Comparison and Critical Analysis of the Marketing Strategies Used by Dominos Pizza and Pizza Hut - Term Paper Example

Comparison and Critical Analysis of the Marketing Strategies Used By Dominos Pizza and Pizza Hut By Location Introduction Domino’s was founded in 1960 in Michigan, and started expanding internationally in 1983. As of 29th December 2013, Domino Pizza is believed to have had close to 858 stores in the United Kingdom. According to a recent report by (Hall, 2015), recent shares in Domino’s Pizza have soared by more than seven percent, but the fast food company had also announced a 15.1 percent rise in the underlying profit before taxation to £54.8m last year. On the other hand, Pizza Hut was founded in 1958 in Kansas and became the number one pizza restaurant in terms of sales in 1971. The company has over 650 stores in the UK, as well as 350 restaurants and 300 delivery stores. Pizza Hut is still a giant among the pizza chains but has been quite disappointed with the second-quarter results in the U.S market. According to a report by (Munarriz, 2014), Pizza Hut’s revenue has climbed by 10.5 percent to $446.6 million, fueled by a 7.7 percent spike in the restaurant sales. The essay is a comparison and a critical analysis of the marketing strategies utilized by Domino’s Pizza and Pizza Hut to achieve competitive advantage in the UK market. Marketing mix and market segmentation Domino’s Pizza The company has an effective strategy towards developing the different sizes of products ranging from small to medium and large. (Dominos, n.d.), agrees that such a strategy is useful in covering the interests of most of the company’s customer base. Also, the idea to develop different types of pizzas is effective in promoting its products and catering for the different tastes of customers. For instance, their range of products includes varieties such as Mexican Green Wave Pizza, Country Special Pizza, Seventh Heaven Pizza, Zesty Chicken pizza, and Grand Supreme Pizza among other popular pizzas. Since not every client visiting the restaurant might be interested in buying pizza, the management has a good move to counter the loophole and now offers extra food items such as Stuffed Garlic Bread Sticks, Calzone pockets, Pasta Italiano, and Taco Indiana. Domino’s pricing strategy in the marketing mix is also effective and targeted towards the lower middle-class as well as the middle-class income group (Dominos, n.d.). In fact, Domino’s delivery price is proven to be slightly below that of Pizza hut in its traditional restaurants. The move by the company to develop a consistent and uniform pricing policy is satisfactory and beneficial towards encouraging repeat customers. The price factor, though lower than that of Pizza Hut, appears to be troublesome and a contributory factor to its development. However, there prices are quite high as compared to those set by McDonalds and KFC which are their indirect competitors. Affordability is the key towards tremendous success of such a reputed company, and the management should work towards measuring their prices to the level of its customers. Domino’s place and positioning is quite effective for the business. Through the current geographical location, Domino has managed a direct channel with its huge customer base. One of the strongholds of the company’s place is the decision to offer home delivery services for pizza, encouraging all age groups of customers to make their orders through a telephone message or phone call (Collier, 2006). Domino has also established a reliable place on its official website and customers can make their orders directly, without the need for a physical visit to the store. It is possible that Domino understands how enjoyable it is for buyers to sit in the comfort of their homes or offices and receive their pizza package within the shortest time possible. Apart from the online platform, Domino’s pizza has a strategically placed location suitable for the customers who prefer dining in an outlet. Thus, the company has various outlets in very good locations such as in main streets and shopping malls. Domino’s promotion strategies are also operative towards achieving its business goals and objectives. The idea of maintaining direct contact with the huge customer base can be viewed as a promotion that has led the company to unattainable heights. Its policy entailing door-to-door pizza deliveries is amazing and a great contribution to the success of the company (Kurtz & Boone, 2004, p. 68). Ideally, all the customers are always sure that Domino’s will deliver their pizza within thirty minutes after making their order request. The decision by the company to utilize its delivery boys is an efficient move towards making it in the use of telemarketing techniques as a means driving promotion campaigns. Moreover, the company has been quite observant on its competitors, which is a key strategy towards keeping their promotion strategies in check. Lastly, Domino’s pizza sells their pizza to no specific target market. Therefore, their products are suitable for any customer craving to eat gluten free pizza or rather a larger menu with healthier choices. Since Domino’s is an international