Pizza Hut’s Success: Entrepreneurship, Innovation, Quality, and Customer Service

EXECUTIVE SUMMARY

During the past four decades Pizza Hut has built a reputation for excellence that has earned the respect of consumers and industry experts alike. Building a leading pizza company has required relentless innovation, commitment to quality and dedication to customer service and value. The qualities of entrepreneurship, growth and leadership have characterized Pizza Hut’s business through more than four decades of success. Through the strength of its heritage, its culture and its people and franchisees, Pizza Hut looks forward to more success in future.

There are different objectives of every organization. In order to achieve these objectives different targets are set. Targets pass down the hierarchy depending on the nature of the business. Therefore, in order to achieve the objectives, management decides on different strategies. These strategies are divided into many sub-parts and are useful for the running of the business. The employees and the management know what they have to achieve through the targets which have been set to them and the strategies they have adopted help them know the way they will achieve the objectives.

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Similarly, Pizza Hut has different targets set to them and they have adopted different strategies to successfully achieve the targets set. These targets are set by the RSC i.e. the restaurant support centre in Karachi. These targets are passed on to the RGM (restaurant general manager) and he passes them to the workforce. These targets fall within the organizational structure in which there are many people who have different targets to achieve. In order to successfully achieve the targets they need to co-operate and work in a friendly environment.

INTRODUCTION & HISTORY OF PIZZA HUT

About Pizza, Some will tell you Italy. That's wrong. What you know as pizza came into vogue around the time of Napoleon and the French revolution. Italians, known to be lovers of fine food and wines perfected and imported this terrific dish to America. From here it quickly endeared itself to mass production and re-export to the rest of the world. Bon appetite! In 1958, Frank and Dan Carney had an idea for a great local pizza restaurant in Wichita Kansas. The small 25 seat restaurant only had room for 9 letters on the sign… the building looked like a hut… so 'Pizza Hut' was born! Fifteen years later, we opened the first UK restaurant and since then we've become the biggest Pizza Company on the planet, Let see listen Pizza Hut Story from them! 1958 Frank and Dan Carney open the first Pizza Hut in Wichita, Kansas. 1972 1000 restaurants are open throughout the USA.

1973 Pizza Hut went international with restaurants in Japan, Canada & England. The first UK Pizza Hut opened in Islington, London.
1977 PepsiCo bought Pizza Hut.
1980 Pan Pizza was introduced.
1982 The UK joint venture started between PepsiCo and Whitbread. 1984 Over 50 restaurants so far in the UK.
1986 By now, there were 100 restaurants in the UK and 5000 worldwide. 1987 An average of one restaurant opened each week in the UK. 1988 The UK's First Delivery Unit was opened in Kingsbury, London. 1992 There were 9,000 restaurants in 84 countries.

1993 There were 300 restaurants and delivery stores in the UK. 1994 10,000 Pizza Huts were open for business.
1997 PepsiCo decided to focus on their drinks business. As a result, Tricon Global Restaurants was born, creating the largest restaurant brand in the World. Tricon became the partner company with Whitbread. 1999 Pizza Hut had over 400 restaurants, employing 14000 people. 2002 Tricon Global became YUM! Brands Inc.

2006 Whitbread sold their share of the joint venture to Yum! Brands Inc. Pizza Hut UK Ltd was now 100% owned by Yum!
2008 We bought Godfather's Pizza in Ireland with 28 stores.

ABOUT PIZZA HUT

DEPARTMENTS:

There are four departments in Pizza Hut Gulshan branch. These are as follows: Back of House (BOH): This department is for the kitchen staff members, who contains cooks and chefs who prepared different meals for the customers. Front of House (FOH): This department contains the waiters and servers who serve meals to the customers according to customer’s need. Delivery Department: This department includes delivery man who delivers pizza to the customer’s venue and they are also called Home service for customer satisfaction. Management Department: This department consists of the managers, accountant and cashiers. Managers are further classified as: Restaurant General Manager (RGM).

Assistant General Manager (AGM).
Shift Manager.
This sequence of Managers is followed by the Pizza Hut.
Trainee Department: This department includes the expertise and trainees who trained new employees that how to attain the customer satisfaction. Every new employee who is hired by Pizza Hut must have the learning ability and they are trained by expertise for the betterment of their organization. Read also about heritage of operations management

FRANCHISE:

There are 17 outlets in Karachi and 39 branches in whole Pakistan.

