Name :- Rahul H.

Soni
Class :- S.Y.B.M.S
Div :- C
Roll No. :- 200
Subject :- PUBLIC RELATIONS
MANAGEMENT
Topic :-Dominos Pizza Crisis

Introduction:-

Dominos Pizza: company background:-

Founded in 1960 by Tom Monaghan and his brother James, Dominos Pizza started, like
most corporate success stories, as a small pizza shop in Ypsilanti, Michigan, US. After 38
years of ownership, Tom Monaghan announced his retirement and sold his entire stake to a
Massachusetts investment firm called Bain Capital Inc. (LA Times, 1998).
The business expanded rapidly throughout the following decades and today, Dominos
Pizza is a successful worldwide known pizza delivery corporation. According to its official
website, Dominos Pizza is the worlds leader in pizza delivery, operating a network of
company-owned and franchise-owned stores in the US and international markets.
Dominos international expansion started back in the 80s, when the company opened its
first international store in Canada, and now reached to more than 9000 stores in over 60
markets around the world. Dominos international restaurants and over 90% of its US ones
are franchise-owned and operate in compliance with the standards of the Dominos brand
(Dominos Pizza Annual Report, 2008).
The company operates in a highly competitive food service industry market in the Quick
Service Restaurant (QSR) sector. Competition in this business sector is very intense with
regard to product quality, service and price. Pizza Hut is the main competitor of Dominos
Pizza and together with Papa Johns, the three represent 47% of the pizza delivery market
in the US (Dominos Annual Report, 2008).
As stated by Dominos, its growth strategy focuses on values such as:
putting people first
demanding integrity
striving for customer loyalty
delivering with smart hustle and positive energy
winning by improving results
The company has one simple mission to be the best pizza delivery company in the world.
With a motto like Sell More Pizza, Have More Fun, Dominos guiding principles combine
the concepts of work and fun even if many people consider the two words as being in
antithesis. According to Dominos corporate culture, the company values the contributions
of its customers, team members, suppliers and all other stakeholders and views diversity
as an important competitive advantage. The company considers diversity at the workplace
as a stimulation of the working environment and in the same time, encourages innovation
and creativity we believe we are stronger, more effective and more profitable because
we use all the human resources our society has to offer (Dominos website, Aug. 2011).
Along the years, Dominos continued to expand its product line and strengthen its brand,
receiving much attention and positive reviews from different industry trade publications
and financial newspapers. In 2003, Dominos Pizza was rewarded for the quality of its
delivery systems and named Chain of the Year by Pizza Today magazine, a pizza trade
publication. As main driver behind the companys growth, the strength of its franchises was
recognized by Forbes magazine in 2011, who placed the Dominos on the first position of
The Top Franchise for the Money (Forbes, Jan. 2011).

Crisis facts and timeline:-

We all have our secret ingredientsand in about five minutes they will be sent out on
delivery where somebody will be eating these. Yes, eating them. And little did they know that
cheese was in his nose and there was some lethal gas that ended up on their salami. Now,
thats how we roll at Dominos! Kristi Hammond, creator of prank video (April, 2009)
We have created a timeline of the relevant facts relating to Dominos crisis, on which we
shall develop a detailed exposure of the events that lead to the outbreak of the crisis. The
facts are mainly taken from The PR Strategist article Dominos delivers during crisis: The
companys step-by-step response after a vulgar video goes viral, an interview with Tim
McIntyre, Vice President of Communications and spokesperson of Dominos Pizza.

Dominos Pizza: crisis timeline:-

The incident happened on Easter Sunday, April 12 2009, when two employees of Dominos
Pizza shot four videos of themselves during their working hours in the kitchen of a pizza
restaurant, doing unsanitary things to the food they were preparing for delivery. The first
and most popular video Dominos Pizzas Special Ingrediants (sic) shows a male Dominos
employee inserting pieces of cheese in his nose, waving pieces of salami behind his
backside and violating other health code standards before placing them on sandwiches
(The NYTimes, Apr. 2009), while his fellow female colleague provides narration (she was
laughing and joking in the background about that being a usual behavior at Dominos). The
other videos Sneeze Sticks, Poopie Dishes and Dominos Pizza Booger were also
showing the male employee violating multiple food service industry hygienic rules.