company, its geographic segmentation is considered to be beyond the original starting point. Also, the demographic segmentation does not apply to Domino’s since restaurant businesses can market their products to anyone provided they can (Kara, et al., 2006). In terms of benefit segmentation, Domino’s pizza would be the perfect choice for individuals simply looking for healthy choices or rather the cheapest products available in the market. Pizza Hut Pizza’s Hut product strategy has proved effective in gaining competitive advantage over its competitors. The company is prominent for offering its consumers with Italian products such as Pizzas, pasta, and bread. However, the strategy to go local by providing Birizza to its customers is a good move to combat competition from popular options such as McDonalds, Dominos, and KFC (Pizzahut, 2010). The product characteristic of the pizzas is that they are of high quality and are served to the customers in very sizeable portions. Another good companion strategy used by Pizza Hut is the decision to provide home delivery services like Domino’s Pizza does. The price strategy of Pizza hut is both effective and non-effective towards the strengthening of the company’s marketing segment. First, it is non-effective since the price set for the pizzas and other food products is premium and only affordable for a select group of customers. However, strategy seems effective too, since the company understands pretty well that it is a new entrant into the pizza industry and strives to provide high quality food as a measure to counter its competitors (Restaurant-Brands, 2014). The ambiance of the pizza is better and richer than that of most of its competitors who serve similar Italian products. Thus, Pizza hut knows how to cater for its premium prices by offering high quality pizzas no other company can manufacture. Place strategy in the Pizza hut marketing mix is also effective and non-effective towards the development and maintenance of a market segment. The strategy is non-effective since Pizza hut is located in the A grade places across most urban areas. The position locks out the customers in B grade areas who would love to have a taste of the pizza. On the other hand, it is effective, for the placement of Pizza hut is good at maintaining a premium position in the mind of the customers. It also allows people from B grade towns to visit A grade areas to have a bite of the highest quality pizza from Pizza hut (Goyal & Singh, 2007). Also, A grade towns have a high likelihood of getting their pizzas from Pizza hut rather than from Dominos due to the price positioning. Also, positioning the restaurant in B grade areas would have been a huge mistake, since people from these regions prefer the likes of Dominos. Pizza hut is also known to have a good promotion strategy that is very effective in its marketing mix plan. The company does it well by concentrating its efforts on introducing the new products and building an equal brand of products (Ahmed, 2014). The company makes use of festivals to pin ads and promote discounts and offers on their products to attract more customers. At the same time, the move by Pizza hut to do several enterprise discounts allows discounts to the corporate customers. The local Pizza hut outlet also uses BTL marketing strategies such as newspaper inserts, hoardings, and lollipops to promote their activities, which is a good strategy towards expanding its market reach (C. Montgomery & Chester, 2009). Lastly, Pizza hut’s market segmentation is simple, easy to understand, and effective in building a strong customer base. For instance, its geographic segmentation is worldwide, and the company is serving more than 80 countries the world over (Clark, 2014). Also, its demographic segmentation involves the younger generation of consumers as well as those who can spend quite a lot of money on the best pizzas in the market. Lastly, the psychographic segmentation covers the people who have a good attitude about the food sense offered by the Pizza group (Tierney & Loyalty360, 2013). The restaurant serves all types of personalities as long as they can afford the prices listed. Conclusion and key recommendations Pizza hut has various targets which it can achieve in a given period. Therefore, in order to achieve the targets, the company has to employ different strategies in its market niche apart from what they are doing currently. Indians are quite value-sensitive rather than price-sensitive, and Pizza hut should find possible means to use even higher quality products. For Dominos, the dining options have to be altered drastically if the company has to target the premium segment of customers interested in purchasing pizza from them. They are way behind Pizza hut in their dining experience and need to work that out quickly if they are to measure up to the standards. Bibliography Ahmed, J., 2014. Pizza hut marketing report 2013, Karachi: Indus University, Karachi. C.Montgomery, K. & Chester, J., 2009. Interactive Food and Beverage Marketing: Targeting Adolescents in the Digital Age. Jounal of Adolescent Health, 45(3), pp. 18-29. Clark, R., 2014. 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