You are on page 1of 46

Famoso Neapolitan Pizzeria: A Case of Restaurant Marketing1

Marketing decision making is a collaborative process in Famoso Inc., comprising the marketing
department and Famoso partners Jason Allard, COO; Justin Lussier, CEO; and Christian Bullock,
Chief Business Development Officer. The commercial name of Famoso Inc. is Famoso
Neapolitan Pizzeria or simply Famoso Pizzeria or Famoso. The headquarters of the company
used to be located in Edmonton, Alberta, but is now located in Richmond, British Columbia. The
company currently has several plans and challenges. It plans to continue to expand in Canada,
particularly in Ontario and British Columbia. Management is also currently investigating the
market potential for Famoso in the United States, and in 2015 management plans to start
considering which other countries could provide opportunities for the Famoso business model.
One of the companys current challenges is the increase of year-over-year labour cost. From a
marketing perspective, how can Famoso and its leadership seize those opportunities and
minimize those challenges?
Figure 1: http://www.famoso.ca/

1 Dr. Fernando Angulo-Ruiz (AnguloruizL@macewan.ca), assistant professor at MacEwan University, wrote this
case solely to provide material for class discussion. The author does not intend to illustrate either effective or
ineffective handling of a managerial situation. The author may have disguised certain names and other identifying
information to protect confidentiality. The author thanks Jason Allard, COO of Famoso Inc., for providing critical
information to develop the case, as well as Ray Ho, Marketing & Communications Manager of Famoso Inc. for
providing very insightful comments and additional information to enrich the content of this case.

Chapter 1: How Marketing Discovers and Satisfies Needs


Company Background2
In the summer of 2005 Famoso Inc.s co-owner Justin Lussier travelled throughout Italy and
Naples and fell in love with the mouth-watering fire-roasted pizzas. Naples is the birthplace of
pizza, where eating a margherita pizza is a daily ritual and where culinary traditions in pizza
making have gone unchanged for 200 years. After eating at Pizzeria Sorbillo in Naples, Lussier
looked for a payphone and called his friends and future partners, Jason Allard and Christian
Bullock. He convinced them that they needed to bring authentic Neapolitan pizza to Canada.
Training with the Association Verace Pizza Napoletana, an organization preserving the standards
of authentic Neapolitan pizza,3 Famosos owners learned about the unique ingredients and
cooking process required.
Whether you eat it on the streets of Naples, or inside Famoso Neapolitan Pizzeria, experiencing
authentic Neapolitan pizza is an unforgettable experience. The business concept is a franchised
fast-casual pizzeria that offers authentic Neapolitan pizzas, fresh salads, espresso, and
gelato/desserts in a counter-ordering format with added service. The stores provide atmosphere
and style allowing for a comfortable meal whether its a quick lunch or a wine-filled evening.4
The Famoso pizza is made of 00 Caputo flour, Campania tomatoes imported from Italy, and
other fresh ingredients. These ingredients help form a beautiful pizza that is cooked in authentic
bell ovens. This is the same way that Italians have been doing it for centuries.5 The 00 in the
flour refers to highly refined, low-gluten flour that produces both a soft and a crispy crust, and
because of the low levels of high quality gluten, it allows the consumer to easily digest the pizza
and feel great. Famoso pizzaiolos stretch every pizza dough by hand; no rolling pins or machines
are allowed because an authentic Neapolitan pizza is about not only the ingredients but also the
methods used. Tomatoes from the Campania region of Southern Italy contain lower acidity and a
natural sweetness that helps them caramelize in the intense heat of the fire oven. Famoso uses
fior di latte (fresh, whole milk mozzarella), the larger version of bocconcini on all its pizzas. This
cheese was invented in Naples and has a rich creamy texture. Famoso also uses fresh basil
leaves. Famoso imports bell-shaped fire ovens from Italy that cook the pizza at 900 F in 90
seconds.6
Questions
2 Excerpts from Famoso.ca (2014). Inspiration, May 28, 2014: http://www.famoso.ca/inspiration.php
3 For a history of Neapolitan Pizza and Pizza in Naples, see http://www.famoso.ca/history.php
4 Excerpts from Famoso.ca (2014). Authenticity, May 28, 2014: http://www.famoso.ca/authenticity.php
5 For a history of Neapolitan Pizza and Pizza in Naples, see http://www.famoso.ca/history.php
6 Excerpts from Famoso.ca (2014). Authenticity, May 28, 2014: http://www.famoso.ca/authenticity.php

1.
2.
3.
4.

What are the needs and wants of Famosos consumers?


How does Famoso satisfy consumer needs?
Which are some of the uncontrollable forces that impact Famosos marketing program?
What business orientation does Famoso potentially follow?

Chapter 2: Famosos Marketing Strategy


Famoso Neapolitan Pizzeria was founded on the passion for authentic, fire-roasted pizzas from
Naples, Italy. Whether you eat it on the streets of Naples, or inside Famoso Neapolitan Pizzeria,
experiencing authentic Neapolitan pizza is an unforgettable experience. The business concept is a
franchised fast casual pizzeria that offers authentic Neapolitan pizzas, fresh salads, espresso, and
gelato/desserts in a counter-ordering format with added service. The stores provide atmosphere
and style, allowing for a comfortable meal whether its a quick lunch or a wine-filled evening.7
The competitive advantage of Famoso is the following: its pizza-making process adheres,
passionately, to the strict standards of the Associazone Verace Pizza Napoletana. Famoso imports
flour and tomatoes directly from Naples, and every pizza is topped with fior di latte (fresh whole
milk mozzarella). Famoso imports bell-shaped fire ovens from Italy that cook the pizza at 900F
in 90 seconds. After being cooked in the fire oven for 90 seconds, the final thin-crust pizza
cannot be compared to any pizza available on the market today. The pizza is light, both soft and
crispy, and because of the low levels of gluten in the flour, allows consumers to easily digest the
meal and feel great.8
Famosos marketing strategy focuses on guest experience in the restaurant, or what the company
calls four-walls marketing. It emphasizes marketing inside the restaurant, as the hour-and-ahalf to two-hour consumer experience in the restaurant is critical to the success of Famoso. It is a
company priority to provide an excellent guest experience when it comes to food quality,
excellent service, and a memorable atmosphere. The ultimate goal is that the guest leaves happy,
something that seems easier said than done. Some of the key marketing metrics Famoso uses to
measure effectiveness are word-of-mouth, willingness to recommend, and return on investment
(ROI).
To date, Famoso Neapolitan Pizzeria has been ranked as one of Canadas fastest-growing
companies, by the PROFIT 500 guide.9 Famoso experienced a revenue growth in 2012 of 323
percent, with approximate 2012 revenues of $2 to $5 million. The company had 456 employees
in 2012. Famosos owners have taken the Famoso franchise across Canada; there are currently 25
franchises, in Alberta, British Columbia, and Ontario. Famoso has plans to open restaurants in
the United States by 2015.10 Because of its results, Famoso received media attention from the
Canadian Broadcasting Corporation (CBC) in March 2014. Also, Famosos pizzas have been
ranked the best pizza in Edmonton by Avenue magazine11; one of the most popular new
7 Excerpts Famoso.ca (2014). Authenticity, May 28, 2014: http://www.famoso.ca/authenticity.php
8 Excerpts from Famoso.ca (2014). Atmosphere, May 28, 2014: http://www.famoso.ca/atmosphere.php
9 For more information, see http://www.profitguide.com/microsite/profit500/2013
10 See CBC.ca story at http://www.cbc.ca/m/touch/canada/edmonton/story/1.2572793
11 See note at Avenue Edmonton http://www.avenueedmonton.com/articles/best-restaurants-best-pizza

restaurants in Toronto, Vancouver, and Edmonton by Urbanspoon 2012; and one of the five best
gourmet pizzerias in Calgary by Where Alberta 2013.

Questions
1. Where does Famoso want to go? Develop a market-product analysis.
2. What are Famosos goals or objectives?
3. Which are the special capabilities (skills, technologies and resources) that distinguish
Famoso Neapolitan Pizzeria from competitors and provide value to its customers?
4. Which tools does Famoso use to assess the success or failure of marketing programs?

Chapter 3: What Are the Opportunities and Threats for Famoso? An Environmental
Scanning
Industry and Competitive Analysis
The industry group that Famoso Inc. belongs to is North American Industry Classification 72251
full-service restaurants and limited-service eating places. Full-service restaurants (NAICS
722511) are establishments primarily engaged in providing food services to patrons who order
and are served while seated and pay after eating. These establishments may sell alcoholic
beverages, provide take-out services, operate a bar or present live entertainment, in addition to
serving food and beverages. This Canadian industry includes drinking places that primarily serve
food. Limited-service eating places (NAICS 722512) are establishments primarily engaged in
providing food services to patrons who order or select items at a counter, food bar or cafeteria
line (or order by telephone) and pay before eating. Food and drink are picked up for consumption
on the premises or for take-out, or delivered to the customers location. These establishments
may offer a variety of food items or they may offer specialty snacks or non-alcoholic
beverages.12 Famoso Neapolitan Pizzeria is a fast casual restaurant providing the quick
convenience of ordering at the counter with the relaxed comfort of added service at the table.
Famosos model of serving style is as follows: (1) the consumer finds a table [menus are on
table], (2) the consumer orders at the counter, (3) the consumer starts a tab or pays at the counter,
and (4) Famoso servers bring food and beverages to the consumers table. The consumer can
order additional beverages or dessert from the table, and s/he can pay the bill at the table.13
Euromonitor International provides some of the key trends and developments in the consumer
food service in Canada (NAICS 72251) as follows14: Modest Growth Overall as Canadians
Remain Cautious. While the Canadian economy and consumer confidence improved over
2012/13 compared with the recessionary period, the recovery pace was slower than anticipated.
The Canadian economy remained shaky as the recovery was threatened by a host of factors.
These included a downturn in the housing market and stricter mortgage rates, as well as unstable
international financial markets. Canadians will continue to balance their away-from-home dining
budgets carefully and consider where and how they spend their money. The average Canadian
household expenditure on consumer food service was $2,207 in 2011. All in all, over 20122017
sales through Canadian consumer food service are expected to see a compounded annual growth
rate (CAGR) of 1 percent in constant value ($) terms. The number of outlets is also expected to
grow only marginally as the Canadian market is already highly developed, and any growth in one
operator likely to come at the expense of another.
12 Visit Statistics Canada for more information regarding North American Industry Classification System in Canada
at http://www.statcan.gc.ca/pub/12-501-x/12-501-x2012001-eng.pdf
13 Excerpts from Famoso.ca (2014). How it works, May 28, 2014: http://www.famoso.ca/how_it_works.php
14 Excerpts from Passport (2013). Consumer food service in Canada. Euromonitor International, November.
Accessed May 28, 2014:
http://www.portal.euromonitor.com.ezproxy.macewan.ca/Portal/Pages/Magazine/IndustryPage.aspx

