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Real Decisions at PizzaExpress

Marketing I

Group assignment

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Company Case

Real Decisions at PizzaExpress

Authors: Spadaro Vanessa

Nguyen Thi Khanh Thuong

Kim Ngan Duong

Instructor: Eldon Sveinn

Course name: Marketing

Date: 05/03/2013

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Contents ......................................................................................................................................................... 2

1) What is/are the decision(s) facing PizzaExpress? .................................................................... 4

2) What factors are important in understanding these decisions? ............................................. 5

3) Which types of segmentation and targeting strategies are PizzaExpress implementing in

this case? ......................................................................................................................................... 6

4) What suggestions for a health conscious product do you recommend? .............................. 10

5) What steps should be followed to implement your suggestion? ......................................... 11

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1) What is/are the decision(s) facing PizzaExpress?

PizzaExpress is a UK-based pizza restaurant with different restaurants in UK and in other

countries. From the text you can understand that managers and staff try to be closer to the

final customer to understand their needs and to be successful in satisfying them. Until now,

they have been able to do that and to meet the expectations of customers that continue to

appreciate their dishes, creativity and style.

But now something new has come: a new target made up of women over 45 years that are

weight-conscious. Starting from the analysis of the market, PizzaExpress knows that these

women usually eat out twice per month with their family or female friends and they are looking

for some delicious food that respect a certain amount of calories without losing the good taste.

Knowing these details, the restaurant has to take the decision to serve or not this new target.

Moreover, this means to spend time, money and effort to create a specific food line for

satisfying the needs of the target.

Considering the fact that the number of people that are conscious about their weight and about

eating healthy food is growing, we think that PizzaExpress has taken the right decisions to serve

this target. With this decision, they are able to satisfy specific needs of some of their consumers

and to attract new customers that do not find the same products in other restaurants.

Moreover, they have been able to combine taste with lower calories. In that way they let

customers not be stressed by the need to renounce to eat something delicious like a pizza in

order to respect the number of calories. Finally, customers are happy and able to enjoy eating

out.

About the food line created specifically for the new target, PizzaExpress has been smart to

create a complete range of dishes from pizzas to wine. This lets customers enjoying a full meal

respecting the calories they can eat or drink, without wasting the effort of ordering a light pizza

without anything to drink with a low amount of calories.

Moreover, this new line of food has helped PizzaExpress to cut expenses since the dough used

for cooking each Leggera pizza is less. So, less dough, more pizzas. This fact is important,

especially in crisis time, when firms have not a lot of money to spend and they try to rationalize

their expenses.

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Finally, we think that PizzaExpress was one of the first pizza restaurants offering a new low-

calories menu. In fact the customers’ consciousness in confront of healthy food is something

that developed in the last ten years. This creates an advantage over the competitors that do

not understand quickly the customers’ needs and so they are going to lose part of their

customers.

2) What factors are important in understanding these decisions?

PizzaExpress’s decisions come from the analysis of the market, the close relationship with their

customers and from the analysis of itself. This last thing means that only when a firm knows its

strengths and weaknesses, it can be able to come up with products that are able to meet the

needs of customers. PizzaExpress recognizes the fact that it always offers quality and creativity.

Therefore, it tries to follow them in every decision that should be taken.

The first factor that can explain the decisions taken is the increasing need of having restaurants

offering light and delicious food for those who are healthy conscious people. Nowadays more

and more people, especially women, try to eat less calories as possible to be fit and healthy.

However, most of the times this means to make renounces and to avoid going out for having

dinner. All that makes consumers unhappy while the food philosophy is based on enjoying the

moment of eating. Therefore, people struggle for having a good and tasteful meal with low

calories on it.

Another factor is the necessity of maintaining the loyalty of customers. The new segment was

discovered analyzing the customers of PizzaExpress and not only the market in general. These

customers expect quality and creativity. This is connected to be fresh and new and to keep the

pace of customers’ necessities. If the new customers’ need is to have the possibility to order a

low-calories food, the restaurant should listen to the customer and try to find a way to satisfy

the need and to keep the customers happy. Only in that way can PizzaExpress avoid losing the

customers and to maintain their loyalty.

Moreover, customers want that PizzaExpress is able to meet their expectations. Once a firm or

a restaurant had met the customers’ needs and created a specific image of itself, customers

expect the same for the future. So, new decisions should be based on the maintenance of the

expectations to make customers continue using the products or the services.

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We should consider also the importance of saving money coming from having a pizza that uses

less dough than the normal pizzas. As we said before every kind of firm tries to cut costs and

sometimes the creation of something new is neglected by a reduction of the budget. The

creation of a new product or service that requires less components or ingredient as in this case

can be a good solution to saving money and satisfy customers.

