DISSERTATION REPORT

On

“Impact of Price Promotions on Brand loyalty of

DOMINOS in Food and Beverages in Delhi & NCR.“

Submitted By

ABHINAV KHANNA
A0102207003

MBA (M&S) Class of 2009

Under the Guidance of

Prof Dr. Gargi Bandyopadhyay

Lecturer, Deppt of OM & DS

In Partial Fulfillment of Award of Master’s Degree

In Business Administration

To

AMITY BUSINESS SCHOOL

AMITY UNIVERSITY UTTAR PRADESH

1
 AMITY UNIVERSITY UTTAR PRADESH
AMITY BUSINESS SCHOOL

DECLARATION

I, Abhinav Khanna student of Masters of Business Administration from Amity

Business School, Amity University Uttar Pradesh hereby declare that I have completed
Dissertation on “Impact of Price Promotions on Brand loyalty of DOMINOS in Food and
Beverages in Delhi & NCR” as part of the course requirement.

I further declare that the information presented in this project is true and original to
the best of my knowledge.

Date: March 24th, 2009 Abhinav Khanna

Place: Noida A0102207003

MBA (Marketing & Sales)

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 AMITY UNIVERSITY UTTAR PRADESH
AMITY BUSINESS SCHOOL

CERTIFICATE

I, _________________ hereby certify that ___________ students of Masters of

Business Administration at Amity Business School, Amity University Uttar
Pradesh has completed dissertation on “Impact of Price Promotions on Brand loyalty
of DOMINOS in Food and Beverages in Delhi & NCR”, under my guidance.

Prof Dr. Gargi Bandyopadhyay

Lecturer, Deppt of OM & DS

ACKNOWLEDGEMENT
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It has been enriching experience in the phase of doing the project on Impact of Price
Promotions on Brand loyalty of DOMINOS in Food and Beverages in Delhi & NCR.

I would like to thank Mr. Ranjan Kumar Nireshwalia‐ Product Manager, HILTI India
for sparing his precious time for patiently clearing my queries about the project and giving me
complete guidance throughout the project. Under his guidance only the project has been
possible.

I am immensely grateful to Prof. Dr. Gargi Bandyopadhyay who guided me throughout the
project.

And last but not the least I would like to express my gratitude to the all the construction
contractors and distributors who provided me the required information and took out time from
their busy schedule, without which collection of data would have been like crossing seven
seas on this earth.

EXECUTIVE SUMMARY
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PROJECT TITLE

Impact of Price Promotions on Brand loyalty of DOMINOS in Food and Beverages in

Delhi & NCR.

RATIONALE OF PROJECT

The rationale behind this project is to analyse customers perception about various price
promotions offered at Dominos. This project is directed towards exploring the attitude of
customers towards price promotions offered at Dominos and to analyse the effectiveness of
these price related promotional schemes on the customer base of Dominos.

OBJECTIVE OF PROJECT

The research project has been carried out to find the effectiveness of price promotions on
brand loyalty of customers of Dominos. The objective of the project is to analyze that
whether customers of Dominos perceive price promotion as a purchase decision factor or not
and whether price promotions can have an impact on longer term brand equity and not just
short term effects.

RESEARCH METHODOLOGY

A directed structured questionnaire incorporating close ended questions was administered to

the customers of Dominos at various outlets in Delhi & NCR region for the purpose of
research study, using convenience sampling and mall intercept. This was supported with in-
depth interviews to comprehensively extract out relevant data. Appropriate sources such as
company literature, brochures and catalogues have been referred appropriately to substitute
the research study conducted.

FINDINGS

After interviewing the customers of Dominos, the findings were as under:

• A customer purchase of Dominos pizza depends on three factors:
- Various promotional offers such as buy1 get 1 free, get 50% off etc.
- Massive savings on the part of customers while availing the offer.
-New and exciting offers for its customers are introduced every month by Dominos.

• Most of the customers use Domino’s price related promotional schemes while making
the purchase especially high involvement consumers use coupons, rebates and other
promotional tactics more frequently.

• Customers who are highly loyal to Dominos would not switch to other existing brands
in pizza market if they have similar price related sales promotion schemes.

• Many customers perceive that companies use promotional schemes just to increase its
sales.
CONCLUSION
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The important facts which have been concluded from the data regarding how customers
perceive price related promotional deals by Dominos and the impact of such deals on the
loyal group of customers of Dominos are :-

• For the brand loyal consumer, a price promotion serves to encourage repeat usage and
neutralize the competition.
• Loyal buyers, a consumer category more aware of the value of the deal, have a
considerably more positive perception of the promotional offer, which translates into
higher purchase volumes.
• Highly loyal customers have considerably higher perception of promotional offers
than those that are less loyal towards the promoted brand.
• Price related sales promotions may assist in sustaining long term product loyalty of
present users in addition to their more traditional role of obtaining product trial among
new users.
• Viewing price related sales promotion as merely a means for obtaining product trial
among non users or as an enticement to brand switching among low loyalty
consumers disregards a considerably large and important segment of the target
market. : The present brand loyal customers of Dominos.

