3. Nick-N-Willy's a Company Offering a New Concept in Delivering Pizza To

3. Nick-N-Willy’s

A company offering a new concept in delivering pizza to American and Canadian homes has ambitious expansion plans. Additional consumer research is necessary to determine the viability of the concept in the Canadian marketplace.

The Company

Nick-N-Willy’s was founded in 1988 in Boulder, Colorado by Keith McQuillan and Trevor Jones. It grew quickly and steadily as a purveyor of a truly unique concept: high- quality gourmet pizzas that customers bake at home in their own ovens. Fresh pizza served piping hot offers advantages over both delivered pizza and frozen pizza.

In 2001, Scott Adams and Richard Weil, a pair of food industry and franchise veterans, acquired the franchise company from the founders; it currently operates as Nick-N- Willy’s Franchise Company, based in Lone Tree, Colorado.

The Market and Competition

The pizza market is divided between restaurant pizzas (takeout, delivery, and dine-in alternatives) and frozen pizzas purchased in supermarkets. In Canada, the leaders in pizza delivery include Pizza Pizza, Dominos, and Pizza Hut. Among sit-down restaurants there are Boston Pizza, Pizza Nova, and Western Pizza and Family Restaurants. Other takeout and delivery operations include regional companies such as 2-4-1 Pizza, Family Pizza, and Greco Pizza Donair. Among frozen pizza brands, the market leaders are Crescendo Rising Crust Pizza (McCain Foods) and Delissio (Kraft Foods).

After two decades of rapid growth in the 1970s and 1980s, North American pizza sales began to slow in the 1990s but the rate of new pizza openings kept climbing. Now, the industry’s biggest players are battling each other for growth in a mature market. “Everybody is looking for an angle to outdo their competitors,” says Jon Prinsell, the president of YUM Restaurants Canada, the parent of the Pizza Hut chain. It is estimated that more than 8000 restaurants serve pizza in Canada, ringing up annual sales of $4 billion—nearly 10 percent of the total food-services industry.

Among the major pizza restaurants it seems that pizza offerings have been exhausted and menus have been expanded considerably to accommodate lighter fare to meet consumers’ demand for healthier foods. Salads, sandwiches, and pizza dough with no trans fats became common in most restaurants. The Atkins Diet phenomenon of 2004 that stressed the need to eat low-carbohydrate foods and forbids starchy items like bread and pasta drove people away from pizza and other forms of fast food.

The low-carbohydrate trend has waned, and many companies are reversing their direction. There is recognition that people are now adopting the philosophy that moderation is the most important part of a healthy lifestyle. Pizza-industry competitors, therefore, are expecting an uptick in sales over the next few years.

Product Differentiation

The pizza market is crowded with competitors that essentially offer the same product at the same price. Differentiation is often based on additional services that are offered or temporary promotions on various meal combinations. For example, Pizza Pizza is known for its “Delivery in 40 minutes or it’s free” promotion.

The biggest charge in the industry of late has come from frozen pizza. Both McCain and Kraft now offer much improved products at reasonable prices. McCain’s Crescendo brand offers a rising crust and a taste very similar to restaurant-made pizza. Kraft’s Delissio is so good that people eating it think it’s delivery (at least that’s what the ads say!). Both brands are heavily advertised.

Pizza Pizza recently introduced the heated delivery bag as a means of coping with the popularity of the frozen products. The bag offers customers a pie that’s almost as hot as one out of the oven. “There’s so much competition that everyone has some sort of guarantee,” says Pat Finelli, vice-president of marketing at Pizza Pizza, adding that their delivery bag promotion is in addition to the “40 minutes or free” offer.

Nick-N-Willy’s Concept

Nick-N-Willy’s “build it and bake it at home” concept is a proposition that capitalizes on consumers’ demand for convenience without compromising quality. The product concept is stated as:

Nick-N-Willy’s Take-N-Bake Pizza works on your schedule. With our hand-tossed dough, fresh-cut ingredients and 25 premium toppings, 6 cheeses and 4 signature sauces, our pizza is a fresh take on delivery. Call ahead, we’ll have it ready. Take it home and serve a complete, sit-down dinner in minutes. And because you bake our pizza in your oven, on your schedule, it’s always hot and fresh!

Nick-N-Willy’s is all about convenience. Customers bake the pizzas on their own schedule. A variety of pizzas are available in medium (12-inch), large (14-inch), and family (16-inch) sizes. The company’s written credo states: “If you want it to be the best, make it yourself. Start from scratch every day. Be passionate about your ingredients. Don’t take shortcuts.”

In being the best, everything starts with the pizza dough. Using a closely held recipe of blended flours, Nick-N-Willy’s chefs make the dough fresh each morning, with 100- percent-pure olive oil. The dough is then cut, kneaded, and hand-tossed before becoming the foundation of an assortment of gourmet and traditional pizzas. Ingredients are above the norm and include imported latte mozzarella, Swedish fontina, feta, Swiss and gorgonzola cheeses, fresh garlic, fresh basil, and fresh pesto sauce.

Gourmet pizzas include the Mediterranean (olive oil glaze, mozzarella, fresh garlic, marinated artichoke hearts, and fresh spinach), the Outback (white garlic sauce, mozzarella, green and red peppers, tomatoes, and smoked bacon), barbecued chicken and

smoked chicken, and a Mexican-inspired offering called “The Burn” (refried beans and salsa). For traditionally minded consumers, there are standard topping varieties of sausage, pepperoni, mushroom, tomato, green peppers, and olives. And, of course, there’s the “throw in the works” combination option and the tried and true pepperoni and plain cheese pizzas.

Nick-N-Willy’s rounds out the menu with a selection of salads and beverages. A dine-in option is also available.

The Challenge

Nick-N-Willy’s currently operates two restaurants in Canada; both are in British Columbia—one in North Vancouver and the other in Langley. The company would like to expand in Canada by offering franchise opportunities in suitable markets.

You are a potential franchisee and your task is to determine if Nick-N-Willy’s concept is viable in the long term. Entering into a franchise agreement is very risky—there are no guarantees of success associated with such a venture. The “Take-N-Bake” concept sounds great, but could it simply be another fad or a fashion that will be out of style a few years down the road? If the concept does take off, rest assured that competitors such as Pizza Pizza and Dominos will start offering a similar product. Potential competition could be intense.

Your immediate challenge is to do a scan of the pizza market (using appropriate secondary research tools) to enlighten yourself about the present market conditions and competitive activity. You want to determine if the concept will work in your community (the city where your school is located).

You must also find a means of evaluating consumer reaction to the product concept. What information do you need to obtain from consumers and how will you obtain the information? For this, a primary research proposal will be necessary. What kinds of research activity will you recommend? A decision must be made within two months. The tight timeframe will have a bearing on the type of research study you recommend.

Listed below are some questions that may act as a guideline for devising a research proposal. This case calls for the collection of secondary information and the preparation of a primary research proposal. The actual development of a questionnaire and the implementation of it are left to the discretion of your instructor.

Questions

1. What type of primary research should be conducted? Clearly state the objectives of the research study.

2. Who should participate in the research study? Consider the sample and identify a sampling frame.

3. Should the research be qualitative or quantitative in nature?

4. Should the research consider some or all of the primary research methods: survey, observation, and experiment?

5. If a survey is recommended, how should it be conducted: telephone, personal interview, mail, online?

Adapted from Richard Bloom, “Pizza chains seek bigger piece of pie,” Globe and Mail, January 17, 2005; www.theglobeandmailcom; www.nicknwillys.com; Jacob Bunge, “Take it, bake it, and build it as a brand,” Franchise Times, June/July 2002.