DiGiorno Situation Analysis PDF Free Download
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Team Magnificent
DiGiorno Situation Analysis
Marketing Objectives
Within fiscal year 2010-2011, DiGiorno should achieve a market share of 22.5%
(from 21%) in the frozen-pizza category. This represents approximately $572,520,000 of
sales.
Industry review
DiGiorno has had an incredible presence in the market of frozen pizzas, let alone the
entire food industry. The brand has been able to maintain this presence because of its
strategic positioning among a broader spectrum of food manufacturers. Even during the
toughest economical times, DiGiorno has been able to increase sales more than 20%.
DiGiorno has been able to do this with its “DiGiornonomics” campaign that expressed a
price-value proposition against delivery pizza. DiGiorno released a number of health-
conscious products to sway consumer opinion of frozen pizza being unhealthy. In
response to subway’s popular five-dollar foot long sub sandwiches, the brand launched
DiGiorno Melts last May. For those that love more and more toppings, “ultimate” pizzas
have extra topping and even 50% more pepperoni. DiGiorno has increased their presence
in social media networks like Facebook and twitter. Jerome Bettis is new spokesperson
and has helped DiGiorno dramatically increase Facebook fan base.
Marketing mix
The product lies in the category of frozen pizza. It comes in many crust sizes (rising
crust, thin crust, crispy, garlic bread), toppings (pepperoni, cheese, half and half,
supreme, etc) and sizes (full size pizza vs. personal pan). There are also low calorie
options and flatbread pizzas. The company’s promotion is limited to four coupon
discounts: two for $1.50 off and two for $1.00 off. The importance of the coupon sales
promotion is to promote the product while saving money. A coupon enhances the chance
for an impulse buy. Many consumers may see frozen pizza as a luxury item, one that is
no needed, but would be more willing to purchase if they have or see a coupon. This
generates more consumers which creates higher awareness and may increase sales in the
future. Now that they have tried DiGiorno, due to the coupon, the consumer will
remember DiGiorno the next time they want or need a frozen pizza. DiGiorno 12” pizzas
generally sell for $6 to $8. The personal pan pizza is around $3.
DiGiorno is a quality pizza for it caters to every pizza want. DiGiorno offers gourmet
style, flat breads, melts and a variety of healthy choices. DiGiorno has branched out from
ordinary pizza and has brought these options to the consumer’s homes at a cheaper price
than delivery. DiGiorno sells their frozen pizzas through retail distribution; grocery stores
account for 96% of all frozen pizza sales.
Positioning
DiGiorno is portrays itself as the highest quality frozen pizza. It is a convenient meal
solution aimed at adults who are used to eating restaurant or delivery pizza. It is
considered to be one of the more expensive frozen pizzas; however, it is still cheaper than
delivery. The company offers multiple types of crusts in order to obtain the market share
in each frozen pizza category. DiGiorno uses fresh and natural ingredients in many
different topping and crust combinations in order to compete with delivery.
DiGiorno positions itself as an equal or superior to delivery pizza. Its slogan, “It’s not
delivery, it’s DiGiorno” states the position in the sense that the frozen pizzas are so good
that they taste like delivery pizza. It has changed the frame of mind of the consumers to
associate DiGiorno with delivery rather than frozen pizza. DiGiorno was one of the first
brands to come out and talk about the value proposition of frozen pizza vs. delivery
pizza.
Previous campaigns
DiGiorno was created by Kraft and introduced in the United States in 1996. Previous
campaigns for DiGiorno have focused on one key slogan “It’s not delivery, it’s
DiGiorno.” For over ten years DiGiorno has made that slogan synonymous with their
product. DiGiorno is the “Fresh delivery taste, without the fresh delivery price.” The
concept of being able to eat in and get the exact same taste and quality of delivered food
is DiGiorno’s entire philosophy. For the DiGiorno’s first advertisement campaign, the
slogan was “Fresh delivery taste, without the fresh delivery price”, which later became
the current slogan “It’s not delivery, it’s DiGiorno.” Dick Vitale, a sports personality who
has starred in many commercials, is DiGiorno’s primary pitchman.
