Pizza Hut & its operations in India

Pizza hut was started in 1958, by two brothers Frank and Dan carney in Wichita, Kansas. They
had the idea to open a pizza parlour. They borrowed $600 from their mother, and opened the very
first pizza hut. In 1959, the first franchise unit opened in Topeka, Kansas. Ten years later, pizza
hut was serving one million customers a week in their 310 locations.
Pizza hut is one of the flagship brands of Yum! Brands, INC., which also has KFC, Taco Bell,
A&W and long john silvers under its umbrella. Pizza hut is the worlds largest pizza chain with
over 12,500 restaurants across 91 countries.
In India, pizza hut has 137 restaurants across 36 cities, including Delhi, Mumbai, Bangalore,
Chennai, Kolkata, Hyderabad, Pune, and Chandigarh amongst others & it plans to almost
double the number of outlet in India by 2014. Yum! Is in the process of opening pizza hut
restaurants at many more locations to service a larger customer base across the country.

Core competencies
Tracing footsteps
Pizza hut is akin to the Indian heart and taste buds. Pizza hut has been able to capture the heart
and soul of Indians. This, they achieved through rapid Indianization of pizzas. Chicken tikkas,
tandoori range and spicy korma were welcomed by pizza lovers. In addition to this, pizza hut
takes pride in having the only 100% vegetarian pizza hut in the world at Ahmadabad, Surat and
Mumbais Chow patty. It also has a special Jain friendly menu without root based ingredients and
even serves salad dressings without eggs.
Through the looking glass
Thinking out of the box was never new at pizza hut. With the Palat campaign, they even nudged
Indians to eat pizza backwards. The vehicle for this change was the stuffed crust pizza which has
become a huge hit. The pizzas outer crust has a stuffing of mozzarella cheese and one can run
into people eating these pizzas backwards in many outlets. Talk about bringing changes!!!
Pizza hut is really going global. Tuscani pastas that is truly Italian is now at every pizza hut outlet.
With changing tastes of Indians and greater acceptance of international cuisines, pizza hut has
introduced 30 new items on its menu for this festival season. These include beverages, pasta and
desserts.
Pizza hut express outlets were launched at malls, airports, department stores and gas stations
which offers a reduced version of the menu for globe trotters and busy bees.
Moreover pizza hut is not just a hangout zone for youngsters. It organizes birthday bashes, kitty
parties and corporate lunches. Pizza hut express outlets were launched at malls, airports,
department stores and gas stations which offers a reduced version of the menu for globe trotters
and busy bees.




Swot analysis
Strength

Broad selection of product to target
different segments.
First Mover Advantage (pioneer
advantage)
Strong Brand Image
Excellent service

Weakness

High overhead cost due to large number
of Restraunts
High prices of pizza to that of dominos
that leads to loss of customer
Least promotions
Opportunity

Increased revenue through more
innovative varieties of pizza (Indian
flavour)
Increase in brand loyalty through good
customer service
Growing fast food market of India.
Threat

Emergence of the papa jones worlds
best pizza maker
Low price points of the competitors.
No take away counters for the pizza

Marketing Strategy of Pizza Hut
Total Marketing Strategy: Pizza hut started with the single product but with different sectors
emerging and the degree of competition, it diversified with the several product to serve different
segments. It came with chicken nuggets, garlic bread, pan pizza, Birrizas, etc.
Early entry strategy: Pizza hut was the first entrant in the pizza market of India and followed
early entrant strategy in order to be the market leader it continued to refine the product and
develop new product to suit the Indian food culture.
Strong commitment strategy: Pizza hut has been operating in Indian market by analysing all the
economies of scale in promotion, distribution and manufacturing facilities. If papa jhones or
dominos came out with competitive pricing strategy or innovative product then pizza hut quite
aggressively fight back by bringing new innovative products and more competitive prices to
sustain in market.


Marketing
Strategy
Place
strategy
Price
strategy
Promotion
strategy
Product
Strategy

1. Product strategy

Customer Value Hierarchy: From the above diagram we can see that pizza hut has enjoyment as
a basic product but it provides food for it. Thus a person having a basic need of enjoyment can go
to pizza hut and have pizza which is the companys core product. Hot pizza and good taste are his
expectation. Thus the company should ensure this by providing good pizza. The value adds
services refer to the overall dining experience, the service quality, ambience etc.