RECOMMENDATIONS
After a full analysis of project report, these are the following recommendations:-

• Dominos should use price promotions to reward its highly loyal group of customers
and encouraging repeat usage among moderately loyal consumers.

• Dominos should not only use price promotions as merely a strategy for just increasing
sales but also to renew relationships with its target customers.

TABLE OF CONTENTS

Page
1 Introduction

2 Literature Review
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 2.1 Role of Sales promotions
2.2 Food & Beverages
2.3 Fast food Scenario in India
2.4 Company Profile
2.5 Price related Promo advertisements
2.6 Price & Promotional wars
2.7 Price related offers by Dominos

3 Problem Statement

4 Hypotheses

5 Research Methodology

6 Analysis & Interpretation

7 Conclusions

8 Recommendations

9 Limitations

References

Appendices

INTRODUCTION
This research is directed towards exploring issues related to traditional antecedents of
consumer behaviour and promotional programs targeted at individual consumers of Dominos.
In particular, this research investigates the relationships between brand loyalties, purchase
involvement, experience with the product class and the impact of price-related consumer
promotions on Loyal Vs Non Loyal consumers of Dominos. Whether price promotions can
have an impact on longer term brand equity and not just short term effects is of interest to the
7
marketing practitioner. If a person views the price related consumer promotion positively it
means that the chances of the same person being brand loyal towards that brand would also
be high. There is a positive correlation of price perception and brand loyalty. According to
this, if the perceived prices of the promoted brands are fair then it would have positive effects
on brand loyalty of that brand. Overall consumer promotions are expected to give positive
results with the people who have positive views about consumer promotion and who can be
influenced by promotional efforts. So while deciding about consumer promotion it should be
thought in advance that who is the consumer promotion activity aimed at. This way wastage
of large amounts of money can be avoided by spending on ineffective consumer promotion
activity. Every effort should be given to make the consumers think that the prices of the
promoted brand are fair, even when there is no promotional activity is undertaken. Though
there is a tendency in the F & B sector to provide frequent promotional offers, yet the
perceived quality should in no way go down because there is a good possibility that the brand
loyalty would also go down. This analysis is intended to aid our understanding of how
consumers react to price promotions. It should assist brand managers, retail managers and
marketing personnel to more effectively manage price-related consumer promotions as one
element in an integrated marketing program. Therefore it is imperative that consumer
promotions and other dependant elements have to be studied, to make sure that if a consumer
promotion activity is implemented it is a highly effective one. This way, precious monetary
resources have the minimum chances of being wasted. To look at market share issues, the
price promotion and its impact on brand loyalty of customers in food and beverage sector
(DOMINOS) should be explored.

