Katie Roberts-Kremer
Heather Smith
Kirsten Carlson
Emily Williams
Group Case Study
Domino’s Pizza
1. Situational Analysis
a. Brief History:
Domino’s received an unexpected blow to their brand in April of 2009. Two Dominos’ employees, Kristy Hammonds and Michael Setzer, who worked at a store in the small town of Conover, North Carolina recorded a video of the two using unsanitary and frankly disgusting means of preparing food they later delivered to customers. The video shows the employees passing gas onto a sandwich, putting cheese into their nostrils and then placing it on a sandwich, sneezing into the food, and bragging about other disgusting things they do to food. This video was leaked and went public via YouTube and Domino’s reputation was immediately stained.
In response to the all of the controversy, Domino’s President, Patrick Doyle released his own YouTube video. The video has been criticized because he is obviously reading from a script and he barely looks at the camera. The two employees were fired and charged with one felony count of distributing prohibited foods each. Hammonds was a registered sex offender and had other previous charges, Domino’s is also being criticized for their hiring policies. They responded by stating they will be revaluating their hiring policies and will make them stricter.
Domino’s also has recently come out with new commercials where they respond directly to customers’ complaints about their food along with commercials promoting their new, revamped menu.
b. Key Stakeholders:
Internal:
· Employees
· President, Patrick Doyle
· Shareholders
· Franchise Owners
External:
· Customers
· United States Department of Health
· Competitors (pizza restaurants such as Pizza Hut, Papa John’s, Round Table, Sbarro, and Little Caesars)
c. Political, Social, Economic, and Cultural Factors
Political:
The Domino’s Pizza video scandal brings to light several legal issues, food safety being among the most important. For a national chain who sells nearly 1 million pizzas each day, any food safety or health issue can be devastating. The images of employees making sandwiches and pizzas with blatant disregard to food safety standards as well as intentionally contaminating food products were a serious blow to Domino’s reputation. Following the YouTube video, Domino’s instituted a more stringent food safety training regimen for employees and has commented on the importance of food safety in the food production process as well. Ultimately, it is up to Domino’s customers to decide whether the company has done enough to reassure them of the safety and sanitation of the chain’s food.
Economic:
The economic effects of the YouTube video were twofold: the company’s reputation and share value suffered and the franchise in which the video took place suffered. Though often overlooked in respect to a scandal that affects the overall brand, the local Domino’s Pizza where the video was filmed was forced to complete a health inspection and dispose of hundreds of dollars of products. Moreover, Domino’s shares dropped by 10% in less than a week.
Cultural:
The impact of the YouTube video was detrimental not only to the company’s external reputation but also its internal reputation. While customers are of course the most important people to please in food service, there is no service without employees. For a nation-wide company like Domino’s, maintaining an employee culture of trust, respect, and fun is among their top priorities. However, when even two of the many thousand Domino’s employees break with the mission of the company, everyone pays the price. Of course, as a result of their behavior the employees featured in the video were fired and charged with delivering prohibited foods. But what about the other employees? The question for Domino’s is how to maintain (or re-establish) a culture of trust and mutual respect between employee and management without infringing upon the employees sense of privacy and individual responsibility. No one wants to work with Big Brother watching over their shoulder 24/7.
Social:
Social Media lies at the heart of both the problem and solution to the Domino’s Pizza scandal. An otherwise unremarkable yet unpleasant event became a national PR nightmare when the employees chose to post their video on youtube.com. In a matter of days, the video had had over 1 million hits. Domino’s had several choices in how to respond to the scandal and ultimately, chose the same route that got them into the trouble in the first place. By responding through YouTube videos and Twitter (@dpzinfo), rather than press releases and other traditional avenues, Domino’s was able to reach their target audience as quickly as the initial problematic video had. In addition, by adding Twitter to their initial response, and eventually their ‘showusyourpizza.com’ ads, has created a two-way symmetrical response to the issue, allowing their customers to engage in dialogue with the company.
d. Potential Solutions:
Domino’s Pizza could have better handled their response to the video scandal by:
1. Responding immediately rather than waiting several days in hopes that the video buzz might diminish. Better crisis management might have helped Domino’s to quiet the issue before it became nation-wide news. Their late response seemed to show their lack of preparation for a crisis such as the video.
