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Capturing a Bigger Slice of the Pie The pizza delivery business is very competitive, with both local businesses and national chains competing for a $28

Economics Sep 05, 2020

Capturing a Bigger Slice of the Pie

The pizza delivery business is very competitive, with both local businesses and national chains competing for a $28.5 billion U.S. consumer market annually. Many of the delivery pizzas ordered in the United States each year are purchased by young adults and teenagers. Papa John’s, a 2,700-unit national pizza restaurant chain, believed it could capture more market share if it could find a way to make ordering and delivery easier and more appealing to the technologically savvy members of the younger segment. And if it could do so, it could compete more effectively with larger national companies such as Pizza Hut and Domino’s. In early 2008, Papa John’s introduced a new marketing and ordering channel designed to attract younger consumers, rolling out a new service so customers could order pizza from a cell phone or PDA via text message. Once a customer first established an online account, they could at any time simply tap in their preference for one of several favorite pizzas using an abbreviated code. The meal order would be delivered to any of several preprogrammed delivery addresses, and paid for with credit or debit card information already on file in a database, and delivered within a half hour from the closest retail location.

Key additional benefits of customers’ willingness to opt into this unique channel arrangement are better overall marketing and customer awareness. By keeping a database of customer purchase behavior, customized promotions flow through the channel to pizza lovers, with great deals offered on favorite crusts, meats, and other toppings according to customer’s past preferences. The electronic channel can also be engaged in other ways, such as sending customers digital coupons, providing updates on new menu items, and engaging customers with reminder advertising. The results of employing this exciting new marketing and delivery channel have been impressive, with Papa John’s share rising to 6.9 percent of the marketplace despite having far fewer locations than their major competitors. The company has also recently introduced Web site ordering to great success, with 65 million unique visitors in the first year of operations. The company is optimistic that these new channels will allow it to continue to compete strongly with the “big boys” in the world of pizza delivery.

Q.no 1. What marketing channels were used by Papa John’s?

Q.no 2. What were the benefits of introducing new marketing channels to the company?

Q.no 3. What other marketing gains were achieved by these channels?

Q.no 4. Why digital marketing and digital ordering is significant for marketers in this age?

Expert Solution

1. First , we understand the meaning of marketing channels - it refers to the transfer of ownership of products from the point of production to the point of consumption in which people,organizations and necessary activities are invloved.Direct selling, selling through intermediaries are the some types of marketing channels.

Marketing channels were used by Papa John's are the following-

(i)To attract more younger consumers make available the facility of order the pizza from their cell phone or PDA via text message.

(ii) Adequate delivery syaytem - As within half an hour pizza is delivered to the customer from the closest retail location.

(iii) By keeping database of customer purchase behaviour various offers are given on the crusts,meets and other toppings according to the customer past behaviour

(iv) The electronic channels are adopted to attract the customer such as sending customers digital coupons,providing updates in new menu items,also provide the facility of debit or credit card payment.

As Papa John's adopt the stratgy to satisfy thr customer by providing various services ehich help him to attract the cosumers.

2.The benefits of introducing new marketing channels to the company are -

(i)Increase in profits as when you increase the number of distribution channels, yo frab the opportunities to sell more products to new and existing customers in the market.

(ii) To grab new target markets and also identify the new customers which you had not like to reach with the pevious distribution channels.

(iii) Build greater brand awareness - By adopting new marketing channels you make the customer aware about their brands.By meeting the customer expectations and need through various channels you gain the positive brand sentiment among the customer.

(iv)Reduce Market risks - As risks cannot be eliminated but it can be reduced, By selling on distribution channels,profits can rise and fall.By adopting various new marketing channels market risks can be reduced as proper strategy is followed to meet the demand of consumers.

For example -Papa John's adopt the new marketing channels which results into increase in the profits,As he is available to rise their market share 6.9 percent in the competitive market.By enjoying the impressive results, company also introduced Website ordering.

3.Other marketing gains achieved by these channels- To be able to gain the market share and increase their profits by introducing new market channels.

- It makes the ordering and delivering steps more easier which results into attract more consumers of pizza.

- New marketing channels also allow the company to continue to compete strongly with the 'big boys' in the world of pizza delivery.

- Introduction of website ordering results into great success(65 million unique visitors in the first year of operations).

4.Digital marketing and digital ordering is significant for marketers in this age due to the following reasons -

(i) To target the customers in a cost effective and measurable way.

(ii)To make aware to the customer about their brands with the digital marketing or advertisement efficiently.

(iii) Global reach -Digital marketing allows you to gain the new customers and advertise their company globally in a small investment.

(iv)Openess - By getting involved with digital marketing and digital ordering ,company can easily build customer loyalty and reputation among the customers or in the market.

(v)Digital marketing helps the company to track the activities of the customers with the help of ads and quick survey online about their products. This allows the company to know which marketing methods are effictive, refine and improve their strategy.

(vi) Expansion - As many consumers do almost their shopping online.Digital marketing helps the company to recognise them and get to reach them with the help of Google ads and online compaigns. This all results into increase their sales and profits which contribute to the success of the company.

Conclusion- Reason behind the success of the company is customer satisfaction. Company must adopt beeter strategy plans and marketing channels to make their products familiar among the customers and grab the oportunities in the competitive market.Digital marketing is choosed by the marketers due to  lower costs , higher flexibility and also able to track tje customers past purchasing journey's.Hence all these new marketing channels help the company to increase their market share in this competitive age.

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