Comparative Analysis of Dominos and Pizza hut

Food Industry Comparative analysis between Domino’s pizza and Pizza Hut

2012-13

Acknowledgement This report bears the imprint of many people and without their support it would not have existed. First of all we would like to express our sincere indebtedness and profound gratitude to our parents whose support in all manners had made us capable to complete this project. We would like to express our gratitude to Ms. Shabana Khan for providing us the guidelines and allowing us to undertake a project of this nature. We would also like to thank “MITHIBAI COLLEGE” for timely availability of books which have been an important input into completion of this Report. We are equally thankful to our friends for their valuable and timely inputs in the progress of the Report.

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Contents No Topic

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Abstract

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Introduction

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Scope of study

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Objective of study

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Design of study • Methodology used • Source of data • Sample plan • Sampling method • Data collection Instrument • Limitations faced

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Findings

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Strategies • Strategic formulation

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•

Creation, communication and Capturing Value

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Brand Awareness through television Ad

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Conclusion

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Recommendations

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References

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List of Graphs and Pies No.

Graph and pie

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Age Bifurcation

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2

Frequency of visit in pizza outlets

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3

Pizza Parlor generally visited or ordered from

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4

Brand preferred in terms of quality of food offered

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Brand that provides more variety/options in pizza

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Brand that provides more variety/option in menu other than pizza i.e. appetizers, 10 beverages, dessert, etc.

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Preference between Domino’s Pizza and Pizza Hut in terms of ambience/ a place for

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Preference between Domino’s Pizza and Pizza Hut in terms of customer service.

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Brand that is pocket friendly.

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Brand which has less waiting time in outlet.

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Preference between Domino’s Pizza and Pizza Hut in terms of home delivery service.

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Abstract With increasing disposable income and changing attitude, the exposure to various global cuisines or local delicacies, the Indian food lovers are always ready to taste both. The demand for various fast food items is rising in India. The most popular of them all is Pizza, which is now one of the most favorite fast food items of the Indians. The major in Indian Pizza industry are Pizza Hut and Domino’s Pizza India. From the comparative study of these two Fast food chains Pizza hut and Domino’s we understand that on which front which company is weaker than other and on which front which company is better than other. Pizza hut is the largest pizza restaurant company in the world with12000 outlets in 90 countries and it enters in INDIA in1996 whereas The Domino’s pizza enters in INDIA in 1995and now it has 220 outlets in India. But after all Domino’s which has First mover advantage and customer base; cannot succeed as most favorable brand in between the people of those who likes Pizzas according to survey. From this study we know that Pizza Hut is preferred by customers over Domino’s Pizza in factors such as quality of pizza, dining experience, ambience, and customer service. In price category the price of the pizza is less in Domino’s rather than pizza-hut. Domino’s Pizza has an edge over the Pizza Hut in factors such as price and home delivery services.

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Introduction With increasing disposable income and changing attitude, the exposure to various global cuisines or local delicacies, the Indian food lovers are always ready to taste both. The demand for various fast food items is rising in India. The most popular of them all is Pizza, which is now one of the most favorite fast food items of the Indians. Major companies in this field are as follows: 1. Pizza Hut 2. Domino’s 3. Papa John’s 4. Smokin’ Joes Fast food is one of the world’s largest fast growing industry types. India’s fast food industry is growing by 40%. The 6000 crore fast food retail industry is mainly dominated by the multinational players and the key players which are active in the research of the food retailing. Because of the availability of raw material for fast food, global chains are flooding into the country. The percentage share held by food service of total consumer expenditure on food has increased from a very low base to stand at 2.6% in 2001. Eating at home remains very much ingrained in Indian culture and changes in eating habits are very slow moving with barriers to eating out entrenched in certain sectors of Indian society. The growth in nuclear families, particularly in urban India, exposure to global media and western cuisine and an increasing number of women joining the workforce have had an impact on eating out trends. Domino's Pizza and Pizza Hut, the two big US fast food chains entered India in 1996. Each claimed it had the original recipe as the Italians first wrote it and was trying desperately to create brand loyalty. Domino's and Pizza Hut - tried to grab as large a slice of the pizza pie as possible. While Pizza Hut relied on its USP of "dining experience", Domino's USP was a 30-minute delivery frame. To penetrate the market, both the players redefined their recipes to suit the Indian tastes. Domino's went a step ahead by differentiating regions and applying the taste-factor accordingly. Domino's also made ordering simpler through a single toll-free number throughout the country. Domino's and Pizza Hut expanded their market ever since they entered India. Pizza Hut is the world's largest casual dining restaurant chain with over 13,000 restaurants across 97 countries and 143 stores across 34 cities in India, including Delhi, Mumbai, Bangalore, Chennai, Kolkata, Hyderabad, Pune, and Chandigarh and Yum! is in the process of opening Pizza Hut restaurants at many more locations to service a larger customer base across the country. Today Domino's Pizza India has grown into a countrywide network of more than 300 stores with a team of over 9,000 people. According to the India Retail Report 2009, Domino’s Pizza were the largest Pizza chain in India and the fastest growing multinational fast food chain between 2006-2007 and 2008-2009 in terms of number of stores.