Another factor to consider is also the increasing interest for healthy food coming from the

social and medical institutions. In the last years both public and private institutions have

increased their worry about the huge number of fat people present in the modern society and

in some societies the law makes the prices of sweeties be higher to decrease the demand and

the use of them. All of that in order to avoid health problems. Therefore, PizzaExpress can take

advantage of this interest because it could receive more attention from institutions and from

more people.

3) Which types of segmentation and targeting strategies are

PizzaExpress implementing in this case?

Companies recognize that they cannot appeal to all buyers in the marketplace or at least not

to all buyers in the same way. Every product or service will appeal to the needs and desires of

a certain market because not every individual has the same requirement and demand and

companies themselves also vary widely in their abilities to serve different segments of the

market.

In designing a customer – driven marketing strategy, the first two steps are segmentation and

targeting, in which the company selects the customers that it will serve. Market segmentation

involves dividing the large, heterogeneous market into smaller distinct group of buyers with

different needs, characteristics or behavior, who might require separate products or marketing

mixes. [1]

There is no single way to segment a market. As stated in the case, PizzaExpress is currently a

casual, sit-down eatery that caters to a full range of customers. They have tried different

segmentation variables, alone and in combination to view the market structure such as

demographic, psychographic, behavioural segmentation.

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From demographic aspect, PizzaExpress’s consumer markets are segmented within those

criteria such as: age and life-cycle stage (children, teenager, adult, middle-aged people) ;

gender (male, female); family size (1-2, 3-4, 5+).

From psychographic aspect, they divided buyers into smaller groups based on social class,

lifestyle and personality characteristics.

From behavioural aspect, their consumer market is breaking down into smaller types based on

buyers’ knowledge, attitudes, uses and responses to product.

PizzaExpress main groups of consumers here in this case are:

- Children who are more interested in being served many small different courses presented

one after another than adult.

- Weight – conscious women especially women over 45 years old who tend to eat out twice

a month with their female friends, partners and children. Many of them face the dilemma

between the desire to eat delicious food and the desire to lose weight. They want to enjoy

eating out while managing their weight.

- Family - with parents and kids.

Once PizzaExpress has successfully identified the segments within a market, the next step is to

target these segments with products that closely match the needs of the customers within that

segment. Market targeting includes evaluating the various segments and deciding how many

and which segments it can serve the best.

Depending on its company resources, product variability, product life – cycle stage, market

variability and competitive marketing strategies, PizzaExpress uses differentiated marketing (or

segmented marketing) – a market – coverage strategy in which a firm decides to target several

market segments and designs separate offers for each. their choice generally depend on several

factors. First, how well are existing segments served by other manufacturers? It will be more

difficult to appeal to a segment that is already well served than to one whose needs are not

currently being served well. For most chain restaurants, catering specifically for children to tap

into the family market is a fundamental strategy. PizzaExpress also aims to better suit families

loyal to the restaurant chain by designing a one of a kind kids’ menu which keep them occupied

with four small courses come one after another at quite a fast pace than adult.

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Secondly, how large is the segment, and how can they expect it to grow? Beside the kid

segment, women – specifically those aged over 45 is another target market has been brought

to light. Those people tend to consider eating out as a treat and do not want to be reminded

of their diet. By focusing to serve this segment, PizzaExpress are also able to satisfy specific

needs of parts of existing consumers and attract new customers who do not find the same

products that match their wants and requirements in other restaurants.

Thirdly, it is the awareness of a company about its strengths that will help it appeal particularly

to one group of consumers. Firms may already have an established reputation. PizzaExpress

would probably be better off targeting families in search of consistent food creativity and style

in sophisticated atmosphere in nice, clean restaurants that encourages diners to eat out.

The last step in designing a customer-driven marketing strategy is market positioning in which

the products is defined by consumers on important attributes – the place the product occupies

in consumers’ mind relative to competing products.

Once the organization like PizzaExpress decides on its target market, it strives hard to create

an image of its product in the minds of the consumers. The marketers create a first impression

of the product in the minds of target audience through positioning. In other words, Positioning

involves implementing the firm’s targeting which are “4Ps” in short: Product, Price, Promotion

and Place.

Product

Product Category

PizzaExpress have well-designed specific types of menus for each consumer groups such as:

kids’ menu (with four small courses presented one after one); adult menus (with courses come

regularly and steadily).

