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Insight: Why Domino’s Pizza is the consumers’ choice 

In the business world, new entrants often find themselves struggling and lagging behind market starters, with the larger portion of the market share frequently held by the first mover of a market, but it’s a different story in Nigeria’s pizza market.

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Domino's Pizza in Nigeria. Pizza companies, Debonairs Pizza

In the business world, new entrants often find themselves struggling and lagging behind market starters, because a largeportion of the market share is often held by the first mover of a market. However, the story is different in Nigeria’s pizza market. 

Within the past seven years of its operation in Nigeria, Domino’s Pizza’s achievements have managed to change the business rule book. This is all thanks to the consumers.

 Nairametrics learnt all these and more during an interview with Domino’s Nigeria’s CEO, Patrick McMichael, and Amalia Sebrakunzi, the company’s Marketing Director.

As you may well know, Domino’s Pizza is not the first pizza company to make its way into the Nigerian market in effort to take advantage of the growing urban lifestyle in the country. The American QSR (quick service restaurant) company was beaten to the market by Debonairs with just a few years. However, Domino’s success story has proven that being consumer-centric can erode the advantages of being the first mover.

Domino’s rise to the top: The Nigerian pizza market is run by three players Domino’s PizzaDebonairs and Pizza Hut. It is, however, dominated by Domino’s Pizza. Within the space of barely six years, the company has recorded significant growth beyond the grasp of Debonairs, with repeat purchases and referrals leading to increase in sales and profits. 

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Domino’numbers say it all: The company recorded a total 265,000 pizza orders in the month of March 2019. This is a significant boost when compared to 162,000 orders in March 2018. Consequently, the company’s customer base grew by 28% within a year, even as its store count increased to 90 across Nigeria.

“Debonairs and Domino’s came into the market with the same opportunity in the same marketplace to grow their businesses. One (Debonairs) chose to go the franchising route; another (Domino’s) chose to go the company store route.

“One chose to market the business in one particular way, the other chose marketing in different way, and the customers decided the rest. If the customers come to you, you grow, if the customers don’t come to you, you don’t grow.

“Domino’s is growing because customers are coming in, driving sales up and giving the company growth opportunities.”  McMichael

Categories of Domino’s outlets include the following-

  • Single branded: Only Domino’s or Coldstone store
  • Double branded: Domino’s and Coldstone store
  • Triad: Domino’s, Coldstone and Pinkberry store. 

Why consumers switched loyalty: It is possible that the blend of international and local flavours helped to increase the demand for Domino’s pizza. The company localised its pizza menu by 30%, while international flavours account for 70% of its pizza offerings. The inclusion of domestic flavours saw the listing of chicken-suya and beef-suya. Customers are, of course, the drivers of this decision. 

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The Price factor: Another driver of Domino’s customer base is its pricingWhile also offering premium prices like other pizza makers, the company deepened its penetration among the Nigerian population by further slashing its pizza prices by 10% and introducing the masses pizza ‘Smallie pizza’ which goes for N550; making it the cheapest pizza in Nigeria. 

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Maintaining quality after crashing pizza priceDue to its steady growth since inception, negotiation with suppliers has become easier compared to when the company first started. The suppliers are aware that it’s a win-win relationshipthe bigger Domino’s grows, the more successful they become as well. This is enough incentive for the company’s business partners to offer products or raw materials at affordable prices. 

Incentives for staff: Asides training the staff, Domino’s also offers them monetary incentives to encourage the maintenance of quality across all storesTeams whose stores pass the internal self-audit quality check get to share N300,000 monthly. It has also introduced mystery checks from third party agents to ensure consistency in quality. 

How Domino’s handle complaintsThe company tracks customers’ complaints and work on their feedback by reaching out to unsatisfied customers. While the company said the volume of complaints are dwindling, it is not resting on its oars; the company reworked its pizza menu, and introduced the ‘new extra menu’ last month, after receiving ‘dry pizza’ complaints. 

“Regarding the complaints, we are very serious about it; that’s actually an integral Domino’s culture worldwide. We are always very open to criticism, and we believe our worst enemy could be only ourselves.

