The journey began in 1958, when two college students and brothers from Wichita, USA, Frank and Dan Carney, opened the first Pizza Hut restaurant at their hometown on June 15, 1958. After borrowing $600 from their mother, they purchased some second-hand equipment and rented a small building on a busy intersection in Wichita. The result of their entrepreneurial efforts was the first Pizza Hut restaurant, and the foundation for what would become the largest and most successful pizza restaurant company in the world.
Many people ask how Pizza hut got its name. When Carneys were setting up their first restaurant, the building had sign with room for just nine characters. They wanted to use “pizza” in the name, which left room for a word with only three letters. A family member suggested the building looked like a hut –and Pizza Hut was born.
Pizza Hut: Today
Pizza Hut is not only the acknowledged leader of pizza industry worldwide, but it is also the world’s largest pizza chain, with over 12,000 restaurants across 100 countries, employing more than 300,000 people, serving 1.7 million pizzas everyday to more than seven million customers.
Pizza Hut is the high-flying brand of Yum! Restaurants International,
which is also the parent company of KFC, Taco Bell, A&W and Long John Silvers. Taking other four brands with Pizza Hut, Yum! Restaurants International makes up the world’s largest restaurant group.
Pizza Hut in Bangladesh
Transcom Foods Limited, a concern of Transcom Group is the franchisee of Pizza hut in Bangladesh. With a seating capacity of 220 persons, the first outlet of Pizza Hut is located on South Avenue, Gulshan-1.
Pizza Hut provides the perfect mix of great food, great service and great place at a great value to customers who are looking for a grand experience. We believe in positive intension, and maintain a strong internal environment by developing our competitive work force, which we trust. The latest technological tools along with the best support systems from our franchiser YUM! International is used to ensure easy workflow and to make our restaurants the favorite in the Country.
The success of Pizza Hut relies heavily on delighting our customers by ensuring that all their needs and desires are met in every way. Hence, the company give strong importance to marketing efforts to ensure that. Along with customer satisfaction, make sure, that the business makes money! Therefore, the first task is to understand our consumers from every aspect.
In this regard, we have tried to gain a thorough understanding of our competitive environment and continuously strive to develop unique business ideas to make our business a success. Thus, Pizza hut has successfully attained a broad range of loyal customers, to whom pizza has gained extreme popularity. In order to expand this range, our marketing team is involved in developing new products and concepts, all the time. Above all, not only do we make GOOD FOOD, we are also famous for providing great service and dining experience, to give our valued customers more reasons, to return.
Due to the vast success of our flagship restaurant in Gulshan, and huge demand from consumers, opening of new stores in different cities are already under way. And from this experience marketing team has the recognition and understanding of * cultural influences
* governmental and political influences
* demographic and lifestyle trends
* local and national economic trends
In Pizza Hut the role of operations is to be obsessed with the quality of our pizza and the experience that our customers receive. There are 3 distinct categories of restaurants.
Full Service Restaurants
These are the traditional pizza restaurants that offers seated service and take-away. Home Service Restaurants
Restaurants that offer home deliveries and take-away.
Restaurant Based Delivery
A full service restaurant in combination with delivery and takeaway service. Currently, they are operating as the first category of restaurant, i.e a full service restaurant, with take-away facility. In the near future we will plan to introduce the other categories as well. All Pizza Hut sites work on the CHAMPS standard
These six objects define the very core of customer expectations. CHAMPS have become the vehicle, which drives Operations Excellence into our business and is also supported by a reward and recognition scheme for the Team members. The 'CHAMPScheck' is a tool used to ensure consistency of service and product quality across the entire Pizza Hut estate; in fact it is used for all the Yum! Brands internationally. Environmental considerations
Pizza Hut uses environmentally friendly materials where applicable, e.g. water based paint and recycled Pizza boxes.
