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I would like o express my gratitude towards the management of Pizza Hut Sir Lankan for their kind co-operation. This helped me in completion of this report successfully. Also my special gratitude and thanks to industry persons for giving me such attention and time. My thanks and appreciations go to my colleague in developing the report and people who have willingly helped me out with their abilities. Executive Summary This report describes the appropriate tools and techniques in the strategic analysis in order to examine the current trends and issues in the business environment of Pizza Hut when launching a new product to the market.
In addition, there is a brief history of Pizza Hut, which will be provided. The purpose of this executive summary is to provide a clear understanding regarding the marketing campaign that was undertaken by Pizza Hut. Pizza Hut is an American restaurant chain and an international franchise that offers different types of pizza. Corporately known as Pizza Hut Inc. It is a subsidiary of Yum Brand Inc. On producing the product name “Cup Cake Munchies” The content explains the different environments that the organization works in, the frameworks used to analyze information and the marketing traceries that are taken to launch the new product.
The report also includes the ways in which Pizza Hut has identified their strengths and the weakness. In addition, the PEST analysis how it affects them. The report describes the process of facing the problems that could arise on launching a new product successfully. Moreover, the difference between domestic and international market along with the ways the organization face the competition by adopting the best pricing strategy for the products. Introduction Operating a business is not an easy task for the management as well as to the winners.
The management as well as the owners will have to face many challenges and risks involved in managing a business, especially in a span internationally. Pizza Hut is one of the most popular brands in the world at present. Pizza Hut is a American restaurant chain and an international franchise that offers different types of pizza along with side dishes. Corporately known as Pizza Hut Inc. It is Brothers Dan and Frank Carney in their hometown of Wichita Kansas founded a subsidiary of Yum Brand Inc. Pizza Hut in June 15 1958. Pizza Hut is split into several different restaurant formats.
Pizza hut continues to flourish in the business adding more Munchies” that is similar to Nutty Lava Cake product line in the organization, which is the new eye catcher of Pizza hut. Pizza Hut has undertaken the necessary marketing strategies by considering the environmental factors & by analyzing the strengths, weaknesses, threats & opportunities. In addition, the use of effective promotional campaigns will help the products to gain a considerable market share in a less period. Task 3 Macro & micro environment factors The study of economics can be divided into two areas. One of these involves looking at the economy as a whole.
It looks at the performance, structure and behavior of the entire economy. This is Macro environment. In contrast, Micromanagement looks at individual parts of the economy. By adopting strategies that can manipulate these factors, Pizza Hut will be able to increase the growth of the organization & successfully acquire a higher market share. To analyze these different environments organizations use frameworks such as PEST, PESTLE or SOOT analysis most commonly. Pizza Hut has used the same frameworks to analyze the market and make the required decision to maintain an undistributed process in manufacturing and racketing.
Macro environment factors With the use of PEST analysis, the organization has been able to analyze the external environmental or the macro environment factors to which the organization does not have direct control over but which has direct impact on the organization. The political, economical, social & technological environments includes in the PEST analysis. PEST ANALYSIS Political Economical may affect the business in different ways. There are not many political factors affecting Pizza Hut. Factors such as laws on business employment, pollution and action apply on the organization, which it has to follow regarding the rules.
If the country’s economy is, better so the GAP of the country will be good, this is a green signal for the business as the per capita income of the people will increased and they will spend more money. Most of the people in the beginning of the months spend more and they visit Pizza Hut very often. Social Technological Pizza Hut is a multinational and it is originated from America so the organization is overwhelmed by western culture Every country has cultural norms, values, beliefs and religion which can affect the organization.
Now a day’s technology is improving immensely so as the baking and heating ovens will be have new and efficient in order to provide and effective service to the customers. Due to advancement in technology, the marketing can be done with much more faster pace. Computer based customer data that is MIS helps in collecting customer data. MICRO ENVIRONMENTAL FACTORS Micromanagement factors can be controlled by the organization, which are more close to the organization that has a direct impact on the decisions and process. Pizza Hut has carried out a full analysis of the micromanagement before deciding corporate treated businesses. ) Customers- Businesses are in constant race to boost up profits, keep current customers, and exert a pull on potential new customers, consequently competing for customers on a worldwide market like never before. CRM is a modern, popular weapon used by firms in this fierce competition, to enhance interaction between customer and supplier.. It helps firms to build individual customer relationships in such a way that both the firm and the customer get the most out of the exchange, providing both parties with long term benefits. Overall customers are satisfied with he level of service, quality of food, amongst others.
It has been discovered that the level of customer satisfaction and delight leads to high degrees of customer loyalty, discouraging brand-switching possibilities. This gives Pizza Hut a competitive edge over competitors. 2) Employees -Employees play a main role when it comes to maximizing the growth of an organization. Because it requires skilled staff to run an organization smoothly. Pizza hut has a well trained team of employees to ensure a quality service. Also the organization is equipped with skilled staff because it is a necessity to maximize sales ultimately.