Product differentiation

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 huts success has been its unique dining
experience. Crewmembers at pizza hut strive each day to provide customer mania the kind of
service that ensures that every visit of the customer is a memorable one.
Pizza features: Pizza hut has many unique features of their product due to which it attracts the
customers. The product is classified into non-durable goods as it is a food item pizza hut differentiates
itself with its competitors with respect to their wide range of offerings (menu items) one can find besides
pizzas range of, pastas appetizers, cakes, and desserts etc.
Mass customisation: The main advantage of pizza hut is that one can customise his own pizza by
selecting the bread and loading it with the toppings which one can select. This creates variety in
the customers mind and thus one can enjoy whatever pizza hut can offer.
The most unique feature is that there is pan 4 all scheme where one can select 4 different types
of vegetarian /non- vegetarian combinations of pizza! This is a unique way of offering as there are
many consumers who come in groups where someone in the group may want a non- vegetarian
pizza can avail the offer.
Conformance quality: Pizza huts products have very high conformance quality i.e. All the
products produced are identical and meet the promised specifications
All
Offering
inclusive
Value added
Services
Hot pizza good to eat
Pizza
Enjoyment
Potential Product: Pizza hut
experience as a whole.
Value add- Augmented
Product
Good Taste: Expected
product
Food: Basic Product
Basic Requirement: core
benefit.
Style: Pizza is delivered in hot pans and served in style. The toppings in the pizzas are also
dressed in a good fashion. Thus having food in style defines pizza huts experience.
Service differentiation
Ordering ease: Once one enters the restaurant immediately the assistants initiates the ordering
process by providing the menu. All associates are well trained in English and can take order from
any customer.
Delivery: Pizza huts style of delivering the pizza to the customer is quite an experience. The
restaurant is aesthetically designed; all the staff members are uniquely dressed. Managers dressed
in special uniforms. Also the tables, menu, are all placed in a good manner. This on itself is quite
impressive. All orders placed in restaurant is served within 15-20 minutes and the take away
orders (ordered on phone) is delivered within 30 minutes. Care also has been taken by the
company to pack the pizzas in special covers so that it remains hot till the customer haves the
food. Any pizzas delivered outside 30 minutes are given free. Also discount coupons are given to
the customer in case one doesnt want a free pizza.
Packaging & labelling

The packaging of the pizza has been quite extraordinary in the sense that, it serves the basic
purpose of serving hot tasty pizza.

In house dining: In house dining, the pizzas are not packed, instead they are served in hot pans,
and plates are provided to the customers. The extra ingredients like oregano mix, chilli flakes etc.
Are kept in a bottle having pores. Thus the customer can easily pour the ingredients into the pizza.

Take away orders: They are put in a paper box neatly labelled with pizza hut brand logo. Also
there is a plastic support given (its in the shape of a tripod) at the bottom of the pizza to prevent it
from sticking at the bottom. A pizza hut logo is also given in the tripod. The extra ingredients like
oregano mix, chilli flakes etc. Are given in a paper pouch which is also branded with the pizza hut
logos.

Home delivery orders: All the pizzas covered in paper boxes described above are packaged into
a special delivery bags for retaining the heat. Thus we can observe that from every labelling,
packaging the company tries to imbibe the brand of pizza hut in the minds of consumers

2. Place strategy
Once the product has been decided upon and the market segmented, targeted and the product
positioned, it is time to decide how and where the marketer can deliver the value (product) to the
customer. This is done through marketing channels that make the product available for
consumption to the customer.

Push and pull strategies in channel marketing:

In a push strategy, the manufacturer uses his sales force, trade promotion, money or other means
to induce intermediaries to carry promote and sell its products to end users.

In a pull strategy, the manufacturer uses advertising, promotion and other forms of
communication to persuade the customer to demand the product from intermediaries, thus
inducing the intermediaries to order it.




Pizza hut: (masters at pull strategy) Pizza hut follows more or less the opposite strategy. Pizza
hut has mastered the art of pull strategy. It pioneered the practice of advertising and promotion in
the fast food industry. Pizza hut achieved this remarkable feat by adopting a different marketing
strategy that involved increasing ambiences and amusement for the customers.

Direct channels: 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.

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

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.

The third method of distribution is to order Online.

3. Pricing Strategy

In India Pizza hut is targeting the rich and higher middle class people with a great ambiences
of enjoyment and amusement. They are offering an organized restaurant system and demanding
the higher price for the pizzas. In the pizza hut different types of foods are available like appetizer,
soup & salad, beverages, pasta etc. So for the varieties kind of food the pricing strategy is
different in the pizza hut. Their customers are more or less fixed and they are price insensitive.

Pizza Hut follows A High/Low Pricing(Price Skimming) strategy as far as its new product
are concerned where it fixes the price higher than its competitors and then gradually lowers the
price below the competitors prices.