THE ROLE OF SALES PROMOTION

Traditionally marketers have used advertising as a means to build awareness, create an image
or position a product to build long term brand equity. Sales promotions, on the other hand,
have been used to achieve timed sales increases. A potential additional goal of sales
promotion, and the subject of this research investigation, is the impact of a sales promotion on
brand equity and loyalty to the brand. In particular this study will evaluate whether a sales
promotion, in the form of a rebate, has differential effects between non-users and frequent
users of the brand. A brand loyal consumer nearly always purchases the same brand, while a
non-loyal user often switches brands. Indeed, within most product categories it is rare to find
consumers who exclusively purchase one brand and thus a brand loyal consumer may be
considered one who usually purchases a given brand, allowing for occasional purchases of
other brands. In recent years, the use of sales promotions has risen dramatically (Gale, 1994).
One of the primary reasons promotional activity has increased is that the effectiveness of
promotional campaigns is considerably easier to measure and document than the effectiveness
of an advertising campaign. The broad use of in-store scanners, store scanner panels, and
frequent shopper cards identifying individual consumers, coupled with syndicated data
suppliers, such as A.C. Nielsen Company and the National Panel Diary (NPD), has given
managers access to the transaction based data needed for accurate analysis of promotional
programs. In order to effectively evaluate sales promotion programs, the data must not be
aggregated, but collected, and analyzed on an individual-store-week basis, which has
recently, been made possible with the broad utilization of in-store scanners (Totten and
Block, 1994). Short term price promotions generally lead to increased sales which can be
easily documented through electronic scanner data, substantiating the strong positive
correlations between sales promotions and sales activity. Unfortunately, advertising
researchers find it much more difficult to prove sales increased due to an advertising program,
since advertising research relies on considerably more subjective measures (Shapiro, 1990),
8
and there is a much greater time/distance gap between receiving an advertising message and
consumption opportunities. Use of scanner data, etc. has proven the strong correlation
between promotional offers and sales, while the longer term effect of advertising is not as
easy to measure and document to brand managers. Additional support for sales promotions as
a primary component of a promotional strategy come from the competitive nature of the retail
environment. Sales promotions appeal to retailers because they: (1) accelerate purchase, (2)
raise shelf space revenue, (3) provide sales staff with a basis for facilitating interaction with
consumers, and most importantly (4) generate increased tangible sales as inventory moves
more quickly out of the store (Ehrenberg, Hammond and Goodhardt, 1994). Further, retailers
rely on promotional programs to generate store traffic and to increase store loyalty (Totten
and Block, 1994) as well as giving the retailer a reason to develop local advertising and
"special" in-store merchandising that features the promoted brand or product. Faced with
promotion programs offered by competing manufacturers in the same product category,
retailers have the advantage of selectively supporting those promotional programs that will
maximize retailer profit, through increased sales while maintaining the long term store image.
This trend of increased use of sales promotion is requiring brand managers to rethink their
strategic marketing plans (Gale, 1994; Shapiro, 1990). Sales promotions have become a
permanent fixture on the marketing landscape: retailers demand it, manufacturers need it, and
consumers expect it (Bhasin, Dickinson, Hauri and Robinson, 1989). The issue that marketers
must face is how to best utilize promotional strategies to entice short term bottom line sales
while maintaining long term brand loyalty. It also requires managers to rethink the goals of
their promotional activities, and to better determine how promotion can best fit into an
integrated marketing campaign. The two short term and most frequently noted goals of
promotion are to induce product trial and increase sales through accelerated purchase or
stockpiling. One of the means by which price promotion is employed to entice consumers to a
given product is by reducing their financial risk through price-based promotions. Firms
expect that a promotion will lead to increased brand switching with the potential for these
new customers to become brand loyal based on a positive trial experience (Ehrenberg,
Hammond and Goodhardt, 1994).
A consumer cannot become a "loyal" user unless he/she first becomes a user through product
trial. This product trial approach is extremely effective, due to the strong beliefs formed, on
the part of the consumer, through direct product experience. While consumers learn about
products from a variety of sources, including advertising and word-of-mouth, past studies
have shown a dramatic impact of product trial on consumer attitudes (Smith, 1993; Marks and
Kamins, 1988). Consumers hold much stronger brand perceptions when their conclusions are
based on actual experience, rather than the experience of others (e.g., word-of-mouth), or
through sources such as television advertising which are perceived as biased in favour of the
product being featured. It is widely known by practitioners and marketing researchers alike
that short-term consumer price promotions for branded products tend to have immediate
significant effects on the sale of the promoted brand (Neslin, Henderson and Quelch, 1985).
Promotional elasticity can be expected to be lower for consumer goods that are more difficult
to stockpile because of perishability, inconvenient size, or uncertainty of future usage needs.

Price related sales promotion

Price related sales promotion is a variety of short-term incentives to encourage trial or

purchase of a product or service by the consumers or the trade (retailers). There has been
increase in the sales promotion budgets of all organizations. Price promotions are defined as
‘promotions such as coupons, cents off, refunds and rebates that temporarily reduce the cost
of the goods or service’. These promotions focus on the reduced economic outlay required to
9
obtain a good or service. Non price promotions are defined as ‘promotions such as giveaways
or contests in which value is temporarily added to the product at full price’. Studies, which
have compared consumer response to different promotions, have followed this classification
in differentiating between types of promotion.

Coupons

A coupon is a written price reduction used to encourage consumers to buy a specific product.
Coupons reduce a product’s price and are used to prompt customers to try new or established
products, to increase sales volume quickly, to attract repeat purchasers, or to introduce new
packages sizes or features.

Coupons are distributed on and in packages, trough freestanding inserts (FSIs), print
advertising, direct mail, and in stores through shelf dispensers, electronic dispensers, and at
checkout counters. According to a survey, consumers’ preferred methods of receiving
coupons are through color leaflets in Sunday newspaper (67%) and by mail (59%)

Demonstrations

Demonstrations are excellent attention getters. Manufacturers offer them temporarily to

encourage trial use and purchase of the product or to show how the product works. They can
be highly effective for promoting certain types of products, such as appliances, cosmetics,
10
and cleaning supplies. As the labor costs can be high, demonstration are not used widely.

Frequent-User Incentives

Many firms develop incentive programs to reward customers who engage in repeat (frequent)
purchases. For example, most major airlines offer frequent-flyer programs through which
customers that have flown a specified number of miles are rewarded with free tickets for
additional travel. Frequent-user foster customer loyalty to a specific company or group of
cooperating companies that provides extra incentive for patronage. They are favored by
service businesses, such as auto rental agencies, hotels and credit card companies.

Point-of-Purchase Displays

Point-of-purchase (P-O-P) materials include outside signs, window displays, counter pieces,
display racks, and self-service cartons. These items, often supplied by products, attract
attention, inform customers and encourage retailers to carry particular products. A retailer is
likely is to use point-of-purchase materials if they are attractive and informative.

Free samples

Marketers use free samples for several reasons: to stimulate trial of a product, to increase
sales volume in the early stages of a product’s life cycle, or to obtain desirable distribution.
Sampling is the most expensive of all sales promotion methods because production and
distribution – at local events, by mail or door-to-door delivery, in stores, and on packages—
entail very high costs. Free samples are generally not appropriate for slow-turnover products.
Despite high costs, use of free samples is increasing. In a given year, it is not unusual for
three-fourths of all consumer product companies to use sampling.

