Pizza Hut plays the 'same game'

Sept. 25, 2002

Word that Pizza Hut is rolling out a Chicago-style pizza later this year was not the sort of news most folks wanted to hear.

Operators without behemoth marketing budgets like Pizza Hut's surely are groaning over the thought of another advertising blitz like the industry leader laid out for its Big New Yorker a few years ago. Despite New Yorkers' claims that the pizza was neither authentic nor deserving of that moniker, the sales generated by the $80 million campaign did make an authentic and beneficial impression on Pizza Hut's bottom line. The slick TV and radio ads also were nearly omnipresent and just about drowned out any competitors' tune at the time they ran.

Steve Coomes, Editor

Makers of Chicago-style pizza surely didn't like hearing about Pizza Hut's facsimile of their core product, which it calls "Chicago Dish Pizza." Anytime someone deviates from culinary tradition, the creators of that tradition generally cry heresy -- regardless of whether they're right. And just like New York pizzeria owners, Chicago deep-dish makers are bound to say it's no mirror image of the original and that it won't sell in their town.

Perhaps they're right, that it won't sell in the Windy City. But you can bet it'll make a strong impact elsewhere.

The pizza-loving public, however, may be the most disappointed of all to hear about Pizza Hut's new pie. Not because anyone expects it to be a bad product, rather because it won't be a different product, something that Pizza Hut has ample resources and talent to create. Speaking for myself, I'd hoped you could have come up with an original item, Pizza Hut, not a revision of something that already exists.

To be fair, Pizza Hut isn't alone in this quest to look and taste like its competitors. For many of the top U.S. pizza companies, this has been a "me too" year like none I can remember. In 2002 alone, Little Caesars, Papa John's, Pizza Hut and Papa Murphy's Take-'N-Bake Pizza introduced or plan to introduce a deep-dish pizza.

Most recently, Papa John's and Domino's Pizza rolled out similar breaded chicken appetizers at the very same time -- no irony there.

Such activity begs these questions: Why, mega-chains, are your R&D departments working so hard to ride waves driven by competitors when those teams surely are capable of making their own? Is it so terribly hard to come up with a signature product from within the broad range of ingredients already on your shelves?

Innovation is the solution

Despite my desire for industry innovation and my hopes for a new-fangled pizza from Pizza Hut, I understand that the decision to duplicate already-successful products is driven by profit. And as a capitalist, I don't begrudge any company for making a legal buck (especially if some shares of Yum! and Papa John's are among those in my mutual funds).

Shareholders want earnings, earnings are born of sales and companies on the front lines of an ongoing pizza-industry trench war will use any ammunition available to gain some ground.

But does every company have to go to battle with the same weapons?

Apparently so, and that's not only disappointing, it flies in the face of the novel advances that got each and every aforementioned company to where it is now. All of them got to the top or near it by making a unique impact on the pizza industry -- not by copying others. Standing out among the crowd helped them become known entities and ultimately grow into the business empires they are today.

Now, however, when margins are tight and market share is won or lost by slivers -- the very time when companies need to distinguish themselves from the crowd -- these companies have chosen to imitate each other instead of making customers take notice and say, "Now that's unique. I'll give that a try."

Ultimately, playing this "same game" will turn pizza purchases into decisions of price rather than product, and that's a dangerous battle plan to implement in the larger restaurant war with burgers, chicken, fish, etc.

Yes, it's my bet Pizza Hut's new pizza will drive sales at least in the near term. But when the public tires of the same old thing and asks, "Well, what have you created for me lately," what will the company do?

I haven't a clue, but I hope it's something new.

Topics: Commentary

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