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INTRODUCTION
Yum! Brands, Inc., based in Louisville, Ky., is the world’s largest restaurant company
in terms of system units with more than 39,000 restaurants in more than 125 countries
and territories and 1.4 million associates. Yum! is ranked #213 on the Fortune 500
List and generated more than $13 billion in revenue in 2012. Our brands - KFC, Pizza
Hut and Taco Bell– are the global leaders of the chicken, pizza and Mexican-style
food categories.
The Yum! System includes four operating segments: U.S., International (Yum!
Restaurants International), China and India Divisions. Outside the United States in
2012, the Yum! system opened approximately five new restaurants each day of the
year, making it a leader in international retail development.
At Yum! we're building a vibrant global business by focusing on four key business
strategies:
Build leading brands across China in every significant category
Drive aggressive international expansion and build strong brands everywhere
Dramatically improve U.S. brand positions, consistency and returns
Drive industry-leading, long-term shareholder and franchisee value
Results for 2012 once again affirmed our consistent record of success with 13%
Earnings Per Share (EPS) growth, which marks the eleventh straight year we
delivered at least 13% growth and exceeded our 10% EPS growth target. For the full
year 2012, we opened 1,976 new restaurants outside the U.S. Importantly, we
achieved Return on Investment Capital (ROIC) of 22%+ and continued to be an
industry leader.
We're proud of the unique culture we've built, one that's filled with energy,
opportunity, and fun. We believe in our people, trust in their positive intentions,
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encourage ideas from everyone, and have actively developed a workforce that is
diverse in style and background. Yum! is a place where anyone can, and does, make a
difference.
BOARD OF DIRECTORS
David C. Novak:
David C. Novak became Chairman of the Board on January 1, 2001, and Chief
Executive Officer of Yum! on January 1, 2000. He was also President of Yum! from
October 1997 to May 2012. David previously served as Group President and Chief
Executive Officer, KFC and Pizza Hut from August 1996 to July 1997, at which time
he became acting Vice Chairman of Yum!. He also held senior management positions
at Pepsi-Cola Company, including Chief Operating Officer, and Executive Vice
President of Marketing and Sales.
Novak shapes the company’s overall strategic direction, including four key growth
strategies: 1) build leading brands across China in every significant category; 2) drive
aggressive international expansion and build strong brands everywhere; 3)
dramatically improve U.S. brand positions, consistency and returns; and 4) drive
industry-leading, long-term shareholder and franchisee value. Additionally, he
devotes much of his time each year to personally teach leadership skills to the
company’s management and franchisees, emphasizing teamwork and a belief in
people that rewards and recognizes customer-focused behavior.
Novak is a director of the Yum! Brands Foundation and World Food Program USA.
Additionally, he is a member of The Business Council and The American Society for
Corporate Executives, while also devoting considerable personal support to the
United Nations World Food Programmed and Dare to Care Food Bank hunger relief.
He is also the recipient of the national 2008 Woodrow Wilson Award for Corporate
Citizenship.
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Sam Su
Director since 2008 | Vice Chairman of the Board, Yum! Brands, Inc.
and Chairman & CEO,
Yum! Restaurants China
Jing-Shih S. Su has been Vice Chairman of the Board since 2008. He is also Chairman and
Chief Executive Officer of YUM’s China Division, a position he has held since May 2010. From
1997 to May 2010, he was President of YUM’s China Division. Prior to this position, he was
the Vice President of North Asia for both KFC and Pizza Hut.
Michael J. Cavanagh
Director since 2012 | Co-CEO of JPMorgan Chase & Co.’s Corporate &
Investment Bank
Michael J. Cavanagh is Co-CEO of JPMorgan Chase & Co.’s Corporate & Investment
Bank. Prior to that, he was the Chief Executive Officer of JPMC’s Treasury &
Securities Services business, one of the world’s largest cash management providers
and a leading global custodian. He is also a member of the firm’s Operating and
Executive Committees. Prior to being named CEO of Treasury & Securities Services
in 2010, Cavanagh was Chief Financial Officer of JPMorgan Chase & Co. for six
years. Before being named CFO, Cavanagh was Head of Middle Market Banking for
JPMorgan Chase. Cavanagh joined Bank One in May 2000 (prior to its acquisition by
JPMorgan) and held a variety of roles there including Head of Strategy and Planning,
Treasurer, and other executive positions in banking. Before joining Bank One,
Cavanagh spent seven years with Citigroup and its predecessors.
David W. Dorman
Director since 2005 | Non-Executive Chairman, CVS Caremark Corporation
David W. Dorman is the Non-Executive Chairman of the Board of CVS Caremark
Corporation, a position he has held since May 2011. Until May 2011, he was the
Non-Executive Chairman of Motorola Solutions, Inc. (formerly known as Motorola
Inc.), a leading provider of business and mission critical communication products and
services for enterprise and government customers. He served as Non-Executive
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Chairman of the Board of Motorola, Inc.from May 2008 until the separation of its
mobile devices and home businesses in January 2011. From October 2006 to May
2008, he was Senior Advisor and Managing Director to Warburg Pincus, a global
private equity firm. From November 2005 until January 2006, he was President of
AT&T Inc., a company that provides Internet and transaction-based voice and data
services (formerly known as SBC Communications). He was Chairman of the Board
and Chief Executive Officer of the company previously known as AT&T Corp. from
November 2002 until November 2005. Prior to this, he was President of AT&T Corp.
from 2000 to 2002 and the Chief Executive Officer of Concert, a former global
venture created by AT&T Corp. and British Telecommunications plc, from 1999 to
2000.
Mr. Dorman serves on the board of Motorola Solutions, Inc. and Georgia Tech
Foundation. He served as a director of AT&T Corp. from 2002 to 2006.
Massimo Ferragamo
Director since 1997 | Chairman of Ferragamo USA, Inc.
Massimo Ferragamo is Chairman of Ferragamo USA, Inc., a subsidiary of Salvatore
Ferragamo Italia, which controls sales and distribution of Ferragamo products in
North America. Mr. Ferragamo has held this position since 1985. Mr. Ferragamo has
served as a director of Birks & Mayors, Inc. from 2005 until 2007.
Mirian M. Graddick-Weir
Director since 2012 | Executive Vice President of Human Resources, Merck &
Co., Inc. Mirian M. Graddick-Weir serves as Executive Vice President of Human Resources
for Merck & Co., Inc., a position she has held since 2008. From 2006 until 2008, she was
Senior Vice President of Human Resources of Merck & Co., Inc. Prior to this position, she
served as Executive Vice President of Human Resources and Employee Communications of
AT&T Corp from 2004 to 2006. Ms. Graddick-Weir served as the Executive Vice President of
Human Resources of AT&T Corp. from 1999 to 2004. Ms. Graddick-Weir has held various
executive positions throughout her career with AT&T, which began in 1981. Ms. Graddick-
Weir is a director of Harleysville Group Inc.
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J. David Grissom
Director since 2003 | Chairman, Mayfair Capital, Inc.| Chairman, The Glenview
Trust Company
J. David Grissom is Chairman of Mayfair Capital, Inc., a private investment firm
formed by Mr. Grissom in 1989. In addition, Mr. Grissom has been Chairman of The
Glenview Trust Company, a private trust and investment management company, since
2001. From 1973 to 1989, he held various senior positions, including Chairman and
CEO of Citizens Fidelity Bank & Trust and Vice Chairman of its successor, PNC
Financial Corp. He served as a director of Churchill Downs Incorporated from 1979
to 2010.
Bonnie Hill
Director since 2003 | President, B. Hill Enterprises LLC
Bonnie G. Hill is President of B. Hill Enterprises LLC, a consulting company. She has
held this position since July 2001. She is also co-founder of Icon Blue, Inc., a brand
marketing company. She served as President and Chief Executive Officer of Times
Mirror Foundation, a charitable foundation affiliated with the Tribune Company from
1997 to 2001 and Senior Vice President, Communications and Public Affairs, of the
Los Angeles Times from 1998 to 2001. From 1992 to 1996, she served as Dean of the
McIntire School of Commerce at the University of Virginia. Ms. Hill currently serves
as a director of AK Steel Holding Corporation, The Home Depot, Inc., California
Water Service Group, and The Rand Corporation. She serves as the Lead Director of
the Board of Directors of The Home Depot, Inc. She also served on the boards of
Hershey Foods Corporation from 1993 to 2007 and Albertson’s, Inc. from 2002 to
2006.