Money refunds and rebates

With money refunds, consumers submit proof of purchase and are mailed a specific amount
of money. Usually, manufacturers demand multiple product purchases before consumers
qualify for refunds. With rebates, the customer is sent a specified amount of money for
making a single purchase. These methods used primarily to promote trail use of a product.
One of the problems with money refunds and rebates is that many people perceive the
redemption process as too complicated. Consumers also have negative perceptions of
manufacturers’ reasons for offering rebate. They may believe that these are new, untested
products or products that haven’t sold well. If these perceptions are not changed, rebate offers
may degrade the image and desirability of the products being promoted.

Premiums

Premiums are items offered free or at minimum cost as a bonus for purchasing a product.
They are used to attract competitors’ customers, introduce different sizes of established
products, add variety to other promotional efforts, and stimulate consumer loyalty.
Inventiveness is necessary, however; if an offer is to stand out and achieve a significant
number of redemptions, the premium must match both the target audience and the brand’s
image. To be effective, premiums must be easily recognizable and desirable. Premiums are
placed on or in packages and can also be distributed by retailers or through the mail.

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Consumer Contests and Sweepstakes

In consumer contests, individual compete for prizes based on analytical or creative skills.
This method generates retail traffic. Marketers should exercise care in setting up a contest.
Problems or errors may anger consumers or result in lawsuits. Contestants are usually
involved in consumer contests than in sweep stakes, even though total participation may be
lower. Contests may be used in conjunction with other sales promotion methods, such as
coupons.
Entrants in consumer sweepstakes submit their names for inclusion in a drawing for prizes.
Sweepstakes are used to stimulate sales and, as with contests, are sometimes teamed with
other sales promotion methods. Sweepstakes are used more often than consumer contests and
tend to attract a greater number of participants. Sweepstakes cost considerably less than
contests. Successful sweepstakes can generate widespread interest and short-term increases in
sales.

Food and Beverages

Food

According to the Ministry of Food Processing, the size of the Indian food processing industry
is around US$ 65.6 billion including US$ 20.6 billion of value added products. Of this, the
health beverage industry is valued at US$ 230 billion; bread and biscuits at US$ 1.7 billion;
chocolates at US$ 73 million and ice creams at US$ 188 million. The size of the semi-
processed/ready to eat food segment is over US$ 1.1 billion. Large biscuits & confectionery
units, soya processing units and starch/glucose producing units have also come up, catering to
domestic and international markets. The three largest consumed categories of packaged foods
are packed tea, biscuits and soft drinks.

Beverages

The Indian beverage industry faces over supply in segments like coffee and tea. However,
more than half of this is available in unpacked or loose form. Indian hot beverage market is a
tea dominant market. Consumers in different parts of the country have heterogeneous tastes.
Dust tea is popular in southern India, while loose tea in preferred in western India. The urban-
rural split of the tea market was 51:49 in 2000. Coffee is consumed largely in the southern
states. The size of the total packaged coffee market is 19,600 tonnes or US$ 87 million. The
urban rural split in the coffee market was 61:39 in 2000 as against 59:41 in 1995. The total
soft drink (carbonated beverages and juices) market is estimated at 284 million crates a year
or US$ 1 billion. The market is highly seasonal in nature with consumption varying from 25
million crates per month during peak season to 15 million during offseason. The market is
predominantly urban with 25 per cent contribution from rural areas. Coca cola and Pepsi
dominate the Indian soft drinks market.

Fast Food scenario in India

The industry trend in India suggests that there is a significant shift in in-house pizza
consumption i.e. 10 % in 1995 to 30% in 2005. The delivery business is slated to grow at the
rate of 15-20% annually as of 2005. The average per store figures for pizza hut represent that
take away or home delivery accounts for 5.6-9.5% of its total sales revenue. Pizza hut is not
12
able to match the logistics of Dominos in metros where the presence of its large dine-in.
which prevented its presence all across the city. Pizza hut thus is also contemplating a move
towards the smaller towns (with population between 1 million and 3 million) where it felt its
delivery cum dine-in business would be a success as it could cash in on its brand name and
also on an efficient delivery system as the distance were smaller. The fast food market in
India began growing when more women started working. They want convenience at an
attractive price and a variety of products. An AC Nielson study indicates that a whopping
71% of urban Indians eat food from take-away restaurants more than once a month and as
many as 35% of the population do so 2-3 times in a month placing India as the 7th on the list
of 28 countries surveyed. Pizza hut meets these requirements by providing salads, potato
wedges, mushrooms, etc and ice cream along with its variety of pizza toppings. For the pizza
market in particular, the market is currently growing at 300% per year. Currently about
75,000 pizzas are sold every day in the country.

