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Pizza Hut is subsidiary of yum! Brands. Inc. The world's largest restaurant company with more than 34,000 restaurants in over 100 countries. Fast food industry in growing very rapidly and so many new companies are entering in the market. Due to the increased competition companies are losing their market shares.
Pizza Hut is preparing to introduce a new product called "The Pickle Supreme Pizza" in the UK market. The "Pickle Supreme Pizza" target market consist of professionals those have less time, students, single person households, families with high or medium income. Geographically this product will target Asian people which we feel that are less served in future by Pizza Hut. The new pizza will expand the pizza line and provide more options in our well balanced menu. Our major rivals include Domino Pizza, McDonald's, KFC and other Quick Service Restaurants (QSR).
The primary objective of this new pizza is to serve our Asian customers and take competitive over other competitors. We also want to increase our market share by 2 percent in the market with the help of this new "Pickle Supreme Pizza". Our marketing planning process of this new product will consist to situational analysis of the market, 7P's of marketing Mix and control and implementation stage in which our marketing team evaluate the effectiveness of our plan. The marketing department will be responsible of executing this marketing plan into action.
A number of demographic and social trends in the UK increasing demand for the quick services restaurants. The divorce rates in UK and other growing trends shows that people are getting married later in life.These factors and many others like Government figures show the number of single-person households rose from 12% of all households in 1971 to 18% in 2001.The figure is expected to reach 38% by 2026.The trends in the 2000's showing that individuals are choosing to eat out more often than eat at home. Another factor to consider is the increased number of women working outside the home. As a result of more women in the workforce, household incomes are increased and are higher than past. The increased incomes and dual-career family's result in less time and people have no time to cook food at home. Also because of higher incomes, consumers have more income that allowing them to eat out more often and when they are at home they are looking for something ready to eat.
The UK is the largest fast food market in Europe and every 6 out of 10 consumers visit Pizza Hut every year, 2 out of 10 for one of our main competitors.
In the UK and Ireland, the pizza fast food franchise industry is one of the fastest growing sectors, with pizza taking its place as a popular food among consumers. Similar to eating trends in the USA, the UK is also expanding its consumption level with millions of pizza being consumed every year. As in America people eat 100 acres of pizza per day, or 350 slices a second, the UK is also catching up to this figure very quickly. In a recent survey conducted by BBC World found that 45% of people in the UK were agreeing that they like the taste of fast food very much. Pizza Hut market consist of professionals those have less time, students, single person households, families with high or medium income.
Political issues include regulatory and judicial system which may affect the business. As our target market is in UK and there are no series political problems in that market.Â Increase taxes can affect pizza hut in future but better management will help us to overcome that problem.Â
UK is badly affected by rescission. Unemployment level is very high in UK and the savings of people are also very low. This economic slump in the UK will also affect the Pizza Hut because pizzas at Pizza Hut are expensive. We will consider thisÂ factor when setting the price of our new pizza.Â
Every country has its own social norms, values and religion which can affect Pizza Hut according to its location. In UK people are from different back grounds with different religion and values. We will consider all these factors in our new pizza specially a largeÂ AsianÂ community in UK which in past was lessÂ served by Pizza Hut.
Due to new technology there are so many different ways of marketing such as internet, telemarketing textÂ massages to theÂ existing customers as well asÂ potential customers.Â We will use new methods of promotion to increase our market share.
Target Market and Customer Profile
This section includes the profile of the customers and target markets
Due to globalization people are coming from different countries in UK. Our major target is to serve Asian people with that product. Asian people like to eat spicy food and also large numbers of people are vegetarian or eat Halal food. This product will cover all those people.
Students are the target market of Pizza Hut because they spend a lot of time with friends in universities and like to go out frequently for parties and celebrations.
Dual-career families result in less time at home; they have less time to cook food at home. Also these people have higher incomes which allowing them to eat out more often.Â
Single person house holds
The single person house hold are also increasing these people are a target market of Pizza Hut. These people are also like to eat out most the times.
Higher and medium income Professionals
High professionals are targeted by the pizza hut. Because of lesser time and high disposable income they prefer ready to eat food or eat out side.
Strong Brand Name
Â Brand recognition is major strength for Pizza Hut. Pizza hut has the strong brand name and a market leader by providing large range of pizzas that strong image of pizza hut will make it easy to launch new pizza in the market.
Loyalty of customers is strength of Pizza Hut. The loyal customer will also help the Pizza Hut to launch new pizza in the market.