Targeting Millennial Crowd on the Go. While the average age of the population in Canada
continues to rise, the country saw an increase in the number of millennialsa group in the range
of 1934 years old, whose numbers increased by close to 10 percent in 20072012 period.
Coupled with the urbanization trend and a tendency to eat away from the family table and on the
go, the increased proportion of young busy urbanites encouraged many operators to focus on
meal solutions to respond to the demands of this demographic group, which is also seeking meals
and food varieties beyond unhealthy fried and typical fast food. Additionally, the strong presence
of millennials online, in every form and format, on a daily basis and for a variety of tasks, also
led to greater emphasis by food service operators on digital media as a means of reaching out to
existing and potential customers to drive traffic. Food service operators will likely continue to
focus on quick breakfast and lunch options to capture busy young urbanites. Fitting into the trend
is likely to be the expected positive trend in street food as more options will open up with
changes in the regulatory environment across major Canadian metropolitan areas. Over the
forecast period 20132017, street stalls/kiosks are expected to see a 2 percent constant value
CAGR, spurred on by new legal developments and consumer demand. Additionally, on-going
use of online tools, social media, mobile applications and interactive communications the
generation of millennials grew up with, and will continue to use going forward, will remain on
the agenda to drive customer traffic and attract the attention to new menus and outlet openings.
Staying Course Toward Healthier Menus. While far from perfect, Canadians continue to try and
look for healthier food options, in both retail and foodservice. Although some foods seen as
unhealthy, such as fries, remain a favorite, more consumers are keeping an eye on menu option
developments and recommendations found in media and online social networks to select better
meals when dining out, whether in a full-service restaurant or fast food outlet. A Harris/Decima
consumer survey released in the summer of 2012 indicated that 65 percent of respondents would
like the idea of having more information regarding fat and sodium content at all restaurants. In
addition to consumers, dieticians and media spotlighting of the issue of healthy eating, debates
continue to evolve around regulatory changes, which could see sodium reduction and other
initiatives to improve nutritional content of away-from-home meals. Thus, for instance, studies
released in the Canadian Medical Association Journal in early 2012 called once again on the
policy that would see mandatory reduction of sodium content in fast food meals. To succeed in
the changing operating conditions and changing consumer views of daily nutrition, foodservice
operators will need to ensure they address concerns through ingredient changes and menu
options that allow those Canadians who seek nutritiously improved meals to have that option.
Alongside popular meals, offering fresher and healthier meal solutions will be increasingly
important. Also, while not part of the regulatory environment, given Canadian consumers
interest in ingredients and meal content, posting information on menu content could be beneficial
(provided, of course, there are menu options that can meet standards of health-conscious
consumers). Finally, it is likely that operators offering fresh made-to-order options and
ingredients positioned as more natural and freshly made will do better in the long run compared
with more established traditional meal choices, especially in quick-service establishments.
Ethnic Foodservice Options Continue To Expand. Canadas immigrant population continues to
grow. This has become one of the key driving forces of population growth in Canada. The
principal source of immigration flow continues to emanate from the Asia-Pacific region,
although Canada continues to see a sizable proportion of new immigrants from the Middle East

and Africa and Central and South America. According to a national household survey released by
Statistics Canada, in 2011 one in five Canadian residents were born outside the country
apparently the highest level among the G8 nations. Additionally, 19 percent of the Canadian
population (or over six million people) counted themselves as member of a visible minoritya
trend further supported by immigration. Immigration statistics released by Statistics Canada for
full-year 2012 indicated that while the number of immigrants from destinations such as Europe
and the US has been flat to declining, the flow of immigration from Asia increased by 12 percent
over 20072012. The six million-strong and growing population of ethnic consumers, in an
otherwise mature marketplace, is likely to encourage players to consider the development of
specifically formulated menus. It will open up opportunities to drive sales by developing
products and marketing strategies that reflect changing the ethnic composition and meal and
ingredient preferences of the Canadian population. Current forecasts are that categories such as
Asian fast food and Asian full-service restaurants will continue to outpace the overall growth
projected for the Canadian foodservice environment. Opportunities will also exist in street food,
with immigrants familiar with the concept and established Canadians looking for more diverse
options in street food stalls (now that laws across municipalities and provinces allow the latter to
a much greater degree). In addition to Asian immigration, opportunities will also exist in
developing menus inspired by African and Middle Eastern cuisine, as well as South and Central
American.
Competitive pressures call for creativity, but not all moves are successful. In 2012 the outlet
count for foodservice in Canada saw a decline of close to 1 percent, in large part due to
significant competition in already highly developed markets and difficulties in driving additional
customer traffic. As competitive pressures mount in the conditions of a very developed market,
coupled with changing consumer attitudes and preferences, foodservice operators consider a
variety of strategies to drive customer traffic. In addition to the use of online tools, menu
developments and greater attention to healthier food options and ingredients, many have paid
closer attention to improved store ambiance as well as attempts to capture a future consumption
audience by developing pre-packaged products for retail. While some strategic moves have
worked well and helped operators to drive customer traffic, others have not been successful,
coming too late and offering too little to excite consumers. The strategies for future growth
should build on lessons learned over the review period 20072012, and this includes both
positive and negative experiences and missed targets. Operators must be well aware of what is
already available and whether they can offer something better to attract consumer attention. For
instance, while entering the retail environment with dedicated pre-packaged products has worked
for some foodservice operators, it does not mean that such a strategy will ensure success for all.
One example of a fairly unsuccessful entry includes McDonalds retail coffee, as the brand was
unable to offer anything of interest to Canadian coffee drinkers, who have a vast choice across all
price segments. Also, while ambiance and experience have become increasingly important for
consumers, it does not mean that all moves to create that special ambiance and experience are
fitting. For instance, in 2013 iconic Quebec coffee marketer Van Houtte (now owned by Green
Mountain Coffee Roasters) introduced an idea of Quartier du Caf (Coffee District) to be built
potentially in the St-Michele area of Montreal. Coffee aficionados, city workers, students and
tourists fuelling the diverse food and coffee landscape of downtown Montreal are unlikely to find
appealing the idea of going to St-Michele to visit Quartier du Caf, especially if the Quartier
consists mostly of a Van Houtte bistro (of which there are plenty in the downtown area) and a

museum dedicated to Albert Van Houtte (founder of the famed Quebec coffee house). Selling the
coffee experience does help support coffee growth. However, such experiences do not have
universal appeal, and location and potential customer makeup have to be considered for such a
concept to be a viable business strategy for growth.
Tables 1, 2 and 3, below, provide statistical information about the size of the industry in Canada.
Table 1 shows distribution of outlets in Canada according to the type of ownership. There were
approximately 3,062 and 3,425 independent and chained pizza outlets in 2012 in Canada. The
number of full-service pizza restaurants was 2,520 stores in 2012; of those, approximately 806
outlets were chained full-service pizza restaurants and about 1,714 independent full-service pizza
restaurants. In 2012, total sales of full-service pizza restaurants was C$2,511.3 million; of that,
C$1,464.5 million was sales from chained pizza restaurants and C$1,046.8 million from
independent owned stores. Additionally, there were a total of 1,545 stores of fast food pizza
restaurants in 2012; of those, 526 were chain-owned stores and 1,019 independently owned
stores. Total sales of fast food pizza restaurants was C$965.1 million; of that, C$359.1 million
was sales of chained fast food pizza restaurants and C$606 million of independent stores.
Table 1. Number of Stores in 2012 by Ownership of Restaurants: Independent vs. Chained
Outlet

Independent

Chained

Total Number of
Stores

Total Sales (C$ Mill)

100% Home Delivery/Takeaway


921
2,356
3,277
2066.1
(NAICS 722512)
Cafes/Bars (NAICS 722410 &
5,766
2,848
8,614
4,868.4
722512)
Full-Service Restaurants
19,429
4,894
24,323
21,282.6
(NAICS 722511)
Fast Food (NAICS 722512)
11,846
22,380
34,226
21,701.0
Self-Service Cafeterias (NAICS
259
442
701
589.1
722512)
Street Stalls/Kiosks (NAICS
2,762
501
3,263
490.4
722330)
Total Consumer Food Service
40,983
33,421
74,404
50,997.6
Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade
interviews, trade sources

