Domino’s Pizza: Social Media Case

Report
Exclusively available on IvyPanda
Updated: Aug 30th, 2021

Table of Contents
1. Introduction
2. The crisis/ situation
3. Shareholder impact
4. Organization response
5. Alternative responses
6. References

We will write a custom Report on Domino’s Pizza: Social Media Case specifically

for you
for only $16.05 $11/page

811 certified writers online

LEARN MORE

Introduction

Coombs (2007) defined crises as the “perception of unpredictable events”

(Coombs, 2007) which if not cushioned against would affect or alter the
important expectations of shareholders. He went further to add that if not
properly checked it would go a long way in impacting negatively on the
organizational performance thus generating negating outcomes on several
indices. Simply, it is a process an organization would undertake when facing a
problem that dents on its image and has the potential to harm the given
organization.

The effects are largely felt on several facets of the company such as a change
in consumer attitudes, decline in shareholder value and a general public
outcry. In any crisis, the above should be expected. All organizational crises
present to the organization three major challenges within which they have to
wade through. Such are the threats the crisis signify to the organization, the
surprise element the crisis present and the limited time within which the
management is to make decisions (Wilcox, 2006).

The above therefore is a case study of Domino’s pizza, a United States owned
company that manufactures pizza. It constitutes a chain of restaurants and
other international joints operating within and outside the United States.

Its headquarters are located at Domino Farms Office Park campus in

Michigan, Ann Arbour Township. The company started operations in 1960 and
has grown over time to be America’s second largest pizza manufacturer. They
are however the largest internationally given their vast network of both
corporate and franchise stores.

The crisis/ situation

This paper is a case study of Domino’s pizza’s scandalous video that was put
on the media courtesy of two of its employees. They did this without the
knowledge of the senior management and within 48 hours the video had
created over a million views.

The result, as expected, constituted the crises which, like any other, had not
been foreseen but was creating formidable backlash within the consumer
cycles and impacting negatively on the company therefore (Coombs, 2007).
The whole crisis was caused by the uploading of a prank video on YouTube
by two of the organization’s employees. In the video they are engaging in
unhealthy and uncouth practices that violate all consumer protection laws
especially those related to food.

They are seen inserting cheese in their nostril, they blow mucus on a
sandwich and further they insert washing sponge, the one they use for
washing their clients dishes in their buttocks. The videos went viral, attracting
viewership up to the millions within a span of only 48 hours. It is the viewers
who also double up as their clients who informed Domino’s management. The
protagonists were immediately arrested, though the damage had already been
done (Hogan, 2009).

Get your 100% original paper on any topic done

in as little as 3 hours
LEARN MORE

The Domino’s crisis according to my understanding is the transgression type.

In analyzing the situation, the videos portray that an act actually occurred and
there is therefore by all means a crisis. In trying to decipher the degree of
damage to the company, it was widespread and majorly touched on the
organization’s image.

Reactions generated included phrases such as “oh, my God. I’m never eating
at Domino’s again or my children eat at Domino’s, I hope this is a bad joke”
(Hogan, 2009) as was evident on the video is a clear demonstration of
stakeholders’ seriousness on the same issue. Even then, given the fact that
the food was never packed and sold to consumers, there are no real victims,
all are hypothetical and given the fact that the company has served its
clientele for decades, it could be easier to wade through such basing on their
reputation.

The situation described above was definitely caused by the mischievous

employees. Much as they claimed it was a prank, they should have foreseen
the consequences of their actions. The management too, or the officials at the
farm were also lousy on their roles in keeping the image of the company.

It took them 48 hours before they removed the videos by which time it had
attracted a very large number of viewers online. Aside from this, the company
also initially brushed it off in the hope that it will be a storm that would cool
down on itself, they were wrong in that and they had to look for ways to
console and assure their irate clientele about the situation.

Shareholder impact
Normally, the stock value of any organization during a catastrophe is affected
by the crisis. According to Dr. Knight and Pretty (1996), there are three
impacts on the stock value of any organization. These include complete
recovery and even gains made on the stock value above the ‘pre-catastrophic’
value, others he merely termed as ‘recoverers’ those that retained their value
while them that lost he termed as ‘non-recoverers.’

On average, the cumulative impact gathered to about 5% additional to their

stock value, in this regard a positive impact on the share value. Non-
recoverers, according to his study remain unchanged in the period ranging
from the fifth to the 50th day after the crisis. These, he added, go on to suffer a
negative collective impact in terms of loss to the tune of almost 15% on stock
price through to the first year onwards.

Domino’s pizza is ranked, according to the above rationale as a recoverer.

This is due to the fact that when the catastrophe hit the total sales went low
immediately but immediately the management took corrective steps to assure
the public and distance themselves from these acts the sales resumed.

