Assignment

On

“Marketing Strategy

Of Pizza Hut”

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Marketing Strategy of Pizza HutCourse: Principles of Marketing

Submitted To:

Kashfia AhmedSenior Lecturer

Department of Business AdministrationEast West University

Dhaka 1212

Submitted By:

Shams Jahan Farhat ID # 2009-1-10-060

Md.Golam Mursalin ID # 2009-1-10-308

Yasir Arafat Areef ID # 2009-1-13- 034

Md.Atiqur Rahman Khan ID # 2009-3-10- 014

Shakh Riad Adnan ID # 2009-2-10-092

Submission Date: 15.07.2010

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LLETTERETTER OFOF T TRANSMITTALRANSMITTAL

Ju ly 15 , 2010

Kash f i a AhmedSen io r Lec tu r e rDepa r tmen t o f Bus ine s s Admin i s t r a t i onEas t Wes t Un ive r s i t y

Sub j ec t : Submis s ion o f Ass ignmen t .

Dea r Madam:

We a r e ve ry p l ea sed t o submi t t h i s a s s i gnmen t on “Pi z za Hu t ” a s you have

au tho r i zed u s t o i n t h i s s emes t e r .

We a r e hono red t o p r epa re t h i s a s s i gnmen t unde r you r gu idance s i nce i t

gave u s t he oppo r tun i t y t o know the cu r r en t ma rke t i ng s t a t u s o f “ Pi z za

Hu t” and ana lyze i t s ma rke t cond i t i on .

We t r i ed ou r l eve l be s t t o a ccumula t e t he i n fo rma t ion fo r you a s

comprehens ive a s pos s ib l e . We wi l l be ob l i ged t o p rov ide fu r t he r

c l a r i f i c a t i on on t h i s r epo r t wheneve r nece s sa ry .

S ince re ly Your s ,

Shams Jahan Farhat [ID # 2009-1-10-060] ________________

Md. Golam Mursalin [ID # 2009-1-10-308] ________________ Yasir Arafat Areef [ID # 2009-1-13-034] ________________

Shakh Riad Adnan [ID # 2009-2-10-092] _______________

Md. Atiqur Rahman Khan [ID # 2009-3-10-014] ________________

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Acknowledgement

We wou ld l i ke t o exp re s s ou r g r a t i t ude and i ndeb t ednes s t o ou r hono rab l e

f a cu l t y , Ms . Kash f i a Ahmed , Sen io r Lec tu r e r , Depa r tmen t o f Bus ine s s

Admin i s t r a t i on , Eas t Wes t Un ive r s i t y (EWU) . Wi th he r i nexhaus t i b l e

gu idance , va luab l e adv i ce , con t i nuous i n sp i r a t i on , cons t ruc t i ve c r i t i c i sm

and gene ros i t y she he lped u s t o c a r ry ou t t h i s r epo r t succe s s fu l l y .

We wou ld a l so l i ke t o exp re s s ou r g r a t i t ude t o t he webs i t e t ha t he lped u s

t o ga the r a l l t he nece s sa ry i n fo rma t ion .

F ina l l y , we wou ld l i ke t o t hank t o a l l g roup member s t ha t d i r e c t l y o r

i nd i r ec t l y he lped u s t o p rov ide and accumula t e a l l t he nece s sa ry

i n fo rma t ion fo r t he a ccompl i shmen t o f t h i s a s s i gnmen t .

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Table of Content

Executive Summary v

Title Page

1. Introduction……………………………………….. 1

2. Company Profile…………………………………... 2

3. Market Segmentation……………………………… 3

4. Target Marketing………………………………….. 5

5. Market Positioning ………………………………. 6

6. Positioning Map………………………………. …. 6

7 Differentiations …. ……………………………… 6

8. Choosing Right Competitive Advantage……………… 7

9. Positioning Strategy…………………………………….. 8

10. Positioning Statement………………………………. .9

11. Marketing Mix…………………………………… 9

12. Conclusion……………………………………….. 11

13. Reference………………………………………… 12

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Executive Summary

Pizza Hut is one of the leading pizza restaurant companies in the world in terms of both the

number of outlets and the percentage of market share that it holds. Pizza Hut’s main

purposes are to provide foods and services of superior quality and value that improve the lives of

the world's consumers, now and for generations to come.