The organization makes sure the employees are always updated and aware of the new technologies and knowledge by providing training and development programs to the staff. Have better quality raw materials and on time deliveries of raw materials with flexible payment schemes. 4) Shareholders – Shareholders are an essential part of an organization because investments are needed for an organization to undertake new projects and to generate more money so it is a must that Pizza hut maintains a positive relationship with the investors in long term. ) Media -Media planners determine the most cost effective media mix that will each the target audience and satisfy the media objectives. The Company’s image can be changed depending on the media attention. Discusses media options and opportunities narrowly target consumers using niche channels and programs. A positive media attention can “Make” an organization or its products as well as a negative media attention can “break” it. Instead of risking the image of the organization, Pizza has public relations consultants to handle such issues to maintain the organizations good name in the future as well. ) Competitors – Keeping a track on the competitors is a very important thing for an organization so that the organization can be aware of the activities that the competitors undertake, how they face the changing economic conditions, consumer behavior & technological developments. Domino’s is the closest competitor at present. SOOT Analysts Every organization has its strengths, weakness, opportunities and threats. Considering the macro and microdensitometer Pizza Hut has analyzed the strengths, weaknesses, opportunities and threats of the organization using the SOOT analysis.
With the use of this framework, the organization can undertake the required strategies for to launch new product to the market successfully. STRENGTH Pizza Hut is the market leader in providing different products, as there are no many competitors in this sector. Their good image makes the organization stronger Pizza Hut is providing quality products, good taste with qualified staff. Pizza Hut has a good make the organization more prosperous. They are ISO certified. They have enough resources for operating different activities of the organization. They are providing free delivery services.
Another big strength and even competitive advantage is the fact that they have full service restaurants and they can market for families much easier than Domino’s. WEAKNESS Pizza Hut has a high overhead cost due to restaurant because of overhead cost the prices charged is high. They are providing less range of products comparatively at higher prices. They are more focused on western products instead of eastern. OPPORTUNITIES New markets can be explored and new opportunities they can gain. Pizza Hut comes up with new products considering eastern taste of the people. Diversification of new products also increases the market share of Pizza Hut.
They can also reduce prices because of more resources. THREATS The main threat for Pizza Hut is competitors. Their closest competitor is Domino’s. Domino’s main competitive advantage over Pizza Hut is their lower price. SEGMENTATION CRITERIA Main segments, which Pizza Hut has captured, are the combination of high incomes and dual career families, due to high-income consumer have more disposal income, allowing them to eat out more often. Pizza Hut holds the most market share in the industry, the perceived quality and service of the company will help to ensure better the average chance at a successful introduction of a new product.
Introduction of a new product that keeps with the trends is also important to reduce the risk of failure. Pizza Hut maximum market segmentation is younger generations. These generation range from 12 to 30, the overall spending of these generations is mostly on non- essential items. After conducting surveys on consumer income and their spending behavior, Pizza Hut analyzed how to promote the products for the different segmentations effectively through analyzing the information with the use of the up’s of marketing mix, which are listed down as follows. PRODUCT Product refers to the actual program of planning.
The goal of the Pizza hut is to develop the best product with the available resources. Cup cake Munchies is a similar product line to Lava cake, which is under desserts. Varieties of toppings are available. These are complete nutritious and healthy desserts guaranteed. The nutrition plan also provides guidelines clearly, on what Cup Cake Munchies should be taken by diabetes patients. As Pizza hut has to boost its sales in the existing markets. Therefore, the new Cup cake Munchies are introduced in all branches line Pizza hut compete with the quality of products produced. Therefore, the pricing strategy adopted is market skimming.
They have adopted this pricing strategy, as hey want to hold maximum share of the market by maximizing profit. Pizza hut is free to charge any amount. The charge high prices due to uniqueness of the products. They satisfy the target market for the price they pay. The pricing strategy is not Just to get the worth of the quality but also to get the maximum profits before anyone else enters the market. 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.
Pizza hut uses direct distribution channel. The direct channel is also useful when there is large number of buyers but small amounts purchased. Customers can call, place a order and the order will be delivered to the customers home. Another method is dine-in. PROMOTION The objectives of promotion are to introduce a new product, stimulate demand, and change the short-term behavior of the customer. The main promotion is a coupon to purchase. They are also distributing door-to-door brochures to capture more customers. TARGETING STRATEGY Pizza hut targeted market defines them as a family product.