2. One solution suggested by Brandseye.com was to utilize a program designed to monitor a company’s online reputation. While certainly a reasonable suggestion, perhaps a better method of issues management would be instituting a company policy on social media that both embraces it and outlines particular rules to guard against abuse.
Questions:
1. Domino’s has recently done a new marketing and commercial campaign illustrating that they are responding to peoples’ complaints and dissatisfaction with their pizzas. This campaign does not directly address the YouTube video. Do you think Domino’s should directly address the issue in a nationwide campaign? Why or why not?
2. Beyond dealing with the negligent employees, what responsibility does Domino’s have to address the issue of food safety in their restaurants? Has your perception of food quality been tainted by rumors and/or leaked videos such as this?
3. Do you think that this situation would have been so publicized if it wasn’t for social media? Could the situation have been avoided if Domino’s had a previously established code regarding social media use in the workplace?
1) In my opinion, I don’t think Domino’s should directly address the issue of the YouTube video. I say this because I am very familiar with Domino’s new ads and their campaign to respond to people’s complaints with pizzas, but I had never heard about the YouTube video until you guys mentioned it in class. I feel that by brining up the YouTube video, they would just inform more people about it, and make those who have seen it start thinking about it again.
ReplyDelete3) I don’t think the situation would have been publicized at all if it wasn’t for social media. The employees might have shown the video to some of their friends, but the issue most likely would have ended there. It’s very important for companies to have codes about social media in or about the workplace. The employees probably weren’t thinking about how their video could affect the company, just how “funny” it would be to viewers. Companies need to put policies in place to protect themselves from this type of thing. The nonprofit I used to work for had issues with employees complaining about their job and the nonprofit itself on Facebook, so they had to take action and have a training session for all employees about what is and is not appropriate when using social media to talk about work. At this point, social media is unavoidable, so companies need to keep up with their policies.
Jen Cupp's response to Question 1 & 3:
ReplyDelete1) I also think that Domino's is correct in not directly addressing the video. Given the nature of the incident (and how gross it is!), I think the fewer people who know about it, the better, for Domino's image. If Domino's were to draw more attention it it, it would mean more people may watch and know about the video, thus adding to Domino's PR woes rather than fixing them.
However, the issue at hand is consumer trust in Dominos and its products. By not addressing the issue directly, Dominos also risks losing more trust or not making gains to rebuilt it.
I think its current strategy with the new marketing/advertising campaign focused on building consumer trust is a wise method. This campaign is able to focus on building trust with its consumer publics while not fully addressing the original video.
3) I also agree with Cassi that the situation wouldn't have been publicized or made such an impact on Dominos (such as the company's shares dropping) and consumers if the video had not been uploaded to YouTube or spread via social media.
I'm sure we have all heard rumors of unsanitary practices in food service and gross stories regarding food providers such as McDonalds, Dominos, etc. However, because these are just spread by word of mouth and often regarded as "urban legends," there is no physical, direct evidence to make us believe they are true. Thus, we rarely change our consumer habits.
The YouTube video made such a rumor visible to anyone and everyone. It made it REAL because consumers could see it with their own eyes. This hurt Dominos far more than perhaps if the employees who created the video just bragged about what they did to friends and the story spread via word of mouth.
Would a report in the news about this story have as much influence as the YouTube video? I am leaning toward answering my own question with "no" just because I see the restaurant reports on local news. These reports often showcase restaurants who have received low scores from the health department.
However, people STILL go to these restaurants and eat there, and the restaurants often improve their scores at the follow-up health inspection by cleaning up their practices and food handling. These reports are also local, so they don't reach people nationwide (or even worldwide).
YouTube is a worldwide-accessible site though, so anyone could watch the video. I think this is ultimately what hurt Dominos the most. The story was made national, even global, instead of staying local. Thus it hurt the image of every Dominos chain in America instead of just the local one where the incident happened.
Without social media, the story probably wouldn't have moved to the global level, maybe even not the national level.