In this report we have discussed about how Pizza Hut uses marketing segmentation, targeting

and positioning strategy.

Pizza Hut believes a plentiful and leveraged diverse strategy is a competitive advantage. Their

goal is to grow that competitive edge by fostering an inclusive culture. Diversity is a business

strategy for Pizza Hut. It's an intentional choice that creates sustainable competitive advantage.

Here we have discussed how Pizza Hut plans and uses diverse strategies to segment the

market(Major segmentation variables for consumer market, requirements for effective

segmentation), target each of the segmented market(Evaluating and selecting market

segmentation) and differentiation and positioning (Positioning maps, possible value

differentiation, choosing the right competitive advantages, selecting an overall positioning

strategy and developing a positioning statement).Finally we have discussed about marketing mix.

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Introduction

About Pizza Hut:

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, 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.)

Pizza Hut was founded in 1958 by brothers Dan and Frank Carney in their hometown of Wichita,

Kansas. When a friend suggested opening a pizza parlor, they agreed that the idea could prove

successful Currently based in Addison, Texas Pizza Hut is relocating its headquarters to Legacy Office

Park in nearby Plano when the lease on its current building, which it has occupied since 1995, expires at

the end of 2010

Pizza Hut Today:

Pizza Hut is not only the acknowledged leader of pizza industry worldwide, but it is also the world’s largest pizza chain with more than 6,100 restaurants in the United States and over 5,500 restaurants in 97 countries and territories around the world, employing more than 300,000 people, serving 1.7 million pizzas everyday to more than seven million customers.

Pizza Hut in Bangladesh:

Transom Foods Limited, a concern of Transom Group is the franchisee of Pizza hut in Bangladesh. With a seating capacity of 220 persons, the first outlet of Pizza Hut opened South Avenue, Gulshan-1 at 6th December. Currently there are three outlets, two in Dhaka which are situated at Gulshan and Dhanmondi other at Chittagong. Very soon Pizza Hut is going to open another new outlet in in sylhet. All foods served in the outlets in Bangladesh are 100% halal.

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Company Profile

WHEN IT COMES TO TOSSING AROUND DOUGH, NO ONE DOES IT MORE 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 RUN KFC AND TACO BELL IN ADDITION TO PIZZA HUT.

Contact Information

Address: 14841 Dallas Pkwy.Dallas, TX 75254

Phone: 972-338-7700

Fax: 972-338-6869

Financial Highlights

Fiscal Year End: December

Key People

• President and Chief Concept Officer: Scott O. Bergren

• COO: Patrick C. (Pat) Murtha

• CFO: David Gibbs

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Top Competitors

• Domino's Pizza, Inc. (dpz)

Segmentation, Targeting and Positioning

Market Segmentation

Actually, market segmentation is the identification of the group of customers, who are different from one another & need different products. Now a day, companies can’t avoid the process segmenting the market. So Pizza hut has also gone through it as a part of business. Pizza hut has segmented the whole market into smaller group of buyers who have differences in characteristics, needs or behaviors. As the different segments need different products, Pizza hut have tried to deliver different products for their selected segments. Four very important variables of market segmentation of Pizza hut are discussed in following

table:

Var iab les

Segment ing un i t

Exp lana t ion Example

Geograph ic

Coun t r y UK, USA, India, China, Pakistan, Bangladesh

Ci t y In provincial capitals of India, Pakistan, Bangladesh

Mumbai, New Delhi, Lahore, Karachi, Dhaka, Bangladesh

Dens i t y Areas of cities where selected segments’ customers are dense

Gulshan, Dhanmondi, Bayli Road of Dhaka

Demograph ic

Fami l y s i ze sizes of combo is offered

Family size pizza

Fami l y L i f e Cyc le

Tables of different sizes

Tables for Couples, Family with kids

Re l i g i on Allowing people of different religion to enjoy

Halal foods for all religions

i n come people having enough money will spend a lot for food

Family size’s prices are high

Occupa t i on Students & professional persons who don’t have time to go home for meal

Lunch packages

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Genera t i on People of the generation who spend money in non-essential things

High price foods

P s y c h o g r a p h i c

Soc ia l c l ass

Upper middle & upper class people are customers

High prices of foods

Persona l i t y People who don’t want to be alone

Crowd in Pizza Hut environment

Behav io ra l

Occas ion Occasional customers

Special decorations in occasions like Valentines Day, Pahela Baisakh

Bene f i t Who want specials privileges

Quality food, quality service

Requirement for Effective Segmentation: Market segmentation has to be very much useful to work. Some such requirements for a segmentation to be effective is discussed below:

Measurable: Segmentation of Pizza hut is very much measurable. They have targeted the higher middle class people. They are utilizing the scopes pretty efficiently.