We will write a custom Report on Domino’s Pizza: Social Media Case specifically

for you!
Get your first paper with 15% OFF
LEARN MORE

Organization response

The response by the organization came in rather too late. Internally, the
company worked to set up a strategy to counter the crisis, they took a whole
day figuring out how to build or restore their image. Their first decision was to
stay silent about the whole issue since they feared coming out publicly on the
same might also create awareness among their clients who did not know
about the video. As a result therefore, there was neither a press conference
on the same nor any formal media release to the public explaining the
situation.
They also decided against hiring an external team to handle the crisis and
also involving their very own marketing department. As time progressed, the
situation got more serious. The company therefore decided that making a
public apology over YouTube would be a must given that the social media was
abuzz with irate sentiments from their clients worldwide (Hogan, 2009).

In the video was the company’s chief executive officer, Mr. Patrick Doyle. He
undertook the mortification strategies and combined them with ingratiation
strategy. They used the repentance tactic and bolstering tactic to reaffirm their
client that he was important to them and they valued them above everything
else.

They also empathized with the irate consumers then informed the clients that
the room where the footage had been taken had been locked and was no
longer used for production. He reiterated that it was being sanitized and as a
measure to curb such menace the company would review its hiring
procedures to sieve out such people. This, as was later discovered was linked
t the fact that one of the arrested employees had actually been arrested once
been arrested for committing a sexual offense

Immediately they noticed the video, the company management directed a

search for the two employees involved. They used online media to track them
down through sites such as YouTube and other independent bloggers.

They also involved the police, the district attorney and the health department
to assist in carrying out the investigations and bring the culprits to book. The
short coming to all their strategies was until then, as they discovered not
yielding the desired outcomes. Most conversations were done online via
twitter and YouTube (Hogan, 2009).

They were faced with a major challenge though, that for them to delete the
videos from the internet they would need the written consent of the parties
involved, and at this time they had not been arrested, this was so because the
account holders with YouTube were the sole copyright owners. The more the
video stayed the more it created public outcry over the incident, and had the
stringent procedures not been there the video would have been brought down
within 24hours and the outcry would be less therefore.

Members of the management also undertook to be interviewed by the public

and media houses alike, defending the company position. Mr. Tim McIntyre,
the vice president in charge of communications stated that he two were a
mere bunch of scoundrels who meant to pull a prank thinking it would be
funny.

Not sure if you can write a paper on Domino’s Pizza: Social Media Case by
yourself? We can help you
for only $16.05 $11/page
LEARN MORE

He disassociated them from the brand, arguing that the two cannot represent
the 100,000 employees who set out to work every day for the company
worldwide, and neither can they the company name (Hogan, 2009). The
management also hinted at further investigating the owner of that franchise,
they said on account of the fact that that the owner is solely responsible for
hiring is staff, and that he operates only under license from the mother
company; Domino’s pizza.

Also in compliance to Coombs theory, when Domino’s discovered that the

owner of the franchise had employed a sex offender which was against their
standards, they distanced themselves in terms of responsibility and also
defended the company to its clients by painting it as a scapegoat by the
franchise owner (Coombs, 1995).

In a nutshell, the company in an attempt to quell the tension that had risen set
out the following objectives; It created the impression of putting the consumer
first by shutting down the tore and directing a thorough sanitation of the same.
This loosely translated to putting public interest first. They also took
responsibility for the actions of their employees and made haste to correct the
situation.

They communicated to the clients using the same channels the video had
been broadcasted. This was on both YouTube and twitter. Had they used a
different means they probably would not have reached the audience that was
complaining.

They also used the right person to communicate and reaffirm the company’s
position to the client, and much as he took blame he made sure to use the
sufferer’s strategy by informing the public that those were mere actions of their
employees and the company was just a victim. Such denotes the seriousness
of the company in dealing with the crisis and hence consumer confidence is
assured (Hogan, 2009).

Alternative responses

Other responses the management had included doing ads with the public
health officials in order to show the public that they really value sanitation.
They also engaged the public more in preparation of their quinines and such
public confidence was consequently restored.

References

Coombs, W. (2007). Ongoing crisis communication: Planning, managing, and

Responding. Thousand Oaks, CA: Sage.

Hogan, D. (2009). Domino’s case shows value of crisis communication.

Arizona: University of Phoenix Press.

Knight, R., & Pretty, D. (1996). The Impact of Catastrophes on Shareholder

Value. New York, NY: Anchor.

Wilcox, D. (2006). Public Relations: Strategies and Tactics. Boston, MA.

8th Edition. Pg. 262-263. Cambridge: Cambridge University Press.