PizzaHut Report

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Report and Marketing Strategies of Pizza Hut

Institute of Management Sciences, Peshawar Pakistan Page 1

A PRESENTATION REPORT ON

PIZZA HUT PESHAWAR

ACCEPTED TO

SIR IMRAN WAZIR

ACCEPTED BY:

ADNAN KHAN

MUJAHID HUSSAIN

NAVEED SAEED

SHAHZAD TAHIR

ZARTASHIA ARSHAD

BBA (HONS) - C

1st

Semester


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TABLE OF CONTENTS

S. No. Topic Page Number

1 Letter of acceptance 3

2 Executive summary 4

3 History of Pizza 5

4 Introduction & History Of Pizza Hut 5

5 Pizza Hut Mission Statement 6

6 Comparative Strategy 7

7 PEST 8

8 SWOT 9

9 Segmentation 10

10 Positioning 10

11 Targeting 11

12 Pizza Hut Strategies 11

13 Functional Level Strategy 11

14 TQM (Total Quality Management) 12

15 Business Level Strategy 12

16 Pricing Strategy 12

17 Market Share 13

18 Four P's of Marketing 14

19 Product 1420 Price 1421 Place 1522 Promotion 1623 Conclusion 17

24 References 18


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LETTER OF ACCEPTANCE

To:

Mr. Imran Wazir,

Lecturer IM| Sciences,

Peshawar.

Subject: PREPARATION OF REPORT

We are Hereby Presenting the presentation on Company Pizza Hut and assure you submission

of our report in compliance with the instruction envisaged. Name of topic is repeated for ready

reference please.

Marketing Plans & Business report on Pizza Hut

Yours sincerely,

Adnan KhanMujahid Hussain

Naveed Saeed

Shahzad Tahir

Zartashia Arshad

Date: March 03, 2009


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EXECUTIVE SUMMARY

During the past four decades Pizza Hut has built a reputation for excellence that has earned the

respect of consumers and industry experts alike. Building a leading pizza company has required

relentless innovation, commitment to quality and dedication to customer service and value.

The qualities of entrepreneurship, growth and leadership have characterized Pizza Huts

business through more than four decades of success. Through the strength of its heritage, its

culture and its people and franchisees, Pizza Hut looks forward to more success in future.

There are different objectives of every organization. In order to achieve these objectives

different targets are set. Targets pass down the hierarchy depending on the nature of the

business. Therefore, in order to achieve the objectives, management decides on different

strategies. These strategies are divided into many sub-parts and are useful for the running of

the business. The employees and the management know what they have to achieve through

the targets which have been set to them and the strategies they have adopted help them know

the way they will achieve the objectives. Similarly, Pizza Hut has different targets set to them

and they have adopted different strategies to successfully achieve the targets set. These

targets are set by the RSC i.e. the restaurant support centre in Karachi. These targets are

passed on to the RGM (restaurant general manager) and he passes them to the workforce.

These targets fall within the organizational structure in which there are many people who have

different targets to achieve. In order to successfully achieve the targets they need to co-

operate and work in a friendly environment.


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HISTORY OF PIZZA

About Pizza, Some will tell you Italy. That's wrong. What you know as pizza came into vogue

around the time of Napoleon and the French revolution. Italians, known to be lovers of fine

food and wines perfected and imported this terrific dish to America. From here it quickly

endeared itself to mass production and re-export to the rest of the world. Bon appetite!

INTRODUCTION & HISTORY OF PIZZA HUT

In 1958, Frank and Dan Carney had an idea for a great local pizza restaurant in Wichita Kansas.

The small 25 seat restaurant only had room for 9 letters on the sign the building looked like a

hut so 'Pizza Hut' was born!

Fifteen years later, we opened the first UK restaurant and since then we've become the biggest

Pizza Company on the planet, Let see listen Pizza Hut Story from them!

1958 Frank and Dan Carney open the first Pizza Hut in Wichita, Kansas. 1972 1000 restaurants are open throughout the USA. 1973 Pizza Hut went international with restaurants in Japan, Canada & England.

The first UK Pizza Hut opened in Islington, London.

1977 PepsiCo bought Pizza Hut. 1980 Pan Pizza was introduced. 1982 The UK joint venture started between PepsiCo and Whitbread. 1984 Over 50 restaurants so far in the UK.