Response to Cassi and Jen's responses to Question #1:
ReplyDeleteI agree that the commercials should not address the YouTube video because it would draw attention to something that certain public would never see. Because social media is usually focused on younger people, there is a good chance that older generations would never see the original video. I do however think it was a good move to address the issue on YouTube (even if the president did not execute the apology in the correct way) so that the apology only reached the people that it touched in the first place.
Kellie Barth's response to Question #2:
ReplyDeleteI think that this becomes an issue of corporate social responsibility. The company needs to constantly monitor its behavior and prove to the community (or in this case the nation as well) that it is acting in the best interest of its publics. Though this incident only occurred at one Domino's location, I think that the company needs to address the issue at all of its locations in order to make sure that something like this never happens again. If Domino's is not going to talk about the YouTube video publicly (which I do not think it should do) then it still needs to publicize the incident within the company. I think that it would be a wise move for the company to continue to stress health safety issue within the company and (without addressing the specific YouTube issue) launch a campaign to let the community know that Domino's is dedicated to making quality, healthy pizzas, which they are trying to do with their new commercials. I also think that they should have a blog or some other type of two-way communication with their customers so that people can express their health/quality concerns with the company without having to take a picture of their pizza and send it in to try and be part of the commercial.
Many other rumors of health safety issues, especially in fast food restaurants, have come to the attention of the public in past years but we only hear about them for a short period of time. When I hear one of these rumors I am usually conscious of the problem and want to avoid the restaurant for about a week, but then I forget about it. I tend to realize that incidents like this can happen at any restaurant and that worrying about a food quality issue affecting me would be a waste of time so I am not usually too tainted by these rumors, at least after a couple weeks after the rumors surface.
Response to Kellie Barth's response to Jen and me.
ReplyDeleteKellie, I also agree with you that it was a good move to address the issue on YouTube since that reached the people the story impacted in the first place, but I also agree that it wasn’t executed in the correct way. It seems that although Domino’s President used the same medium as the employees used, having a man in a suit reading a script and barely looking at the camera doesn’t seem like it would reach the same audience. Even if it did, I doubt that younger people would spend much time watching the video or paying attention to what he was saying. It reminds me of class yesterday when we talked about just because an organization can use social media doesn’t mean it’s always the best option for them.
In response to Question 1:
ReplyDeleteI seriously question the wisdom of the new campaign for two main reasons. The first is the chosen venue. It seems like the pizza company has poured lots of money and time into its TV commercial campaign. Studies show this is no longer the most effective way to reach publics:
"While mass media are highly effective in generating name recognition, even their information-disseminating utility is not as great as before because of declining trust. In the Golin/Harris 2002 Trust Index, the communications business sector all had negative trust scores (Golin, p. 240)."
Today, studies show peers are the most credible source of information. According to Wilson and Ogden, social media is quickly overtaking traditional media as the best channel for messages (2008, p. 211). Furthermore, the researchers tell us “the range of Internet capabilities helps us creatively reach a highly segmented public at an incredibly low cost (p. 211). Domino’s could have created a similar viral campaign using social media at a lower cost and with a higher return. They could have spread their message faster and it could have been more organic, meaning they could have constantly updated it in response to publics’ response. The only drawback with this approach is Domino's would lose control of the message and would be vulnerable to further attacks. At the very least, the company should have combined their commercials with an aggressive social media campaign.
The second reason I question this approach is that it plants a negative opinion of the company in the publics’ minds. Their campaign acknowledges their products tasted bad, but I’m sure their most loyal customers never faulted the company for the taste of its pizzas. Fabre’s caterpillar experiment – wherein he placed food outside the caterpillars’ normal path and the insects didn’t change paths – shows how customers are driven by past behavior (Wilson and Ogden, 2008, p. 103). The campaign in essence breaks the loyal customer’s habit of unquestionably loving Domino’s pizza.
In response to Question 2:
ReplyDeleteI think that Domino’s, for the sake of its own reputation, should do more than just deal with negligent employees when such scandals arise. In order to rebuild its reputation, the organization has to utilize disassociation tactics (as described in Smith’s action and response strategies) to separate its brand from the idea of contaminated food as much as possible.