2.1 Environmental forces:
Strategies are not and should not be developed in a vacuum. They must be responsive to the external and internal environment. Otherwise the firm become, in effect, the most efficient producer of buggy whips, leisure suits, or slide rules. To avoid such strategic mistakes, firms must knowledgeable about the business environment. Here we analyze the pricing strategies of Pizza Hut. In order to developing the pricing strategies and implementing these strategies into program they must scan the major internal and external factors. a. The Company
Pizza Hut is a chain restaurant, operated by Transcom Group in Bangladesh. In designing the pricing strategies, they must take account the other company groups. Top management sets the company's mission, objectives, broad strategies, and policies. They must work closely with departments. Finance department of the Pizza Hut is concerned with finding and using funds to carry out the long run and short run cost and different promotional program. The R&D department focuses on designing tasty and attractive pizzas. The purchasing and operations are responsible for getting supplies and materials, producing and distributing a desired quality and quantity of the foods.
The marketing manager of the Pizza Hut must monitor the price trends of their key inputs or raw materials such as bread loaf, different meats, capsicums, oregano, different flavor souses etc. Because it charges the price of a pizza that both covers all its costs for producing, distributing, and selling the product and delivers a fair rate of return for its efforts and risk. As cost is an important element in its pricing strategy so they should try to reduce supply cost of the inputs.
c. Marketing Intermediaries
Pizza Hut uses direct marketing to sell their products. Their cost of serving customers is comparatively high than the others. Besides they uses marketing service agencies such as research and development firm, advertising agencies, media firms and marketing consulting firms to promote their products and target the right market. Developing pricing strategies involve the cost of maintaining these intermediaries to sell their final product to consumers. d. Customers
The Company believe that customers estimate which offer will deliver the most value. They face a vast array of product and brand choices, prices and suppliers. Whether the buyers are satisfied after purchase depends on the offer’s performance in relation to the buyer’s expectations. As the customers are the value- maximizers then if the total customer value and the total customer cost doesn’t equal then they become dissatisfied. So it is the most important factor for Pizza Hut to implement effective pricing strategy that match the customers’ expectations to incur in evaluating, obtaining, using and disposing of the given market offering. e. Demographic Environment
Pizza Hut chooses Bangladesh to set up their outlets as it is one of the mostly dense countries in the world. Growing population means growing human needs to satisfy. Depending on purchasing power, it also means growing market opportunities. This large and highly diverse population poses an opportunity for them to capture the increasing market share. Pizza Hut established their outlets exclusively at Gulshan in Dhaka, at Agra bad in Chittagong. Pizza Hut divides its population group into six different levels: 1. Preschool
2. School-age children
4. Young adults age 25 to 40
5. Middle aged adults age 40
They provide different offer with changing prices to the customers.
f. Changing pricing strategies with changing family structure The traditional family structure is changing with the modern world. The number of working women has also increased. This trend has increased the consumption of convenience foods and services. In order to capture big market share and consumers’ support they must design their pricing strategy that satisfy the consumers’ perceived value.
g. Economic Forces
Pizza Hut use market skimming as their pricing strategy. They charge high price at the initial stage. It focuses on the changes in income of the consumers, their changing spending patterns. Pizza Hut target the high class people as their potential customers. They also set the outlets exclusively in the city. It also monitors the changing spending patterns of the people. Today people spend more in the foods.
h. Natural Factors
The deterioration of the natural environment is a major global concern. As a restaurant Pizza Hut should take the pricing strategies that also contribute the improvement of green movement. Recently they use recyclable or biodegradable packaging of their products. i. Technological Advancement
New technologies create new markets and opportunities. Developing the pricing strategy, technological advancement should give the priority. Pizza Hut uses internet to serve online orders with the help of Bangladesh, keep account of raw materials, and they use consumers’ database of the regular customers. j. Political Environment
Pizza Hut makes their marketing environment in Bangladesh by following the rules and regulation of the government. It considers several laws covering issues such as competition, fair trade practice, environmental protection, product safety, truth advertising, labeling, pricing and other factors in setting their product price. h. Cultural Factors
Recently the people of Bangladesh have tried to copy the Western culture. They are becoming interested to the western food like pizza, burger, hot dog, pasta, and so many foods. Pizza Hut uses this changing trend in their marketing as well as a pricing strategy. They spend more funds in product promotional program in this country. They offer Ramadan discounts, Valentines Day offer for the couples, friendship day program and so on. All of these schemes must match with their pricing style.
