Marketing Strategies of Dominos and Pizza Hut in the UK - Coursework Example

MARKETING STRATEGIES OF DOMINOS AND PIZZA HUT IN THE UK and Marketing Strategies of Dominos and Pizza Hut in the UK Introduction The Pizza and fast food industry in the UK has grown over the years attracting the attention of some of the biggest restaurant chains in the world. However, the market has largely been dominated by two American franchises, Domino’s Pizza and Pizza hut (Wenderoth, 2009 p. 56). Competition between the two firms has intensified over the past few years as they grapple to fight for the market share. As such, the two companies have employed varied strategies in their marketing and promotional campaigns. However, the marketing strategies used by the two organizations have resulted in dissimilar results over the years, which have led to one of the firms remaining as the market leader in the UK for quite some time. This paper focuses on comparing and analyzing the marketing strategies used by both companies within the UK. Domino’s Pizza Group is the UK master franchise of Domino’s Pizza, an international fast food restaurant chain that specializes in Pizza delivery. The Group operates a chain of pizza restaurants in the UK, Ireland, Germany, and Switzerland. Domino’s Pizza Group is the largest branch or franchise within the Dominos brand in terms of profits and retail sales. The company opened its first British outlet in 1985 at Luton (Kotler, Kartajaya, & Setiawan, 2010 p. 52). The company embarked on a marketing strategy that saw it opening about nine new outlets each month. Currently, Dominos has more than 777 franchises in the UK, which makes it the biggest pizza delivery company (Lamb, Hair, & McDaniel, 2009 p. 63). The market share of Dominos is estimated to be 26% (Kotler, Kartajaya, & Setiawan, 2010 p. 53). Pizza hut is the other American Franchise that has dominated the fast food market in the UK. Pizza hut is a subsidiary of the YUM! an international market leader in the fast food restaurant system with over 37000 units in more than 110 countries globally (Carroll, 2009 p. 33). The company was first introduced to Britain in 1973 in Islington, London. However, it opened its first Pizza Delivery Unit in the UK in 1988 at Kingsbury. As of today, Pizza Hut is the second largest Pizza delivery firm in the UK, with a market share of 25% and about 750 restaurants located in various places in the UK (Ahlstrom, & Bruton, 2010 p. 28). Figure 1. Market Share for the Pizza and Fast Food Industry in the UK Domino’s Pizza Marketing Since its inception in the UK market, Dominos has been synonymous with high quality fast food, offering a wide range of Pizza varieties. Domino’s Pizza was the first restaurant to introduce home delivery services, being able to create a niche for itself in the fast food industry (Llanas, 2015 p. 37). Since then, the company has been able to build a strong relationship with its customers through its marketing mix. Besides the 4Ps that make up a marketing mix (Product, Price, Place, and Promotion), Dominos has also been efficient in incorporating the 4Cs or customer viewpoints in its marketing (Pride, Hughes, & Kapoor, 2013 p. 23). These are Customer solution, cost, convenience, and communication. With regard to product, one of the four Ps of a marketing mix, Dominos has been able to deliver high quality food products to its customers. Domino’s Pizza product is designed to fit the needs of specific categories of customers. For instance, the company designs pizza for both vegetarian and non-vegetarian customers. The ability of the restaurant to localize its pizza flavors, which are also served fresh and hot depending on the preferences of the customers (Kotler, Kartajaya, & Setiawan, 2010 p. 41). However, besides the Pizza’s, the company also offers other products and services to its esteemed customers throughout the UK. Some of the company’s products include beverages and other fast foods such as bread sticks, cheese, and various forms of pasta to spice up their menu. Nevertheless, despite this broad range of products on its menu’s Dominos is largely known for its Pizza, which is its bestselling product. Price is the other important factor for consideration in a company’s marketing mix. The company targets customers in the lower middle class as well as those in the upper middle class. As such, its product prices are set to reflect the income levels of these market segments in the UK market (Kahn, 2007 p. 27). Therefore, Domino’s Pizzas are relatively affordable for the majority of its customers. The company pursues to offer value to its customers through various pricing schemes and product discounts. Place is also important in a company’s marketing strategy. In this regard, Dominos has been very effective in creating a direct channel of communicating with its customers (Richter, 2012 p. 48). With its extensive food delivery scheme, the company is able to reach out to customers in different places in locations where it operates. The direct marketing channels enable customers to call the restaurant directly to request for product deliveries in their locations. In addition, the company has an far-reaching online presence, which allows customers to communicate directly across various online platforms