Marketing Strategies of Pizza Hut - Report Example

RESEARCH SKILLS: PIZZA HUT Table of Contents Table of Contents 2 3 Section One: Introduction 4 Research Objectives 4 Research questions 4 Importance of the Study 4 Limitations of the study 5 Section Two: Literature review 5 Marketing strategy of Pizza Hut 5 Section Three: Research Methodology 6 Section Four: Findings and Discussion of findings 7 Section five: Conclusions and Recommendations 8 References 9 Abstract Pizza Hut is a well-known brand that deals with the production of custom made pizzas all over the world. It began as a humble company that achieved profitability over the years to be listed in the New York Stock exchange. Its sole aim was to increase its market share through the allocation of franchises to entrepreneurs all over the world (Daszkowski, 2012). This has seen the brand expand its networks to countries all over the world. Pizza Hut employs various marketing strategies including free pizza delivery to consumers and use of unique toppings. It also employs the use of efficient customer satisfaction mechanisms that ensure that consumers receive their order steaming hot. It has employed marketing strategies that are based on market dominance and product innovations that have enabled it achieve profitability even in the face of changing consumer trends (Dobkin, 2007). The primary research conducted among business owners discovered that they were willing to invest in the Pizza Hut Franchise owing to the market association. As a result, Pizza Hut has improved its market strategy in order to keep up with the changing trends in the competitive pizza market. Section One: Introduction Pizza hut, founded in 1958, is a pizza parlor that was opened by two brothers Dan and Frank Carnery. To start the business, they borrowed $600 from their mother then together with John Bender, rented a small building. Initially, they used second hand equipment and went on to expand to more modern equipment. They currently make original style pizzas that are served up on a variety of crusts. The marketing strategy is one of the most important aspects of every top brand that allows it to capture the attention of its target market. Research Objectives 1. To determine the marketing strategy that has been used by Pizza Hut. 2. To evaluate investor perceptions on Pizza Hut as a franchise. 3. To evaluate consumer perceptions of Pizza Hut products. Research questions In order to understand the marketing strategy that has been implemented by Pizza Hut, the following research questions will be addressed. 1. What marketing strategies has Pizza Hut put in place over the years to ensure that it maintains its position in the market? 2. Why is Pizza Hut a successful brand? 3. Why are customers of Pizza Hut satisfied with its pizzas? Importance of the Study A well-structured marketing strategy has been known to be the basis of success for any brand in the market. The study seeks to outline how a well-structured marketing strategy has enabled a small company achieve a huge market share to the extent of being listed in the Stock Exchange. Insight into the marketing strategy that has been employed by Pizza Hut will allow for an analysis on the factors that are required to achieve success in markets all over the world. Limitations of the study The research had limitations in both time and resources allowing it to be largely exploratory in nature. A survey was undertaken through the use of questionnaires and further information collected from secondary sources. Section Two: Literature review Pizza Hut grew as a result of the intense marketing campaigns that were initiated as the restaurant idea became profitable. It adopted the concept of franchising which realized its first franchise being opened up in Canada in 1964 (Daszkowski, 2012). Under this concept, Pizza Hut would sell the use of its name among other proprietary rights to individuals all over the world in exchange for a share in the profits of the franchise. In this way, Pizza Hut was able to increase their market share and achieve and increase in overall profitability. The company grew in market share and was listed at the New York Stock Exchange in 1972 when it offered 410,000 shares of common stock to the public (Daszkowski, 2012). It also expanded by acquiring other big names in the restaurant industry like Taco Kid, Next Door and Flaming Steer. Later on, it strategically merged with PepsiCo, a global soft drink company that further improved its position in the market. Marketing strategy of Pizza Hut Pizza Hut employed the use of personal customer satisfaction that ensured that the individual customer was satisfied with the type of pizza that they received. This was done through the introduction of “Personal Pan Pizza” that provided customers with a five minute guarantee that their single serving pizzas would arrive quickly and steaming hot. This was done with the aim of proposing the meals as a quick lunch time fix that would fit into everybodys needs. The “Hand-Tossed Traditional Pizza” was also introduced that allowed customers to select their own toppings varying in type and quantity that was tailored to every consumers needs (DeVilartis & Shrader., 2005). The company also introduced the free delivery service that enabled the customer to order and receive their pizza from specified locations within the city. The corporation also employed the system of franchising that allowed it to spread all over the country and even internationally to increase its market share. Section Three: Research Methodology A cross sectional study was conducted in