I think it was a good idea for Domino’s to improve its food safety training regimen since it shows that they are taking steps to prevent this behavior from happening again however, I think they could do more by setting up policies and putting in place structures within the organization to prevent such scandals. For instance, Domino’s could make it a requirement for all employees to sign a code of conduct specifically binding them from doing anything to compromise the quality of the food they prepare. This code should be displayed in the kitchen, or other areas where employees spend their time. Domino’s could also create avenues for anonymously reporting such behaviors. This will serve as a deterrent since employees never know who is going to turn them in. More importantly, Domino’s should make it a priority to inculcate ethical values into its employees in order to prevent such behaviors from happening in the future.
In response to Jen:
ReplyDeleteI agree with Jen’s opinion that the fewer the people who see this video, the better it is for Domino’s. After all, the more management talks about it, the bigger of a deal it will become in the media. My question is, how about customers who did see the video? Doesn’t Domino’s have to find some way to repair their reputation with those people?
Although Domino’s current ad campaign aims at developing relationships with its customers and showing how it is changing, it does little to erase the image of all the disgusting things on that video from my mind. By not effectively dealing with the scandal, their ad campaign won’t have any impact on the many people who saw that YouTube video. I think Patrick Doyle was right to use the same means by which the negative message came out to issue a statement (since it would reach the same audience) however, he went about it the wrong way.
In conclusion, I think Domino’s needs to find an effective way to address the video issue (among its customers who watched it) but not in such a way as to draw further attention to it.
1. I think Domino's should stay far far away from the original YouTube video! If they address the video, they are pretty much advertising that the video is out there and enticing people to look for and watch it. The less information tying them to the video, the better. It's interesting because I had no idea there was a YouTube video or what had prompted Domino's to start their new campaign. So it worked for me, although I still don't buy Domino's pizza, but I didn't buy it before their campaign either...
ReplyDelete2. Yes, Domino's has a responsibility to reassure their publics that they are following all food safety requirements or even going above and beyond the minimum requirements. I'm grossed out every time something like this happens. However, I don't need a leaked video to know that people do disgusting things to food. It's unfortunate that individuals ruin things for the group, but it's also good to be conscious that when you can't see your food being prepared, you run the risk of having it be contaminated. When I don't prepare my own food I am at the mercy of whoever does prepare it. That person may not wash their hands after they use the bathroom, or may sneeze into the food and keep cooking... The world is messy, human beings are messy bags of germs... A company can do more than they have to to create a clean environment, but it's impossible to control the actions of each employee.
1.) I also agree that Domino’s should not directly address the incriminating YouTube video in their nationwide campaign. Prior to our class discussing the YouTube video, I was unaware of there being such a video. I was aware of the new nationwide campaign Domino’s was putting on because of poor customer satisfaction in the past but I did not know it began directly as a response to the videos. The new commercials try to persuade potential customers to go out and try the new revamped pizza at Domino’s. In the new ads “great taste” is guaranteed. As a pizza lover, I did feel persuaded to go out and try this new more delicious Domino’s pizza, but if I had been made aware of the disgusting acts that took place at a Domino’s in NC then my appetite would have been killed right on the spot.
ReplyDelete3.) No way would this situation have been so publicized if it were not for social media. I don’t think anyone could have imagined how much an impact YouTube would have in society. With the continuous advancement of video phones and hand-held mini recorder anyone at anytime can upload a video onto the internet. Privacy and security issues in the workplace need to be updated in order to take these technological advancements into consideration. In many business setting cell phones are not allowed. This is because employers do not want their employees to be sidetracked with cell phone usage. It should also be seen as a way to minimize the possibility of recording images or video that could be damning to the company. If management would have enforced a no cell phone or camera rule then this PR nightmare might not have happened.
In Response to Osenkor: I agree, this is an issue with Domino's internal publics not its external publics. Yet it seems like they formed a campaign that focuses on stakeholders outside rather than inside the organization. This doesn't seem very intuitive. A good strategic management plan is needed to prevent another scandal. The plan should address social media use, as well as employee conduct.
ReplyDeleteJen's response to Marlena's original answers (which I might add got deleted by my evil Internet so I am trying to recreate it below!).
