Download Steven Carlisle

Steven Carlisle
Table of Contents
I. Executive Summary ............................................................... 5
II. Situation Analysis ................................................................. 7
A. The External Environment ....................................................................................... 7
Industry Analysis ...................................................................................................... 7
Porter‟s Five Forces ............................................................................................. 7
Competitive Pressures ......................................................................................... 8
Economic Growth and Stability ........................................................................... 11
Political, Legal, and Regulatory Issues ............................................................... 11
Changes in Technology ...................................................................................... 12
Sociocultural Trends ........................................................................................... 12
B. The Customer Environment................................................................................... 13
Who are the firm's current and potential customers? ............................................. 13
What do customers do with the firm's products? .................................................... 14
Where do customers purchase the firm's products? .............................................. 14
When do customers purchase the firm's products? ............................................... 14
Why (and how) do customers select the firm's products? ...................................... 15
Why do potential customers not purchase the firm's products? ............................. 15
C. The Internal Environment ...................................................................................... 16
Review of marketing goals and objectives ............................................................. 16
Review of current marketing performance ............................................................. 16
Review of current and anticipated organizational resources ..................................... 17
Review of current and anticipated cultural and structural issues ............................ 17
III. SWOT Analysis ................................................................... 18
A. Strengths ............................................................................................................... 18
Strength 1: High Quality Ingredients ...................................................................... 18
Strength 2: Strong Employee Training Program..................................................... 18
Strength 3: Strong Marketing Support .................................................................... 19
Strength 4: Efficient Restaurant Layout.................................................................. 19
B. Weaknesses .......................................................................................................... 19
Weakness 1: Locations .......................................................................................... 19
Weakness 2: Limited Menu Items .......................................................................... 20
Weakness 3: Switching Costs ................................................................................ 20
C. Opportunities ......................................................................................................... 20
Opportunity 1: New Menu Items ............................................................................. 20
Opportunity 2: Locations ........................................................................................ 21
Opportunity 3: Strong Brand Recognition ............................................................... 21
D. Threats .................................................................................................................. 21
Threat 1: Competition‟s Larger Menu ..................................................................... 21
Threat 2: Competition‟s Locations .......................................................................... 21
Threat 3: Competition‟s Brand Recognition ............................................................ 22
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E. The SWOT Matrix.................................................................................................. 22
F. Matching, Converting, Minimizing, and Avoiding Strategies .................................. 23
IV. Marketing Goals and Objectives ....................................... 24
A. Marketing Goal A: Increase Menu Offerings ......................................................... 24
Objective A1: Addition of Take and Bake Items ..................................................... 24
Objective A2: Addition of Sandwiches and Salad Items ......................................... 24
B. Marketing Goal B: Increase Profits ........................................................................ 24
Objective B1: Open New Store Locations .............................................................. 24
Objective B2: Implement customer loyalty program ............................................... 24
V. Marketing Strategies ........................................................... 25
A. Primary Target Market and Marketing Mix ........................................................... 25
1. Primary target market: Fresh Papa: New Customers – Existing markets ........... 25
Product: Fresh Papa‟s ........................................................................................ 25
Pricing: Fresh Papa‟s ......................................................................................... 26
Distribution: Fresh Papa‟s................................................................................... 26
Promotion: Fresh Papa‟s .................................................................................... 26
2. Primary target market: New store locations: New markets – New customers ....... 27
Product: New Store Locations ............................................................................ 27
Pricing: New Store Locations.............................................................................. 27
Distribution: New Store Locations....................................................................... 28
Promotion: New Store Locations ........................................................................ 28
B. Secondary Target Market and Marketing Mix ........................................................ 29
1. Secondary target market: Papa‟s MCV: Current customers ............................... 29
Product: Papa‟s MVC .......................................................................................... 29
Pricing: Papa‟s MVC ........................................................................................... 30
Distribution: Papa‟s MVC .................................................................................... 30
Promotion: Papa‟s MVC ...................................................................................... 30
2. Secondary target market: Sandwich and Salad Line: Existing Market – New
customers .............................................................................................................. 31
Product: Sandwich and Salad Line ...................................................................... 31
Pricing: Sandwich and Salad Line ....................................................................... 32
Distribution: Sandwich and Salad Line ................................................................ 32
Promotion: Sandwich and Salad Line .................................................................. 32
VI. Marketing Implementation................................................................................. 34
A. Action Plans .......................................................................................................... 34
Action Plans: Fresh Papa‟s .................................................................................... 34
Action Plans: Papa‟s MVC ..................................................................................... 38
Action Plan: Sandwich and Salad Line................................................................... 41
Action Plan: Location Growth ................................................................................. 42
B. Tactical Marketing Activities .................................................................................. 43
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VII. Financial Forecasts and Budget ...................................... 44
A.
Budgets .............................................................................................................. 44
Fresh Papa............................................................................................................. 44
Papa‟s MVC ........................................................................................................... 44
Sandwich and Salad Line ....................................................................................... 44
Location Growth ..................................................................................................... 44
VIII. Evaluation, Control, and Contingency Plans .................. 45
Output Control Mechanisms (performance standards) .............................................. 45
1. Product performance standards: ....................................................................... 45
2. Distribution performance standards: ................................................................... 46
3. Price performance standards: ............................................................................. 46
4. IMC/Promotion performance standards: ........................................................... 46
IX. Appendices......................................................................... 47
1. Product Mix: Papa John‟s versus Competition ...................................................... 47
2. Industry Structure .................................................................................................. 48
3. Perceptual Map: Fresh Papa‟s............................................................................... 49
4. Perceptual Map: Papa‟s MVC ................................................................................ 51
5. Timeline: Fresh Papa‟s .......................................................................................... 53
6. Timeline: Papa‟s MVC ............................................................................................ 54
X. References........................................................................... 55
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I. Executive Summary
The purpose of the Papa John‟s marketing plan is to assess the external and
internal environments for the company, establish the marketing goals and
objectives for the company, define the marketing strategies, and develop action
plans to implement the strategies.
The external environment for Papa John‟s is highly competitive. There are local
and national chains that compete for the same customers Papa John‟s targets. Of
these, Pizza Hut and Dominoes Pizza are the strongest competitors. However,
recently, there has been an increase in the amount of take and bake pizza
restaurants owned both locally and nationally; Papa Murphy‟s Take and Bake Pizza
is one of the nationally owned chains. These restaurants put pressure on Papa
John‟s by offering similarly priced pizzas and have financial strength to open many
stores. With the addition of a new in home baking technology, consumers can
bake fresh or frozen pizzas in home faster and with higher quality than the oven.
The internal environment at Papa John‟s is strong; however, recently they have
closed underperforming stores. Papa John‟s has several strengths which include
in-house commissaries and a strong supply chain. Papa John‟s does have a few
weaknesses that they can overcome. The biggest weakness is that Papa John‟s is
a relatively new company compared to Pizza Hut and Dominoes Pizza as they both
have more locations than that of Papa John‟s. Additionally, switching costs for
customers is extremely low as a result of heavy couponing from the competition.
Papa John‟s has two main marketing goals: increase menu offerings and increase
profits. In order for Papa John‟s to increase menu offerings the company needs to
introduce new and exciting menu offerings. Similarly, to increase profits, the
company needs to increase store locations and implement a customer loyalty
program.
Research shows that to reach the objective of increasing menu offerings the
company should focus on two areas: take and bake pizza and a sandwich and
salad line. Furthermore, to reach the objective of increased profits, the company
should offer customers a loyalty program and conduct research to determine the
locations of new units. Note, the addition of new menu items will also allow the
company to increase profits.
