RETAIL PROJECT

ON
PIZZA HUT

GROUP MEMBERS:-

CONTENTS
 1) INTRODUCTION………………………………………..1

2) RETAIL ENVIRONMENT…………………………….2

3) POSITIONING…………………………………………...3

4) MARKETING STRATEGY…………………………….4

5) PRODUCT ASSORTMENT…………………………….5

6) PRICE POSITIONING………………………………….6

7) CUSTOMER PROFILE…………………………………7

8) CONSUMER PULL FACTORS………………………...8

9) COMPARISON…………………………………………..9

10) LONG TERM PROGNOSIS…………………………..10

INTRODUCTION
Pizza Hut is one of the flagship brands of Yum! Restaurant Int. which
also has KFC, Taco Bell, A&W and Long John Silver’s under its
umbrella. It is the world’s largest pizza chain with over 12,500
restaurants across 91 countries.

Pizza Hut was started in 1958, by two brothers Frank and Dan Carney
in Wichita, Kansas. They had the idea to open a pizza parlor. They
borrowed $600 from their mother, and opened the very first Pizza Hut.
In 1959, the first franchise unit opened in Topeka, Kansas. Almost ten
years later, Pizza Hut was serving one million customers a week in their
310 locations. In 1970, Pizza Hut was put on the New York Stock
Exchange under the ticker symbol PIZ.

In 1986, Pizza Hut introduced delivery service, something no other

restaurant was doing. By the 1990's Pizza Hut sales had reached $4
billion worldwide. In 1998, Pizza Hut celebrated their 40th anniversary,
and launched their famous campaign "The Best Pizzas Under One
Roof." In 1996, Pizza Hut sales in the United States were over $5
million.

The first Indian outlet was opened in June 1996 in Bangalore. In India,
Pizza Hut has 139 restaurants across 36 cities. Pizza Hut has been voted
the “best family restaurant” for the second year running at the 2007
Tommy’s Parent Friendly Awards. "Pizza Hut is known for quality,
innovation and category leadership.

RETAIL ENVIRONMENT
Out of all the existing pizza chains such as Domino's, Smokin Joe’s, Papa
John’s, Pizza Corner, U.S Pizza, Pizza Hut has a dominating market share of
48% of the total market share. However, this forced competitors to look for
new methods of increasing their customer bases. They all try to come up
with some newer, bigger, better pizza for a low price. But Pizza Hut has
always had the first mover advantage. Their marketing strategy in the past
has always been to be the first. One of their main strategies, that they still
follow today is the diversification of the products they offer.
The market has become greatly competitive and the customer has become
more discerning and adventurous. This however has not affected Pizza Hut's
comfortable reign over the Indian pizza industry and the ever increasing
number of loyal customers who have made it possible for Pizza Hut to
aggressively extend its presence.
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 make a pizza into something slightly different so that
customers will think it’s a whole new product. E.g., in 1983, Pizza Hut
introduced 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. Currently, they are marketing "The Big New Yorker," trying to bring
the famous New York style pizza to the whole country.
3

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 Bangalore 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. 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 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 139 restaurants across 36 cities.

MARKETING STRATEGY
Pizza Hut’s marketing strategy is very simple: “we want to satisfy our
customer by offering them the best.” Pizza Hut has always valued
customer service and satisfaction. In 1995, Pizza Hut began two
customer satisfaction programs: a 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.
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 to different segments that other
pizza chains cannot. For example, Pizza Hut can market to families
much easier than Domino's or Little Caesar's. Pizza Hut offers a sit-
down, conversational type restaurant where families can take their
children for birthday parties for example. Pizza Hut's broad selection
of products also makes it easier for them to market to different
market segments.
The other two strategies followed by Pizza Hut is C.H.A.M.P.S
(Cleanliness, Hospitality, Accuracy, Maintenance, Product quality
and Speed) and 3F’s (Fun, Friendly and Familiar). These two
strategies have really helped Pizza hut to evolve out as a market
leader with a competitive advantage.