The high/low pricing strategy has several advantages for Pizza Hut.
Used to create excitement
Set high price initially to send a signal that its products are best in quality
and service offered in excellent.
Helps in segmenting the market as Pizza Hut can sell the extreme pizza to
the customers who wish to pay higher price as well as to the bargain
hunters too.
Sometimes in face of competition either from pizza players or from its substitutes, Pizza Hut has
also reduced price by maintaining the same level of customer service and quality. At 30-35 per
cent market share, 'Pizza Hut' is working hard to woo Indians. Their strategy? Localise flavours.
And while it's hard to imagine eating a pizza that tastes like sev puri or nimbu mirchi, that's
exactly what the global giant has deemed necessary to attract local palettes by launching 15
variants of pan pizzas two months ago based on these flavours. These are priced between Rs 135
to Rs 225. From 200 stores today, Pizza Hut hopes to reach up to 500 stores by 2015 which will
be in both the casual dining and delivery formats.

Owning a pizza chain is not the easiest of things to do in India. The country has stringent food
regulations and procuring food licenses is tough. The industry is highly fragmented and plagued
by poor infrastructure, volatile real estate prices, shortage of skilled and semi-skilled manpower,
high attrition rates and no organised supply chain.
4. Promotional Strategy
Communication objective: 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 uses many promotional strategies. The main promotion is a coupon to purchase. This
promotion is also distributed mainly by mail, but also by fliers on college campuses around the
country in order to reach the target market

A critical factor in Pizza Huts 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.

Communication mix

Advertising: Pizza Huts communication has also always struck a chord with the Indian
customer.
The more recent campaign that was launched with the introduction of the Tandoori pizzas
featured a typical Indian wedding procession abandoning the bridegroom when enticed by
delicious aromas from a Pizza Hut restaurant. While the famous Good times start with great
pizzas slogan has been prominent in the communication, the focus has remained on the best and
most distinct pizzas.

Sales promotion: Pizza Hut laid more emphasis on its restaurant dining experience. Pizza Hut
localizes it menu to capture local Indian Market. It positioned itself as family restaurant and also
concentrated on wooing kids.

Public relations: In India, eating out is perceived as a form of entertainment. Which is why Pizza
Hut servers not only serve our customers great food, they also sing and dance for them. And many
of Pizza Huts customers would, we are certain, love to participate in this process

Events and experiences: Pizza hut use their events to reach to the customer and often it is used as
brand building as well as product selling.

Direct and interactive promotion: Pizza hut provide many services online such as Birthday
reminder service- here people can save the birthday date of their friends, relatives , and pizza hut
will remind you the birthday date and birthday parties discount. Customer can book online E-
coupon and discount offer available to online customers Even customer can do online order of
pizzas.

Personal selling: Pizza huts try to attract the younger generation as their main market segment
but they mainly target high and higher middle class customer. They actually bother about
customers enjoyment and food not the price. Thus Pizza Huts concentrate more on carrying out
above the- line activities in the area it serves.




People

The best part of Pizza hut are the people. Pizza hut introduced a novel way of showing customer
appreciation the bell. Anyone who rings the bell on exiting from Pizza hut is greeted with a loud
thank you from all the waiters in Pizza hut. These people also do performances frequently on
celebrations and most important of all, the pizza hut chain has the most polite and well-mannered
people in the fast food industry.

Process

Pizza hut serves only freshly made Pizza and pastas. The process of Pizza hut involves having the
raw materials half prepared in the kitchens of Pizza hut. Once the order is received, the pizza is
immediately prepared and served hot. In case of pizza hut delivery, pizza hut has gone a further
length and introduced a hot mark on all their packaging for Home delivery. If the mark is not red,
than the pizza is not hot and it can be returned to the outlet. Furthermore the outlet also promises
30 minutes delivery for which it has to maintain a slew of drivers who deliver the pizza.

This completes the marketing mix of Pizza hut. The reality of the market is that Pizza hut is a
fantastic food chain, but it is slowly being overtaken by Dominos because of the presence of
Dominos to deliver pizzas to even B grade towns and cities. Ignoring the B grade towns is a
deliberate marketing strategy of Pizza hut. But in the long term, whether this marketing strategy is
right or wrong, only time will tell.

Physical evidence in the marketing mix of Pizza hut

The only reason Pizza hut is able to demand premium pricing is because of its physical
evidence and the ambiance. The cutlery of Pizza hut is fantastic and it is an enjoyable
experience to have the pizza out of the pan right into our plate. The bowls served along
with pasta are also good. The glasses are big. And the seats and tables are comfortably
spaced giving people the complete experience of luxury dining. Combine that with the
excellent people in Pizza hut and you have an excellent afternoon or evening of dining out
for Italian cuisine.