In Japan, Pizza Is Recast as a Meal for Special Occasions
Domino's Quirky Marketing Campaigns and Inventive Pies Pay Off
Kenji Ikeda walks into a conference room toting a pink, heart-shaped pizza box in one hand. In the other is a pizza box that looks like the moon.
Mr. Ikeda is exec VP-marketing for Domino's Pizza in Japan -- a country that to Americans may as well be the moon when it comes to pizza. In the U.S., pizza is the epitome of casual -- frequently mentioned in the same breath as beer and football. In Japan it's a more upscale affair. Christmas Eve, the most popular day of the year to share a pie with family and friends, is big business for Domino's, with sales three to four times that of a normal Saturday .
"Kentucky Fried Chicken was the tradition in Japan. People would get together to eat fried chicken and Christmas cake -- it was a common thing," Mr. Ikeda told Ad Age , through a translator, at the company's Tokyo headquarters. "So we started driving people to order pizza. Now, people perceive [Christmas Eve] as an occasion to buy fried chicken, get pizza delivered and then eat Christmas cake."
Pizza doesn't have much of a history in Japan, with Domino's entering the market in 1985. The chain has just 15% market penetration in its delivery areas, and the average Japanese pizza eater indulges only four times a year. Domino's ranks No. 3 in the country, behind domestic chain Pizza-La and Pizza Hut, in revenue and number of locations. But Domino's execs expect to beat Pizza Hut on revenue this year.
To compete and cultivate a pizza-loving culture, Domino's Japan is working to create more occasions to enjoy it. On Valentine's Day, it delivered heart-shaped pizzas in those pink boxes with the message: "Be careful. This pizza and you two are really hot. Don't get burned!" Heart-shaped pizzas will also make an appearance for Mother 's Day.
Working with ad agencies ADK and Hakuhodo, Domino's has also adopted a zany marketing style devoid of TV spots.
"TV commercials don't have the same impact as before," Mr. Ikeda said, adding that the company hasn't purchased TV ads in five years. "Internet and social media are getting so big."
Rather than spending on commercials, we're trying to create newslike topics that people talk about," he said. "If the topic is hot and fun, people will spread it for us. Although we don't have any commercials, we get featured on news and other programs."
The toppings alone deserve a shout-out. Japanese pizzas come with toppings that pepperoni-loving Americans couldn't fathom. Domino's has sold a $50 pie featuring foie gras. And a recent $50 offering was the "Prestige Quattro" with a different topping on each quarter: classic margherita, snow crab and shrimp gratin, Mangalitsa pork with Bordeaux sauce, and beef stew with fresh mozzarella.
"The gourmet pizza outlets in America have nothing on our Japanese delivery menu," said Scott K. Oelkers, president-CEO of Domino's Pizza Japan and an American.
Japanese consumers value aesthetics, so presentation is also key. Patrons expect every slice to have precisely the same amount of toppings, which must be uniformly spaced and arranged. Shrimp, for example, are angled with the tails pointing the same way.
The Japanese "really care about the look of the food," Mr. Ikeda said. "Japanese food is all about the beauty of the setting, how it's laid out and the color. So we care a lot about that ."
Mr. Ikeda, 54, joined Domino's 24 years ago as a store manager in Tokyo and rose through the ranks. He solidified his marketing reputation in 2010, helping Domino's Japan gain worldwide attention with a "25 Surprises" campaign to celebrate its 25th anniversary.
One promotion in particular received heavy media coverage. The chain offered 2.5 million yen (about $31,000 at the time) for one hour's work at a Domino's store. The company's Ann Arbor, Mich., headquarters, which had not been informed, was confused by calls from "applicants." Mr. Oelkers received submissions from Eastern Europe in his personal email account. In all, about 12,000 people applied.
The lucky winner was a rural housewife who had never eaten delivery pizza. She flew to a remote island in a small Cessna to deliver pizzas to schoolchildren also new to pizza. She donated her "wages" to charity.
"All we did was post it on a Monster.com-equivalent site," Mr. Oelkers said. " "Here's this job, you get paid 2.5 million yen for an hour of work, please apply.' The budget on this deal was extremely small. It just went viral in Japan and around the world."
Other anniversary promotions included a free pizza every year for people born on the same date that Domino's was founded in Japan, free pizza for every 25th person to order online and gold slice trophies for anyone ordering all 73 products on the menu. A contest to name the best-looking delivery man was suspended after someone rigged a computer to vote repeatedly for a short, chubby candidate, eventually crashing the system.
In keeping with its out-of -this-world antics, Domino's announced last summer that it would build the first-ever pizza store on the moon. The chain worked with space agency JAXA (the Japanese equivalent of NASA), Honda and other high-profile companies to detail plans for the construction, including an engineer's presentation and funding breakdown for the lunar outpost. (Total price tag for Domino's pizza joint on the moon: $21 billion.)
"We wanted to come up with something that no others would think of , but we wanted to take a serious approach to this project," Mr. Ikeda said.
"We considered that ... people wouldn't take it seriously, so other entities needed to collaborate with us," he continued. "[Then] people started thinking, "How serious are they? They might be really serious.' That's what we wanted everyone to think."
Honda engineers even designed a "moon scooter," said Mr. Oelkers, who has a starring role in the space-expansion campaign. He donned an astronaut's suit in a grainy video from "space." Mr. Oelkers, 52, became widely recognized in Taiwan years ago after starring in a series of silly Domino's spots, including one that spoofed "Crouching Tiger, Hidden Dragon."
"He's the most suited to be an astronaut on the moon," Mr. Ikeda said, unable to suppress laughter.
"Sorry about that ," Mr. Oelkers deadpanned. "It was not my idea."
Messrs Oelkers and Ikeda declined to disclose the marketing budget of Domino's Japan but said the stores spend the same percentage of sales on media as U.S. stores.
According to Domino's annual report, there are 4,907 stores in the U.S., which contribute 5.5% of sales to fund national marketing campaigns. With just 210 locations in Japan, the total budget is small for such an expensive media market -- hence the emphasis on creative stunts and digital marketing.
The offbeat strategy appears to be paying off. Individual-store sales are almost 50% higher than the average U.S. store, and same-store sales have been up three years in a row, Mr. Oelkers said.