About Pizza, Some will tell you Italy. That's wrong. What you know as pizza came into popular around the time of Napoleon and the French revolution.
Italians, known to be lovers of fine food and wines perfected and imported this dish to America. From here it quickly affection itself to mass production and re-export to the rest of the world.
INTRODUCTION & HISTORY OF PIZZA HUT:-
In 1958, Frank and Dan Carney had an idea for a great local pizza restaurant in Wichita Kansas. The small 25 seat restaurant only had room for 9 letters on the sign... the building looked like a hut... so 'Pizza Hut' was born! Fifteen years later, we opened the first UK restaurant and since then we've become the biggest Pizza Company on the planet, Let see listen Pizza Hut Story from them!
In the past, Pizza Hut has always had the first mover advantage. Their marketing strategy in the past has always been to be first. One of their main strategies that they still follow today is the diversification of the products they offer. Pizza Hut is always adding something new to their menu, trying to reach new markets. For example, in 1992 the famous buffet was launched in Pizza Hut restaurants worldwide. They were trying to offer many different food items for customers who didn't necessarily want pizza.
Lastly, Pizza Hut has always valued customer service and satisfaction. In 1995, Pizza Hut began two customer satisfaction programs: a UAN (in USA 1-800) number customer hotline and a customer call-back program. These were implemented to make sure their customers were happy, and always wanted to return. In our plan, we will first give a situation analysis of curren and relevant environmental conditions that affect our plan. Next, we will give a brief analysis of the current fast food industry, and any trends or changes that might occur in the future.
Sigmund's Gourmet Pasta is close to entering their second year of operation. The Pasta has been well received, and marketing is now critical to its continued success and future profitability. The basic market need is to offer individuals, families, and take out customers fresh, creative, attractive, pasta dishes, salads and desserts. Sigmund's uses homemade pasta, fresh vegetables, and premium meats and cheeses.
The product mix strategies
Pizza hut has a head-on competition with McDonalds and Sigmund's pasta so wherever they place their products; pizza goes there as well. Locally in India pizza face a less competition with the local brands like Sigmund's pasta etc which are producing more or less same product as pizza.
The brand pizza hut is so strong that it is the attribute itself.
Prices and Quality:
Pizza hut is based on high quality and prices.
The brand equity is very high as the value added by brand to product effect the product selling.
Potential Customers:- the potential customers for pizza are Tourists, Downtown workers, students, family groups, weekend shoppers.
Total Quality Management (TQM) Of Pizza Hut : -
This is the most important for a food chain like Pizza Hut. All the employees' backof- the-house i.e. the kitchen assistants are trained accordingly. They are given extra classes in order to meet the quality standards set by Pizza Hut around the world. This strategy is important in order to satisfy the CHAMPS. This strategy is strictly implemented in Pizza Hut in order to fulfill the quality standards. Different quality management staff is also there at Pizza Hut. The shift managers have the task to observe whether the quality standards are met or not, whereas there are a total quality management department at the main office in Delhi. This department has the task to implement quality standards and know whether they are achieved or not.
- Downtown workers:-
- Weekend shoppers:-
These are the largest potential customers for pizza and the growth rate of these type of customers is 9%. The majority of these types of customers are retired, semi retired and professionals and the favorite activity of these type of customers are attending art exhibition, reading and travelling.
These are the second largest group of customers. The median age is 32, average household income is $40,000/year, and favorite activities include camping, fishing, hunting, and spending time with family. The growth rate of these type of customers is 2%.
This includes high school students and college students from Southern Oregon University. The median age is 20, household income is $12,000/year, and favorite activities include snowboarding/skiing, dancing, and shopping. The growth rate of these type of customers is 8%.
This group includes people who travel from rural areas, and nearby towns.The median age is 44, household income is $35,000/year, and favorite activities include fishing, hunting, gardening, and spending time with family. The growth rate of these type of customers is again 2%.
There are two type of market needs we are attempting to fill. First, there's a need for a fast food that produces high quality, great flavored food, at a low cost. In other words, there's a need for value beyond "cheap."
The second type of need is breakfast cereals like pizza hut, pasta, burgers, nodal etc which customers wants with a good quality.
The market for breakfast cereals is becoming more demanding. While breakfast cereals chains such as D-Lite and others in the mid-1980s failed in their attempt to market low since the 90's, some companies have found that healthy breakfast cereals pays off.
Consumer households today spend approximately 46% of their food budgets on breakfast cereals. The National Restaurant Association predicts that the QSR market will grow slightly slower than the overall market for food services.
This is due to reduced discretionary income, and recessionary economic pressures in 2000 and 2001. The overall growth rate in the pasta business is expected to be 4.4% in 2001.