Strong financial position
Pizza Hut has excellent international turnover and strong financial position will also help in new pizza's financial matters.
Specialized in pizzas
Pizza Hut is specialist in pizza making and this specialty will create a strong perception in customers mind for our new pickle pizza.
Subsidiary of Yum! Brands,inc
Yum is the world's largest restaurant company and Pizza Hut is subsidiary of Yum brand.
Full service restaurants
Pizza Hut provides a full service restaurant and delivery services which some of the pizza Hut's competitors are not doing. Because of restaurant facility Pizza Hut can market some other segments like families that other pizza chains cannot.
Pizzas at Pizza Hut are high priced. This is the greatest weakness Pizza Hut has in the market as compared with others.
Higher overhead costs
Pizza Hut has higher overhead costs, due to the restaurant services and extra facilities that other competitors do not have to deal with.
Pizza Hut has the lesser number of outlets and consumers feel difficulty to find pizza Hut. The Pizza Hut chains are not spread as compare to the other fast food restaurants.
More focused on western taste:
Pizza Hut is more focused on western taste and less on others. The new arrival will also helpful to overcome that weakness.
New Pizzas with different sizes and taste
This opportunity is always open for pizza hut to come with new tastes and sizes and served the better than others. We can generate more revenue with our new innovative pizzas. Pickle pizza will help us to take full advantage of that opportunity.
Pizza Hut has the opportunity to provide the Halal pizzas and capture a new segment which will increase the market share of pizza Hut.
Number of outlets
Pizza Hut has the opportunity to expand the business so Pizza Hut should open more outlets to increase market share and compete will with others like McDonalds.
The competitions in fast food industry is increasing day by day, this increased competition reducing the profit margins in the industry and also cause a great decrease of market share.
Low prices by competitors
The prices of the competitors are the major concern for Pizza Hut. The competitors are offering low prices to the customers and have competitive advantage over Pizza Hut.
Other competitors to take into consideration are frozen pizzas that are available in super stores and grocery stores.
Pizza Hut is facing huge competition in the market. Competitors of Pizza Hut are;
Restaurants and cafes
Fast-food and Quick-service Restaurants
Domino's pizza, Inc.
Domino's Pizza, Inc. is an international fast food pizza delivery corporation. Domino's pizza is the UK and Ireland's leading pizza delivery company. Domino's first UK store opened in 1985. Domino's pizza is the direct competitor of the Pizza Hut. Low prices of pizzas are the real competitive edge of the Domino's.
McDonald's is the world's largest chain of fast food restaurants, serving nearly 47 million customers daily. McDonald's primarily sells hamburgers, cheeseburgers, chicken products, French fries, breakfast items, soft drinks, milkshakes and desserts. More recently, it has begun to offer salads, wraps and fruit.
Kentucky Fried Chicken, or KFC, is a chain of fast food restaurants based in Louisville, Kentucky.KFC is the subsidiary of Yum Brand. While it's primary focus is fried chicken but giving tough time to the Pizza Hut. KFC also offers a line of roasted chicken products, sides and desserts.
Quick Service Restaurants (QSR), Takeaways:
There are thousands of local quick services restaurants are involved in the UK's fast food industry. These local takeaways are providing pizzas, fried chicken, and salads according to the local consumer's taste and on very low prices. These restaurants are the real competitors of the pizza hut. The new Pizza Hut's pickle pizza will help pizza hut to compete with these restaurants.
MacDonald Corporation is the largest group among all top Fast Food corporations. It is having huge brand value as well as revenue, Moreover, the domino's Pizza Inc is the lowest earning group among all, but these all companies are having a universal aim to provide quality food at lower price to the customers. In order to survive in the global industry a company must come up with new tactics and innovations to charge ahead of the competitors.
We are offering a new pizza to our customers that will be especially popular in Asian customers and also other pizza consumers. New "pickle supreme pizza" will be available in all different bases and toppings.
Topping of the "pickle supreme pizza" will be mixed pickle, mushrooms, mixed peppers, black olives (customers can add any other available topping of their choice).
The "pickle supreme pizza" will be available in our three menus with different sizes as other pizza's are available
Delivery and takeaway menu
The new pickle pizza will be available at all pizza hut chains throughout UK. We will take start from England and Wales and then cover Scotland and Ireland as well.
The opportunities are also the part of the marketing strategy.
