The Dallas-based chain decided to rethink its marketing after noticing that more young Hispanics—the fastest growing segment of the youth population in the U.S., according to a recent analysis by the U.S. Census Bureau—are bilingual and bicultural.
Pizza Patrón wants to market to English speakers without alienating its base clientele. Above, a pizza maker bakes at Pizza Patrón in Los Angeles.
"These are Hispanics born in the U.S. who have one foot in each culture," says Andrew Gamm, Pizza Patrón's brand director. "They are very into adopting American culture without fully letting go of their Hispanic roots. In our previous 25 years of doing business, we focused on these peoples' parents."
Pizza Patrón is re-allocating its advertising budget, rejiggering commercials, opening restaurants in new areas and using more English on menus. It's tricky because Pizza Patrón wants to lure new, younger clientele without alienating its historic base of immigrant customers.
Mr. Swad, still the company's chief executive, viewed marketing to Spanish speakers as an opportunity to differentiate the brand. So the chain added items like churros, which are fried dough desserts; lime-and-pepper-flavored chicken wings; and cheese sticks dubbed "QuesoStix." Sometimes the restaurants also offer limited-time Mexican offerings like caramel candies made with goat milk and pecans.
As the Hispanic population grew, so did Pizza Patrón's popularity. In 2007, the chain drew international attention—and attracted more business—when it began accepting Mexican pesos as payment.
Typically, Pizza Patrón opened pizzerias in neighborhoods in which at least half the population was Hispanic. Most of the company's growth came in the Southwestern U.S. and large cities where Hispanics congregated, and nearly all of its ads were on Spanish-language media outlets.
The company began reconsidering its strategy after executives saw a video produced as part of a presentation to prospective franchisees. The video, shot during a random store visit one Friday afternoon about two years ago, showed groups of young Hispanic customers placing orders in English, as well as African-American and white customers.
"It was eye-opening," Mr. Gamm says. The company then conducted focus groups and surveys that confirmed its Hispanic customer base was indeed becoming younger and more bicultural.
Pizza Patrón next year plans to completely flip-flop its marketing mix by allocating 70% of its ad budget to English-language television and radio stations and 30% to Spanish-language media outlets.
Television ads will show groups of young people buying pizza, to appeal to 18- to 24-year-olds.
The company now is opening restaurants in areas with as little as 30% Hispanic residents, and expanding into other areas where Hispanics have moved, such as Michigan, Oregon and North Carolina, and in smaller cities within new and existing markets. The company plans to open about 20 restaurants in 2011 and another 40 in 2012.
To keep traditional customers from straying, Pizza Patrón plans to add more Latin-themed specialty pizzas and to post in-store graphics honoring holidays many Hispanics celebrate, such as Dia de los Reyes Magos, or Day of the Three Kings, coming up in January.