Jonathan S. Linen
Director since 2005 | Advisor to the Chairman of American Express Company
Jonathan S. Linen has been an advisor to the Chairman of American Express
Company, a diversified worldwide travel and financial services company, since
January 2006. From August 1993 until December 2005, he served as Vice Chairman
of American Express Company. From 1992 to 1993, Mr. Linen served as President
and Chief Operating Officer of American Express Travel Related Services Company,
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Inc. From 1989 to 1992, Mr. Linen served as President and Chief Executive Officer of
Shearson Lehman Brothers. Mr. Linen is a director of Modern Bank, N.A. and The
Intercontinental Hotels Group.
Thomas C. Nelson
Director since 2006 | Chairman, President & CEO of National Gypsum
Company
Thomas C. Nelson has served as the President and Chief Executive Officer of
National Gypsum Company, a building products manufacturer, since 1999 and was
elected Chairman of the Board in January 2005. From 1995 to 1999, Mr. Nelson
served as the Vice Chairman and Chief Financial Officer of National Gypsum
Company. He is also a General Partner of Wakefield Group, a North Carolina based
venture capital firm. Mr. Nelson previously worked for Morgan Stanley & Co. and in
the United States Defense Department as Assistant to the Secretary and was a White
House Fellow. He also serves as a director of Belk, Inc. and Carolinas Healthcare
Systems.
Thomas M. Ryan
Director since 2002 | Former Chairman and Chief Executive Officer,
CVS Caremark Corporation
Thomas M. Ryan is the former Chairman and Chief Executive Officer of the Board of
CVS Caremark Corporation ("CVS"), a pharmacy healthcare provider. He served as
Chairman from April 1999 to May 2011. He was Chief Executive Officer of CVS
from May 1998 to February 2011 and also served as President from May 1998 to May
2010. Mr. Ryan serves on the board of Five Below, Inc. and is an Operating Partner of
Advent International. Mr. Ryan was a director of Reebok International Ltd from 1998
to 2005 and Bank of America Corporation from 2004 to 2010.
Robert D. Walter
Director since 2008 | Founder and Retired Chairman/CEO, Cardinal Health,
Inc.
Robert D. Walter is the founder of Cardinal Health, Inc., a company that provides
products and services supporting the health care industry. Mr. Walter retired from
Cardinal Health in June 2008. Prior to his retirement from Cardinal Health, he served
7
as Executive Director from November 2007 to June 2008. From April 2006 to
November 2007, he served as Executive Chairman of the Board of Cardinal Health.
From 1979 to April 2006, he served as Chairman and Chief Executive Officer of
Cardinal Health. Mr. Walter also serves as a director of American Express Company
and Nordstrom, Inc. From 2000 to 2007, he was a director of CBS Corporation and its
predecessor, Viacom, Inc.
8
BRANDS OF YUM
KFC: KFC (Kentucky Fried Chicken) is a fast food restaurant chain headquartered
in Louisville, Kentucky, United States, which specializes in fried chicken. An
"American icon", it is the world's second largest restaurant chain overall (as measured
by sales) after McDonald's, with over 18,000 outlets in 120 countries and territories as
of December 2012.[6][4]
KFC restaurants offer consistent branding and similar menus
worldwide. Most outlets are operated on a franchise basis, with a minority operated
directly by the company itself. Franchisees purchase certain items from the parent
company, pay a royalty as a percentage of earnings, and contribute towards local
advertising costs.
KFC was founded by Harland Sanders, who began selling fried chicken from his
roadside restaurant in Corbin, Kentucky during the Great Depression. Sanders was
one of the first people to see the potential of the restaurant franchising concept, with
the first "Kentucky Fried Chicken" franchise opening in Utah in 1952. The franchise
popularized chicken in the fast food industry, thereby diversifying the market and
challenging the dominance of the hamburger.[7]
Marketing himself as "Colonel
Sanders", he became a legendary figure of American cultural history, and his image is
still prominently used in KFC branding.[7]
By 1963, the company was the largest fast
food business in the United States. The company's rapid expansion saw it grow too
large for Sanders to manage, and he eventually sold the company to a group of
investors. KFC was one of the first fast food chains to go international, opening
outlets in England, Mexico and Puerto Rico by the mid-1960s. In the early 1970s,
KFC was sold to the spirits firm Heublein, who were taken over by the R.J. Reynolds
conglomerate, who sold the chain to PepsiCo. Throughout the 1970s and 1980s, KFC
experienced mixed success at home as it went through a series of corporate owners
who had little or no experience in the restaurant business, although it continued to
expand in overseas markets. In 1987 KFC became the first Western restaurant chain
to open in China. KFC has since expanded rapidly in China, and the country is now
the company's most profitable market. PepsiCo spun off its restaurants division (also
including Pizza Hut and Taco Bell), as Tricon Global Restaurants, which later
changed its name to Yum! Brands.
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KFC primarily sells fried chicken pieces and variations such as chicken sandwiches
and wraps, salads and side dishes such as French fries and coleslaw, desserts and soft
drinks, often supplied by PepsiCo. Its most famous product is pressure fried chicken
pieces, seasoned with Sanders' "Original Recipe" of 11 herbs and spices. The exact
nature of these ingredients is unknown, and represents a notable trade secret. Large
portions of fried chicken are served in a cardboard "bucket", which has become a
signature of the chain since being introduced by franchisee Pete Harman. KFC is
famous for the slogan "finger lickin' good", which has since been replaced by
"Nobody does chicken like KFC" and "So good".
KFC has been the target of an ongoing campaign by the animal rights organization
PETA, although company executives have protested that the chain is unfairly singled
out for criticism. The chain has also been accused by Greenpeace of contributing to
the destruction of the world's rainforests with unsustainably sourced cardboard and
paper packaging. In 2012, in China, the company was found to have been buying
poultry that had been raised with illegal levels of growth hormone and antibiotics.
This resulted in a restaurant boycott by a large number of Chinese through December
and January of 2013.
TOCO BELL:
Taco Bell was founded by Glen Bell who first opened a hot dog stand called Bell’s
Drive-In in San Bernardino, California[2]
in 1946 when he was 23 years old. Six years
later, he sold the stand and opened a new one two years later, this time selling tacos
under the name of Taco-Tia. Over the next few years Bell owned and operated a
number of restaurants in southern California including four called El Taco. Bell sold
the El Tacos to his partner and built the first Taco Bell in Downey in 1962. In 1962,
he sold Taco-Tia. Kermit Becky, a former Los Angeles police officer, bought the first
Taco Bell franchise from Glen Bell in 1964,[2]
and located it in Torrance. The
company grew rapidly, and by 1967, the 100th restaurant opened at 400 South
Brookhurst in Anaheim. In 1970, Taco Bell went public with 325 restaurants. In 1978,
PepsiCo purchased Taco Bell from Glen Bell.
PIZZA HUT
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INTRODUCTION
It was the summer of 1958 when DAN and FRANK CARNEY Decided to open a
pizzeria. With mouth-watering Pizzas prepared by the founder themselves, pizza Hut
soon Become a popular Neighbored Restaurant. From then to over 12500 restaurants
across the world today, we have come a long way, to offer an experience you`ll never
forget. Pizza hut Restaurant teams are dedicated to making our guests feel welcome
and accepted and help them to create fun and memorable moments.
In India, Pizza Hut has 137 restaurants across 36 cities, including Delhi, Mumbai,
Bangalore, Chennai, Kolkata, Hyderabad, Pune, and Chandigarh amongst others.
Yum! Is in the process of opening Pizza Hut restaurants at many more locations to
service a larger customer base across the country.
Pizza Hut (corporately known as Pizza Hut, Inc.) is the world’s largest pizza chain an
American restaurant chain and international franchise that offers different styles of
pizza along with side dishes including pasta, Buffalo and chicken wings, breadsticks,
and garlic bread .Pizza Hut is one of the flagship brands of Yum! Brands, Inc., (the
world's largest restaurant company), with approximately 34,000 restaurants,
delivery/carry-out locations, and kiosks in 100 countries. Yum brands runs KFC and
TACO BELL in Addition to PIZZA HUT.