The implementation of the take and bake pizza, called the “Fresh Papa”, and
customer loyalty program, called “Papa‟s MVC”, will occur over the next year. First,
the customer loyalty program will be implemented through the existing customer
database in February of 2006 with new customers targeted starting two months
later. The addition of the customer loyalty program will increase the switching costs
for consumers. Following the implementation of the customer loyalty program, the
new take and bake line will be introduced beginning in July 2006. It is estimated
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that the research for the customer loyalty program will be $610,000 for marketing
efforts, product development, and distribution of the program information.
Furthermore, it is estimated that the introduction of the take and bake pizza line will
be $525,500 for marketing efforts, product implementation, and pricing surveys.
Finally, the implementation of opening new stores and the sandwich and salad line,
called “PJ‟s Lite Fare”, will occur at varying times. First, the opening of new stores
will be researched ongoing to determine the proper locations to open stores. This
research will begin immediately. It is estimated that this program will cost
approximately $10,000 per unit opened. Secondly, the implementation of the
sandwich and salad line will begin with marketing research to determine the needs
of the consumer in May 2006. The addition of sandwiches and salads to the menu
will increase profits and also give consumers an alternative to pizza items. It is
estimated that the costs of the research for the sandwich and salad line will be
$100,000; which is a one-time charge.
By introducing take and bake pizzas, implementing a loyalty program, opening new
stores, and adding sandwiches and salads Papa John‟s will be able to reach the
current marketing objectives of increase menu offerings and increase profits. With
the implementation of these four items, Papa John‟s will further gain competitive
advantage over the competition.
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II. Situation Analysis
A. The External Environment
Industry Analysis
Porter’s Five Forces
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Competitive intensity within the industry
o Compared to nationally owned pizza restaurants rivalry is
high.
o Compared to locally owned restaurants rivalry is high.
•
Threat of new entrants
o Threat of new entrants from nationally owned pizza
restaurants is high because they have the capital to open
multiple units.
o Threat of new entrants locally is low because of the high cost
involved to open a new pizza restaurant.
•
Threat of substitutes
o There are many choices for consumers to purchase pizza from
locally owned to national chains therefore the threat of
substitutes is high.
•
Bargaining power of buyers
o With the multiple outlets available for consumers the
bargaining power of buyers is high because if prices are too
high they will shop elsewhere.
o Additionally, many consumers switch between pizza
restaurants because they choose the outlet with the best
coupon.
•
Bargaining power of suppliers
o The bargaining power of suppliers is low for the nationally
owned pizza restaurants so they can demand lower prices.
o The bargaining power of suppliers for locally owned pizza
restaurants is high because they do not buy in large quantities.
•
All things considered, Porter‟s Five Forces are high so the industry
may not be as profitable or attractive.
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Competitive Pressures
•
Major Competitors
o Pizza Hut: offers Delivery, Carryout, or Dine-in
 Size:
 Operates in 86 countries
 7,500 Units in the U.S.
 4,774 Units Internationally
 Growth
 Focus for this company is in three areas:
• Delivery service concept called Wing
Street
• Dine-in service called Pizza Hut Bistro
• Multi-brand stores
 Profitability
 2004 Sales $8.7 billion
 5 year growth of 3%
 Target markets
 Families, 25 – 50 years old
 Products
 10 Crust types
 Pastas
 Appetizers
 Sandwiches and Salads
 Dessert Pizzas
 Key Strengths
 Multi-brand units; for example, Pizza Hut with
Kentucky Fried Chicken in one building
 Strong Franchise relations
 Fresh dough made daily
 Book-It Program to get kids to read
 Key Weaknesses
 Unattractive stores
• Company is pushing to remodel all stores
to make them seem more inviting
 Legal proceedings
• Company is in several legal struggles
relating to employee rights and customer
rights
 Key marketing capabilities
 Distribution of supplies through approved
vendors
 National, Regional, and Local Advertising Plans
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o Dominos Pizza: offers Delivery and Carryout
 Size
 Operates in 50 countries
 5008 Units in the U.S.
 2749 Units Internationally
 Growth
 This company expects to add between 200 and
250 stores per year
 Profitability
 2004 Sales $4.63 billion
 5 year growth 6.6%
 Target markets
 College Students, Lower Income Families
 Products
 3 types of crust
 Appetizers
 Key strengths
 Strong and proven growth and earnings model
 Strong store-level economics
 Strong and well-diversified franchise system
 Strong brand recognition with college age
consumers
 Key Weaknesses
 Poor brand recognition with families
 Limited product offerings
 Key marketing capabilities
 18 Dough manufacturing facilities in the U.S.
 8 Dough manufacturing facilities internationally
 Long-term partnerships with suppliers
 National, Regional, and Local Advertising Plans
o Little Caesars Pizza: offers carryout and delivery
 This company is family owned and operated and is
not listed on any stock exchange therefore it is not
possible to find data.
 Products
 3 types of crust
 Appetizers
 Sandwiches
 Salads
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o Papa Murphy‟s: offers Carryout
 This company is privately held and therefore it is not
possible to obtain financial information
 Over 880 stores in the U.S.
 Products
 2 types of crust
 Appetizers
 Fresh ingredients
 Cookie Dough
o Godfather‟s Pizza: offers carryout, delivery, and dine-in
 This company is privately held; therefore it is not
possible to obtain financial information
 563 Units in the U.S.
 Products
 3 types of crust
 Sandwiches and salads
 Appetizers
 Dessert Pizzas
•
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•
•
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•
Brand
Competitors
Pizza Hut
Dominos Pizza
Pizza Inn
Little Caesars
Pizza
Godfather‟s
Pizza
Potential competitors
o Locally Owned
o Frozen Pizzas in stores
o Fresh Pizzas in grocery stores
o CiCi‟s Pizza: offers Buffet
 560 stores in 26 states around the U.S.
o Round Table Pizza: offers Delivery, Carryout, Dine-in
 500 stores
o Chuck E. Cheese: offers Carryout and Dine-in
 500 stores
o Pizza Inn: offers Delivery, Carryout, and Dine-in with a Buffet
 391 stores
Product
Competitors
•
•
•
Locally Owned
Stores
Fresh Pizza in
Grocery Stores
Papa Murphy‟s
Generic
Competitors
•
•
•
•
Fast Food (KFC)
Panera Bread
Gas Stations
Frozen Pizzas
Total Budget
Competitors
•
•
•
Applebee‟s
Chili‟s
TGIFriday‟s
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•
2005 Consumers Choice (Restaurants and Institution magazine) are:
1. Papa Murphy‟s
2. CiCi‟s Pizza
3. Papa John‟s Pizza
4. Round Table Pizza
5. Pizza Hut
6. Little Caesars Pizza
7. Domino‟s Pizza
8. Chuck E. Cheese
•
For a recap of the competitors product mix versus Papa John‟s Pizza
see Appendix 1. Product Mix: Papa John‟s versus Competition.
•
For a recap of the competitors size and financials see Appendix 2.
Industry Structure.
Economic Growth and Stability
Papa John‟s operates in many states and internationally. Overall in
the U.S. consumer confidence is down which leads to lower
spending. As gas prices fluctuate, some consumers may be
adversely affected and limit the purchase of pizza to frozen pies from
the grocery store.
Political, Legal, and Regulatory Issues
The political factors that could affect Papa John‟s Pizza are due to
the uncertainty of international governments. International
governments may move to limit the number of U.S. firms that operate
in the country therefore forcing out companies that are not wholly
owned by the host country.
Legal issues that affect Papa John‟s Pizza are disputes with workers,
defending trademarks, and disputes with suppliers.
