•Topic:

Pizza Hut (pēt'sə h^t)

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Economics Project

HISTORYPizza Hut is a resturant chain and international franchise based in Addison, Texas•USA (a northern suburb of Dallas) 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, and kiosks in 100 countries.

HISTORY•The chain was founded in 1958 by Dan and Frank Carney.•The Original Pizza Hut building was later relocated to the Wichita State University campus.•Additional restaurants were opened, with the first franchise unit opening in 1959 in Topeka, Kansas. •At the same time Pizza Hut was growing in and around Kansas, Shakey's Pizza was developing a stronghold along the West Coast.•By 1972, with 314 stores nationwide, Pizza Hut went public on the New York Stock Exchange under the stock ticker symbol PIZ.•In 1977, Pizza Hut was acquired by Pepsico, who later also bought KFC and Taco Bell.

HISTORY•In 1997, the three restaurant chains were spun off into Tricon, and in 2002 joined with Long John Silver's and A&W Restaurants to become Yum! Brands.•Pizza Hut has opened Pizza Hut Express which specialize in large 12" pizzas.•The oldest continuously operating Pizza Hut in the world is in Manhattan, Kansas, in a shopping and tavern district known as Aggieville.

Fun Facts in Pizza HutHistory

•Pizza hut are the world's largest user of cheese, Over the course of a summer it is estimated that Pizza hut uses a 100 million pounds of cheese. Pizza Hut uses more than 300 million pounds of cheese annually.

•Pizza Hut purchases more than 3 percent of all cheese production in the United States ,which requires a herd of about 170,000 dairy cows to produce it.

•They also use 700.000.000 pounds of pepperoni and 525.000.000 pound of tomatoes in one year.

•Gorbachev (the former president of the USSR) also played in a Pizza Hut commercial.•In 2001 Pizza Hut sponsored a pizza delivery to theinternational space station.

MARKET SHARE

•In whole world, pizza hut has a market share of 48%. Whereas Domino’s covers about 20% of the market share.

•Other pizza sellers, both having small business or large restaurants have total 32% share in world market.

•Pizza hut is using advance marketing strategies to enhance its sales and to over come more market share.

MISSION STATEMENT

The mission of Pizza hut, can be identified by its mission statements that are used in different promos. Like these

• “To be the best pizza for every pizza occasion”

• “ Alone we are delicious, Together we are YUM!”

Another one is:

• We are P.E.A.R.L.S

§ PASSION for excellence in Doing everything§ EXECUTE with positive energy and need§ ACCOUNTABLE for growth in customer satisfaction§ RECOGNIZE the achievement of others and have fun doing it§ LISTEN and more importantly, respond to the voice of thecustomer.

MARKETING STRATEGY

• Some strategies used by the company is by showing its sincerity to the customers.

• This is done by displaying big boards on busy roads, and by framed Motives in written form inside the restaurants.

• Pizza Hut Says:

We want to satisfy our customer by offering them “The Best”

MARKETING STRATEGY

• Be C.H.A.M.P.S§ Cleanliness§ Hospitality§ Accuracy§ Maintenance§ Product & Quality§ Speed

You will Find 3F’s at Pizza Hut1. Fun2. Friendly3. Familiarity

SEGMENTATION

• Segmentation:Identifying portions in market different from one another is

called segmentation

The Segments Pizza Hut is Working on

§ Higher Income: it means pizza hut is setting its prices to built is standard and hence only those people with good income are the regular customers of pizza hut.

§ Dual Career Families: families having dual carriers and hence it means they earn good income.

§ Age 12-50 Years: providing the range of pizza of all sizes and tastes for the customers from the age of 12years to 50 years.

Types Of Segmentation

• Geographic segmentation

– Localize products, advertising, promotion and sales effortsto fit the needs of the individual areas and cities is geographic

segmentation.e.g. Products and Promotion in India about Cow Meat etc.

• Psychographic segmentation

– Dividing the market into different groups based on socialclass, life style or personality characteristics is psychographic

segmentation.e.g. Choosing Prices for Products as 999 OR 899

Target Market

• Pizza hut targeted market defines them as a family product. This is because they don't really directly market there customers. They are target everyone.

• Were as there 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.

• They have many competitors and they are bound to try everything to Coe up tops. There competitors are every where.

• 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 there products better quality but also cheaper.

Target Market

• They try to offer something different with there product as well. They offer a range of stuffed crusts.

• To try and attract customers of young age, they also do vegetarian options with meat free pizzas and a salad and pasta bar.

• This is because young generation is more health conscious now and mostly are vegetarians. Not a lot of restaurants offer a salad and a pasta bar.

