Restaurants

The domino effect

Entering a market that had not yet warmed up to the concept of fast food, Domino's Pizza spurred other domestic and international brands to follow suit as well. Ajay Kaul, its CEO (Indian Subcontinent), talks about the journey so far

For a market that had never been accustomed to the international style of fast food, the challenge for Domino's Pizza was daunting but held promise because people had aspirations. Ajay Kaul, CEO (Indian Subcontinent), Domino's Pizza India, says, "Our research was based more on understanding the consumer's lifestyle by tracking the aspirations of double-income families for international foods and brands. Another interesting find from our research was that the Indian consumer was opening up to experimenting with new styles in food."

According to Kaul, Domino's currently holds a market share of around 40 per cent of the organised pizza market and is looking at various innovation techniques. But the food chain has had its share of struggles in its mission to create a niche market. He explains, "When we entered the market, we did everything on our own; even make our own sauce and cut vegetables. Now all our processes are outsourced to vendors. At Domino's we do not want to do anything other than managing dough. That's what Domino's actually does worldwide."

The game plan

The strategy of Domino's hinges on simplicity and the promise of delivery in 30 minutes. Throwing light on this unique strategy, Kaul, says, "When you are hungry, you don't want to wait. If we can peg customer expectations at the right time and fulfill it, chances are that they would be more than happy."

However, the promise of 30-minute delivery involved certain complexities. "Usually, when other marketers open their outlets, the major factors that are taken into account are location, visibility of the brand, etc. For us the factors are a bit different. For example, we have to see whether there is enough parking space, how far it is from the store, then set up location-based systems since finding the correct street and correct houses is an arduous task," he reveals.

He also explains the groundwork that goes into opening stores and says, "First we map the territory. Whenever you step into a Domino's store, you will see a map of delivery areas with house names and numbers on it. We also train our staff regarding this; when a person joins us, the first week of his job involves locating houses, not delivering." This he says is the unique selling proposition of the brand. But does quick service mean a drop in quality? Of course not, exclaims Kaul saying, "In advertising and branding the challenge is to narrow down your message. We focus on 30 minutes. And while speed is of the essence, if the food is lousy, the customer will not order again."

On the horizon

With 105 stores in 27 cities across the country, Domino's is looking at investing close to Rs 20 crore through six more outlets by 2006-end and add another 25 by next year. By the end of 2007, the group is looking at touching the target of 150 outlets. "Since the start of this year, the company has already opened 16 stores and is recording a growth rate of 45 per cent while the domestic pizza market is growing at 25 per cent annually," Kaul says. As part of its marketing campaign, the company has roped in Bollywood funny bone Paresh Rawal and looking at spending over Rs 5 crore for its new advertising campaigns. It also plans to invest another Rs 8 crore in relocating its factories in Delhi and Bangalore to deliver raw materials in the new set of outlets it plans to open. Simultaneously, it would also set up satellite commissary units to ensure timely delivery in small cities starting with Chandigarh with an investment of Rs 50 lakh.

Looking at other avenues such as structural innovations, Kaul says, "As there is growing use of the Internet and mobiles phones, the company is looking to establish new state-of-the-art point of sales with touch screen systems. This will come at an investment of around Rs 50 lakh." The company is also toying with the idea of opening franchisees for its outlets in B-class cities such as Indore and Aurangabad.

Kaul believes…

India is certainly on an upward swing and elaborating on this Kaul says, "With income levels rising more and more people will start getting brand conscious and the concept of ordering food is also going to catch up. We will also witness the emergence of non-metro cities that will witness a rapid growth in F&B outlets. Competition among domestic and international brands will certainly heat up and with such a vast marketplace, only the players that offer quality food will survive."