“My worries are my products, my campaigns, and my quality. Am I able to keep my quality to the standard that I want it to be? So we have a very open channel. If somebody contacts us, we respond to them.

“We have something we call ‘wow’, so if somebody complains of something, we would reach out to them, understand what happened, and give them a little extra.” -Sebrakunzi 

The company also organises focus groups and researches to really understand the customers.

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Challenges in the Nigerian business environment: McMichael admitted that the business terrain in Nigeria is difficult. He, however, added that in his 29 years in the business, he has learned the necessity of understanding the market which a business operates in and the need to prepare well prior to participating in the market. 

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He further asserted that the benefit of doing business in Nigeria is that the demand is strong, though the supply chain and fluctuation in the economy poses a problem to businesses. 

“The other part that scares us is the supply chain and the fluctuation in the economy. So you have to build a Nigerian supply chain. You can’t be exposed too heavily to a national fluctuation or investing fluctuation because that put pressure on your business. You have to build your supply chain locally; that is where majority of the people fall apart.” -McMichael

Investing its growth into Nigerian kidsDomino’s Pizza has enrolled 246 kids in school so far. The target is award 1000 full-year scholarship per year. In the meantime, the company is working with Slum2School to deliver on this initiative. 

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Note that for every Cinnastix that is purchased, N100 is given back. For every corn waffle that is purchased in Coldstone and Pinkberry, the money is given to Eat ‘n’ Go foundation. 

Ripple effect of Domino’s across Nigerian economyAccording to McMichael, since Domino’s entrance into the Nigerian market, the company has invested over N10 billion. It has hired over 2100 staff to run its operations across Nigeria, and still plans to grow the workforce number to 3000 by Q4 of 2019. 

Asides Domino’s internal workforce, the company also works with local suppliers that go beyond raw material in Nigeria. The increasing demand for Domino’s products has also seen the company partnering with local suppliers. 65% of the Domino’s raw materials are sourced locally, with the company looking to fully localise the sweet cream base for Coldstone this year. 

Domino’s growth and innovation plansThere is a five-year plan which will see the company’s stores reach 300; more stores are already under construction. Also, its workforce will be strengthened within this duration, increasing it to 8000. 

Last year, the company launched a new website and apps on Android and the Apple platforms. It also introduced a new menu. There are plans for new pizza flavours and digital initiatives. It also intends to have a call centre by Q4 2018, which will cater to different languages across Nigeria.

Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

4 Comments

4 Comments

  1. Ability B. Japhet

    May 9, 2019 at 11:06 am

    I was never a lover of Pizza and does my wife never a lover of Ice Cream or even pizza.
    It’s always difficult wen I want to take the family out cause I need to crack my brain and search for locations.
    But I can tell you today dat Domino’s and cold stone gave us a choice of flavors.
    Proud to be a consumer of this products.

  2. David Assefa

    May 9, 2019 at 11:35 am

    Congrats to Patrick and the entire team. This is amazing.

  3. Ndidi Okoye

    May 9, 2019 at 12:28 pm

    Great interview. Domino’s is quite clear on their plans.

  4. Frank

    May 10, 2019 at 12:10 pm

    Domino’s environment is always cozy. Their ice cream is a delight to the taste bud. And my children love the pizzas especially chicken supreme and chicken suya.

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Financial Services

Niger Insurance Plc gets shareholders nod to restructure business

Niger Insurance Plc has announced plans to restructure its insurance business into distinct but mutually dependent business entities.

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Edwin Igbiti

Niger Insurance Plc has obtained shareholders’ approval to restructure its insurance business into general, life and business insurance, with each segment to be structured as a separate legal entity.

This is part of the resolutions passed at the 50th Annual General Meeting of Niger Insurance Plc., held on 20th of January, 2021 at Peninsula Hotel in Lekki, Lagos.

The decision to restructure the company is in a bid to make it more efficient and profitable to stakeholders, especially as efforts are geared towards overturning a loss of about 1,1723.2% Year-on-Year, earlier made by the company in its last reported financial statement, Q2, 2020, as reported by Nairametrics.

