A Project Report on PRICING STRATEGY of Pizza hut (20011 - 2013)

Submitted in partial fulfillment of the requirement of Masters of Business Administration (MBA) Guru Gobind Singh Indraprastha University

SUBMITTED BY:

Submitted to:

Gitarattan international business school Madhuban chowk,rohini,delhi-85 (Affiliated to Guru Gobind Singh Indraprastha University)

Table of Contents

chapter Chapter 1 Introduction Chapter 2 Research methodology Secondary source Objective and scope About Pizza Hut Company History Overview of the Industry in India

page 1-14

15-17

Chapter 3 Industry profile Current Market Scenario Competitors Market share

18-24

Chapter 4 Data analysis Chapter 5 Conclusion Recommendation Chapter 6 References Bibliography

25-26

27-29

30-32

Chapter 1

Introduction
Pizza hut is the largest pizza Restaurant Company in the world. It has 12000 outlets in 90 countries employing more than 3 lakh people. The legacy of pizza hut began in 1958. In India there are not much outlets, out of 10 86 countries India is one of them but only in 9 cities pizza hut has its outlets.
Tricon global; restaurants which owns the Pizza hut Franchisee has become very popular in India in the Indian Pizza Market. The first Pizza Restaurant was opened in 1958 in Wichita, Kansas under the name Pizza hut and features a variety of pizzas with different toppings as well as pasta, salads, s andwiches and other food chains. For the last ten years Pizza hut was named as the worlds best pizza chain in America and in India also it has captures most of the market share. Pizza hut is the largest pizza restaurant company in the world.

The project gives an overview of the history of pizza hut as in how pizza hut started and where all it is present and what has its progress been till now has been covered.

Company Profile

About Pizza Hut

Pizza hut is the largest pizza restaurant company in the world. It has 12000 outlets in 90 countries; employing more than 30000 people. Pizza Hut has an aggressive expansion plan for India. It intends to have more than 1 00 outlets by the end of the year Pizza Hut has more than 12,500 units across 90 countries making it one of the largest pizza brands. Furt her, all new outlets in India would be franchisee owned resulting from the smooth functioning of the existing stores which are all franchisee owned. Hence, the same arrangement will be followed in the future to ensure growth-oriented results The data written below represent what Pizza hut is all about and gives a brief profile of the company. Their main quote: "Customer are the reason that we are here." No customers No Pizzas

Thats the secret ingredient.

The 5 secret principles: Employees are our secret ingredients. Show your "care". Say "yes" to customers Satisfied, capable teams create satisfied customers.

Satisfied customers create profit and growth

PIZZA HUT IS ALL ABOUT Its all about you and all about customers i.e. customer creation and custom er retention through customer satisfaction, its all about team spirit, team spirit in order to attain good results. "WE SUCEED BECAUSE WE KNOW HOW TO WORK TOGETHER " They specify "How we work together principles" CUSTOMER FOCUS: They listen and respond to the voice of the customer. BELIEF IN PEOPLE: They believe in people, trust in positive intentions, encourage ideas from everyone and actively develop a workforce that is diverse in style and background. RECOGNITION: They find reasons to celebrate the achievements of others and fun doing it. COACHIONG AND SUPPORT: They coach and support each other

ACCOUNTABILITY: They do what they say they are accountable, they act like owners. EXCELLENCE: They take pride in their work and have a passion for excellence. POSITIVE ENERGY: They execute with positive energy and intensity. They hate bureaucracy and all the nonsense that comes with it. TEAM WORK: They practice team together and team apart. They call themselves C=Cleanliness H=Hospitality A=Accuracy of orders M=Maintenance of facilities P=Product quality S=Speed of service They answer questions like: "What influences a customer decision to a restaurant? Food appeal=31% Food experience=50% Food value=13%

CER= CHAMPS EXCELLENCE REVIEW CEM=CUSTOMER EXPERIENCE MONITOR

"HANDLING CUSTOMERS" Solve problem before it actually becomes a complaint. Never argue with the customer Never blame any other crew member Treat the customer, as you want to be treated. Thank the customer.

Company History

Pizza huts story began with a small restaurant and two young brothers - Dan and Frank Carney. In the year 1958 they were struck by inspiration and opened the first Pizza hut in Wichita, Kansas, USA. When they were setting up, they only had room for 25 seats - and the restaurant sign only had space for nine letters. They wanted pizza in the name, which left space for just 3 more letters. Because the building looked like hut ----- Pizza hut started.

Now Pizza hut is the largest pizza Restaurant Company in the world. It has 12,000 outlets in the 90 countries, employing more than 300,000 people.

The first pizza hut restaurant was opened in 1958 in Wichita , Kansas and within a year the first franchise unit was open.

By 1977 when Pizza hut was acquired by Pepsi co its US restaurant system had grown to nearly 3200 units today Pizza hut is the largest restaurant chain in the world . Specializing in the sale of ready to eat Pizza products as of year-end 1996 concept had grown to more than 12300 units.

For ten of the last 12 years, Pizza hut was named best pizza hut chain in America in the Choice in chains national consumer survey published annually by restaurants & Institutions magazine . Also, the January 1997 Consumer reports named Pizza hut as the best Pizza chain in Americ a and now it has opened.