Table 2. Number and Total Sales of Full-Service Restaurants in 2012 by Ownership and
Casual vs. Non-Casual
Outlet
Total Number of Stores
Total Sales (C$ Mill)
Casual Dining Full-Service
15,628
13,973.1
Independent
12,496
8,274.0
Chained
3,132
5,699.1
Non-Casual Dining Full Service
8,695
7,309.5
Independent
6,933
4,287.6
Chained
1,762
3,022.0
Total
24,323
21,282.6
Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade
interviews, trade sources

Table 3. Total Sales and Stores Growth of Fast Food Restaurants in 2012
Outlet

Total Sales (C$ Mill)

20072012 CAGR
Number of Stores

20072012 Total Growth


Number of Stores
Fast Casual Dining
366.9
3.1
16.7
Non-Casual Dining
21,334.1
0.1
0.7
Total
21,701.0
0.1
0.4
Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade
interviews, trade sources

Table 4. Brand Share in Chained Restaurants as a % of Total Consumer Food Service (C$)
Brand
Tim Hortons
McDonalds
Subway
Boston Pizza
A&W
Starbucks
Swiss Chalet
KFC
Wendys
St Hubert
Pizza Hut
Dairy Queen
International
Pizza Pizza
Burger King
Quiznos
Dominos Pizza
Montanas
Little Caesars Pizza
East Side Marios
Milestones
Second Cup
Kelseys
Harveys
Pizza Hut Express
Panago
Taco Bell
Keg, The
Mandarin
Couche-Tard
Alimentation
White Spot
Wendys

Corporation
Tim Hortons Inc.
McDonalds Corp.
Doctors Associates Inc.
Boston Pizza
International Inc.
A&W Food Services of
Canada Inc.
Starbucks Corp.
Cara Operations Ltd.
Yum! Brands Inc.
Wendys Co, The
St Hubert BBQ Ltd.
Yum! Brands Inc.
Dairy Queen Inc.

Share in 2010 (%)


17.7
11.2
4.5
3.0

Share in 2011 (%)


18.2
11.0
4.6
3.0

Share in 2012 (%)


18.4
10.9
3.7
3.0

2.9

2.8

2.8

2.2
2.1
2.4
1.6
1.4
1.3

2.3
2.1
2.0
1.8
1.8
1.5
1.2

2.6
2.1
2.0
1.8
1.8
1.4
1.2

Pizza Pizza Ltd.


Burger King Holdings
Inc.
Quiznos Corp.
Dominos Pizza Inc.
Cara Operations Ltd.
Ilitch Holdings Inc.
Prime Restaurants Group
Inc.
Cara Operations Ltd.
Dinecorp Hospitality Inc.
Cara Operations Ltd.
Cara Operations Ltd.
Yum! Brands Inc.
Panago Pizza Inc.
Yum! Brands Inc.
Keg Restaurants Ltd.
Mandarin Restaurant
Franchise Corp.
Couche Tard Inc.

1.1
0.9

1.1
1.0

1.1
1.0

1.0
0.7
0.7
0.7
0.8

1.0
0.8
0.8
0.7
0.7

0.9
0.8
0.8
0.7
0.7

0.5
0.7
0.7
0.7
0.6
0.5
0.6
0.5
0.5

0.5
0.7
0.7
0.6
0.6
0.5
0.5
0.5
0.5

0.7
0.6
0.6
0.6
0.6
0.5
0.5
0.5
0.5

0.5

0.5

0.5

White Spot Ltd.


Wendys/Arbys Group.

0.5
1.8

0.4
-

0.5
-

Others
35.8
35.6
35.9
Total
100.0
100.0
100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade
interviews, trade sources

Questions
1. To what NAICS does Famoso belong: full-service or limited-service restaurants?
2. Classify key trends and developments provided above in terms of environmental forces:
whether they belong to social, economic, technological, competitive, or regulatory forces.
3. How can key trends and developments affect current and future Famoso marketing strategy?
4. How can the current issues on the temporary foreign worker program affect Famoso?
5. What is the ratio of Famosos total number of stores out of the total number of stores in the
chained casual dining full-service restaurants?

Chapter 4: The Purchase Decision Process of Famosos Consumers


The consumer food service industry in Canada is a $51 billion industry.15 It comprises home
delivery/takeaway, cafes and bars, full-service restaurants, fast food, self-service cafeterias, and
street stalls/kiosks. Full-service and fast food restaurants represent approximately 85 percent of
the industry. Tables 1 and 2 below show the most preferred restaurant brands by consumers in
Canada. For instance, Table 1 indicates that the four most preferred brands of chained fullservice restaurants are Boston Pizza, Swiss Chalet, St. Hubert, and Pizza Hut. Table 2 reveals
that the most preferred brands in the chained fast food category are Tim Hortons, McDonalds,
Subway, and A&W.
As reported by Euromonitor International,16 while the return of consumer confidence over the
last two years rekindled the Canadian culture of eating out, the slower-than-expected pace of
economic recovery kept consumer budgets under tight control and did not allow for extensive
growth in the category. As Canadian consumers remain careful in the choice of less expensive
full-service restaurants, ethnic restaurants (particularly Asian and Middle Eastern) played well
into this slow-growing economic environment with restricted spending, by offering a choice of
moderately priced, good quality meals in an accessible restaurant setting. Second, preference for
ethnic restaurants in Canada is informed by demographic trends and the cultural preferences of
the population. The latest national household survey by Statistics Canada indicated that in 2011
one in five Canadian residents was foreign-bornreportedly the highest level in the G7
countries. This already sizable and still increasing proportion of the ethnic population, with key
source countries in Asia-Pacific, has been identified as a trend to watch in both the food service
industry and grocery retailing.
Ethnic restaurants exhibit the highest growth rates in the restaurant environment. North
American restaurants fall behind ethnic restaurants in growth rates, but still constitute the highest
value share in the full-service restaurant environment in Canada. Their main appeal is providing
a comfortable social environment where people can relax and entertain, featuring comfortable
seating, televised sports events, or longer opening hours. Evidently both a good price-to-quality
balance and distinctive food choices were necessary for success in the restaurant environment in
2012. Chained pizza establishments were doing better at least on the first criterion, price-toquality balance, while also providing more sit-in options and better ambiance.17
15 Excerpts from Passport (2013). Consumer food service in Canada. Euromonitor International, November.
Accessed May 28, 2014.
http://www.portal.euromonitor.com.ezproxy.macewan.ca/Portal/Pages/Magazine/IndustryPage.aspx
16 Excerpts from Passport (2013). Full service restaurants in Canada. Euromonitor International, November.
Accessed May 28, 2014.
http://www.portal.euromonitor.com.ezproxy.macewan.ca/Portal/Pages/Magazine/IndustryPage.aspx
17 Excerpts from Passport (2013). Full service restaurants in Canada. Euromonitor International, November.
Accessed May 28, 2014.
http://www.portal.euromonitor.com.ezproxy.macewan.ca/Portal/Pages/Magazine/IndustryPage.aspx

The slow economic recovery did not automatically lead to higher demand for fast food, as
reported by Euromonitor International. Canadians became more watchful of health choices and,
minding their budgets, increased consumption of only certain types of fast foods, such as ethnic
cuisine, pizza, and bakery products. At the same time they slowly returned to the more
conventional casual dining, such as cafs, bars, and casual restaurants, proposing a wider variety
of menus and featuring better ambiance. Pizza fast food faces strong competition from 100
percent delivery/takeaway, as well as from frozen pizza products at retail locations. The
segments strategy for growth included promoting cost-effective meal deals and extending the
menu items for budget-conscious consumers.18
Questions
1. What is the purchase decision process of Famosos consumers? Jeff
2. What are the evaluative criteria and the potential considerations of consumers in the fast food
and full-service restaurant industry? Hassan
3. What is the level of Famosos consumer involvement in the purchase process? Nandani
4. What are the psychological factors that influence (or may influence) Famosos consumer
purchase decision process? Jihye
5. What are the situational and sociocultural factors that influence (or may influence) Famosos
consumer purchase decision process? Sami

18 Excerpts from Passport (2013). Fast food in Canada. Euromonitor International, November. Accessed May 28,
2014. http://www.portal.euromonitor.com.ezproxy.macewan.ca/Portal/Pages/Magazine/IndustryPage.aspx

Table 1. Brand Share in Chained Full Service Restaurants in Canada


Brand
Boston Pizza
Swiss Chalet
St Hubert
Pizza Hut
Montanas
East Side Marios
Milestones
Kelseys
Keg, The
Mandarin
White Spot
La Cage Aux Sports
Jack Astors
Baton Rouge
Red Lobster
Scores Pizza
Smittys
Mikes Restaurant
Joeys Only
Rickys All Day Grill
Dennys
Pizza Delight
Restaurant
Applebees
Neighborhood Grill &
Bar
Caseys Grill

Corporation
Boston Pizza International
Inc.
Cara Operations Ltd.
St Hubert BBQ Ltd.
Yum! Brands Inc.
Cara Operations Ltd.
Prime Restaurants Group
Inc.
Cara Operations Ltd.
Cara Operations Ltd
Keg Restaurants Ltd.
Mandarin Restaurant
Franchise Corp.
White Spot Ltd.
Sportscene Restaurants Inc.
SIR Corp.
Imvescor Restaurant Group
Inc.
Darden Restaurants Inc.
Delight Corp Ltd.
Smittys Canada Ltd.
Imvescor Group Inc .
Joeys Only Franchising
Ltd.
Rickys Family Restaurants
Ltd.
Dennys Corp.
Imvescor Group Inc.