11
Pizza Hut is known for its
Good Quality Food (Hygiene)
Brand Name
Food worth its Price
Good Service
New Kind and Styles of Pizzas in its Menu.
VISSION OF THE PIZZAHUT:
Growth with a big heart.
MISSION OF THE PIZZAHUT:
To be the number one restaurant company in every category we operate (as
defined by system sales).
GOAL OF THE PIZZA HUT:
1,000 stores.
One billion dollar business (system sales).
50,000 employees.
12
PIZZA HUT STORY
1958: The legacy of Pizza Hut began, when two college-aged brothers.
1959: Pizza Hut is incorporated in Kansas and the first franchise unit opens in
Topeka, Kansas.
1968: International market entered with opening of Pizza Hut restaurant in
Canada.
1969: Red roof adopted for restaurants.
1972: Pizza Hut, Inc. listed on New York Stock Exchange under the symbol
PIZ.
1977: Pizza Hut, Inc. stockholders overwhelmingly approve merger with
PepsiCo, Inc. for an undisclosed sum.
1986: Delivery service, as a new concept, is initiated.
1996: Pizza hut comes to India with a dine in restaurant Bangalore that has
special vegetarian pizzas.
1997: Pizza hut opens a dine-in restaurant in Delhi.
2007: Pizza hut brought out our Thick n Thin Pizza and began to re-franchise
our dine-in restaurants.
2009: Pizza Hut offering baked fillings in the corner of the pizza.
13
LOCATION IN INDIA
Pizza Hut entered India in 1996, and opened its first restaurant in Bangalore. Since
then it has captured a dominant and significant share of the pizza market and has
maintained an impressive growth rate of over 40 per cent per Annum. Yum! Brands
Inc.is the owner of the Pizza Hut chain worldwide. A Fortune 300 company, Yum!
Brands own Kentucky Fried Chicken, Pizza Hut, Taco Bell, A&W and Long John
Silver’s restaurants worldwide. In India Pizza Hut has not included all kinds of Pizza
which it serves elsewhere. But rather localized its menu as per Indian customers
A critical factor in Pizza Hut’s success has been a menu that has constantly evolved
and expanded to cater to the changing needs and specific preferences of customers in
different parts of the world. In having understood the pulse of the customers in India,
Pizza Hut has clearly established itself as a brand with an Indian heart. Besides
offering an extensive range of vegetarian pizzas, it was the first pizza chain to open a
100% vegetarian restaurant in India in Surat and later in Ahmedabad and Chowpatty,
where it offers a Jain menu sans all root-based ingredients.
14
OVERVIEW OF THE PIZZA HUT
As the world's largest pizza restaurant company with
almost 6,600 restaurants in the United States and more
than 4,000 restaurants in 100 other countries, Pizza Hut,
Inc., a subsidiary of Yum! Brands, Inc. (NYSE: YUM),
has been the place families have gathered for 49 years.
The company’s legacy of leadership and innovation has
made it the recognized leader in the $37 billion pizza
category.
NATURE OF THE PIZZA HUT
Pizza hut would be in the food (veg. and non-veg.) and
drink sector.
It offers pizzas wide range of the finest pizza’s, including
pizza’s for meat lovers, pepperoni lovers, cheese lovers
and vegetarians, pastas, wings, and drinks, as well as sides
and desserts, such as stuffed pizza rollers, breadsticks,
cheese sticks, baked desserts, and cinnamon sticks.
15
The company also offers catering services. In addition,
Pizza Hut franchises its restaurants. Further, it provides
online ordering also.
16
COMPANY PROFILE
Pizza Hut (corporately known as Pizza Hut, Inc.) is an American restaurant chain and
international franchise that offers different styles of pizza along with side dishes
including pasta, Buffalo wings, breadsticks, and garlic bread. Pizza Hut is a subsidiary
of Yum! Brands, Inc. (the world's largest restaurant company) with approximately
34,000 restaurants, delivery/carry-out locations, and kiosks in 100 countries. When it
comes to tossing around dough, no one does itmore often than Pizza Hut. The unit of
YUM! Brands operate the world's #1 pizza chain with more than 13,200 outlets in
about 90 countries worldwide. The chain serves a variety of pizza styles, including its
flagship Pan Pizza, as well as Thin n' Crispy, Stuffed Crust, Hand Tossed, and
Sicilian. Other menu items include pasta, salads, and sandwiches. Pizza Hut offers
dine-in service at its characteristic red-roofed restaurants, as well as carry-out and
delivery service. About 15% of the restaurants are company-operated, while the rest
are franchised. The world's largest fast food company, YUM! Brands runs KFC and
Taco Bell in addition to Pizza Hut. Pizza Hut Inc. is the largest pizza restaurant
company in the world in terms of both the number of outlets and the percentage of
market share that it holds. A subsidiary of PepsiCo, Inc., the company oversees more
than 11,000 pizza restaurants and delivery outlets in 90 countries worldwide. In
October 1997, the company expected to become a subsidiary of Tricon Global
Restaurants, Inc., formed from the spin-off of PepsiCo's restaurant holdings. Pizza
Hut is split into several different restaurant formats; the original family-style dine-in
locations; store front delivery and carry-out locations; and hybrid locations that offer
carry-out, delivery, and dine-in options. Many full-size Pizza Hut locations offer
lunch buffet, with "all-you-can-eat" pizza, salad, bread sticks, and a special pasta.
Additionally, Pizza Hut also has a number of other business concepts that are different
from the store type; Pizza Hut "Bistro" locations are "Red Roof’s which offer an
expanded menu and slightly more upscale options.
"Pizza Hut Express" and "The Hut" locations are fast food restaurants. They offer a
limited menu with many products not found at traditional Pizza Huts. These type of
stores are often paired in a collocated location with a sibling brand such as Wing
17
Street, KFC or Taco Bell, and are also found on college campuses, food courts, theme
parks, and in stores such as Target.
Traditionally, Pizza Hut has been known for its ambiance as much as pizza. Vintage
"Red Roof" locations can be found throughout the United States, and quite a few exist
in the UK and Australia. Even so, many such locations offer delivery/carryout service.
This building style was common in the 1960s and 1970s. The name "Red Roof" is
somewhat anachronistic now, since many locations have brown roofs. Dozens of "Red
Roofs" have closed or been relocated/rebuilt. Many "Red Roof" branches have beer if
not a full bar, music from a jukebox, and sometimes an arcade. In the 1980s, the
company moved into other successful formats including delivery/carryout and the fast
food "Express" model. The oldest continuously operating Pizza Hut in the world is in
Manhattan, Kansas, in ashopping and tavern district known as Aggie Ville near
Kansas State University. In 1994 several changes resulted in the company's first
decline in operating profits in 15 years. The pizza market was no longer growing; fast
food rivals cut prices; and investment in new outlets was draining corporate resources.
PepsiCo's restaurant division saw sales in restaurants open at least one year fall six
percent in 1994, contributing to a drop in profits of 21 percent (to$295million).
In an effort to change this disturbing direction, Roger A. Enrico moved from
PepsiCo's beverage and snack food divisions to head the restaurant division in 1994.
His first move was to heavily promote a new product: stuffed crust pizza, a pizza with
a ring of mozzarella folded into the outer edge of the crust. The company used a
massive advertising campaign to promote the new product, including television
commercials that paired celebrities eating their pizzas crust first.
Some indicators were promising: market share rose from25.6 to 27 percent; 1995
sales increased 16 percent to $5.2 billion; and operating income rose to $414 million,
up 40 percent from the year before. In 1996 Pizza Hut planned to introduce a major
new product each year and two or three line extensions. The following year it
followed through on this course, introducing Totally New Pizzas with 67 percent
more toppings than previous pizzas and thicker sauce. The company allocated $50
million for the project, part of which was to be used to install new or improved ovens.