PROBLEM STATEMENT

There are many companies that are operating to serve the Food & Beverage markets; as a
result the competition has heightened. Price related consumer promotions are being heavily
used in the Food & Beverage markets to increase sales of each available brand. Consumer
related sales promotions, when implemented use lot of monetary resources. Failure to
implement the consumer promotion activity effectively may result in major loss of money.

HYPOTHESIS
Hypothesis of the Study are:

1) Brand loyal customers will have significantly more positive perceptions of promotional deal than

consumers who are not loyal to promoted brand.

2) Brand loyal consumers are likely to purchase proportionately more of promoted brand then

consumers who are not loyal to the promoted brand.

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COMPANY PROFILE

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DOMINOS PIZZA

Since inception, Domino's Pizza India Ltd. has proceeded to become one of the largest and
fastest growing international food chains in South Asia. The first Domino's Pizza store in
India opened in January 1996, at New Delhi. Today, Domino's Pizza India has grown into a
countrywide network around 220 outlets in 42 cities and is the leader in the fast food delivery
segment.

Ever since it was established, Domino's Pizza India has maintained its position of market
leadership with its constant product innovation and maintenance of stringent service
standards. More importantly, it has established a reputation for being a home delivery
specialist capable of delivering its pizzas within 30 minutes to its community of loyal
customers from its entire chain of stores around the country. Customers can order their pizzas
by calling a single countrywide Happiness Hotline - 1800-111-123. In fact, Domino's was the
first one to start this facility for its customers.

At Domino's the core competence is defined as minutely as its oregano is chopped. It's a
`home delivery specialist' whose corporate promise is: "A hot and fresh pizza delivered in 30
minutes or less." Tying in with that focussed definition of competence is Domino's corporate
positioning statement: "Nobody delivers better."

Domino's vision is focused on “Exceptional people on a mission to be the best pizza delivery
company in the world! ". Domino's is committed to bringing fun and excitement to the lives
of our customers by delivering delicious pizzas to their doorstep in 30 minutes or less, and all
its strategies are aimed at fulfilling this commitment towards its large and ever-growing
customer base.

Domino's constantly strives to develop products that suit the tastes of its customers, thereby
bringing out the Wow effect (the feel good factor). Domino's believes strongly in the strategy
of 'Think local and act regional'. Thus, time and again Domino's has been innovating toppings
suitable to the taste buds of the local populace and these have been very well accepted by the
Indian market.

Domino’s Pizza India Limited

Domino's Pizza India Limited (DPIL) is the master franchisee for India, Srilanka, Bangladesh
and Nepal from Domino’s Pizza International Inc., USA. The company had been promoted
by Mr. Shyam S. Bhartia and Mr. Hari S.Bhartia of the Jubilant Organosys Group (Formally
Vam Organic Group).
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The Company was Incorporated in March 1995. The First Domino's Pizza store in India was
opened in January 1996, at New Delhi and today after nine years Domino's Pizza India has
grown into a countrywide network of over 100 outlets in 27 cities, which includes:-

North - Delhi, Gurgaon, Chandigarh, Ludhiana, Amritsar, Jallandhar, Dehradun, Shimla,

Agra, Kanpur, Lucknow, Noida, Faridabad, Mussoorie

South - Chennai, Bangalore, Hyderabad, Coimbotore, Mangalore, Cochin, Secundrabad,

Manipal,

East - Kolkatta

West - Mumbai, Pune, Ahmedabad, Goa

Domino’s intends to penetrate completely within these markets by opening up 20-25 outlets
per year in these cities. Domino’s has a young and enthusiastic team of over 2,100
employees. Today, Domino’s has emerged as the leader in the fast food segment with about
65% of market share of pizza delivery in India and have outlets more than any other
corporation in the business of food, not just the pizza business. All the Company outlets are
corporate outlets invested by the company and also managed by the company.

Over a period since 1996, Domino's Pizza India has established a reputation for being a home
delivery specialist capable of delivering its pizzas within 30 minutes to its community of
loyal customers from its entire stores around the country. Customers can order their pizzas by
calling the single countrywide "Hunger Helpline" - 1600-111-123 and Domino’s was the first
one to start this facility for its customers.

Domino’s vision is “Exceptional people on a mission, to be the best pizza delivery company
in the world!” Domino’s is committed to bringing fun and excitement to the lives of our
customers by delivering delicious pizzas to their doorstep in 30 minutes or less, and all our
strategies work for fulfilling this commitment towards our large and ever-growing customer
base.

Domino's constantly strives to develop the product that suits the taste of its customers to bring
out the 'WOW' effect (i.e. the feel good factor). Domino’s believes in the strategy of “Think
local and act regional” that is blended with a playful image personified by our "Hungry Kya?"
positioning. Thus, time and again Domino’s has been innovating toppings, suitable to the
taste buds of the locals and these have been very well accepted by the Indian market, are
doing extensively well in the market. We are constantly in the process of innovating further;
we introduce new topping every 3 –4 months

Domino’s understands customers demand and is constantly developing local flavours

understanding the local sentiments. Also, the ingredients, sauces etc. are made keeping in
mind the taste buds of Indian consumers while retaining the international flavour.