Product Quality , Features and Improvement

PizzaExpress’ establishment focuses on combining authentic taste, service and creativity. Given

the driven lifestyles and trendy, young-at-heart characteristics of its customers, PizzaExpress’

food range is designed to assure the balance both calorie control and style in an imaginative

way which are both healthy and delicious. Thanks to the development chefs and marketers

collaboration, the consultancy from the Foods Standards Agency as well as qualified

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nutritionists, PizzaExpress determined a cap of 500 calories for a pizza worthy of a weight –

conscious consumer’s appetite.

In 2009, they launched a brand new food range designed for those who want to enjoy the

benefit of eating out without the consequence of gaining weight called Leggera. The Leggera

pizzas are low in fat with cheese and fresh salad replacing the dough in the centre, delivering

around 500 calories. Besides, a lighter and less calorific wine has been created which possesses

fewer than 100 calories per small glass, marking it a popular selection amongst weight-

watching customers and a complement to the pizza.

Price

With the new Leggera brand, PizzaExpress also saves resource and the price as it requires only

half the amount of dough as regular pizza.

Place

Customers often eat out in PizzaExoress’ restaurants.

Promotion

Their campaign spanned for 3 months included print advertisements, digital escalator panels,

Facebook posts and social media, all of which apply a creative strategy.

Its current approach to advertising - principally word-of-mouth and digital activity - is right for

the brand. 'Our marketing budget is very small and it is hard for creative agencies to understand

what we do, as they don't live and breathe the brand like we do,' said the Marketing Director

of Pizzaexpress. [1] By inviting influential food and life – style bloggers to free Leggera Lunch

events, guests’ discussions about the food online afterwards, a “Blogger Lunch Month” in

September 2009 and Additional events with Weight Watchers, PizzaExpress appeared in 60

blogs and over 1,000,000 people were reached by this online worth of mouth. In 2010, it was

honoured for its new campaign and innovative brand experience.

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4) What suggestions for a health conscious product do you

recommend?

Standing in the customers’ shoes, when eating out we require that a health conscious cooked

food is a nutritious product in which its ingredients include more antioxidant compounds like

vitamin A, vitamin E and beta carotene, and fiber which helps us in losing weight.

A healthy meal should hold very little saturated fat, sugar, meats and salt. Saturated fat, which

raises the cholesterol level in blood that causes heart diseases, is found in “high-fat cheeses,

high-fat cuts of meat, whole-fat milk and cream, butter ice cream and ice cream products, palm

and coconut oils.” according to Centers for Disease Control and Prevention [2]. Besides, any

sorts of sugar, whether white sugar, brown sugar or corn syrup are high in calorie density and

super low in any nutritive value, meaning that we eat a smaller portion with more number of

calories. We also suggest that health conscious foods should contain smaller pieces of meat

since although meat is a great source of protein, it is a big source of saturated fat, too. In

addition, obviously, the less sodium, the better meal.

Moreover, a good food should be more organic, easy to digest and have no preservatives and

any kinds of toxic substances like pesticides, melamine, heavy metals or “sewer” oil.

However importantly, those foods must be tasteful and hygienic. While hundreds of nutrition

researches are published annually, simple, health and creative recipes are shared every second

on Internet and restaurant industry are intensely competitive than ever, diners today do not

need to give up good taste to keep good health anymore; in contrast, they are such fussy eaters.

Next, food hygiene is never too normal to concern restaurateurs. A health conscious products,

whether street foods or luxurious plates, must be cared about their sanitary status both before

and during served to customers. For example, a report on five Mc Donald restaurants on the

Norwegian TV channel TV2 last month announced that the bacteria measured on the tables far

exceeded those found in the toilets of the restaurants. (And its reason is that employees used

the same tissue to wipe down the tables which help to spread bacteria.) [3]

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5) What steps should be followed to implement your suggestion?

Let us suppose that we were the advisors of an ethnic restaurant or a fast-food shop, not the

homemakers who are in charge of shopping, cooking and trying to protect the health of their

families. In order to satisfy all requires in question 4, the restaurant would take action as below:

First, picking as many fresh and organic ingredients as possible, especially bell peppers, spinach,

cucumbers, celery, apples, peach and grapes, which top the list of fruits and vegetables most

contaminated with pesticides. When the restaurant must use canned products, the restaurant

would choose ones with clear nutrition facts labels to make sure when cooking, they will cut

back or reduce, and for instance, salt and saturated fat amounts in recipes. Moreover, the

restaurant would do business with green suppliers like local farmers and biodegradable

packaging companies.