In 1996 Pizza Hut accounted for 17 percent of PepsiCo's total sales and 13 percent of
its operating profit. However, these gains could not offset the drain that capital
investment placed on PepsiCo's other divisions. The parent company's return on assets
18
was significantly greater in its beverage and snack food divisions than in its restaurant
division. In the late 1990s, PepsiCo drew together its restaurant businesses, including
Pizza Hut, Taco Bell, and KFC. All operations were now overseen by a single senior
manager, and most back office operations, including payroll, data processing, and
accounts payable, were combined. In January 1997 the company announced plans to
spin off this restaurant division, creating an independent publicly traded company
called Tricon Global Restaurants, Inc. The formal plan, approved by the PepsiCo
board of directors in August 1997, stipulated that each PepsiCo shareholder would
receive one share of Tricon stock for every ten shares of PepsiCo stock owned. The
plan also required Tricon to pay a one-time distribution of $4.5 billion at the time of
the spinoff. If approved by the Securities and Exchange Commission, the spinoff
would take place on October 6, 1997.Enrico, which had risen to the position of
PepsiCo CEO, explained the move: "Our goal in taking these steps is to dramatically
sharpen PepsiCo's focus. Our restaurant business has tremendous financial strength
and a very bright future. However, given the distinctly different dynamics of
restaurants and packaged goods, we believe all our businesses can better flourish with
two separate and distinct managements and corporate structures."
19
ANSOFF MATRIX
EXISTING
CUSTOMERS
NEW
CUSTOMERS
EXISTING
SERVICES
Consolidation/
Market Share
Building
Market
Development
NEW
SERVICES
Service
Development
Diversification
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 different things in their menu. Most recent one is the filling of toppings in
the pizza corner. Therefore they are offering same customer a different kind of
product. Thus they are into Service Development. 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 it as a whole new product. For this they
take innovative ideas from Institutes like IHM (Institute of Hotel Management) as
well as motivate their workforce to come up with
20
QUALITY MANAGEMENT
To ensure stringent international bench-marks in the quality of products and services
at all its restaurants across the world, Pizza Hut has a mystery shopper program in
which an unknown official visits a restaurant and evaluates it on certain defined
parameters called C.H.A.M.P.S. that stand for Cleanliness, Hospitality, Accuracy,
Maintenance, Product quality and Speed. Based on the report submitted by the
official, the restaurants are rated and in the rare case of finding under performers, they
are kept under strict vigil.
This is the most important for a food chain like Pizza Hut. All the employees’ backof-
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
observe whether the quality standards are met or not, whereas there are a total quality
management department at the main office in Gurgaon. This department has the task
to implement quality standards and know whether they are achieved or not.
21
PERCEPTUAL MAPPING
Perceptual mapping helps the Management to see the real picture of their own and
their competitiors. In above map, Services are plotted on X-axis and Pricing is plotted
on Y-axis.
Expensive and high services : 1st quadrant
Expensive and moderate services : 2nd
quadrant
Inexpensive and moderate services : 3rd
quadrant
Inexpensive and high services : 4th
quadrant
The competitors for Pizza Hut are Domino’s, KFC and McDonalds. Pizza Hut is
providing High Services at very high price. That is why it is plotted in 1st quadrant.
Likewise, McDonald provide high services but the food products are not expensive.
But in 2nd
quadrant, the services are moderate and they cost high than McDonald.
22
PIZZA HUT IN INDIA
The Dodsal Group was founded in Mumbai, India, in 1948 by the Nandlal Kilachand
family as a trading company in partnership with a British trading company
(DODWEL) and Mr. Karsa Salem. The Group has transformed from a family trading
enterprise into a multi-billion dollar Organization under the leadership of Rajen A.
Kilachand.Today, it is a Dubai based diversified multinational conglomerate which
operates in the areas of Trading and Distribution; Engineering, Procurement and
Construction; Exploration and Production; Casual Dining Restaurants; and
Manufacturing.
Dodsal Group set up Dodsal Enterprises Pvt Ltd. in 1997 with headquarters in
Mumbai to carry forward the Group's vision and endeavors in casual dining
restaurants, in addition to the Group's trading and distribution activities. Dodsal
Enterprises Pvt. Ltd., today, runs 79 Pizza Hut and KFC outlets, with franchise rights
from Yum! Brands Inc., in major metropolitan cities in India.
Dodsal Enterprises Pvt. Ltd. runs several casual dining restaurants, with franchise
rights from Yum International, in major metropolitan cities in India, including
Mumbai and Bangalore. The Dodsal Group diversified into the food services industry
in 1997, after noticing a major gap in the market for casual dining restaurants. The
Group’s foray into a new and exciting industry began with the launch of its franchises
of KFC and Pizza Hut in India andhas since grown from strength to strength, now
running more than 70 outlets in the county. The Dodsal Group is in the process of
establishing its own chain of casual dining restaurants that will take Indian street food
to international masses. The Group is also setting up a chain of affordable fine dining
restaurants in partnership with maestro chef Marco Pierre White.Dodsal Enterprises
Pvt. Ltd.'s casual dining restaurants and franchises have consistently been voted
number one in the customer satisfaction index and their restaurants have won
numerous industry awards.
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7 P’s OF SERVICES
PRODUCT
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.
Over the years Pizza Hut has also developed and successfully introduced a range of
products especially suited to the Indian palate. These products like Chicken Tikka,
Spicy Korma, Spicy Paneer and the Masala and Tandoori pizzas have been a
tremendous success. What has also given Pizza Hut a competitive edge is that in
addition to an extensive range of internationally renowned pizzas like The
Italian, the proprietary Pan Pizza and Stuffed Crust, in India the menu offers
the option of a complete meal. It includes appetizers, a Salad Bar - where the
customers can make their own fresh salads, a range of soups, pastas and desserts
PRICE
In the past, Pizza Hut has successfully used the high/low pricing strategy when setting
the retail price of its products. The high/low retail pricing strategy allows Pizza Hut to
charge a price that is above the competition, but also promote frequent sales to lower
the price below them. Both Pizza Hut and the beverage Mountain Dew are Pepsi
subsidiaries, bundle pricing will be used.. Pizza Hut will be able to sell two products
together at a single price to suggest a good value. Different groups of customers are
willing to pay different prices for the same product. Pizza Hut can sell "The Extreme"
to the customers who will pay the higher price to be the first to buy and also to the
bargain hunters Finally, this strategy will emphasize product and service quality.
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Pizza Hut sets a high initial price for its products to send a signal to customers that its
products are quality and the service is excellent.
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 by mail
(VIP members), 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.
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.
The first method of distribution used by Pizza Hut is delivery. Customers can call
Pizza Hut ahead of time, place an order, and the order is delivered to the customer's
home.
Another method of distribution is for customers to dine-in. Customers can go to 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.
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The third method of distribution is! online ordering. Customers can now go on the
Internet and place an order. 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. The market coverage for "The Extreme" will be nationwide.
Customers all over the country will be able to order "The Extreme" by one of the
three distribution methods.
PEOPLE
Here the job design is not the most difficult task to do. Also there is no specific
requirement for recruiting process.
After talking one of the employees in Pizza Hut, we came to know the criteria of
selection. The girl was from west India, she was only 10th
passed out. After this we it
was confirmed that there is no proper requirement of the educational background. The
only factor they were considering on the communication skills, how they
communicate with the customers.
Since the communication is the most important factor between the customer and
employee because the whole process is depended on giving the orders for food. For
this the Management conducted the training process for the new employees. The
Training is given for total 5 days. Out of 5 days, they have 3 days for kitchen training
and other 2 days in the main dining, that is, how to take orders and basically how to
communicate with customers and make them happy by their services.
PROCESS
The design of the process of the pizza hut is very efficient .pizza hut do not follow
any kind of hierarchy , all the employee is at the same level ,pizza hut has a very
prescribe and well known process by adopting various technology software which
help them to upgrade their supply management and also manage their crowd of
customer efficiently.
PHYSICAL EVIDENCE
The ambience of the pizza hut is good enough to catch up the people .they provide a
very good dining experience with high quality of atmosphere in terms of there
physical evidence. and pizza hut always try to upgrade with changing environment
and modernization is key of success of the pizza hut.
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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.
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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
Branches at various cities. 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 is
another one of 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 Indian market can affect their market
Share.
iv. Other local restaurants can affect their market share by providing pizzas
with
lower price.
v. Social factors can affect their image as a Western organization.
