Besides its network of sales managers, Tombstone maintains five distributors in Michigan, Minnesota, South Dakota, Wyoming, and Hawaii. Hawaiian shipments are arranged through a broker who buys Tombstone pizzas mainly for the military. Tombstone sends its freezer truck to Alameda, Calif., where the broker arranges to have the shipment picked up. Distributors conduct business in the same manner as Tombstone, sending their vendors directly to stores. White agrees with Sebold, however, that Tombstone's strongest card is its own sales force. "Being a one-product company can sometimes be a negative," notes White, "but it's also a plus, because it's hard to lose perspective on what we're selling. If you don't sell pizzas, then you don't sell anything." Although distributors' salespeople have taken the training program, he notes, they don't have the same focused aggressiveness because they are selling a range of products.
Until the mid-1970s, the bulk of Tombstone's pizzas were sold to taverns, campgrounds, motels, gas stations, and other small outlets. When Sebold arrived, he led the Simeks through a formal, almost textbook approach to defining Tombstone's market. "We realized we weren't only in frozen pizzas, we were also in the convenience-food business. That opened up a whole new market segment for us. We could compete not only against pizza but also against pot pies, TV dinners, and other frozen entrees." Tombstone began to concentrate on developing new business among food stores -- which today accounts for 75% of sales -- holding to its original system of store-door delivery.
Sebold had advocated a direct sales force because it gave Tombstone the control over its product that no distributor network had. He and the Simeks stuck with direct store delivery for the same reason: It provided desirable control over their pizza. Tombstone's sales force goes directly into the stores where they not only restock the shelves and take new orders, but also provide product demonstrations -- a key part of Tombstone's marketing effort to stand out as "special."
"As competition gets stiffer," notes Sebold, "every pizza producer claims to be selling 'quality,' so the word no longer has any relative value." Tombstone packages many of its products in clear plastic -- most producers box pizza -- so that the customer can see what he is buying.
Last year, Tombstone hired Charles Stoerzinger, formerly a marketing manager at Green Giant Co. Stoerzinger plans to make a modest shift in the marketing program by increasing demonstrations in new markets and focusing on more traditional forms of advertising -- such as TV, newspapers, and couponing -- in established markets. Under Stoerzinger's direction, Tombstone has also retained a new Minneapolis advertising agency, Campbell-Mithun Inc., which will, he believes, result in more creative advertising campaigns and better media buys.
Some food-store buyers -- who prefer to work through brokers and to warehouse products themselves -- have resisted Tombstone's direct store delivery approach. Dominick's Finer Foods chain, with 74 supermarkets in the Greater Chicago area, opened its doors to Tombstone vendors only in May, after two years of negotiations. "Store-door delivery not only creates congestion," says Larry Nauman, vice-president of advertising and public relations for Dominick's, but "every time a driver opens the back door to enter or leave the store, it's an opportunity for theft" or for that person to rearrange the shelves to out-position competitors' products. But Dominick's finally agreed to carry Tombstone Pizza, because, says Nauman, "customers wanted Tombstone real bad. We were losing action without handling it." Notes Pep Simek: "When you're tied for the No. 1 -- selling product in Chicago, they have to start taking you seriously."
The Simeks see no reason why they can't continue to operate their store-door delivery system when they are 2, or even 20, times the size. After all, they point out, Frito-Lay Inc., the $1.9 billion-a-year company that has carved out a 40% share of the more than $5 billion-a-year salty-snack industry, runs a highly efficient store-door delivery system.
Tombstone is also girding itself for rising fuel costs. "You have to assume they'll increase," says Dewey Sebold. "But even if gas rises to $3 a gallon, we're prepared to streamline our fleet, shorten our routes, and still call on our major, most profitable customers." So far, Tombstone has seen no reason to expand its use of brokers and distributors to carry its goods to retail shelves.
The belief at Tombstone Pizza that its product is special starts at the top. "At Tombstone, you know areas you don't tamper with," says Sebold. "You don't, for instance, screw around trying to make Pep's pizza sauce any different."
Such a commitment to maintaining product quality is at the heart of Tombstone's success. Without Ron and Pep Simek's fixation that pizza sauce must be applied just so, Tombstone would have found it difficult to bend the arrow back to continue turning out a specialty instead of a commodity product. "And once you've got a commodity," says Dewey, "there isn't much allowance for drift. It's difficult to ever turn back and develop market share in the specialty, high-quality end of the business."
"The risk a company runs when it wants to market its product as a specialty rather than a commodity," adds Stanford's Davis, "is that it may resort to all sorts of strategies at the expense of quality. The test, in the long run, is a good product."
