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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. 

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. 

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.

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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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Business News

Nascon Allied Industries Plc: Increase in sale of goods boosts revenues

Nascon Allied Industries Plc recorded a boost from an increase in the sale of goods revenue-generating unit

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Nascon Allied Industries Plc recorded a boost from an increase in the sale of goods revenue-generating units, as total revenues increased slightly. The company reported revenues of N21.87 billion in 2020 (9months) – 4.01% increase compared to N21.03 billion in the corresponding period of 2019.

What you should know

Key highlights from 2020 (9months) results

  • Revenues increased by 4.01% from N21.03 billion to N21.87 billion YoY.
  • Revenues from sale of edible, refined, bulk grade salt; seasoning and vegetable oil, increased to N21.87 billion, +22.53% YoY.
  • Other income increased to N12.81 million, +27.43% YoY.
  • No revenue was recorded for freight income on the deliveries of salt and seasoning income-generating unit.
  • Gross profit increased to N8.96 billion, +74.56% YoY.
  • Operating profit increased to N3.64 billion +18.60% YoY.
  • Pre-tax profits increased to N3.47 billion, +16.63% YoY.
  • Post-tax profits increased to N2.29 billion, +13.27% YoY.
  • Earnings Per Share increased to 115 kobo, +12.75% YoY
  • Total assets increased to N44.36 billion, +45.79% YoY.
  • Total liabilities increased to N32.04 billion, +67.21% YoY.
  • Total equity increased to N12.32 billion, +9.35% YoY.

(READ MORE:Dangote’s NASCON Allied Industries Plc moves operation from Apapa)

Bottomline

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Nascon Allied Industries Plc recorded a boost from increase in sale of goods revenue-generating unit, but no revenue was recorded for its freight income on the deliveries of salt and seasoning revenue generating-unit.

Though companies have generally recorded decreased revenues in the last three quarters, mostly due to COVID-19; Nascon Allied Industries Plc was able to increase its total revenues and pre-tax profits in the period under consideration.

 

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Tech News

Instagram disables its “Recent” feature

Instagram has announced it remove the “recent” tab from hashtag pages on a temporary basis.

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COVID-19: Instagram cracks down on coronavirus AR effects, Instagram Tenders apology for fagging #EndSARS fake, Instagram has disabled the “Recent” feature for the forthcoming U.S election,

Instagram disclosed that it would remove the “Recent” tab from its hashtag pages for people in the United States of America.

The social networking and video sharing service stated this on its official Twitter handle. It said it is “doing this to reduce the real-time spread of potentially harmful content that could pop up around the election.”

What you should know

Nairametrics had reported on Instagram’s apology for its algorithm malfunction that led to the flagging of #EndSARS posts as fake.

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Instagram has also taken the following measures to ensure a successful November election.

  • The registration of 4.4 million votes this year through its flagship platform – Instagram and Messenger.
  • Serving as a means of information and tool to people in the US on the electoral process
  • The ban of any content that can thwart the success of the election.

(READ MORE:U.S dollar stable amid U.S holiday)

Mark Zuckerberg, the CEO of Facebook, said he was perturbed about the high risks for civil unrest in the US due to the upcoming presidential election.

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“I’m worried that with our nation so divided and election results potentially taking days or weeks to be finalized, there is a risk of civil unrest across the country.”

Furthermore, he disclosed on a call while discussing Facebook’s Q3 earnings, that “given this, companies like ours need to go well beyond what we’ve done before.”

Why this matters

The aim of the short-term decision is to decrease the spread of misinformation in the forthcoming US election.

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ENDSARS

#EndSARS: Police did not shoot protesters – IGP Adamu

The IGP has said that police officers acted professionally and exercised commendable restraints during the #EndSARS protests.

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The Inspector-General of Police, M.A Adamu, has said that officers of the Nigeria Police Force acted professionally and exercised commendable restraints during the protests, in a response to Amnesty International about police firing at protesters.

The IG disclosed this in a statement on Friday morning, saying reports on the shooting of protesters is not true.

What you should know

Amnesty International released a report on the 21st of October, 2020, saying it has confirmed “that the Nigerian army and police killed at least 12 peaceful protesters yesterday at two locations in Lagos. The killings took place in Lekki and Alausa, where thousands were protesting police brutality as part of the #EndSars movement.”

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President Muhammadu Buhari also disclosed last week that 51 civilians, 11 Police officers, and 7 soldiers have been killed in the unrest.

The IGP said today that, “Officers of the Nigeria Police Force acted professionally, exercised commendable restraints and some paid the supreme price for peace during the recent protests and ensuing violence in some parts of the country.

“The Amnesty Int’l report is untrue, misleading, and contrary to all available empirical evidence.

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“Even when the protests turned violent in some parts of the country, the officers still maintained utmost restraint and did not use excessive force in managing the situations.”

The IG added that 22 Police personnel were killed by hoodlums, with many more injured and that 205 police stations were attacked.

“Available reports show that twenty-two (22) police personnel were extra-judicially killed by some rampaging protesters and scores injured during the protests. Many of the injured personnel are in life-threatening conditions at the hospital.

“Two hundred and five (205) police stations and formations including other critical private and public infrastructure were also damaged by a section of the protesters,” he said.

The IG said Amnesty International failed to pay tribute to police officers who lost their lives in the violence and accused the organization of “discriminatory tendencies.”

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