POSITIONING

Pizza hut has done their positioning in the target market by keeping in view two basic factors:

1. Quality2. Frequency

• Worldwide and in Pakistan, Pizza Hut has come tobecome synonymous with the

‘Best pizzas under one roof‘

• Crew members and trained specially and the training session is named as 'customer mania‘ which makes the crew members proficient in providing the customers a Unique dining experience.

e.g. speed & quality of service

MARKETING MIX

Large Chicken Supreme Pizza:

This is the type of Pizza in the world with largest sales. It contain cheddar cheese, mozzarella cheese, Spicy chicken, chicken fajita, smoked chicken, onions, green peppers, olives & mushrooms. with double the amount of topping , capsicums, tomatoes, tomato sauce with oregano leaves and basin leaves.

Quality:This is considered as most tasty pizza in Pakistan

and is highly demanded as compared to other variety of pizza. As people think that it is a good pizza ,so most of the people don’t want to take a different variety of pizza as there is a common fear that it might happen that pizza of different variety wouldn’t taste good and hence they will face loss of money on a less tasty pizza.

• Product• Place• Promotion• Price

Four P’s

MARKETING MIX

Design:Usually typical round style Pizzas are offered to the customers,

however Pizza Hut now introduced rectangular shaped large pizza which is further divided into 16 pieces in form of stripes.

Features:

On purchase of a large pizza a pitcher of Pepsi, Dew or 7up are offered depending upon the choice of customer.

Large Rectangular Pizza named as ‘Dippin Strips’ is offered with three delicious dipping.

Packaging:

Pizza is delivered in Boxes behind the bikes of delivery boys and they claim to serve it as hot as it is on the time when its been taken out of the oven.

• Product• Place• Promotion• Price

Four P’s

MARKETING MIX

•Pizza hut has opened its branches world-wide and is having 34,000 outlets in 100 Countries.

•In Pakistan Pizza hut has opened 37 outlets in 9 Cities.

Karachi – 17 branchesLahore – 10 branchesIslamabad – 2 branchesFaisalabad – 2 branchesHyderabad – 1 branchPeshawar – 1 branchMultan - 1 branchRawalpindi – 1 branchSialkot – 1 branchMuree - 1 branch

• Product• Place• Promotion• Price

Four P’s

MARKETING MIX

• Pizza Hut is the pioneer of pizza in Pakistan, aimed at the casual dine-in market.

• Pizza Hut came to Pakistan in 1993 with only one outlet at Boat Basin, Clifton, Karachi.

• Today, there are 37 restaurants in nine cities in Pakistan.

• The slogan is “Share the good times”.

• The second largest outlet of the Pizza Hut is situated in Lahore at M.M.Alam Road.

• The monthly sales of the outlet is more than US$1,30,000 (about 1 crore rupees) making it the second highest revenue generator of Pizza Hut all over the world.

• Product• Place• Promotion• Price

Four P’s

MARKETING MIX

• Pizza Hut also opened its outlets in Sport Arena’s, Major Airports & Shopping Mall of big cities as they are the most crowded places.

• Pizza Hut opens its outlet in every fourth area of the city, depending upon the size of the city. So that it is more accessible to the customers.

e.g. Karachi & Lahore has large number of outlets as compared to other cities because they are the biggest cities of Pakistan.

•Channel:Pizza hut sell their products through 3 ways 1. Take In 2. Dine in3. Home Delivery.

• Product• Place• Promotion• Price

Four P’s

MARKETING MIX

• Pizza hut spends approximately Rs. 1million - 1.2 million on advertising annually using a Media mix.

• Pizza Hut advertise their products through§Bill Boards§TV Ads§News Papers

•Visit to School & Colleges: they visit school, colleges and universities and set their stalls to promote their products among young community.

•Sales Promotion (Discounts): they offer discounts on their products, On Super supreme they reduced the price from 745 to 700 and also add a pitcher of soft drink.

• Product• Place• Promotion• Price

Four P’s

MARKETING MIX

• Another technique used by pizza Hut to promote the company within the country & culture it is working in, is that, it introduced several locally-influenced tastes of pizza aiming the taste buds of the Pakistani market.

• This includes Seekh Kebab Pizza Sundance Pizza Spicy Hot Pizza Bonfire Pizza Ring O Fire Pizza Green Chicken Tikka Pizza Spicy Prawn Pizza

• Product• Place• Promotion• Price

Four P’s

MARKETING MIX

• Super Supreme is a pizza which contain chicken as well as beef.

• It was not Popular in India as Cow meat is forbidden in Hindu religion.

• But it is due to their good advertising and promotion techniques that most of the young generation in India is now eating Super Supreme along with beef topping.