COMPETITORS OF THE PIZZA HUT
Today, competition is not only rife but growing more intense every time. In Bangladesh the most dominant competitors of Pizza Hut are the BFC, KFC, CFC, DOMINOUS PIZZA, HELVITIA, SHARMA PALACE, CHICKEN KING, BURGER KING, BELLA ITALIA. As the basic product of Pizza Hut is the different flavors pizza, the other fast-food shop is also serve pizza and may copy the marketing strategy of Pizza Hut. It has a certain cost burden that shares much of its strategic conduct. In developing an effective strategy it makes a clear difference between the market concept of competition and the industry concept of the competition. They analyze their competitors’ base on the following characteristics: a. Objectives
b. Strengths and weaknesses
c. Reaction patterns
International Competitors of Pizza Hut
* Papa John’s
* Little Caesar’s
Founded in 1960, Domino’s pizza is the recognized world leader in pizza delivery operating a network of company founded and franchise-owned stores in national and international markets. Domino’s Pizza’s vision illustrates a company of exceptional people on a mission to be the best pizza delivery company in the world. With more than 8000 restaurants and delivery units spread across in 50 countries, Domino’s holds the 2nd position in international pizza market. Domino’s is the world’s fastest pizza maker. It makes 14 pizzas in 2 minutes and 35 seconds. In 2004, Super Bowl Sunday was the busiest day of the year when Domino’s sold close to 1.2 million pizzas which is approximately 42% more pizzas compared to a normal Sunday. Super Bowl Sunday ranks among the top five days for pizza deliveries annually along with Thanks giving, New Year’s Day, New Year’s Eve and Halloween. Little Caesars
Little Caesars is 4th largest pizza manufacturer in USA. The company claims to be largest carry-out pizza chain in the world. The company is famous for its advertisement campaign of “pizza! Pizza!” which was later altered to “pan! Pan!’ to promote their pan pizzas. Little Caesars is famous for selling more pizzas at fewer prices. It has notable “differentiating Strategy” wherein Little Caesars sells “Hot-N-Ready” pizza for $5.00 only which means those customers do not have to call before taking the delivery of their pizza. They can just drop in to a “Little Caesar” outlet and collect their hot-n-ready pizza instantly. Marketing Strategy
Pizza Hut follows the following strategy:
* Total market strategy:
Pizza Hut started with a single product i.e. Pizza but with different segments emerging and the degree of competition increasing, it diversified into several products to serve different segments. It came up with chicken nuggets, wedges, garlic bread, smiley etc. * International marketing strategy:
Pizza Hut started with local market strategy in Kansas, USA then moved on to regional markets in and across USA. In 1968, Pizza Hut started its international movement by opening its 1st restaurant in Canada. And today Pizza Hut is world’s largest pizza chain with its presence in more than 100 countries. * Early Entry Strategy:
Though Pizza Hut was not the first entrants in the pizza market in USA. But Pizza Hut followed an early entrant strategy. Customers knew what a pizza is but still there was huge potential to tap. In order to become a leader, pizza hut continued to refine their product & develop new product to suit their customer’s changing tastes. Ultimately Pizza Hut with its superior promotion, manufacturing and distribution activities has turned out to be the “winner”. * Strong Commitment Strategy:
Pizza Hut has been operating in the pizza market by realizing all economies of scale in promotion, distribution and manufacturing facilities. If Papa Johns or Little Caesars come out with a new competitive pricing strategy or innovative product, then Pizza Hut quite aggressively fights back by bringing more competitive prices or better innovations in product category. In simple words, Pizza Hut takes all possible measures to defend its leadership position in the market. Customer Focus
“Consumption is the sole end and purpose of production; and the interest of producer ought to be attended to only so far as it may be necessary for promoting that of the customer”- Adam Smith Frank and Dan Carey recognized that the concept of Pizza was quite new to American. Although frozen pizzas and pizza mixes had entered into the market and started penetrating in non-traditional food market. Initially Pizza sampling was done to test the product and consumer’s preferences about the product. Thus first Pizza Hut was a success. From the very start, Pizza Hut aimed to get pizza’s to the masses. Initially, the entire world was a common market for Pizza Hut until it began segmenting and targeting particular market segments by differentiating and developing diverse products for them. Pizza Hut as a company has always tried to target and satisfy various diverse customer categories in different countries depending upon various factors and situations. Pizza Hut in order to fulfill its marketing objective of maximizing customer satisfaction by providing high quality products, has believed in the following marketing strategy: “Think Global, Act Local”