The next morning, on Monday April 13th, the two employees decided to upload the videos
on the online video-sharing site, YouTube. In the evening, Tim McIntyre, Vice President of
Communications at Dominos Pizza received an e-mail from an influent blogger, alerting
him of the existence of some vulgar videos on YouTube. He also mentioned in the email
that, for the public interest, he reposted the videos on his website. The next day, after
checking the videos online, McIntyre realized that the videos were not a hoax and that the
most popular video had already received more than 250.000 views on YouTube. We got
blindsided by two idiots with a video camera and an awful idea. Even people whove been
with us as loyal customers for 10, 15, 20 years are second-guessing their relationship with
Dominos, and thats not fair, declared McIntyre for The New York Times (Apr. 2009).
Within a couple of hours, Dominos managed to identify the employees and their location
Kristi Hammond and Michael Setzer two full-time employees at Dominos Pizza franchise
store in Conover, a small town in North Carolina. After locating them, Dominos contacted
the local police to arrest the two felons and the local health department to sanitize the
restaurant. The same day, McIntyre received an apologetic e-mail from Ms. Hammond, who
said that it was all a prank and me nor Michael expected to have this much attention from
videos that were uploaded. No food was ever sent out to any customer.(Advertising Age,
Apr. 2009).


In the beginning, Dominos took the decision to not respond publically, hoping that the
crisis would blow over but by Wednesday, propelled by Twitter and other social media
platforms, the YouTube post turned viral, reaching more than one million views. Under
these circumstances, Dominos decided to post an official response on its website and
uploaded a video on YouTube of Patrick Doyle, CEO of Dominos Pizza, apologizing for the
situation and saying that the two workers have been identified, fired and arrested under a
felony warrant. The company also took legal action to have the original videos removed
from YouTube and created an official Twitter account to address the comments of its
stakeholders (TimeUS, Apr. 2009).

According to the Emerging Media Research Council, two days later, on April 17, Dominos
search in Google yielded prank video as third result while the apology video fourth, with
almost as many views as the remaining copy of the prank video. With the rise of social
media, Dominos found itself in a middle of a serious online crisis situation with more than
one million disgusted viewers and a badly damaged reputation.

Dominos crisis management strategies
Issues management:-

The first stage of Gonzalez-Herrero and Smiths model is the same as Coombs signal
detection sub-stage of the pre-crisis stage of his model. Issues management can therefore
be considered an active search and interpretation of warning signs, the purpose being to
identify and manage any issue than might cause problems to the organization before
turning into a serious crisis situation. Of course, retrospectively speaking, it is easier to
identify the specific actions that could have helped Dominos prevent the crisis. When the
the crisis occurred, Dominos was not very familiar with the vehicles of online
communication nor with any social media strategy (Stull, 2009). Of course, even if
Dominos would have already had a strong online stakeholder engagement approach, the
company still could not have stopped the employees from posting the videos but it could
have definitely reacted to the videos much quicker, preventing the videos from going viral.
Thereby, the lack of online presence led to the transformation of an isolated incident into a
serious crisis, affecting the customers and its reputation. Judging by the number of viewers
the video had, we can see that Dominos management failed to scan negative issues online
and thus permitted the videos to escalate into a crisis. Dominos found out about the videos
from different bloggers who felt obligated to notify corporate headquarters as soon as the
videos were found (Peeples & Vaughn, 2009).