• The Chicken Tikka topping which is now used in franchises in India was first used in restaurants in Pakistan.

• Pizza Hut offers annually an "All you can eat" in the month of Ramadan

• Product• Place• Promotion• Price

Four P’s

PIZZA DELIVERY TO SPACE

•Pizza Hut Delivered Pizzato space in Year 2001

Which made them MoreFamous and a New Slogan

came into BeingThat

“Wherever ThereIs Life, There Will Be

Pizza Hut’s Pizza”

Sponsorships

• In 2000, Pizza Hut was a part-time sponsor of Galaxy Motor sports.

• Pizza Hut was the shirt sponsor of English Football Club.

• In 2005, Pizza Hut sponsored “The Simpsons” on Channel 4.

• In March 2007, Pizza Hut partnered with Verizon Wireless to offer a free LG mobile phone with the purchase of a Cheesy Bites Pizza.

• 2007-08 Pizza Hut is a sponsor of the Newcastle Vipers ice hockey team for the season in the UK.

• Product• Place• Promotion• Price

Four P’s

Advertising

• The 1990 NES game Teenage Mutant Ninja Turtles II: The Arcade Game, came with a coupon for a free pizza. The game was filled with

Pizza Hut advertising and pizza that would refill the character's life.

• In late 2008 Pizza Hut's main advertising slogan was "Gather 'round the good stuff".

• Early 2007 saw Pizza Hut move into several more interactive ways of

marketing by utilising mobile phone SMS technology and their MyHut ordering site, they aired several television commercials containing hidden

words that viewers could type into their phones to receive coupons

Advertising

• On April 1, 2008, Pizza Hut in America sent emails to customers advertising that they now offer pasta items on their menu. The email (and similar advertising on the company's website) stated "Pasta so good we've changed our name to 'Pasta Hut'.

• " The name change was a publicity stunt held in conjunction with April Fools' Day, extending through the month of April, with the company's Dallas headquarters changing its exterior logo to Pasta Hut.

• This name change was also used to promote the new Tuscani Pasta line and new Pizza Hut dine-in menu.

• The First Pasta Hut Ad has the Original Pizza Hut restaurant being imploded and recreated, but when they construct the new building, the sign saying "Pasta Hut" is placed on the building.

Demand Curve

Demand Curve of Large Chicken Supreme Pizza per day

350

450

400

500

550

600

650

8000 8200 8400 8600 8800 9000

Price Quantity demanded

400 9100

450 8875

500 8750

550 8600

600 8450

650 8300Qd

Price

Factors of demand and supply

Determinants of Demand

• Income

• Taste

• Expectations

• Price of Related Goods

Supply Curve

Supply curve of Large Chicken supreme Pizza per day

350

450

400

500

550

600

650

8000 8200 8400 8600 8800 9000

Price Quantity supplied

400 8150

450 8300

500 8450

550 8600

600 8750

650 8875

Price

Qd

Factors of demand and supply

Determinants of Supply

• Price

• Input prices

• Expectations

• Technology

Elasticity

Elasticity of Demand:

%age change in price = p2-p1/p1 x 100%age change in quantity demanded = Q2-Q1/Q1 x 100

= (% Change in Quantity Demanded)/(% Change in Price)

= <1Elasticity of Supply:

%age change in price = p2-p1/p1 x 100%age change in quantity Supplied = Q2-Q1/Q1 x 100

= (% Change in Quantity Supplied)/(% Change in Price)

=<1

Equilibrium

Equilibrium Price of Large Chicken Supreme Pizza

Equilibrium Price

Price Quantity demanded

Quantity supplied

400 9100 8150

450 8875 8300

500 8750 8450

550 8600 8600

600 8450 8750

650 8300 8875

350

450

400

500

550

600

650

8000 8200 8400 8600 8800 9000

Price

Qd, Qs

Quantity F.C V.C T.C A.F.C A.V.C A.T.C M.C0 50000 00000 50000 ----------- ----------- ---------- 6250

25 50000 6250 56250 2000 250 2250 6500

50 50000 12750 62750 1000 255 1255 6750

75 50000 19500 69500 666.7 260 926.6 7000

100 50000 26500 76500 500 265 765 7250

125 50000 33750 83750 400 270 670 7500

150 50000 41250 91250 333.33 275 608.33 7750

175 50000 49000 99000 285.7 280 565.7 8000

200 50000 57000 107000 250 285 535 8250

225 50000 65250 115250 222.22 290 535 8500

250 50000 73750 123750 200 295 545

Cost of Production

Cost of Production Graph

Graph

A.T.C

A.V.C

A.F.C

M.C

ANY Questions??