This month's article is a follow up to last months article ["How Pizza Hut Ruined Pizza", RJ, Jul. 2010, Pg. 13-Ed.]. If you have not read it I strongly suggest you do so. We talked about how Pizza Hut lowered pricing. It was a great marketing scheme "Any size pizza, any toppings for $10." People flocked to the store and sales were up. That was the good news. The bad news is that soon all the other pizza places in town lowered their pricing also. Now the public knows the "real" cost of making a pizza and the new public expectation, set by Pizza Hut, is to pay $10 for any pizza, any toppings. It's going to be difficult, if not impossible, to go back to old (profitable) pricing.
The economy really has been down for the past year or two. The reaction of most contractors has been the same. As an industry, we have lowered our pricing. What are we now telling the customer, without saying it? Right again, "We have been ripping you off at the higher prices we used to charge." And guess what? When one contractor lowered his price so did the guy down the street. What has this done to the expectations of much of the public? Right, the "expected" cost of replacing equipment just went down. Does this sound familiar?