16
Domino’s constantly strive to make the company an integral part of the lives of
the target audiences by getting involved with the clientele at the emotional level
and building long-term relationship with them. Thus, Domino’s concentrate more
on carrying out below-the-line activities in the area it serves.

Domino’s believe in bringing fun and excitement into the lives of our clientele.
We take our delivery proposition very seriously and our entire corporate ethic is
based on it. Domino's is the recognized world leader in Pizza delivery. But it isn't
just about delivering; it's also about giving back to the community. Domino’s
believes that an essential component of corporate responsibility is to provide
support to charitable organizations that benefit the communities where its
employees and customers work and live. Domino’s worldwide is known for its
commitment toward social causes and believes in adding fun to the lives of our
customers and communities it serves.

In India, Domino’s has been associated with the NGO’s devoted to the cause of
underprivileged children’s. Domino’s conducts Store Educational Tour (SET) for
the underprivileged children time-to-time. Recently this was done in the one of
the Domino’s outlet in Delhi and Mumbai with the underprivileged children from
CRY (Child Relief and You) where Domino’s took the pledge to provide part-time
employment to the eligible wards from CRY who are above 18 years, reiterating
its commitment towards social causes. Also, fifty- percent of that day’s first 20
deliveries of the store were given to CRY toward the cause of the underprivileged
children. Domino’s Pizza India also boasts about its commitment to serve its
customers on time by implementing the “30 MINUTES OR FREE” service
commitment, they have been able to achieve this as a result of continuous
efforts and dedication of the entire team in improving operating efficiencies.

Domino’s Pizza India has been consistently rated amongst the top 2 pizza chains
worldwide in the Domino’s family by Domino’s International, in terms of quality
of operations.

17
PRICE RELATED PROMO ADVERTISEMENTS

Pizza Mania Sicilian Wheat Stuffed Crunch Chinese Pizza

Treat Pizza Pizza

Taste Ki Full Cheese Burst Pizza Jeeto Shot II Cheese Burger

Guarantee Pizza

Summer Fun Meal for 4 Jeeto Sure Shot I Double Cheese

Promotion Crunch

30 mins or Free
Pizza

18
COMPETITORS

19
20
Pizza Hut

21
 Not every company that decides to enter India is
successful. Foreign companies can often pay a heavy
price if they don’t get their tactics right especially in the
beginning. The margin of error is even lesser in the case
of a fast food company. A multi ethnic country like India
which is a melting pot of different religions and cultures
invariably leading to different tastes and food taboos
proves a challenge to every company that wants to sell
fast food here. However, one company that has got its
tactics right in this very competitive sector is the American pizza giant Domino’s
following the right kind of price promotion strategies to
favorably connect with its target market. Through its 'Fun Meal for 4’ pack the Domino’s
Pizza India offers four pizzas at the rate of Rs 180. This means charge of one
pizza will be just Rs 45. This has helped the speciality food franchise to
enhance the strength of its customer base.

The challenge for Domino’s when it entered India was to establish

itself along with its traditional rival Pizza Hut. Since they began
both have done well but Domino’s has done just a little bit better. In
the coming years as things stand Domino’s looks in great shape to
become the number one player in India’s fast growing pizza industry.

Already having set up more than two hundred stores in every major metro in the country
Domino’s is on the right track towards making India one of its prime revenue destinations.

The future holds great promise for Domino’s but

it mustn’t forget the presence of other chains.
Apart from its premier rival Pizza Hut, the old
warhorse Pizza Corner and a new challenger
Smokin’ Joe's have been making steady
headways into the Indian market through attractive price related schemes.

A lot of effort has gone into Domino’s marketing. Its ad campaigns have constantly evolved
from establishing its name to emphasizing the taste of its products. Many have been aimed at
publicizing newer products with various price promotion schemes.

PIZZA PRICE COMPARISON

Company Price Range (Rs)

Domino's Rs 35-345
PizzaHut Rs 75-350

22
PRICING AND PROMOTIONAL WARS
In 1998, Pizza Hut also launched a promotional campaign to attract the customers. It had a
‘Pan In Your Name contest where it offered a free pizza to anybody with the word Pan in
his/her name. In April 2000, Pizza Hut launched its innovative Pizza Pooch Menu and a Pizza
Pooch Birthday Party package exclusively for kids in the 6-10 age groups. The Pizza Pooch
menu included a wholesome delicious meal and a gift for the child. The menu was intricately
designed with pictorial games. A free set of crayons was also provided to keep the children
occupied while their parents dined. The campaigns were eye-catching with cartoon characters
on the mailers, hoardings and print advertisements where the cartoon characters were aimed
at matching varying moods of kids. The Pizza Pooch birthday package was full of fun and
excitement. The birthday party included a well-decorated area within the Pizza Hut outlet
with several gifts for the children. The party was conducted by a trained host with lots of free
gifts.