Regulatory issues facing Papa John‟s Pizza are federal, state, and
local health departments, labor boards, and zoning laws. There are
federal labor laws that Papa John‟s Pizza must follow. Each state
has varying standards for food service and labor laws. In addition,
there are federal food service laws that restaurants must follow.
Each city or town has differing zoning laws that Papa John‟s must
follow.
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Changes in Technology
The emergence of the internet in households has changed the way
that Papa John‟s interacts with consumers. Instead of calling the
store, consumers are able to order online and even schedule future
delivery times. This service is a valuable asset to the company; when
a consumer places an order online it sends an e-mail to the
registered e-mail account with the estimated delivery time. Also, the
company has made it easier to pay by accepting credit cards both
online and in the store. Additionally, when a consumer is a registered
Papa John‟s customer they send out coupons via e-mail which
reduces costs of mailing out coupons to consumers.
The emergence of in home pizza ovens is a new technology;
consumers are able to purchase in-home pizza ovens which reduce
the amount of time it takes to make home made pizzas. For
example, Wal-Mart sells the Presto Pizzazz Pizza Oven retailing for
$36.76 and Amazon.com has the same item for $44.82. This
technology claims to cook store bought pizza in less time and with
better taste than the oven.
The emergence of the internet also has changed the way that Papa
John‟s communicates with its stores. For example, stores are able to
place orders with Papa John‟s, International via computer.
Currently, when a consumer orders online the system sends an email to the registered e-mail address for the account which lets the
customer know the amount of the order and the estimated delivery
time. The down side is that individual stores are not able to control
the time estimate that is given. Papa John‟s needs to utilize a
tracking system for individual orders so that the consumer can go
online and see where the order currently stands in the process. For
example, consumers could check to see if the order is out for delivery
or still in the process of being made.
Sociocultural Trends
Demographics have not had a significant impact on the pizza
industry; however many people are going away from eating on the go
to having one night a week set aside for family dinner. This has
impacted the pizza market because people are cooking quick meals.
As a result, they may be purchasing more take and bake pizzas than
before.
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Papa John‟s does not offer a dine-in option for consumers so this
may impact the ability to get the portion of the business that desires
the experience of dining out in a pizza parlor.
Furthermore, with the recent surge of fad diets in America, Papa
John‟s and other chains may need to find ways to exploit them with
consumers in mind. For example, Pizza Hut has started offering
lower fat pizza in some markets.
The human resources portion of this industry is a major factor in the
success of any restaurant. Many workers are part-time high school
students; as a result they may not take pride in the job they are
performing. Part-time high school students are likely to change jobs
more often which drives up costs due to continually training new
employees.
B. The Customer Environment
Who are the firm's current and potential customers?
•
•
•
•
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Demographic
o Males and Females 20 – 45 with or without families
o Middle to upper income
Geographic
o There are no specific geographical areas
Psychographic
o People that enjoy quality pizza
Product usage
o The product is usually consumed at an individuals home,
office, or dorm room
Purchase process
o Purchasers are usually the user of the product unless they are
buying for an office or school meal.
o Influencers could be friends, family, or co-workers.
o Typically the person that purchases the product has the
financial responsibility for the product.
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What do customers do with the firm's products?
•
•
•
Purchase
o Consumers may purchase a single pie or multiple pies
depending on the need and time of order.
o Complementary products would include:
 Soda
 Appetizers
 Dipping sauces
Consumption
o Heavy users order at least once per week.
o Moderate users order two times per month.
o Light users order once per month or less.
o Consumption of complementary products.
o Consumption would occur at lunch or dinner soon after the
purchase.
Disposition
o Many consumers throw out the box the pizza comes in
therefore the box does not get recycled.
o The box itself is made from recycled materials and can be put
in a cardboard bin for recycling.
Where do customers purchase the firm's products?
•
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•
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The product is purchased at the stores or over the internet.
Consumers can either have the pie delivered or pick it up in the store.
The recent addition to the internet site for Papa John‟s is the ability to
order on line.
Due to the perishability of the items sold this retailer has no other
source to sell the product.
When do customers purchase the firm's products?
•
The purchase of this product is year round however, there may be
seasonal fluctuations based on weather or sporting events.
o Weather affects the purchase due to snow, ice, or rain.
because consumers do not want to get out in the elements
o Sporting events affect the purchase when games are on
television especially during playoffs.
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Why (and how) do customers select the firm's products?
•
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•
•
•
Basic features of the products and competitors are similar; they all
satisfy a need for food.
The needs of the customer may change in the future, the customer
may want pasta or a salad instead of pizza therefore the competitor
will be able to satisfy that need.
Payment methods: Cash, Check, Credit Card, Gift Certificate
Many consumers purchasing pizza are brand loyal however many will
purchase from the competition because of the current coupons or
specials offered.
The slogan “Better Toppings, Better Pizza” may have consumers
thinking that Papa John‟s does in fact offer higher quality than the
competition; therefore, they are able to chare premium prices for the
product.
Why do potential customers not purchase the firm's products?
•
•
•
The basic needs of non-customers are satisfied by the competition
the main reason that non-customers would not purchase from Papa
John‟s include: lack of complementary items, no dine-in space, or
simply do not like the product.
The primary benefit that competition would have over Papa John‟s
may be location of stores, hours of operation, or loyalty programs.
The ability convert non-customers into customers of Papa John‟s
product are strong. By creating brand loyalty and recognition that
Papa John‟s offers “Better Ingredients, Better Pizza” is key to the
success of converting non-customers.
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C. The Internal Environment
Review of marketing goals and objectives
The Papa John‟s Mission Statement “Papa John's will create superior
brand loyalty, i.e. "raving fans", through (a) authentic, superior-quality
products, (b) legendary customer service and (c) exceptional
community service” clearly defines where it sees itself in the
marketplace.
•
•
•
•
The Current goal of Papa Johns is to build brand loyalty
internationally.
The goals are based off the firm‟s mission statement.
The goals are consistent with the industry.
The current growth strategy is market penetration utilizing existing
goods and existing markets.
Review of current marketing performance
•
•
•
Offers Delivery, carryout, and limited dine-in
 Size:
 2,829 stores
 49 states 17 countries
 118 Perfect Pizza stores in the UK
 In 2005 plan to open 200 stores
 Profitability
 2004 Sales $942.4 Million
 5 year loss of .74%
Franchisees are required to join an advertising co-op
 Offer national level, regional level, and local level
advertising
The industry as a whole is growing, Papa John‟s loss of sales over 5
years may be due to the closing of a few underperforming stores.
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Review of current and anticipated organizational resources
•
•
•
•
Papa John‟s owns and operates its dough making facilities and
commissaries and all restaurants are required to order from them
directly.
Papa John‟s is closing one of the dough making facilities and the
stores served by that particular distribution center will be allocated to
other regional centers.
Papa John‟s owns several acres of land to allow the growth of
commissaries and dough production facilities.
The ability to grow the dough and commissary facilities will allow
Papa John‟s to meet future needs of customers.
Review of current and anticipated cultural and structural issues
•
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•
•
•
•
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Papa John‟s focuses on making the customer experience delightful
for all consumers of the product.
Papa John‟s plans for long term growth with the available space to
grow the dough production and distribution facilities.
Papa John‟s consistently adapts to changing customer needs an
example would include the recent addition of Papa‟s Perfect Pan
Pizza.
The founder, John Schnatter is still the President and CEO of the firm
this may lead to power struggles with in the firm if his personal goals
for the company are not consistent to those of the shareholders.
The marketing function of the company lies in its ability to offer the
stores support at the regional and local level; through the use of
advertising co-ops, which enables the local stores to compete with
other national brands as well as locally owned stores.
Papa John‟s has a Franchise Advisory council which holds regular
meetings to discuss marketing ideas, growth, and other issues.