As Perry (2003) observes, in this stage, the Internet has the purpose to minimize the
potential damage of a crisis and maximize the process of recovery after the crisis. The
actions that Dominos could have taken during this monitoring stage are numerous and are
supposed to be effective in preserving the online reputation and brand (Gonzalez-Herrero
& Smith,2008). With a trained team and an efficient online monitoring system that covers
all relevant websites and social media platforms or with the external help of a monitoring
agency to constantly scan for issues, Dominos could have been prepared to approach this
issue in different ways, addressing the issue faster so that the video would not have spread
to so many people. As we will see in the next stage, McIntyres internal communication
team partnered with an external agency for future new media strategy work to ensure the
online presence of Dominos. As McIntyre concluded in an interview, nothing is local
anymore. Thats the challenge of the Web world. Any two idiots with a video camera and a
dumb idea can damage the reputation of a 50-year old brand. (USA Today, Apr. 2009).

Planning-prevention:-

Just as in Coombs crisis preparation sub-stage, the planning-prevention stage focuses on
actions made by the organization in order to be prepared when the crisis occurs. It mainly
consists of selecting a crisis team and an online crisis plan that helps the organization in the
process of dealing with the inevitable aspects of any crisis. According to Tim McIntyre, in
2009 Dominos was actively working on the creation of a social media team and had
already created a strategy to launch the company in the online social environment: we
were building a plan to introduce Dominos to Facebook, to Twitter and to some of the
other relevant social media sites. The two major aims of the online strategy were to
engage in an open dialogue with stakeholders and to allow the company to efficiently
monitor mainstream and social media, thus staying up to date with relevant issues.
Ironically, Dominos was planning to start implementing their online strategy just as the
crisis occurred. McIntyre declared for The PR Strategist that [] we didnt want to just
jump in without a strategy. We wanted to do it right. [] so we ended up having to jump in
during the crisis, which was the opposite of how we wanted to do it. And our timing was off
by a week. (The PR Strategist, Aug. 2009). In this context, Dominos was aware of the
advantages of using the internet as an information resource. The company was already
asking itself what actions it could proactively take to avoid a potential online crisis and
minimize the negative consequences of such a crisis (Gonzalez-Herrero & Smith, 2008).
Evidently, Dominos could have been much more prepared to deal with the challenges of an
online crisis if the social media strategy would have been implemented at least a few weeks
sooner. The experience gathered in the online environment, even if only for a short period
of time, could have helped prepare the company better for the challenges of an unexpected
online crisis that it was soon about to face.

