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Project Report ON Pizza Hut
Project Report ON Pizza Hut
SUBMITTED TO:MRS. NEHA KAPOOR LECT. MGMT DEPTT CT INSTITUTIONS, SHAHPUR JALANDHAR .
CONTENTS
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INTRODUCTION..1
RETAIL ENVIRONMENT.3 POSITIONING..4 MARKETING STRATEGY....5 CONSUMER PULL FACTORS..6 COMPARISON....7 LONG TERM PROGNOSIS...8
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INTRODUCTION
Pizza Hut is one of the flagship brands of Yum! Restaurant Int. which also has KFC, Taco Bell, A&W and Long John Silvers under its umbrella. It is the worlds largest pizza chain with over 12,500 restaurants across 91 countries. Pizza Hut was started in 1958, by two brothers Frank and Dan Carney in Wichita, Kansas. They had the idea to open a pizza parlor. They borrowed $600 from their mother, and opened the very first Pizza Hut. In 1959, the first franchise unit opened in Topeka, Kansas. Almost ten years later, Pizza Hut was serving one million customers a week in their 310 locations. In 1970, Pizza Hut was put on the New York Stock Exchange under the ticker symbol PIZ. In 1986, Pizza Hut introduced delivery service, something no other restaurant was doing. By the 1990's Pizza Hut sales had reached $4 billion worldwide. In 1998, Pizza Hut celebrated their 40th anniversary, and launched their famous campaign "The Best Pizzas Under One Roof." In 1996, Pizza Hut sales in the United States were over $5 million. The first Indian outlet was opened in June 1996 in Bangalore. In India, Pizza Hut has 139 restaurants across 36 cities. Pizza Hut has been voted the best family restaurant for the second year running at the 2007 Tommys Parent Friendly Awards. "Pizza Hut is known for quality, innovation and category leadership.
RETAIL ENVIRONMENT
Out of all the existing pizza chains such as Domino's, Smokin Joes, Papa Johns, Pizza Corner, U.S Pizza, Pizza Hut has a dominating market share of 48% of the total market share. However, this forced competitors to look for new methods of increasing their customer bases. They all try to come up with some newer, bigger, better pizza for a low price. But Pizza Hut has always had the first mover advantage. Their marketing strategy in the past has always been to be the first. One of their main strategies, that they still follow today is the diversification of the products they offer. The market has become greatly competitive and the customer has become more discerning and adventurous. This however has not affected Pizza Hut's comfortable reign over the Indian pizza industry and the ever increasing number of loyal customers who have made it possible for Pizza Hut to aggressively extend its presence. 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. Another strategy they used in the past and are still using is the diversification of their pizzas. Pizza Hut is always trying to make a pizza into something slightly different so that customers will think its a whole new product. E.g., in 1983, Pizza Hut introduced Pan Pizza, which had a guarantee of being ready to eat in 5 minutes when dining at Pizza Hut restaurants. In 1993, they introduced the "BigFoot," which was two square feet of pizza cut into 21 slices. In 1995, they introduced "Stuffed Crust Pizza," where the crust would be filled with cheese. Currently, they are marketing "The Big New Yorker," trying to bring the famous New York style pizza to the whole country.
POSITIONING
Pizza Hut was among the first multinational brands to enter the food retail sector in India. When the first Pizza Hut restaurant opened in Bangalore 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. Worldwide and in India, Pizza Hut has come to become synonymous with the 'best pizzas under one roof'. This is because at Pizza Hut the belief is that every pizza has its own magic, thus making it a destination product which everyone seeks. It is this belief that has ignited the passion to create, innovate and serve the finest product the industry has to offer, while setting standards for others to strive to replicate. Pizza Hut is committed to providing uncompromising product quality, offering customers the highest value for money and giving service that is warm, friendly and personal. A critical factor in Pizza Hut's success has been its unique dining experience. Crewmembers 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 to the current 139 restaurants across 36 cities.
MARKETING STRATEGY
Pizza Huts marketing strategy is very simple: we want to satisfy our customer by offering them the best. Pizza Hut has always valued customer service and satisfaction. In 1995, Pizza Hut began two customer satisfaction programs: a 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. Another big strength and even a competitive advantage is 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 to different segments that other pizza chains cannot. For example, Pizza Hut can market to families much easier than Domino's or Little Caesar's. Pizza Hut offers a sitdown, conversational type restaurant where families can take their children for birthday parties for example. Pizza Hut's broad selection of products also makes it easier for them to market to different market segments. The other two strategies followed by Pizza Hut is C.H.A.M.P.S (Cleanliness, Hospitality, Accuracy, Maintenance, Product quality and Speed) and 3Fs (Fun, Friendly and Familiar). These two strategies have really helped Pizza hut to evolve out as a market leader with a competitive advantage.
COMPARISION
MARKET SHARE
OTHERS 32% PIZZA HUT PIZZA HUT 48% DOMINO'S OTHERS DOMINO'S 20%
Leveraging the India Advantage : International brand with an Indian heart Pizza Hut is one of the first international pizza chains with purely vegetarian dine-ins at Chowpatty (Mumbai), Ahmedabad and Surat, which also serve Jain menus. Pizza Hut has even opened two allvegetarian restaurants in the western state of Gujarat to cater to the Jain religious community, whose members prefer not to eat at places where meat is served. Offering more than the international menu International food chains typically offer only a few localized products in other parts of the world. However, Pizza Huts local menu is as large as the international one. According to Pizza Hut, the Indian food heritage is very rich, and hence Indians like local flavors. The Tandoori range of pizzas, which was developed locally, has a menu mix of over 20 per cent. Indigenous sourcing of raw materials Pizza Hut has reduced costs through indigenous sourcing of raw material. It has tied up with a local company Dynamix Dairy Industries Ltd (DDIL) for sourcing mozzarella cheese. The landed cost of imported mozzarella comes to US$ 3.3 - 3.5 per kilogram. The domestic price, however, works out to US$ 2.99 - 3.1 per kilogram. Pizza Hut is adding to the bottom line by localizing equipment as well as by paying attention to inventory replenishment, which has been reduced from 60 to 30 days.
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Future plans
According to Yum! Restaurants International, India is amongst the top five growth markets for Pizza Hut. Pizza Hut is also experiencing double-digit growth in India and hence is confident about expanding its operations in India. Pizza Hut hopes to increase the number of Pizza Hut outlets in India to 180 by the end of 2008 from the present figure of 130. The expansion programme will make Pizza Hut the fastest growing western restaurant chain in India. In addition, Yum! plans Pizza Hut to be in 42 cities by end of 2007, and 55 cities by end of 2008.
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