Contemporary Marketing 16th Edition by Louis Boone,David Kurtz

Exercise 28

People love Pepe's pizza so much they'll line up around the block waiting for a chance to sink their teeth into fresh dough, homemade sauce, and toppings-all roasted in a coal oven while they sip a root beer or iced tea Regular customers may even choose a table at Pepe's Pizzeria near the open kitchen, where they can watch their crust being spun and tossed, then slipped into the oven. The open kitchen isn't just a nod to the latest trend in restaurant design; it's an acknowledgement of the importance of Pepe's nearly 90-year relationship with its customers. "I treat the customers as if they are part of my family," says Jennifer Kelly, granddaughter of founder Frank Pepe. From 1925, when Pepe began selling pizzas off a pushcart, until today, when hundreds of hungry diners pass through the doors of Pepe's New England restaurants every day, customers have been considered family and friends. Pepe's Pizzeria has built its brand equity not only on the high quality of its food but on its social interaction with customers. "They relate to their customers," says Pepe's CEO Ken Berry. Kelly is a co-owner of Pepe's, along with several siblings and cousins. She is also a server at the New Haven, Connecticut, flagship restaurant. This means that Kelly sees her customers every single day and gets to know them well. She understands how they feel. "When I go out to dinner, I like to be treated with respect," Kelly explains. "I treat them the same way." She listens to them and cares about getting their orders exactly right. If a group of diners has waited in line for a long time, she's empathetic about that too. "They're hungry," Kelly says. "I try to get them their drinks and salads right away." Kelly also notes that hiring the right staff is critical to the restaurant's success. The wait staff does make transactions; but the relationships they create in just an hour or two ensure that diners will return. "We hire people who know what to do," Kelly says. "We aren't going to hire someone who doesn't have our values."
Even as the price of everything rises, Pepe's pizza prices stay relatively the same. But it's not a focus on price for the purpose of cutting costs or skimping on ingredients-it's one of Pepe's original values, treating his customers as if they were friends and family. "Frank's business survived the Great Depression because he didn't increase prices. He gave to people," Kelly explains. "He was a contributor to the war-time veterans... my grandfather never charged them. This is the type of man my grandfather was. This is the type of heritage that we follow." As for prices in today's economy, Kelly asks, "Why would we increase prices right now? People are struggling." She comments that a family of four can eat at the restaurant for around $20 and be satisfied-which means they are very likely to return.
Pepe's doesn't need to do a lot more in the way of marketing to enhance its relationships, but there are thousands of pizza joints littered across the nation, translating to competition. Valuing its roots-but not wanting to be stuck in the last century-the company does engage in social marketing for broader relationship building. On Pepe's Facebook page, which has more than 14,000 "likes," customers post comments such as, "I have driven 50 miles- each way-for one of these pizzas." The company advertises new menu items there, including beverages. Fans can also enter the current "Where in the World Is Pepe's?" contest for a chance to win a $300 Pepe's gift card and an iPad. Or they can log on to their Twitter accounts to enter #MyPepes contest by tweeting a picture of their pizza from the restaurant.
Still, Pepe's will always maintain its old-world family feel. Berry describes how Pepe sometimes spent 24 hours at a time in his pizzeria, fashioning new recipes, making dough, cleaning the kitchen. People tossed pebbles at the windows late at night or early in the morning to catch his attention and ask him to make them a pizza-which he did. In this regard, the transition of Pepe's from 1925 to today's world is seamless. "It goes back to the people from our community and our neighborhood," says Kelly. "Those are the people who made us famous. Those are the people who made us who we are today."
Questions for Critical Thinking
1. How does Pepe's Pizzeria use price and social interactions to build relationships with its customers?
2. How does Pepe's Pizzeria ensure customer satisfaction?