Share in 2010 (%)


10.4

Share in 2011 (%)


10.3

Share in 2012 (%)


10.4

7.2
5.7
4.9
2.6
2.6

7.1
6.1
5.0
2.6
2.6

7.5
6.3
4.9
2.7
2.4

1.7
2.5
1.9
1.7

1.8
2.3
1.8
1.7

2.4
2.1
1.8
1.7

1.6
1.5
1.3
1.7

1.6
1.6
1.3
1.7

1.6
1.6
1.5
1.5

1.8
1.5
1.4
1.0
1.3

1.3
1.4
1.7
1.1
1.3

1.4
1.4
1.2
1.1
1.1

0.9

0.9

1.0

0.8
0.9

0.9
0.8

0.9
0.8

DineEquity Inc.

0.6

0.6

0.6

Prime Restaurants Group


Inc.
Humptys Restaurants
International Inc.
Stonewater Group

0.8

0.7

0.6

Humptys Family
0.7
0.6
0.6
Restaurants
Mr Mikes Steakhouse
0.3
0.3
0.3
& Bar
Olive Garden
Darden Restaurants Inc.
0.6
0.3
0.3
Chicken Chef
Chicken Chef Inc.
0.3
0.3
0.2
Mr Greek
Mr Greek Restaurants Inc.
0.3
0.2
0.2
Nickels Grill & Bar
Resto Pro Inc.
0.2
0.2
0.2
Others
38.9
39.8
39.7
Total
100.0
100.0
100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade
interviews, trade sources

Table 2. Brand Share in Chained Fast Food Restaurants in Canada


Brand
Tim Hortons
McDonalds
Subway
A&W

Corporation
Share in 2010 (%) Share in 2011 (%) Share in 2012 (%)
Tim Hortons Inc.
29.9
30.8
31.3
McDonalds Corp.
19.0
18.5
18.5
Doctors Associates Inc.
7.6
7.7
6.3
A&W Food Services of
4.9
4.8
4.7
Canada Inc.
KFC
Yum! Brands Inc.
4.0
3.5
3.4
Wendys
Wendys Co, The
3.1
3.1
Dairy Queen International
Dairy Queen Inc.
2.1
2.1
2.0
Burger King
Burger King Holdings Inc.
1.6
1.7
1.7
Pizza Pizza
Pizza Pizza Ltd.
1.6
1.6
1.6
Quiznos
Quiznos Corp.
1.6
1.7
1.6
Harveys
Cara Operations Ltd.
1.1
1.0
1.0
Taco Bell
Yum! Brands Inc.
0.9
0.9
0.9
Couche-Tard Alimentation Couche Tard Inc.
0.8
0.8
0.8
Petro-Canada
PetroCanada Inc.
0.7
0.7
0.7
Country Style
MTY Food Group Inc.
0.5
0.6
0.7
7-Eleven
Seven & I Holdings Co Ltd. 0.7
0.7
0.7
Mr Sub
MTY Food Group Inc.
0.6
Triple Os
White Spot Ltd.
0.4
0.6
0.5
Macs Alimentation
Couche- Tard Inc.
0.5
0.5
0.5
Coffee Time
Chairmans Brand Corp.
0.5
0.6
0.5
Arbys
Arbys Restaurant Group
0.4
0.4
Inc. (ARG)
Esso
Exxon Mobil Corp.
0.4
0.4
0.4
Thai Express
MTY Food Group Inc.
0.2
0.3
0.4
Sushi Shop
MTY Food Group Inc.
0.3
0.3
0.3
Edo Japan
Edo Japan Inc.
0.3
0.3
0.3
Made in Japan Teriyaki
Made In Japan Japanese
0.2
0.2
0.3
Experience
Restaurants Ltd.
Taco Time
Kahala Corp.
0.3
0.3
0.3
Mary Browns Chicken
Famous Mary Browns Inc.
0.3
0.3
0.3
Husky/Mohawk
Husky Energy Inc.
0.3
0.3
0.3
Baskin-Robbins
Dunkin Brands Group Inc.
0.3
0.3
0.2
Mr Sub
Mr Submarine Ltd.
0.6
0.6
Wendys
Wendys/Arbys Group
3.1
Arbys
Wendys/Arbys Group
0.4
Others
14.6
14.4
15.7
Total
100.0
100.0
100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade
interviews, trade sources

Chapter 5: How Can Famoso Seize the Opportunity of Targeting Corporate Buyers?
Famoso Neapolitan Pizzeria was founded on the passion for authentic, fire-roasted pizzas from
Naples, Italy. Whether you eat it on the streets of Naples, or inside Famoso Neapolitan Pizzeria,
experiencing authentic Neapolitan pizza is an unforgettable experience. The business concept is a
franchised fast casual pizzeria that offers authentic Neapolitan pizzas, fresh salads, espresso, and
gelato/desserts in a counter-ordering format with added service. The stores provide atmosphere
and style, allowing for a comfortable meal whether its a quick lunch or a wine-filled evening.19
In general, Famoso Inc. mainly competes in the business-to-consumer market rather than in the
organizational market. The franchising business model allows Famoso to target other
organizations to be franchisees. The question is whether Famoso can target corporations or other
organizations as potential customers.
Perhaps in an effort to target corporations, Famoso currently offers Feast Packages. These
packages offer a group price based on the number of people in a group visiting a Famoso
Neapolitan Pizzeria. For instance, the price for a 10-to-12 people package is $147. The group can
choose 4 items from appetizers and salads and 7 pizzas. Desserts and add-ons are available. The
price for a 13-to-16 people package is $202; diners choose 5 items from appetizers and salads,
and 10 pizzas. The price for a 17-to-20 people package is $265; the group can choose 8 items
from appetizers and salads, and 12 pizzas.
Questions
1. What are the key characteristics of organizational buying that may directly influence
Famoso?
2. Which are the critical organizational buying criteria that may influence corporate decisions to
buy from Famoso Neapolitan Pizzerias?
3. Does the organizational buying process matter for Famoso? If so, why?

19 Excerpts from Famoso.ca (2014). Authenticity, May 28, 2014: http://www.famoso.ca/authenticity.php

Chapter 6: What Is Famosos Target Market?


Most companies segment markets because of an almost unassailable premise: People are
different, and people who are different are likely to have different needs and wants. Market
segmentation involves aggregating prospective buyers into groups that have common needs and
will respond similarly to a marketing action.20
Smart marketers segment markets so that they can respond more effectively to the specific needs
and wants of groups of potential buyers and thus increase sales and profits. Famoso Inc.
leadership is not different. They have gone through a formal process of market segmentation, and
the target market selected is defined as urban, suburban, family, young & hip, 1840-year-old,
slightly skewed to females, and medium to high annual income.
Although Famoso has a specific target market, the company suggests that their target is broader
and what matters is how welcome consumers feel when visiting a Famoso restaurant. Famoso
Neapolitan Pizzeria appeals to a wide array of customers. Couples sipping wine, families on a
night out, single customers in for a quick meal, and customers buying takeout all enjoy quality
products. Whether you eat it on the streets of Naples, or inside Famoso Neapolitan Pizzeria,
experiencing authentic Neapolitan pizza is an unforgettable experience. There are only a handful
of pizzerias in Canada providing authentic pizza according to the standards laid out by the
Associazone Verace Pizza Napoletana. Once customers taste Famosos pizza, Famoso becomes a
destination.21
Questions
1.
2.
3.
4.

What are the dimensions/ways Famoso uses to segment markets?


What other dimensions/ways can Famoso use to segment markets?
What is Famosos current positioning?
Write a positioning statement for Famoso.

20 Taken from Crane, F., Kerin, R. A., Hartley, S. W., & Rudelius, W. (2014). Marketing, 9th Can. Ed. Toronto:
McGraw-Hill Ryerson.
21 Taken from Famoso.ca Accessed May 28, 2014 http://www.famoso.ca/franchise/

Chapters 7 (with reference to Chapter 16): How Can Famoso Leverage Social Media for
Marketing Research? Is the Company Doing Enough?
Famoso Inc. needs to constantly understand the changing needs and wants of consumers in the
food service industry in Canada. In addition, the company needs to identify industry trends,
analyze potential competitors, and research potential consumers in current markets and
international markets such as the United States. The latter information will help Famoso decide
whether to enter a particular market.
Famoso considers market research critical when entering new markets. Managers know they can
use exploratory, descriptive, or causal research. Exploratory research is often conducted with the
expectation that subsequent and more conclusive research will follow; typical techniques include
searching existing literature, and holding focus groups and in-depth interviews. Descriptive
research is typically used to profile particular situations. The researcher has a general
understanding of the problem and is seeking conclusive data to determine a particular course of
action; typical methods include surveys, observations, and ethnographic studies. Causal research
is employed to identify cause-and-effect relationships among variables; lab and field experiments
are the typical methods used.22
In the past, Famoso has developed few demographics studies to guide decision making and
marketing strategy. Lately, the company has included the use of social media to gain critical
consumer insights. For instance, managers consider social media an excellent driver of great
opinions. They engage consumers on Facebook, Twitter, and Instagram. In addition, they are
implementing QR codes that consumers can scan. This link will direct them to a survey on
restaurant atmosphere, experience, and price point. Managers will then use the results of data
analysis to formulate and implement tactical communication points in Famosos marketing
strategies.
Questions
1. How can Famoso expand its use of social media to do exploratory and descriptive research?
2. From which type of studies would Famoso benefit the most?
3. Develop a short questionnaire to test how well Famoso Neapolitan Pizzeria is doing in your
city and to determine which evaluative criteria consumers are using when choosing a
pizzeria.
4. What kind of research does Famoso need to do before deciding to enter the United States?

22 Taken from Crane, F., Kerin, R. A., Hartley, S. W., & Rudelius, W. (2014). Marketing, 9th Can. Ed. Toronto:
McGraw-Hill Ryerson.