5
PRODUCT ASSORTMENT
Pizza Hut will offer a new product called "The Extreme" pizza. "The Extreme" is
a twenty-inch pizza with twice as much cheese and toppings as Pizza Hut's other
pizzas. This new pizza will have many different competitive advantages. The
first competitive advantage of "The Extreme" is that it is the largest pizza on the
market. No other pizza restaurant offers a twenty-inch pizza.
The second competitive advantage is that it has more cheese and toppings than
any other pizza on the market.
Another competitive advantage is the Pizza Hut brand name. Pizza Hut has built
a brand name that means quality products and services. Since Pizza Hut will be
introducing "The Extreme," customers will automatically think this is a high
quality product.
The final competitive advantage is that this product will be the first pizza to
target America's youth. "The Extreme" pizza will target Generation X and
Generation Y or people between the ages of 12 and 30. This market purchases a
lot of pizza each year, but very few pizza restaurants actually target them. "The
Extreme" will be introduced on Super Bowl Sunday, 2001.
During the introduction stage of the product life cycle, Pizza Hut will try to
establish a market for the product and persuade early adopters to buy. During the
growth stage, Pizza Hut will try to build sales and develop a preference for the
product. Pizza Hut will try to seek differentiation during the maturity stage. "The
Extreme" is expected to begin to decline after one year on the market.
 6

PRICE POSITIONING
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. The retail price of "The Extreme" pizza should be set at $9.99,
which is higher than Pizza Hut's competitors. Several sales promotions
and coupons will be used to lower the price below those competitors.
Since both Pizza Hut and the beverage Mountain Dew are Pepsi
subsidiaries, bundle pricing will be used. Customers can purchase "The
Extreme" for $9.99 and receive a two-liter bottle of Mountain Dew for
free. Pizza Hut will be able to sell two products together at a single
price to suggest a good value. The high/low pricing strategy has several
advantages. First, this pricing strategy will help segment the market.
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. The high/low pricing strategy will also create excitement.
Customers will be able to try something new when they purchase "The
Extreme" and this exciting experience may bring those customers back
to purchase other products. Finally, this strategy will emphasize product
and service quality. 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.

CUSTOMER PROFILE
This target profile provides a comparison of Pizza Hut’s customers
compared to:

a) Total Population 14+

b) Total Purchased from Fast Food Places/Restaurants in the Last 4
Weeks.

This target profile provides you with instant access to some of the
world's most insightful, robust consumer research, with unmatched
accuracy, integrity and sheer power.

Armed with a complete picture of your customers or your competitor’s

customers, you are in the best position to fine tune you product strategy,
focus your communication, and thereby optimize your marketing
budget.

Don’t rely on unconfirmed reports; buy this target profile to get all that
data, over 400 variables, everything from attitudes and activities to
media consumption.
 8

CONSUMER PULL FACTORS

• 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.
• 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.
• Pizza Hut has a unique tradition. A bell hangs at each Pizza Hut
restaurant, which is rung by customers who as they leave wish
to thank the servers for yet another memorable visit.

COMPARISION
MARKET SHARE

OTHERS 32%
PIZZA HUT
PIZZA HUT 48% DOMINO'S
OTHERS

DOMINO'S 20%
 10

LONG TERM PROGNOSIS

With competition being so strong in this industry the threat of imitation
products will surely be a problem to be dealt with. Pizza Hut will
however have the first mover advantage with this product. With the
entry of imitation products into the market, Pizza Hut will have to
adjust its mixes to accommodate change. The promotions may have to
be bigger and better than the competition, or the product may need to be
altered to give it that little bit of an edge over the competition. For
example stuffing the crust with cheese or giving a free topping with the
purchase would help give Pizza Hut an edge over the competition.
Pizza Hut is moving beyond big cities. While consolidating its presence
in the metropolitans, this aggressive expansion will involve Pizza Hut
entering smaller cities like Cochi, Nasik, Bhubaneswar, Lucknow and
Madurai . It is strengthening its roots in the Indian market by tying up
with local and popular brands such as Reliance Communication. Apart
from this it is also developing local supply chain.
Basically, Pizza Hut will need to remain flexible in the maturity stages
of the product life cycle in an attempt to continue to be the market
leader. Overall, this is a product that is not much unlike any of the other
new pizza's that Pizza Hut has introduced. What makes this new product
so exciting is the marketing plan that is directing the product at a new
segment. We are taking a large pizza with a lot of toppings and
marketing it as an "Extreme Pizza" to a generation of younger adults
that are consumed by this marketing tool. This is what will make this a
success. The mix of promotion and advertising we will be using will
target a very profitable