Other key decisions reached at the 50th AGM include;

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In case you missed it: The shareholders of Niger Insurance Plc in the 49th Annual General Meeting approved the decision by the company’s board to raise additional capital to the tune of N15 billion, in a bid to meet the revised recapitalization targets for general and life insurance companies.

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What you should know: The House of Representatives had in December 2020 directed NAICOM to suspend the mandatory deadline for the first phase of 50%-60% of the minimum paid-up share capital for insurance and reinsurance firms.

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Nigeria’s Qua Iboe crude exports resume as ExxonMobil lifts force majeure

ExxonMobil has lifted a force majeure on Nigeria’s Qua Iboe crude oil exports as production resumes.

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ExxonMobil has lifted a force majeure on Nigeria’s Qua Iboe crude oil export terminal, as crude exports resume for the first time in almost six weeks after a fire at the terminal halted operations.

This is according to a company spokesman yesterday, who confirmed the company had lifted force majeure on Qua Iboe crude loadings.

Qua Iboe production started to ramp up to normal levels of 200,000 b/d in the past week, according to sources, with the release of both the February and March loading programs.

The VLCC Dalia was also in the process of loading a 1-million-barrel stem at the Qua terminal since January 21, 2021, according to data intelligence firm Kpler. This will be the first export of Qua Iboe since December 15, 2020, after a fire hit the facility and injured two workers.

The company has been under pressure since the closure and prices have taken a hit as a result of the disruption. S&P Global Platts last assessed the grade at a discount to Dated Brent of 50 cents/b, down from a premium against the benchmark in December.

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Bonny Light, a mainstay Nigerian crude which typically trades at roughly the same level as Qua Iboe, was last assessed 30 cents/b higher.

What they are saying

One trader said: “If you get a cargo of Qua now it could be 50 cents to a dollar below Bonny even – a January cargo is completely out of cycle and the reliability issues mean people won’t touch it.”

Another trader stated that: “[The return of Qua Iboe] is not what West African crude assessments (WAF) differentials needed.”

What you should know

  • Qua Iboe is one of Nigeria’s largest export grades, and is very popular among global refiners, with India, the US, Canada, Italy, Spain, Indonesia, and the Netherlands being key buyers.
  • Qua Iboe is light sweet crude, which has a gravity of 36 API and sulfur content of 0.13%. The crude, produced from fields 20-40 miles off the coast of southeast Nigeria, is brought to shore at the Qua Iboe terminal via a seabed pipeline system.
  • Indian demand has steadied following a buying spree late last year, and European demand has been hit by renewed coronavirus lockdowns in the region.
  • Prices for Nigerian crude have suffered in recent weeks, even with lower supply due to the outage.
  • February and March loading programs have been issued for Qua Iboe averaging 169,643 b/d and 153,226 b/d respectively.
  • Production of this key grade ranged between 180,000-220,000 b/d in 2020, according to S&P Global Platts estimates.

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CBN says revised new cheque book to become fully operational from April 1, 2021

The CN has announced plans to discontinue the use of old cheque books with effect from March 31, 2021.

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The Central Bank of Nigeria (CBN) has in a circular to all Deposit Money Banks (DMBs), accredited Cheque Printers/Personalisers, and the Nigeria Interbank Settlement System (NIBSS), stated that the revised cheque book will become fully operational from April 1, 2021.

The apex bank has directed all DMBs to enlighten their customers on the revised cheque book, introduced across all banks as full enforcement of its usage will commence on the stated date.

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The disclosure is contained in a circular that was issued by the CBN and signed by its Director Banking Services, Mr Sam Okojere.

The CBN in the circular noted that the clarification became necessary as some stakeholders had been interpreting the circular differently from the intended purpose.

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The CBN in the circular stated, ‘’Please refer to our circular dated 9th December, 2020, referenced BKS/DIR/CIR/GEN/02/042 on the above subject.

It has come to our notice that some stakeholders interpret the circular differently from the intended purpose. Consequently, it has become imperative for the CBN to issue the following clarifications;

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What you should know

  • It can be recalled that in an earlier circular issued on the revised cheque book, the CBN had put the cut-off date for the parallel run of the old and new cheques at August 31, 2020.
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READ: CBN temporarily suspends cheque clearing during Coronavirus lockdown

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