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Marketing Challenges at Pizza Hut in Pakistan

Prepared By

Abdul Shakoor BM - 25095

Introduction

Pizza Hut established in 1958 in Wichita Kansas City at United States of America. Two brothers (Frank & Dan Carney) borrowed $600 from their mother and started food business (Pizza). Pizza Hut is a American restaurant chain and international franchise based in Addison, Texas offering different styles of pizza. The worlds largest restaurant company with approximately 34,000 restaurants in 100 countries & it is ISO (International Standard Organization) certified. At global level it is part of Pepsi Empire and in Pakistan it is franchised to M/s. Habib Oil Mills (Pvt.) Ltd. Which runs it under franchisee name M/s. MCR (Pvt.) Ltd.
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Pizza Hut in Pakistan

Pizza was introduced in Pakistan in the year 1993 by opening first branch / Outlet at Boat Basin, Karachi. Pizza sales in Pakistan generates over $ 2 billion annually, which is the second largest sales revenue in the world. Pizza Hut has multiple outlets in major cities including Karachi, Lahore, Faisalabad, Multan, Gujranwala, Peshawar, Hyderabad, Rawalpindi and Islamabad. These outlets offer a wide variety of pizza combining western and eastern recipes.

Pizza Hut in Pakistan

Mission:  We are the employers of choice offering team members opportunities for growth, advancement and rewarding careers in a fun, safe working environment. To be the best pizza for every pizza occasion. Vision:  To improve the well being of our customers, community and people connected to our enterprise. Objective & Goals:  Our goal is to reach 85% recognition of the new product in our target market.  As with all businesses, the most important goal of a company is to increase revenue and profits.
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Marketing Challenges at Pizza Hut in Pakistan


Pizza Hut facing various challenges like:


Choosing of advertising medium for advertisement from large number of T.V. and radio channels, so many news papers, magazines etc. Availability of Parking Space for customers. Proper training and grooming of staff especially for those who directly interact with customers. Increasing competition and threat of new entrants. Lack of social responsibility

 

 

Marketing Process
         

Understand the Market Place Need, Wants & Demands Marketing Offer Customer Value & Satisfaction Exchange & Relationship Designing a Customer Driven Strategies Building Customer Relationship Customer Relationship Management Partnership Relationship Management Capture Value from Customers in Return
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Market Segmentation
Pizza Hut is on the base on multiple segmentation (Geographical, Demographical & Psychological Segmentation).

Target Market:
   

Pizza Hut has targeted those families who like to go out for dinner once a week. Pizza Hut has made delivery services for those customers who like to have pizzas in their home with their families or friends. Pizza Hut maximum market segment is younger generations. These generation ranges from 12 to 30. Pizza Hut targeted those customers that they like vegetarian 8 options with meet free pizzas and a salad and pasta bar.

Market Segmentation
Positioning:


Pizza Huts success has been its unique dining experience. Positioning involves implanting the brands unique benefits and differentiation in customers minds. Pizza Hut is providing uncompromising product quality, offering customers the highest value for money & giving service that is warm, friendly and personal. Pizza Hut use strong brand image and high price for high quality products for positioning their positive image in the minds of customers. Pizza Hut provide CUSTOMER MANIA the kind of service that ensures that every visit of the customer is a memorable one.
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Market Segmentation
Slogans:
Pizza Hut makes its slogans by finding unique features of its products to position itself. Slogans create positive image in customers mind. Some Slogans of pizza hut are;
 

The best pizzas under one roof Share the good times

Unique Selling Proposition:




Pizza Hut makes and sells its product according to place and norms. It always follows the customer needs, wants and demands, to make its product more reliable in customer mind. Pizza hut through quality and quick services always maximizes its market share. That is why its products are unique in all around the world. Pizza Hut Fresh, hot pizza delivered in thirty minutes or less or it is free
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Marketing Mix
Product:


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. It provides its customers with complete nutrition plan and healthy food is guaranteed too. The nutrition plan also clearly tells diabetes patients can use what range of food at pizza hut . They introduce the very first "Chapli Kabab Pizza" which was very healthy product by Pizza hut in this region. There are a lot many products according to different geographical places.

