International marketing environmental analysis of

Pizza Hut

Compiled by :
Tiyo Cahya Nisbana
C1H016019
 Preface

First of all, thanks to Allah SWT because of the help of Allah, writer finished
writing the paper entitled “International marketing environmental analysis of Pizza Hut”
right in the calculated time.

The purpose in writing this paper is to fulfill the assignment that given by Mrs.
Alisa Tri Nawarini, SE., M.B.A. as lecturer in International Marketing.

In arranging this paper, the writer trully get lots challenges and obstructions but
with help of many indiviuals, those obstructions could passed. Writer also realized there are
still many mistakes in process of writing this paper. Because of that, the writer says thank
you to all individuals who helps in the process of writing this paper. Hopefully Allah
replies all helps and bless you all.the writer realized that this paper still imperfect in
arrangment and the content. Then the writer hope the criticism from the readers can help
the writer in perfecting the next paper.

Last but not the least Hopefully, this paper can helps the readers to gain more
knowledge about International Marketing.

Purwokerto, 21 Oktober 2018

Tiyo Cahya Nisbana

Table of Contents
CHAPTER 1........................................................................................................................................ 4
INTRODUCTION............................................................................................................................... 4
CHAPTER II ....................................................................................................................................... 7
CONTENTS ........................................................................................................................................ 7
A. Economic environment ........................................................................................................... 7
B. Social and cultural environment .............................................................................................. 7
C. Political and legal environment ............................................................................................... 8
D. The strategies they used to cope environment......................................................................... 8
CHAPTER III................................................................................................................................ 11
CONCLUSION ............................................................................................................................. 11
CHAPTER 1

INTRODUCTION

History of Pizza Hut

Pizza Hut was founded in June 1958 by two Wichita State University
students, brothers Dan and Frank Carney, as a single location in Wichita, Kansas. Six
months later they opened a second outlet and within a year they had six Pizza Hut
restaurants. The brothers began franchising in 1959. The iconic Pizza Hut building
style was designed in 1963. PepsiCo acquired Pizza Hut in November 1977.

Before closing in 2015, the oldest continuously operating Pizza Hut was in
Manhattan, Kansas, in a shopping and tavern district known as Aggieville near
Kansas State University. The first Pizza Hut restaurant east of the Mississippi River
opened in Athens, Ohio, in 1966 by Lawrence Berberick and Gary Meyers.

Pizza Hut's international presence includes Canada and Mexico in North

America, India (not in the Pizza Hut division, but in the Yum! India division),
Bangladesh, Pakistan, Australia, New Zealand, United Kingdom, Sweden, Norway,
Finland, Germany, Spain, Turkey, South Africa, Honduras, Costa Rica, El Salvador,
Guatemala, Colombia, Venezuela, Chile, Brazil, Peru, Tanzania, Ecuador, and
Nicaragua, and its Asian presence includes Japan, Saudi Arabia, the United Arab
Emirates, Qatar, the Philippines, Vietnam, Thailand, Malaysia, Singapore, Indonesia,
Brunei Darussalam, China (now part of Yum! spinoff Yum China), Hong Kong,
South Korea, Myanmar, and Macau. Pizza Hut was one of the first American
franchises to open in Iraq.

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 The company announced a rebrand that began on November 19, 2014, in an
effort to increase sales, which dropped in the previous two years. The menu was
expanded to introduce various items such as crust flavors and 11 new specialty
pizzas. Work uniforms for employees were also refreshed. In 2017, Pizza Hut was
listed by UK-based company Richtopia at number 24 in the list of 200 Most
Influential Brands in the World.

Strategy they used

Pizza Hut uses a mix of geographical and psychographic segmentation

variables to make its products available in the market. The world’s famous Pizza
brand uses undifferentiated targeting strategy to design the offerings and services as
per the choice of the customers. It uses value-based positioning strategy to create the
everlasting image in the mind of the consumers.

Rapid expansion

Pizza Hut had long been offering other products such as pasta in addition to
pizza by the time it went public in 1972. The 1000th restaurant was opened in the
same year ‒ in Wichita, of course. This rapid expansion continued.

