Empirical Analysis On The 7ps Of Pizza Hut Marketing Essay

Abstract and aim

By using “personal survey” questionnaire, 150-200 students of City University of Hong Kong will be asked, in order to find out the competitive advantage of Pizza hut and compare with Spaghetti House for places to buy food in names and addresses from Hong Kong Island, Kowloon and New Territories. Addresses were area code to census tracts.

Based on individual factors are traditional explanations for the inability of some people to change dietary habits. This study examines the food service by Pizza Hut and its competitive advantages over Spaghetti House

Aim

This work aims to find out the successful factor of other competitors and to provide suggestions and evidences in order to increase the sales and profits of Pizza Hut by improve Pizza Hut’s services and its competitive advantages.

Background / outline

Hong Kong is an international city. There are seven million residents and lots of tourists would love to shop in Hong Kong thus there are different social cultures exist including diet habit.

Foreign food is playing an important role in Hong Kong to suit customers’ different needs. There are a lot of western restaurant in Hong Kong such as, Spaghetti House, McDonald’s, Kentucky Fried Chicken (KFC) and Pizza Hut etc. Lots of people especially teenagers like Pizza Hut very much, they love to eat western foods, so Pizza Hut attracts a bulk amount of regular customer for a long period.

Pizza Hut is an American famous restaurant chain, offering different styles of pizza along with side dishes including pasta, buffalo wings, 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 units, kiosks in 100 countries.

Pizza Hut has been serving Hong Kong for almost 30 years. The first Pizza Hut restaurant opened in Hong Kong in 1981 with its first delivery service began in 1992, while the business of Pizza Hut is still increasing every year.

Since 1987, Hong Kong Pizza Hut franchise has owned by the Jardine Matheson Group. At present, Hong Kong Pizza Hut has a total of over 70 branches and more than 3000 employees.

The main competitor of Pizza Hut is Spaghetti House.

Spaghetti House is also a famous western restaurant in Hong Kong. The menu of Spaghetti House is similar to Pizza Hut; its target market is a little different from Pizza Hut.

Pizza Hut vs Spaghetti House

¼ŽWhich one is more famous?

¼ŽWhich one do customers prefer?

¼ŽWhich products are more competitive?

We hope to find the answer during this project.

In this project, we’ll analyze the 7Ps of market strategies of Pizza Hut and take the personal survey in order to find out the competitive advantage of Pizza Hut and the comparison with Spaghetti House in Hong Kong. More, we can also know that which one is better and more famous.

Secondly, we focus on physical evidences from customers’ opinions to improve the environments of both restaurants.

Finally, we refer to the result gained from questionnaires to make the recommendations and suggest new marketing strategies to Pizza Hut for the improvement.

Objective and research questions

Study the demographics of target customers

Determine which attributes of pizza are the most important to the customers

Determine the preference of product package by the customers

Determine the acceptance of new products by our target customers

Identify the purchase behavior of the customers

Identify which promotion channels are the most effective

Measure the satisfactory level of customers towards Pizza Hut

Critical Literature Review

Western fast food chain’s development and impact in Asia

Majority scholar to believe food is more affected by culture to restrict in consumption product.

As far as relatively other products concerned, that is more difficult to change the customer’s behavior such as U.S breakfast’s manufacturer “Kellogg’s” to spend 20 years time in Japan, ability success to entry use as major rice and kelp soup make breakfast of consumption market.

Some country and district such as Japan and Hong Kong’s children as regards coke, pizza and spaghetti etc foreign country’s food never again, but that “local food” is accompany children to grow and combine in local culture.

From the above, Pizza Hut can identify market opportunities and develop targeted promotion plans. Therefore, research and development professionals stay on HK of competitor initiatives and explore demand for fast food products.

Advertising agencies working with clients in the food industries understand the product buyer to develop messages and images that compel consumers to purchase Italian food products.

Business development executives understand the dynamics of the market and identify possible partnerships.

Finally, information and research center librarians provide market researchers, brand and product managers and other colleagues with the vital information they need to do their jobs more effectively.

A 360° View of Fast Food and Impulse Habits

Here has huge market growth potential for manufacturers and retailers to development in fast food chains and fast food services. According to the ACNielsen survey result, citizen’s average monthly purchase frequency in fast food, impulse food and drinks is around 20.

Monthly Purchase Frequency for Impulse Food and Drinks in Hong Kong

In addition, in a global consumer survey conducted over the Internet by ACNielsen in October 2004, 30 percent of Asia Pacific consumers claimed to eat takeaway at least once a week, closely behind the US (33%).

As the result, eight of global top ten’s fast food consumption market from Asia Pacific, and Hong Kong ranks is the world’s No.1, have a fast food than traditional 26% higher than the United States , hard upon is Malaysia (59%) and the Philippines is 54%, 12% said never again to eat fast food, have 35% eat fast food even more.

