PIZZA PATRON CHANGES ITS MARKETING STRATEGY TO ATTRACT YOUNGER HISPANICS, "QUE BUENO, BONITO Y BARATO"

Business That Long-Catered to Older Spanish-Speaking Immigrants Reaches Out to Younger Clientele

Pizza Patrón, a 100-unit restaurant chain that has long catered to a Spanish-speaking clientele, is turning its charms on English speakers.

The Dallas-based chain, which offers such pizza toppings as chorizo sausage and jalapeno peppers, decided to rethink its marketing after noticing that more young Hispanics—the fastest growing segment of the youth population in the U.S., according to a recent analysis by the U.S. Census Bureau—are bilingual and bicultural.

"These are Hispanics born in the U.S. who have one foot in each culture," says Andrew Gamm, Pizza Patrón's brand director. "They are very into adopting American culture without fully letting go of their Hispanic roots. In our previous 25 years of doing business, we focused on these peoples' parents."

The shift comes as many traditional marketers, such as Kraft Foods Inc. and Anheuser-Busch InBev NV, are courting Hispanic consumers with Spanish-language advertising and products such as lime-infused beer.

Pizza Patrón, a privately held chain that expects revenues of more than $40 million this year, is re-allocating its advertising budget, rejiggering commercials, opening restaurants in new areas and using more English on menus. It's tricky because Pizza Patrón wants to lure new, younger clientele without alienating its historic base of immigrant customers.

Mr. Gamm says that's something he's concerned about but "a lot of my worry is alleviated by the fact that many of these young people have the purchasing power in the household. Thmey do the translating for mom and dad. In that respect, I think we'll be OK."

Attracting a broader demographic makes sense because "statistics demonstrate that virtually every ethnic group has largely integrated into American culture by the second or third generation," says Todd Hooper, restaurant strategist at retail consulting firm Kurt Salmon Associates.

The first Pizza Patrón was opened in Dallas in 1986 by Antonio Swad, an Ohio-born man of Italian and Lebanese descent. Although Mr. Swad didn't set out to target Hispanics, most of his customers were and they placed orders in Spanish, Mr. Gamm says.

Mr. Swad, still the company's chief executive, viewed marketing to Spanish speakers as an opportunity to differentiate the brand. So the chain added items like churros, which are fried dough desserts; lime-and-pepper-flavored chicken wings; and cheese sticks dubbed "QuesoStix." Sometimes the restaurants also offer limited-time Mexican offerings like caramel candies made with goat milk and pecans.

As the Hispanic population grew, so did Pizza Patrón's popularity. In 2007, the chain drew international attention—and attracted more business—when it began accepting Mexican pesos as payment.

Typically, Pizza Patrón opened pizzerias in neighborhoods in which at least half the population was Hispanic. Most of the company's growth came in the Southwestern U.S. and large cities where Hispanics congregated, and nearly all of its ads were on Spanish-language media outlets.

The company began reconsidering its strategy after executives saw a video produced as part of a presentation to prospective franchisees. The video, shot during a random store visit one Friday afternoon about two years ago, showed groups of young Hispanic customers placing orders in English, as well as African-American and white customers.

"It was eye-opening," Mr. Gamm says. The company then conducted focus groups and surveys that confirmed its Hispanic customer base was indeed becoming younger and more bicultural.

Pizza Patrón next year plans to completely flip-flop its marketing mix by allocating 70% of its ad budget to English-language television and radio stations and 30% to Spanish-language media outlets.

Television ads will show groups of young people buying pizza, to appeal to 18- to 24-year-olds.

The company now is opening restaurants in areas with as little as 30% Hispanic residents, and expanding into other areas where Hispanics have moved, such as Michigan, Oregon and North Carolina, and in smaller cities within new and existing markets. The company plans to open about 20 restaurants in 2011 and another 40 in 2012.

Instead of menu boards and promotional materials being mostly in Spanish, English will now be the dominant language. For instance, in the past, pre-made pizza that didn't have to be ordered ahead of time was branded as "lista," meaning "ready now." Now, the chain will include both the Spanish word and the English translation.

To keep traditional customers from straying, Pizza Patrón plans to add more Latin-themed specialty pizzas and to post in-store graphics honoring holidays many Hispanics celebrate, such as Dia de los Reyes Magos, or Day of the Three Kings, coming up in January.

Pizza Patrón also is using phrases like "bueno, bonito y barato," which literally means "good, pretty and cheap" while conveying a deeper meaning about the value of a product.