The crisis:-

After the crisis outbreak, organizations need to put in practice all of the actions established
by the crisis team in the planning-prevention stage. As Gonzalez-Herrero and Smith (2008)
outlined in their model, the existence of the internet made Dominos crisis possible, acting
like a triggering factor. The negative role of social media in this case was that within hours,
the videos had been taken from YouTube and embedded or reposted on other sites,
including popular blogs GoodAsYou and The Consumerist. Once this occurred,
Dominos, as well as the two original posters, lost the ability to control the spreading of the
videos or who viewed them (Peeples & Vaughn, 2009). McIntyre was obviously aware of
theability of online content to turn viral, as we can see in his response to the blogger who
alerted him about the prank videos: the challenge that comes with the freedom of the
Internet is that any idiot with a camera and an Internet link can do stuff like this [] and
ruin the reputation of a brand thats nearly 50 years old.
As a result, the posting of the videos on YouTube reflected some of the worst fears
consumers have about food purchased in restaurants and represented the trigger event of
Dominos online reputational crisis. Powered by social media, the videos and related
discussions have quickly moved to Facebook, Twitter and many other social networking
platforms. As we have mentioned earlier, Dominos did not have a well prepared crisis plan
with actions ready to be performed after the outbreak of the crisis, but despite being
unprepared, Dominos crisis team took some strategic measures to put the fire away and
restore their online image.
Once the organization realized that they were facing a real crisis situation the moment
when McIntyre received the e-mail from the webmaster of Good As You warning him about
the presence of negative company-related videos McIntyres first reaction was to send the
links to the videos to different Dominos key persons (social media team, head of security
and senior management), informing them that This has been posted, we need to do
something about it. Lets begin (The PR Strategist, Aug. 2009). According to theory,
Dominos made sure that all its internal and external key stakeholders were aware of the
crisis situation so that they could monitor and report all crisis outcomes from that moment
on. When McIntyres social media team was alerted about the videos by a second blog, this
time the well-known consumer affairs blog, The Consumerist, they immediately realized
the dramatic impact on their stakeholders and on Dominos reputation. In this regard,
McIntyre and his team began taking immediate actions to contain the crisis, identifying the
employees and their location as soon as possible. Dominos captured stills of the videos and
identified employees faces and distributed them to all of its US restaurants through the
companys internal network. With the help of two readers of The Consumerist, who used
different clues from the videos, innovative geo-mapping and other investigative tools, the
company managed to find the location of the videos creators the same day.
Next, Dominos contacted the local police and district attorney to investigate the incident
and worked closely with the franchise owner to fire the two Dominos employees
responsible for the crisis and bring in the local health department to sanitize the restaurant
and discard all open food containers. Even though McIntyre received an e-mail from Kristi
Hammond informing him that the food they had tampered with never left the store, he
checked the orders system to make sure that none of the food had in fact been delivered.
This way he found out that during that Sunday, no telephone calls had been registered,
meaning that the sandwiches had never actually reached any clients. Both employees that
appeared in the videos were now facing serious felony charges for violating multiple food
health standards and were therefore arrested (TimeU.S. Apr. 2009). Taking note of legal
implications in their strategic actions, Dominos acted according to law and made efforts to
remove the videos from YouTube only after having obtained the copyright claim from Ms.
Hammond, two days later after the initial posting.
During the crisis, Dominos constantly used the internet to engage in two-way
communication with its stakeholders in order to keep them informed on the development
of the events, activity performed by only 44% of companies according to Perry and Taylors
(2005) study on the use of new media tactics. At first, McIntyre and his team selected only
readers of the two blogs that initially covered the incident as target audience for their crisis
response, motivating his choice by stating that there are a lot of people who dont know
about it; lets focus on talking to the audience thats talking to us.(The PR Strategist, Aug.
2009). The team kept the audience informed about all its ongoing actions and decisions by
sharing updates and messages with both GoodAsYou and The Consumerist blogs. Dominos
used the two popular blogs as communication channel to foster dialogue between the
company and its audience.
The decision to not issue a public press release right away was motivated by Dominos with
the intention of not escalating the crisis by alerting even more people of the incident. This
way, the company hoped that the crisis would soon blow over and considered that a public
response to the videos would only attract more attention.
However, the decision to not go public was in fact an unfortunate one because by
Wednesday, just two days later, propelled by Twitter and other social media platforms, the
first YouTube video turned viral and reached more than one million views. TV, radio and
Web news stories ricocheted around the world and Dominos found itself right in the
middle of the toughest situation [] in terms of a digital crisis, as stated by the managing
director and head of the United States crisis practice at the PR firm Burson-Marsteller (The
NYTimes, Apr. 2009). McIntyres social media team soon discovered that discussions of the
incident spread on Twitter and that most reactions were now not about how terrible the
videos were, but more focused on the companys reaction to them, as observed in
comments such as Does Dominos know about this?, What is Dominos doing about it?
and How come they [Dominos] are not talking to anybody? (Twitter, Aug. 2009). As a
result, McIntyre acknowledged that Dominos initial crisis management strategy was
inappropriate in terms of social media potential, admitting that what we missed was the
perpetual mushroom effect of viral sensations (The PR Strategist, Aug. 2009). This so-
called mushroom effect had spread the crisis very far in a very short period of time and the
company learned that news outlets from Peru, China, Greece and United Kingdom were
running the story and that Dominos as a search word had surpassed Paris Hilton for the
first time ever (The PR Strategist, Aug. 2009). Moreover, references to the videos were in
five out of twelve results on the first page of Google search for the same word (The
NYTimes, Apr. 2009). Under these circumstances, Dominos took the next strategic step and
adapted its strategy to include a much wider audience. As a result, the company posted an
official statement on its corporate website, called Update to our Valued Customers, in
which it explained the situation and the effect it had on the company. Additionally, an
apology video was created and uploaded on YouTube and a visible link was added to it on
the company website. The video had all of the elements required by an effective crisis
management strategy, as theory suggests: it featured Dominos Pizza CEO, Patrick Doyle,
who personally addressed stakeholders and described in detail the actions that Dominos
had already taken and would take in the future (employees fired, warrants issued for their
arrest, store shut down and sanitized, re-examining hiring practices). The CEO also
apologized for the incident and thanked the online community for its support and for
bringing the issue to the companys attention. To make the message spread even faster,
Dominos asked all employees to use their own Twitter accounts to tweet links to both the
video and website response. Later that day, Dominos created its first corporate Twitter
and Facebook accounts in an attempt to engage as many stakeholders as possible in an
open and honest dialogue (TimeUS, Apr. 2009).

