Pizza chains chart ambitious growth; major players safeguard market against fast-food invaders while widening the mom-and-pop gap with new products, unusual sites and niche marketing

Nation's Restaurant News, August 3, 1992 by Theresa Howard

And the price battle has the potential of getting even tougher. Just last month Domino's ran a promotion that knocked down the price on a second pizza to 99 cents. Although the chain ran the promotion for carryout only orders, the move appeared to introduce a brand-new opportunity for discounting.

Pizza Hut as well offered "free pie in July" to customers who purchased a large pizza at its regular price.

Despite that special, Pizza Hut is trying simultaneously to build customer loyalty with its "come-back" coupons. Created by the company's national print advertising firm, Sullivan, Higdin & Sink, the customized coupons are generated through each store's individual customer data base.

"One of the big advantages with point-of-sales systems is building the customer data base," says Pizza Hut's Williamson. "For the first time we are going to pinpoint [increased] frequency and that should allow us to drive up topline sales."

While those companies are using technology to micro-market, other chains like Godfather's and Papa Gino's are relying on increased advertising spending to reach their customers. Although Godfather's Cain would not disclose figures, he said the company has boosted its advertising budget and is "doing more in-store, radio and print" promotion.

Papa Gino's is tapping increased advertising and local demographics. "We have doubled our marketing budget in 1992 vs. 1991," says Papa Gino's Grimm. "We are trying to make more effective use of print and radio and doing chainwide events," Grimm explains. He also says Papa Gino's is trying to run the chain "one restaurant at a time" by "taking advantage of what each trade area and demographics have in store."

Aside from trying to build top-of-mind awareness with advertising, some operators are focusing on non-traditional sites to tap captive audience and in-transit markets. Hotels, for example, are quickly finding foodservice partners in the pizza segment.

Domino's recently inked a deal to provide direct delivery to Holiday Inn Express units, and Pizza Hut is making its way nationally into many Marriott-run hotel properties.

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