Pizza Hut's Mission Statement

“Put smile on the face of customers by providing them satisfaction.”

“Alone we are delicious, together we are YUM!”

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.

Be C.H.A.M.P.S:
(Cleanliness, Hospitality, Accuracy, Maintenance, Product quality and Speed).

You will find 3F’s at Pizza Hut:
(Fun, Friendly and Familiarity)

DESCRIPTION OF REPORT
(MARKETING STRATEGIES OF PIZZA HUT)
“The marketing logic by which the business unit hopes to achieve its marketing objectives.” This forced competitors to look for new methods of increasing their customer bases. Many pizza chains decided to diversify and offer new non pizza items such as Buffalo wings, and Italian cheese bread. The current trend in pizza chains today is the same. They all try to come up with some newer, bigger, better, pizza for a low price.

Offering special promotions and new pizza variations are popular today as well. For example, chicken is now a common topping found on pizzas. In the past, Pizza Hut has always had the first mover advantage. Their marketing strategy in the past has always been to be first. One of their main strategies that they still follow today is the diversification of the products they offer. 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 come up with some innovative way to make a pizza into something slightly different - different enough that customers will think it’s a whole new product. For example, let's look at some of the pizzas Pizza Hut has marketed in the past. In 1983, Pizza Hut introduced their 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. In 1997, they marketed "The Edge," which had cheese and toppings all the way to the edge of the pizza. Currently, they are marketing "The Big New Yorker," trying to bring the famous New York style pizza to the whole country.

Recently Pizza Hut introduced Pizza Strips same kind of Pizza presenting in a new way to attract their customers towards their organization. They are also coming up with a new deal three new Pizzas with local taste specially introducing for kids for the coming Summer to increase their market share.

Lastly, Pizza Hut has always valued customer service and satisfaction. In 1995, Pizza Hut began two customer satisfaction programs: a UAN (in USA 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. In our plan, we will first give a
situation analysis of current and relevant environmental conditions that affect our plan. Next, we will give a brief analysis of the current fast food industry, and any trends or changes that might occur in the future. Also read Beef Cattle Management Practices

MARKET SEGMENTATION:

Dividing a market into distinct groups of buyers who have distinct needs, characteristics, or behavior and who might require separate products or marketing programs. Main segments which Pizza hut has captured are the combination of higher incomes and dual career families, due to higher income consumer have more disposable income, allowing them to eat out more often. Pizza Hut holds the most market share in the Pizza industry, the perceived quality and service of the company will help to ensure a better the average chance at a successful introduction of a new product. The introduction of a product that keeps with today trends is also important to reduce the risk of failure. Pizza Hut maximum market segment is younger generations. These generation ranges from 12 to 30, the overall spending of these generations is mostly on non essential items, the higher amount of spending has been done on eating out. Pizza Hut also segment the market for children or kids like they arrange magic shows and other fascinating services to kids at the dining branch for the kid’s attraction.

MARKET TARGETING:

The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.

Pizza hut targeted market defines them as a family product. This is because they don’t really directly market their customers. They are targeting everyone whereas their competitors target a certain gender or age. But pizza hut targets a wide range of customers. This is because they want to make the most money and who blames them. They have many competitors and they are bound to try everything to cope up tops. Their competitors are everywhere. There are just a few that are main competitors and pizza hut will always try to be the best and get the most money by making their products better quality but also cheaper. They try to offer something different with their product as well. They offer a range of stuffed crusts to try and attract customers. They also do vegetarian options with meet free pizzas and a salad and pasta bar. Not a lot of restaurants offer a salad and a pasta bar. This is another competitive idea to attract or customers.

MARKET POSITIONING AND DIFFERENTIATION:

POSITIONING: Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

DIFFERENTIATION: Actually differentiating the market offering to create superior customer value.

Pizza Hut was among the first multinational brands to enter the food retail sector in Pakistan. When the first Pizza Hut restaurant opened in Karachi 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 Pakistan. Worldwide and in Pakistan, 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.

Crew members 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 Pakistan to the current 39 restaurants across 9 cities.