Employees of Papa John‟s are encouraged to learn more about the
business and Papa John‟s offers performance based incentives to
team members at the corporate level as well as at the franchise level.
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III. SWOT Analysis
A. Strengths
Strength 1: High Quality Ingredients
Papa John‟s uses only fresh ingredients in the pizza production
process. Customers perceive value of high quality fresh ingredients.
Many of Papa John‟s competitors use frozen pizza dough and sauce
made from concentrate therefore using fresh ingredients enables
them to meet customer expectations better than the competition.
Papa John‟s utilizes its assets in the dough making facilities and
commissaries to directly monitor product quality.
Many of Papa John‟s competitors allow individual stores to purchase
outside the company; therefore, there is little or no control on quality.
Strength 2: Strong Employee Training Program
Papa John‟s offers continuing training at regional training centers
around the United States to assist team members in learning skills
needed to make better pizzas and run profitable stores. By
controlling the training of employees, Papa John‟s offers its
customers the same experience at each and every store therefore
providing consistency.
Papa John‟s competition rely on store managers to properly train
employees as a result the customer experience may be different
across the company.
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Strength 3: Strong Marketing Support
The current marketing program at Papa John‟s allows them to
reach out to the individual communities where it operates. Utilizing
the current marketing support Papa John‟s is able to act in the best
interest of the communities where stores are located.
Papa John‟s competition also utilizes local marketing but the local
markets have little control over the promotional activities.
Strength 4: Efficient Restaurant Layout
Papa John‟s restaurant layout is customer and employee friendly.
Customers can see throughout the entire store and watch pizzas
being made. In addition, the layout provides employees a clear
view to the front of the restaurant so they can better serve the
needs of customers. Finally, the restaurant layout provides a more
efficient way to work; making the flow better for employees; cutting
labor costs; and passes these savings on to the customer.
The restaurant layout of Papa John‟s competition is not customer
friendly. Pizza Hut in particular has several varying layouts and
they often do not enable the customer to see through the
restaurant. Additionally, the employees can not see through the
stores and as a result the customer response time is lengthened.
This results in higher labor costs and higher prices.
B. Weaknesses
Weakness 1: Locations
Papa John‟s is still considered new to the pizza market, they are not
as large as the competition. Most of Papa John‟s competition has
doubled the amount of stores. As a result, Papa John‟s is not able to
serve as large a market as the competition. The upside to this is that
Papa John‟s has not saturated all of the markets that are available to
them; whereas the competition may not be able to continue to grow
the business through store growth.
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Weakness 2: Limited Menu Items
Papa John‟s only offers a few menu items as compared to the
competition. As a result, customers that want a greater variety to
meet the needs of the entire family may turn to the competition.
Offering only pizza, appetizers, and beverages Papa John‟s may be
losing customers to the competition which offers sandwiches, pasta,
and take and bake pizzas.
Weakness 3: Switching Costs
The pizza industry has many brand loyal customers however many
customers will choose the company where they have a coupon for
the purchase. The switching costs for consumers is extremely low
considering that calling Papa John‟s to order pizza is just as easy as
calling the competition.
Papa John‟s does not blanket the market with coupons in the mail as
often as the competition. Instead Papa John‟s focuses on sending
coupons to customers that order from them. As a result, non Papa
John‟s customers do not have coupons readily available as often as
the competition.
C. Opportunities
Opportunity 1: New Menu Items
The addition of menu items will allow Papa John‟s to better serve the
needs of the customer.
Papa John‟s can capitalize on the addition of menu items in the short
run by adding various types of pizzas to the menu. Long-term out
look, Papa John‟s could add sandwiches and salads to the menu
which would better satisfy the consumers‟ needs.
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Opportunity 2: Locations
Papa John‟s is still considered a newer pizza company; they have not
yet saturated the market for the quality product that is served.
Short term Papa John‟s can open more stores in markets they
currently operate within and long term they can open in markets
where they are not yet operating.
Opportunity 3: Strong Brand Recognition
Papa John‟s has strong brand recognition across the country and as
a result needs to exploit the image to gain more customers and make
it the first choice in the consumers evoked set.
Short term Papa John‟s could coupon the areas where they are
currently operating and long-term they can continue to sponsor
events and grow the business by opening locations in untapped
markets.
D. Threats
Threat 1: Competition’s Larger Menu
Papa John‟s competition offers many varying menu items where as
Papa John‟s only offers a select offering of pizza, appetizers, and
drinks.
To prevent the competition from limiting its capabilities Papa John‟s
needs to offer new and exciting menu items to drive sales and
continue to focus on the message of “Better Ingredients, Better
Pizza”.
Threat 2: Competition’s Locations
Papa John‟s competition has about two times as many locations so
the competition is better able to serve a wide variety of customers.
Papa Johns can combat this threat by extending the delivery areas in
the short term and in the long term open more stores where they are
currently operating to meet the needs of the customers.
21
Threat 3: Competition’s Brand Recognition
Papa John‟s is not the only pizza chain with strong brand recognition
therefore, the competition is able to advertise locally, regionally, and
nationally just as well if not better than Papa John‟s.
To limit this threat in the short term Papa John‟s can advertise at key
times when people are deciding to purchase pizza, during football,
baseball, basketball, etc. Long term Papa John‟s can sponsor
sporting events which will get the Papa John‟s name out more than
just a 30-second commercial.
E. The SWOT Matrix
Strengths:
o High Quality Ingredients
o Strong Employee Training
o Strong Marketing Support
o Efficient Restaurant Layout
Opportunities:
o New Menu Items
o Locations
o Strong Brand Recognition
Weaknesses:
o Locations
o Limited Menu Items
o Switching Costs
Threats:
o Competition‟s Larger Menu
o Competition‟s Locations
o Competition‟s Brand Recognition
22
F. Matching, Converting, Minimizing, and Avoiding Strategies
Strengths to opportunities:
Papa John‟s can utilize the strengths of high quality ingredients,
employee training, and marketing support to implement new menu
items and seek out potential new store locations.
Papa John‟s can utilize the strengths of employee training and
marketing support to make the brand recognition stronger.
Weaknesses to strengths:
Papa John‟s can convert the weakness of store locations into
strength by continuing to grow the business through the use of
employees and marketing.
Papa John‟s can convert the weakness of limited menu into strength
by focusing on implementing new high quality menu items to the
menu.
Papa John‟s can not directly control the switching costs of
consumers; however; they can minimize the risk by increasing the
coupon direct mail function and implementing a customer loyalty
program.
Provided Papa John‟s is able to successfully convert its weaknesses
and opportunities to strengths it will minimize the impact of the threats
it faces from the competition.
23
IV. Marketing Goals and Objectives
A. Marketing Goal A: Increase Menu Offerings
Objective A1: Addition of Take and Bake Items
•
•
•
Specific and measurable outcome: Increase in profits by 10%
and increase in new customers seeking this type of product by 5%
Time frame: Six months
Responsible unit/person: Marketing department, product
development department, and employee training center
Objective A2: Addition of Sandwiches and Salad Items
•
•
•
Specific and measurable outcome: Increase in sales by 5% and
increase in customer flow by 2%
Time frame: One year
Responsible unit/person: Marketing department, product
development department, and employee training center
B. Marketing Goal B: Increase Profits
Objective B1: Open New Store Locations
•
•
•
Specific and measurable outcome: Increase of store locations
by 20 each year
Time frame: Ongoing
Responsible unit/person: marketing departments, unit managers,
area managers
Objective B2: Implement customer loyalty program
•
•
•
Specific and measurable outcome: Increase in repeat customer
orders by 40%
Time frame: Ongoing
Responsible unit/person: Marketing department, store
managers, store employees
24
V. Marketing Strategies
A. Primary Target Market and Marketing Mix
1. Primary target market: Fresh Papa: New Customers – Existing
markets
This targets primary need: Quick and fresh food to cook at home
Identifying characteristics: Middle to upper income, 20-45 years
old, with families, within 15 miles of unit locations
Purchasing habits and preferences: Value quality over price
Consumption characteristics: Frequent to infrequent purchasers
Segmentation Criteria:
Identifiable and Measurable: The size and location of this
market is available through the Census Department.
