Pizza Hut Inc

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Marketing-II

Case Analysis
Pizza Hut, Inc.

Introduction
Pizza Hut, Inc. was started on June 15, 1958, by two college students Dan and Frank Carney from Kansas. In 1968 they were a chain of 296 restaurants. It went public in 1968 and was acquired by Pepsico in 1977. In 1981 Pizza hut became the largest Pizza restaurant in the world accounting for sales worth $1 billion. By 1986 it had 5025 domestic units. All Pizza hut restaurants were fully serviced eat-in and carry out family restaurants. The Pizza market is a fast growing one. Over the years it had evolved into 3 broad categories – * Eat-in

* Carryout
* Delivery
In 1982, delivery system consisted of only 1% of the total revenue of pizza market. This was estimated to grow to 32% by 1990. Carry out segment accounted for more or less the same percentage of the market share (approx. 41%) while eat-in decreased from 57% in 1986 to 27% in 1990. Pizza Consumer

* Second most popular food after Ham burgers
* Consumer research shows that Pizza was personal
* Pizza was considered to be a Dinner food/evening snacks * Consumption of pizza varied from place to place
* People increasingly preferred home delivery and carry out rather than cooking or eating in restaurants * Pizza was considered as an eat-at-home food
Competition
* Dominos pose a serious threat to Pizza Hut due to delivery model structure * Godfather’s Pizza was initial rival to Pizza hut most significant national competitor The Franchisee System
* Franchising was an integral part of the pizza hut strategy since its founding * In 1986, 135 individuals, partnerships and corporations operated 2395 pizza hut restaurants and 96 delivery-only units as franchisees * The company by itself operated 2173 restaurants and 361 delivery-only units * Each Franchise was given an initial Five year development schedule * Franchisees paid Pizza Hut an initial fees of $15000 for each system restaurant opened...
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