After opening new restaurants in Japan and England, the 100th international
restaurant began operations in Australia in 1976. This brought the total number of
restaurants to 2000. After the shareholders approved the takeover by Pepsico Inc., the
steady upwards trend continued uninterrupted. In 1977, the opening of the 3000th
restaurant in the USA (in Texas) was celebrated. In 1980, Pan Pizzas with
individually selected toppings were introduced worldwide in all Pizza Hut

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restaurants. Today they are an absolute classic and they will undoubtedly remain that
way.

Staying true to our principles

Naturally, in the course of the company’s 52-year history, there have been
many changes in the pizza business. Much of Pizza Hut’s continued success is based
on the fact that it has never deviated from its original principles: quality,
characterized by freshness and first-class products, and courteous, friendly service
that makes the customer feel like royalty.

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CHAPTER II

CONTENTS

A. Economic environment

Environmental Factors includes the hygiene and considering the trends pertaining to the
environment like introducing the concepts of recycling are the important factors that need
to be considered for the food chains like Pizza Hut. People of every region are now very
much vigilant about their health with the growing pace of several diseases. So that the
organization could always be the top priority of the customers and it must not lose its
prestige.

B. Social and cultural environment

a. Social

The social factors are related to the people and the faith is of the people. As per the
Pizza Hut, the social factors that will impact the business are the demographic and the life
expectancy of the local people in which the franchise of the Pizza Hut is situated. The area
where life expectancy is high and where there is more urban population there are more
chances of sales and of course more chances of the profits. Likewise, the regions where
people are more prone to fast food mostly in the developed states are the higher regions of
getting profits and increasing the number of the franchise.

b.

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 c. Cultural

Pizza Hut's culture focuses on satisfying the customer's need and wants. There will be
many deadlines for you to achieve and it may result in you making many mistakes, but it
allows you to experience a stressful environment and overcome the challenges that you're
forced to face. However, you may receive free pizzas on rare occasions and there are a few
benefits, but ultimately, working at Pizza Hut is a short term method to help you understand
a glimpse of a fast paced and stressful work environment.

C. Political and legal environment

Pizza Hut is an international business now. The food chains of Pizza Hut are located
from the United States to the third world states in Asia. With every different region and
state, there are certain political factors which need to be kept in mind for the owners in
order to excel in that particular area. The political factors encompass the policies and the
underlying actions of the government of the state in which the branch of Pizza Hut is. If the
government of the state is more prone in a proliferation of Pizza Huts outlets, there will be
more and more restaurants of Pizza Hut. This proliferation of restaurants will eventually
increase the employment opportunities for the local people over there and will also provide
more entertainment facilities at each step to the local residents. Apart from this the
regulation policies for the business also play a prominent role in setting up the business in
the locality. For food chains like Pizza Hut, these policies are very important for the
success. So the places which provide business friendly policies give opportunities to the
Pizza Hut organization to set up the business in a successful way.

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 D. The strategies they used to cope environment

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 United States, Pizza
Hut launched Cheesy Bites Pizza and Stuffed Crust Pizza.

Pizza Hut uses a mix of geographical and psychographic segmentation variables to

make its products available in the market. The world’s famous Pizza brand uses
undifferentiated targeting strategy to design the offerings and services as per the choice of
the customers. It uses value-based positioning strategy to create the everlasting image in the
mind of the consumers

1) Sales promotion

One of Pizza Hut’s more recent sales promotions is its “Happy Hour” menu. The Happy
Hour menu provides consumers the choice not only pizza, but also pasta, salad and plus
garlic bread and a drink. Pizza Hut promoted this menu at a £4 fixed price. Pizza Hut
premiered this promotion using an ATM advertising campaign. The purpose of this
campaign is to hopefully increase visits by customers to Pizza and was cleverly timed to
premier around pay-day for most of the working public.