Growth Rate: Growth of the take and bake pizza industry is
strong in addition, potential competitors of Papa John‟s were
ranked number one by Restaurants and Institutions Magazine.
Substantial: With growth in the desire to make fresh home
cooked meals this offers a considerable size market.
Accessible: The target market is readily available through the
current store locations.
Responsive: Papa John‟s customer base is responsive to
new menu additions.
Targeting Strategy: A Mass Marketing Strategy will work best for
this product.
Product: Fresh Papa‟s
Major features and benefits: Quick and fresh home cooked meals
for family occasions, two sizes and original crust, Papa‟s Pan, and
thin crusts will be used.
Sustainable competitive advantage: High quality ingredients and
quality customer service and internet structure in place to take
advantage so pizzas are ready to pick up or deliver.
Differentiation/positioning strategy: Position Papa John‟s against
current national and local take-and-bake companies as well as other
non take-and-bake companies (see Appendix 3: Fresh Papa).
Brand name and packaging: Brand name Fresh Papa‟s served in a
non reusable pizza pan and a Fresh Papa‟s pizza box.
Customer service strategy: Product will be available for carryout or
delivery through existing stores.
25
Complementary products: Appetizers, beverages, and drinks
Pricing: Fresh Papa‟s
Pricing objectives: Papa John‟s should implement the pricing
strategy of sales-oriented to maximize market share and unit sales.
The price structure for this product will be similar to the current ready
baked pizza strategy that Papa John‟s uses however the cost will be
reduced approximately $2 to $5 per pie.
Description of per unit costs: Per unit costs will be approximately
$3 for packaging, ingredients, and delivery fee. In addition, the initial
investment for research and marketing will be approximately $2,000
per store.
Discount/markdown policy: The use of couponing will offer $1 to $2
off the order.
Distribution: Fresh Papa‟s
General supply chain strategy: Papa John‟s will use the current
supply chain therefore controlling product quality and costs.
Intermediaries and channels to be used: There will be no outside
intermediaries used for distribution and the current distribution
strategy will be used.
Elements of customer convenience: Provides access to fresh
pizza through delivery or carryout.
Promotion: Fresh Papa‟s
General IMC strategy: Promote the new Fresh Papa‟s to existing
and potential customers through mass advertising.
IMC objectives and budget: The objective is to create awareness
for the new product and generate new business for Papa John‟s.
Elements of the advertising strategy: Posters, POP displays,
coupons, and television advertisements.
Elements of the personal selling strategy: Train employees on the
correct way to build a pie and interact with customers.
Elements of trade sales promotion strategy: Direct mail coupons
to initiate sampling of Fresh Papa‟s, buy one get one free.
Elements of consumer sales promotion strategy: Use of the buy
one get one free promotion through the website ordering program.
Elements of the sponsorship strategy: There is no sponsorship for
this plan.
26
2. Primary target market: New store locations: New markets – New
customers
This targets primary need: Quick and fresh food to enjoy at home.
Identifying characteristics: Middle to upper income, 20-45 years
old, within 15 miles of unit locations
Purchasing habits and preferences: Value quality over price
Consumption characteristics: Frequent to infrequent purchasers
Segmentation Criteria:
Identifiable and Measurable: The size and location of this
market is available through the Census Department.
Growth Rate: Growth of the pizza industry is strong.
Substantial: With growth in the pizza industry this offers a
considerable size market.
Accessible: The target market is available through growth of
new store locations.
Responsive: Consumers enjoy fresh hot pizza and are
receptive to new locations.
Targeting Strategy: A mass marketing strategy would work best for
growth in the industry.
Product: New Store Locations
Major features and benefits: Quick and fresh pizzas delivered or
available for carryout.
Sustainable competitive advantage: High quality ingredients and
quality customer service and internet structure in place to take
advantage so pizzas are ready to pick up or deliver.
Differentiation/positioning strategy: Position Papa John‟s against
current national and local restaurants.
Brand name and packaging: Brand name Papa John‟s served in a
Papa John‟s pizza box.
Customer service strategy: Product will be available for carryout or
delivery through existing stores.
Complementary products: Appetizers, beverages, and drinks
Pricing: New Store Locations
Pricing objectives: The current pricing structure should be used.
Description of per unit costs: Per unit costs are approximately $5 $8 dollars per pizza.
Discount/markdown policy: The use of couponing offers $1 to $2
off the order.
27
Distribution: New Store Locations
General supply chain strategy: Papa John‟s will use the current
supply chain therefore controlling product quality and costs.
Intermediaries and channels to be used: There will be no outside
intermediaries used for distribution and the current distribution
strategy will be used.
Elements of customer convenience: Provides access to fresh
pizza through delivery or carryout.
Promotion: New Store Locations
General IMC strategy: Promote the new store location potential
customers through mass advertising.
IMC objectives and budget: The objective is to create awareness
for the new location and generate new business for Papa John‟s.
Elements of the advertising strategy: Posters, coupons, and
television advertisements.
Elements of the personal selling strategy: Train employees on the
correct way to build a pie and interact with customers.
Elements of trade sales promotion strategy: Direct mail coupons
to initiate sampling of Papa John‟s, buy one get one free.
Elements of consumer sales promotion strategy: Use of the buy
one get one free promotion through the website ordering program.
Elements of the sponsorship strategy: There is no sponsorship for
this plan.
28
B. Secondary Target Market and Marketing Mix
1. Secondary target market: Papa‟s MCV: Current customers
This target's primary need: High quality, fresh pizza
Identifying characteristics: Middle to upper income, 20-45 years
old, within 15 miles of unit locations
Purchasing habits and preferences: Value quality over price
Consumption characteristics: Frequent to infrequent purchasers
Segmentation Criteria:
Identifiable and measurable: Current customer database
makes this segment readily available.
Growth Rate: Growth rate is determined by the growth of the
business.
Substantial: The current customer base is large.
Accessible: The computer system that Papa John‟s uses
keep track of customers therefore the customer base is readily
available.
Responsive: With the growth of loyalty programs customers
are receptive to these types of programs.
Targeting Strategy: A mass marketing strategy will work best for this
program, with an emphasis on the current customer base.
Product: Papa‟s MVC
Major features and benefits: Customers will be able to gain points
for orders placed through the stores or websites. Customers will be
able to use points for free pizzas and other items like an Apple iPod
or music downloads. With the technology that Papa John‟s uses for
customer orders the consumer will not have to worry about carrying a
card; all the customer will have to do is give their phone number
when ordering. Finally, Papa‟s MVC will offer discounts and specials
not available to non-participants.
Sustainable competitive advantage: This will reduce switching
costs by increasing brand image and making Papa John‟s the first
choice in pizza by placing them at the top of the consumers evoked
set.
Differentiation/positioning strategy: By being the first to implement
a customer loyalty program Papa John‟s will be able to differentiate
itself from the competition by creating customer loyalty and make the
switching costs higher for customers (See Appendix 4: Papa‟s MVC).
Brand name and packaging: Papa‟s MVC (Most Valuable
Customer)
29
Customer service strategy: Program details will be sent out to
existing customers before the national launch of the marketing
campaign.
Complementary products: There are no complementary products
for this product.