Chapter 8: Concept Test of a New Product


The responsibility of developing new products at Famoso Inc. lies at the corporate level.
However, since Famosos philosophy is to integrate franchisees and make them feel like partners,
the company motivates stores to bring new ideas to the company.
As part of the innovation strategy, every franchise owner and management team goes to Naples
for a 10-day trip (to visit a winery, taste Italian mozzarella, and experience Italian culture).
Franchisees learn to be passionate about food, which is critical for the success of Famoso.
In terms of product development, Famoso has hired a new chef who is experimenting with
flavours and dishes. Two new menus are launched in a given year. The first is launched in
April/May and focuses on spring/summer flavours, with special attention on the freshness of the
dish. The second is launched in September/October, and emphasizes fall/winter flavours, richer
items, and soups. A key aspect of developing a new product is the accessibility, and the use of
great ingredients.
In order to engage consumers in this innovation process and co-create new products, Famoso
launched the Famoso Next Top Chef. Famoso asks customers to submit recipes they would
like to see on Famosos menu. Every month Famoso looks through the recipes and sees trends
and creations that inspire the company in its new menu choices. Corporate chef Don Letendre
tests selected recipes until the final product is ready to be featured on seasonal spring/summer
and fall/winter menus.23
Questions
1. Would you classify Famoso innovations as continuous or discontinuous?
2. Generate three ideas for a new pizza at Famoso.
3. Screen and evaluate your three ideas using the external approach method and post the best
idea at Famoso.ca.
4. Assuming your idea has a business fit, and that Famoso decided to develop it, how would
you go about market testing using standard test markets?

23 More information can be found at Famoso.ca

Chapter 9: What Is Famosos Brand Personality?


Famoso Neapolitan Pizzeria claims to be a true pizzeria. Famoso presents the pizzeria as another
social dining option available to consumers and neighbourhoods. Whether consumers are looking
for a casual lunch, a wine-filled evening, or a scoop of gelato and a capuccino, Famoso pizzerias
provide the atmosphere consumers are looking for.
Famoso opened its first store in Edmonton, AB. Edmonton really does have a proud history
when it comes to launching restaurant chains. Earls/Joey restaurants trace its roots to this city.
Boston Pizza was birthed in Edmonton. Jason Allard, Justin Lussier, and Christian Bullock have
taken the Famoso vision from its initial location on Jasper Avenue to the national stage. How has
Famoso earned such a wild following since it was launched in 2007? By sticking with tradition.
The thin-crust pizzas are cooked for a short time at high temperatures. This guarantees that the
pizzas cook evenly. Famoso has BBQ chicken, pepperoni, and mushrooms for the traditionalists,
but its gourmet New World pizzas stand out. The prosciutto arugula sees the two ingredients
married on a white pizza. While the method is straight from Naples, Famoso is not afraid to cross
cultures when it comes to what goes on top. The spicy Thai pizza features peanut sauce; while
the Moo Shu BBQ duck is an ode to Chinese takeout.24
Famoso has been ranked as one of Canadas fastest growing companies by PROFIT 500 guide.25
Famoso experienced revenue growth in 2012 of 323 percent, with approximate 2012 revenues
from $2 to $5 million. The company had 456 employees in 2012. Famosos owners have taken
the Famoso franchise across Canada: There are currently 25 franchises from Alberta, British
Columbia and Ontario. Lussier has plans to open restaurants in the U.S. by 2015.26 Because of
these results, it received media attention by CBC in March 2014. Also, Famosos pizzas have
been ranked the best pizza in Edmonton by Avenue magazine27; one of the most popular new
restaurants in Toronto, Vancouver, and Edmonton by Urbanspoon 2012; and one of the five best
gourmet pizzerias in Calgary by Where Alberta 2013.
Figure 1: The Famoso Brand

24 Taken from http://www.avenueedmonton.com/articles/best-restaurants-best-pizza


25 For more information, see http://www.profitguide.com/microsite/profit500/2013
26 Read CBC.ca story at http://www.cbc.ca/m/touch/canada/edmonton/story/1.2572793
27 Read the note at Avenue Edmonton: http://www.avenueedmonton.com/articles/best-restaurants-best-pizza

Source: Famoso.ca

Questions
1.
2.
3.
4.

What is the brand personality of Famoso Neapolitan Pizzeria?


How can Famoso continue to build a stronger brand?
What branding strategy does Famoso employ?
How can Famoso apply the concept of ingredient branding?

Chapter 9: Understanding Famosos Franchise Model


Famoso Inc. franchises its concept.28 The company seek partners who value passion for fantastic
food, great service, and being profitable, and then provides support and training to franchisees.
For instance, Famoso has the ability to secure A real estate, which ensures franchisees are
positioned to succeed. The company works exclusively with commercial real estate teams to
secure top-quality sites across the country. The real estate teams know the Famoso brand well,
and know what demographics, neighbourhoods, and trade areas fit the brand. Table 1 shows the
capital requirements to open a Famoso store.
Famoso also provides training and other support programs to ensure franchisees have the tools
and knowledge to uphold the companys reputation of high quality. According to Famoso, it is
important to experience authenticity firsthand. Therefore, Famoso takes all franchisees to Naples,
Italy, for a 10-day trip to eat Napoletana pizza in 200-year-old pizzerias and to experience the
citys vibrant culture. According to Famoso, Italians are very passionate and proud of their
culinary history, and its important for North Americans to adopt this passion. Franchisees also
visit local farmers and some of Famosos suppliers. This adds to franchisees knowledge and
appreciation for the art of Neapolitan pizza. In addition, Famoso puts franchisees and
franchisees management teams (comprising three people) through five to seven weeks of oneon-one training in a Famoso pizzeria. This is followed by three weeks of on-location training and
support when the franchisee opens her pizzeria.29
As the franchisor, Famoso provides feedback to improve franchisees pizzerias. Famoso also
focuses on maintaining consistency in branding, food, and service between stores by connecting
franchisees with suppliers. Negotiated supply agreements ensure franchisees get the most
competitive pricing available in order to offer value to customers.
Each Famoso franchise contributes 2 percent of gross sales to an advertising fund used by
Famoso to develop and execute strategies to increase business. In addition to this marketing fee,
franchisees pay royalty fees of 6 percent of gross sales.30
Questions
1.
2.
3.
4.

Explain the form of ownership of Famoso.


What is the level of service at Famoso Neapolitan Pizzerias?
What is the depth and breadth of Famoso stores?
What is the positioning of Famoso in the retail matrix compared to Joeys, Earls, Cactus,
Boston Pizza, and Pizza Hut?

28 Table 1 provides information about the approximate capital requirements needed to open a Famoso store.
29 Excerpts from Famoso.ca (2014). Franchise, May 28, 2014: http://www.famoso.ca/franchise/
30 Excerpts from Famoso.ca (2014). Franchise, May 28, 2014: http://www.famoso.ca/franchise/

Table 1. Capital requirements


Breakdown for:

Lower Cost Store


($CDN)

Higher Cost Store


($CDN)

Franchisee fee

30,000

30,000

Training Fee

30,000

30,000

Opening Promotion Fee

5,000

10,000

Deposit for Lease

10,000

30,000

Tenant Improvements

350,000

500,000

Major Equipment and Fixtures

170,000

200,000

Smallware/Opening order, Commissary order

20,000

30,000

Signage

7,000

25,000

Electronics (TVs, sound system, computers


etc.)

10,000

20,000

Inventory

25,000

35,000

Insurance

3,000

5,000

Working Capital

30,000

50,000

Licenses

3,000

5,000

Additional Funds (First 3 months)

60,000

80,000

Total investment

743,000

1,040,000

Source: Famoso.ca. Franchise, May 28, 2014: http://www.famoso.ca/franchise/

Chapter 10: Guest Experiences at Famoso


Famoso Inc. was founded on the passion for authentic, fire-roasted pizzas from Naples, Italy.
Whether you eat it on the streets of Naples, or inside Famoso Neapolitan Pizzeria, experiencing
authentic Neapolitan pizza is an unforgettable experience. The business concept is a franchised
fast casual pizzeria that offers authentic Neapolitan pizzas, fresh salads, espresso, and
gelato/desserts in a counter-ordering format with added service. The stores provide atmosphere
and style, allowing for a comfortable meal whether its a quick lunch or a wine-filled evening.31
Famosos marketing strategy focuses on guest experience in the restaurant, or what the company
calls four-walls marketing. It emphasizes marketing inside the restaurant, as the hour-and-ahalf to two-hour consumer experience in the restaurant is critical to the success of Famoso. It is a
company priority to provide an excellent guest experience when it comes to food quality,
excellent service, and a memorable atmosphere. The ultimate goal is that the guest leaves happy,
an aspect that seems easier said than done. Some of the key marketing metrics Famoso uses to
measure effectiveness are word-of-mouth and willingness to recommend, and return on
investment (ROI).
Famoso pizzerias aim to provide the quick convenience of ordering at the counter, with the
relaxed comfort of added service at your table; where the service, atmosphere, and food are of
excellent quality, and every customer feels welcome.
Walking the narrow streets of Naples, Italy and setting foot in 200-year-old pizzerias to enjoy a
mouth-watering fire-roasted pizza is a unique experience. When people step into Famoso, they
are welcomed by a room that combines Old World brick and rich wood with modern colours,
lighting, and music that create a distinct ambience. With the pizzaiolos (pizza chefs) throwing
hand-stretched doughs in the air, and pulling pizzas out of our imported fire oven, we set a mood
that cannot be duplicated.32
The Famoso pizza is made of 00 Caputo flour, Campania tomatoes imported from Italy, and
other fresh ingredients. These ingredients help form a beautiful pizza that is cooked in authentic
bell ovens. This is the same way that Italians have been doing it for centuries.33 The 00 in the
flour refers to highly refined, low-gluten flour that produces both a soft and a crispy crust, and
because of the low levels of high quality gluten, it allows the consumer to easily digest the pizza
and feel great. Famoso pizzaiolos stretch every pizza dough by hand; no rolling pins or machines
are allowed because an authentic Neapolitan pizza is about not only the ingredients but also the
methods used. Tomatoes from the Campania region of Southern Italy contain lower acidity and a
natural sweetness that helps them caramelize in the intense heat of the fire oven. Famoso uses
fior di latte (fresh, whole milk mozzarella), the larger version of bocconcini on all its pizzas. This
cheese was invented in Naples and has a rich creamy texture. Famoso also uses fresh basil
31 Excerpts from Famoso.ca (2014). Authenticity, May 28, 2014: http://www.famoso.ca/authenticity.php
32 Excerpts from Famoso.ca (2014). Atmosphere, May 28, 2014.
33 For a history of Neapolitan Pizza and Pizza in Naples, see http://www.famoso.ca/history.php

