Tuesday, December 22, 2009

Domino's Burns Subway

Jan 22, 2009

The battle between Subway and Domino's Pizza over baked sandwich superiority just got hotter. After receiving a cease-and-desist letter telling the No. 2 pizza outfit to stop airing its new campaign, Domino's president David Brandon set fire to the document on national TV last night (Jan. 21).

The ad, which was produced less than a week ago and ran on Fox's American Idol, is the latest messaging trumpeting the fact that consumers preferred Domino’s new oven baked sandwiches over Subway's by a margin of two-to-one. The results were part of an independent taste test conducted on Domino's behalf.

The letter arrived from Subway earlier this month. Upon receiving it Brandon challenged his marketing team and lead agency Crispin Porter+Bogusky, Miami, to come up with a plan to leverage it. "I said ‘listen this is a bit if a swipe at us, suggesting there is an integrity issue around the test we did and how we did. I don’t like it,'" Brandon told Brandweek. "It made us want to scream even louder about our two-to-one taste claim results. When they asked me to be in the ad, I had to be a team player.”" Domino's plans to continue running the ad for awhile.

Brandon brushed off the letter because in order to get approval for the campaign, Domino’s had to have the claims reviewed by lawyers as well as the networks. "The requirements are significant and we passed all of them."

Prior to the launch of this new attack ad, Jeff Moody, CEO of the Subway Franchisee Advertising Trust, told Brandweek: "We don't think the test was legitimate and therefore the results are very misleading. The networks would not know enough about the operations of the companies to easily see through the flaws in the research. Therefore, as long as there was a big enough sample they would approve the ads even though they are false."

Moody’s four specific issues were:
1. "They did the comparison against three sandwiches and have written the ads to suggest that the results are relevant across the whole product line."
2. "They did not compare the Domino's Philly Cheese Steak sandwich to Subway's Philly Cheese Steak (which we have as a national product) but rather to our Steak and Cheese. Philly Cheesesteak uses a shaved beef product which is completely different than our Steak and Cheese product so their comparison is invalid."
3. "Subway's whole positioning is that we make customized sandwiches, right before your eyes, with your choice of bread, meats, cheeses, vegetables and sauces. We believe that they made every Subway sandwich the same and based the build on our pictures which include all the veggies. The majority of consumers don't add all the veggies."
4. "The production and consumption conditions weren't reflective of the real world and were biased against Subway. Our subs are cooked one at a time and consumers usually eat them right away in the restaurant, or take them across the street to their office." If the subs were served cold they obviously weren’t as good.

"[Subway is a] big company that is very good at what they do, but we are very proud of our baked sandwich product line. We have every right to shout it from the rooftops," said Brandon. "They tried to get to pizza business which is a direct assault on pizza category. We didn’t whine about it. They had every right to do a taste claim which wouldn’t have worked very well."

Domino’s spent $135 million on U.S. media for the first 11 months of last year compared to the $412 million Subway spent (excluding online expenditures), per Nielsen Monitor-Plus.