Our challenge as operators and what we do every day to build our brand and protect our brand is to make sure that we're delivering that promise every day. [ Music ] >> The beginning of Frank Pepe Pizzeria was established when my grandfather returned from World War I. He wanted to establish his own business and in which he did and this is the current location, the original location where we are right now where he came with my grandmother's guidance as well to make bread here. Essentially, make bread here during the week and then he also made pizza on Saturday and Sunday. Originally pizza was plain tomato with grated cheese. >> Our pizza really has a heritage, you know, and it goes back 87 years virtually unchanged during those 87 years. We've added refrigeration and air conditioning but, you know, that's pretty much it for the additions and so it's a way for people really to step back in time with a handcrafted product. The dough is made daily in the restaurants. Many of our ingredients still come from the same purveyors they did decades ago. My name is Ken Berry. I'm President and CEO of the Frank Pepe's Development Company. My major role in the company is to oversee the growth of the company while maintaining standards that have been set for us for generations and to build brand equity. What's happened over generations people have adopted Pepe's as their own and this presents a challenge and it's also something very favorable. The favorable part of it is that we have a loyal customer-base that's been built up. The challenge is is that customer-base has very, very high expectations and if you don't deliver the promise they'll let you know about it right away. Our challenge is as operators and what we do every day to build our brand and protect our brand is to make sure that we're delivering that promise every day. I joined the company several years ago. There was just the New Haven location at that time and a decision had been made by the family that they wanted to broaden their customer-base and expand. Our belief was that if you had a pizza that looked and tasted like what had been accustomed to in New Haven and you're in familiar surroundings that you would recognize it as just as good as the pizza in New Haven. So, when we set out to do this project and expand Pepe's beyond New Haven, we were of the opinion that replicating every possible aspect of the New Haven was very critical to the whole Pepe's experience. It was more than just the recipes and the ingredients. We replicated the furniture and we used the same stain colorings, the same ceiling coverings, the same uniforms for our staff. Many of our staff in the non-New Haven restaurants do come in and train in New Haven and we also have some key employees that travel from restaurant to restaurant to make sure that the pizzas are baked properly, help train new employees. When we first started out, our main focus on letting people know what we were doing is we actually let our current customers know what we doing. We were going to open up in Fairfield, Connecticut and many of our customers in New Haven were from the Fairfield area so just marketing to them on something as simple as a pizza box that, hey we're coming to Fairfield, Connecticut. We did other things like press releases that the New Haven media picked up on. One of the curious things that happened when we opened up at Fairfield, there was actually a small number of hardcore Pepe's customers that were opposed to us expanding and a boycott was put together for a first restaurant, so what happened opening day we had about 6 or 7 people protesting and about 200 people online to be with some of the first people inside, so and it was very successful from that day forward. But with Pepe's your marketing aspect is really too; one is you want to let people know where you are and then secondly you have a little education to do because not everybody, as much as we'd like to think in Connecticut has ever tried a Pepe's pizza. There's many people that haven't. I would break our marketing down into two things; one is public relations and then the second is that typical marketing/advertising. On the public relations front, we do a lot with charities, in fact, we have a tab on a website that allows customers to request donations for their charities. We do also do something called a Good Neighbor night and many of our restaurants which is another local store, public relations vehicle where we donate 15% of our proceeds to that group for a particular night. The quid pro quo is they bring in customers that normally wouldn't be there that night and we in return give them a percentage of the proceeds. On the more traditional marketing advertising front we look at two things; one is a grand opening which will take us in one direction and then an informational marketing afterwards which is generally, you know, here's where we are, so we've done billboards on the interstates which seemed to work pretty well for us in terms of a good return on our investment. We don't really have enough locations to make broadcast media cost effective. Print is pass. We will do some direct mail. One of our more successful grand opening events is week prior to a planned opening we give away free pizza for a week. Not only does this help us train our employees, break in our ovens, help us you know do kind of a shakedown but it introduces our product to people that may never have considered us as their pizza restaurant. It also creates a great word of mouth buzz and I think it makes a statement to the public that we're so confident in the product that we sell that we're willing to give away a weeks-worth of product because we know you're going to like it and you're going to come back and be regular customers for us. We've also in the last couple of years used social media quite a bit, it's essentially the new word of mouth. We've put a lot of effort behind that in terms of Facebook and Twitter. It also involves the customers with us and keeps that relationship going. [ Music ]

