In an article published by the Wall Street Journal, Domino's Pizza is increasing the price of its specialty pizzas from $5.99 to $7.99 per pie. Domino's has decided to increase its "average ticket" after getting heat by one of its main competitors - Pizza Hut. Pizza Hut has recently changed the prices of their pizzas from $10 each to $8, $10, or $12 each, depending on the type of pie. One of the "deals" Domino's is promoting is upgrading from a two medium, two-topping pies (priced at $5.99) to the "premium American Legends specialty pies" (priced at $7.99) The extra $2 will give customers more options of toppings - which Domino's hopes will encourage costumers to buy the American Legends specialty pies.
Currently, the $7.99 deal is only being promoted online. There is no confirmation about advertisement for this offer on television as of now. It is stated that "Medium "American Legends" pizza can cost around $13.99 in some markets". Since Domino's only charges $7.99 for these pies, they are suffering from the price cut. Therefore, Domino's is hoping its promotions will attract more people to keep the "traffic" up.
I believe this is a smart move by Domino's. The company has to keep up with its competitor (Pizza Hut), especially because both companies are very similar. However, I believe Domino's should start advertising this $7.99 on television because many people may still be under the impression that Domino's pies are $5.99 until they receive the receipt. I also think television advertising at this price will be more effective because many Americans watch television and the more advertisement the company has, the more people will order the pies. I also think it is important to note: "Domino's shares have surged on the sales gains. In 4 p.m. New York Stock Exchange composite trading, shares were up 1.2% at $13.25, up 58.1% on the year, though down from the 52-week high of $16.32 hit in April." Hopefully this $7.99 price will bring up the shares as well.
http://online.wsj.com/article/SB10001424052748703843804575534403767643686.html?mod=WSJ_business_whatsNews
I think this is an issue that is constantly relevant in the fast-food industry. Whether its Burger King and McDonalds or like you wrote about, Domino's and Papa John's, the chains will always be in competition with one another and have to always change and update their prices. I definitely agree with you in regards to advertising on TV. As much as people use the internet they are not searching for Domino coupons. People are always watching TV and would be more likely to take notice of these sales if the commercial was constantly on rerun.
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