Chief of Marketing | 04 Jun 2005
“Branded pizza market stands at about Rs 275 to 325 crore. We have close to 60 per cent share of the delivery market. But if you look at the total market, that is delivery plus dining plus takeaway, we would have a 40 per cent market share.”
“Rakshit Hargave, Chief of Marketing, Domino's Pizza India, is a management graduate from FMS, Delhi, and an engineer from Institute of Technology, BHU. He began his career in 1992 with Telco. Subsequently, he joined Nestle where he worked both in marketing, handling sugar confectionery, and in sales as Area Manager, Delhi. During his stint at Nestle, he also developed innovative brand ideas for Maggi.
Before moving to Domino’s, he worked with ABN Amro for a year. In an interview with Sakshi Talwar of exchange4media, Hargave recaptures his experience at the pizza major. Excerpts:
Q. You have been with Domino’s for three years now. Can you recap the company’s journey in leveraging the brand?
Three years back, we were at a stage in the company where we had a lot to consolidate. Not all stores were making profit so we had to implement an action plan, which would firstly ensure that all our stores became cash positive, and then start on a programme of acquiring more customers through aggressive marketing. We undertook low-cost activities like giving incentives, having stores compete with each other, buy one get one free proposition, festivals, pizza manias and other on-ground activation to bring immediate customers. And we were able to raise the bar without any support from media. We then appointed contract as our advertising agency and worked with them to leverage the brand. We started on a brand communication programme to highlight the delivery proposition of Domino’s. We then introduced new products based on research. Then two years back we came up with a promotion with coke as people expected a beverage with a Pizza. We also introduced thin crust pizzas for people preferring a low carbohydrate diet. Then in December 2003, we introduced international best selling dessert, Cinna Stix.
Q. Besides introducing new products, what have been other promotional activities by Domino’s and how far were they effective?
In July last year, we decided to focus on the take-away market. To give value to the customer, we came up with Rs 50 pizza same time as Pizza Hut had come up with its promotion. We gave away a lot of free pizzas. Even today we give close to 1000 pizzas free during a week. We kept our promise of free pizza if it was late beyond 30 minutes. The company bore the cost. In November last year we came up with double cheese crunch pizza. And it increased sales by 45 per cent. Besides that we did a lot of ground activities in terms of alliances, radio advertising, etc. We also have this programme called the Rolex challenge. It’s a programme run by Domino’s international where store managers are awarded a Rolex watch if the achieve a certain sales level in specified time. Within the last four months 10 store mangers have won Rolex watches.
Q. Considering your giveaways, is the company making profits?
We are very profitable. In fact, we grew 40 per cent over the last year, and we plan to grow another 40 per cent in the coming year.
Q. How did you come out with the 30-minute or free proposition and what were the reasons for its success?
We were growing about 20 per cent but we felt we were not able to move the market as we wanted. We were looking at a model in marketing where we’ll get a huge number of orders in one store. In India, the biggest strength is its population. So, we decided to go with a high volume mentality. To make our delivery proposition stronger, we came up with a new communication last year in April stating that if we can’t deliver the pizza in 30 minutes, we’ll give it free. We started with Paresh Rawal, which saw us move up in terms of sales and customer acquisition by about 30 per cent. A free pizza is a very strong ploy but when a customer buys, he doesn’t buy for a free pizza but because he wants service guarantee.
Q. Do you have any new marketing initiative for this summer?
We have a new coke promotion linked with the 30-minute proposition. We also have a new advertising campaign to extend the 30 minutes delivery brand promise, this time featuring Anupam Kher. Though Paresh Rawal was doing a wonderful job, we thought in the new creative, Anupam will be the best suited.
Q. A pizza is not available for less than Rs 50 whereas a burger is easily available for even Rs 20. Don’t you face intense competition from fast food brands?
There is competition at all levels. We feel that we are also competing with a Rs 20-pack of Lays chips. So, the competition is not only with fast food but with packaged food as well. They key issue is, within the sphere of the spending power that the consumer has, how strongly have you positioned your brand. Fast food market is also dependent on creation of supply. And considering the number of new stores that are being opened, fast food market is growing at about 20 percent per annum.
Q. Though initially, you started as take-away and delivery chain, a few outlets now also have dining. Is this strategy an extension to fight competition that might be eating into your market share?
It’s not because of competition. We are never going to position ourselves as a dining chain. But wherever consumer has expectations and where the real estate is such, we have dining as it is about the experience.
Q. What is your share in the branded pizza market in India?
Branded pizza market stands at about Rs 275 to 325 crore. We have close to 60 per cent share of the delivery market. But if you look at the total market, that is delivery plus dining plus takeaway, we would have a 40 per cent market share. However, penetration of pizzas is still very low and there is a lot of scope.
Q. What is the ad-spend of Domino’s?
Our advertising spends include the discounts that we offer in the market, which is close to Rs 10 crore. Over and above that, we spend about 10 per cent of our turnover on print, press and television. So the total is around Rs 20 crore.
Q. What is the brand positioning of Domino's? What is the target audience?
Internationally too, we are positioned as pizza delivery experts. Target for pizzas at a higher level is anywhere between the age of 4 and 80. But 18 to 35 years is the core target group for our communication.
Q. How many stores do you currently have? Is there any plan to expand via the franchise route?
We have close to 100 stores in 27 cities and the immediate plan is to open 20 new stores this year at the existing locations. We are evaluated franchising as an idea and if that takes off, we will open more than 20 stores. We are also considering entering Nepal and Bangladesh market in the near future.
Q. Are you taking any specific initiatives that target children?
Yes we are. Everyday between 3pm and 6pm, we give two pizzas for Rs 100 including non-veg pizzas. Most orders come from children who have come from school. Very shortly we also plan to be present on kids channel, with communication directed only at children. We had tie-ups with Cartoon Network and Hungama.