With every occasion Pizza hut adapts its ambience and decoration with a different concept, like wise in India on the Independence day they decorate their outlets with all national colors and logos etc., and on the valentines day for example they take out their pizza in heart shape to attract more ofyoung customers which get more attracted towards these things.

Companys DEtail

INTERNATIONAL OPERATIONS
Mexico

Typical location in

Mexico, equipped with

scooters for pizza delivery. Pizza Hut

restaurants are located throughout the world. Based on their location and the culture of the people, Pizza hut often offers different menu choices in these countries than in the United States and Canada.

Australia & New Zealand

In Australia, Pizza Hut has followed a different model , Australian Pizza Huts now generally operate as take away and delivery operations with all Orders processed by two major call centers located in Brisbane and Sydney. Australian Pizza Hut restaurants currently compete with Domino's, Pizza Haven, Eagle Boys and various others Pizza stores. Pizza Hut stand in Oslo Airport

India

Pizza Hut came to India in 1996 with a dine-in restaurant in Bangalore Pizza Hut now has a presence in many major Indian cities such as Bangalore , Chandigarh, Ludhiana, Jalandhar, Udaipur, Lucknow, New Delhi, Bangalore , Chandigarh, Ludhiana, Jalandhar, Udaipur, Lucknow, Amritsar, Cochin, Agra, Hyderabad (with multiple branches in many of those cities), Ahmedabad, Indore, Mangalore, Mysore, Visakhapatnam and Bhubaneswar.

Product Profile
Featured items

Now stuffed with even more delicious, melted cheese in the crust, making your last bite as good as the first!

Double Deep Pizzas are hand-crafted by loading the entire pizza with twice the toppings of a medium pizza,. Choose from three great recipes: Supreme Deep, Meaty Deep, and Veggie Deep.

SPECIALITIES

Your

choice

of

two

fresh

toppings

smothered

in

mounds

of

cheese.

Has six kinds of meat: pepperoni, Italian sausage, ham, bacon, beef and pork toppings.

Fresh mushrooms, red onions, green peppers, tomatoes and black olives make this a veggie-fan's favorite.

SIGNATURE CRUSTS

Our pizzeria-style pizza is now made with a light flavorful new crust and more of our zesty Italian sauce in every bite.

America's favorite thick-crust pizza -- crispy on the outside, soft and chewy on the inside.

America's favorite thick-crust pizza -- in a smaller, single-serving size.

Now stuffed with even more delicious, melted cheese in the crust, making your last bite as good as the first!

Just enough crispy crust to get a mouthful of toppings in every bite.

Chapter 2

RESEARCH METHODOLOGY
OBJECTIVES OF STUDY
To study how direct marketing is done by PIZZA HUT, to substantiate its effort to strengthen its direct marketing. To study about PIZZA HUT as a brand in India. To know about the long and successful history of PIZZA HUT. To study the working and functioning of PIZZA HUT in India and the world. To study the pricing policy of pizza hut To study PIZZA HUTS and competitors strategies. To give recommendations and suggestions thereof.

SCOPE OF STUDY
The subject matter has been arranged in a Systematic manner, providing all the

details and Explanations needed. Every effort has been taken by to make the Project report complete in itself. This report has been divided into sections and sub sections for a better understanding.

TYPE OF DATA COLLECTED

SECONDARY SOURCE WEBSITES MAGAZINES AND NEWSPAPERS

Chapter 3

Current market Scenario

Key players (COMPETITORS)
Papa John's International makes a lot of dough. The company operates the
world's #3 pizza chain (behind YUM! Brands' Pizza Hut brand and Domino's) with about 3,000 pizzerias across the US and in almost 30 international markets. Its restaurants offer several pizza styles and topping choices, as well as a few specialty pies such as The Works and All the Meats. Papa John's locations typically offer delivery and carry-out service only. It owns and operates more than 580 locations, while the rest are franchised. Founder and chairman John Schnatterowns about 17% of the company.

Pizza Corner
Pizza Corner is a chain of pizzerias founded in 1996 by entrepreneur Fred Mouawad of Global Franchise Architects. Pizza Corner currently operates in Bangladesh, India and Thailand. As its name suggests, Pizza Corner primarily focuses on pizzas. They also serve numerous side dishes such as Garlic Bread and Chicken Nuggets. Starters like pasta and salad are becoming increasingly popular. Pizza Corner recently introduced pizza in a cone in India under the brand Conizza.