Growth in catering services is expected to be at around 6.5%. Since about 20% of sales will be generated from catering services, and the market growth will slow during the current post recessionary period, overall market growth rate is targeted to a weighted 4.82%.
The SWOT analysis is following....
Pizza Hut is the market leader in providing different products of pizzas as there are no competitors in this sector. There good image makes the organization more strong. Pizza Hut is providing good taste, quality products with qualified staff, good atmosphere and hygienic environment. They are specialized in pizzas. Motivation level of staff is very high which make the organization more prosperous. They are ISO (International Standard Organization) certified. They have enough resources for operating different activities of the organization. They are providing free home delivery service. They have created monopoly in this sector. Another big Strength and even a Competitive Advantageis the fact that they have a full service restaurant as well as delivery services. Most of Pizza Hut's competitors do not have restaurants. Because of the restaurant, Pizza Hut can market too many different segments that other pizza chains cannot. For example, Pizza Hut can market to families much easier than Domino's or Little Caesar's.
However, the fact that Pizza Hut does have a restaurant to run is also a weakness. Pizza Hut has higher overhead costs, due to the restaurant that other competitors don't have to deal with. Another result of higher overhead costs is higher prices Pizza Hut must charge. Obviously, Pizza Hut is not the low cost producer. They rely on their quality pizza and good service to account for their higher prices. They are providing less range of products comparatively with high prices. They are more focused on Western taste instead of Eastern.
New markets can be explored and new opportunities they can gain. Pizza Hut can come up with the new products considering the Eastern taste of the people as like McDonalds. Diversification of new products can increase their market share. They can reduce their prices because of more resources.
Pizza Hut's number one threats are from their competitors. Currently,
- Their closest competitor is Domino's Pizza who is working to open their Branch at Delhi. Domino's main competitive advantage over Pizza Hut is their Lower price.
- Little Caesar's who is establishing their self in India and might move to this category.
- New entrance like Dominos pizza in India market can affect their market share.
- Other local restaurants can affect their market share by providing pizzas with lower price.
PEST (Political, Economic, Social & Technological)
- POLITICAL ISSUES:
- ECNOMIC FACTORS:
- SOCIAL FACTORS:
- TECHNOLOGICAL FACTORS
Political issues include regulatory frame work operating in judicial system which may affect the business in different ways. There are not many political factors in delhi affecting Pizza Hut as is lack of competition. Factors such as laws on business employment, pollution and taxation apply on the organization which it has to follow regarding the rules.
If the county's economy is better so the GDP of the country will be good, this is a green signal for the business as the per capita income of the people will be increased and they will spend more money. In our survey we came to know that most of the people in the beginning of the months spend more and they visit pizza hut very often. When the inflation rate increases the cost of raw material also increases and this leads towards high prices of the products and vice versa.
Pizza hut is a multinational and it is basically originated from America so the organization and product is overwhelmed by western culture. There are social forms of society which consist of Upper class, middle class, middle upper class, lower class and lower class. Every country has cultural norms, values, beliefs and religion which can affect the product.
By regular innovation the organization and product can be affected in term of process and delivering and customer data, daily transactions, future forecasting and decision making. New vehicles will make their service more efficient.
Main segments which Pizza hut has captured are the combination of higher incomes and dual career families , due to higher income consumer have more disposable income , allowing them to eat out more often.
Pizza Hut holds the most market share in the Pizza industry, the perceived quality and service of the company will help to ensure a better the average chance at a successful introduction of a new product. The introduction of a product that keeps with today trends is also important to reduce the risk of failure.
Pizza Hut maximum market segment is younger generations. These generation ranges from 12 to 30, the overall spending of these generations is mostly on non essential items, the higher amount of spending has been done on eating out.
Pizza Hut was among the first multinational brands to enter the food retail sector in India. When the first Pizza Hut restaurant opened in Delhi the quick service industry was at a nascent stage and the pizza category was dominated by a sole regional player who had a marginal presence. Pizza Hut went on to play a significant role in pioneering and developing this category in India.
A critical factor in Pizza Hut's success has been its unique dining experience. Crew members at Pizza Hut strive each day to provide 'CUSTOMER MANIA' - the kind of service that ensures that every visit of the customer is a memorable one.
Pizza Hut's constant endeavor to provide extra value - whether it is pizzas which are available to suit every price range, new promotions or the introduction of innovative product ranges - that puts a 'Yum' on every customer's face - has allowed it to increase its presence in India.
Business Level Strategy: -
Business level strategies are plans made to gain a competitive advantage over its rivals in a market. Hence, all the businesses need to adopt business level strategies in order to compete in a competitive environment. If we take a look at the India market, there are no large competitors of Pizza Hut but unlimited small competitors exist in the market. The threat of competitors is very low as there is no international food chain offering pizza in Pakistan at present. Therefore, present strategies adopted by Pizza Hut are keeping in consideration the present competition. Whereas, in future this competition will increase and Pizza Hut will have to change all its business level strategies in order to compete with its rivals.