1986 By now, there were 100 restaurants in the UK and 5000 worldwide. 1987 An average of one restaurant opened each week in the UK. 1988 The UK's First Delivery Unit was opened in Kingsbury, London. 1992 There were 9,000 restaurants in 84 countries. 1993 There were 300 restaurants and delivery stores in the UK. 1994 10,000 Pizza Huts were open for business. 1997 PepsiCo decided to focus on their drinks business. As a result, Tricon Global Restaurants

was born, creating the largest restaurant brand in the World. Tricon became the partner

company with Whitbread.

1999 Pizza Hut had over 400 restaurants, employing 14000 people.

2002 Tricon Global became YUM! Brands Inc. 2006 Whitbread sold their share of the joint venture to Yum! Brands Inc. Pizza Hut UK Ltd was

now 100% owned by Yum!

2008 We bought Godfather's Pizza in Ireland with 28 stores.


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Pizza Hut's Mission Statement

We take pride in making a perfect pizza and providing courteous and helpful service on time all

the time. Every customer says, "I'll be back!"

We are the employer of choice offering team members opportunities For Growth,

Advancement, And Rewarding Careers in a Fun, Safe Working Environment.

P.E.A.R.L.S PASSION for excellence in Doing everything EXECUTE with positive energy and urgency. ACCOUNTABLE for growth in customer satisfaction and profitability. RECOGNIZE the achievement of others and have fun doing it. LISTEN and more importantly, respond to the voice of the customer.


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COMPARATIVE STRATEGY:

This forced competitors to look for new methods of increasing their customer bases.

Many pizza chains decided to diversify and offer new non-pizza items such as Buffalo wings,

and Italian cheese bread. The current trend in pizza chains today is the same. They all try to

come up with some newer, bigger, better, pizza for a low price. Offering special promotions

and new pizza variations are popular today as well. For example, chicken is now a common

topping found on pizzas.

In the past, Pizza Hut has always had the first mover advantage. Their marketing

strategy in the past has always been to be first. One of their main strategies that they still

follow today is the diversification of the products they offer. 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 come up with some innovative way to make a pizza into

something slightly different - different enough that customers will think its a whole new

product. For example, let's look at some of the pizzas Pizza Hut has marketed in the past. In

1983, Pizza Hut introduced their 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. In 1997, they marketed "The Edge," which had

cheese and toppings all the way to the edge of the pizza. Currently, they are marketing "The

Big New Yorker," trying to bring the famous New York style pizza to the whole country.

Lastly, Pizza Hut has always valued customer service and satisfaction. In 1995,

Pizza Hut began two customer satisfaction programs: a UAN (in USA 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. In our plan, we

will first give a situation analysis of current and relevant environmental conditions

that affect our plan. Next, we will give a brief analysis of the current fast food

industry, and any trends or changes that might occur in the future.


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ENVIRONMENTAL AND INTERNAL ANALYSIS OF PIZZA HUT

In our visit to Pizza Hut we conducted research on PEST (Political, Economic, Social and Technological)

Analysis.

In the internal analysis of Pizza Hut we have considered SWOT of the Company.

PEST (Political, Economic, Social & Technological)

i. POLITICAL ISSUES:Political issues include regulatory frame work operating in judicial system which may affect the

business in different ways. There are not many political factors in Peshawar affecting Pizza Hut as is

lack of competition. Factors such as laws on business employment, pollution and taxation apply on the

organization which it has to follow regarding the rules.

ii. ECNOMIC FACTORS:If the countys economy is better so the GDP of the country will be good, this is a green signal for the

business as the per capita income of the people will be increased and they will spend more money. In

our survey we came to know that most of the people in the beginning of the months spend more and

they visit pizza hut very often. When the inflation rate increases the cost of raw material also increases

and this leads towards high prices of the products and vice versa.

iii. SOCIAL FACTORS:Pizza hut is a multinational and it is basically originated from America so the organization is

overwhelmed by western culture. There are social forms of society which consist of Upper class,

middle class, middle upper class, lower class and lower class. Every country has cultural norms, values,beliefs and religion which can affect the organization.

iv. TECHNOLOGICAL FACTORS:Now a days technology is improving so as baking and heating ovens will be of new and efficient

technology and will provide efficient service. Due to new technology there are new ways of marketing

like internet; telemarketing and the organization can advertise their products with much more faster

pace. Computer based customer data that is MIS (managing information system) helps in collecting

customer data, daily transactions, future forecasting and decision making. New vehicles will make their

service more efficient.


