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Papa John’s Pizza and Manufactured Housing

November 10th, 2013 Leave a comment Go to comments

Most of us have heard the trademark words on TV: "Better Ingredients, Better Pizza. That's Papa John's." Pizza Hut did not take that claim lightly. Some have the impression Pizza Hut sued Papa John's over those few words, lost on appeal and the rest is history. Indeed, Pizza Hut and their attorneys took a dim view of the matter, as About states:

john-h-schnatler(1).jpg"In fact, the company's lawyers filed a federal false advertising lawsuit against Papa John's." "This on-going battle actually began in 1998. But the U.S. Supreme Court put this case to rest in 2004, turning down Pizza Hut's appeal."

Let's take a look at their slogan and some of Papa John's history, to see what lessons it may hold for the manufactured housing industry today.

For some corporate background, Wikipedia says:

"Papa John's Pizza is the third largest take-out and delivery pizza restaurant chain in the United States behind Pizza Hut and Domino's Pizza, according to Pizza Today magazine." "In September 2012, Papa John's Pizza opened its 4,000th restaurant, in New Hyde Park, NY." "Internationally, there are over 4,000 Papa John's establishments, including over 3,200 in the U.S. and the remainder spread among 32 other countries."

History

"The Papa John's restaurant franchise was founded in 1984 when "Papa" John Schnatter knocked out a broom closet in the back of his father's tavern. He sold his 1972 Camaro to purchase $1,600 worth of used pizza equipment and began selling pizzas to the tavern's customers out of the converted closet. His pizzas proved so popular that one year later he was able to move into an adjoining space…"

Lawsuit

In 1997, Pizza Hut filed suit against Papa John's based on a series of advertisements that compared the ingredients of Papa John's and its competitors. At trial, the court agreed with Pizza Hut's argument that Papa John's slogan did not constitute statements of literal fact – that "fresher ingredients" do not necessarily account for a "better" pizza; this ruling was overturned in 2000 when Papa John's appealed the decision. Although the jury's decision on the misleading advertising was upheld, the appeals court determined that Pizza Hut failed to prove, under the requirements of the Lanham Act, that the misleading advertising and puffery had a material effect on consumers' purchasing decisions."

"We conclude that (1) the slogan, standing alone, is not an objectionable statement of fact upon which the consumers would be justified in relying, and thus not actionable under section 43(a); and (2) while the slogan, when utilized in connection with some of the post-May 1997 comparative advertising – specifically, the sauce, dough and stuff campaigns – conveyed objectionable and misleading facts, Pizza Hut has failed to adduce any evidence demonstrating that the facts conveyed by the slogan were material to the purchasing decisions of the consumers to which the slogan was directed."[9]

Customer Satisfaction via "Quality, Branding, Technology"

Papa John's went after an image and ideal of "better pizza," and sought to deliver it!  Their campaign clearly resonated with the public. From their 2012 annual report, we garner the photo above of founder/CEO John H. Schatner, as well as the following chart and insights.

2012-pappa-johns-pizza-annual-report-posted-masthead-blog-mhpronews-.JPG

We could have photo-shopped out the text above the graphic, but wanted to leave it in because it is every bit as important as the graphic itself. It says: "…continue to reward Papa John's for our sharp focus on product quality and customer satisfaction."

Among the corner-stones we preach on the Masthead and the Cutting Edge in Marketing and Sales blogs – indeed, throughout much of MHProNews.com – are the critical need for customer satisfaction.

The truth is, we too have a great product!  But we don't have to have a perfect product for it to become wildly popular with the public. McDonald's is the number one restaurant chain in the world, but who recalls (or cares…) when was the last time Zagat's rated them #1 for taste or quality?

Nor should the McDonald's statement be construed that they lack quality or that we have their level of it.

Rather, it should be a challenge that whatever markets we as professionals go after – be it entry level or residential style homes – we ought to be able to dominate. We are not starting from the back of an old broom closet, as Papa John did, we already have a multi-billion dollar base!

The manufactured housing "recipe" includes, but is not limited to:papa-johns-2012annual-report-excerpt-for-masthead-blog-mhpronews-com-.JPG

  • quality construction in an controlled indoor climate yields a home,
  • quality construction material, often using the same suppliers as conventional housing,
  • building that is 'greener' because of some 30% less material waste,
  • construction that saves on labor costs through assembly line efficiencies, which yields
  • construction that is built more rapidly and
  • jigs and other methods means our homes are more true than conventional 'stick builders' normally achieve.
  • Our industry's homes are also more energy efficient,
  • less costly to maintain and
  • safer against fires than conventional construction.

Not to be missed is the appeal of our homes!  I think too often marketers in our industry are way too hung up on the lowest price pitch.