In very near future Dominos is opening its first branch in Karachi. This would be a threat for Pizza Hut and hence, the strategies would be changed.
Pricing Strategy : -
The level of competition a business faces determines its pricing strategy. Sometimes a business has the scope to set its price and sometimes a business cannot. When a business has the scope to set its price there is a number of pricing strategies or policies it might choose. As there are no such competitors of Pizza Hut which could compete with the quality of pizza produced at Pizza Hut, therefore, the pricing strategy adopted by Pizza Hut is 'market skimming'. Pizza Hut has adopted this pricing strategy as they want to hold maximum share of the market by maximum profit. This is a golden era for Pizza Hut, as there are no competitors and hence, Pizza Hut is free to charge any price they want. They are charging higher prices due to the uniqueness of the product. They satisfy the target market as the food quality is worth the price paid. The pricing strategy is not just to get the worth of quality but also to gain maximum profits before any competitor enters because then Pizza Hut will have to change its pricing strategy. Although the prices would be lowered with the new entrants in the market but not to a greater extent as the quality food products are not home-produced. They are imported from different countries keeping in view the best quality.
The market share of pizza hut is 48% and the market share of Dominos is 20% and rest 32% is of others.
FOUR P'S OF MARKETING
Product refers to the actual program you are planning. The goal of pizza hut is to develop the best product with the resources available. Pizza Hut sells pizzas in four different sizes: personal (an individual serving), small, medium and large, though most stores have done away from with the small size. A variety of toppings are available, plus "specialty" styles, including Meat Lovers, Pepperoni Lovers, Cheese Lovers, Veggie Lovers, Double Cheeseburger, Supreme, Super Supreme and the newly introduced Pizza Mia. The pan pizza has a thicker crust than most other commercially available pizzas .so their products have help them to retain their customers and to increase them .they provide their customers with complete nutrition plan and healthy food is guaranteed. The nutrition plan also clearly tells diabetes patients can use what range of food at pizza hut. Over weight patients are also satisfied and the pizza with less cholesterol can be ordered.
This encourages the customers to visit pizza hut rather than going elsewhere. As pizza hut has to boost its sales in the existing markets, so they the new food products are introduced in all branches line-by-line because all branches are operated in co-operation with one another.
Different products for different regions are also developed as there are choice differences.
As there are no such competitors of Pizza Hut which could compete with the quality of pizza produced at Pizza Hut, therefore, the pricing strategy adopted by Pizza Hut is 'market skimming'. this pricing strategy will help segment the market. Different groups of customers are willing to pay different prices for the same product.
The high/low pricing strategy will also create excitement. The pricing strategy adopted by Pizza Hut is 'market skimming'. Pizza Hut has adopted this pricing strategy as they want to hold maximum share of the market by maximum profit. This product will emphasize product and service quality.
Distribution The type of distribution channel used by Pizza Hut is the direct channel. The direct channel is successful when there is an extremely large market that is geographically dispersed. The direct channel is also useful when there are a large number of buyers, but a small amount purchased by each.
Pizza Hut uses three different methods of selling its products directly to the market.
- The first method of distribution used by Pizza Hut is Home. Office delivery. Customers can call Pizza Hut ahead of time, place an order, and the order is delivered to the customer's home.
- Another method of distribution is for customers to dine-in. Customers can go to the nearest Pizza Hut, place an order and either leave with the order or eat at the restaurant. One of Pizza Hut's largest competitive advantages is its restaurant style facility. Pizza Hut offers a clean place to sit down and enjoy the variety of pizzas, salads, and sandwiches in a fun, family atmosphere.
- The third method of distribution is to order Online. Selective County Customers can now go on the Internet and place an order for Pizza.
This method is useful because it allows customers to view the entire menu, download any special coupons, and order without having to disclose any credit card numbers.
The objectives of promotion are to introduce a new product, stimulate demand, change the short-term behavior of the customers, and encourage repeat or greater usage by current customers. Pizza hut uses many promotional strategies. The main promotion is a coupon to purchase. This promotion is also distributed mainly by mail, but also by fliers on college campuses around the country in order to reach the target market.They are using billboards on main stream places to get there customer. They are also distributing door to door brochures to capture more and more customers.
Pizza huts also using marketing techniques. These are the strategies Pizza hut is using for its marketing. Pizza huts try's to attract the younger generation as their main market segment. Apart from this Pizza Hut is using intense marketing strategies they are also giving ads in magazines.
Advertising camping will creates awareness of the products in our target markets.