ACNielsen’s data also showed that although in the United States have 97% of adults do not mind eat fast food, but this data has also been Asia exceeded.

From this result, fast food culture can popular in Hong Kong is about the Hong Kong peoples to demand fast and convenient lifestyle.

Many people require swift and convenient, hurried cadence of life may not have time to cook at home, it affects our lifestyle, make to popularity of fast food culture in Hong Kong. As the same time because of the convenient location, the price is cheaper.

In additional, because may about Hong Kong people’s personality, most are not satisfied to spend too much time on waiting. However, teenagers usually to eating fast food more during the noon or after school. While an adults to eat breakfast is out of home that provides an opportunity for suppliers and retailers. So, fast food culture is the most sales in Hong Kong.

Top 10 Global Markets for Weekly Fast Food Consumption

Hong Kong

61%

Malaysia

59%

Philippines

54%

Singapore

50%

Thailand

44%

China

41%

India

37%

US

35%

Australia

30%

New Zealand

29%

Source: ACNielsen Online Survey, October 2004

Modeling repurchases frequency and customer satisfaction for fast food outlets

In this competition environment of Hong Kong, leading the company is necessary customer that requires spending many resources to enhance customer loyalty and satisfaction with the company. Therefore, the company need understanding what factor is affect customer’s behavior and satisfaction, and then try to improve the customer services quality in the fast food industry, thus help make more loyalty customers.

Improving service quality has become one of the most important strategies a service provider can use to differentiate itself from its competitors and thus position itself more effectively in the marketplace (Cronin and Taylor, 1992). Rust and Oliver (1994) suggested that quality is one dimension on which satisfaction is based.

Although many studies provide a theoretical basis for studying the relationship between waiting time, consumer satisfaction and return frequency, they have failed to investigate the relationship between waiting time and the return frequency. The aim of this study is to investigate the impact of waiting time and other service quality factors on customer satisfaction and return frequency in the fast food industry. As waiting time appears to be a vital factor of the services in fast food operations, therefore, fast food industry is chosen for our research purpose.

Based on a survey of fast food outlets, we formulate a repurchase frequency model and a satisfaction model. The repurchase frequency model describes the relationship between the number of return visits and service quality factors including waiting time.

The overall satisfaction model describes the relationship between the customer’s overall satisfaction level, the waiting time and other service quality factors. These models will help managers to identify root causes for customer satisfaction and loyalty and thus enable them to make focused improvements in critical areas to improve profitability.

Hong Kong fast food culture

Hong Kong is a delicacies paradise, and also is a fast food paradise, various Chinese and Western fast food restaurant at Hong Kong everywhere, lunch take-out to office are also has good idea or business.

Hong Kong fast cadence of life, high working performance, many things have to stress efficiency and effectiveness of demand. It is because fast food more emphasize fast, therefore many foods have prepared cooked and heating for consumers. So, fast food culture offers fast and convenient especially popular for peoples.

Nowadays, the purposes to co-operate for healthy fashion, fast food already changed into emphasize food’s quality and sustenance, many foods have consumer to pay or order then start cook. Therefore, foods will more fresh and higher quality than prepared cooked.

At the other hard, fast food chain to be particular about decoration than before, show the high class and city lifestyle;

Detrude of fast-food restaurants in recent years, hot pot, iron meals and other food types, making customers to stay longer in the fast-food restaurants, but also because of the fast-food restaurants to make food choices many more customers are willing to patronize fast food restaurants.

A financial tsunami to assist development fast food industry

Although global financial tsunami cause economic recession, but fast food always is catering trade’s exotic flowers, Pizza Hut, Burger King, McDonald’s and Kentucky Fried Chicken (KFC) these fast food chains have grow a business volume in this period. Café De Coral, Pizza Hut etc. also want to development this period.

Due to economic crisis affected unemployment and so on reason, thus affected consumer’s confidence. However, relatives enhance of fast food’s attraction, increasing peoples in order to save times or money abandoned traditional restaurant meals, and tend to choice fast food. Therefore, fast food chain has obtained more market.

Form the above; Pizza Hut should continue its diversification strategy to gain more market share.

It should incorporate or develop healthier food include low-carbohydrate pizzas to satisfy the needs of different customer. If it is able to stay ahead of the competition in this aspect, they will have a strong competitive advantage over other companies.

Service quality in the fast food industry

Service quality has become a predominant part of all advanced organizations’ strategic plans. Increasing attention paid to service quality has resulted in more progress and profit for organizations. At an international marketing level, in a struggle for a share of market, managers have to understand and know how to modify their operations for success in the various cultures of Hong Kong.