"By themselves those words mean just what they say, but combined, it's a phrase that only our Hispanic customers would get," Mr. Gamm says. "It's a way we wink at them and say, 'We get you."'

COMMENTARY:    What a great idea.  Latino inspired pizza's.  I like the Jalepeno and Chorizo pizzas.  

Pizza Patron is taking its newfound popularity among younger Hispanics very seriously by also expanding into licensing its brand of frozen pizza's.

Pizza Patron has store locations in California, Nevada, Arizona, Colorado, Texas, Georgia and Florida and expects to expand nationally.  

Pizza Patron has adopted both quick service pizza and carry-out restaurant models designed to keep the costs associated with building and operating a Pizza Patrón to a minimum which in turn allows them to offer customers the best value proposition in the industry.

A typical Pizza Patron carry-out restaurant is positioned in community-based shopping center locations that ideally have strong anchor tenants to complement their national brand. Pizza Patrón searches for highly visible and easily accessible urban, suburban, and small town locations.

Storefronts should be no more than 75 feet from the primary traffic corridor with an unobstructed line of site to their storefront and signage.  Their preference is to have 20 feet of storefront with a minimum of 15 feet and a maximum of 25 feet. The ideal footprint is 1200 sq. ft. but can adapt the model to spaces as small as 850 sq. ft. and as high as 2000 sq. ft.

They require 10 to 15 dedicated parking spaces for our customers with adequate lighting. There must be a minimum of two ingress/egress points to primary traffic flow.

Pizza Patrón’s goal is to be located on primary traffic corridors that have high visibility and high daily traffic densities with easy and convenient accessibility for our guests.

 

Pizza Patron's goal is to find great restaurant franchisee's who share their passion to become an active part of the community they serve. Prior restaurant management experience is not required for single unit operators. Multi-unit developers must have the capability to establish a professional management team committed to the day-to-day operations of their restaurants. Equity participation by your management team is encouraged.

• Operating partner must live in the market where their store is located.
• Minimum net worth of $150,000 and available investment equity of $60,000 per location to be developed.
• Multi-unit developers must live in, or operate existing businesses in the desired market.
• Multi-unit developers must have multi-unit restaurant operational or development experience.
• Multi-unit developers agree to commitment of 3-20 units
• Personal experience and people skills are also carefully weighed.
• All developers must possess knowledge of real estate and trade areas in desired development territory
• All developers must have passion, drive and enthusiasm for the restaurant industry.

The investment is among the lowest in the industry, and it is matched with an opportunity that is truly amazing if you are willing to work hard.

CARRYOUT STORE

	Actual Or Estimated High	Actual Or Estimated Low
Initial Fees: Development Fee Franchise Fee	$7,500 $12,500	$7,500 $7,500
Security Deposits	$4,500	$1,500
Architectural/ Engineering Fees	$4,000	$2,500
Leasehold Improvements	$120,000	$89,000
Furniture, Fixtures, Equipment and Smallwares	$74,000	$63,000
Signs	$12,000	$6,000
Travel, Lodging and Meals for Initial Training	$3,500	$2,500
Operating Permits	$1,500	$500
Opening Inventory	$7,000	$4,000
Opening Publicity and Promotions	$7,000	$5,000
Additional Funds – 3 months	$20,000	$10,000
TOTALS (excluding real estate purchase and lease costs)	$273,000	$199,000

QSP™ FREESTANDING STORE

	Actual Or Estimated High	Actual Or Estimated Low
Initial Fees: Development Fee Franchise Fee	$7,500 $12,500	$7,500 $7,500
Security Deposits	$4,000	$1,500
Architectural/ Engineering Fees	$6,000	$4,000
Leasehold Improvements	$279,000	$200,000
Furniture, Fixtures, Equipment and Smallwares	$74,000	$63,000
Signs	$35,000	$15,000
Travel, Lodging and Meals for Initial Training	$3,500	$2,500
Operating Permits	$1,500	$500
Opening Inventory	$7,000	$4,000
Opening Publicity and Promotions	$7,000	$5,000
Additional Funds – 3 months	$20,000	$10,000
TOTALS (excluding real estate purchase and lease costs)	$457,000	$320,000

 

The U.S. Hispanic market is the fastest growing consumer segment, and Pizza Patron is ideally positioned to take advantage of that growth. 

Courtesy of an article dated December 29, 2010 appearing in The Wall Street Journal's Franchising

Comments

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