad and El
Nino
Pete Licata pizza grande quito siento
detangler pesos yo pizza
Santa's Allah when Domino's Pizza
entered Mexico the pizza product was
really positioned at the high end more
an upper-middle-class kind of food it
was very expensive that really worked
well until the economy of Mexico
collapsed and that forced a radical
shift in how they did business so what
they did was they actually lowered
prices and began to advertise that Pizza
is a great meal for the entire family
but they made so much more money doing
that that today Domino's Pizza is the
number one restaurant chain in Mexico
larger than Domino's Mexico has other
innovative strategies geared to their
specific market needs the relocator was
thoughts in the high traffic areas and
right now we have an example in the
subway station in the country but we are
sending close to 20,000 slices in it
they set aside one day in which they
feed every child in virtually every
orphanage in the country there's a lot
of kids in this country a lot of food
heat so we decided to give pizza free
200000 teaching that into this country
Domino's is going to be
rather than helping the community
Domino's learned an important lesson
about the value of working with local
master franchise owners and has
prospered ever since sticking with a
core strategy that we follow in the u.s.
is a really good starting point
convenience plus great product equals a
great business for us
you
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