In Malaysia for instance, Pizza Hut targeting both urban adults as well as families with pre-teens and teenage children by offering a delicious mix of nutritious Itlaian-Amercian cuisine which includes world’s favorite pan pizza. Pizza Hut Malaysia at the same time offers a cozy, friendly ambience in which to relax and have a great time with family or friends. Pizza Hut Malaysia's success has been due to imaginative and innovative thinking in continuously developing, marketing and promoting new pizza products with unique and distinctive flavor, taste, style and appeal. In order to target the entire family experience, Pizza Hut launched a Hand Tossed Pizza which was pizza hut’s first step in traditional stuffed crust segment. It offers not-to-thin and not-to-thick crust on which the entire family agrees. To tap the market for young single in-hurry office goers looking for “fast lunch”, Pizza hut came up with “personal pan pizza for one”. The Personal Pan Pizza® revolutionized lunch and became the perfect solution to satisfy pizza cravings in a hurry. Pizza Hut introduced America to the perfect pizza for on-the-go back in 1983. Today, we can find Personal Pan Pizzas® in airports, college cafeterias and even sports arenas. To satisfy the New York pizza lovers, Pizza Hut introduced a “The big New Yorker Pizza”. This pizza was 30% larger than pizza hut’s largest pizza. It is New York style pizza at un-New York price introduced in 1999. In some countries, to capture the interest of “Echo Boomer generation” which the ultimate cheese loving population, Pizza Hut launched “The Ultimate Cheese” to give them the ultimate pizza experience. As Pizza Hut is the world’s largest Pizza manufacturing company believing in strategy of “Think Global, Act Local”, somewhere in USA pizza hut introduced variants with extra cheese or large in size, at the same time, when pizza hut to grow in international waters as Asia, it diversified to adapt their cultures and provide their favorite flavors. In order to tap huge spices lovers’ population in India, Pizza Hut recently has launched “The Great Indian Treat” which is rich in Indian spices and garlic. In order to tap market segment less than 18 years, pizza hut introduced “Stuff! Under 18 only” in United Kingdom, to tap the kids segment, various “Value combos” are introduced comprising of a Pizza, Chicken wedges, Fruit drink and ice cream. Whereas to tap the teenage market, Pizza hut introduced different flavors of pizza along with fruit beer was offered. At the same time, Teenagers were lured by promotional schemes as “DUBIT CARD” which will allow them to take discounts at various entertainment places including pizza hut. In an attempt to target, the people who are young and romantic at heart, whether it is an 18 year old boy friend or 50 year husband, on the occasion of “Valentine’s Day”, Pizza Hut launched a limited edition “Sweetheart Pizza” in the shape of heart. In nutshell, Pizza Hut tried to target each and every diverse population segment either on the scale of age (kids, teenage, office goers, senior citizens) or on basis of lifestyle (singles or couples) or special interest groups (celebrations, parties, festivals).
Pizza Hut: An Overview of the “Product Strategy”
“Product Strategies specify a market needs that may be served by different products offerings”. * Product Positioning Strategy:
Pizza Hut has always followed “Single brand positioning” strategy wherein it has positioned only its pizzas. Although the positioning statement has been different in different countries but it has always hovered around its “PIZZAS”. For instance, in Canada, its positioning statement is “The best tasting pizzas under one roof” which reflects a great variety of pizza being served , in China it has positioned on “Dine-in restaurants”, in Australia, it is “made fresh, served hot and on time” which reflects that best of ingredients are used and pizza is delivered on time. Similarly, in India, pizza hut’s positioning has been “Good times, Great pizza. * Product-Scope strategy:
Pizza Hut follows a “multiple product strategy” as pizza hut not only sells pizzas, but also deals in a variety of other products as
Soups and Desserts
Salads & Pastas
Although all the product offerings in pizza hut are not as fast moving as its pizza, but they usually complement each other. For instance, a family coming for a dinner usually starts with some soup and garlic breads and then moves on to pizzas along with some diet salads.
