Posted by: Chris | January 30, 2008

Services Marketing and the Pizza Continuum


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My neighborhood borders a large area of undeveloped land. Actually, it used to border a large area of undeveloped land. Just since we moved to this neighborhood last July, we have witnessed the building of a strip mall, a development of patio homes, and some office space in nary more than a half mile of land.

My wife and I have watched the strip mall closely, hoping for some exciting new store or restaurant to be located so close to our house. We watched as the open spaces were filled with a dry cleaner, a liquor store, and what looks to be a home furnishings store. So when we saw that one of the last openings was to be filled with a no-name pizza joint, we watched closely with guarded anticipation.

Two days ago, the restaurant had an “Opening Soon” banner out front. Yesterday, a “Now Open” banner proudly waved at its storefront. I was excited-until this morning. As I drove to work today, I looked longingly at this new potential, only to see the lawn of the strip mall strewn with signs that advertised “$6.99 Large Pizza.” The potentially low quality of such a cheap pizza was not so much of my concern as the positioning the restaurant was attempting. I don’t mind paying less for a pizza, but I do mind going to a “cheap” pizza restaurant.

“Price” is one of the most underrated of the Five (or Six or Seven) P’s of marketing. Businesses assume that people simply want to pay as little for a product or service as possible. (Except, of course, Howard Schultz, founder of Starbucks). But in a marketing context, price has to go well beyond simply guaranteeing the lowest of the industry. Price positions.

When I was in high school, I schlepped pies for a restaurant called “Pay-Less Pizza.” Indeed, the name did say it all. And for about 4 months, Tulsans could buy a very cheap large pizza (around $5.99 at the time). Compare that to the hole-in-the-wall, Savastano’s, an unassuming little pizzeria south of Tulsa that has the ambiance of a dorm room on the freshman floor. This place has the nerve to charge $16.50 for a 12″ deep-dish cheese, pepperoni, and sausage pizza-and there is always a long wait to get in.

Of course, quality is an issue-Savastano’s serves the best deep-dish pizza around—a product that takes roughly 30 minutes to complete, and which stands inches high atop the platter it comes out on. But the point that I want to make is that price is not king, and the primary value of this “tool” is not to pay for the supplies, salaries, etc. that went into the product or service, but to position the product or service in the consumer’s mind. That’s right: the relationship between price and costs is merely incidental. But the relationship between price and positioning is monumental.

Enter Services Marketing.

In services marketing, the “product” is the person—the front-line service employee. Unfortunately, some restaurants shout their devaluation of this essential “product” as loudly as the pizzeria near my house did when they posted gaudy signs in the lawn. Companies do this when they use job applications as tray-liners, or when they post the available shifts on their company message center out front. These companies are saying to the general public, “We care so little about the type of employee candidates we are looking for that we will use one of our most effective recruiting tools as a disposable ketchup-catcher.” I now know how much this company values one of its most significant branding tools: the service-side employee.

Services marketing begins before the employee recruitment process takes place. It has to do with the way employees are sought out. It has to do with the first point of contact between the company and the candidate. It has to do with the value the company places in their application process. There is a message, not only to the candidate, but also to a company’s clients, in the way these things take place. The companies who use applications as tray liners are simply advertising to potential candidates and the rest of their clientèle, “Hey, we offer a $6.99 service product.” And from my experience, the fruits of such internal branding match the value ascribed by the company.

Recruitment and marketing go hand-in-hand. Valuation of the employee candidate is essential to internal branding. And the recruting initiatives of a company speak volumes both internally and externally.

So which end of the pizza continuum is your company on?

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