In March 2000, Domino's slashed prices of Pizza by 40%. The price of a regular Pizza with
three toppings was cut from Rs.225 to Rs.130. In October 2000, Domino's ran a scheme,
where it gave away two pizzas for the price of one, within five days of placing an order.
During the same time, Pizza Hut launched a ‘one rupee pan deal’ scheme. Under the scheme,
for every pan Pizza purchased, another was given away for Re.1. In November 2000, Pizza
Hut introduced a scheme called ‘barah nahin to tera (if not served in 12 minutes, it is yours
free)'. The scheme offered a speed lunch in 12 minutes for Rs.89. One second over 12
minutes guarantees that the customer would get it for free. . Pizza Corner is at a great
disadvantage when it comes to price: its eight-inch Pepperoni Pizza costs Rs 155 while a
Dominos costs Rs 85.

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PRICE RELATED OFFERS BY DOMINOS

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25
RESEARCH METHODOLOGY
Marketing research:
Research methodology may be treated as the heart of the project without a proper and well –
organized research plan it is impossible to complete the project and draw objective of survey
to collect appropriate data, which work as a base for drawing conclusion and getting result.

Marketing research is a systematic collection, analysis, interpretation and reporting of

marketing data to enable the marketing manager to solve some marketing opportunities. It is a
objective study of problems undertaking goods and services. It may be emphasized that it is
not restricted to any particular area of services but it’s applicable to all its phases and aspect.
At this stage it may be worthwhile to examine some definition of marketing research.

Procedure:

The procedure that followed can be enlisted as below:

• Reading about various price related promotional offers of Dominos.

• Deciding on the objective to proceed.
• Developing Survey instruments
• Conducting personal interviews
• Finally analyzing the data obtained from the customers.

Process adopted:

1. Gaining knowledge about the Price promotions introduced by Dominos

2. Customer Survey

3. Referred to brochures and websites of competitors

- Research design:
Research design is key important primarily because of the increased complexity in the
market as well as marketing approaches available to the researchers. In fact, it is the key
to the evolution of successful marketing strategies and programmers. It is an important
tool to study buyer behaviour change in consumer lifestyles, consumer patterns, and
forecast market change. A research design specifies the method and procedures for
conducting a particular study.

A two stage Research was conducted:

1. Secondary Research:

Data was collected from websites and catalogues to understand the product and the
charges of the different bank.
1 Company Literature
2 Other sources required‐ various brochures, catalogues and articles on sites.

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 2. Primary Research:

A Primary Research was conducted:

The questionnaire was prepared and filled by customers of Dominos.

Questionnaire:
It is the most popular tool for the data collection. A questionnaire contains the questions
that the researcher wishes to ask his respondents which is always guided by the objective
of the survey.

In Depth Interviews:
In Depth interviews have to be conducted with a selected sample with the objective of developing
deep insights into respondents. The study is based on primary data derived through sample
survey using pre-tested structured instrument (questionnaire). In order to study the
perception of customers on price related sales promotion, I used brands from fast food
market especially pizza brands in food and beverage sector. The instrument consisted of
questions pertaining to experience in availing schemes, interest in schemes, perception
about the scheme etc. Data was collected from 100 consumers in Delhi & NCR region.

Sampling Plan & Design:

Elements:

The target population of the study included the general population.

Sampling Technique: Convenience sample and mall intercept

- Sample Frame
Outlets located in Delhi/NCR of Domino’s

- Sample size:
Sample size includes:

Delhi -- 30 (2 Outlets)
Noida -- 55 (6 Outlets)
Gurgaon-- 25 (2 Outlets)

Target sample size – 100 respondents (72 Males, 28 Females)

- Collection and coding of data

 Questionnaire
 Tool: MS Excel

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 - Data collection methods:
The parameters involved in the research and type of data to be analyzed has to be
identified. At this stage, we have to organize a field survey to collect the data. One of the
important tools for conducting marketing research is the available of necessary and useful
data. Therefore we would go for personal interview, as this is one of the best means for
collection of data.

- Obtaining the Primary Data

The data collection was primarily done through communication. Communication

involves questioning respondents to secure the desired information, using a data
collection instrument called questionnaire. The questions were in writing and so were
the responses.

Communicatio
n

Degree of structure- Degree of disguise- Method of Administration-

Structured Undisguised Personal Interview

Research Instrument

A structured non-disguised response was developed as a research instrument. All type of

questions is included in the questionnaire.

Data analysis and interpretation

 Questionnaires
 Pie chart and bar chart

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Pie chart & Bar chart

This is very useful diagram to represent data, which are divided in to a number of categories.
This diagram consists of a circle divided a number of sectors whose are proportional to the
values they represent. The total value is represented by the full circle. This diagram bar chart
can make comparison among the various components or between a part and a whole.

ANALYSIS & INTERPRETATION

General Analysis:

In general it is seen that consumers mainly prefer to use coupons of Dominos. As coupons
include various offers like Buy 1 Get 1 free etc so customers feel that they are getting more
value for money.

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 B
Figure 1

Price cut has also been preferred as customers believe that they are getting an advantage in
paying less than the original amount. Premiums, money refunds and sweepstakes have also
been used by customers.