There are two running advertisements that target both genders. One ad shows a man
wearing a pink tutu to work after losing a bet that he's eating delivered pizza. Another
commercial shows a guy dancing around the kitchen eating pizza. His wife is shocked
that he would answer the door for delivery wearing boxer shorts and black socks. Each
advertisement ends with the slogan “It's not delivery. It's DiGiorno.”
The DiGiorno ads are known for their ability to stay simple and stick to the key
message, which is that DiGiorno has high-quality, fresh-baked taste that is just like
carryout or delivery.
DiGiorno also does promotional giveaways. For example in 2001 DiGiorno had
specially marked packages of their pizza carry a game code and a toll free number that
consumers could call to see if they were potential winners. Prizes included a new
Chrysler PT Cruiser, $1,500 towards a cell phone and service, and a one-year supply of
DiGiorno Pizza. This strategy caused DiGiorno to see a greatly increase in sales.
The measurable results of DiGiorno’s advertisements have been excellent, especially
when they first began in the late 90’s. In 2002 frozen pizza sales were up 6.4% for the
first 52 weeks. At this time DiGiorno picked up advertisements on a national scale and
was making good revenue. It displaced Tombstone to become the number one choice of
frozen pizza.
Competitive analysis
DiGiorno’s main competitors in the frozen pizza category are Tombstone and Red
Baron. The frozen-pizza category makes up for more than $3.2 billion in retail sales in
2008. DiGiorno has been rated highly among frozen pizzas since its introduction with
rising crust. Delivery pizzas are another set of competitors. During 2009 DiGiorno tried
to push against delivery pizza during the recession by claiming it was much more
affordable than delivery but just as good. DiGiorno is aiming not only at the delivery
pizzas, but fast food as well. In an effort to compete it has made new products such as
flatbread melts and offered pizzas with a wide variety of toppings with the option of 50%
more pepperoni.
Delivery pizza’s strengths are that its pizza tastes the best, and frozen pizza cannot
compete with delivery in regards to taste. A main weakness of delivery pizza is the cost.
The base price is more expensive, there is a delivery charge, and consumers are expected
to tip the deliverer.
DiGiorno’s flatbread is attempting to take on fast food restaurants promotion such as
Subway’s five-dollar foot long. Its flatbread is offered at a much lower price of $3.49.
Tombstone Stuffed Crust Pizza is another Kraft brand and was rated very well by
Consumer Reports.
Red Baron has become popular because of its advertising and its breakfast pizza.
Uncontrollable variables (constraints)
The economic state of the target market is a major variable that contributes to success
of DiGiorno. Luckily, the poor economic state of our country can help DiGiorno sales if
the pizza is promoted correctly. Americans are spending less and looking for new ways to
save on their everyday purchases. The low cost of DiGiorno pizza may encouraged
buyers to choose the brand over a favored but more expensive brand of frozen pizza,
frozen entrée, or perhaps even over other more expensive meals in general.
Another uncontrollable variable is weather – the weather in a particular region may
encourage or discourage buyers from purchasing DiGiorno pizza. For example, those
who live in a northern region may choose to stock up on frozen entrees because they are
easily stored and prepared, not to mention warm!
The season also contributes to consumer buying habits. There are approximately 15
million secondary-school students in the U.S. According to the American Council on
Education (ACE) 20 percent of those 15 million live in dorms or on campus. Dorm living
and on-campus style housing is small and students may not have the means to cook full
meals. Secondary education is also time-consuming and many students work their way
through college, leaving little time to cook. In result, college students are assumed to
purchase more already prepared, easy-to-fix meals than that of the average consumer.
As of 2002 49 percent of single-mothers were working full-time, year-round jobs and
had children between 6 and 18. Meaning, the majority of these children were enrolled in
school from August until May. During the summer season, those students may be at
home while their mothers work. Many on-the-go mothers purchase microwavable meals
for their children to prepare.
Food news and scandals can contribute greatly to what consumers choose to eat.
During the mad cow scare, many families avoided eating red meat. If a big news story
were to caution consumers away from frozen meals or from a particular ingredient that is
included in DiGiorno pizza (tomatoes, cheese, wheat), consumers may become more
wary about purchasing frozen pizza.