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Market segmentation
Market segmentation is a marketing strategy that involves dividing a broad target
market into subsets of consumers who have common needs, and then be designed and
implemented to target these specific customer segments, addressing needs or desires
that are believed to be common in this segment, using media that is used by the
market segment.
While there may be theoretically 'ideal' market segments, in reality every organization
engaged in a market will develop different ways of imagining market segments, and
create product differentiation strategies to exploit these segments. Successful market
segmentation and corresponding product differentiation strategy can give a firm a
commercial advantage, due to the more effective match between target customer and
product.
Criteria for segmenting
An ideal market segment meets all of the following criteria:
It is possible to measure.
It must be large enough to earn profit.
It must be stable enough that it does not vanish after some time.
It is possible to reach potential customers via the organization's promotion and
distribution channel.
It is internally homogeneous (potential customers in the same segment prefer
the same product qualities).
It is externally heterogeneous, that is, potential customers from different
segments have different quality preferences.
It responds consistently to a given market stimulus.
It can be reached by market intervention in a cost-effective manner.
It is useful in deciding on the marketing mix.
Basis for segmenting consumer markets
Geographic segmentation
The market is segmented according to geographic criteria—nations, states, regions,
countries, cities, neighborhoods, or zip codes. Geo-cluster approach combines
demographic data with geographic data to create a more accurate profile of specific [1]
With respect to region, in rainy regions you can sell things like raincoats, umbrellas
29
and gumboots. In hot regions you can sell summer wear. In cold regions you can sell
warm clothes. A small business commodity store may target only customers from the
local neighborhood, while a larger department store can target it's marketing towards
several neighborhoods in a larger city or area.
Psychographic segmentation
Psychographics is the science of using psychology and demographics to better
understand consumers. Psychographic segmentation: consumers are divided according
to their lifestyle, personality, values and social class. Consumers within the same
demographic group can exhibit very different psychographic profiles.
Positive market segmentation
Market segmenting is dividing the market into groups of individual markets with
similar wants or needs that a company divides into distinct groups which have distinct
needs, wants, behavior or which might want different products and services. Broadly,
markets can be divided according to a number of general criteria, such as by industry
or public versus private. Although industrial market segmentation is quite different
from consumer market segmentation, both have similar objectives. All of these
methods of segmentation are merely proxies for true segments, which don't always fit
into convenient demographic boundaries.
This part of the segmentation process consists of drawing up a perceptual map, which
highlights rival goods within one's industry according to perceived quality and price.
After the perceptual map has been devised, a firm would consider the marketing
communications mix best suited to the product in question.
Behavioral segmentation
In behavioral segmentation, consumers are divided into groups according to their
knowledge of, attitude towards, use of or response to a product. It is actually based on
the behavior of the consumer. Called behavioral segmentation.
Occasions
Segmentation according to occasions is based on the arising of special need and
desires in consumers at various occasions. For example, for products that will be used
in relation with a certain holiday. Products such as Christmas decorations or Diwali
lamps are marketed almost exclusively in the time leading up to the related event, and
will not generally be available all year round. Another type of occational market
30
segments are people preparing for their wedding or a funeral, occasions that only
occurs a few times in a persons lifetime but happens so often in a large population that
it can be considered a market segment.
Benefits
Segmentation takes place according to benefits sought by the consumer or which the
product/service can provide.
Using segmentation in customer retention
The basic approach to retention-based segmentation is that a company tags each of its
active customers with three values:
Is this customer at high risk of canceling the company's service?
One of the most common indicators of high-risk customers is a drop off in usage of
the company's service. For example, in the credit card industry this could be signaled
through a customer's decline in spending on his or her card.
Is this customer worth retaining?
This determination boils down to whether the post-retention profit generated from the
customer is predicted to be greater than the cost incurred to retain the customer.
What retention tactics should be used to retain this customer?
For customers who are deemed worthy of saving, it is essential for the company to
know which save tactics are most likely to be successful. Tac`tics commonly used
range from providing special customer discounts to sending customers
communications that reinforce the value proposition of the given service.
Niche marketing
A niche is a more narrowly defined customer group who seek a distinct set of
benefits. Identified by dividing a segment into sub segments, distinct and unique set
of needs, requires specialization, and is not likely to attract too many competitors.
Price discrimination
Where a monopoly exists, the price of a product is likely to be higher than in a
competitive market and the quantity sold less, generating monopoly profits for the
seller. These profits can be increased further if the market can be segmented with
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different prices charged to different segments charging higher prices to those
segments willing and able to pay more and charging less to those whose demand is
price elastic. The price discriminator might need to create rate fences that will
prevent members of a higher price segment from purchasing at the prices available to
members of a lower price segment. This behavior is rational on the part of the
monopolist, but is often seen by competition authorities as an abuse of a monopoly
position, whether or not the monopoly itself is sanctioned. Areas in which this price
discrimination is seen range from transportation to pharmaceuticals.
SEGMENTATION OF PIZZA HUT:
Main segments which Pizza hut has captured are the combination of higher
incomes and dual career families, due to higher income consumer have more
disposable 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.
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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 India
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. Crew members 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 147 restaurants
across 38 cities.
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Market Targeting
Pizza hut targeted market defines them as a family product. This is because
they don’t 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 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 no 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 it’s 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
35
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.
36
PRODUCTS OFFERED BY PIZZA HUT
The Pizza Hut® menu provides a variety of selections, such as:
• 4 for All™ Pizza
• Sicilian Pizza
• Honey BBQ Chicken®
• Pan Pizza
• Hand-Style Tossed Pizza
• Thin n’ Crispy®
• Stuffed Crust Pizza
• The Big New Yorker Pizza
Pizza Hut also offers a Lover’s Line and P’Zone
Pizzas in addition to the following menu items:
• Appetizers/Salads:
• Lunch Buffet:
• Breadsticks
• Spaghetti with marinara or
meat sauce
• Wings (hot & mild)
• Kid’s meal (PPP w/drink)
• Garlic bread
• Dessert Pizzas (apple and
cherry)
• Salad Bar
• Beverages – soft drinks, beer,
tea, coffee, and milk.
37
ENVIRONMENTAL AND INTERNAL ANALYSIS OF
PIZZA HUT
In my visit to Pizza Hut i 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 county’s 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
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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 day’s 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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ABOUT THE TOPIC SPECIFY
I have done my project on the title of “role of market segmentation in enhancing the
sales of pizza hut”. Pizza hut is one of the leading restaurants company in India.
Company has won the India’s most Trusted Food Services Brand. In this restaurant I
learned about the pizza industry, full details about the pizza hut’s market segments. i
come to know the products of pizza hut and I worked particularly in marketing
department, so that I learned how pizza hut is working on its market segments & what is
their role in sales, how pizza hut is treating the customers, how to handle the
customer’s queries ,etc. .
DESIGN OF STUDY
A design of study provides the framework to be used as a guide in collecting and
analyzing data. Market survey is one of the best examples of descriptive research.
This is a short research study at a given point of time, and consists of a sample of the
population of interest. Its advantages are that it gives a good overall picture of the
position at a given time. It can cover many variety of interest, and is not affected by
the movements of elements in the sample. Because other elements can be
substituted for them. My research is to discover the possible measures, by detailed
analysis, for the company which would be helpful up to some extent to retain a good
position in the competitive market.
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OBJECTIVES OF STUDY
The aim of this research is to explore how market is segmented in pizza hut in order
to develop an integrated model appropriate to supporting the introduction of further
market segments so as to increase its sale Therefore, following objectives should be
considered
To highlight the future challenges before the managers.
To explain the steps in market planning.
To explain various types of market segments.
How to improve and maintain image of product and business.
How to increase sales revenue.
How to target a new market.
How to make new market segment.
How to satisfy the customers.
How to generate customer base for business.
How to create good image.
To increase the quality of life of people.
To understand market opportunities
.
To understand strategies to increase market share.
To understand the communication chain to customers.
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SIGNIFICANCE
Successful companies almost all have a significant market share; it is rare for more
than three or four companies to be truly successful in any segment of the market. It is
not unusual for one company to dominate with every other company trying to catch
up.