In this way, pizza hut caters to different people with different needs and tastes and preferences. This helps in increasing sales, profitability, market share and above all “Customer’s Mind Share” * Product-Design Strategy:
Pizza Hut follows the strategy of selling Standardized Products with modifications. Pizza Hut mainly sells 4 types of pizzas: Pan Pizza, hand-tossed pizza, stuffed crust pizza and Thin N Crispy pizza. Pizza Hut serves these standard style pizzas everywhere in the world but at the same time, it offers its customers to choose different toppings as extra mushrooms or extra capsicum and onions with extra cheese or chicken toppings like toppings of meat, bacon, fish, ham, beef topping, pork toppings etc.
Secondly it offers what is known as “Value meal combos” wherein it offers a combination of pizzas, appetizers, beverages etc at lower prices. For instance, Pizza hut introduced “Meal for 2” which offers a medium pan/freshizza pizza, garlic bread sticks with 2 glasses of pepsi.
Similarly pizza hut also offered “Meals for 4” where it offered 2 medium pan pizzas, with one plate of garlic bread and one portion of wedges with 4 glasses of Pepsi/Soup.
Pizza Hut by offering standard products seeks economies of scale and by offering modification options enhances customer satisfaction which adds to brand equity of Pizza Hut. * Product innovation strategy:
Pizza Hut has been constantly involved in innovating new products. It started as Pizza chain in 1958. On one hand, it offers traditional Italian pizzas while on other hand, it innovated several new varieties as pan pizza, thin n crispy, stuffed crust, the big New Yorker pizza, hand tossed pizza, the edge pizza along with the Sicilian Pizza.
Pizza Hut spends extensively on research and development of its innovative products. At the same time, customer’s feedback also plays an important role in preparing new pizzas. For example, The Big New Yorker Pizza.
Pizza Hut continued to make innovations as it followed “International marketing strategy”. In India, Pizza Hut launched international style pizza in localized Indian flavors like Tandori pizza range with Punjabi flavors, vegetarian tama-tam, Murgh Mazedar Pizza etc.
Similarly, in China along with traditional pizzas, it served “Sangria” and “Escargot”.
Along with pizzas, Pizza Hut also innovated beverages and drinks to satisfy the tastes of consumers. For e.g. Pizza Hut in Oman has added a refreshing splash of tropics to their menu with the launch of Monin, a new line of flavored drinks.
Value Marketing Strategy:
Pizza Hut as far as value marketing is concerned follows
Customer- service strategy
Pizza Hut promises its customers to give them best quality product by using best quality ingredients. Time and again it re-emphasizes on this fact through its advertisement campaigns.
Pizza Hut main motive is to enhance its customer’s satisfaction by providing them best quality products at affordable prices.
At the same time, pizza hut always tries to deliver on time. Although Pizza Hut’s competitor Domino’s differentiates on basis of timely delivery in 30 minutes, however, Pizza Hut through its innovative technology is also trying to reduce its delivery time to 30 minutes and fight back Domino’s. PRICING STRATEGIES OF PIZZA HUT IN THE PRODUCTS’ LIFE CYCLE STAGES Their pricing strategy usually changes as the product passes through its life cycle. As Pizza Hut chooses the market- skimming pricing strategy by setting a high price for their pizzas at the initial stage to skim maximum revenues layer by layer from segments (high society people, exclusive outlets) willing to pay the high price, their introductory stages were especially challenging. Here example given for Bangladeshi Context. Pricing strategies: Product Development Stage
This stage begins when the parent company (Transcom Group) finds an idea to purchase the franchise of selling pizza at a particular area. During this stage the sales are zero and their investment cost mounts. Pricing strategies: Introduction Stage
Introduction stage starts when the Pizza Hut was launched their basic product first at Gulshan in Dhaka. In designing their pricing strategy they face the following factors: 1. Their opening cost was very high because they organize a grand party and use heavy sales promotion to entice trial. 2. At the initial time their sales were comparatively low. 3. High cost per customer for creating superior image was increasing. 4. Their profit was positive.
5. The customers are the innovators of the new flavors pizzas with an attractive presentation style. 6. They charge the higher price with the justified quality. 7. They build only two exclusive distribution outlets.