Problems and opportunities
Strengths:
• Nestle name
• Little seasonal fluctuation (This equals little loss in money flow during the
seasons. DiGiorno is a year-round product.)
o Highest in January, February and March
o August is also high due to back-to-school
• West central region shows a high level of frozen pizza consumption
o DiGiorno can spend less money and focus on gaining awareness on
the areas that are already show high-consumption. They can focus
mainly on repeat, and they know to spend more on frequency in
these areas, rather than on reach.
• Grocery account for 96% of frozen pizza sales which tells DiGiorno this is a
great area to place the coupon promotions.
• Large families, single men, and teens are major consumers. This tells
DiGiorno to use greater frequency and less reach when promoting to these
demographics.
Weaknesses:
• 85% of US know about DiGiorno yet only 35% prefer it, which is a weakness
because this shows 50% of people who have encountered DiGiorno choose
otherwise.
• Northeast has the lowest number of buyers/consumers of frozen pizza
meaning they will require media time, space and money devoted to the
awareness campaign as well as the continuous campaign.
• Consumers are concerned with health over price and may have low
perceptions of DiGiorno, which means they require awareness of DiGiorno’s
gourmet and healthy pizzas. The health-aware consumers will need to be
targeted and will need more frequency and less reach, but changing their
perceptions will be the greatest task.
Opportunities:
• Due to the economy and interest for nutrition, sales for frozen entrees have
gone up
• Prices have been lowered due to the economy
• Convenience
• 50% of cooking is microwaving
• Niche groups
o Low carbohydrate
o Gourmet
o Microwavable
o Single servings
• Special promotion coupons ($1.50 and $1.00)
• South and East central regions show high band usage and an average level of
frozen pizza consumption
• Consumers concerned with price and not health
Threats:
• Fast-food and delivery competition
• Challenge of healthy and great tasting
Advertising Objectives
DiGiorno has been on the frozen pizza market since 1996 and has spent a significant
amount of money on advertising. DiGiorno frozen pizza is past the awareness phase and
is moving from no purchase to multiple purchases. DiGiorno is already priced
competitively with the other frozen pizzas and controls the market share so we want to
encourage the people who already know about DiGiorno to buy some more frequently
and increase the positive attitude of it.
Target Audience
After thorough research we have come to the conclusion that DiGiorno’s primary
target audience is adults 25-49 and the secondary target audience is adults 18-24. Men
and women both purchase DiGiorno but women who do the shopping, are on a limited
budget, live in a major city, and are already inclined to buy frozen pizza are the primary
target. College students, both male and female, are another major consumer as well as
men who are interested and follow sports, presumably why Dick Vitale is one of their
spokespersons. The south and east central regions of the country are among the highest
purchasers of DiGiorno frozen pizza with the south having a CDI of 105 and a BDI of
115 and the east central having a CDI of 109 and a BDI of 120. While the west with a
CDI of 119 and a BDI of 103 is a great opportunity to invest in since they have above
average frozen pizza consumption. Single and married people are virtually equal in their
likelihood to consume frozen pizza, as are whites and blacks.
The "It's Not Delivery. It's DiGiorno" campaign targeted an audience of adults aged
25 to 54. The tighter focus was on adults 44 and younger with incomes of $40,000 and
above that were medium to heavy users of carryout pizza parlors such as Pizza Hut.
Kraft supported the DiGiorno introduction with an $11 million budget, a little more
than the $9 million it allocated to its in-house rival Tombstone. Television advertising
took place in selected markets around the country during 1996 and the first three quarters
of 1997. In the last quarter of 1997, television spots were shown on national networks.
Print advertising, which carried into 1998, was focused on general interest and
entertainment publications, and included: Entertainment Weekly, Style, People, TV
Guide, Rolling Stone, and ESPN Magazine. Men were specifically targeted with ads in
Esquire and GQ, and gourmet cooks with ads in Bon Appetite.