Pricing: Papa‟s MVC
Pricing objectives: There will be no cost to consumers for the use of
this program.
Description of per unit costs: Per unit costs will be approximately
$1.50 per customer for direct mail and advertising.
Discount/markdown policy: The markdown for this product will be
subject to the redemption of the points for free pizza or other items.
Distribution: Papa‟s MVC
General supply chain strategy: Papa John‟s corporate office will
send out the details of the program to the existing customers and
once per quarter to new customers.
Intermediaries and channels to be used: Papa John‟s corporate
office will be responsible for mailing out the gifts for points redeemed
for items other than pizza.
Elements of customer convenience: The customer will only need
to supply the phone number when ordering for the points to be added
to the account. Once a customer gains enough points for an item the
customer service representative will be prompted to ask the customer
if they would like to redeem the points for the order. If so, then the
customer service representative will key this in if not the customer will
have to visit the Papa John‟s website to redeem for other gifts.
Promotion: Papa‟s MVC
General IMC strategy: Promote the new Papa‟s MVC to existing and
potential customers through mass advertising and direct mail.
IMC objectives and budget: The objective is to create awareness
for the new program and generate new business for Papa John‟s.
Elements of the advertising strategy: Posters, POP displays,
coupons, direct mail, and television advertisements.
Elements of the personal selling strategy: Train employees on the
correct way to handle the loyalty program and interact with
customers.
30
Elements of trade sales promotion strategy: Direct mail program
sending information to existing customers and after two months
implement the national program and mail out information (point
balance and program information to new customers) once per
quarter.
Elements of consumer sales promotion strategy: Customers will
call or order online and automatically be awarded points; in addition,
customers can opt-out of the program.
Elements of the sponsorship strategy: There is no sponsorship for
this plan.
2. Secondary target market: Sandwich and Salad Line: Existing
Market – New customers
This target's primary need: High quality alternatives to pizza
Identifying characteristics: Middle to upper income, 20-45 years
old, within 15 miles of unit locations
Purchasing habits and preferences: Value quality over price
Consumption characteristics: Frequent to infrequent purchasers
Segmentation Criteria:
Identifiable and measurable: This market will be identified
through market research.
Growth Rate: Growth rate is determined by the growth of the
business.
Substantial: Many people do not eat pizza therefore it gives
an alternative to pizza.
Accessible: This market is accessible through the current
locations and advertising.
Responsive: With the growth of the sandwich industry;
consumers are responsive to quality sandwiches.
Targeting Strategy: A multi-segment marketing strategy will work
best for this program, with an emphasis on the current market base.
Product: Sandwich and Salad Line
Major features and benefits: Sandwiches will be made on high
quality bread baked fresh in the stores each day utilizing the current
pizza ovens. Ingredients that are currently used for pizza will be
available for use on the sandwich when ordered. Sandwiches will be
served hot or cold depending on the consumer‟s preference.
Customers will be able to order sandwiches via internet, telephone, or
walk-in for pick-up or delivery.
31
Sustainable competitive advantage: High quality ingredients and
quality customer service and internet structure in place to take
advantage so sandwiches are ready to pick up or deliver. In addition,
it will allow Papa John‟s to offer a healthy alternative to pizza.
Differentiation/positioning strategy: By adding high quality
sandwiches to the menu, Papa John‟s can capitalize on the lunch
crowd in addition to positioning them against competitors such as
Pizza Hut, Little Caesars, and Panera Bread.
Brand name and packaging: PJ‟s Lite Fare
Customer service strategy: Products will be available for pick-up or
delivery through existing stores.
Complementary products: Chips and beverages
Pricing: Sandwich and Salad Line
Pricing objectives: Pricing will be set as sales-oriented so that the
company can gain market share and maximize unit sales it is
recommended that Papa John‟s charge $5 – $7 per sandwich.
Description of per unit costs: Per unit costs will be approximately
$3.50 per customer.
Discount/markdown policy: The markdown for this product will be
$1 - $2 off each sandwich.
Distribution: Sandwich and Salad Line
General supply chain strategy: Papa John‟s will use the current
supply chain therefore controlling product quality and costs.
Intermediaries and channels to be used: There will be no outside
intermediaries used for distribution and the current distribution
strategy will be used.
Elements of customer convenience: Provides access to high
quality fresh sandwiches and salads through delivery or carryout.
Promotion: Sandwich and Salad Line
General IMC strategy: Promote the new PJ‟s Sandwich and Salads
to existing and potential customers through mass advertising and
direct mail.
IMC objectives and budget: The objective is to create awareness
for the new sandwich and salad line and generate new business for
Papa John‟s.
Elements of the advertising strategy: Posters, POP displays,
coupons, direct mail, and television advertisements.
32
Elements of the personal selling strategy: Train employees on the
correct way to build the sandwiches and salads and interact with
customers.
Elements of trade sales promotion strategy: Direct mail program
sending information to the market upon national rollout.
Elements of consumer sales promotion strategy: Customers can
call or order online for pick-up or delivery.
Elements of the sponsorship strategy: There is no sponsorship for
this plan.
33
VI. Marketing Implementation
A. Action Plans
Action Plans: Fresh Papa‟s
Objective: Fresh Papa Product Line Strategy
The objective is to introduce a new take-and-bake pizza line to the existing menu for
Papa John‟s Pizza.
Target Market
The target market for the take-and-bake line is people who desire a fresh home baked
pizza to share with family and friends.
Description of Program
To utilize existing ingredients to make pizzas which consumers purchase and bake at
home. Product offerings will include the three types of crust Papa John‟s currently
offers: original, pan, and thin. Pizzas will be made on disposable pizza pans and
wrapped in plastic wrap to hold toppings in place until baking.
Program Responsibility
Responsibility lies with Papa John‟s marketing department, product development
department, and employee training center.
Timing
Research to be completed by May 2006 with national rollout complete by July 2006
Budget
Expected costs of this action plan are $25,000; product package design and menu
boards. There will be no costs for additional equipment or ingredients.
Controls
Sales of the new product will be monitored each month to determine success.
34
Objective: Fresh Papa Distribution Strategy
The distribution strategy will gain additional consumers who desire freshly baked pizza
at home for family meals. The goal is to increase market share and repeat business for
Papa John‟s.
Target Market
The target market for the take-and-bake line is people who desire a fresh home baked
pizza to share with family and friends.
Description of Program
When calling to place an order the customer service representative will ask if the
customer would like to try the new Fresh Papa take-and-bake pizza. This will ensure
the customer is aware of the product for future orders. Additionally, the pies will be
available for delivery or carryout to the consumer.
Program Responsibility
Responsibility lies with store managers, marketing department, and employees.
Timing
Ongoing; after launch of the product in July 2006.
Budget
There are no additional costs for this strategy.
Controls
Number of Fresh Papa‟s purchased for delivery and carryout separately to determine
the need for delivery.
35
Objective: Fresh Papa Pricing strategy
Papa John‟s should implement the pricing strategy of sales-oriented to maximize market
share and unit sales. The price structure for this product will be similar to the current ready
baked pizza strategy that Papa John‟s uses however the cost will be reduced
approximately $2 to $5 per pie.
Target Market:
The target market for the take-and-bake line is people who desire a fresh home baked
pizza to share with family and friends.
Description of Program:
Conduct national research to determine what other take-and-bake pizza companies
charge for pies. Once the competitor prices have been determined set prices for the
new Fresh Papa‟s so that the price will be competitive to competition.
Program Responsibility:
Responsibility lies with Papa John‟s marketing department, product development
department, and local store managers who can readily check the competitions prices
and report back to the corporate headquarters.
Timing:
Pricing will be accomplished by June 2006.