There are a number of reasons for this:
A dominant supplier controls the market and sets expectations of price and
quality
He develops a reputation and brand, he is highly visible
There is a “comfort factor” in buying from a market leader
Customers come to him first a
Marketing becomes very much easier if you are a big player in your market
place. It you are not, you will always struggle to be seen.
It is often said that it is better to be a relatively big fish in a small pond than a
small fish in a big pond and the way to achieve this is to shrink your target
market. You should specialize on a particular sort of customer. This is called
segmenting the market. When you do this, it is much easier to become known
and develop a reputation. You can concentrate your marketing activities.
Referrals are both easier and more effective. You learn the special needs or
desires of your customers. So, how do you select your segment? To be useful, a
segment must be:
Different
Relevant
Significant
Accessible
Suitable size
The main aim of market segmentation is to categories the customers according to their
need and to provide them the best product the product should be different as well as
should be according to the budget, it should hold a significance and should provide
satisfaction to customer as well segmentation also provide the information on the
popularity of the product. The market segmentation gives opportunity to the firm to
generate profit based on the desire of the customer; it provides them the information
42
on the sale of the product from particular segment. Hence market segmentation plays
a vital role in building up of a firm.
Review of literature
Art Weinstein said in his book “The most important thing I've learned from working in
market segmentation research and strategy for more than 15 years is that few
companies get the most from their target marketing. Their top executives advocate
the need to be market- or customer-oriented but base their marketing plans on
cursory, incomplete, or emotional analyses. They end up with 'fuzzy' business
missions, unclear objectives, information that isn't decision-oriented, unfocused
promotional strategies, and no real plan to attack niche markets. This happens
because they haven't developed an effective strategy for segmenting high-tech and
industrial markets. They don't have a process that introduces and improves their
business segmentation planning and execution. What they need is a handbook for
improving their organization's performance in new and existing business markets.” It’s an important research in the field of marketing. I have referred many books and
previous research reports on the market segmentation among which few is PHILLIP
KOTLER for marketing and the previous year research report on the marketing
strategy of pizza hut S.I.M.B.S BANGLORE. I have gone through the various
magazines such as Q.S.R magazine which stands for quick service and fast service
restaurant news. This magazine says that pizza hut is dominated in all of its segments
with its competitors this year which is 2013 ,
Further I have gone for the literature in the past I came to know that about my topic
which is market segmentation of pizza hut and its effect on sales of pizza hut I have
reviewed literature present on Google and I have reviewed the student pack offered
by pizza hut for students. I have visited the official sites of pizza hut site which is
www.pizzahut.com to gather information about its products and the type of customers
its deals with.
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Research gap
I have review many literature so far and no one is providing the emphasis on the
,market segmentation, from earlier research I came to know that there is a research
gap because most of the data I have captured shows the marketing techniques only no
one is providing the detailed information on the segments and their role in sales . To
fulfill this gap I am doing this research.
Research methodology
Research refers to answering to a question or a solution to a problem in a systematic and
scientific manner. Research always starts with a question or a problem .Its purpose is to
question through the application of the scientific method. It is a systematic and intensive
study directed towards a more complete knowledge of the subject studied.
Marketing research specifies the information required to address these issues, designs,
and the method for collecting information, manage and implemented the data collection
process, analyses the results and communicate the findings and their implication.
I have prepared my project as descriptive type, as the objective of the study demands
the answer of the question related to find the opinion of people about PIZZA HUT.
SAMPLING
A new independent study proves for the first time in-store sampling not only has dramatic
sales impact on the day of the sampling event, but also increases sales of established
products and line extensions, as well as new products, for many weeks following. The
study also found in-store sampling lifts sales of the entire brand franchise in addition to
the sampled brand, among other things never thought possible. As a result of the study,
for the first time in-store sampling can now be considered measured media, and its cost
effectiveness, when applied to all of the sampling’s benefits over time, is significantly
greater than previously believed.
The methodology used to sample from a larger population will depend on the type of
analysis being performed, but i will include simple random sampling systematic sampling
and observational sampling. The sample should be a representation of the general
population.
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SAMPLE SIZE
Sample size refers to the number of items to be selected from the universe to constitute a
sample. The size of sample should neither be excessively large, nor too small, it should be
optimum. We have selected the sample size as 100.
SAMPLE UNIT
Sampling unit refers to who are the people we are target to collect the primary data. My
sampling unit is customers.
I have undergone the random sampling technique to collect the data. Questionnaire,
interaction with customers and inception are the techniques which i used in this
research. Sampling unit for this project is all the outlets of pizza hut in Jaipur. I will
personally visit these outlets and will meet the marketing managers so that to explore
the different market segments and to pursue a thorough study of them.
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DATA COLLECTION
To know the response, I have used the questionnaire method. If one wishes to find what
prospects think or know, the logical procedure is to ask them. This has led marketing
researches to use the questionnaire technique for collecting data more than any other
method.
In this method questionnaire were distributed to the respondents and they were asked to
answer in the questionnaire. The respondents were aware of the objective. They knew
why they were asked to fill the questionnaire.
Data’s are collected in two ways
Primary data: data observed and collected directly from 1st hand experience.
Secondary data: published data or data collected in past or by other parties.
Primary Data:
1. Questionnaire
2. Personal interactions.
Secondary Data:
1. Various official websites.
2. Through pamphlets and Boucher of the company.
3. Newspaper and Magazines.
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LIMITATIONS OF RESEARCH
LIMITATION OF TIME:
The time specified for the way the survey was 60 days which is a short time to analyze
each and every aspect related to the unit. If the time allowed would have been more, then
the selection and size could have been improved and thus, degree of accuracy of the
findings would have been higher.
LIMITATION OF SAMPLE SIZE:
The information embodied in the report may not prove to be perfect and reliable
since only a small sample size of 20 was selected for food habits of
Bangaloreand50 customer’s feedback in Pizza Hut.
While designing the questionnaire it was kept in mind to gather more and more
information from each target person. For the neither present nor descriptive
question could have served the purpose. Therefore the questionnaire contained
both open ended and closed ended questions.
The accuracy of indication given by the responsible may not be consider adequate
as whether the language used in the questionnaires understood by the respondent
cannot be taken for granted.
Language barrier, language barrier is the basic thing which we find difficult to
overcome it while we going for study.
There is the possibility of error in data collection.
Possibility of error in analysis of data due to small sample size.
Time is also one of the major limitations of this research.
Some of the people were not ready to cooperate and were not ready to share any
information with us.
The views of respondents are likely to change as human’s nature is very dynamic.
The result figure may be biased since the respondents. Investors may provide
wrong information.
The survey may not give the whole scenario of the Indian market.
47
DATA ANALYSIS AND INTERPRETATION
I have taken statistics of 60 days and selected 50 people for the purpose of analysis.
Each person has its own opinion about pizza hut.
Each person indicates about its own need so in order to overcome bias, in random I
have collected interview of 100 people.
The following processed data are interpreted:
Male -female ratio
Age group
Profession
Financial status
Income group
With whom you are going
Pizza size
Meal
Occasion
Branches of pizza hut
Price range
Timings of visits
Rating of pizza hut
48
For all the above the, that tabular form and graphs are provided as below.
MALE FEMALE RATIO:
Opinion of 100 people.
INTERPRETATION: THIS SURVEY TABLE AND CHART 1 SHOWS
OF 100 PEOPLE, OUT OF THEM 54 IS MALES AND 46 ARE FEMALES.
46%
54%
MALE-FEMALE RATIO
male
female
S.NO PARTICULARS NO. OF RESPONDENTS
(%)
1 MALE 46
2 FEMALE 54
TOTAL 100
49
AGE GROUP:
OPINION OF 100 PEOPLE.
INTERPRETATION: THIS SURVEY TABLE AND CHART 2 SHOWS
100 OF 25 PEOPLE IN EACH GROUP.
25
25 25
25
AGE GROUP
10 TO 18 18 TO 25 25 TO 35 35 & ABOVE
S.NO AGE GROUP NO OF RESPONDENTS (%)
1 10-18 25
2 18-25 25
3 25-35 25
4 35 AND ABOVE 25
TOTAL 100
50
PROFESSION:
OPINION OF 100 PEOPLE.