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SWOT ANALYSIS:

Every organization has its strengths, weakness, opportunity and threats. So, the SWOT analysis for

pizza hut is as under:

Strengths:

Pizza Hut is the market leader in providing different products of pizzas as there are no competitors in

this sector. There good image makes the organization more strong. Pizza Hut is providing good taste,

quality products with qualified staff, good atmosphere and hygienic environment. They are specialized

in pizzas. Motivation level of staff is very high which make the organization more prosperous. They are

ISO (International Standard Organization) certified. They have enough resources for operating different

activities of the organization. They are providing free home delivery service. They have created

monopoly in this sector. 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 too many different segments that other

pizza chains cannot. For example, Pizza Hut can market to families much easier than Domino's or Little

Caesar's.

Weaknesses:

However, the fact that Pizza Hut does have a restaurant to run is also a weakness. Pizza Hut has higher

overhead costs, due to the restaurant that other competitors don't have to deal with. Another result of

higher overhead costs is higher prices Pizza Hut must charge. Obviously, Pizza Hut is not the low cost

producer. They rely on their quality pizza and good service to account for their higher prices. They are

providing less range of products comparatively with high prices. They are more focused on Western

taste instead of Eastern.

Opportunities:

New markets can be explored and new opportunities they can gain. Pizza Hut can come up with the

new products considering the Eastern taste of the people as like McDonalds. Diversification of new

products can increase their market share. They can reduce their prices because of more resources.

Threats:

Pizza Hut's number one threats are from their competitors. Currently,

i. Their closest competitor is Domino's Pizza who is working to open their Branch at Karachi.Domino's main competitive advantage over Pizza Hut is their Lower price.

ii. Little Caesar's who is establishing their self in India and might move to Pakistan is another oneof Pizza Hut's competitors, right behind Domino's in market share. Little Caesar's is famous for

offering large quantities of pizza for less money.

iii. New entrance like Dominos pizza in Pakistan market can affect their market share.iv. Other local restaurants can affect their market share by providing pizzas with lower price.


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v. Social factors can affect their image as a Western organization.SEGMENTATION:

Main segments which Pizza hut has captured are the combination of higher

incomes and dual career families , due to higher income consumer have moredisposable income , allowing them to eat out more often .

Pizza Hut holds the most market share in the Pizza industry, the perceived

quality and service of the company will help to ensure a better the average chance at

a successful introduction of a new product. The introduction of a product that keeps

with today trends is also important to reduce the risk of failure.

Pizza Hut maximum market segment is younger generations. These generation

ranges from 12 to 30, the overall spending of these generations is mostly on non

essential items, the higher amount of spending has been done on eating out.

POSITIONING

Pizza Hut was among the first multinational brands to enter the food retail sector in

Pakistan. When the first Pizza Hut restaurant opened in Karachi 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 Pakistan.

Worldwide and in Pakistan, 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. Crew

members at Pizza Hut strive each day to provide 'CUSTOMER MANIA' - the kind of service thatensures 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 Pakistan

to the current 38 restaurants across 9 cities.


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Market Targeting:

Pizza hut targeted market defines them as a family product. This is because they dont really directly

market their customers. They are target everyone whereas their competitors target a certain gender or

age. But pizza hut targets a wide range of customers. This is because they want to make the most

money and who blames them.

They have many competitors and they are bound to try everything to cope up tops. Their competitors

are everywhere. There are just a few that are main competitors and pizza hut will always try to be the

best and get the most money by making their products better quality but also cheaper.

They try to offer something different with their product as well. They offer a range of stuffed crusts to

try and attract customers. They also do vegetarian options with meet free pizzas and a salad and pasta

bar. Not a lot of restaurants offer a salad and a pasta bar. This is another competitive idea to attract or

customers.

STRATEGIES ADOPTED BY PIZZA HUT:

A business's strategy is the pattern of decisions and actions that are taken by the business to achieve

its goals. A business has a variety of goals and objectives. All businesses need to organize their business

activities in order to achieve their business objectives. Running a business involves planning the current

as well as future activities. Hence, in order to achieve the business objectives, all business

organizations adopt different strategies. Similarly, Pizza Hut has adopted many strategies which help

achieve the targets set by the main office to the local store opened at Peshawar. Changes are the

external as well as internal environment has led Pizza Hut rethink their past strategies and has

therefore designed new strategies after noticing the changes in the environment. These environmental

changes are seen through the PEST and SWOT analysis. After considering all the factors Pizza Hut has

decided upon the strategies and their current strategies are divided into five main categories and

further have sub-parts. These strategies are: -

Functional Strategies: -

These are strategies designed to improve the efficiency of a business's operations. They often focus on

an area, such as marketing, human resource etc. All business organizations adopt strategies at

functional level as once the functional objectives are achieved, corporate objectives become easy. In

order to make the functional strategy efficient, Pizza Hut has made all the functional departments co-

operate with each other.