Budget:
Approximate costs will be $500 for initial marketing and research
Controls:
The sales of Fresh Papa‟s will determine the effectiveness of the pricing as well as the
increase in market share.
36
Objective: Fresh Papa Promotion strategy
The goal of the promotion is to increase awareness of the Fresh Papa to existing
customers and potential new customers.
Target Market:
The target market for the take-and-bake line is people who desire a fresh home baked
pizza to share with family and friends.
Description of Program:
Develop an Integrated Marketing Campaign to drive sales of the Fresh Papa. This
would include posters, flyers, direct mail, and television spots geared to drive sales of
the product. Thirty second television spots would be placed during prime time family
programming.
Program Responsibility:
Responsibility lies with Papa John‟s marketing department.
Timing:
Promotion will begin when the national rollout begins July 2006.
Budget:
Promotion budget will include posters, flyers, and promotional marketing material costs
are estimated at $500,000.
Controls:
Sales generated after the national rollout.
37
Action Plans: Papa‟s MVC
Objective: Papa‟s MVC Product Strategy
To accomplish the goal of increased profits through a customer loyalty program: Papa‟s
MVC (Most Valuable Customer).
Target Market:
The target market for this program is existing Papa John‟s customers with a national
rollout to make non-customers aware.
Description of Program:
Customers will be able to gain points for orders placed through the stores or websites.
Customers will be able to use points for free pizzas and other items like an Apple iPod or
music downloads. With the technology that Papa John‟s uses for customer orders the
consumer will not have to worry about carrying a card; all the customer will have to do is
give their phone number when ordering. Additionally, customers can register more than
one phone number for the account; for example, home, mobile and office number. Finally,
customers will be able to check the point balance online.
Program Responsibility:
The responsibility lies with the Papa John‟s marketing department, employee training
department, and store managers to ensure employees know how to handle questions
and information about the program.
Timing:
This program will launch on February 1, 2006 to existing customers and two months
later to new customers.
Budget:
The initial budget will be $10,000 for printing of materials to support the program.
Controls:
The controls for this are the number of repeat orders and the redemption of points for
products.
38
Objective: Papa‟s MVC Advertising Strategy
To increase awareness of the Papa‟s MVC program through mass advertising to noncustomers.
Target Market:
The target market for this program is non-customers of Papa John‟s.
Description of Program:
Develop an Integrated Marketing Campaign to drive awareness of the Papa‟s MVC
program. This would include posters, flyers, direct mail, and television spots geared to
drive orders at local units. Thirty second television spots would be placed during prime
time and major sporting event telecasts.
Program Responsibility:
Primary responsibility will fall on the part time employee who conducts the field research
and the two owners to develop the price structure. Accounting documents will also be
responsible for showing if the strategy is successful.
Timing:
The national rollout will begin April 1, 2006.
Budget:
The initial cost of the program will be $500,000 for advertising, direct mail, promotional
materials, and information at units.
Controls:
The number of new customers will be evaluated each month to ensure the effectiveness
of the campaign.
39
Objective: Papa‟s MVC Distribution Strategy
The objective for the distribution strategy of the Papa‟s MVC is to get the program detail
to existing and new customers.
Target Market:
The target market for this program is new and existing Papa John‟s customers.
Description of Program:
Existing customers will be automatically enrolled in the program through the use of the
database currently in place at Papa John‟s. Information packets will be mailed out the
last week of December 2005 to existing customers detailing the program. The
information packet will have a unique customer identification number on a post card for
customers to return if the do not wish to be part of the program, or the ability to enroll by
the internet.
New customers will only need to supply the phone number when placing an order and
the customer service representative will ask if they want to be included in the program.
If the customer wants to be part of the program Papa John‟s will mail out information
packets once per quarter to the new customers.
In addition, customers ordering in the store will be able to pick up information at the
order location or visit the Papa John‟s website to enroll.
Program Responsibility:
The Papa John‟s marketing department, employee training center, and store managers
will have responsibility to make sure customer service representatives know the details
of the program.
Timing:
The timing will begin April 1, 2006 for new customers.
Budget:
The initial budget will be $100,000; this includes costs of printing the information
packets and mailing of the packets to existing customers.
Control:
The control will be the number of repeat customers using the program.
40
Action Plan: Sandwich and Salad Line
Objective: Sandwich and Salad Line Product Line Strategy
The objective is to add alternative menu items to the Papa John‟s Menu.
Target Market:
The target is new and existing Papa John‟s customers who desire an alternative to
pizza.
Description of Program:
The program will evaluate the need for alternative non-pizza menu items. The
sandwich and salad line will complement the pizza menu through the use of high quality
ingredients and fresh baked bread. The sandwiches will be traditional sandwiches
made from existing Papa John‟s ingredients. For example, ham and cheese. The salad
line will be prepackaged salad kits similar to those found in grocery stores. Customers
will have the option of ordering a salad kit to complete the meal or a sandwich if they do
not want pizza.
Program Responsibility:
Program responsibility lies with the marketing department, product development
department and employee training department of Papa John‟s.
Timing:
The timing research and development for the sandwich and salad line will be complete
by May 2006.
Budget:
The budget for the sandwich and salad line will be $100,000 for research and
development of the additional menu items.
Controls:
The controls will be the initial research to ensure customers want the new menu items.
41
Action Plan: Location Growth
Objective: Location Growth Distribution Strategy
The objective is to locate and open new stores in areas where the company is not yet
operating.
Target Market:
The target market is non-customers of Papa John‟s.
Description of Program:
The program will consist of market research to evaluate the need for new locations and
the locations to place them for maximum market penetration.
Program Responsibility:
The responsibility will be the property development department and the marketing
department of Papa John‟s headquarters.
Timing:
This will be an ongoing project to enable Papa John‟s to open twenty stores per year.
Budget:
The budget for this plan is $10,000 per new location.
Controls:
The controls will be the market research conducted to locate new stores.
42
B. Tactical Marketing Activities
Specific Tactical
Activities
(Action Plans)
Product Activities
1. Fresh Papa
2. Sandwich and
Salad Line
3. Papa‟s MVC
Pricing Activities
1. Fresh Papa
Distribution
Activities
1. Fresh Papa
2. Papa‟s MVC
3. New Store‟s
Objective A1:
Addition of Take
and Bake Items
1. Create new
product line
1. Increase
menu
offerings
1. Competitively
price
1. Increase
Profits
1. Increase
customer
count
1. Increase
market share
IMC Activities
1. Fresh Papa
2. Papa‟s MVC
1. Increase
awareness
Objective A2:
Addition of
Sandwiches
and Salad
Items
Objective B1:
Open New
Store
Locations
Objective B2:
Implement
customer
loyalty
program
3. Increase
Profits
3. Implement
Customer
Loyalty
Program
2. Create new
product line
2. Increase
menu
offerings
2. Increase
Profits
3. Increase
Profits
3. Locate and
open new
units
3. Increase
Profits
3. Inform
customers
2. Increase
profits
2. Raise
awareness
43
VII. Financial Forecasts and Budget
A. Budgets
Fresh Papa
Product Strategies
Advertising Strategies
Pricing Activities
Distribution Activities
Total
$25,000
500,000
500
0
$525,500
Papa’s MVC
Product Strategies
Advertising Activities
Distribution Activities
$10,000
500,000
100,000
$610,000
Sandwich and Salad Line
Product Strategies
$100,000
$100,000
Location Growth
Distribution
Activities
$10,000
X 20 units
$200,000
Total Budget
$1,435,500
44
VIII. Evaluation, Control, and Contingency Plans
Output Control Mechanisms (performance standards)
1. Product performance standards:
Sales for the Fresh Papa will be monitored each month to
determine success. The goals for the Fresh Papa are: increase
profits by 10% and increase new customers by 5%. Provided the
Fresh Papa does not meet performance standards it is
recommended that the program be scratched and market research
be implemented to add additional menu items to the pizza menu;
for example, Calzones.