Almost 79% of the customers out of the total customers surveyed are loyal towards Dominos
so they do not want to try or switch to other brands of pizza such as Pizza hut, Papa John’s,
Pizza Square, Amul but still 23% of the customers would try other brands of pizzas.

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 Figure 2

Dominos is the most preferred pizza outlet by the customers so customers use various types
of coupons to avail attractive offers, schemes, discounts, free gifts etc. So it is preferred by
the customer to use a Dominos coupon to get maximum savings on purchase of the pizza.
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 Figure 3

While some customers of Dominos use coupons once or twice in a month as they feel that
Dominos would introduce new and more attractive offers than the existing offers.

From the figure given below, I have analysed that almost 83% of customers perceive price
related sales promotion as purchase decision factor as they believe that promotion offers
motivates them into buying a particular product as well as these offers provides them with
various monetary as well as non monetary benefits but still a small fraction of customers feel

32
that offers are used to manipulate them to buy the product as well as force them to pay extra
than the original amount.

Figure 4

Out of the total customers surveyed, 42% of customers perceive strongly that price
promotions are essential which motivates them to make a purchase whereas 41% of
customers perceive price related promotional offer moderately to make a purchase while 17%
of the customers are not affected with the promotional offers introduced by Dominos.

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Figure 5

34
 Figure 6
120%
a) Most customers pre pone their buying decision in wait of another lucrative offer on
Pizzas as customers feel that the promotion offers provides them with various benefits
such as 50% OFF on purchase of second pizza.

b) Most customers postpone their buying decision in anticipation of an offer as some

100%
customers always avail various promotional offers when they buy Pizza so they are
ready to wait for a new offer so that they should avail the new offer from Dominos.

c) According to the analysis, most of the customers buy those products which they like
so they never purchase other products in the similar category even if they have
attractive promotions on them. Thus, customers only buy those products which are
value for money and will be motivate to purchase these products by availing any
promotional offers on the product of their choice.

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 Figure 7

Out of the total customers surveyed, 43% of customers believe that increasing sales is the
main objective of the companies when they introduce price related promotional offers.
Some customers also believe that companies use sales promotion as a tool to clear their stocks
as well as to promote new brands. Only 2% of the customers feel that companies offer
promotions to reinforce company image while 4% think that these offers are used as value
addition for customers.

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CONCLUSION
The important facts which have been concluded from the data regarding how customers
perceive price related promotional deals by Dominos and the impact of such deals on the
loyal group of customers of Dominos are :-

• For the brand loyal consumer, a price promotion serves to encourage repeat usage and
neutralize the competition.

• Loyal buyers, a consumer category more aware of the value of the deal, have a
considerably more positive perception of the promotional offer, which translates into
higher purchase volumes.

• Highly loyal customers have considerably higher perception of promotional offers

than those that are less loyal towards the promoted brand.

• Price related sales promotions may assist in sustaining long term product loyalty of
present users in addition to their more traditional role of obtaining product trial among
new users.

• Viewing price related sales promotion as merely a means for obtaining product trial
among non users or as an enticement to brand switching among low loyalty
consumers disregards a considerably large and important segment of the target
market. : The present brand loyal customers of Dominos.

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RECOMMENDATIONS
After a full analysis of project report, these are the following recommendations:-

• Dominos should use price promotions to reward its highly loyal group of customers
and encouraging repeat usage among moderately loyal consumers.

• Dominos should use sales promotion not only for short term sales effects but for
obtaining the long term product loyalty of present users in addition to their more
traditional role of obtaining product trial among new users.

• Marketing managers must begin to view sales promotion activities as a brand

management strategy to improve relationships with the existing customer base.

• Dominos while introducing attractive promotional schemes should also communicate

to its target customers that these schemes are not only used to increase sales but also
these offers are used to generate high brand loyalty among its target market.

• Dominos should not only use price promotions as merely a strategy for just increasing
sales but also to renew relationships with its target customers.

• Brand managers of Dominos must concentrate their focus on the highly loyal
consumer who purchases in considerably higher volumes than their less loyal
counterparts.

• Dominos should promote their price related promotions in such a way so as to

encourage higher perceptions of the deal which will lead to higher consumer
expectations of the deal, and ultimately higher purchase volume for the promoted
brand.

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Limitations

There are vast amounts of information and write-ups relating to the topics
of this research that are present in the internet and various other sources,
but it was not possible to gain access to many such information. So
missing out some important aspect of the discussed topics can be a
possibility. There is a major time constraint in doing the research work and
preparing the report, a much larger pool of information could have been
dealt with if there was more time to analyze them. A minimal sample size
will be used for this research; if a larger sample was taken into
consideration the research would have been more accurate. The survey
will be conducted in Delhi & NCR region which could be a possible reason
for the people’s mind set to be similar and survey results not being very
different from each other, the results could be different if people from
outside metropolitan cities were brought under consideration.

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REFERENCES

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APPENDICES

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