Accessible: Pizza hut become very much successful to reach & serve. Pizza hut is available in places where, their desired customers can get them. But still in our country, it has not reached in cities without Dhaka & Chittagong. But they have potential customers at many other cities.

Substantial: pizza hut has enough large segments & those are enough Profitable Segments.

Differentiable: Pizza hut offers Halal foods, different size of combos; different size tables etc are for different segments, which response differently.

Actionable: Pizza hut has enough resources for taking action for its services whenever needed.

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Targe t Marke t ing

Segmenting the market reveals company’s market segment business opportunities. The company

evaluates each market segment’s attractiveness and selects one or more of the market segments

to enter. Targeting marketing involves two steps: 1.Evaluating Market Segment. 2. Selecting

Market Segment.

1. Evaluating Market Segment: To target the best market segments the company first evaluates

segment’s size and growth, segment structural attractiveness and company objectives &

resources.The company first collects and analyzes data on current segment sales, growth rate,

expected profitability on each segments. Pizza Hut Company accumulates their earnings of each

Strategic Business Unit at the end of the year. For instance- If Pizza Hut’s market share is

growing rapidly in a specific segment, then the Company will decide whether to expand it or not.

The company also examines major structural factors that involve competitors, buyer power,

supplier power and substitute products. For instance- If a target segment has too many

competitors for Pizza Hut then that segment will be unattractive for the Company. Even if a

segment has the right size, growth and also is structurally attractive, sometimes the company

should consider its own objectives.

2. Selecting Market Segment: The Company Chooses one of four target marketing strategies,

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They are: Undifferentiated or Mass Marketing, Differentiated or Segmented Marketing,

Concentrated or Niche Marketing and the last one is Micromarketing or Local, Individual

marketing

1. Undifferentiated Marketing: The target customers are of upper middle & upper class people. Pizza hut skips all other social classes.

2. Differentiated Marketing: Products for different segments are delivered. Different SIZES OF pizza appetizers, ice creams, etc can form a differentiated marketing approach.

3. Concentrated Marketing: Pizza hut has products for some specific groups.

4. Micro Marketing: Changes interior decoration depending on occasions.

Differentiation and Positioning:

Positioning Map: The positioning map between Pizza hut and Domino’s is given below

Price High

PIZZA HUT

*DOMINO’S PIZZA

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Di f f erent ia t i on : By creating product, service, channel, people & image differentiation pizza hut reach the consumer touch point more effectively & efficiently in comparing with their competitors in the competitive food sector. Pizza hut’s product holds pretty a favorable position in the consumers mind.

1. Product Differentiation: Pizza hut has differentiated their product on reliability, taste, and nutrition & quality. It always tries to serve their best. Quality of its product is strictly maintained by the authority. Their main focus is quality of product.

2. Service Differentiation: Pizza hut has many brunches throughout the world as well as Bangladesh. In those brunches they have a service goal that is to give every customer a reason to return. They form an idea of customer mania to maintain the standard of service.

3. Channel Differentiation: Dhaka is the most populated district of the country. That’s why there are many outlet of pizza hut in Dhaka. It has good transportation facility for the distribution, so that that outlet can get the product at proper time. They have targeted chittagong and sylhet also. They have selected product according to those characteristics. For an example- they import spicy ingredients and chicken from the foreign country. By this it has made channel differentiation.

4. People Differentiation: Pizza hut has gained a strong competitive advantage through people differentiation by hiring and training skilled, sincere, educated people. Pizza hut is present all around the globe, on all countries, with around 42000 people working in more than 100 countries.