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Marketing Mix

Price:


The pricing strategy adopted by Pizza Hut is 'Market Skimming'. Pizza Hut has adopted this pricing strategy as it wants to hold maximum share of the market by maximum profit . Different groups of customers are willing to pay different prices for the same product. The high/low pricing strategy will also create excitement. According to the sizes of the pizzas, prices are made. They offer pizza sizes such as personal pan, which is of 6 inches, regular of 9 inches, and then come the large of 12 inches.
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Marketing Mix

Place / Distribution:


 

Pizza Hut have 40 outlets in 09 cities in Pakistan. In Karachi 19 Outlets, Hyderabad 01 Outlet, Lahore 11 Outlets, Islamabad 02 Outlets, Rawalpindi 02 Outlets, Multan 01 Outlet, Sialkot 01 Outlet, Peshawar 01 Outlet & Faisalabad 02 Outlets. The type of distribution channel used by Pizza Hut is the direct channel. Pizza Hut uses two different methods of selling its product directly to the market. The first method of distribution used by Pizza Hut is Home and Office delivery. The second method of distribution is for customers to dine-in.
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Marketing Mix
Promotion:


The main promotion strategy is a coupon to purchase. This promotion is also distributed mainly by mail, but also by fliers on college campuses, offices etc around the country in order to reach the target market. Pizza Hut has made different schemes to capture their customers. Such as, Double Masti, Meal Deals, Midnights Deals and the famous on Ramadan Deal.

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SWOT Analysis
Strength:


Pizza Hut is providing good taste, quality products, good atmosphere and hygienic environment. They are providing free home delivery service. Another big strength and even a Competitive Advantage is the fact that they provide full service restaurants as well as delivery services. Pizza Hut focused on Western taste instead of Eastern. It gives less parking facilities, its advertisements are very less and it is working less for social welfare. Pizza Hut has higher overhead cost causing higher prices Pizza Hut must charge of their products.
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Weakness:
 

SWOT Analysis
Opportunities:
  

Pizza Hut can come up with the new products considering the Eastern taste of the people. They can reduce their prices because of more resources. In outlets Broader Sitting Area, More attractive environment and attractive offer should be introduced, ordering online system. New entrance, their closest competitor in Pakistan market can affect their market share. The rising price of special ingredients like cheese, used in pizzas. Many of its competitors are trying to capture the market share of the Pizza Hut by introducing similar kind of pizzas and food items.

Threats:
  

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Domino Pizza


 

 

Domino Pizza founded in 1960 in the United States and International Market. Domino has currently 8800 stores in over 60 international markets. In the Year 2004 Domino Pizza first store opened in Karachi. In the Year 2006, Unique Food Service Company was acquired fully by Hilal Confectionery Group. In Karachi Domino Pizza have 05 Outlets and Lahore have 03 Outlets. The Vision of Domino Pizza is a company of exceptional people on a mission to be the best pizza delivery company in the world. Domino Pizza segmented the market demographically, target the younger and old age the range of 13 50. Marketing Strategy of Domino Pizza is that they introduced a birthday packages especially for kids. Domino Products are good quality and the hygiene of the Pizzas.
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Domino Pizza


 

Domino pricing strategy is based on economy of the country. It adopts the market penetration strategy. The Strength of Domino Pizza is Low Price Menu. The Weakness of Domino Pizza is they have not dine-in facility and the own restaurant. The Opportunity of Domino Pizza is capturing the new customer through low price menu. The Threat of Domino Pizza is the main closest competitor PIZZA HUT captured the whole market.

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Conclusion


Pizza Hut is the pioneer of a pizzas in Pakistan. It is a highly reputable organization and growing day by day. Due to bad economic conditions and increasing competition Pizza Hut is facing more challenges. The organization is facing various challenges among which more important challenges are proper and further attention towards advertisement and availability of proper parking space. If proper attention is paid towards these two challenges the revenue of the organization may increase and a prominent financial change would definitely be visible in the years ahead.

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Recommendation


Pizza Hut must focus on more advertisement, as the organization is not paying attention towards this aspect. Therefore more and proper advertisement according to the need and demand of the market situation is the dire need. The organization must put more efforts towards new idea generation for making its food with more variety and taste. Range of food items may be widened to attract new customers and retain existing customers as well. More emphasis on training and development of staff is required with induction of new employees. Pizza Hut must come forward in social issues and should contribute sufficient amount towards betterment of society. As Proper and Secure parking space was the most common challenge described by the managerial / supervisory staff the organization must focus on it and must pay proper attention. Proper parking space may facilitate the customers and they may dine-in with peace of mind. It would help to generate more revenue.
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