Hey Domino’s, get the door! It’s us!

Written and Edited by Daniel Kilkelly
Domino’s had a campaign recently that focused around the idea of taking pictures of your pizza, and sending it in to Domino’s. If you did, you could potentially win $500. This was known as the “Show Us Your Pizza” campaign.
This campaign might well have been referred to as a success. Many people did send in pictures of their pizzas. This allowed Domino’s to effectively gauge how well (or more likely, how poorly) they were doing in certain regions in meeting customer expectations. The desire was then to take the areas that seemed to have the most customer dissatisfaction, and work to recreate the image of their product by going into the Domino’s locations and making sure that a new quality control system was in place to ensure that better quality pizzas were being made.Domino’s went so far as to show one order that was particularly poor, and show a spokesman for the company getting the pizza and bringing it to the front door of a customer who had previously sent in the picture. They then opened up the new pizza box and showed what it looked like, and asked the person to eat the pizza and tell the company what they thought about it, to which the customer said that he thought it was considerably improved. The spokesman then told the camera that they had made the customer a customer for life by fixing their order and giving them free pizza for life (if you really want to say that $500 is tantamount to enough pizza to last a lifetime), and that the whole desire behind the campaign was to make sure that everyone got better pizza.

The whole commercial and campaign showed great organization and marketing ability. It displayed open desire for the company to meet customer’s needs and also described itself as wanting to commit to a relationship with its customers. This open and “honest” advertising certainly seemed to sit well with consumers and stock purchasers, because after a several month decline in stock price from May to July (low of $10.99 on June 28, 2010)-perhaps showing that something had gone wrong with their campaign at that time and further prompting the “Show Us Your Pizza Campaign”- we note that in August, when the campaign officially came online, stock began to see an increase.

Since August, we have seen the stock enter a bull market, growing consistently quarter after quarter with its most recent close on March 10th, 2011 showing the stock price to be valued at $17.50. What’s been interesting though is seeing the amount of insider activity that’s been occurring with large amounts of insider sales occurring after the $17 price mark. Predictions are that the stock will continue to rise to $18.67 but I wonder if that’s an accurate estimation.

If we say that the average change in stock price per week is calculated as:

Change of stock price

Number of Weeks
Then => ($17.50 – $11.00) / (255/7) = $6.50 / 36.43 wks = + $0.18/weekThen in order to reach the expected $18.67 it should take:

Pfv -Ppv / ($0.18/wk) = ($18.67 – $17.50) / ($0.18/wk) = $1.17 / ($0.18/wk) = 6.5 weeks.

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