2) Sponsorship

Pizza Hut possesses a wide sponsorship in different and variety areas from past until
now. For instance, the notable sponsorship of Pizza Hut is as a part of PepsiCo’s. There has
also been partnerships with Formula one, Euro ’96’ and was a sponsor of the Newcastle

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Vipers ice hockey team from 2007/08 EIHL season. Nowadays, Pizza Hut is proud to
sponsor National Family Week. This is the biggest official celebration of families and
‘Pizza Hut is a gold sponsor of such an exciting new initiative backed by the largest
coalition of family in the UK.’ (The Greenwich Gazette, 2009) Therefore due to the
association with such reputable brands, sponsorship is a very useful method of marketing
for Pizza Hut and has helped communicate the image of Pizza Hut to its target audience.

3) E-marketing

The internet communication of Pizza Hut plays an important role for customers. Pizza
Hut also has used social networking sites such as Facebook and Twitter to create E-
marketing. Facebook users can join a Pizza Hut group and receive information of any
promotions. This new form of marketing is Pizza Hut adapting to new technology and
understanding there are a lucrative options for marketing this way. The target audience that
use social networking sites most profoundly Generation X and this creates a parallel to a
large proportion of Pizza Huts target audience.

4) Branding

In 2008 Pizza Hut rebranded its UK business to Pasta Hut. The expenditure of this
rebranding cost ‘£100M’ (Marketing Week, 2008) as it refurbished many restaurants and
also created new outlets. The change of the brand’s name could be seen as a trial exercise to
promote and test the market’s acceptability of the new name. It has been noted however
that most of people still prefer the previous name ‘Pizza Hut’ and found the rebranding of
‘Pasta Hut’ stale and uninteresting.

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CHAPTER III

CONCLUSION

A. Conclusion
As a conclusion, Pizza Hut is a great company in managing their
productivity. Pizza Hut is the largest pizza restaurant corporation in the globe
according of both the number of outlets and the percentage of market share that it
has.

Pizza Hut company has a great demand in the market. There are many
factors that affect demand of Pizza Hut. Namely, price of other goods (substitute),
customer preferences and tastes and consumer income. Price of other goods affects
demand of Pizza Hut. Consumer will find other alternative if price of pizza in Pizza
Hut increases. Thus demand of Pizza hut decreases. Secondly, customer preferences
and tastes also affect demand of Pizza Hut. If Pizza Hut couldn't satisfy consumer
tastes, the demand of pizza Hut will drop as consumer will find other alternative
that satisfy them. Next factors that affect demand of Pizza Hut is consumer income.
Other things being equal, when income increases, consumer’s demand for more
goods and services will increase. Thus, when consumer income increase, the
demand for Pizza Hut will also increases. Taxation also affects demand of Pizza
Hut. The higher the taxes that charged in Pizza Hut, the lower the purchasing power
of consumer. Thus this decreases the demand for Pizza Hut.

Pizza Hut tends to have an elastic demand. Elastic demand happen when
there is a small change in percentage of price of a product will lead to a larger
percentage change in quantity demanded. As a prove, consumer will not consume
Pizza Hut if the price increases. Consumer will try to find another alternative.
Therefore, it decreases demand of Pizza Hut.

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 It is clearly shown that from the survey that Pizza Hut has many loyal
customers. This is proved when the survey shows that customer satisfaction is at the
good parameter for quality, price, store, ambiance and service. This also can be
proved when 11 out of 14 people agree that eating Pizza Hut is value for money.
The suggestions we can provide to Pizza Hut in improving their services are to
include more new dishes to their menu so that customers would have more choices
to choose. Pizza Hut also should regularly make a discount such as by creating a
combo meals and giving discount vouchers.

B. Recommendations

Companies must be able to maintain or even improve existing product quality. For
example, by innovating on the menu new foods that are in accordance with the wishes
of consumers and immediately Check if you find damaged food or drink or not
according to customer wishes. This is for create reliable consumers and buy back return
as a loyal customer and can be a reference for their family and friends.

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 REFERENCE

http://www.yum.com/pizza-hut-corporate-green-team-awarded-the-environmental-star-of-
excellence/#.W8248mgzY2x

https://www.encyclopedia.com/social-sciences-and-law/economics-business-and-
labor/businesses-and-occupations/pizza-hut-inc

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