Community Marketing Feeds Papa Murphy's Success
As many restaurant chains struggle to ride out the most challenging foodservice industry climate in recent history, Papa Murphy's Take-'N'-Bake Pizza chain seems to be offering the right formula at the right time: convenient yet fresh and reasonably priced meal solutions.
And from the marketing perspective, a local, community-oriented, franchise-owner approach facilitated by corporate has been no small factor in driving awareness and uptake of an already of-its-time concept, a chain executive tells Marketing Daily.
The Vancouver, Wash.-based Papa Murphy's chain, which uses fresh dough and toppings to create pizzas that consumers take home and bake themselves, is bucking the declining traffic/sales trends impacting so many restaurant chains and independents. Those trends reflect both consumers' reductions in dining out in favor of at-home meal preparation and food retailers' aggressive moves to compete with restaurants by expanding into fresh, easy-to-prepare-at-home convenience foods.
Indeed, a growing number of food retailers, as well as restaurant chains, are emulating Papa Murphy's take-home-and-bake pizza concept, according to a new Packaged Facts report on fresh convenience foods in the U.S.
Papa Murphy's -- which was acquired by Lee Equity Partners in second-quarter 2010 and currently has more than 1,200 locations in 36 states and Canada -- reported that its 2009 system-wide sales grew more than 7% to $630 million, and that same-store sales grew more than 2%, even as trade media estimated the pizza restaurant category to be down by about 6% to 7%.
According to the newly released annual Nation's Restaurant News (NRN) "Top 100" census report, that sales performance -- as well as Papa Murphy's new-store growth -- outpaced all pizza-industry competition for the year, and made the brand the only pizza chain among the top 10 in NRN's overall chain rankings. Now the fifth-largest U.S. pizza chain, Papa Murphy's opened 83 locations in 2009.
Papa Murphy's has been voted "Best Pizza Chain in America" for seven consecutive years by U.S. consumers in Restaurants and Institutions ' "Consumers' Choice in Chains" survey, and is a four-time winner of Pizza Today's "Chain of the Year" award.
The chain's ability to offer prices typically lower than dine-in, delivery or traditional carry-out restaurants is part of its appeal to consumers, notes Packaged Facts. Furthermore, its concept reduces overhead (no ovens, freezers or delivery trucks/drivers), providing relatively low-cost entry for franchisees. In Franchise Business Review's 2009 franchisee satisfaction ratings, Papa Murphy's ranked high among the top 100 major foodservice brands.
Like other pizza chains, Papa Murphy's -- created out of two small West Coast chains in 1995 by entrepreneur Terry Collins -- relies heavily on print coupons/promotions delivered through mass-mailer coupon distribution programs, according to Evan Evans, VP, field marketing and corporate communications for Papa Murphy's.
In addition, the chain encourages franchise owners to get local/designated marketing area TV spots that emphasize its differentiating message of "value, quality and freshness" -- prepared when the consumer/family wants to eat, rather than being determined by delivery services or pick-up times -- onto the air as quickly as possible once a new location opens, Evans tells Marketing Daily.
But in marketing terms, Papa Murphy's biggest strategic differentiator from major pizza/QSR chains is local store marketing, says Evans. Corporate provides the 500+ franchisees, who on average own about 1.5 stores (only about 30 of the chain's locations are company-owned) with a library of promotional concepts/materials and training that enable them to create promotional partnerships with local, non-competitive businesses.
For example, says Evans, a pizza franchise owner might provide a nearby dry cleaner with hanger coupon tags for a Papa Murphy's special deal or freebie, with the dry cleaner in return getting exposure for its own offers/promo materials in the Papa Murphy's outlet. Or a local dentist might receive promotional exposure in the local Papa Murphy's in return for handing out PM "reward" coupons to kids who have completed their dental checkups ... or a local hardware store might provide a Weber grill for a raffle, with entry tied to a purchase or offer at the local Papa Murphy's.
"We are not a stand-alone destination -- our locations are about 1,200 square feet, on average, and typically located within strip malls," explains Evans. "But as mom-and-pop operations, we can take marketing to a much more personal level than a typical pizza chain or QSR. That personal touch takes us out of the 'chain' equation in consumers' minds, making us part of the community."
Papa Murphy's also started an e-club several years ago, and offers promotions/deals in twice-per-month emails to a database that has now reached about a half-million brand fans, according to Evans.
The chain is relatively late to social media, but has attracted about 25,000 fans since it launched its Facebook page in February, and is regularly engaging with these heavy brand users and monitoring/ learning from their "99% positive" comments, Evans says.
Twitter is new to the chain, which plans to focus on leveraging that channel to a greater degree later this year or early next year, he says. "We also looked into Foursquare, but we don't think that's a great fit for us, because we don't have the several-times-per week frequency" of Starbucks or other coffee house/snack/breakfast formats, Evans adds.