8. Build mass advertising in newspaper, bill boards etc.
9. They compete with few competitors.
Pricing Strategies: Growth Stage
In this stage their sales are rising. The customers are properly known about the brands and the goods. 1. High cost per customer reduces and become the average cost. 2. During this stage profits are rising.
3. They maximize their market share.
4. They use product line extension by adding new flavors, ingredients, sizes such as family size, single pan pizza etc. 5. Their competitors are growing.
6. Develop new marketing plan to make the product superior from the competitors. 7. They also organize birthday party, marriage day party and so many occasions for a payment. By these they enhance their brand image.
Pricing strategies: Maturity Stage
Pizza Hut is now passing through the maturity stage. Their profits are at the peak. This stage normally lasts longer than the previous stages, and poses formidable challenges to marketing management. 1. Product modification by modifying the products’ quality improvements, feature improvements and style improvements. 2. Stable number of competitors is beginning to rise.
3. They change the price to match or best competitors’.
4. Pizza Hut is building a new outlet at Dhanmondi to meet the increasing demand of customers. 5. They create significance brand differences from competitors and take the advantages.
Pricing strategies: Decline Stage
This is the product life cycle stage in which a product’s sales decline. Pizza Hut doesn’t reach in this stage at present. Pizza Hut: An Overview of Franchise Model
“Franchising” involves a contractual arrangement between a franchisor (a manufacturer, a wholesaler, or a service sponsor) and a retail franchisee, which allows the franchisee to conduct a given form of business under an established name and according to a given pattern of business. Pizza Hut after its incorporation in 1958 opened its first franchise unit in Topeka, Kansas. Followed by a Pizza Hut restaurant built in just 5 days by franchisees in Oklahoma State Fair. In 1968, Pizza Hut made a global entry by entering in Canada. Then it made a strong foot holding in Australia, Japan, England, Kuwait, and Abu Dhabi. By 1989, Pizza Hut was already serving 54 countries. In 1996, Pizza Hut entered India with the first dine-in restaurant in Bangalore. While entering in the international arena, Pizza Hut used the “Franchising Route” as the entry strategy. In Bangladesh Pizza Hut enter Franchising with “Transcrom group”. Reasons why Pizza Hut adopted “Franchising” as the entry strategy: * The best method to establish operations without risk of operations in an unfamiliar country. * Franchising root helps in learning the buyer behaviour, consumer preferences, market realities etc. * Franchising helped Pizza Hut in building a brand name and creating efficient distribution system. * In certain socialist countries as China, Russia etc, direct foreign investment is not allowed, so pertaining to the local legal framework of these countries, Franchising is an easier route to enter into these countries. Pizza Hut: An Overview of the Global Strategy
Pizza Hut before entering into any new country conducts a comprehensive market survey of that country to learn about the culture that prevails in that country, the state of government and politics, the legal framework (product quality laws, packaging laws) , commercial practices (business structure, patterns of competition). Strategy Adopted by Pizza Hut for Global marketing programs: Localized strategy:
Pizza Hut follows the strategy of “Think Global, Act Local”. For e.g. in India, the 1st Pizza Hut which was launched in Bangalore served complete vegetarian meals.
Similarly, in China, along with serving Pizzas, Pizza Hut also serves “Sangria” and “Escargot”.
Similarly, in India, to match the spicy tastes of Indian consumers, Pizza Hut launched “Tandoori Treat”, “The Great Indian Treat”.
For the cheese lovers in the United States, Pizza Hut launched Cheesy Bites Pizza and Stuffed Crust Pizza.
In South Asian Muslim Country (like Bangladesh) Pizz Hut giver special Offer during Ramadan like “eat as much as You can” in iftar.
International Marketing Coordination:
Pizza Hut’s international marketing activities though dispersed in different countries are properly coordinated to gain competitive advantage as * All marketing activities as market research, advertisements, and restaurant interiors are done using a similar method. * Marketing know-how and skills are transferred from one country to another. For e.g. the “franchising model” is used successfully in all the countries by Pizza Hut.