MARKETING MIX
(FOUR P’S OF MARKETING)

PRODUCT:

Product refers to the actual program you are planning. The goal of pizza hut is to develop the best product with the resources available. Pizza Hut sells pizzas in four different sizes: personal (an individual serving), small, medium and large, though most stores have done away from with the small size. A variety of toppings are available, plus "specialty" styles, including Meat Lovers, Pepperoni Lovers, Cheese Lovers, Veggie Lovers, Double Cheeseburger, Supreme, Super Supreme and the newly introduced Pizza Mia. The pan pizza has a thicker crust than most other commercially available pizzas. So their products have helped them to retain their customers and to increase them. They provide their customers with complete nutrition plan and healthy food is guaranteed.

The nutrition plan also clearly tells diabetes patients can use what range of food at pizza hut. Over weight patients are also satisfied and the pizza with less cholesterol can be ordered. This encourages the customers to visit pizza hut rather than going elsewhere. As pizza hut has to boost its sales in the existing markets, so they the new food products are introduced in all branches line-by–line because all branches are operated in co-operation with one another. Different products for different regions are also developed as there are choice differences. Pizza hut offers a long list of products and never afraid to offer new products like in Peshawar according to market they introduce the very first "Chapli Kabab Pizza" which was very healthy product by Pizza hut in this region. There are a lot many products according to different geographical places. Like in India they have got there vegetable pizzas, which has a large market there BUT not the Cow Meat Pizza.

PRICE:

As there are no such competitors of Pizza Hut which could compete with the quality of pizza produced at Pizza Hut, therefore, the pricing strategy adopted by Pizza Hut is 'market skimming'. Pizza Hut has adopted this pricing strategy as they want to hold maximum share of the market by maximum profit. This is a golden era for Pizza Hut, as there are no competitors and hence, Pizza Hut is free to charge any price they want. They are charging higher prices due to the uniqueness of the product. They satisfy the target market as the food quality is worth the price paid. The pricing strategy is not just to get the worth of quality but also to gain maximum profits before any competitor enters because then Pizza Hut will have to change its pricing strategy. Although the prices would be lowered with the new entrants in the market but not to a greater extent as the quality food products are not home-produced. They are imported from different countries keeping in view the best quality. First, this pricing strategy will help segment the market. Different groups of customers are willing to pay different prices for the same product. The high/low pricing strategy will also create excitement. The pricing strategy adopted by Pizza Hut is 'market skimming'. Pizza Hut has adopted this pricing strategy as they want to hold maximum share of the market by maximum profit. This product will emphasize product and service quality.

Pizza hut is using Market Skimming Price Strategy.
Low price for meal and expensive for just one.
Coupons Worldwide and Gift Card in Developed Countries.
Charging Method in Pakistan Price x 16% Tax e.g. For a Pizza of 999 you will Pay Rs. 1149

PLACE:

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. Distribution 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.

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

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. One of Pizza Hut's largest competitive advantages is its restaurant style facility. Pizza Hut offers a clean place to sit down and enjoy the variety of pizzas, salads, and sandwiches in a fun, family atmosphere.

The third method of distribution is to order Online. Selective County Customers can now go on the Internet and place an order for Pizza. This method is useful because it allows customers to view the entire menu, download any special coupons, and order without having to disclose any credit card numbers.

Having 34,000 outlets in 100 Countries. In Pakistan 39 outlets in 9 Cities. Sport Arena’s, Major Airports & Shopping Mall. Channel: Selling through Take In, Dine in, Home Delivery.

PROMOTION:

The objectives of promotion are to introduce a new product, stimulate demand, change the short-term behavior of the customers, and encourage repeat or greater usage by current customers. 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. They are using billboards on main stream places to get there customer. They are also distributing door to door brochures to capture more and more customers. Pizza huts also using marketing techniques. These are the strategies Pizza hut is using for its marketing. Pizza huts try's to attract the younger generation as their main market segment. Apart from this Pizza Hut is using intense marketing strategies they are also giving ads in magazines. Advertising camping will creates awareness of the products in our target markets. They also promote their products in newspaper like in “Dawn”.

MARKETING ANALYSIS (SWOT ANALYSIS)

Every organization has its strengths, weakness, opportunity and threats. So, the SWOT analysis for pizza hut is as under:

STRENGNTH:

Pizza Hut is the market leader in providing different products of pizzas as there are no competitors in this sector.