The general picture of this second step is that the restaurant would get into substituting all

“bad” components, which are popularly used in normal recipes, with “good” components that

supply a wide range of antioxidants, vitamins and fiber to diners. Let us take seasonings like

fat, sugar and salt as examples. The restaurant would opt for unsaturated fat such as olive oil

over saturated fat in butter. Olive oil is known as one of the healthiest foods while many

researchers explained heavy consumption of olive oil as a reason for a longer life expectancy

of people in the Mediterranean region. They would also use sweeteners in place of sugar

judiciously in processing baked goods, puddings, jams and dairy products because sweeteners

nearly add no calories. In order to eliminate salt, we have had various ways. The restaurant

would not add salt to boiling water for potatoes or pasta, but add at the end of cooking and

just before serving, when the eater will taste it in every bite. Or else, they could enhance foods

with bold flavors from healthy ingredients as fresh spices and herbs. These plates will have

great flavor without much salt as in normal recipes.

Third, the restaurant would invest in study about vegetarian recipes then serve new delicious

meatless dishes to not only vegetarians but non-vegetarians also. In that way the restaurant

would incorporate more vegetables, whole grains and nuts and make them center of the plate

in lieu of meat. These foods provide plant protein, especially sorts of nuts are a big source of

monounsaturated fat, which is proved to lower cholesterol levels; whereas meat provides both

protein and high saturated fat content. Processed meat such as bacon, hot dogs, and the like

should be avoided as much as possible since they significantly increase the risk of heart diseases

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and cancers. The restaurant’s researches on health issues and changes in cooking formulas

would be public for advertising purposes. Customers would be encouraged to try new dishes

and give opinions as well as recommendations.

Forth, the restaurant would re-design the formulas to be able to offer one dish with more sizes,

up to demands of each diner, because one of the easiest ways to manage calories intake is by

choosing appropriate portions.

On the fifth step, recipes should be inspired by different cooking styles from various parts of

the world and developed with new combinations. The restaurant’s chef would learn how to

borrow other cooking techniques to refresh their menus a couple times per month. Nutrition

science change continually, so updating knowledge on food trends, eating-well recipes and

customers’ demands may keep the restaurant’s options on health-conscious meals open.

The sixth step relates to hygienic procedures. The restaurant should be cleaned up using

required methods from its whole kitchen to every counter and table in serving place. A lesson

drawn from the recent Mc Donald’s case reminds that cleaning procedures would also be

usually checked out and improved.

Seventh, menus would be designed to show nutritional facts and descriptions of ingredients of

each single plate. Menus would suggest which kinds of dishes are suitable to physical and

mental conditions of individuals such as suffering diabetes, being on a weight-loss diet or

wanting more mental focus in a chess match upcoming,… Menus would also highlight dishes

salt-to-taste or high fat for diners to consider before ordering. As a result, these new designed

menus help the restaurant advertise their new recipes; new cooking approaches and diner care

policy as well as help customers make easier and quicker decisions on their plates.

The last but not least step would be marketing to people as how the restaurant put every effort

into keep their customers’ health. The restaurant would open a “cuisine” blog on which they

could update about their so far discoveries and improvement in the recipes. From that blog,

people could also learn free some simple healthy recipes of the restaurant. This would let

people try these foods in reality and give back their comments and suggestions. The restaurant

could instruct how to cook smartly with olive oil in lieu of saturated fat or how to prepare bitter

vegetables in order to use less salted, etc. The blog would be a place the restaurant advertise

their passions and point out the weaknesses of their competitors, too.

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In short, diners today may be inclined to pay more for safer foods with increased nutritional

value and improved freshness, texture and taste. Most restaurants are struggling with seeking

formulas where more vegetables and fruits are now added beside their still-unhealthy French

fried chicken or sautéed beef, without changing the taste. Differently, our overall idea for some

steps above is that investing in creating healthy-but-tasteful foods is a more aggressive

differentiation strategy. In other words, this approach means that a restaurant, at first, start by

serving only health-conscious foods, then they try to improve the recipes to make flavors more

attractive. It will be more sustainable, but of course, a bit pricey, so obviously, which and how

many steps to implement - it still depends on a restaurant’s target customers to invest in

appropriate ways.

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Reference Kotler, Armstrong, Wong, Saunders, Principles of marketing-5th European edition, Prentice Hall

[1] http://www.prweek.com/uk/features/1043876/Profile-Putting-love-menu-PizzaExpress/

[2] http://www.cdc.gov/nutrition/everyone/basics/fat/saturatedfat.html

[3] http://www.moroccoworldnews.com/2013/02/78046/mcdonalds-carries-more-bacteria-

than-those-in-toilets/

http://www.eatingwell.com/healthy_cooking/healthy_cooking_101_basics_techniques/healthy

_cooking_basics/10_secrets_to_cooking_healthier?page=11