Companies Need to Make Sure Everyone, from the CEO on Down, Recognizes the Impact of Their Words

In a highly publicized conference call, first reported by Forbes, Papa John’s founder John Schnatter used the “N-word” during a discussion between Papa John’s executives and marketing agency Laundry Service. What followed was weeks of turmoil where Schnatter first stepped down as chairman of the Papa John’s board of directors, then said his decision to step down was a mistake, and then filed a lawsuit against the company he founded for what he describes as the “heavy-handed” way he was treated. The company’s stock has taken a hit as a result of all the negative publicity (although it did briefly rebound after Schnatter announced his resignation).

Unfortunately for rival pizza company Pizza Hut, the damage done to Papa John’s reputation hasn’t helped its own fortunes. As Paul R. La Monica writes for CNN Money, “Yum Brands [which also owns KFC and Taco Bell] said in its earnings report Thursday that a key measure of Pizza Hut’s sales fell last quarter.”

The struggles of Pizza Hut, even in the face of Papa John’s struggles, are an example of how the poor performance of a rival doesn’t necessarily translate into success, especially when there are other players in the market having great success. In this case, that other player is Domino’s. “The biggest problem for Pizza Hut — and Papa John’s for that matter – is that Domino’s (DPZ) commands the fast pizza market,” writes La Monica. “It’s been on an epic tear lately and posted strong gains in sales and its stock price for the past few years.”

La Monica points out that Domino’s has been adept at courting younger customers through useful technological improvements. For example, customers can order by sending a pizza emoji on Twitter or using Facebook Messenger.

Key lesson for marketers in any industry: In a market dominated by a handful of competitors, the loss in market share of one player doesn’t translate into a proportionate increase for all of the other players. As the Pizza Hut example shows, even when competitors are losing business, other companies still need to have a desirable offering to capture some of that business.

What opportunities might emerge if your number one competitor suddenly lost its footing in the market? Are you poised to leverage those opportunities?


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Strategic Communications, LLC, works with B2B clients to help them achieve their goals through effective content marketing and management with both internal and external audiences. We are adept at evaluating and analyzing communication efforts and working with clients to plan, create and publish high-quality, unique content, through both on- and offline media to achieve desired results. Our background in business journalism, marketing, PR/media relations and online communications makes us well-positioned to serve the needs of 21st-century marketers.

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(Strategic Communications is certified as a Woman-Owned Business Enterprise through the Wisconsin Department of Administration.)

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