ReplyDeleteI think Marlena is definitely right with her criticism of Domino's for using television advertising when research has shown it isn't as effective as other methods such as peer to peer/word of mouth.
However, I think that the research may be head of a) our perceptions (and by "our" I mean marketers and consumers) and b) the times. Let me explain.
Since the birth of television, the trend has been for companies to pay large amounts of money to produce and place advertisements on television. This used to work really well. However, now there are hundreds, if not thousands, of television channels from which to choose! It isn't easy to reach the majority of America by airing a commercial during the evening news on ABC or CBS anymore.
Yet companies still spend a lot on television advertising. Television advertising is perhaps just effective enough to justify its costs. But this will most likely change in the next 10 years.
First of all, social media is still very new. It provides word of mouth type marketing, but is so new that we don't have a lot of trust, confidence or results in/from it...yet. Television is a tried-and-true medium for now. And it remains one of the best ways to broadly target a variety of people.
Also, social media is expensive. Sure, Twitter and Facebook accounts are free, but they do take a lot of time to manage effectively. Social media demands INSTANT updates and information. This means companies must rely on one, two, or more people to simply manage their "online presence." As we all know from our campaigns in this class, it takes a lot of effort, time and resources to research, identify, segment, target and create messages for specific publics. Social media requires unique messages because it targets specific groups while television advertising reaches a wide and diverse group.
So, my prediction is that until television wanes more in effectiveness and social media gains more of our confidence and results (and research starts to show this clearly in both cases), companies will continue to place their money toward television advertising, knowing they will get some results, rather than putting it toward social media marketing.
The good news in all of this is that, as this trend turns toward social media, there may be some more jobs out there for people like us!
Responding to Leeanna's answer to Q2
ReplyDelete"human beings are messy bags of germs"
Hearing that statement definitely turns me off from eating anything prepared by anyone besides myself. I must admit that after learning of this disgusting video my stomach does get a little squeamish when I think of eating Domino's pizza but I would be a fool to think that this is an isolated incident. Yes, there are health regulations that every food provider has to follow but anyone that has ever worked at a restaurant know these are not followed. Waiters touch the lemons in your water with their bare hands after touching money and bussing their tables! This is not supposed to happen but every restaurant I've worked at people continue to do this. I can't let myself dwell on this though. After being to a country that has no regulations on food I've learned to ask very few question and just enjoy the flavors of the food in my mouth.
Kelly Burt's Response to Question 1:
ReplyDeleteWhile it is definitely too late now, I think definitely Domino's *should* have addressed the YouTube video as soon as it was made public. We've learned in class that effective crisis management means immediately and directly addressing the problem. To return to the subject now would only further hurt Domino's already damaged reputation. When the video first aired on YouTube, Domino's could have addressed the public up front using the inoculation theory, which serves to inform the public of the news they may hear surrounding unethical behavior before the media or competitors have a chance to frame the situation. Using the inoculation theory Domino's could have warned the public that there was a disturbing incident at Domino's which was about to go viral on YouTube. They could have restated their commitment to safe food-handling procedures, assured the public that this kind of behavior is unacceptable, and that the employees in question were being prosecuted accordingly. However, this crisis communication campaign would have been effective only if Domino's addressed the YouTube video immediately after it was published. To do so now would only make matters worse, because Domino's would reopen old wounds, so to speak, and they might risk appearing irrelevant, and like poor problem-solvers, to say the least. They're better off focusing on the new pizza campaigns.
Response to Jen and Cassie's answers to Question 3:
ReplyDeleteI agree that without social media the food mishandling incident would have never gone global, national, and maybe the situation would have never left that fateful Domino's store. So yes, perhaps if they had stricter regulations they could have avoided the PR scandal altogether and the public would have never found out, but this seems to propose another question: Regardless of on-the-job technology restrictions, doesn't the public have a right to know what goes into their food? While prohibiting YouTube may have benefited Domino's, what consequences does that have for consumers? If someone spit into my pizza I would surely want to know. I don't care if YouTube was involved or not! So do food chains and other organization have the right to act as gatekeepers as to what goes on inside their walls? What the public doesn't know won't hurt it?