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Sunday
Jun092019

Papa John's

Papa John's recent sales have suffered dramatically because of very bad publicity which sparked the brand's ongoing turnaround. A restoration of consumer sentiment is expected to take 12-18 months and corporate reported in 1Q19 that the brand is not even 12 months past its 2nd big event. The resultant brand overhaul included: the removal of company's founder, CEO & marketing spokesman; a $250MM investment from a turn-around investment fund (Starboard Value LLP); the appointment of new board members including NBA star Shaq O'Neal who will also act as brand ambassador for at least 3 years; and an audit on brand culture & new appointments to enhance diversity. PJ's new positioning around a relentless pursuit of "better" and bringing people together addresses the expectations of Millennials & Gen Z consumers for companies to have an active role in making the world a better place. Long-term growth priorities include: making people a priority; improving brand differentiation; creating accessible value; implementing tech advancements; and improving unit economics. The goal is to create a customer-centric organization which will leverage customer data to integrate and innovate across every consumer touchpoint. Previously, the brand largely followed the founder's singular vision of keeping focused on better pizzas. Essentially, PJ seeks to evolve into a brand management organization with marketing based upon: customer segmentation; customer needs assessment; and customer journey mapping. Its new CMO's mandate is to better connect with customers around the brand's product quality differentiator (fresh original dough, fresh packed sauce, meats without fillers & pizzas with no artificial flavors or colors) and accessible value (making it easier for customers to purchase PJ’s pizza whenever, wherever & however they want) without sacrificing one for the other. These new consumer insight & analytical capabilities will be applied to its Papa Rewards loyalty program via its 4Q18 re-launch and the brand plans to leverage customer data into 1-to-1 marketing designed to drive traffic without relying on blanket discounts across all channels. Trials around a broader menu to better compete with the delivery aggregators and Domino's and tests of how to execute value on the national and local level should help to improve the brand's relevancy. In any case, it is a challenge to translate a pizza+ positioning into a higher check given the commodity nature of this segment which is so reliant on a lower income demo. In conclusion, while Papa John's brand has suffered a tremendous hit, its ongoing repositioning is well designed for the patient so long as the chain can figure out how to do value as a pizza+ player. 

 

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