This is because they do not directly market their customers. They target everyone where as their competitors target on a certain gender or age. However, Pizza hut target a wide range of customers. Pizza Hut chose a concentrated marketing strategy for Cup cake Munchies because the company was clear & confident about the specific segment that the product is targeted at, the children. This has given many advantages as well as few disadvantages. The advantages are that targeting a specific segment can reduce the cost on promotional campaigns and advertising.
This can also help the organization to produce the products focusing on that specific segment by improving the qualities hat the particular segment would prefer. The downsides are that the organization is bounded to market the product within a limited number of customers so choosing the correct segment is necessary in this targeting strategy. CHANGES IN BUYER BEHAVIOR IN DIFFERENT SITUATIONS Pizza hut provides a kind of service that every visit of the customer is a memorable one. Constant endeavor to provide extra value. Introduction of Cup cake Munchies that put Yum on every customer face.
Buyer behavior or the purchasing process is a complex process on what influences the consumer to purchase the product. Many internal and external factors should be taken into consideration when looking at the buyer behavior as they have a direct impact on the consumer buying decision. Pizza Hut has undertaken different strategies to influence the consumer to purchase the This is the first step in a consumer buying process, at which point the consumer recognizes the needs and wants due to a problem caused or maybe due to a new interest.
Gathered the required details through conducting surveys. INFORMATION SEARCH The consumer starts to gather information about the product needed at this stage. As a successful marketer Pizza hut has provided ample amounts of information about the product through internet, broaches, leaflets, posters etc. So that the consumers have easy access to the information of the products, which would eventually lead the consumer to chose the company’s products. PURCHASE DECISION Consumers decide to purchase the product after selecting at this point.
Even at this stage, there are chances that the customer would change the idea and go for a competitor’s product or hesitate to make future purchases if the purchasing process create negative image within the consumers. Having an undistributed production, on time deliveries & quality products had created a positive image within the customers regarding the organization. POST PURCHASE BEHAVIOR Usually every consumer gets the feeling of whether or not the purchase they made is worth after the purchase.
If the result turns out to be, negative it will be a black mark for the company at which point the company loses customers and fail to attract new customers. For that it is necessary that Pizza hut produce good quality products and undertake promotional activities to make the consumer feel that the purchase they made is worth. This will lead the company attract new customers through the current customers which will initially increase the number of sales of the company. TYPES OF BUYER BEHAVIOR 1 . Complex buying behavior 2. Habitual buying behavior 3. Variety seeking buying behavior 4.
Dissonance reducing buying behavior Variety seeking buying behavior Since the products are new as the customers experiment the product through a variety seeking buying behavior achieves its objective of capturing the customers permanently towards the product by providing quality products and transform the consumers buying behavior to a habitual buying behavior. Habitual buying behavior After creating, a positive image within the customer towards the product and making buying behavior to a habitual buying behavior so that instead of consuming the company’s products for a change they will continue to consume products habitually.
NEW POSITIONING Positioning is how the organization needs the consumers to see their products. Yet along producing and marketing the product is not enough to win the consumer attraction. It is necessary that the organization create a positive image among the consumers. Pizza Hut is capable of making the consumers think that these products re high in quality and is worth purchasing. Establishing such image is hard due to the competition so Pizza Hut is adopting better pricing strategies.
The most important management for a food chain like pizza hut is total quality Management. The entire employee’s are well trained accordingly. They are given extra classes in order to meet the quality standards this strategy is important in order to satisfy the CHAMPS. Difference of Business to Customer marketing & Business to Business marketing Business to Customer marketing Pizza hut markets its products to customers directly through the own outlets which as few advantages as well as disadvantages.
Advantages are that the company can ensure of providing quality goods and services, get customer feedbacks directly an efficiently, have a higher profit margin etc as well as the disadvantages are additional cost in maintaining outlets, lack of availability throughout the country, company has to concentrate on both selling and manufacturing processes. INTERNATIONAL AND DOMESTIC MARKETING Domestic market mostly requires a simpler process compared to international marketing. In addition, the costs are less on production since a moderate quality is ample to produce for a local market.
However, when it comes to international markets it is completely different which requires a complex process & better quality to match up the standards of the international competitors. Mostly products are tailored for the international market because the consumer requirements and expectations differs’ from one country or region to another. International sales can be used to help the sustainability of the organization even at a state at which the national market is declining. Because of producing high quality goods to compete in the international market the organization builds up a good reputation as well as a better brand name.
As there are dozens of suppliers globally providing services in different part of the world and Pizza hut is the one who got the bigger market share globally. This survey was taken from www. Survey. Com Conclusion To conclude the report, it is understood that Pizza hut has adopted different marketing strategies with the use of different frameworks according to the situations and there is flexibility in the strategies as they can be changed with the changes in the market conditions. The newly launched product “Cup Cake Munchies” had to face barriers to launch it to the market as a successful product.