Ask yourself this question. Would Papa John's sales revenues be roughly half of what our industry's entire new home construction revenues are if they had an image of "cheaper is better?"

In our sister operation, MHC-MD's marketing for clients, we often focus on the appeal and “sell the sizzle,” before we start talking about the elements of the steak.

Sometimes, you don't have to sell the steak at all, because the sizzle is what so many desire.

But all too often, through poor marketing, poor sales methods, a lack of training and short sited policies, some in our industry inadvertently may contribute to the seemingly incessant barrage of less-than-stellar “image issues.“

It is worth noting that Terry Decio and Wally Comer – each in their own way in their respective interviews with us – stated the critical need for enhancing our Image to the public at large.

Lender Barry Noffsinger, MH Community legends Randy Rowe and high-flying UMH's CEO Sam Landy, MH/RV supplier king Leigh Abrams, association executive Jim Ayotte and many others found in our Cup of Coffee interviews each echo the value and need for image-building and enhanced professionalism in their own words, all of which which yields satisfied customers. Satisfied customers yields more sales.

Let's juggle for a few moments the phrasing Papa John's used in the graphic on the sidebar from their 2012 annual report. Quality, Branding and Technology.

Key Takeaways

In our case we need all three too! Technology – including, but not limited to – the internet make image anhancement far easier and less costly today than many think. Projects like the one the MHI Supplier's Division is exploring to use Product Placement in videos can harness sounds and visuals without the much higher cost of network or cable TV.

New home Quality is already a given in our industry, but we must strive relentlessly for improvements.

But the analogies with Papa John's don't all line up perfectly, notably on the topic of Branding. Yours truly – along with some of our clients – are among the few voices in MH that realize that branding, unbranding and rebranding must all be part of the mix for manufactured housing. When you finish this column, please see that article linked above.

The key takeaways are that we can learn much from successful companies like Papa John's, and can mimic their lessons in many cost effective ways. Try to take Papa John's marketing campaign away from them, and I'd bet John Schnatter would call out the guards!

Clayton Homes is aligning itself for marketing purposes with the wildly popular Duck Dynasty folks, as has been noted numerous times in the Daily Business News and in Lisa Tyler's article about the 2013 Tunica Show. Don't doubt for a moment that this campaign is a plus for the Clayton family of brands, because it is!

So what is the rest of the industry doing?  What are YOU doing?

Remember, you don't have to spend mega-bucks to get good results with ROI that would make any public company's stock envious.

One last lesson we could take away from Papa John's – or other successful pizza franchises – is the items they added to their menu over the years to broaden their appeal. Buffalo wings, sides and deserts compliment the sodas and pizzas they offer. This increases market breadth and penetration, all of which boosts the bottom line.

Our industry must learn similar lessons.  Are you seeing more low credit scores than high ones?  Why not reach out to more upscale buyers who have better credit?  Let's quote MH lender Barry Noffsinger;

I hear all the time that we need financial institutions to return “to the ‘90’s” and buy deeper. My question is why? Shouldn’t we learn from history? According to Fair Isaac, 73% of the US population has a credit score over 650.”

(Read more about Barry's points on this topic when you finish this column at this link).

If you only market to or attract the 'get me done' customer, you have to ask what are you doing wrong?  What can you do to attract more customers with cash and good credit?

As a programing note, we will be digging into easy, free or low cost ways that you can boost your marketing and sales performance during my presentation at the 2014 Louisville Show's “Show Me the Money!” Seminar series.

Ladies and gents, “Better homes that cost less yield a better lifestyle.”  That's modern manufactured housing!  We successfully market for MH Communities and Retailers using that kind of message, and coupled with solid sales training, that combo yields for our clients more qualified traffic, more sales and measurable bottom line results.

If we can and others can do it on a budget, you can too.

Let me close by saying, that I'm not a stockholder, but I am an admirer of what John Schnatter and Papa John's Pizza has accomplished. He had a vision, pursued it from a closet sized operation and boldly worked and fought his way to become the #3 pizza franchise in the nation.

Let's learn those lessons and create some more success stories in our industry too! ##

PS: Check our many Exclusive and Red Hot Featured Articles for November and see the other new stories at MHLivingNews.com too.

L. A. "Tony" KovachL. A. 'Tony' Kovach
ManufacturedHomeLivingNews.com | MHProNews.com |
Business and Public Marketing & Ads: B2B | B2C
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L.A. 'Tony' Kovach, MHM - Publisher, Marketing Director and Industry Consultant
http://www.linkedin.com/in/latonykovach
Manufactured Home Marketing Sales Management trade journal
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863-213-4090