George Hansen is General Manager for the Marigold Inn in Augusta, Georgia. Sharon
Coombs is Restaurant and Food Services Manager for the Inn. She reports to George. Two
years ago, Sharon noticed a decline in room service business, the highest margin portion of
her operation. This decline coincided with an increase in the national sales of pizza delivery
and carryout firms as well as an increase in the number of empty pizza boxes from these
firms being left in guest rooms in the Inn. Her immediate response was to install a pizza
oven in the kitchen and offer room service pizza to guests. The effort met with modest
success, though it was well below her expectations. Questionnaires completed by departing
guests revealed a problem of product quality.
Focusing on this problem, Sharon improved the Inn’s pizza until blind taste tests judged it at
least equal in quality to the products of the two major pizza delivery competitors in Augusta.
Sales did not improve, convincing Sharon that the problem was a perceived mismatch
between the hotel’s image and guests’ expectations of pizza makers. Guests simply did not
seem to believe that the traditional steak and seafood restaurant at the Inn could make a
high-quality, authentic pizza. Based on this conclusion, Sharon presented the following
proposal to George:
“Sales of room service pizza are stagnant due to guests’ misperception that our product is
lower in quality than that of competitors. This misperception is based on the belief that until
we disassociate our pizza from the Marigold Inn name. Therefore, to capture more room
service pizza business, we should create a ‘Napoli Pizza’ image for our guest room delivery
service by:
• Preparing ‘Napoli Pizza’ brochures for each guest room, complete with a phone number
with a prefix different from that of Marigold Inn. The number will reach a special phone
in room service, which will be answered, Napoli Pizza, authentic Italian pizza from old,
family recipes.’
• Using special ‘Napoli Pizza’ boxes for delivering room service pizza to guests.
• Issuing ‘Napoli Pizza’ hats and jackets to room service personnel for use in pizza
delivery. Room service waiters and waitresses will wear these garments to deliver pizza.
They will change to their regular uniforms for other deliveries.”
How should George respond to this proposal?
Author: Fred L. Miller, Associate Professor of Marketing, Murray State University
Posted by Daisy Wilson
RSS Green MBA Blog
I believe that George cannot accept this proposal. Although it doesn’t appear that a shadow pizza restaurant would actually hurt anyone, such an elaborate web of misrepresentation will put the motel at risk of angering customers and possibly irreparably damaging their reputation should they be found out. It might make more sense for the motel to partner with a local pizza restaurant, putting advertising for the pizza restaurant in the motel rooms in return for a share of the sales. Another option would be to build the credibility of the motel’s room-service pizza directly with customers by offering the first personal size pizza for free, or offering free mini-pizza in the lobby bar during happy hour. Finally the motel could actually open Napoli pizza on the premises, Many hotels have restaurants within them that operate as separate entities. Having this restaurant on the premises could even offer the additional benefits as a place for members of the community to come and eat, expanding the customer base beyond the guests at the motel. A transparent approach in which they respect the customer’s right to choose rather than tricking them into ordering the motel pizza is the way to go.
Deceiving customers is never a good idea. While there may be an upside in the short term, it is hard to see how this would be a long-term solution to their decline in room service sales. I don’t see anything wrong with marketing their pizza as “Napoli Pizza, authentic Italian pizza from old, family recipes,” but misleading customers with smoke and mirrors is a bad business decision. While there are certainly some frequent clients at the hotel, for the most part a hotel’s clients are constantly changing. Simple adjustments in advertising could help target this audience. Client’s will usually be unfamiliar with the area, and will most likely look at the hotel’s list of local restaurants or food options. Mentioning their pizza department’s delicious, authentic, and speedy pizza here would be appropriate.
This is a great example of why people should not eat pizza.
Actually, this is a perfect example of why ethical behavior needs to embraced by a society that puts added importance to the long-term rather than the short term. The first to bloggers have made this point, in different ways.
Let’s say that George goes along with the plan. How does he keep this little secret with the rapid turn over in the hotel staffing industry? At what point will this become public knowledge? Will the extra short term profitability ever justify this ‘innocent deception?” Why not think of other ways to accom-plish the same?
The hotel should sponsor a pizza eating contest, similar to the hotdog eating contest that is now covered live on national television. They can serve their own pizza. This will allow them to positively advertise their pizza honestly.
Has anyone read Anthony Bourdain’s ‘Kitchen Confidential’ or ‘The Nasty Bits’? Not that we have much time for leisure reading at the moment, but I would recommend them as a means of gaining insight to the restaurant and food service industries, where ethics are either ardently enforced or completely disregarded in lieu of moving the product and creating customer satisfaction (and generating a lot of money).
The Pizza Puzzle only scratches the surface of the deception that exists within the industry. Serving food that has been stored in abominably unsanitary conditions, or is old to the point of spoilage but can be covered up with a nice puttanesca are only a few examples of questionable ethics within the business. The book ‘Waiter Rant’ is also a good read and will convince you that you should never, ever, EVER be rude to your waitstaff or risk a variety of violations to your dish, spit not the least of which you should be concerned with.
Happy eating! –Daisy Wilson
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