making their requests. Finally, dominos uses various promotional schemes to reach out to its huge customer base. Dominos uses strategies such as customer discounts and free delivery services. For instance, some promotional campaigns for Dominos see the customers get a free Pizza whenever they purchase more pizzas. In other instances, the Dominos gives a 50% discount on the second pizza a customer buys (Daft, 2006 p. 45). Domino’s profit maximization strategy is based on the 4Cs of Customer solution, cost, convenience, and communication (Ramaswamy & Namakumari, 2009 p. 43). The company aims at providing solutions for customers in accessing food at their own convenience. Therefore, it has strengthened its delivery system with a team of many pizza delivery personnel responding to customer requests with immediate effect. Similarly, the company has also maintained its costs or product prices relatively affordable, thereby attracting many loyal customers. Dominos was also one of the first companies in the UK to open up its online presence back in 1999. This has increased its market reach and convenience for its customers who can easily make orders via the internet. Through the 4Cs strategy, Dominos has been able to build long term relations with its customers and attracting more loyal customers. This has enabled the organization to maximize its profits and remain at the helm of the industry. Pizza Hut Marketing Strategy Pizza hut employs the strategy of multiple products in its product range (Schweig, 2007 p. 23). As such, the company offers a variety of products to its customers, including beverages, pasta, deserts, and appetizers among others. However, pizza is the its main product, which is the main cash cow for the company. The company offers different kinds of pizza in terms of their sizes, targeting the different segments in its market. Its products are of high eminence and are often marketed under the same brand name, which has also turn out to be very popular in the UK. Pizza hut’s pricing strategy is that of price skimming. This implies that the company can offer its new products at prices higher than that of its competitors. However, with time, the product prices will reduce to the level of market prices (Kapoor, Paul, & Halder, 2011 p. 64). This enables the company to create a buzz in the market for its new products, thereby gaining the attention of customers. Furthermore, the company offers its pizza products for different sets of customers depending on their income levels. For instance the extreme pizza targets the affluent people in the market who can afford to pay an extra coin for the big sized pizza. However, there are other varieties for the lower income customers. Place occupies an important part in the company’s marketing efforts. The company has endeavored to open many locations in strategic places around the country. This is driven by the need to make its shops accessible to all customers (Kellow, Costain, & Beeken, 2011 p. 39). Besides, the company has a robust food delivery services that also see its customers get food delivered to them at their own convenience. Therefore, Pizza hut employs both direct and indirect marketing strategies. Finally, Pizza hut uses diverse strategies to market and promote its services in the market. For instance, the company engages in many promotional campaigns in the media platforms such as television, radio as well as the internet (Codita, 2011 p. 111). Furthermore, the company also offers discounts to its loyal customers as one way of promoting its products. Conclusion Both companies are alike in their operations, based on their marketing strategies. They both offer pizza as main products, which has been a source of their competition in the market. However, the difference between the two companies comes from the fact that Dominos was one of the first fast food outlets in the UK. This has enabled it to build a huge customer base in the country, by attracting a host of loyal customers over the years. Furthermore its rapid expansion around the UK as well as its extensive internet services has been at the forefront of its success in recent years. On the other hand, there is a lot of room for improvement for Pizza Hut in order to catch up with the competition. For instance, the company needs to expand rapidly in order to be able to reach out to as many customers as possible. In addition, there is need for Pizza hut to employ a localization strategy that will see its pizza products have localized flavors for its customers in different places. References Ahlstrom, D., & Bruton, G. D. 2010. International management: Strategy and culture in the emerging world. South-Western Cengage Learning, Mason, OH. Carroll, A. B. 2009. Business & society: Ethics & stakeholder management. South-Western Cengage Learning, Mason, OH. Codita, R. 2011. Contingency factors of marketing-mix standardization: German consumer goods companies in Central and Eastern Europe. Wiesbaden: Gabler. Daft, R. L. 2006. Organization theory and design. Mason, OH: Thompson-South Western. Kahn, E. (2007). Innovate or Perish: Managing the Enduring Technology Company in the Global Market. John Wiley & Sons, Inc., Hoboken. Kapoor, R., Paul, J., & Halder, B. 2011. 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