INTERPRETATION: THIS CHART 3 SHOWS 100 PEOPLE OUT OF
WHICH MAJORITY IS STUDENTS.
38%
20%
10%
5%
20%
5%
2%
PROFESSION
student
govt. service20
private service
industrialist
self employed
professional
others
S.NO PARTICULARS NO OF RESPONDENTS (%)
1 STUDENT 38
2 GOVERNMENT
SERVICE
20
3 PRIVATE SERVICE 10
4 INDUSTRIALIST 5
5 SELF EMPLOYED 20
6 PROFESSIONAL 5
7 OTHERS 2
TOTAL 100
51
FINANCIAL STATUS:
OPINION OF 100 PEOPLE.
INTERPRETATION: CHART 4 SHOWS 100 PEOPLE OUT OF WHICH
56% ARE DEPENDENT AND 44% ARE INDEPENDENT.
44%
56%
FINANCIAL STATUS
DEPENDENT
INDEPENDENT
S.NO PARTICULARS NO OF
RESPORNDENTS (%)
1 INDEPENDENT 44
2 DEPENDENT 56
TOTAL 100
52
INCOME GROUP (AVERAGE MONTH INCOME):
OPINION OF 100 PEOPLE.
INTERPRETATION: ABOVE TABLE AND CHART 5 SHOWS 100
PEOPLE OUT OF WHICH THE PEOPLE HAVING INCOME 30000 AND ABOVE
FORMS THE MAJOR SEGMENT.
15
18
20
47
INCOME GROUP
0 TO 5000 5000 TO 15000 15000 TO 30000 30000 & ABOVE
S.NO PARTICULAR NO OF
RESPONDENTS (%)
1 0-5000 15
2 5000-15000 18
3 15000-30000 20
4 30000 AND ABOVE 47
TOTAL 100
53
WITH WHOME YOU ARE COMING TO PIZZA HUT?
OPINION OF 100 PEOPLE
INTERPRETATION:FROM THE ABOVE TABLE & CHART 6 WE CAN
SAY PEOPLE GENERALLY VISIT PIZZA HUT WITH THEIRE FAMILY
MEMBERS AND FRIENDS.
ALONE 4%
FRIENDS 39%
FAMILY 41%
BELOVED 6%
COLLUIGE 10%
WITH WHOME YOU ARE COMING
TO PIZZA HUT?
S.NO PARTICULAR NO. OF RESPONDENTS
1 ALONE 4
2 FRIENDS 39
3 FAMILY 41
4 BELOVED 6
5 COLLUIGE 10
TOTAL 100
54
SIZES OF PIZZA:
OPINION OF 100 PEOPLE.
S.NO PARICULAR NO. OF
RESPONDENTS
1 SMALL 20
2 MEDIUM 50
3 LARGE 30
TOTAL 100
INTERPRETATION: ABOVE TABLE AND CHART 7 SHOWS THAT
PEOPLE GENERALLY LIKE TO HAVE MEDIUM AND LARGE SIZE PIZZA IN
PIZZA HUT.
20%
50%
30%
SIZES OF PIZZA
SMALL
MEDIUM
LARGE
55
MEAL:
OPINION OF 100 PEOPLE.
S.NO PARTICULAR NO. OF
RESPONDENTS (%)
1 BRUNCH 10
2 LUNCH 25
3 EVENING SNACKS 20
4 DINNER 45
TOTAL 100
INTERPRETATION:ABOVE TABLE AND CHART 8 SHOWS THAT
PEOPLE LIKE TO VISIT PIZZA HUT FOR TO MAJOR MEALS EVENING
SNACKS AND DINNER.
10%
25%
20%
45%
MEAL
BRUNCH LUNCH EVENING SNACKS DINNER
56
SATISFACTION WITH THE PRICE:
OPINION OF 100 PEOPLE
INTERPRITATION: ABOVE TABLE AND CHART 9 SHOWS THAT
FROM 100 PEOPLE 52 PEOPLE ARE NOT SATISFIED AND 48 PEOPLE ARE
SATISFIED.
48%
52%
SATISFACTION
YES NO
S.NO PARTICULAR NO. OF
RESPONDENTS
(%)
1 YES 48
2 NO 52
TOTAL 100
57
OCCASION:
OPINION OF 100 PEOPLE.
INTERPRITATION: ABOVE TABLE AND CHART 10 SHOWS
PEOPLE VISITS PIZZA HUT MOSTLY ON BIRTHDAY PARTIES,
ANYVEERSARY AND ANY OTHER TIME.
30%
25%
30%
5% 10%
OCCASION
BIRTHDAY ANNIVERSARY REGULARLY OCCASSIONALY ANY OTHER TIME
S.NO PARTICULAT NO. OF
RESPONDENTS (%)
1 BIRTHDAY 30
2 ANNIVERSARY 25
3 REGULARLY 30
4 OCCASSIONALY 5
5 ANY OTHER TIME 10
TOTAL 100
58
BRANCHES OF PIZZA HUT:
OPINION OF 100 PEOPLE.
INTERPRETATION: THE ABOVE TABLE AND CHART 11 SHOWS
100 PEOPLE OUT OF WHICH 20 PEOPLE IN EACH QUADRENT LIKE EACH
BRANCH OF PIZZA HUT.THIS IS BEACAUSE OF LOCATION
SEGMENTATION.
20%
20%
20%
20%
20%
BRANCHES OF PIZZA HUT
GAURAV MATHUE CRYSTAL PALM EVERSHINE TOWER
HYPERCITY MALL GOVIND MARG
S.NO PARTICULARS NO. OF RESPONDENTS (%)
1 GAURAV TOWER 20
2 CRYSTAL PALM 20
3 EVERSHINE TOWER 20
4 HYPERCITY MALL 20
5 GOVIND MARG 20
TOTAL 100
59
PRICE RANGE:
OPINION OF 100 PEOPLE.
S.NO PARTICULARS NO. OF RESPONDENTS
(%)
1 125-200 RS 40
2 200-400 RS 30
3 400-600 RS 20
4 600 & ABOVE 10
TOTAL 100
INTR PRETATION: THE ABOVE TABLE AND CHART 12 SHOWS 100
PEOPLE OUT OF WHICH 40 LIKES BUY PIZZA IN RANGE OF 125-200 AND
3O PEOPLE PEOPLE BUY PIZZA IN 200-400 HUNDRED RANGE AND FORMS
THE MAJOR PART OF CHART.
40%
30%
10%
20%
PRICE RANGE
125 TO 200 RS
200 TO 400
400 TO 600
600 & ABOVE
60
TIMINGS OF VISIT:
OPINION OF 100 PEOPLE
INTERPRITATION: THE ABOVE TABLE AND CHART 13 SHOWS
THAT OUT OF 100 PEOPLE 40 PEOPLE VISIT PIZZA HUT IN BETWEEN 9 -11
PM AND 30 PEOPLE VISITS FROM 6-9 PM.
5% 15%
10%
30%
40%
TIMINGS OF VISIT
9 TO 12 PM 12 TO 3 PM 3 TO 6 PM 6 TO 9 PM 9 TO 11 PM
S.NO PARTICULARS NO OF RESPONDENTS
(%)
1 9-12 PM 5
2 12-3 PM 15
3 3-6 PM 10
4 6-9 PM 30
5 9-11 PM 40
TOTAL 100
61
RATING OF PIZZA HUT:
OPINION OF 100 PEOPLE.
S.NO PARTICULAR NO OF
RESPONDENT
1 POOR 20
2 GOOD 30
3 VERY GOOD 40
4 EXCELLENT 10
TOTAL 100
INTERPRETATION:THE ABOVE TABLE AND CHART 14 SHOWS
THAT OUT OF 100,40 PEOPLE RATE PIZZA HUT AS VERY GOOD AND 30
PEOPLE RATE IT AS GOOD AND OUT OF 100 ONLY 20 PEOPLE CRITISISED
IT & 10 RATE IT AS EXCELLENT.
