Message Font: Serif | Sans-Serif
No. of Recommendations: 0
In cased you missed this story, I though I would pass it along.

Pizza Hut Brass Behind Battle To Kill Papa John's Slogan

Friday, January 7, 2000 12:51 PM

By Richard Gibson

DALLAS (Dow Jones)--A federal court mandate this week that Papa John's International Inc. (PZZA, news, msgs) scrap its primary advertising slogan represents a major victory for archrival Pizza Hut in the firms' long-running marketing battle.

The ruling must be particularly sweet for the new chief executive at Pizza Hut parent Tricon Global Restaurants Inc. (YUM, news, msgs), David C. Novak.

Court documents disclose that three years ago, upset at how smaller Papa John's had been able to "kick our butts in sales," Novak told subordinates he wanted Papa John's' "Better Ingredients, Better Pizza" slogan wiped off its pizza boxes. Moreover, he was willing to file a lawsuit if necessary to do it, a former aide testified.

A jury in U.S. District Court here last November sided with Pizza Hut in its "misleading advertising" case against its smaller competitor, and this week the presiding judge agreed. As a result, Papa John's must drop the "better" line from ads this month, and remove it from packaging and stores before April.

Eliminating Papa John's catchy line, which Pizza Hut took as a direct putdown of its products, was but one salvo in a wide-ranging campaign directed by Pizza Hut's top brass, the documents show. Another tactic was to foster comparative taste tests around the country - sometimes by encouraging local media to undertake them - as Pizza Hut fostered the notion of "pizza wars." The theory was that, even if Pizza Hut's products didn't win, at least the chain would gain free publicity for its line of "Totally New Pizzas."

Other Pizza Hut efforts to "Stoppa the Papa," as one was known, included using license-plate numbers to contact and recruit Papa John's delivery drivers, the court records show.

Among the most telling revelations was testimony from a former Pizza Hut public relations executive, Robert A. Doughty. He testified about a meeting in early 1997 at which he heard Novak say he wanted the "Better Ingredients, Better Pizza" line "removed from Papa John's boxes, and that he would like to be in a position where he could file a lawsuit to make that happen." Doughty is now vice president of public relations and communications at Burger King Corp., a unit of Diageo PLC (DEO, news, msgs).

Novak later denied under oath making such a statement. But a subsequent Pizza Hut strategy summary includes as one goal, "Plan to take 'Better Ingredients, Better Pizza" off Papa John's boxes. A page from that summary, stamped "Highly Confidential," lists "What we need more of." Among the items is " 'Stealing' good ideas from the competition."

Pizza Hut executives were clearly worried about Papa John's, at the time the nation's fourth-largest pizza chain behind Pizza Hut, Domino's and Little Caesars. One confidential Pizza Hut call to arms said "quality product" and "good value for money" were among Papa John's attributes. That document was headlined, "At this rate, Papa John's will be a larger scale, well positioned competitor in 3 years."

A memo dated Aug. 26, 1997, from Novak to the Pizza Hut executive team illuminates his thinking about what the chain needed to do to fight back. In it, Novak posed a series of questions about Papa John's aggressiveness: "How much longer are we going to let them own the quality brand position? How much longer are we going to let them run their false advertising claims (or if it isn't false, make it false)? ... How much longer are they going to have better service? ... How much longer are they going to kick our butts in sales?"

Novak's memo concluded, "Let's let Papa John's arrogance and results drive our sense of urgency and translate these efforts into results we can be truly proud of. Obviously, the status quo is a continuation of pretending we are the leader when we're not."

To regain momentum, Pizza Hut launched a plan known internally as "Lightning Bolt." It was in part designed to slow Papa John, and called for the introduction of several new pizza products.

At the time, Pizza Hut was part of PepsiCo Inc. (PEP, news, msgs). It subsequently was spun off, along with KFC and Taco Bell, as Tricon in the fall of 1997.

A Tricon spokesman, asked to comment on the documents, said, "The judge and jury heard all that testimony and factored it in when deciding that 'Better Ingredients, Better Pizza' was false and misleading and deceived a substantial number of consumers." He said Papa John's "disparaged Pizza Hut, our brand, our people and our products."

Comparative advertising claims - especially using words like "better" and "best" - aren't by themselves forbidden terms in the world of advertising, of course. But they were a key issue in the Dallas trial, where the jury for the most part sided with Pizza Hut in condemning them.

Yet among the exhibits in the court file is a KFC ad headlined, "Better Recipes, Better Choices, Better Call Us For Dinner!" Similarly, the court file shows that such words are common in the pizza industry. Ad slogans include "Nobody Delivers Better" (Domino's); "Best Pizza Ever" (Pizza Inn), and "The Best Pizzas Under One Roof" (Pizza Hut).

Pizza Hut adopted that slogan in the summer of 1998 - just weeks before it filed its "misleading advertising" lawsuit against its smaller rival.

Papa John's has said it intends to appeal the court's decision.

I bought a PZZA pizza on line over the weekend. It was a very nice experenice. I didn't have to talk to anyone and it arrived in thirty minutes. About ten minutes later the Papa John store called and ask me "it everything was alright."

They have a very nice web page and a map showing all the states, you click the state and enter your zip code. The nearest Papa John store pops up with the addess and phone number.

I liked it very much.


Don Hicks

Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.