There good image makes the organization more strong. Pizza Hut is providing good taste, quality products with qualified staff, good atmosphere and hygienic environment.

They are specialized in pizzas. Motivation level of staff is very high which make the organization more prosperous.

They are ISO (International Standard Organization) certified. They have enough resources for operating different activities of the organization.

They are providing free home delivery service. They have created monopoly in
this sector.

About 60% part of their profit is from youngsters and remaining part includes family and kids.

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 too many different segments that other pizza chains cannot. For example, Pizza Hut can market to families much easier than Domino's or Little Caesar's.

WEAKNESSES:

However, the fact that Pizza Hut does have a restaurant to run is also a weakness. Pizza Hut has higher overhead costs, due to the restaurant that other competitors don't have to deal with. Another result of higher overhead costs is higher prices Pizza Hut must charge. Obviously, Pizza Hut is not the low cost producer. They rely on their quality pizza and good service to account for their higher prices. They are providing less range of products comparatively with high prices. They are more focused on Western taste instead of Eastern.

OPPURTUNITIES:

New markets can be explored and new opportunities they can gain. Pizza Hut can come up with the new products considering the Eastern taste of the people as like McDonalds. Diversification of new products can increase their market share. They can reduce their prices because of more resources.

THREATS:

Pizza Hut's number one threats are from their competitors. Currently, Their closest competitor is Domino's Pizza who is famous for their speed. Domino's main competitive advantage over Pizza Hut is their Lower price.

Little Caesar's who is establishing their self in India and might move to Pakistan is another one of Pizza Hut's competitors, right behind Domino's in market share. Little Caesar's is famous for offering large quantities of pizza for less money.

Dominos pizza in Pakistan market can affect their market share.

Other local restaurants can affect their market share by providing pizzas with lower price.

Social factors can affect their image as a Western organization.

Their market share is less in India because there are more vege lovers in India.

MARKETING PLANNING

Marketing Planning involves deciding on marketing strategies that will help the company to attain its overall objective. Pizza Hut always plans to market themselves keeping youngsters in their mind and they always try to public their products on that magazines and channels which are more closer to the young generation. One of their best media partner is AAG CHANNEL (Nojawano ka Channel).

MARKETING IMPLEMENTATION

The process that turns marketing strategies and plans into marketing actions in order to accomplish strategic marketing objective. In Pizza Hut Marketing Implementation for their meals, deliveries and other services requires day to day decisions and actions by organization. In Pizza Hut Marketing Managers take decisions about the four Marketing P’s (Price, Place, Product & Promotion). They talk with Manufacturing department for product and other inputs and with the Finance department for funding and cash flows. They also connect with outside people such as advertising agencies and the News Media to obtain publicity support.

MARKETING CONTROL

The process of measuring and evaluating the results of Marketing strategies and plans and taking corrective actions to ensure that objectives are achieved. Pizza Hut evaluates their decision and strategies which helps the organization to increase their revenues and sales. In Marketing Control Pzza Hut is more concern with Financial strategies.

CONCLUSION

This report concludes :
Executive summary,
Introduction about pizza hut,
Departments, Franchise,
Mission statement,
Marketing Strategies, Segmentation, Target Market,
Differentiation and Positioning ,
Marketing Mix(the 4 P’s of marketing),
Marketing Analysis or SWOT analysis,
Market planning,
Market implementation,
Market controlling.

RECOMMENDATIONS

The service could have been faster.
The quantity should be increased.
More and more deals should be introduced for every time of the day. Special discounts should be there for regular customers.
The parking areas should be provided and if not possible the roads infront of the branches should be driver friendly. The guard outside the entrance should open the door and not let customers do it for themselves. The manager told us that 40% of their sales are done to the teenage class which is
either bunking or on a date. Pizza Hut is destroying the moral Islamic values. The delivery should be on time.

There should be a check over the people entering the premises. They should be checked and passed through security gates or should be checked through the metal detectors. The premises for the toilets should be different instead of one place.

BIBLIOGRAPHY

Primary Data:
We visited the Gulshan branch and met the branch manager over there and we took the permission from the Head office Manager.

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