If youre a pizza lover, youd say that a sizzling hot, fresh pizza sells itself. If you happen to live in southern New Englandand be a pizza loveryoud probably say that everyone knows about Pepes Pizzeria. But Ken Berry, CEO of Pepes, understands the importance of spreading the word about his companys pizza, even though its practically got a cult following. Founded by Frank Pepe in New Haven, Connecticut, pizzeria employees still hand-toss every single pizza. Our pizza really has a heritage, observes Berry. It goes back 87 years, virtually unchanged during those 87 years. He notes that the company has added refrigerators and air-conditioning, but thats about all. When diners visit the restaurant, they enjoy the sights, sounds, smells, and flavors of this heritage. Its a way for people to step back in time, Berry says. The pizza dough is still made fresh daily, and the ingredients come from many of the same sources they did decades ago. Pepes has built a loyal following through the years. People have adopted Pepes as their own through generations, notes Berry. This word-of-mouth advertising is impossible to buy or replicate, and it helps strengthen the brand. But it also represents a challenge, in that these loyal customers arrive at the restaurant with high expectations. If they bring friends or family, they expect those guests to be served a top-notch meal, much as if they were entertaining in their own home. If you dont deliver on your promise, theyll let you know right away, warns Berry. When Pepes co-owners decided to expand from its initial location several years ago, their strategy included replicating every aspect of the Pepes dining experienceright down to the furniture and uniforms of the wait staff. They wanted customers to walk into the new location in Fairfield, Connecticut, and feel right at home. They didnt anticipate a backlasha small core of regular New Haven customers who objected to the expansion of their beloved Pepes. These customers staged a protest outside the new restaurant as it opened to the public. But publicity surrounding the opening of a new Pepes swelled beyond the protestorsand 200 people showed up to wait in line for their own piece of Pepes pie. If anything, the buzz surrounding the protest likely attracted more customers to the new location. Pepes approach to advertising is pretty straightforward. The pizza sells itselfone bite, and pizza lovers are hooked. So the main objective is to make consumers aware of the restaurant, which now has several locations in the tri-state area surrounding New York City. As the Fairfield restaurant neared its opening date, Pepes alerted current customers with a simple message printed on top of each pizza box (coincidentally, many of Pepes regular New Haven diners actually lived in Fairfield). The company also published press releases and advertised the grand opening of the new restaurant. Billboards along the interstate highway proved to be effectivewith travelers, as did some direct-mail efforts. Pepes recently ventured into social media with a Facebook page and Twitter account, which Berry refers to as the new word of mouth. Pepes posts photos, blurbs about menu items, and relives a few proud moments on Facebook. Customers comment about their favorite pizza flavors (such as spinach and gorgonzola), and share experiences (like driving 50 miles each way for a Pepes pizza). Berry notes that Pepes presence in social media keeps the relationships with customers going. Educating consumers about Pepes is the second advertising objective. With such a tasty product, what better way to attract new customers than to let them discover that the proof really is in the pie? Now when Pepes launches a new restaurant, they give away free pizza for about a week before the grand opening. Thats right: free pizza, for a week. Ken Berry explains that this promotion serves three purposes: It trains the new employees, tests the new ovens, and introduces Pepes pizza to new customers. The giveaway generates plenty of good buzz about Pepes pizzas and makes an important statement to the public: Pepes is so confident about the quality of its food that theyre willing to give it away for a weekcertain that consumers will become regular customers. Pepes also enjoys positive public relations surrounding its charitable giving. The company website has a tab allowing customers to request donations for their particular charities, and the restaurant conducts regular Good Neighbors Nights, from which it donates 15 percent of its proceeds to a designated not-for-profit group. All of these efforts roll together into cohesive marketing communications with one major goal. Our challenge is to build our brand and protect it, says Berry, and to make sure we deliver every day.

1. What are the disadvantages local establishments like Pepes Pizzeria face when expanding into different areas?

2. How has Pepes Pizzeria helped its loyal customers retain their sense of belonging with the brand, even after diversifying to different locations?

3. Briefly explain the public relations, advertising, and marketing techniques used by Pepes Pizzeria while expanding to new locations.

Keep your answers short and simple. However, make sure that you answer the questions completely.