Media Strategies and Tactics
The media budget allocation for DiGiorno is $25 million for the one-year period
beginning July 1, 2010 and ending June 30, 2011. We are going to allocate $18,774,360
or 75% of the budget for network television media and $438,000 for cable. Out-of-home
advertising will be allocated $2,491,680. We will allocate $1,168,142 for magazine
inserts. We will use $365,000 for advertising on Facebook. The remaining $1,762,818
will be left for various promotions.
The best media vehicle to easily and assuredly reach the largest portion of the target
audience is network and cable television. Within the United States, 98% of homes have at
least one television. Spot segmentation will be based on television stations, programs and
times of day.
We will spend most of the allocated budget on network and cable television. It will be
the most expensive, but it will reach the largest audience. Network television will allow
reach 99% of our target audience. Since it is broadcast across the entire nation, it will hit
all of the target regions as well. Advertising on network television will occur in a
flighting pattern, with advertising being the heaviest at the beginning of the most popular
television seasons.
We will also use cable television in a pulsing pattern. Since we will be using specific
stations instead of specific shows, we will be able to more easily regulate and place our
advertising in the desired pulsing pattern.
With social media playing a big role of communication, social networking sites such
as Facebook increase directly with Internet share. Facebook has an average user age of 33
-which fits in our primary target audience. Facebook in the fourth most popular social
networking site in the world, and has the highest adoption rate in social media marketing.
Also, the site is free to join. On Facebook, DiGiorno can make groups and put out events
so audiences can visibly see and go to events sponsored and hosted by DiGiorno. The
company can also give out online coupons and deals that are only available to a person
who becomes a fan of DiGiorno or joins the DiGiorno Facebook group.
Network television, cable television, and Facebook are all media vehicles that are
used or viewed within the home. Because DiGiorno pits itself against delivery pizza
companies, and the point of delivery pizza is to eat it at home, it is important to advertise
to the target audience in the place where they will consume the product. People eat more
when they are watching television, and the more entertained they are, the more they eat.1
Watching television is a family activity.
Showing the target audience the product while entertaining them with clever DiGiorno
commercials will not only encourage them to eat DiGiorno pizza, but also encourage
them to eat more than they normally would.
2
1 http://www.jurgita.com/articles-id2434.html
2
http://books.google.com/books?id=mkM9AAAAIAAJ&pg=PA148&lpg=PA148&dq=%
22television+is+a+family+activity%22&source=bl&ots=SpuSePyAKl&sig=EmFhgGMq
SL2lY0x3W0gQsvwuZRA&hl=en&ei=w9XYS9OtJoLK8wThxtiaBw&sa=X&oi=book_
result&ct=result&resnum=1&ved=0CAkQ6AEwAA#v=onepage&q=%22television%20i
s%20a%20family%20activity%22&f=false
Advertisement on television will reach an
entire family during a television program, which means that DiGiorno will be presented
to both the buyers and the consumers of the household. A clever or thought-provoking
commercial can also cause conversation between the family members about DiGiorno
pizza, which will in turn increase the family members’ interest and memory of the
product.
Outdoor advertisements have the major advantage of targeting drivers or commuters.
Colorful billboards, bus stop ads, and other outdoor vehicles demonstrate the aesthetic
appeal of a freshly cooked, hot DiGiorno pizza. These vehicles also have the advantage
of advertising where a product can be purchased, and can even be placed right next to a
purchasing location. Placing billboards near grocery stores will encourage buyers to pick
up a quick and delicious DiGiorno pizza on the way home from work, school, or errands.
Since drivers or commuters tend to travel the same path every day, the outdoor vehicles
will reinforce the DiGiorno message on a daily basis.
With the out-of-home media, we will target the three markets with the highest levels
of DiGiorno brand usage– South, East Central and West Central. Those markets make up
more than half of the United States and we will also target New York and Baltimore due
to their high levels of frozen pizza consumption and large populations. Using outdoor
advertising, such as billboards, we will advertise in big cities gain more reach in each
specific region.
Magazines have the same aesthetic advantage as outdoor and television
advertisements. Magazines advertisements are high quality images that show every
steamy, delectable detail of a DiGiorno pizza. Magazines also have the reach advantage
of re-readability. People browse through magazines at the pharmacy, the grocery store,
the Super Walmart – all of which sell DiGiorno pizza on location. Once someone buys a
magazine they may take it home and read it again, pass it to a family member in the
household, or pass it on to a friend. Several people who all affect each other’s buying and
eating habits will see the same magazine advertisement at the cost of only one insert.