Dominos
Jubilant FoodWorks Limited, a Jubilant Bhartia Group Company holds the Master Franchise Rights for Domino's Pizza for India, Nepal, Sri Lanka and Bangladesh. The company has been listed on the Indian bourses recently. Prior to Sep 24, 2009, the company was known as Domino's Pizza India Limited and underwent a name change, rest of the terms remaining the same. Over the period since 1996, Domino's Pizza India has remained focused on delivering great tasting Pizzas and sides, superior quality, exceptional customer service and value for money offerings. We have endeavored to establish a reputation for being a home delivery specialist capable of delivering pizzas within 30 minutes or else FREE to a community of loyal consumers from all our stores around the country. Domino's constantly strives to develop products that suit the tastes of our consumers and hence delighting them. Domino's believes strongly in the strategy of 'Think global and act local'. Thus, time and again we have been innovating with delicious new products such as crusts, toppings and flavours suitable to the taste buds of Indian Consumers. Further providing value for money and affordable products to our consumers has been an important part of our efforts.

pricing strategies
Pizza hut ideology of customer behind its pricing strategy . Willing to pay for relevance . Willing to pay for excitement. Willing to pay for quality. Willing to pay for simplifying life. Willing to pay for forward movement.

Pizza hut is not playing pricing games with customers.

They following high/low pricing strategy.

In simple words it is applying PRICE SKIMMING strategy for its products.

A product pricing strategy by which a firm charges the highest initial price that customers will pay. As the demand of the first customers is satisfied, the firm lowers the price to attract another, more pricesensitive segment.

Thus in order to provide maximum value to customers and enhance the brand value it sometimes maintains the same price, while some time reduce prices and some time increase prices also. i.e in India pizza hut introduce THE GREAT INDIAN TREAT. It didnt increase price of existing pizza but reduce quantity of products in its value meal combo. Pizza hut follows one-price strategy, means it charges same price to all customers under similar conditions and for same quality. This helps in establishing a favorable fair image among its customers as well as having stable market.

SWOT ANALYSIS
STRENGTHS It promises to deliver the pizzas in 30 minutes or offers free pizzas if ord er doesnt reach on time, whereas its competitors promise to deliver the pizzas in 39 minutes. The way in which they do up their ambience, the atmosphere, the sitting area, the way in which They greet the customers and the way they sing and make everyone have fun on occasions. A contemporary design split level seating, high ceiling and aesthetic pizza hut murals. Pizza hut was the first to start online pizza delivery in San Francisco, which still hasnt been started by any of its competitors. Variety is the main strength they possess. They offer pastas, spaghetti, garlic bread etc. They are known to modify their menu and ambience according to occasions. e.g., they offer heart shaped pizzas on Valentine s Day.

WEAKNESSES: Its focus on the delivery concept is not much as compared to its competitor. Their variety as far as pastas and spaghetti are concerned are not much as compared to pizza express and pizza corner. The prices at pizza hut are comparatively more expensive than dominos. The pizza hut ad aaa she doesnt like pizzas has down rated their salads just to prove their pizzas superior and they have shown that their salads are not good, this is a major weakness in their Advertisement. One of the weaknesses of pizza hut is lack of efficient cold cha ins in the country. The company surmounted this problem, by reducing the dependency on cold chains besides setting up its own infrastructure.

OPPORTUNITIES : The first ad campaign on TV defines pizza hut as a brand and what it offers to its existing and potential customers. In future, focus will be on other facets of the brand and offerings. It could start on line delivery in India and other countries like it has started in the U.S. It could open more outlets in shopping malls, airports, railway stat ions etc. Mumbai is an important center, which has still not been tapped by pizza hut. This city has a potential for 30 outlets. To open an outlet in those areas where the competitors have opened, like dominos in Agra etc.

THREATS: Amul has come up with a 30 rupees pizza, which is a big threat to pizza hut at least in the short run if not in the long run. Variety in pizza express and pizza corner as far as pastas, spaghettis etc. are concerned is much much more, and this has been checked by us by looking at their menu cards. Dominos offers CHEESE WALA HUNGER a regular hand toast pizza for rupees 39.

Chapter 4

data analysis
COMPARI SON WITH ITS BIGGEST COMPETITOR DOMINOS COMPARISON BETWEEN DOMINOS AND PIZZA HUT Companys products DOMINOS Target customers Convenience Delivery 15%premiu and m A goodhot pizza delivered to your door within 30 of at a Benefits price Value proposition

minded pizza speed lovers

goodquality

minutes ordering

moderate price

PIZZA HUT Youngsters Good quality 20% extra premium

Unbeatable at

pizza

unbelievable

within the age and group of 13 to toppings 30 along

prices.

with

Italian serving

Chapter 5

Conclusion
Through the market research of the industry it can be concluded thatmarket for pizza is growing tremendously. Though pizza hut owns a good share but it faces extremely tough competition from Dominos.

Recommendations

Pizza hut should improve on developing products for all age groups instead of concentrating on only young crowd.

Pizza hut should also concentrate on areas like appetizers. Dominos leads in this segment.

The chain should improve on its delivery and promotional tactics. Dominos is doing well in this area too.

They should use more well-known celebrities as brand ambassadors, who can relate well with the middle class.

Chapter 6

Bibliography
References BOOKS REFERRED:MARKETING MANAGEMENT PHILIP KOTLER MARKETING MANAGEMENT - C.B. GUPTA

MAGAZINES REFERRED:BUSINESS TODAY OUTLOOK BUSINESS WORLD

INTERNET SITES:WWW.PIZZAHUT.COM WWW.GOOGLE.COM WWW.ANSWERS.COM WWW.HOVERS.COM WWW.KNOWLEDGESTORM.COM