Pizza: Childhood Favourite Turned Investor Nightmare

Pizza. It’s every child’s favourite food. Heck, it’s still one of my favourite foods. And for the first time in my pizza-eating career, I’ve finally encountered a pizza that I don’t like: Papa John’s.

I should clarify – it’s not the pizza I don’t like, it’s the company. And it really isn’t the company, it’s the words of their founder, John Schnatter. Unfortunately, in Papa John’s case, the organization is positioned around the personality of Mr. Schnatter and so its success, or demise, is tied to his words and actions.

At Level5, we use positioning as a means of aligning a client’s strategic intent, style, competencies, and communications in a consistent manner. It can range from very functional-based positioning, on things like ‘Infrastructure,’ to more emotional-based positioning around things like ‘Personality’ (as is the case with Papa John’s).

A Personality-based positioning presents both great risk and great reward. It can be a risk to an organization when the individual has done something wrong, as we’ve seen in the case of Papa John’s where the company’s stock price has fallen nearly 15% since July 11th (the day Forbes reported Mr. Schnatter’s words and he resigned as chairman, though trouble began in November when he called out the NFL). Conversely, it can also inspire confidence and spur loyalty. Case and point, Elon Musk: the man behind Tesla who can attract billions of capital despite never making a year of profit, missing production targets, and burning through doughfaster than, well, pizza in a 900-degree wood burning oven.

Papa John’s has moved quickly to distance themselves from Mr. Schnatter’s persona. For starters, he’s being removed from their marketing materials (I hope they recycle those pizza boxes!). Next, we might see a change in their name. Perhaps we will see “PJ’s” as an abbreviated version of the company; the same move pulled by BP, or British Petroleum prior to the oil spill. But these are just surface changes.

Regardless of company name, the organization faces the dilemma of re-positioning themselves while still standing out in an already crowded and mature pizza market as they fight for a bigger slice of the pizza pie. They may hold their ground and have a new personality take over or can ditch the personality-based positioning altogether and embrace a new positioning around their Products, which is already reflected in their tagline “better ingredients, better pizza.” Needless to say, it’s more than a cheesy exercise of changing a name or logo.

To put it in their language: positioning can be thought of as the crust that holds everything together. It requires all of the internal workings of the company, the toppings (yes, including pineapple), to be carefully selected, placed and aligned to become the pizza they want to be seen as in the market, strategically. It’s one thing to redefine your pizza, but ultimately, it needs to be delivered consistently through a brand-driven customer journey… and ideally within 30 minutes or less.

We work with organizations every day to help build and implement brand-driven strategies, which includes companies that need to undergo a shift (or reinvention) of their strategy, positioning, or even the way they execute their strategies.

By: Richard Baran-Chong, Manager

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