With the inclusion of coupons and special buy offers, direct mail would work well to
compete with delivery pizza options. Due to its inexpensive nature, we will not need to
spend a lot on direct mail; we will buy postage in bulk and mails advertisements and
coupons to our target market. The coupon will be directly targeted to customers, and the
advertisement will be specialized to give them a sense of feeling that DiGiorno cares.
We will spend the rest of the budget on the point of purchase displays and coupons.
POP advertising will provide a reminder to the spur-of-the-moment pizza buyer to buy
DiGiorno instead of another brand. Coupons will be distributed on purchasing locations.
Coupons are an effective and inexpensive way to encourage consumers to buy larger
amounts of DiGiorno. Shoppers who use coupons often end up buying more than they
originally planned.3
3 http://www.entrepreneur.com/marketing/guerillamarketing/article193484.html
Coupons offer a clear incentive and are made specifically to generate
a response or motivate the target audience to take action. Once a customer contacts a
DiGiorno representative, he or she can sell more, inquire more and work on creating a
lasting relationship.3
Media Objectives
High, medium, and low reach/frequency levels are defined below.
Reach Average
High 75-95%oftarget 85%
Medium 50-75%oftarget 65%
Low up to 40-50%oftarget 45%
Frequency Average
High 9-10+in4weeks 10
Medium 6-8in4weeks 7
Low 1-5in4weeks 3
Month
Reach
Frequency
July - August
80 – 90%
3
October – November
60 – 70%
5 – 7
January - February
30 – 40%
9 – 10
April - May
80- 90%
3
This flighting pattern above is the best continuity method for DiGiorno. During the first
eight weeks, beginning at the start of July 2010, we will aim for a high reach with low
frequency (80-90%, 3 respectively). There will then be a four-week drop in advertising.
Beginning in October there will be eight weeks where we have a medium reach and a
medium frequency (60-70%, 5-7), followed with another four-week drop. The next eight
weeks will begin a low reach, high frequency pattern (30-40%, 9-10) with a four-week
drop to follow. This pattern will repeat itself in the following weeks, finishing out the
campaign at the end of June 2011.
This flighting pattern is designed to reach as many consumers as possible at the
beginning of the campaign while keeping cost in mind with a low frequency, and build up
the frequency while lessening the reach as the campaign continues. The pulsing method
will keep the brand fresh within the consumer’s mind throughout all seasons.
The South and East central regions show the highest levels of brand usage, with
average levels of frozen pizza category consumption. The West central region appears to
be an area of opportunity in terms of its high level of frozen pizza category consumption,
trailed by average brand purchase. According to Food & Agricultural Products Center
(FSVP), the top 10 metropolitan statistical areas (MSAs) in per capita consumption of
frozen pizza are, in order: Des Moines, Minneapolis/St. Paul, Milwaukee, St. Louis,
Omaha, Denver, Charlotte, Indianapolis, Chicago and Memphis. The American Frozen
Foods Institute (AFFI) found most of the MSAs listed above with New York City,
Columbus, Dallas and Baltimore to be the highest frozen pizza consuming markets in the
U.S.
The high reach at the beginning of the cycle will bring DiGiorno to the front of
consumers’ minds, while the low frequency will ensure that consumers do not become
bored or annoyed by the campaign at its beginning. Then extra runs of medium frequency
and medium reach may not attain as many consumers, but raising the frequency of the
advertisements should begin to nudge and poke at the consumer's buying urges. Once the
campaign reaches the low reach, high frequency stage, we will emphasize on those who
are most likely to purchase the product and really try to "bring it home."
The four-week off periods will allow the company to stop spending money for a few
weeks; however, the period is not long enough for customers to forget about the product.
When a customer is influenced to purchase DiGiorno, he or she (assuming satisfaction)
will most likely purchase the product again within the next few trips to the grocery store.
After the few off weeks, the campaign will air again, encouraging buyers to start or
continue buying the product.
