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  • Domino's Pizza will be spending 6-7 per cent on digital out of its total marketing budget

    Domino’s Pizza increases its focus on digital

    By Tuhina Anand

     

    Harneet Singh Rajpal

    Domino’s Pizza has increased its spends on the digital medium and this year, it will be spending 6-7 per cent on digital, out of its total marketing budget as opposed to last year where the spend was 3.5-4 percent.

     

    Domino’s Pizza online ordering launched last year has been a runaway success, while it has launched mobile application just month and a half back, which though early days, has seen a traction of 1.5 lakh visits in a short span of time.

     

    Harneet Singh Rajpal, Vice President-Marketing, Domino’s Pizza India, talking about their digital foray said: “It’s more to do with closing the loop by being on the digital medium. Quite often the decision to order a pizza is instantaneous. Hence we wanted to facilitate the ordering which could be done by clicking on the ad and placing an order in few simple steps. In fact, digital has become an effective channel for us in driving our business and getting consumers instantly, thus able to measure our return on investments too.”

     

    While digital medium is being used by Domino’s, which Mr Rajpal points works well on weekdays, like catching people ordering at work, the television works well for them during the weekends.

     

    Television has also helped them in building their brand in Tier II and Tier III cities which is equally important for the company as the metros for growth. In fact, Domino’s has presence in 105 cities and has 465 stores which, as Mr Rajpal puts, makes them the largest Quick Service Restaurant (QSR) player in India which has footprints beyond the metros.

     

    In fact, he points that, inIndia, in the QSR there is a huge potential to grow even in metros, despite competition as metros still have a huge degree of under-penetration.

     

    Like is the trend now with the QSR players namely, its competition – including McDonalds, KFC, Pizza Hut – Domino’s too has been focusing on introducing new products to woo customers.

     

    It has recently launched the stuffed garlic bread and the product is even being supported by a TVC. In April this year, it re-launched its Pizza Mania and one has seen a constant effort to rev up its menu. It has also been focusing on side dishes and that, as Mr Rajpal said, is to offer to its customers a complete meal experience.

     

    Mr Rajpal explained: “In the QSR category, the food fatigue is very high and people get bored easily with the offering, especially in India, the demand from consumers for new taste is much higher than around the world. The thinking behind the constant launch of new products is to give consumers new reasons to come to us and taste new products. This has been our growth strategy, which not only helps us to get new customers but also hold on to the existing ones. Our R&D team is constantly working to come out with unique and tasty offerings for our consumers.”

     

    Domino’s has seen a growth of 30 per cent in the last fiscal and has seen 20 per cent plus CAGR in last five years at the store level.

     

  • Such alliances can provide the domestic partners with a slew of insights across the entire retailing process

    Local retailers partner global brands to launch own labels

    By Sarah Jacob

     

    Ramesh Tainwala believes that “women kindergarten teachers tend to be more confident mothers.” As analogies go, this one may border on the stretched but what the chairman of Planet Retail is attempting to convey is that retailers like him can pick up learnings by partnering with marquee brands, and then use them to boldly build labels of their own.

     

    Planet Retail, which has brought brands like Debenhams, Acceorize, Nautica and Next into the country, has begun flying solo with handbags brand Lavie. It’s not the only domestic retailer following a learn-and-launch strategy.

     

    DLF Retail, which has tied up with brands such as Claire’s and DKNY, launched in-house home decor chain Pure Home + Living a year ago. It is now set to flag off another format called Pure Kitchen Studio by November. Or take Lalit Kishore, master franchisee of sports footwear brand Lotto in India, who has launched his own brand of footwear called Globalite. And then there’s Devyani International, a franchisee for Pizza Hut, KFC and Costa Coffee in India, which has introduced South Indian fast-food chain Vaango independently.

     

    “It is easy to open outlets on your own. But international partnerships help in understanding the economics, food preferences and processes for standardised delivery,” said Virag Joshi, president & CEO, Devyani International.

     

    Alliances can provide the domestic partners with a slew of insights across the entire retailing process. Rohit Aggarwal, promoter of Lite Bite Foods, which started as a franchise for Subway, gives an example. “One takes for granted that the freezer or chiller is cold, but (working with an) international brand teaches you that the temperature needs to be checked every 30 minutes.” Lite Bite is now a Rs100 crore operation running not just Subway outlets but home-grown chains like Punjab Grill and Street Foods of India.

     

    International partnerships also help build a sophisticated team with focused skill sets. “Skills that the management feels can be leveraged without an additional cost to build their own brand in parallel with the primary brands,” said Gaurav Marya, president of Franchise India Holdings, which helps brands partner franchisees in India.

     

    There are plenty of synergies that can be availed of from sharing support functions and the supply chain. Economies of scale come into the picture on the advertising front, distribution, hiring and office space, too.

     

    Devyani International, for instance, has a common production unit or commissary in Gurgaon for brands across its portfolio. And Mr Kishore’s Globalite rides on the wholesale supply chain that is used to retail Lotto across multi-brand stores.

     

    Companies say that in the initial stages having international brands in the kitty helps with prospective trade partners. “A foreign partner carries a lot of weight,” said Mr Aggarwal.

     

    Kanchan Lall, associate VP at management consulting firm Tecnova, likens this trend to the development of private labels by retailers. “Once you grasp the understanding of a business, you look for avenues with higher margins and decision-making flexibility,” she said.

     

    The domestic brand builders rule out potential conflicts of interest, pointing out that the local labels typically operate in a different market segment. “Globalite would not matter to Lotto as the two cater to different price segments,” Mr Kishore explained. While Lotto retails at Rs2, 300 a pair on an average, Globalite is priced around Rs1,500 a pair.

     

    The seven-store handbags chain Lavie gains by being bundled with international brands in Planet Retail’s portfolio. “At the same time, Lavie also helps refine the strategy for the premium and super-premium brands in the portfolio and supports them with assurance of higher footfalls when negotiating with a mall,” said Mr Tainwala.

     

    Source: The Economic Times

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