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MCOM 3314 Ad/PR Research07 December, 2014Malika OuédraogoGeorge L. LozanoBrittny HerbertTaylor StroudDenise StewartDavid Dueñes Amy Romero

The Pizza Hut Marketing Challenge

Secondary Research Focus: Industry/ Online Behavior)

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I. Executive Summary........................................................................................................................................5 A. The Challenge a. The Research i. Secondary ii. Primary C. The RecommendationsII. The Challenge..............................................................................................................................................6III. The Research...............................................................................................................................................8 A. Secondary Research a. Research Objective b. Research Summary B. Primary Research a. Man-On-The-Street Interviews.............................................................................................10 i. Research Objective ii. Research Method iii. Research Findings b. Focus Group........................................................................................................................13 i. Research Objective ii. Research Method iii. Research Findings c. Custom Research.................................................................................................................15 i. Research Objective ii. Research Method iii. Research Finding d. E-Surveys............................................................................................................................19 i. Research Objective ii. Research Method iii. Research Finding

IV. The Recommendations..............................................................................................................................20V. Appendix....................................................................................................................................................22

Table of Contents

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EXECUTIVE SUMMARY

THE CHALLENGE

This Comprehensive report and analysis of the pizza industry aims to determine what the average

consumer expects, wants, and needs when looking at a digital platform to make Online orders. Information was gathered from the community of Canyon Tex-as about their perspective on the pizza industry and Online ordering became instrumental to the success of the Focus Group Methodology. Television advertise-ments from three different pizza companies were used to showcase Pizza Hut, Domino’s, and little Caesers on YouTube. A main topic discussed was about free products: consumers are being charged extra for Ranch

and other condiments. In addition, the participants did not care which pizza they ate: they seem to be more worrisome about who has the best deals and promo-tions. Healthier options did not appeal as an option for the participants, because pizza is not on the top of their list. MOS interviews were conducted with both males and females 18-34 on the West Texas A&M college campus. Questions were asked to find several different diverse viewpoints and to also understand why con-sumers feel the way they do. The research conducted will help better understand how to push Online order-ing of Pizza Hut.

THE RECOMMENDATIONS

When analyzing the focus group, the research developed suggests implementing free condi-

ments, better deals through promotional material, a faster and easier process for online ordering, and pro-moting each digital platform to obtain more traction. In addition, focusing on a cost leadership strategy may be another alternative. Since most of our participants were concerned with cost and promotions, selling piz-

za at a more reasonable price may increase their sales drastically. What needs to also be considered are the complications that come with ordering online. Many participants found that ordering online was compli-cated and filled with errors. One can infer that making online ordering fast and efficient would aid Pizza Hut in their market penetration into the mobile world.

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The goal of the campaign was to increase the share of pizza orders that are done online by 32% by the

end of 2015.

THE CHALLENGE

• Position Pizza Hut as the top choice for customers who order pizza digitally.• Provide the greatest digital orderging experience in the category.• Research the target of 75% of all orders done online/ mobile by the end of 2015.

OVERVIEW

OBJECTIVE

32% Share Increase

68% Remaining

Target Audience

Pizza consumption has a very broad target market, typically 18-64 year-olds; this target narrows to

18-49 year-olds and more specifically millennial aged 18-34. Both men and woman consumer pizza about the same, although men tend to be younger, 18-24, and women typically tend to be mothers.

Strategy57% Overall Ordering

20% Desktop Laptop

23% App/ Mobile/Tablet

Digital online ordering is easier for customers, and it also alows the orders to be placed more accurat-

ly because the consumers have more time to consider ordering options. One can see a full menu so it takes away the rush-factor. The data shows that 43% of all orders are done digitally, wich an increasing number of 23% using apps, mobile and tablet. The other 20% ordes through a Desktop or Laptop.

What They Want

What They Have

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46 Slices

On Average, 46 slices of pizza are con-sumed by the every day American. In

fact, 93% of Americans have eaten pizza in the past month.

