Take Flight with the Red Baron

Red Baron Solo Pizza Promotion for School Foodservice - Spring 2003

Overview

Market Situation: Schools are challenged to maintain participation of students in school lunch programs. The sales a school generates from its a la carte menu offerings provide income that helps subsidize the cost of lunches offered on the main cafeteria line, meals that a school offers under the guidelines of the National School Lunch Program. Often students seek less healthy off-campus snacks instead of eating in the school cafeteria. Red Baron Pizza sought to provide food interest in schools through a superior product story versus branded delivery pizza. Red Baron is a powerful retail brand whose merchandising tools include a squadron of biplanes that promote the Brand nationally. Market Factors: School Foodservice directors have turned to national brands via delivery pizza programs to generate student participation in the cafeteria. Local franchisees of Pizza Hut and Domino's deliver a branded alternative to keep students in the cafeteria. However, due to long delivery and preparation time the pizza is not fresh and slices are not uniform, resulting in disappointed students. School Delivery and Premium Pizza Market Shares are not reported. Share estimates are Red Baron -16%, Domino's - 32%, Pizza Hut - 40%, and other delivery -10%. Sources for this estimate are NPD Crest and QSR Magazine.

Promotion Objectives

The Challenges: The first challenge was to run this program and promotion counter seasonally. Normally, schools plan menus and purchase heavily in September and not traditionally in the spring. The second challenge was to develop this promotion on a budget of $150,000. Marketing Goal: To grow the a la carte premium pizza segment and take share from national pizza leaders Domino's and Pizza Hut by offering a bake-and-serve personal pizza that created the delivery pizza experience, right down to the branded pizza box the product was served in.

Promotion Description

Originally created in December 2001, the program was announced to school foodservice directors via direct mail post card, e-mail, sales force calls and phone center follow-up calls in early 2002. The spring 2002 program won the ProAward for Best Business-to-Business promotion in October 2002. The first wave of the program was so successful, the program was repeated in the fall of 2002 and spring of 2003. Spring 2003 data is not available, as the promotion is running through the end of May. The offer centered around helping schools capture the appetite of students by offering a superior product with a strong brand story and promotional support to create news and excitement at the school level. School foodservice directors placed orders between March 1, 2002 and May 31, 2002 and again between August 1, 2002 and December 31, 2002. Importantly, the program targeted Foodservice directors as well as students. The promotion incentive to the Food Service Director was to offer a series of rewards based on volume purchases. The rewards focused on the annual School Foodservice Director's annual meeting. In addition, making foodservice directors heroes was a key goal. This was achieved by offering great product and promotional incentives rewards that appealed to kids by creating excitement and Brand worthy news in the cafeteria.

The rewards: Based on purchases, school foodservice directors could receive trips to the annual School Foodservice Industry's annual meeting and a variety of promotional support that included Red Baron themed rewards such as: Flying Ace: All expense paid trip to the American School Foodservice Associations conference in Minneapolis and a flight with the Red Baron Squadron (2002). In 2003, the prize was a trip to the annual conference in Reno, including a visit to the Ponderosa Ranch of "Bonanza fame, which will take place in July 2003. Captain: Five year membership to American School Foodservice Association Co-Pilot: One year American School Foodservice Associations membership

The Promotion Incentives to Students included: • Individual Red Baron Pizza boxes • Red Baron micromodel biplanes: Easy to assemble and durable, these models provided a fun food experience in a memorable, brand building way. • In school: Sales were supported with a variety of point of sale materials from posters and floor clings to stickers.

Performance Results

After two years running, this promotion continues to prove profitable. The data that follows reflects promotion activity from September 1, 2002 to December 31, 2002. The sales goal for the Fall was $3.5MM and actual sales were at $5.2MM or 148% over projections and 192% over 2002. The overall case goal of 70,000 was exceed by 38,000 cases for a total of 108,000 cases sold or 154% over projections. The total number of school operators who signed up for the promotion in the Fall was 620, more than double the number participating in the spring promotion, 286, a 216% increase over previous year.

What is noteworthy about the entire program results is that this program was initiated at the end of the school year when buying does not normally occur, but strong momentum and appeal of the program drove increased operator participation in the Fall, back-to-school time period. The low cost of the promotion generated a significant return on investment rapidly.