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Total Quality Management (TQM): -This is the most important for a food chain like Pizza Hut. All the employees back -of-the-house i.e. the

kitchen assistants are trained accordingly. They are given extra classes in order to meet the quality

standards set by Pizza Hut around the world. This strategy is important in order to satisfy the CHAMPS.

This strategy is strictly implemented in Pizza Hut in order to fulfill the quality standards. Different

quality management staff is also there at Pizza Hut. The shift managers have the task to observewhether the quality standards are met or not, whereas there are a total quality management

department at the main office in Karachi. This department has the task to implement quality standards

and know whether they are achieved or not.

Business Level Strategy: -

Business level strategies are plans made to gain a competitive advantage over its rivals in a market.

Hence, all the businesses need to adopt business level strategies in order to compete in a competitive

environment. If we take a look at the Pakistani market, there are no large competitors of Pizza Hut but

unlimited small competitors exist in the market. The threat of competitors is very low as there is no

international food chain offering pizza in Pakistan at present. Therefore, present strategies adopted by

Pizza Hut are keeping in consideration the present competition. Whereas, in future this competition

will increase and Pizza Hut will have to change all its business level strategies in order to compete with

its rivals. In very near future Dominos is opening its first branch in Karachi. This would be a threat for

Pizza Hut and hence, the strategies would be changed.

Pricing Strategy: -The level of competition a business faces determines its pricing strategy. Sometimes a business has the

scope to set its price and sometimes a business cannot. When a business has the scope to set its price

there is a number of pricing strategies or policies it might choose. As there are no such competitors of

Pizza Hut which could compete with the quality of pizza produced at Pizza Hut, therefore, the pricing

strategy adopted by Pizza Hut is 'market skimming'. Pizza Hut has adopted this pricing strategy as they

want to hold maximum share of the market by maximum profit. This is a golden era for Pizza Hut, as

there are no competitors and hence, Pizza Hut is free to charge any price they want. They are charging

higher prices due to the uniqueness of the product. They satisfy the target market as the food quality is

worth the price paid. The pricing strategy is not just to get the worth of quality but also to gain

maximum profits before any competitor enters because then Pizza Hut will have to change its pricingstrategy. Although the prices would be lowered with the new entrants in the market but not to a

greater extent as the quality food products are not home-produced. They are imported from different

countries keeping in view the best quality.


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Market Share:

As there are Dozens of Pizza Suppliers Globally Providing Services in different part of the World, but

Pizza Hut is the One who got the Bigger Market Share Globally.

This is the Survey taken bywww.survey.comthat Pizza Hut is having 48% of Overall Pizza Market in theWorld. After that Dominos is leading with a percentage of 20% while the rest 32% is divided in the

Remaining Pizza Providers Globally.
http://www.survey.com/http://www.survey.com/http://www.survey.com/http://www.survey.com/


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FOUR PS OF MARKETING

PRODUCT:

Product refers to the actual program you are planning. 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, though

most stores have done away from with the small size. A variety of toppings are

available, plus "specialty" styles, including Meat Lovers, Pepperoni Lovers, Cheese

Lovers, Veggie Lovers, Double Cheeseburger, Supreme, Super Supreme and the newly

introduced Pizza Mia. The pan pizza has a thicker crust than most other commercially

available pizzas .so their products have help them to retain their customers and to

increase them .they provide their customers with complete nutrition plan andhealthy food is guaranteed. The nutrition plan also clearly tells diabetes patients can

use what range of food at pizza hut. Over weight patients are also satisfied and the

pizza with less cholesterol can be ordered. This encourages the customers to visit

pizza hut rather than going elsewhere. As pizza hut has to boost its sales in the

existing markets, so they the new food products are introduced in all branches line-

byline because all branches are operated in co-operation with one another.

Different products for different regions are also developed as there are choice

differences. Pizza hut offers a long list of products and never afraid to offer new

products like in Peshawar according to market they introduce the very first "Chapli

Kabab Pizza" which was very healthy product by Pizza hut in this region. There are alot many products according to different geographical places. Like in India they have

got there vegetable pizzas, which has a large market there BUT not the Cow Meat

Pizza.