leaves. Famoso imports bell-shaped fire ovens from Italy that cook the pizza at 900 F in 90
seconds.34
Unlike full-service restaurants where customers wait to order, wait for their drinks, and wait for
their bill, Famoso combines the simplicity of counter ordering with the convenience of a fullservice restaurant. The customer orders at the counter when he is ready, and the staff takes it
from there. The servers deliver food to tables, interact with customers, and clear tables as
necessary. The baristas also offer additional beverages, espresso drinks, gelato, and desserts (e.g.,
Milan Tiramisu) to complete the customers experience. High-end Italian coffee, pizza, and ice
cream under one roofthis is Famoso.
Questions
1.
2.
3.
4.

Develop a customer contact audit of the Famoso experience.


Perform a gap analysis, with a focus on the Delivery Gap.
Develop a five-question questionnaire including the five dimensions of SERVQUAL.
Which of the 4 Ps are the most critical for the success of Famosos service marketing
strategy?

34 Excerpts from Famoso.ca (2014). Authenticity, May 28, 2014: http://www.famoso.ca/authenticity.php

Chapter 11: Famosos Pricing Strategy


Among all marketing and operations factors in a business, price has a unique role. It is the place
where all other business decisions come together. The price must be right, in the sense that
customers must be able and willing to pay it; it must generate enough sales dollars to pay for the
cost of developing, producing, and marketing the product; and it must earn a profit for the
company. Even small changes in price can have big effects on both the number of units sold and
company profit.35
Famoso Inc. aims to provide a high quality-to-price ratio. The company focuses on providing to
its guests a perceived value higher than they are paying for. Famoso prices pizzas lower than its
competition; in particular, below competitors in the premium casual category that includes
restaurants such as Cactus, Joeys, or Earls. The trend in the industry suggests that quick service
restaurants tend to price dishes lower than full-service restaurants and higher than fast food
restaurants. Famoso also adapts its pricing strategy to specific markets. For instance, in Fort
McMurray, Famoso charges higher prices primarily because of higher labour costs.
Perhaps in an effort to target corporations, Famoso currently offers Feast Packages. These
packages offer a group price based on the number of people in a group visiting a Famoso
Neapolitan Pizzeria. For instance, the price for a 10-to-12 people package is $147. The group can
choose 4 items from appetizers and salads and 7 pizzas. Desserts and add-ons are available. The
price for a 13-to-16 people package is $202; diners choose 5 items from appetizers and salads,
and 10 pizzas. The price for a 17-to-20 people package is $265; the group can choose 8 items
from appetizers and salads, and 12 pizzas.
Figure 1: Pricing of some Famosos pizzas36

35 From Crane, F., Kerin, R. A., Hartley, S. W., & Rudelius, W. (2014). Marketing, 9th Can. Ed. Toronto: McGrawHill Ryerson.
36 From http://www.famoso.ca/menu/pizza.php

Questions
1. Which approach is used by Famoso to determine prices?
2. Which price special adjustments does Famoso use?
3. What are some of the pricing constraints Famoso faces?

Chapter 12: Famosos Location Strategies


Famoso Inc.s owners have taken the Famoso franchise across Canada; there are currently 25
franchises in Alberta, British Columbia, and Ontario. Lussier has plans to open restaurants in the
United States by 2015.37 In Alberta, Famoso currently operates in Grande Prairie, Jasper National
Park, Edmonton, and Calgary. In British Columbia, stores are located in Vancouver and
Vancouver Island. In Ontario, there are stores in Toronto and Waterloo. Figures 1 to 5 below
show maps of Famoso locations in Edmonton, Calgary, Toronto, Waterloo, and Vancouver.
When opening a new location, the company usually considers the feasibility of the location, the
interest level of potential franchises, and key demographics of the target market. Decisions to
choose locations in Alberta have followed those considerations.
In the last few years, decisions to locate in British Columbia and Ontario have been based on
strategic partnerships. For instance, potential partners/franchisees were moving from Edmonton
to British Columbia and Ontario for personal reasons, and were interested in opening stores in
those provinces. In British Columbia, the potential partners allowed Famoso to use their
company resources to operate, such as the marketing department and accounting staff. This
strategic opportunity motivated Famoso to open pizzerias in Vancouver and later on move its
headquarters to Surrey. A similar situation of strategic partnerships occurred when the company
decided to locate in Toronto.
The companys goal is to own at least one store in every major market it enters, to better
understand the business context of each market. As of today, Famoso has an operations team
based in every market.
Questions
1.
2.
3.
4.

Which are the current channel design considerations that Famoso employs?
Which other design considerations will Famoso need to use?
Draw a potential supply chain for Famoso.
How can Famoso align its supply chain with marketing strategy?

37 Read CBC.ca story at http://www.cbc.ca/m/touch/canada/edmonton/story/1.2572793

Figure 1: Famoso Locations in Edmonton

Source: maps.google.ca

Figure 2: Famoso Locations in Calgary

Figure 3: Famoso Locations in Toronto

Source: maps.google.ca

Source: maps.google.ca

Figure 4: Famoso Locations in Vancouver and Vancouver Island

Source: maps.google.ca

Source: maps.google.ca

Figure 5: Famoso Locations in Waterloo

Source: maps.google.ca

Chapter 14: Developing an IMC Program for Famoso


To communicate with consumers, a company can use one or more promotional alternatives:
advertising, personal selling, public relations, sales promotion, direct marketing and digital
media. Three of these elementsadvertising, sales promotion, and public relationsare often
said to use mass selling because they are used with groups of prospective buyers. In contrast,
personal selling uses customized interaction between a seller and a prospective buyer. Direct
marketing also uses messages customized for specific customers.
Famoso Inc. makes use of four of these promotional elements: direct marketing, advertising,
sales promotions and public relations. In the case of sales promotions, Famoso offers Feast
Packages. These packages are price discounts based on the number of people in a group of
consumers. There are packages for groups of 56 ($81), 79 ($107), 1012 (price of $147), 13
16 ($202), and 1720 ($265). Famoso also offers daily local specials to boost beverage sales. As
for public relations, Famoso uses sponsorship marketing of community-related projects. The goal
is to create brand identification for the company and its products with members of the local
community. Famoso also develops collateral materials to provide information to the target
market and generate good publicity. These materials include newsletters, corporate websites,
videos, and pictures about the company and its pizzas. Famoso has also benefited from media
coverage through CBC, Avenue magazine, and other magazines about the business and its
success. Famoso employs a conservative approach to advertising because it is expensive and
difficult to track results. That said, Famoso makes use of short radio campaigns and newsprints
to promote specific events and promotions at the restaurants, such as a new store opening or a
product launch. For direct marketing, Famoso has utilized direct mailers offering a free
Margherita pizza in neighbourhoods within a 10 km radius of restaurants, and social media to
promote specific specials.
The IMC strategy also includes an aligned local-store marketing plan that individual restaurants
create to engage in personal selling within the local community. Restaurant owners invite
consumers to the restaurant for VIP meals, and also organize patio parties in the restaurants to
promote local buzz.
Figure 1: Best Pizza Restaurants in Edmonton

Source: Avenue Magazine: http://www.avenueedmonton.com/articles/best-restaurants-best-pizza

Questions
1. Which channel promotional strategy does Famoso pursue: push or pull strategy?
2. Considering that Famoso started operations in 2007, which promotion objectives do they
pursue? Defend your answer.
3. Which method would you suggest Famoso use for setting the promotion budget? Why?
4. Which other promotional elements would you advise Famoso to employ?
5. Which are some of the criteria Famoso can use to select the right promotional tools?

Chapter 15: Is Advertising Valuable for Famoso?


Famoso Inc. makes use of at least two promotional elements: sales promotions and public
relations. In addition to Feast Packages, Famoso employs a variety of sales promotions. For
instance, the company has movie Tuesdays (add $6 to the price of any pizza on Tuesdays and get
a movie ticket, or add $8 any other day of the week) and vino Wednesdays (every Wednesday
enjoy $10 off any bottle and $1 off any 9 oz glass of wine all day). Wednesdays offer is $2 per
prosciutto-wrapped mozzarella ball (with a minimum of 3); Thursdays promotion is a 56 oz beer
pitcher for $15, $5 for a sleeve of beer, or $5 for a 1 oz cocktail; Fridays deal is $1 off 1 oz
single vodka Italian sodas or $2 off 2 oz double vodka Italian sodas; and on weekends prosecco
(200 ml), mimosas, trimosos, Caesars, and Affogato desserts are $1 off.38
When it comes to advertising, Famoso employs a conservative approach because advertising is
expensive and difficult to track results. That said, Famoso uses short radio campaigns and
newsprints to promote specific events and promotions at the restaurants, such as a new store
opening or a product launch. Famoso could also use direct-response or delayed response
advertising. Direct-response advertising seeks to motivate consumers to take immediate action.
Delayed-response advertising, however, presents images and/or information designed to
influence the consumer in the near future when making purchases or taking other actions.
Famoso could also use more traditional advertising such as television, radio, magazines,
newspapers, Yellow Pages, outdoor, and direct mail, and other advertising alternatives such as
Internet (classified and directory advertising, online e-mail, search engine, social media
advertising, and display ads), user-generated content, and place-based media. To select the right
media, Famoso must take into consideration maximizing exposure of the message to the target
audience based on consumer habits and product attributes while minimizing costs.39
Questions
1. In your opinion, would it be better for Famoso to invest in traditional advertising? Why or
why not?
2. In your opinion, would it be better for Famoso to invest in Internet advertising, user
generated content, or place-based media? Why or why not?
3. How can Famoso use a portfolio test to pre-test advertising?
4. How can Famoso use aided and unaided recall to post-test advertising?