Scanning the Environment: S.W.O.T Analysis
Strengths * Name Recognition * First-Mover Advantage (pioneer advantage) * Competitive advantage as pizza hut has he largest network of full service restaurants and delivery services. * Broad selection of products to target different segments. * Strong Franchisee network.| Weakness * High overhead costs due to large number of restaurants * High price pizza which leads to loss of customers. * Internal conflicts among franchisees.| Opportunity * Increase revenue through more and more innovative pizzas. * Increase in brand loyalty through good customer service. * Pizza hut has tremendous scope of expansion through its new online ordering system. * Pizza Hut home delivery network and entry in to new markets.| Threats * Main threat is from competitors. Out of these threat from Domino’s is main concern. * The differentiation strategy followed by any pizza chain is sooner or later adopted by all pizza industry players. New and newer methods to lure the customers must be found out. * Any competitor offering the same quality and diverse flavours might be a real threat to Pizza Hut.|
Pizza Hut: An overview of “Promotion Strategies”
Pizza Hut uses a wide assortment of promotion tools to achieve the following: * Increase the market share
* Increase the sales volume
* To increase repeat purchase
* To induce the non buyers to buy the product
The Promotion mix which it uses is as follows:
“Advertising”: Maximum used Medium of Pizza Hut Promotion Strategy The main objective behind every campaign is either to increase sales by encouraging potential purchasers or inducing repeat purchases or prompting immediate purchase by offering special schemes or to create awareness about a new product offering by highlighting a new flavor or announcing price changes or demonstrating the product in use by depicting an experience. For instance, to launch a new flavor in India named “The Great Indian Treat”, Pizza Hut signed a Javed Jaffrey for its new TV commercial. Similarly to inform the customers about Rs.50 pan pizza, Pizza hut showed Zayed Khan as a young teenager boy friend who has to treat his large number of girl friends with something trendy and affordable. Pizza Hut also launched certain ad campaigns to counter attack its competitors promotions. For instance, in 2005 Pizza Hut launched “Freshizza” ad campaign featuring Malika Arora Khan and counter attacked Domino’s campaign showing Anupam Kher and Paresh Raval. At the same time, Pizza Hut brings about local flavor in its ad campaigns. In different countries, it uses models, situations, positioning clearly related to that particular country. For instance, in India, Pizza Hut focused on occasions such as marriage and used Indian models that represent and relate to their target audience. Similarly, in USA, Jessica Simpson sells chicken nuggets and pizzas for Pizza hut. Internet Advertising
Not only Television advertisement, Pizza Hut along with Pizza innovations, also innovates new ways of promoting its products. Recently Pizza Hut signed a deal with Yahoo internet portal to advertise its products. The Flash-based rich media ad shows a pizza-laden pizza peel (the wooden "paddle" used to lift pizzas in and out of an oven) popping out of the middle of the Yahoo home page. Pepperonis rain down on the pizza, which then zooms across the screen to land in an ad unit on the right-hand side of the page, in Yahoo's Marketplace area. The online campaign was conceived and developed by an integrated team consisting of Yahoo, Pizza Hut, and The Digital Edge, the interactive agency for Pizza Hut. According, to chief marketing officer, Pizza Hut, “Pizza eaters are a broad group and internet advertising helps them in reaching and targeting each one of them”. Print Media (newspapers, magazines, pamphlets, posters)
Although Pizza Hut advertises mainly via television, but print ads also constitutes a major portion of its promotion mix. In order to encourage increased and immediate purchases or to induce non buyers to make purchases, Pizza Hut prints its “coupons”. Similarly, Pizza Hut to launch a new concept or to celebrate a particular theme like Valentine’s Day or Halloween came up with a print ad. Pizza Hut also promotes its pizzas via pamphlets or leaflets which are either hand delivered or sent through the mails to its potential and regular customers. Outdoor Advertisements
Pizza Hut adopted a variety of innovative types of outdoor advertisement. * Balloon Advertising: Pizza Hut indulged in an extremely innovative form of advertising named “Balloon Advertisements” where in cold air balloons in the shape of Pepsi can, pizza slices and garlic bread are placed either in front of the hut or placed at its roof top. (**specimen shown in appendix).