which the study process was conducted at a point in time. Different people with different interests and different socio-economic and demographic characteristics were used in the study to ensure that the information that is captured is variable. As a result of the varied information types and levels that will be collected, both qualitative and quantitative methods of data collection will be employed. Quantifiable data including numbers and figures will be collected as well as less quantifiable data like perceptions and preferences that will be collected using more qualitative methods. Primary research will be conducted through the use of survey questionnaires that were administered to entrepreneurs in selected areas. A two stage sampling criteria was employed whereby purposive sampling was used to identify entrepreneurs and consumers to be included in the study. These were identified from a LinkedIn, a website that handles professional connections among people all over the world. Random sampling was then used to identify thirty six entrepreneurs and forty five consumers as respondents to whom an online questionnaire was administered and the responses collected (Lee, 2001). Secondary sources of information were also used to acquire information on past trends and market figures for Pizza Hut since its inception. This has done through the use of journals, periodicals and articles that were available over the internet. The research approach was inductive involving the use of observation of facts which are then used to formulate a hypothesis that can be tested and proven as a theory. This observation detailed the marketing strategy that had been used by Pizza Hut and the success that it had achieved over the years within its domain. Section Four: Findings and Discussion of findings Out of the forty five respondents to whom the questionnaire was administered, 80% were aware of the existence of the company indicating the market presence that the company still enjoyed. The results from the survey indicated that most of the customers (85%) preferred pizza from company because of the delivery service that they found most convenient. Out of these, 50 percent had actually tried their “Hand-Tossed Traditional Pizza” service and all of them found it pleasant. Those who had not tried the service reported that they would go back to Pizza Hut to actually try out this service. This showed that consumers preferred pizza that was custom made to their liking denoting that an understanding of customer preference is vital to service delivery. 57 percent of the respondents indicated that they found the toppings served by Pizza Hut had unique flavors and could not be compared to those of other companies. However, “Personal Pan Pizza “ service was not a determining factor that made customers prefer Pizza Hut products with 99% of the respondents explaining that most pizza companies and other restaurants also offer the same service. Customers however strongly noted that if the company ceased to offer the service then they would not consume their products. This indicated the strong need for high standards in product quality as a marketing strategy and the need for producers to be in touch with market trends and produce quality products in line with their competition. Out of the thirty six entrepreneurs to whom the questionnaire was administered, 99% were aware of the existence of the company and the products that it specialized in. This denoted the strong influence that the company still had on among entrepreneurs. Given enough capital and an opportunity, 72% stated that would be interested in purchasing a franchise of the business and operating it in their various companies. Out of these, 15% were willing to invest because they believed that the pizza businesses were lucrative and every expanding. A further 6% were willing to try it out as a hobby while the remaining 89% were interested in purchasing the company because of the market share and reputation it had acquired as a result of the other franchises all over the world. This depicted the role that franchising plays in marketing of businesses in the world. A company that is well known and has branches all over the country or even the world is more likely to be trusted than local companies. Franchising is one of the marketing strategies that Pizza Hut employed in ensuring that it increased its market share and achieved profitability. Secondary data from journals and articles also indicated that Pizza Hut was still very profitable owing to the mergers it had formed with other companies. It also provided a review of the various services it offered including free customer delivery services that gave it a competitive edge above the rest. Section five: Conclusions and Recommendations Pizza Hut is one of the companies that have stood the test of time and still maintained profitability even in the face of changing economic times and trends. Consumers all over the world can still develop a taste for pizzas from this company even as new pizza companies emerge. This has been achieved through a dynamic marketing strategy that was initiated by the company such as franchising that has realized increased market share. Free pizza delivery is one service that the company was previously not offering but in the face of changing consumer trends, the company has evolved to offer these services in order to meet the consumer needs. If this trend is anything to go by then Pizza Hut is one company that will be there for many more years to come. References Bachmeier, Kristina. 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