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Pizza Hut Case Study

Essay by   •  February 23, 2016  •  Case Study  •  6,164 Words (25 Pages)  •  1,377 Views

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Table of contents

Introduction ………………………………………..…………………………………………………………………   2

Competitive Landscape ……………………….…………………………………………………………………   2

Retailing format of Pizza Hut ……………….…………………………………………………………………  3

SWOT analysis ………………………………………………………………………………………………………..  3

Buying process of consumers from Pizza Hut ……………………………………………………….... 4

Multi attribute model …………………………………………………………………………………………….. 5

Franchising format of Pizza Hut ……………………………………………………………………………… 6

Market entry strategies of international players.…………………………………………………….. 8

Retail Strategy of Pizza Hut ..…………………………………………………………………………………… 9

Organization Structure at Pizza Hut ………………………………………………………………………  12

Compensation management …………………………………………………………………………………  13

Selection, training and retention ………………………………………………………………………….. 13

Logistics outsourced ……………………………………………………………………………………………… 14

CRM in Pizza Hut  ………………………………………………………………………………………………….. 14

Merchandise Management at Pizza Hut…………………………………………………………………. 15

Visual Merchandise………………………………………………………………………………………………… 18

Pricing……………………………………………………………………………………………………………………… 20

Pizza Hut Communication mix………………………………………………………………………………….  20

Store Management………………………………………………………………………………………………….  24

Customer Service…………………………………………………………………………………………………….. 25

References………………………………………………………………………………………………………………..  27

Introduction

Pizza Hut is an American fast food company, a subsidiary of Yum! Brands, Inc. It is an international franchise known for pizzas and side dishes. Pizza Hut entered India in 1996 and opened its first restaurant in Bengaluru. With Domino’s first operation in India the very same year Pizza Hut had had a tough competition. However Pizza Hut offered the unique value proposition of being an affordable casual dining restaurant providing diners an ideal place to change everyday moments into celebrations with delicious food. Thus, it has been successful in establishing itself as India’s largest casual dining restaurant brand with 462 dine-in restaurants across 44 cities.

Pizza Hut enjoys about 70,000 footfalls across the country and has captured 27 percent of the market share of the eating-out market. Its operations in India are 100 percent franchise based. An average investment for each outlet in India is US$ 275,000-335,000 which is borne by the franchisee.

 Pizza market in India – As per Crisil Research, the India quick-service-restaurants market is estimated to double to Rs 70 billion in 2015-16 from Rs 34 billion in 2012-13. Also the pizza market in India is worth above 1500 crore and has been growing at a CAGR of 26 % for the last five years. India and China has emerged as the next biggest markets for pizza after U.S. Due to the huge opportunities in the tier II and tier III cities the leading pizza makers are attracted towards these locations.

Competitive landscape

Pizza Hut’s biggest competitor, Domino’s Pizza, is currently the market leader enjoying over 55 percent of the market share alone in the organized pizza market and 70 percent in the market share in the pizza home delivery segment. Other competitors include –

  • Smokin Joes
  • California Pizza
  • Papa Jones
  • Sam’s Pizza
  • Pizza Corner
  • U.S Pizza
  • Little Caesars
  • Sbarro
  • Neopolitan Pizza

Retailing formats of Pizza Hut

 Pizza Hut is focused on maintaining the highest quality of their product and services; giving utmost attention to the experience their customer receives.

Retailing Concepts of Pizza Hut in India

  • Red Roof Restaurants:  These are full service restaurants offering a seated service (family-style dine-in) and takeaway, and may be delivered for off-premises consumption.
  • Delivery/Carryout (Delco or Delco-lite) – Offers home delivery and takeaway, all for off-premises consumption.
  • Pizza Home Delivery – Offers only delivery for off-premises consumption.

SWOT analysis

Strengths

  • Popular brand name and high brand loyalty
  • Innovative range of pizzas under one roof
  • Hygienic food and quick service
  • Sound financial system and international turnover
  • Aggressive advertising, marketing and tie-ups with local and popular brands
  • 100 % owned by Yum!
  • Value food
  • Expansion beyond metros – Trichy, Bhubaneshwar, Nagpur, etc
  • Local supply chain  - 95% locally produced

Weakness

  • Declining satisfaction of pizzas among loyal customers
  • Internal conflicts from franchisees

Opportunities

  • International brand with Indian heart
  • Offerings more than the international menu
  • Indigenous sourcing of raw materials
  • Targets upscale products and a downscale consumer base

Threats

  • Fierce competition – consumers more attracted towards convenience than the concept of fine-dining
  • Rising cheese cost threatens margin
  • Threats by other QSRs such as Domino’s, McDonald’s, etc

Buying process of consumers from Pizza Hut

Stages

Factors and measures taken by Pizza Hut to facilitate the stages

Need recognition

  • Stimulation: Advertisements(commercials on T.V, social media channels like Facebook, YouTube, etc.), hoardings, newspaper inserts, exciting  graphics and photography on the websites
  • Status and power: Consumers enjoy great attention and respect which is satisfied to a great extent by the trained employees. Plush interiors offering ultimate dining experience also attracts consumers.
  • Adventure: Promotional offers and discounts during festivals and frequent introduction of new products are executed by Pizza Hut to grab consumer’s attention.

Information search

  • Sources of information: Internal – past experience at other pizza outlets such as Domino’s, or Pizza Hut itself. External – Peers, friends, reviews on the internet, Pizza Hut website FAQs

Evaluation

  • Price: Pizza Hut offers pizzas and other products at prices comparatively higher than its competitor Domino’s due to the high service quality it offers. However, they manage to attract the crowd through its promotional offers and discounts.
  • Variety: Pizza Hut offers wide range of side dishes, desserts and beverages besides pizzas. Another uniqueness about Pizza Hut attracting consumers is the frequent introduction of new dishes.
  • Interiors: Pizza Hut invests heavily on its interiors and location maintaining its premium image.
  • Service: Highly trained staffs ensure quality service at Pizza Hut.

Choice

  • Digital marketing space exploration, tie ups with local and popular brands

Purchase

  • Store/Website: Consumers place their orders from a wide range of dishes available in the menu. Various payment options are made available to make the process more convenient. Prepaid cards, online payment, card payment, etc. available.

Post purchase evaluation

  • High levels of satisfaction build store and brand loyalty is the source of competitive advantage at Pizza Hut.

Multi attribute model

Information about the stores

Store characteristics

Pizza Hut

Pizza Hut Online

Domino's

Domino's Online

Price

High

Low

Variety

Yes, offerings beyond international menu, side dishes, frequent new product development, etc.

Limited delivery of side dishes such as soups, limited beverages

Yes

Delivery of all the varieties

Interior

Luxury, Dine-in

Basic infrastructure

Service quality

High

Moderate

Service time

Low

Low

Location

A grade towns

A as well as B grade towns

Delivery cost

High

Low

Belief about stores' performance benefits

Convenience

5

7

6

8

Economy

6

5

8

7

Assortment

8

7

8

8

Availability of product information

10

10

10

10

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