38 From Famoso.ca
39 Excerpts from Crane, F., Kerin, R. A., Hartley, S. W., & Rudelius, W. (2014). Marketing, 9th Can. Ed. Toronto:
McGraw-Hill Ryerson.

Chapter 15: The Famoso Personal Selling Process


Famoso Neapolitan Pizzeria was founded on the passion for authentic, fire-roasted pizzas from
Naples, Italy. Whether you eat it on the streets of Naples, or inside Famoso Neapolitan Pizzeria,
experiencing authentic Neapolitan pizza is an unforgettable experience. The business concept is a
franchised fast casual pizzeria that offers authentic Neapolitan pizzas, fresh salads, espresso and
gelato/desserts in a counter-ordering format with added service.
Selling is a complicated activity that involves building buyerseller relationships. The personal
selling process consists of six stages: (1) prospecting, (2) pre-approach, (3) approach, (4)
presentation, (5) close, and (6) follow-up. Can any of these stages be applicable to the case of
Famoso? As we know, personal selling is more relevant in the cases of business-to-business
contexts and in some cases of business-to-consumer contexts. Famoso is mainly in a business-toconsumer context. In the case of a person who decides to eat in one of a Famoso pizzeria, the
personal selling process transitions from prospecting stage to close stage. However, arguably, the
follow-up stage of the selling process becomes relevant in the case of Famoso pizzerias. The
follow-up stage includes ensuring that the customers purchase has been properly delivered and
that any difficulties experienced in the consumption process are addressed. Attention to this stage
of the selling process solidifies the buyerseller relationship. Moreover, research shows that the
cost and effort to obtain repeat sales from a satisfied customer is roughly half that necessary to
gain a sale from a new customer. Todays satisfied customers become tomorrows referrals.40
Famoso applies personal selling in its local marketing efforts, where restaurant managers or
assistant managers are responsible for prospecting and visiting all nearby businesses,
associations, institutions, and schools to promote the brand. To close each sales call, potential
guests can be presented with a gift certificate or an invitation to a free VIP meal for about 6 to 10
people.
Questions
1. Can any of additional stages of the selling process be applicable to the case of Famoso
pizzerias?
2. Given that Famoso is a franchised business model, are the six-stages of personal selling
applicable?
3. What is important to take into consideration in the salesforce recruitment and selection
process?
4. What can Famoso learn from traditional salesforce motivation and compensation?

40 Excerpts from Crane, F., Kerin, R. A., Hartley, S. W., & Rudelius, W. (2014). Marketing, 9th Can. Ed. Toronto:
McGraw-Hill Ryerson.

Chapter 16: Famosos Experience in Using Social Media to Connect with Consumers
Famosos marketing strategy focuses on guest experience, or what the company calls four-walls
marketing. It emphasizes marketing inside the restaurant, the hour-and-a-half to two-hour
consumer experience in the restaurant is critical to the success of Famoso. It is a company
priority to provide an excellent guest experience. The ultimate goal is that the guest leaves happy,
something that seems easier said than done. Some of the key marketing metrics Famoso uses to
measure effectiveness are word-of-mouth, willingness to recommend, and return on investment
(ROI).
Famoso uses of social media for critical insight. Social media creates an opportunity to engage
consumers on a personal and fun level while providing relevant and easy to digest content.
Famoso makes extensive use of Facebook and Twitter, and has recently added Instagram to
appeal visually to consumers, not only for its products but also to evoke a sense of familiarity
with the environment and staff. Through these social media vehicles, Famoso receives lots of
interaction with consumers and the community (see Figures 1 to 3). In Facebook, they have
5,679 likes; on Twitter, they have 7,895 followers; and in Instagram, Famoso has 1,069 followers
as of June 11, 2014. The company also has approximately 10,000 Facebook followers dispersed
across their individual location-based accounts. In Google trends, the words Famoso pizzeria
have more interest in Edmonton, which can be considered a mature market, than in younger
markets in Calgary, Vancouver, and Toronto. However, the words Famoso Neapolitan pizzeria
have interest only in Toronto (see Figure 4 for more details). Metrics for social media mentions
when using words Famoso Pizzeria vary compared to Famoso Neapolitan Pizzeria (see
Figure 5 for more details).
Famoso considers social media an excellent tool to procure useful consumer opinions. The
company is implementing QR codes that consumers can scan. This link directs them to a survey
on restaurant atmosphere, experience, and price point, among other types of data. Famoso will
then use the results of the data analysis to formulate and implement successful marketing
strategies. In the case of social media interactions, Famoso encourages consumer involvement by
giving away gift certificates. For instance, on Facebook, Famoso has posted Hey Calgary, we
need your help! Suggest a name for our Stampede pizzas and you could win a $25 GC if we pick
your name!
Questions
1. In your opinion, is Famoso using social media strategically? If not, what does the company
need to do to link social media with marketing strategy?
2. Operationally, what other activities does Famoso need to do on Facebook, Twitter, and
Instagram?
3. Which other social media vehicles does Famoso need to use?
4. How can social media help Famoso build a stronger brand?
5. How do you rate Famosos use of social media compared to Boston Pizza, Cactus, or Earls?

Figure 1. Famoso on Facebook

Source: Facebook, retrieved June 11, 2014, from https://www.facebook.com/FamosoPizza

Figure 2. Famoso on Twitter

Source: Twitter, retrieved June 11, 2014, from https://twitter.com/FamosoPizzeria

Figure 3. Famoso on Instagram

Source: Instagram, retrieved June 11, 2014, from http://instagram.com/famosopizzeria

Figure 4. Google TrendsFamoso Pizzeria

Source: Google trends, retrieved June 11, 2014, from http://www.google.com/trends/explore#q=famoso%20neapolitan%20pizzeria%2C%20famoso


%20pizzeria&cmpt=q

Figure 5. Social Media MentionFamoso Pizzeria & Famoso Neapolitan Pizzeria

Source: SocialMention.com, retrieved June 11, 2014

Chapter 17: Famoso Targets U.S. Consumers


Famoso Inc. has considered entering in the U.S. market and is currently investigating the market
potential there. In 2015 the company plans to start thinking about what other country markets
could provide opportunities for the Famoso business model. Table 1, below, shows a global
picture of the pizza market in 2013.
One of the key trends in the U.S. consumer food service industry, as reported by Euromonitor
International, is the meteoric rise of Fast Casual Quick Service. Fast casual dining, with its
modern appeal and competitive pricing, witnessed rapid growth over 2008 to 2012 period, and
the momentum it built up is unlikely to dissipate in the short-term. With a constant value CAGR
of 7% over this period and a predicted constant value CAGR of 9% over the forecast period
20132017, fast casual dining may very well be the shining star of overall consumer foodservice.
In 2012 alone, the channel grew by 11% in current value terms achieving retail value sales of
US$17.5 billion and representing a 9% share of total fast food sales. Led by innovators like
Panera Bread Co and Chipotle Mexican Grill, these restaurants bridge the gap between quick
service and full-service, offering a best of both worlds type deal to consumers. In a trend that
has been building since the recession, fast casual brands continue to differentiate themselves.
Despite performing well in Latin American fast food, Chipotle has witnessed competitors like
Calexico spring up from a street cart in 2006 to three brick-and-mortar locations by 2013,
propelled by the award for Zagats best Mexican in New York City in 2012. Not only are sales
increasing at a robust rate, but outlet expansion is growing at a healthy pace as well. In 2012
alone, fast casual dining added a total of 614 outlets US nationwide; a 7% increase from 2011.
Over the course of the forecast period, this is expected to grow by 26%, amounting to a total of
12,224 outlets.41 In the case of pizza restaurants, there were 38,008 independent pizzerias in the
United States as of September 2013. Table 2 provides information about the number of
independent pizzerias by states. Tables 3 and 4 show statistics of fast food restaurants and
pizzerias in the United States.
Through streamlined services and a clear demonstration of value, fast casual dining has
established itself as a force to be reckoned with in the consumer food service realm. Many of
these outlets take pride in their fresh ingredients, on-site prep, and use of organically grown
ingredients. Another trend that is likely to increase, one which fast casual has picked up on
before the other foodservice channels, is the serving of alcoholic drinks in outlets. Latin
American fast food brands such as Qdoba, Baja Fresh Mexican Grill, and Chipotle, have long
served bottled craft beer. All three have also served traditional Mexican margaritas as well,
catering to a crowd looking for something a little stronger. With fast casual dinings growth
predicted to be high over the forecast period 20132017, it stands to reason that the biggest
players in consumer food service will not give up share without a fight. For fast food, this means
a focus on healthier and more organic foods. This sort of activity was evident in the new salads
and wraps from McDonalds and even Yum! Brands Taco Bell stepping away from bargain bin
food with the development of its Cantina menu. For casual dining full-service restaurants and
other full-service restaurants, a shift to the middle is a little trickier. Better deals for whole
41 Excerpts from Passport (2013). Consumer Food Service in the US. Euromonitor International, September.
Accessed June 10, 2014.
http://www.portal.euromonitor.com.ezproxy.macewan.ca/Portal/Pages/Magazine/IndustryPage.aspx

families with children, a factor that fast casual does not address, and an increased use of a liquor
licence to placate parents, could both help the struggling channels.42
Questions
1. Develop a short international environmental scan for Famoso if it enters the United States.
2. Which international market entry strategy may be most suitable for Famoso to follow? Why?
3. Given that fast casual dining is growing very quickly in the United States, is it reasonable to
suggest Famoso follow a standardized product and price strategies?