* Space Marketing: Pizza hut came up with a very innovative method of advertising when Pizza Hut paid huge sums (approx $1 million) to put a 30 ft large logo on Russian Proton Rocket. Not only had the logo, Pizza Hut also made its pizza available to the astronauts in the space. On such a successful venture, Pizza hut stated that “If space tourism is going to be a reality, Pizza Hut pizza will make the trip even better." * Banner Advertisement: Styrofirm along with McCann Erickson came up with really innovative banner advertisements to advertise its new range of “Gourmet Pizzas”. * Poster Advertisement: Pizza Hut came with a tremendously successful Poster advertisement campaign on the occasion of “Halloween” when Pizza Hut advertised for “The Ghoulish Tripple cheese, the spooky cheese combo, and the Halloween cheese supreme”.
* Coupons and Rebates: Pizza Hut offers discount coupons in physical form with every purchase we make. However in USA, UK, Canada where online ordering contributes a major percentage to total sales, Pizza Hut offers online coupons for different regions of varying denominations. For e.g. by entering your area zip code, we get a list of coupons of pizza hut offering different pizzas with different toppings. Pizza Hut offers large discount on orders made through these coupons.
* Premiums & Gifts: Pizza Hut offers “Gift vouchers” to be presented as a gift to someone special on marriages, birthday, anniversary etc. these gift vouchers are available in denomination of Rs. 500, rs.1000, rs.2000 etc. Pizza Hut offers CDs and DVD along with their pizzas as gifts to act as an additional incentive for customers to make the purchase. For e.g. Unique DVD Promotion: Pizza Hut came up with a promotion campaign where is offered a free DVD with a large size pizza and in a 6 week promotion, Pizza Hut distributed 10 million DVDs.
* Sweepstakes: Pizza Hut during the launch of “Cheesy Bites Pizza” introduced nation wide online sweepstakes contest to win an autographed pair of shoes by Jessica Simpson. Fans will be able to go online to www.pizzahut.com/cheesybites to enter the sweepstakes. Customers will also have an opportunity to win an autographed pair of Miss Piggy boots.
* Contests: Pizza Hut on various occasions as Mother’s Day, Father’s day, Valentine’s Day organizes contests to attract footfalls in the restaurants as well as to enhance its brand value. * Sampling: Pizza Hut gave “free samples” of the new pizza which it launches. For e.g. in case of “Cheesy Bites Pizza”, Pizza Hut offered free slices of it to the customers for sampling and testing it amongst the consumer group.
* Point of Purchase Material: Pizza Hut restaurant interiors are done in a uniform format for all the restaurants. Pizza Hut also comes out with several innovative POP materials to attract the attention of its customers. For e.g. Spin The Wheel games, danglers and posters. During the launch the “The Great Indian Treat” the entire interiors were given a pink color and the menu and danglers were all colored pink. On the occasion of “Valentine’s Day” in Malaysia, Pizza Hut launched a limited edition “Heart Shaped Pizza” with danglers, greetings cards all over. This limited edition Heart shaped pizza not only created an excitement among the customers, it also increased its brand value.
“Personal Selling refers to face to face interaction with the customer”. * Entertaining the customers in the restaurant: Crew members at Pizza Hut broke in to a boogie at metros like Delhi and Mumbai and performed “Bhangra” in Chandigarh and Amristsar. In Banglade surprising Birthday Wish etc. * Etiquettes of the crew members: The politeness of their speech and the mannerism which Pizza Hut crew members serve their customers is absolutely outstanding which enhances the brand value of Pizza hut in the customer’s mind.
As a Global brand perspective Pizza hut perfectly considers all the environmental and competitive forces.Though Pizza Hut abroad faces extensive competition, like delivery of Dominos, diversified line of Little Ceaser’s, the situation is a little bit different in Bangladesh. It faces mere competition here. Dominos, the first pizza chain in Bangladesh, can not make a good brand image in Bangladesh. Moreover, the prices of Pizza hut are comparatively less than the Dominos Pizza, the only direct competitor of Pizza Hut in Bangladesh, to some extent. So without any tension it not only entered in the market with a reasonable high price but also is continuing that price at present stage. As the target customers of Pizza Hut are affluent people, they also think that the running price is reasonable. But still now a large number of middle class people can not come to Pizza hut because of high price, though they have the strongest interest to visit.