5. Image Differentiation: Pizza hut logo differentiates from the other companies. For that reason customer really identify them in the market, which is another advantages for Pizza hut.

Choosing the Right Competitive Advantage:

Important: Pizza hut gives much importance to product quality rather than any other feature.

Distinctive: Pizza hut doesn’t follow other company’s concept. They have different logo, color and celebrity who promote their products.

Superior: Pizza hut gives priority in quality and taste for their products. But their main focus is proper quality of product.

Preemptive: It’s not easy to copy design of pizza hut.

Affordable: pizza hut always tries to serve best within standard price.

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Profitable: Pizza hut always tries to serve best within standard price and their business is also profitable.

Se l ec t ing an Overa l l Pos i t i on ing S tra tegy :

P R I C E

More The Same Less

M O R E F O R M O R E

M O R E F O R T H E S A M E

M O R E F O R L E S S

T H E S A M E F O R L E S S

L E S S F O R M U C H L E S S

More for more: More for more positioning involves providing the most upscale product pr service and charging a higher price to cover the higher costs. Pizza hut always provides best quality with high price.

More for the same: Companies can attack a competitor’s more for more positioning by including a brand offering comparably quality but at a lower price. But pizza hut is not the example of more for the same.

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More for less: More for less positioning involves providing the more benefits at lower price. Some times pizza hut offers such benefits to the customers. For example at the month of Ramadan they offer unlimited pizza at a fixed price.

The same for less: Companies offer same benefits with fewer prices. But it is not applicable for pizza hut.

Less for much less: Companies offer fewer benefits with fewer prices. But it is not applicable for pizza hut.

Pizza Hut's Mission Statement /Positioning Statement

“We take pride in making a perfect pizza and providing courteous and helpful service on time all the time. Every customer says, "I'll be back!" We are the employer of choice offering team members opportunities For Growth, Advancement, And Rewarding Careers in a Fun, Safe Working Environment. • P.E.A.R.L.S

PASSION for excellence in Doing everything

EXECUTE with positive energy and urgency.

ACCOUNTABLE for growth in customer satisfaction and Profitability.

RECOGNIZE the achievement of others and have fun doing it.

LISTEN and more importantly, respond to the voice of the Customer .

Marketing Mix: The marketing mix consists of everything the firm can do to influence the demand for its product.

Product: Pizza hut has unique design, feature, brand name, services, and good quality & products. They offer standard price but high quality. They mainly focus on quality. They offer deserts beverage salad, pasta or pizza items mainly.

Price: Pizza hut charges price according to there costing. Though pizza hut is well trust brand but they hardly use there brand name while pricing. For this reason it is quite popular. Price of some goods is given below:

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Brand Measure PRICE (TK)

Pizza , Pasta Personal Pan Pizza/ Medium/ Family Size/

310/550/1020/=

Tea/ Coffee Per cup 45/=

Salad Per plate 200/250/300/350/=

Place: Pizza hut makes its product available to target consumers. They targeted mainly populated area such as Dhaka & Chittagong, though their products are available in every outlet of pizza hut. Their channel coverage, assortments, locations are very well planned.

Promotion: Pizza hut is being promoted through advertisements, consumer promotion, public relation, and point of sales.

Advertisements:

1. Television2. Outdoor (bill boards, posters)3. Print (newspapers and magazines)4. Consumer promotion: * Free offers Ex. Unlimited pizza in Ramadan.* Free pizza at winning games

Public Relation: Pizza Hut arranges different kind of programs to create social awareness.

Point of Sales: Sponsor on different programs

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CONCLUSION

Pizza Hut topics is discussed in the preceding chapters. It becomes very clear to us that pizza hut‘s products holds a favorable position in the consumers mind. It’s tactfully promoting its product in Bangladesh. Pizza Hut has done considerable amount of research to analyze the consumer profile of Bangladeshi market. At present it is trying to attract the attention of younger generation, family, etc. Pizza hut is not facing hard competition from other brands. Pizza hut is trying to position itself in the higher end of Bangladeshi market. The way Pizza hut is trying to position and promote itself is very logical and we can see only success in the days to come.

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REFERENCE

BOOK (Principles of Marketing)

HTTP:// www.pizzahutbd.com

HTTP:// www.wikipidia.com

HTTP:// www.google.com

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