The post-crisis:-

Eventually, all organizations return to their usual business environment after the crisis
comes to an end, but even though the crisis is no longer the main focus of management, it
still requires some attention. As recommended by crisis theory, Dominos took action and
engaged its stakeholders in follow-up communication to keep them informed and to
respond to inquiries, even though the crisis was no longer in public attention. Dominos
thanked its customers for the support shown during the difficult moments on their
corporate website and sent personal thank you e-mail messages to the bloggers who
helped McIntyre right from the beginning of the crisis. Since stakeholder perceptions are
very important during a crisis, an evaluation of what happened and how the organization
responded was necessary. After an in-depth analysis of all internet content related to the
events, as theory suggests, Dominos understood the huge importance of social media,
especially during a crisis, and created a social media specialist position at the companys
headquarters in Ann Arbor, Michigan to be the eyes and the ears of Dominos in the social
media space (The PR Strategist, Aug. 2009). McIntyres social media team strengthened
Dominos online presence by actively using the newly-created Facebook and Twitter
accounts, in an effort to stay connected with all stakeholders: were using this to answer
consumer questions - to promote new products []. And then when things happen, were
aware of them, the Vice President of Communications noted (The PR Strategist, Aug.
2009). A crisis that happened in the online environment has long lasting effects that are
almost impossible to eradicate (Gonzalez-Herrero & Smith, 2008). Negative publicity
remains on the web even after the crisis ends even today, people can still view Dominos
videos on GoodAsYou and The Consumerist but companies that clearly showed that they
have learnt from their mistakes and changed their communication style, like Domino did,
will be able to prevent and protect themselves from a similar future online crisis. The data
collected and used to analyze Dominos crisis management strategy in relation to Gonzalez-
Herrero and Smiths (2008) online crisis management model helped us realize the
strengths and weaknesses of the companys strategy. They will be identified and discussed
later on in the paper, but not before Dominos approach on the crisis response has also
been analyzed.