Pizza Hut is the world’s largest pizza com-pany with more than 6,300 traditional

restaurants in the U.S. and another 1,500 Pizza Hut “Express unites located in Target stores, malls, airports, etc. They have 15,000 units in over 90 countries.

Pizza Hut’s strength lies with families, especially young moms and “famillennials.”

Competitors

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T HE R

E S E AR C H

Secondary ResearchTHE NEW FAST CASUAL DINING EXPERIENCE

“Fast Casual” dining is a flourishing concept that reveals how the Pizza Industry attempts to lure

customers, thanks to innovative dining styles and a competent customer service. The “Fast Casual” dining approach aims at satisfying consumer’s needs and sharing a positive experience with the customers. The “Fast Casual” dining includes new formats of menu boards and the ability to offer new ingredients to the target audience.

All full-service restaurants offer some form of table ordering. These restaurants have a higher per-unit

sales volume on average. Consumers that choose to go to a full service restaurant are from higher incomes and are more actively engaged with technology. 20% of consumers say that technology options are an important feature when looking for a restaurant.

IMPORTANCE OF TECHNOLOGY

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The industry research spoke for itself. The industry team uncovered that food customization is so

important for our target market. Pizza restaurants have already made huge strides for accomplishing this for their consumers. Other fast casual restaurants like Taco Bell , Dunkin Donuts, and The Chocri chocolate website all allow you to customize your food with online ordering. If we learned one thing, millennials

want to have their food to have many options, get it fast, and order it the way they want to. According to the QSR Consumer Survey, “32 percent of Americans eat fast food at least once a week. Eating out is a function of a mobile society. Customers want to be able to personalize their menu choices to their tastes. Getting the exact flavor you want to increases the likelihood of a repeat visit.”

CUSTOMIZATION

GROWING

APPEAL

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The goal of our MOS interviews was to get a better understanding of:

• What pizza brand consumers feel loyal to and why?• If they have ever ordered food through an Online application.• What they would change about Online ordering and why?• What they thought about the overall brand of Pizza Hut.

PRIMARY RESEARCH

• We interviewed both males and females 18-34 on our very internationally diverse college campus. • By interviewing and asking people these questions, we were able to find out their viewpoints and undestand why consumers feel the way they do. • This research will help us get a better understanding

OBJECTIVE

METHOD

Mos Interviews

of how we can push online ordering for Pizza Hut.• The Man on the Street interviews were conducted on the West Texas A&M campus in the Jack B. Kelly Center and surrounding areas. • 10 different interviews were conducted.

Hayden Gibbs

Steven Contreras

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“A guaranteed estimated time of arrival of when your pizza is going to get there.”

–Hayden Gibbs

“It would be cool if they showed a video of them making my pizza

they do the whole step by step but if they had an in cam that would be awesome.” –Steven Contreras

One of the big surprises is that the younger genera-tion still calls in orders because they want to make

sure their order is correct. Mostly negative comments about Pizza Hut. Bad experiences, preferring local homemade pizza to global chains. This is what some people suggested to make Pizza Hut more appealing regarding Online ordering:

Findings

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OBJECTIVE

Focus Groups

To discover what the average consumer’s perception of Pizza Hut’s Online ordering is.

METHOD

A focus group was conducted with incentives to bring the participants together to help

better understand thte consumer mind-set. The focus group viewed television advertisements from three different pizza companies– Youtube was the platform used to showcase Pizza Hut, Dominoes, and Little caesars.

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FINDINGS

The participants found it rather confusing and irrelevant with pizza ordering, stating they would prefer talking to an employee over the phone to avoid misunderstandings.

Little Caesars was preferred because of the humor appeal, and the jingle was memorable.

Free Condiments were one of the main topics discussed.

There were high emotional responses to Ranch dressing and pizza, and the local consumer denounced her dissatisfaction with being charged extra for a condiment. Some participants felt that condiments should come with the pizza as an added bonus because pizza and Ranch “just go together.”