Pizza Hut has the largest market share in the pizza industry. The high quality of product and services of the pizza hut will help to ensure good chance at successful introduction of a new pizza. The fast food industry is famous for introducing new products to increase short-term sales. This new pizza will increase the market share of the company .Pizza Hut has the competitive edge in innovative products and this new product that will also be successful in the market. There is a high completion in the market; the introduction of a new product is required to keep ahead of the competition.
One of our main objectives is to provide a pizza to our Asian customers and to fill a gap between pizza hut and our customers. As earlier mentioned that there is a large community of Asian people living in UK and we fell that they are less served by the Pizza Hut. The new pickle supreme pizza will help us to achieve that objective.
Other objectives include
Increase in fast food market share.
Maintain the competitive edge of the innovations.
Fulfil the demand of the customers.
Increase in profitability and growth.
The UK will be the target market of the new pickle supreme pizza. Our major aim is to catch Asian costumers by introducing this new product because we feel that they are less served in the past. Other pizza hut costumers will also like this new pizza. Changing social and demographic trend in UK contributed to increased demand for fast food and our target customers include Students, Dual-career families, Single person households etc.
Innovations in menu and service offerings have been the key to Pizza Hut's success in UK. Using product line extension we are positioning the pizza Hut an Innovative and quality food restaurant chain. Pizza Hut already positions itself as an excellent services and food provider in the fast food industry.
As with all businesses, the most important goal of a company is to increase revenue and profits. With the introduction of this new product we hope to increase the overall sales of the company as well as the services and quality of the products.
The reason behind our success in all over the world is uncompromising drive in providing customers the best in terms of product quality, service, cleanliness and value.
Pizza Hut pizzas are made with fresh dough baked daily and smothered with our very own 100% pure imported Mozzarella cheese. Pizza can be part of a well-balanced meal. Ingredients in our pizza include mixed pickle, mushrooms, mixed peppers, black olives (customers can add any other available topping of their choice). "Pickle supreme pizza" will be available in all sizes in which other pizzas are available such as individual (4 slices) - medium (6 slices) - large (8 slices). Pizza Hut has built a strong brand name that means quality products and services. Since Pizza Hut will be introducing "Pickle supreme pizza" customers will automatically think this is a high quality product.
Pizza Hut is successfully using the high/low pricing strategies when setting the retail price of its products. This high/low pricing strategies will help to serve more segments in the market. The price of "pickle supreme pizza" should be set as
£5.99 for individual
£10.99 for medium
£13.99 for large
Price skimming strategy will be used as Pizza Hut sets high initial prices for its products to send a signal to customers that its products are quality and the service is excellent. The medium and large pickle pizza will be available in deals as well by paying £2.99 extra; customers can add salad of their own choice.
At present we are using the direct distribution channels because our markets are very large and geographically dispersed. Other reason of direct distribution is that we have a large number of buyers, but a small amount purchased by each. Different methods of distribution will be used for "pickle supreme pizza" as company is currently using for other products.
Home delivery is the first distribution method by pizza Hut. Pizza hut provide the pizza for those who want to stay at home and eat pizza.
Online ordering is another distribution method that we are using now.
Customers can go to the nearest Pizza Hut and can sit and eat there Pizza Hut provides an excellent sitting facilities to customers where they can sit and enjoy the variety of pizzas.
This is the most useful distribution method for our pizza. Our new pickle pizza will be available in all distribution channels. This is One of Pizza Hut's largest competitive advantages is its restaurant style facility.
This objective of the promotion is to create awareness of the new product, Stimulate demand and change the short term behaviour of the customers. We will use different advertisement methods to introduce ''Pickle supreme pizza'' such as
Advertisement on television
Billboard in the main areas to get our customers
Leaflets distribution in colleges and universities
Door to Door distribution of leaflets
In store promotions
Advertisement in Foot ball grounds
Advertisement on the Web sites
These methods are used to promote our product in the market. We use different types of advertisement to create awareness in our target market, we use leaflet distribution in universities to create awareness in student about our product. Advertisement on television in very expensive but we will use that method in the introduction stage of the product where intensive marketing in required. The objective is to create awareness among 90% of our target consumers about the new product.
Pizza Hut's providing a very comfortable working environment and our employees are very flexible and they can adopt any change in product with great ease. We will arrange training sessions for employees to upgrade their skills according to the new product. We will put all our efforts to satisfy our employees.
We will not compromise on quality and services in our restaurants. Our process will remain up to the mark for our new product as well. We have sufficient space for our new product to deal with. We will provide quality food, efficient services with on time deliveries. So our processes will continue without any problem.