20%
30%
40%
10%
RATING OF PIZZA HUT
POOR
GOOD
VERY GOOD
EXCELLEN
62
CONCLUSION
Pizza hut is a big company it has to achieve targets in a given period of
time. The time period is mostly a year. The target has to be full filled in
given period of time in order to maintain the market share of the firm,
therefore to fill the target the pizza hut is segmented its market into
different segments in order to maintain its market share and to increase its
sales. It can be concluded that their market segmentation strategies have
been successful and there is flexibility in the strategies as they can be
change with the change in market conditions.
63
FINDINGS OF THE STUDY
Market segmentation research in general has a very wide scope.
Scope refers to the various avenues which are covered under a given field of
study.
Market segmentation Research covers target market, pricing, sales and
distribution researches and so on.
Every research study starts with a problem and the conclusions derived from
the study becomes an information of paramount importance in making
business decisions.
Decisions taken on the basis of research conclusion yields miraculous results.
Objective of the research study is one is one of the decisions to be taken by the
firm.
However, there are indirect implications of any research study.
Scope of the research study directly depends upon the type and quality of
research.
Research done with general objectives will have wider scope as compared to
research done with specific objective.
As I have done two kinds of survey, Food habits of Jaipur people and
Feedback of customers of Pizza Hut.
.The scope of survey conducted by me can be summarized as
follows:
64
Profile of consumers.
Consumer Behavior.
Brand Awareness &Brand Importance.
Competitive Analysis.
Product Portfolio Management.
Modifications in the pricing strategy.
Level of customer satisfaction for quality, services, taste& infrastructure.
Types of food people prefer.
Opinion about the future of fast food business
Reasons to like Pizza Hut.
Suggestions for better prospectus of Pizza Hut.
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SUGGESTIONS
Introduce more variety of non vegetarian pizzas in order to attract the non
vegetarian customers.
Special discounts should be given to students.
The prices of pizza should be nominal.
Provide batter services to the consumers with improved service skills
Open more branches of pizza hut in city in order to increase sales.
Introduce female waitresses to the service team.
Provide offers on the purchase from pizza hut.
Introduce new varieties of pizzas in order to form new segment.
Introduce pizza according to Indian culture in order to maintain sale as
sometimes the people hesitate to try other cuisine a little Indian touch will
provide them the pizza they need.
Increase the no. of drinks in the menu as there is less variety of drinks and it
causes problem at the time of taking order.
Develop combos according to different segments of the market.
Hidden charges should not be there the menu should have each and every
information regarding tax.
66
BIBLIOGRAPHY
In order to have practical knowledge of training, the theoretical knowledge is
must i.e. the basic theoretical concerns must be clear.
In preparing this report. Moreover, extra information of Pizza Hut and I have
visited some websites also.
Phillip kotler for marketing management.
Art Weinstein market segmentation.
Sally dib and Lyndon simkin.
Essentials of marketing. Charls w. lamb, joiseph f fair
WEBLIOGRAPHY
www.google.com
www.wikipedia.org
www.pizzahut.com
www.pizzahut.co.in
67
ANNEXURES
QUESTIONNAIRE
A marketing questionnaire can be used for several purposes. Key among them is to
gauge whether the Particular development in the product and services is needed or not.
Questionnaire can also help to know new product other than the target products.
Questionnaire also helps to know about the target market, target season & target client,
peak times so as to know about the customer satisfaction.
Such questionnaire tests the customer knowledge about the product and services offered
by the particular organization.
A marketing questionnaire helps the organization by providing the information about
their competitors.
It provides detailed information on the basis of which further marketing strategies are
developed.
It provides information about the product popular among the customers and products
which are not at all popular.
By providing this information it helps the firm to add and remove the products according
to customer needs.
68
QUESTIONNAIRE
NOTE: This questionnaire is just for the college research work, so all
information in this Questionnaire will not be disclosed to any company
officials or other.
Customer name: ___________
Email id: _________
Phone no.: ________________
Date: ___________
Q1 WHAT IS YOUR AGE GROUP?
A) 10-18
B) 18-25
C) 25-35
D) 35 AND ABOVE
Q2 WHAT IS YOUR PROFESSION?
A) STUDENT.
B) GOVERNMENT SERVICE.
C) PRIVATE SERVICE.
D) INDUSTRIALIST.
E) SELF EMPLOYED.
F) PROFESSIONAL.
G) OTHERS.
69
Q3 WHAT IS YOUR FINANCIAL STATUS?
A) DEPENDENT.
B) INDEPENDENT.
Q4 WHAT IS YOUR INCOME GROUP?
A) 0-5000 RS
B) 5000-15000 RS
C) 15000-30000 RS
D) 30000 & ABOVE
Q5 WITH WHOME YOU ARE COMING TO PIZZA HUT?
A) ALONE.
B) FAMILY.
C) FRIENDS.
D) BELOVED.
E) COLLUGE.
Q6 WHICH SIZE OF PIZZA YOU GENERALLY PREFER TO BUY IN
PIZZA HUT?
A) SMALL.
B) MEDIUM.
C) LARGE.
Q7 WHICH MEAL IN PIZZA HUT YOU GENERALLY OPT FOR?
A) BRUNCH
70
B) LUNCH.
C) EVENING SNACKS.
D) DINNER.
Q8 ARE YOU SATISFIED WITH THE PRICE CHARGED BY PIZZA
HUT?
A) YES.
B) NO.
Q9 HOW OFTEN YOU TAKE MEAL IN PIZZA HUT PER MONTH?
A) LESS THEN 1 TIME.
B) 1-2 TIMES.
C) 3-5 TIMES.
D) MORE THAN 5 TIMES.
Q10 WHICH OCCASION YOU LIKE THE MOST TO VISIT PIZZA HUT?
A) BIRTHDAY PARTY.
B) ANNIVERSERY.
C) OCCASSIONALY.
D) REGULARLY.
E) ANY OTHER TIME.
Q11 WHICH BRANCH OF PIZZA HUT YOU LIKE THE MOST?
A) GAURAV TOWER(MALVIYA NAGER)
B) CRYSTAL PALM(22 GODAM)
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C) HYPERCITY MALL(JHONTWADA)
D) EVERSHINE TOWER(VAISHALI NAGER)
E) GOVIND MARG(RAJA PARK JAIPUR)
Q12 IN WHICH PRICE RANGE YOU GENERALLY BUY PIZZA FROM
PIZZA HUT?
A) 125-200 RS.
B) 200-400 RS.
C) 400-600 RS.
D) 600 & ABOVE.
Q13 AT WHAT TIME YOU LIKE TO VISIT PIZZA HUT?
A) 9-12 PM
B) 12-3 PM
C) 3-6 PM
D) 6-9PM
E) 9-11PM
Q14 WHAT WILL YOU RATE PIZZA HUT IN COMPARISON TO
DOMINOS
AND PIZZA WORLD?
A) GOOD.
B) VERY GOOD.
C) AVERAGE.
D) POOR.
72
QUESTIONNAIRE
NOTE: This questionnaire is just for the marketing managers & for the
employs of marketing department. The information gathered from this
questionnaire is only for college research work not to be disclosed to any
other person
Manager name: ___________
Employee id: _________
Phone no.: ________________
Date: ___________
Q1 PEOPLE OF WHICH AGE GROUP IS GENERALLY VISITING PIZZA
HUT?
A) 10-15
B) 15-25
C) 25-30
D) 30 AND ABOVE.
Q2 WHAT IS THE RATIO OF MALE AND FEMALE?
_____________________________________________
Q3 WHICH PIZZA SALES IS MAXIMUM?
_____________________________________________
73
Q4 ACCORDING TO YOU WHAT KIND OF SPENDING POWER
CUSTOMERS
HAVE?
A) EXCELLENT.
B) GOOD.
C) AVERAGE.
D) POOR.
Q5 ACCORDING TO YOU WHAT TIME THE SALES IS AT ITS PEAK?
A) 9AM-12PM
B) 12PM-3PM
C) 3PM-6PM
D) 6PM-9PM
E) 9PM-11PM
Q6 WHICH KIND OF TARGET MARKET PIZZA HUT HAS?
A) YOUTH
B) FAMILY
C) OLD PEOPLE.
D) PEOPLE WITH HIGHER INCOME.
E) PEOPLE WITH LOVER INCOME.
F) ALL THE ABOVE.