Pizza Marketplace - Winter 2007 - (Page 29) “Once people call to order based on a coupon, there’s an opportunity to promote additional items on the menu — beverages, side items, additional pizzas,” McIntyre said. Though the company still operates with the form of coupons, the function has been taken over by the POS system. When customers order by phone or online, they select the promotion they would like from those that are available. However, problems can arise as the discount becomes deeper. While 61 cents is the average discount in a grocery store, Karington said, it’s not uncommon for pizzeria operators to reduce a $15 pizza to $9.99, in hopes that it will get the phones ringing. “Your phones start ringing with the wrong kind of people,” he said. “When all you do is cultivate the staunchest bargain-hunters, then you’re vulnerable to a competitor who can go a dollar less than you, or who manages to buy their food cheaper than you.” “Once you discount your menu items, consumers don’t think the menu items are worth regular price, and thus will only frequent a restaurant when they have a coupon.” — Linda Duke, CEO and principal, Duke Marketing “We put coupon codes into our POS systems, eliminating the need to actually collect the coupon at the door,” McIntyre said. “That also helps because the information in the computer is always up-to-date and we know whether an offer is still valid or not.” Coupons are widely known to be effective motivators. In fact, Karington said, one-third of pizza buyers make their selection based on availability of a deal, typically a coupon. Because of this, instead of slashing prices, operators should promote products simply by giving them away, Duke said. Grand openings and seasonal promotions are well-suited to this strategy. “If you want people to try a new menu item, give it to them — a free offer — then they get it in their mouths,” she said, “and hopefully you initiate new trial and then purchase behavior at the regular price.” This story first appeared on PizzaMarketplace.com in Oct. 2007 PIZZ A MARKETPLACE REPORT | WINTER 2007/SPRING 2008 29 http://www.PizzaMarketplace.com
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