Designing the Service of Chinese Pizza Delivery
Expanding into new markets is the dream of every growing business. They see all the people that could benefit from what they offer, if only they had access. It’s easy to get swept up in the potential profits, as well as the tactics of just getting into a new area. With all of this going on, you can quickly forget about making sure your product or service solves the problems of your new customers, not just your old ones.
Pizza Hut, Papa John’s, and Domino’s Pizza all saw this potential in China. They all eagerly opened up their own stores, bringing their style of American food to the Chinese masses, and the masses wanted more. However, Pizza Hut and Papa John’s restaurants are now packed, while Domino’s storefronts are closing to the point of near extinction. What’s the reason? Domino’s just opened up the same store in a new country, while Pizza Hut and Papa John’s adjusted everything for how people in China live.
Domino’s has a 16″ American Family Size that was works well in other countries, so they kept it the same. Meanwhile, competitors shrunk their slices to suit the Chinese eating style. Pizza Hut investigated what different kinds of toppings people enjoyed eating, while Domino’s just kept the same toppings that worked in Japan and Taiwan. Both of these could be overlooked, if it weren’t for the one-two punch of not thinking about how people will get their food, and how they will eat it.
Papa John’s opened up restaurants, making them large and clean to provide a pleasant experience where people could enjoy a night out. In contrast, Domino’s kept their stores delivery-only, as well as their “Delivered in 30 minutes or it’s free” policy, which is a sure fire way to go bankrupt in the stand-still traffic of any metro area that crowded.
In China, the price of pizza is higher than standard Chinese cuisine, qualifying it as fine dining. When food is delivered to the households of extended families that permeate the country, it is only polite that everyone gets to eat food that shows up on the doorstep, which quickly makes Domino’s an expensive proposition. Everyone flocked to the restaurants where they could enjoy fine American food with loved ones, and avoided the possibility of waiting on a giant, expensive meal that was difficult to eat.
It’s easy to pass this off as a “Goofus and Gallant” story, but the point is strong. Even if you think you are only selling a product, there is an entire service experience for anyone who wants the product. Getting into the mind of who you want to interact with is an important part of making sure you are solving people’s needs. Without this, you are just shilling an expensive luxury, and people will stick to what they know instead of reaching for your cold, expensive pizza.
September 20th, 2009 at 2:52 am
I’ve never been, but I imagine it’s difficult/near impossible to make a 30-minute delivery in Chinese traffic. Poor poor Domino’s.
Domino’s does have really fun online capabilities in the US, though. You can track exactly where the pizza is, though every step of the process – from getting the order, through cooking to delivery. Kent showed me in LA last year. It was very cool.
Nice article, but some source-linkage would be nice. There’s a similar blog at http://plasticsnews.com/china/english/chinablog/2009/04/china_culture_business_1_the_p.html — with interesting discussions and a bit more insight into Chinese culture there.