Redemption rates and repeat orders will be monitored each month
to ensure success of Papa‟s MVC. The performance goals for
Papa‟s MVC are: increase in repeat customers by 40%. Provided
Papa‟s MVC does not meet performance standards it is
recommended that the program be reevaluated through market
research.
Market research for the Sandwich and Salad Line will be monitored
to ensure consumers want alternatives to pizza. Provided the
program is launched the performance measures are increase in
profits of 5% and increase in customer flow of 2%. The program
should be implemented if the research shows consumers would like
these alternatives; if the consumer does not want alternatives no
action should be taken to add these items to the menu. Provided
the market research shows negative consumer reaction; it is
recommended to further see if consumers would like alternatives
added to the menu; for example, pasta dinners.
45
2. Distribution performance standards:
The number of Fresh Papa‟s will be measured to evaluate the need
for delivery of the product. If the delivery option is not viable then it
is recommended to discontinue delivery of the Fresh Papa.
The number of repeat customers using the program will be
monitored each month to determine the need of the program. The
goal is to increase repeat customer orders by 40%. Provided the
performance goals are not met it is recommended that further
market research be conducted to better the program.
Market research for new stores will be monitored each month. The
performance goals are to open minimum 20 new units per year.
Provided the performance measures are not met it is recommended
to continue the plan of locating new sites for units.
3. Price performance standards:
The sales of the Fresh Papa will be monitored to determine the
success of the product. The performance measures are: increased
profits of 10% and increase in new customers of 5%. Provided the
performance measures are not met the pricing structure should be
reevaluated.
4. IMC/Promotion performance standards:
The sales generated after the national rollout of the Fresh Papa will
be monitored to ensure success of the product. The performance
goals are increase in profits by 10% and increase in new customers
by 5%. Provided the performance measures are not met it is
recommended the IMC program be reevaluated for effectiveness.
The number of new customers will be evaluated each month to
determine success of the campaign. The performance measures
are increase in new customers by 2% each month. Provided the
performance objective is not met it is recommended to reevaluate
the IMC program for effectiveness.
46
IX. Appendices
1. Product Mix: Papa John’s versus Competition
Papa
John's
Pizza Hut
Dominoes
Pizza
Little
Caesars
Pizza
Papa
Murphy's
Godfather's
Pizza
X
X
X
Crust:
Pan
Thin
Hand tossed
Other
Number of
Toppings
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
18
17
10
14
18
18
X
X
X
X
X
X
X
X
X
X
X
Pasta
X
Appetizers:
Breadsticks
Cheesesticks
Wings
Boneless Chicken
Other
X
X
X
X
X
X
X
X
X
X
Sandwiches
X
X
Salads
X
X
X
X
X
X
X
X
X
X
X
Dessert:
Pizza
Other
Beverages:
Soft drinks
Beer
Other
X
X
X
X
X
X
X
X
X
47
2. Industry Structure
Papa
John's
Pizza Hut
Dominoes
Pizza
Little
Caesars
Pizza
Papa
Murphy's
Godfather's
Pizza
2829*
118
7,500
4,774
5,008
2,749
No Data
No Data
No Data
No Data
563
0
X
X
X
X
X
X
X
X
X
X
X
X
2004 Sales
$942.4 M
$8.7 B
$4.63 B
No Data
No Data
No Data
5-year
growth
-0.74%
3%
6.60%
No Data
No Data
No Data
Units:
US
International
Services:
Dine-In
Delivery
Carryout
Buffet
X
X
X
X
*Papa John's Unit Numbers are not broken down between US and Internationally except
for the UK where is has 118 "Perfect Pizza” Stores
48
3. Perceptual Map: Fresh Papa’s
Before Implementation
High Quality Ingredients
Papa Murphy’s
Papa John’s
Low
Customer
Service
High
Customer
Service
Pizza Hut
Dominoes Pizza
Little Caesars
Godfather’s Pizza
Low Quality Ingredients
Offers Take and Bake
Does not offer Take and Bake
49
After Implementation
High Quality Ingredients
Papa John’s
Papa Murphy’s
Low
Customer
Service
High
Customer
Service
Pizza Hut
Dominoes Pizza
Little Caesars
Godfather’s Pizza
Low Quality Ingredients
Offers Take and Bake
Does not offer Take and Bake
50
4. Perceptual Map: Papa’s MVC
Before Implementation
High Brand Image
Papa Murphy’s
Papa John’s
Low Number
of Repeat
Customers
High Number
of Repeat
Customers
Pizza Hut
Little Caesars
Dominoes Pizza
Godfather’s Pizza
Low Brand Image
Offers Customer Loyalty Program
Does not offer Customer Loyalty
51
After Implementation
High Brand Image
Papa John’s
Papa Murphy’s
Low Number
of Repeat
Customers
High Number
of Repeat
Customers
Pizza Hut
Little Caesars
Dominoes Pizza
Godfather’s Pizza
Low Brand Image
Offers Customer Loyalty Program
Does not offer Customer Loyalty
52
5. Timeline: Fresh Papa’s
53
6. Timeline: Papa’s MVC
54
X. References
“2005 Consumers‟ Choice in Chains: Pizza Papa Murphy‟s Take „N‟ Bake Pizza” (2005,
August 22). Restaurants and Institutions. Accessed at
http://www.foodservice411.com/rimag/archives/2005/08c/papa-murphys.asp on
November 19, 2005.
Detwiler, M (2005, July). “Techno Savvy”. Accessed at
http://pizzatoday.com/features_articles.shtml?article=MzY0OHN1cGVyMzY0NXN
lY3JldDM2NTI= on November 23, 2005.
Dominos Pizza (2005, January 02). “Form 10-K”. Accessed at http://phx.corporateir.net/phoenix.zhtml?c=135383&p=irol-sec on November 19, 2005.
“Godfather‟s Pizza Menu” (n.d.). Godfather‟s Pizza. Accessed at
http://www.godfathers.com/wfdata/frame650-1044/GPIMenu.pdf on December 9,
2005.
Lamb, M (2005, November). “Advertising that Delivers”. Accessed at
http://pizzatoday.com/features_articles.shtml?article=NDI5OHN1cGVyNDI5NXNl
Y3JldDQzMDI= on November 23, 2005.
“Menu” (2003). Little Caesars Pizza. Accessed at
http://www.littlecaesars.com/menu/products.asp on November 13, 2005.
“Our Menu” (2005). Papa Murphy‟s International. Accessed at
http://papamurphys.com/public/menu_papasPizzas.cfm on December 9, 2005
“Our Full Menu” (2005). Pizza Hut, Inc. Accessed at http://www.pizzahut.com/menu/ on
December 9, 2005.
Papa John‟s Pizza, Inc. (2005, March 10). “Form 10-K” Accessed at
http://www.papajohns.com/investor/index.htm on November 22, 2005.
Pizza Inn (2005, June 26). “Form 10-K”. Accessed at
http://www.sec.gov/Archives/edgar/data/718332/000071833205000046/doc1.txt
on November 19, 2005.
“See the Menu” (2002). Dominos Pizza, L.L.C. Accessed at
http://www.dominos.com/Public-EN/Site+Content/Primary/See+the+Menu/ on
December 9, 2005.
Yum Brands, Inc. (2005, February 28). “Form 10-K”. Accessed at http://phx.corporateir.net/phoenix.zhtml?c=117941&p=irol-sec&control_selectgroup=3,4,5 on
November 19, 2005.
55