The pricing of pizza was another giant preoccupation. Participants seemed to lean more towards the more affordable pizza, over the brand, yet the participants in the focus group conducted said they order pizza sporadically–not always on occasions.

Some participants said the Online ordering process needs to be less confusing, a bit simpler and more user friendly; however, most preferred the traditional method of calling for pizza.

In addition, participants found data-mining useful, because their card information was saved to use at a later time– keeping the history of past orders stored and ready to access.

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Custom Research

OBJECTIVE

RESEARCH METHOD

RESEARCH FINDINGS

ANALYSIS

The goal of the custom research was to:

• Help us determine which Pizza Hut online ordering platforms are the easiest to use. • What can be improved about them.• How people feel about them.

We hosted individual contests where participants faced off to order a specific item using one of

the Online ordering platforms (ie. iPhone app, Apple tablet, and website). Two person groups took part in each competition and the person with the fastest time to order on each platform “won”. Each participant was then asked to take be interviewed about their experience.

Interview Questions:

1. Which platform did you most enjoy using?2. What was the most frustrating part of ordering on the platforms?3. Do you order Online or over the phone?4. What would you change about the Online ordering platforms to make it your first option?

Using the Platforms

Many of our participants had never used the online or-dering platforms. After being introduced to them, they were very open to using the platforms again.

Clutter

Many participants felt that the website was overpopu-lated with marketing messages and promotions. They indicated that the website would be easier to navigate with a more streamlined appearance.

Guide

Respondents suggested implementing a guide function with voice capability to access their desired order faster and without confusion.

App Failure

The iPhone app produced multiple errors and was slow to load. The tablet app did not have the same problems.

There are functionality issues with each of the platforms that need to be addressed. Once they have been fixed, it would be prudent to introduce a guide or tutorial to the platforms to help guide customers through the

buying process.

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The respondents said online ordering was simple.

Many respondents favored Coupons.

Most of the respondents said they made under $20,000.

The Majority of Respondents were single.

54%

87%

70%

49% 75%

RESEARCH METHOD

67 completed surveys

out of 75 opened

3/4 majority of respondents did not have kids.

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RESEARCH METHOD

E -Surveys

Other Notable Findings

• 57% of respondents were female • 56% lived in urban areas

• There was little knowledge about Hulu and X-Box

• Preferred ordering over the phone

To find out why people enjoy/ don’t enjoy Online ordering, and what appeals to them the most.

OBJECTIVE

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Heat Map PAPA JOHN’S PIZZA HUT

LITTLE CAESARS DOMINO’S

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Results

PAPA JOHN’S

• “Chili Pizza”• “New Fritos Chili Pizza Large”• “Order Now”• “See All Special Offers”• “Add A Pepsi”• (Image) Fritos

PIZZA HUT

• Bacon. Cheese. Stuffed. Crust.• “$7.99 Large”• “World Hunger Relief ”

LITTLE CAESARS

• “Local Store Coupons”• “Our Menu”

DOMINO’S

• “$5.99 Each”• “7.99 Each”

FINDINGS

• The majority of the survey respondents noticed pricing and special offers. • Occassionaly they would notice a point-of-sale article such as soda.

We Love Coupons!

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Our Sweet Recommendations

• Use technology to increase awareness online and platforms.

• Social Media is key when targeting millennials to consider ordering pizza through the Online and mobile platforms.

• Navigating through mobile devices was rather tedious and difficult, changing this is instrumental to the success of the company.

• Provide promotional incentives to push traffic to mobile devices.

• The correspondants agreed that condiments are crucial to the success of Pizza Hut, so promotial materials can be altered to suite this taste.

• There is an increase in technology, and research shows that a consumer is more likely to select a restaurant if they are more technologically savvy, which includes up-to-date websites and on-table technology. Pizza Hut has a video of YouTube showcasing a table technology, but implementation of this technology should occur in the near future .

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Appendix

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