Physical evidence is the place where the services being delivered. We are providing full service restaurants with family environment and excellent services. Our new product will also be available in restaurant's menu and we have enough space to cover them.
The "Pickle Supreme Pizza" will be introduced and available to the customers in start of the July. The purpose of this action plan is to create awareness among the customers about their new product.
Here are summaries of action plan we will use during the first four months to achieve our stated objectives.
In June we will start our promotional activities by using in-store advertisement with the slogan of "coming soon" or "new arrival", advertisement on the Television in between world cup football matches. We know that this type of advertisement is very expensive but we expect that this type of advertisement will return us huge revenue.
We will start print media and internet campaign to target professionals, students and single households. We will start leafleting in universities, emails to the professionals and advertisement on the famous website like yahoo or msn to create awareness among our target market. We will continue in store advertisement in this month by giving special discount in meal deals.
In post launch advertisement campaign we will continue leaflet distributions and will use some less expensive techniques of promotion like emails, text messages, magazines and news papers.
We will continue our promotions but with less intensity. We will advertise in the news papers and magazines, leafleting with some other promotions on it in order To keep in touch with our customers.
We will identify the market trends and the reaction of the target market towards the product with the help of different types of research methods. This marketing research will help us to identify the positioning of the product in the costumers mind. We will use the following methods to conduct our marketing research
We will prepare a questionnaire that will help us in collecting primary data from the customers. The questionnaire will be consisting of different question which will cover all the points that will required to get the accurate research results.
Surveys will keep us up to date about our customers' expectations and make us fulfils their needs and wants more effectively. For this we would have to conduct a marketing survey of our market and try to find out that what our customers want and what they feel about new product. Whether they are satisfied with our product or want any up gradation in it.
Live Market Test
Live market test will work in two ways such as survey and promotions at one time. In store advertisement, promotions and distribution will be done and free samples will be offer to the people and feedback back will be taken from them. This feedback can positive or negative but will help us in future planning of the products.
Feedback forms are also very important method of survey which will provide quick information with very low cost. Costumers will give information about their experience about products and services which help us to remove deficiencies if any.
We are financially strong enough to introduce a new product in the market. The advertisement budget will be 5% of the projected sale. We are expecting that the "Pickle supreme pizza" will increase our sale by 6%, this forecast is based upon pervious products sale by Pizza Hut. This 6% increase in sale will bring £600 million in revenue. It means advertising budget will be of 30 million. No other plant and equipment expenses will be accrued because the existing plant and machinery is used for the production of "Pickle Supreme Pizza".
Controls and Implementation
We will establish a control program to help the management in measuring the results and identifying any problems or performance variation that need corrective actions. The control process involves establishing standards and measuring performance to correct deviations from standards.
We will use different techniques to monitor quality and customer service satisfaction. This will help us to react very quickly in correcting any problems at the beginning. We will implement the following method to determine the effectiveness and customer satisfaction from our new product.
Annual plan control
In this method will monitor that whether company is achieving the targets and goals that are expected from the new product. Different are used monitor this such as Sales analysis, market share analysis, balance scorecard etc.
With the help of this will control on spending efficiency and marketing expenditures. In this we will analyze the sales force efficiency, advertising and sales promotions effectiveness as compare to expenses on all these things.
This method will be used to collect information from the customers because this will help us to take immediate actions against any problem. Customers are the primary source to check the success of the product. Customer's feedback will help us in taking further steps if required.
Marketing director will hold overall responsibility for all of the company's marketing activities and all managers in the marketing department will report to the director. Marketing Audit plan will also executed enter the supervision of the marketing director.
I have critically analysed the Pizza hut and its current market situation and found that the fast food trends are changing; customers are demanding high quality food with excellent services and sitting arrangements. Pizza hut is offering large range of pizzas with salads, desserts etc, under one roof. Pizza hut also provide restaurant facilities to the customers. With the help of deep research of the market i found that the Pizza hut is losing large market share by ignoring a rapidly growing market of Asian Customers in the UK. These customers are less served by Pizza Hut but now it's time to fill that gap by introducing a new "Pickle Supreme pizza".
The market environment of fast food industry in UK is very competitive. Pizza Hut is facing direct completion as well as in direct competition in the market in the form of Domino's, McDonald's, and KFC. Pizza Hut is a high price restaurant as compare to its competitors but providing high quality food and sitting facilities. Pizza hut has fewer number of outlets which is a weakness of pizza hut