Table 1. Global Pizza Market, 201343


Market size is shown in billions of dollars.
($ bil.)

Share (%)

Western Europe

51.90

28.30

North America

44.20

24.10

Latin America

16.30

8.89

Asia-Pacific

8.70

4.74

Eastern Europe

4.40

2.40

Middle East and


Africa

3.40

1.85

Australasia

2.60

1.42

Source: Global Pizza Market, 2013. Pizza Marketing Quarterly, December, 2013, from Euromonitor.

42 Excerpts from Passport (2013). Consumer Food Service in the US. Euromonitor International, September.
Accessed June 10, 2014.
http://www.portal.euromonitor.com.ezproxy.macewan.ca/Portal/Pages/Magazine/IndustryPage.aspx
43 Global Pizza Market, 2013. Market Share Reporter. Ed. Robert S. Lazich. 2015 ed. Detroit: Gale,
2015. Business Insights: Essentials. Web. 28 May 2014.

Table 2. Number of Independent Pizzerias in US, 201344


Pizzerias (# stores)

Share (%)

New York

4,269.00

11.23

California

3,371.00

8.87

Pennsylvania

3,152.00

8.29

Florida

2,302.00

6.06

New Jersey

2,125.00

5.59

Ohio

2,025.00

5.33

Massachusetts

1,929.00

5.08

Illinois

1,602.00

4.21

Texas

1,507.00

3.96

Michigan

1,389.00

3.65

14,337.00

37.72

Other

Source: Number of Independent Pizzerias, 2013. Pizza Marketing Quarterly, December 2013, from CHD Expert.

44 Number of Independent Pizzerias, 2013. Market Share Reporter. Ed. Robert S. Lazich. 2015 ed. Detroit: Gale,
2015. Business Insights: Essentials. Web. 28 May 2014.

Table 3. Top Fast Food Restaurants in US, 201245


Companies are ranked by system-wide sales in millions of dollars.
Mill $
McDonalds

35,600.00

Subway

12,100.00

Starbucks

10,600.00

Wendys

8,600.00

Burger King

8,587.00

Taco Bell

7,478.00

Dunkin Donuts

6,264.20

Pizza Hut

5,666.00

Chick-fil-A

4,621.00

KFC

4,459.00

Panera Bread

3,861.00

Sonic Drive-In

3,790.70

Dominos Pizza

3,500.00

Jack in the Box

3,084.90

Arbys

2,992.00

Source: Top Fast-Casual Restaurants, 2012.QSR, Annual 2013, p. NA. Market Share Reporter 2015. Online
Edition. Gale, 2014.

45 Top Fast-Casual Restaurants, 2012. Market Share Reporter. Ed. Robert S. Lazich. 2015 ed. Detroit: Gale,
2015. Business Insights: Essentials. Web. 28 May 2014.

Table 4. Top Pizza Restaurants in US, 201246


Companies are ranked by sales in millions of dollars.
Mill $ Share (%)
Pizza Hut

12,600.00

34.25

Dominos Pizza

7,400.00

20.12

Papa Johns Intl.

2,939.20

7.99

Little Caesars

2,900.00

7.88

California Pizza Kitchen

717.50

1.95

Papa Murphys Intl.

702.00

1.91

Sbarro

602.00

1.64

CiCis Pizza

552.00

1.50

Chuck E. Cheeses

410.00

1.11

Round Table Pizza

384.00

1.04

Godfathers Pizza

335.40

0.91

Marcos Pizza

290.00

0.79

Hungry Howies Pizza


and Subs

274.20

0.75

Jets Pizza

267.90

0.73

Old Chicago

235.00

0.64

6,177.30

16.79

Other

Source: Top Pizza Restaurants, 2012. Pizza Today, November, 2013, p. 42, from Technomic.

46 Top Pizza Restaurants, 2012. Market Share Reporter. Ed. Robert S. Lazich. 2015 ed. Detroit: Gale, 2015.
Business Insights: Essentials. Web. 28 May 2014.

Chapter 18: How Can Famoso Integrate Social Responsibility in Its Marketing Strategy?
The Role of Personal Moral Philosophy
Famosos marketing strategy focuses on guest experience in the restaurant, or what the company
calls four-walls marketing. It emphasizes marketing inside the restaurant, the hour-and-a-half
to two-hour consumer experience in the restaurant is critical to the success of Famoso. It is a
company priority to provide an excellent guest experience when it comes to food quality,
excellent service, and a memorable atmosphere. The ultimate goal is that the guest leaves happy,
something that seems easier said than done. Some of the key marketing metrics Famoso uses to
measure effectiveness are word-of-mouth and willingness to recommend, and return on
investment (ROI).
Famoso is also significantly involved with the community, and management considers this
critical to the companys success. The aim is to position every store to feel like a local pizzeria,
one that belongs to the community. Practically, each pizzeria should be involved in local
charities, sponsorships, and events. For instance, Famoso pizzerias host community leagues and
support events that focus on social issues. In 2013 during the Christmas season, Famoso bottled
and sold its tomato sauce for the first time and donated all the proceeds to local food banks in
seven cities (voted on social media by Famosos fans). The company also provides sponsorships
through food donations. These activities allow Famoso franchisees and employees to connect
with people on a personal level. Jason Allard, one of the founders, comments that treating
franchisees as restaurant partners and involving them in the process is a crucial part for the
successful execution of this strategy.
From a consumer perspective, having the ability to make ethical choices is an important aspect of
social welfare. Those choices are based on the personal moral philosophy of an individual. Moral
philosophy is learned through the process of socialization with friends and family, and through
formal education. It is also influenced by societal, business, and corporate cultures in which an
individual finds himself. Moral idealism is a personal philosophy that considers certain
individual rights or duties as universal (e.g., the right to freedom, the right to know, and the duty
to do no harm). Utilitarianism is a personal moral philosophy that focuses on the greatest good
for the greatest number by assessing the costs and benefits of the consequences of ethical
behaviour. This philosophy underlies the economic tenets of capitalism and, not surprisingly, is
embraced by many business executives and students. Ultimately, ethical behaviour rests with the
individual, but the consequences affect many.47 Famoso seeks to support activities that can
promote ethical choices, as in the case of its 2013 Christmas promotion.
Questions
1. Are Famoso and its stores doing enough to be socially responsible? If not, how can they
apply the concept of the triple-bottom line?
2. From a marketing perspective, what are the implications if the great majority of Famoso
consumers follow moral idealism as a personal philosophy?
47 From Crane, F., Kerin, R. A., Hartley, S. W., & Rudelius, W. (2014). Marketing, 9th Can. Ed. Toronto: McGrawHill Ryerson.

3. From a marketing perspective, what are the implications if the great majority of Famoso
consumers follow utilitarianism as a personal philosophy?
4. What are the five steps that Famoso needs to follow to develop a social audit?

Performance Metrics of Famoso


Famoso Inc. has been ranked as one of Canadas fastest growing companies by PROFIT 500
guide.48 Famoso experienced a revenue growth in 2012 of 323 percent, with approximate 2012
revenues from $2 to $5 million. The company had 456 employees in 2012. Famosos owners
have taken the Famoso franchise across Canada; there are currently 25 franchises in Alberta,
British Columbia, and Ontario. Famoso has plans to open restaurants in the United States by
2015.49
Because of its results, Famoso has received media attention from CBC in March 2014. Also,
Famosos pizzas have been ranked the best pizza in Edmonton by Avenue magazine,50 best pizza
in Canada 2010 by the Canadian pizza magazine, 6th in the world in the International Pizza
Challenge 2010; the best pizza in Edmonton in 2009, 2010, 2011, 2012, and 2013 by the Vue
Weekly Golden Fork Awards; among the five best gourmet pizzerias in Calgary by Where Alberta
2013: one of the fastest 50 growing companies by Alberta Venture 2012; and one of the most
popular new restaurants in Toronto, Vancouver, Edmonton by Urbanspoon 2012.51
Famosos marketing strategy focuses on guest experience, or what the company calls four-walls
marketing. It emphasizes marketing inside the restaurant, the hour-and-a-half to two-hour
consumer experience in the restaurant is critical to the success of Famoso. It is a company
priority to provide an excellent guest experience. The ultimate goal is that the guest leaves happy,
something that seems easier said than done. Some of the key marketing metrics Famoso uses to
measure effectiveness are word-of-mouth, willingness to recommend, and return on investment
(ROI).
Questions
1. Which other marketing metrics can Famoso use to evaluate performance?
2. How can Famoso use of marketing dashboards?
3. Can Famoso use marketing metrics in the strategic marketing planning process? If so, how?

48 For more information, see http://www.profitguide.com/microsite/profit500/2013


49 See CBC.ca story at http://www.cbc.ca/m/touch/canada/edmonton/story/1.2572793
50 See the note at Avenue Edmonton http://www.avenueedmonton.com/articles/best-restaurants-best-pizza
51 Excerpts from Famoso facebook: https://www.facebook.com/FamosoPizza/info

You might also like