July 30, 2012 |

Marketing Matters: The price of advertising

By Scott Anthony

special promo posterA good ad is priceless, but can a price-less ad be good? Most of us would be hesitant to run an ad campaign without a price point, and right­ly so. Research firm Phoenix Marketing International finds that the inclusion of specific pricing is a key factor of high per­forming quick service restaurant advertis­ing. Their research states, “In addition to strong creative, what differentiates these top ads from the rest is their ability to weave in a value message with appetizing food items and a positive dining experi­ence. In contrast, most of the ads without price points proved to be weaker perform­ers, even if they showcased premium, appealing food items and conveyed a pleas­ant dining experience.”

When would it be appropriate to pro­mote a product without specifying a price point? There are particular instances such as when promoting a novelty product. Take, for example, the BIG ONE offered by Fox’s Pizza Den of Indiana, Pennsylvania. This 52, slice 30-inch round pizza was promoted by a radio ad for several weeks just emphasizing the uniqueness of the product and intentionally neglecting to mention the nearly $40 price tag. Owner Earl Miller Jr. did his own market research and was pleasantly surprised to report that sales of the BIG ONE tripled over the campaign period. Miller says, “People ask, ‘How much is that pizza?’ We get that a lot, which also means that people are still money wise and cau­tious.” Ads with no pricing are common in artisan pizzerias, which highlight the authentic dining experience and also get results.

Are there times when price is the selling point? Unfortunately, we have seen many cases where pizza is treated as a commodity and people flock to the lowest priced distributor. This does no favors for the pizza industry or to one of America’s favorite foods. However, price used as a selling point can be a great way to introduce a new product. Price in the form of a value menu can also be an option to drive customers to your store — a savvy operator will
always keep close watch on prime costs when ex­ecuting such strategies.

As stated by Miller, people are cautious with their money and look for quality with a value price tag. Phoenix Marketing International conveys that when executed correctly, value messaging can work even with higher price points. This is good news for most operators who deal with food cost in the range of 30 percent. These operators compete on factors such as quality ingredients, convenience, service and the overall customer experience. Value is born from the combination of these factors and a higher price point is thus validated.

Is there a situation when price should not be mentioned? No, but it must always be defended. I would concur with Milton Hershey, “Give them quality. That’s the best kind of advertising.”

Scott Anthony is a Fox’s Pizza Den franchisee in Punxsutawney, Pennsylvania. He is a monthly contribu­tor to Pizza Today and a frequent guest speaker at Pizza Expo.