From the above reason, can organization provide good service; staff’s quality and skills have important influence. Therefore, enhance staff with the training and improve the quality of services, Including improves the quality of staff and customer service and provide effective services such as staff is advised to review the guests a la carte in order to reduce opportunities for error, the menu and dishes can be coded to facilitate data input, restaurant customers should be informed in advance of waiting or cooking time and adoption a recognized service standards and guidelines etc. These can be satisfying consumers’ needs and attraction their have to patronize.

Research methods/ Methodologies

Category

Options

The degree to which the research question has been crystallized

1. Exploratory study

2. Formal study

The method of data collection

Monitoring

Communication Study

The power of the researcher to produce effects in the variables under study

Experimental

Ex post facto

The purpose of the study

Reporting

Descriptive

Causal-Explanatory

The time dimension

Cross-sectional

Longitudinal

The topical scope – Breadth and depth – of the study

Case

Statistical study

The research environment

Field setting

Simulation

The participants’ perceptional awareness of the research activity

Actual routine

The main purpose of our study is needed to find out the comparison of Pizza Hut and Spaghetti house. We need to collect the primary data and secondary data to analysis Pizza Hut’s 7Ps mainly. (Product, Price, Place, Promotion, People, Process and Physical environment)

First, we collect the secondary data from internet to know backgrounds, histories, objective, and the annual reports of Pizza Hut and Spaghetti House etc. Then, we collect other useful information on the internet. Afterwards, we go to libraries to find books such as population information and literature.

After that, we use “Self- Administered Surveys” (Intercept and computer) and “Personal Interview” (Questionnaire) to collect the primary data. Indeed that information is related to our objective. To collect primary data, we will design a set of questionnaire about 7Ps.

The method is taken by samples in Hong Kong (different regions in Hong Kong, Kowloon and New Territory). The proportion will be 60:80:60, a half of male and female. It can be avoided unfair saturation. The sample size will be 200 that it can be reduced bias. The age distribution limits are 10 to 40. Our survey method is face-to-face interview, after the interview we’ll give them a gift. (Such as coupon)

We can understand Pizza Hut’s competitive advantage through information and make the recommendations on new market strategies for Pizza Hut for further improvement. However, we have limited information in secondary data. In conclude, our information mainly come from primary data.

Secondary data is collected from other peoples or organizations, general major secondary data’s sources are internet and daily, moreover including survey, census and company’s records.

However, the primary data is reversing the secondary data, its major used in survey research works.

Secondary data’s advantages is save more collect data’s time, because many background work may carried out or complete, such as some reviews and case studies was carried out, statistics and published book may used to media promotion.

And about the secondary data’s disadvantages, because the data sources not every is trusty, even authorities data may undependable.

Secondary data can be obtained from two different research strands — Quantitative and Qualitative.

Quantitative included housing, social security, census and other related databases.

Qualitative included focus groups transcripts, observation records, structured interviews, semi-structured, research-related documents and other personal.

Any required respondent to complete the questionnaire by oneself is referred to as a self-administered survey.

The most survey method is via use internet, fax, newspaper and e-mail, or via restaurant and shop’s feedback form. According to this self-administered survey is require some inaccurately questionnaire considerations, because have some respondent may cause sensitive question or other special reason thus to indiscriminate answer the questions.

Self-administered survey’s advantage is using anonymous form to answer the questionnaire, thus make the questionnaire’s answer have more effective and true. At the other hard, can make respondent more convenient to answer, and can eliminate the bias, the cost is more than telephone and personal interview cheaper.

However, the most of self-administered survey also not actual to control who to answer questionnaire, the respondent may read other part of respondent’s answer, thus affect their feedback.

A personal interview is one of direct research method that allows face to face conversation between an interviewer and the respondent at home, in shopping centers or everywhere. The use of personal interviews provides interviewers with opinions, and the process of interaction via understanding.

Personal interviews allow analyses of thoughts, attitudes, behaviors, and opinions that have a high level of content validity (Babbie, 2006).

Personal interviews are an appropriate qualitative data collection methodology in a variety of settings including exploration of issues in sensitive areas such as internal agency evaluations or internal agency satisfaction studies. Personal interviews allow participants to share qualitative information in a manner that allows freer expression of ideas and opinions.

Advantages of personal interviews:

1. Qualitative data obtained from small sample.

2. Rapport leads to fewer refusals.

3. In-depth answers possible.

4. Observation improves accuracy.

Disadvantage of personal interviews:

1. Invasion of privacy.

2. Interviewer bias.

3. Cost: Professional Interviewer expensive.

4. People not at home.

5. Can be slow and time consuming.

6. Postal surveys: Distributing or mailing door to door a written questionnaire to a sample of buyers for their completion at home or at work.

Project Plan/Gantt Chart