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PRICE:

. As there are no such competitors of Pizza Hut which could compete with the quality of pizza

produced at Pizza Hut, therefore, the pricing strategy adopted by Pizza Hut is 'market

skimming'. Pizza Hut has adopted this pricing strategy as they want to hold maximum share of

the market by maximum profit. This is a golden era for Pizza Hut, as there are no competitorsand hence, Pizza Hut is free to charge any price they want. They are charging higher prices due

to the uniqueness of the product. They satisfy the target market as the food quality is worth

the price paid. The pricing strategy is not just to get the worth of quality but also to gain

maximum profits before any competitor enters because then Pizza Hut will have to change its

pricing strategy. Although the prices would be lowered with the new entrants in the market

but not to a greater extent as the quality food products are not home-produced. They are

imported from different countries keeping in view the best quality.

First, this pricing strategy will help segment the market. Different groups of

customers are willing to pay different prices for the same product. The high/lowpricing strategy will also create excitement. The pricing strategy adopted by Pizza

Hut is 'market skimming'. Pizza Hut has adopted this pricing strategy as they want to

hold maximum share of the market by maximum profit. This product will emphasize

product and service quality

PLACE/DISTRIBUTION:

It refers to the best place to offer program. That is the place where it is

located and through what channels are we distributing programs and the competitive

advantage lies in distribution. The pizza hut Peshawar is situated out of the marketarea near Army Stadium and Shami road. This site has been chosen keeping in view

the following factors. It is in an out of centre location on retail or Leisure Park with

good parking accessibility. Secondly the catchment area is of a specified minimum

size and within a given drive time to the site.

Distribution The type of distribution channel used by Pizza Hut is the direct channel.

The direct channel is successful when there is an extremely large market that is

geographically dispersed. The direct channel is also useful when there are a large

number of buyers, but a small amount purchased by each.

Pizza Hut uses three different methods of selling its products directly to the

market.

i. The first method of distribution used by Pizza Hut is Home. Office delivery.Customers can call Pizza Hut ahead of time, place an order, and the order is

delivered to the customer's home.


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ii. Another method of distribution is for customers to dine-in. Customers can goto the nearest Pizza Hut, place an order and either leave with the order or eat

at the restaurant. One of Pizza Hut's largest competitive advantages is its

restaurant style facility. Pizza Hut offers a clean place to sit down and enjoy the

variety of pizzas, salads, and sandwiches in a fun, family atmosphere.

iii. The third method of distribution is to order Online. Selective County Customerscan now go on the Internet and place an order for Pizza. This method is useful

because it allows customers to view the entire menu, download any special

coupons, and order without having to disclose any credit card numbers.


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PROMOTION:

The objectives of promotion are to introduce a new product, stimulate

demand, change the short-term behavior of the customers, and encourage repeat or

greater usage by current customers. Pizza hut uses many promotional strategies. The

main promotion is a coupon to purchase. This promotion is also distributed mainly bymail, but also by fliers on college campuses around the country in order to reach the

target market. They are using billboards on main stream places to get there

customer. They are also distributing door to door brochures to capture more and

more customers. Pizza huts also using marketing techniques. These are the strategies

Pizza hut is using for its marketing. Pizza huts try's to attract the younger generation

as their main market segment. Apart from this Pizza Hut is using intense marketing

strategies they are also giving ads in magazines. Advertising camping will creates

awareness of the products in our target markets.


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CONCLUSION

Pizza Hut has many targets which it has achieve in a given period of time. The time-period is mostly a

year. Therefore, in order to fulfill the targets different strategies are adopted by Pizza Hut. It can beconcluded that these strategies have been successful and there is flexibility in the strategies, as they

can be changed with the changes in the market conditions as well as the targets.


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Institute of Management Sciences Peshawar Pakistan Page 19

REFERENCES

Mr. Amir Zeb, Shift Manager, Pizza Hut, Peshawar

Mr. Hamad Zeb, Shift Manger, Pizza Hut, Peshawar

Lower staff of Pizza Hut, Peshawar

Google Search Engine

www.definitions.com

www.answers.com

www.about.com

www.wikipedia.org

www.pizzahut.com
http://www.google.com/http://www.google.com/http://www.definitions.com/http://www.definitions.com/http://www.answers.com/http://www.answers.com/http://www.about.com/http://www.about.com/http://www.wikipedia.org/http://www.wikipedia.org/http://www.pizzahut.com/http://www.pizzahut.com/http://www.pizzahut.com/http://www.wikipedia.org/http://www.about.com/http://www.answers.com/http://www.definitions.com/http://www.google.com/

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