Dominos crisis response strategies:-

The following section explores, from a communicative point of view, the response
strategies Dominos used during and after the crisis in its attempt to rebuild the damaged
reputation, using Coombs (1995) crisis response theory as point of reference. As we have
already seen, Dominos found out about the videos on Monday and officially reacted only
48 hours later, after the incident had already become viral and was covered by mainstream
and social media all over the world. At that point, Dominos was confronting with a serious
reputational crisis in the eyes of the public. Since the two employees committed what
customers of the food industry fear the most sanitary and health standard violations
Dominos realized that it needed to adopt excellent response strategies to repair its stained
reputation and regain its customers trust. According to Coombs (1995), an organization
can respond to accusations of wrongdoing in many ways, ranging from complete denial to
acceptance of blame and asking for forgiveness. Since we have already established that
Dominos crisis is a transgression type, positioned on the intentional/internal axis, we will
now consider the other factors that influence the approach of crisis response. The videos
posted by the two employees represent proof of evidence that a crisis really exists, acting as
testimony of the incident. When assessing the level of damage, it becomes obvious that the
two employees did major damage to the organizations image. Reactions such as Oh, My
God. Im never eating at Dominos again or My children eat at Dominos, I hope this is a
bad joke (GoodAsYou, Apr. 2009) clearly demonstrate that stakeholders perceived the
crisis as being severe, since customer health might have been affected. However, as the
contaminated food never got delivered to customers, the incident did not have any victims.
Judging by its worldwide success and its trustworthy brand, we observe that Dominos has
a positive performance history, being perceived as a company that gained credibility in the
eyes of its stakeholders by delivering quality food for many decades.
According to what Coombs (1995) explained in his decision flowchart, a transgression
action where the evidence is true, with major damage and a positive performance history
requires a mortification strategy coupled with ingratiation. Just as theory suggests,
Dominos took these aspects into consideration when choosing a response to the crisis and
rightfully adopted ingratiation and mortification strategies. The companys first official
response to the crisis was to post a statement on its corporate website. In it, Dominos used
bolstering as tactic and reminded their valued customers of the positive history
performance of the company: a couple of individuals suddenly overshadow the hard work
performed by the 125.000 men and women working for Dominos across the nation and in
60 countries around the world. (dominosbiz.com). The company combined this
ingratiation strategy with two mortification tactics
repentance and rectification. Dominos assured its stakeholders that corrective measures
had already been taken in order to prevent a similar situation: Since the videos first
surfaced yesterday, the two workers have been identified, fired and the affected franchisee
has filed a criminal complaint against them, and there are warrants for their arrest.
(dominosbiz.com). At the end of the statement, Dominos asked for forgiveness and
apologized for the crisis: We apologize for the actions of these individuals, and thank you
for your continued support of Dominos Pizza. (dominosbiz.com). Shortly after posting the
statement, Dominos realized that adopting the same mortification strategies, but this time
using social media platforms, would reach even more stakeholders and would help restore
a stained reputation. Therefore, Dominos posted a video on YouTube in which the CEO
publicly apologizes for the crisis. The CEO used the same tactics of repentance, rectification
and bolstering just as in the statement, adding that there is nothing more important or
sacred to us than our customers trust (official YouTube apology video). Even though the
CEO accepted blame and took responsibility for the crisis, he also adopted a suffering
strategy and portrayed the company as a victim of the crisis. He separated the company
from the two wrongdoers, emphasizing on the fact that their actions were a hoax and that
this is not how things roll at Dominos. In an interview for AdvertisingAge, McIntyre
explained that theres a limit to the things that a company can do to prevent a situation like
this: you can be the safest driver, you know but there is going to be that Friday night
someones drunk and comes out of nowhere; you can do the best you can, but theres going
to be the equivalent of that drunk driver that hits the innocent victim, concluding that
Dominos didnt do this, it was something that was done to us (Jaffe, 2010).
Dominos considered that the apology video was not enough to regain its customers trust
and in order to rebuild the strength of its brand, it created corporate Twitter and Facebook
accounts in which it placed links to the video and issued bolstering statements such as we
care about our customers and Dominos Pizza does great things for your community
(Towner, 2009). Regarding the store in which the incident happened, McIntyre told a local
TV news outlet that The franchise owner is responsible for his actions, and he will be held
accountable (Independent Street, Apr. 2009). This response came right after Dominos
executives found out from the local police department that the female employee was a
registered sex offender. The company claimed that, according to law, the franchisee owner
has autonomy in setting menu prices and hiring employees and that it was up to him to
ensure that all operations and employees met the standards of Dominos brand. In
accordance to Coombs (1995) theory, after finding out that the restaurant owner had hired
a registered sex offender against Dominos standards, the company distanced itself from
full responsibility and excused the company in the eyes of customers by partially
scapegoating the franchisee owner for the incident. Dominos managed to find a suitable
approach during the whole crisis and maintained a tone of customer gratitude and care
throughout. The choice of accepting responsibility and culpability for the crisis ensured
Dominos a successful crisis communication strategy. Benoit, researcher in the field of
image restoration, generally applauded Dominos approach, by stating People do not like
to admit theyre wrong, but they do like to hear other people admit it. When someone does
fess up, people tend to respect you for having the courage to admit it. (The Washington
Post, Jan. 2010).