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Scope of the Study Scope of the study is to find which brand among Domino’s Pizza and pizza hut is more preferred by the consumer and also preferred on which factors.

Objectives • • • •

To find out the market strategies of both the brands. To find out the comparative analysis between Pizza Hut and Domino’s Pizza. To check out the preferences of the people or the consumers. To find out which brand i.e. Domino’s Pizza or Pizza hut is more preferred by people.

Design of Study •

Methodology used: The methodology used in our study is Exploratory Research. As the study is conducted to explore the mind sets of the regular customers regarding preference between Domino’s Pizza and Pizza hut and also preference factors.

• Source of Data: Primary Data: It includes questionnaires, survey and word of mouth. Secondary Data: The Secondary data used includes Company records, past data records, internet sources. •

Sampling Plan: The Sample size used for this study is 50 respondents who have experienced the service of Pizza hut and Domino’s Pizza.

•

Sampling Method: The method used for collecting the data is Convenient sampling which is a form of non- probability sampling. Convenience sampling is a non-probability sampling technique where subjects are selected because of their convenient accessibility and proximity to the researcher.

•

Data collection instrument: Data was collected using the Questionnaire method. A questionnaire is a research instrument consisting of a series of questions and other prompts for the purpose of gathering information from respondents.

Limitations Faced: •

Reluctant Respondents

•

Also the sample size is too small and it is based on convenient sampling so the conclusion cannot be generalized to the entire population.

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Finding and Discussions Research study has been conducted by our group for comparative analysis of Pizza Hut and Domino’s Pizza India to find out which is the most preferred brand. The total numbers of respondents were 50 and the age bifurcation is as follows:

Age Bifurcation Age Group 0-15 16-30 31 - 45 46 & above Total

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No of people 2 30 9 4 50

Age Bifurcation 35

35 30 25 20 15

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10 5

4 2

0 0 to 15

16 to 30

31 to 45

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46 and above

Form the survey conducted of 50 respondents our group discovered the following facts:

1) Frequency of visit in pizza outlets

From the pie chart, we can see that around 3/5 th of the people prefer to go to pizza outlets once a month, the second highest being 24% which is the number of people going once in 2 weeks. This is followed by 10% and 4% which is people going weekly and once in 3 months respectively. 2)

Pizza Outlet generally visited or ordered from

The maximum being Domino’s Pizza with a customer liking of 44% followed by Pizza Hut with 40% and others being 16%.

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3) Brand preferred in terms of quality of food offered

The customers’ preference of pizzas in terms of quality favors in terms of Pizza Hut with 56% and Domino’s Pizza with 44%.

4) Brand that provides more variety/options in pizza

According to our survey, the customers we got had an equal preference to Domino’s Pizza as well as Pizza Hut in terms of variety of pizzas offered.

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5)

Brand that provides more variety/option in menu other than pizza i.e. appetizers, beverages, dessert, etc.

Pizza Hut leads with 60% with customers’ opinion of food other than pizzas and Domino’s Pizza then has 40% remaining share. 6)

Preference between Domino’s Pizza and Pizza Hut in terms of ambience/ a place for dining.

Domino’s Pizza has set its image as home delivering pizza hence it has a low customer preference of 30% in terms of ambience whereas Pizza Hut has 70%. 11

7) Preference between Domino’s Pizza and Pizza Hut in terms of customer service.

Customer service of Pizza Hut is rated better with 60% of customer preference followed by Domino’s Pizza with 40%.

8) Brand that is pocket friendly.

Domino’s Pizza is considered more pocket friendly with a share of 64% by our sample and Pizza Hut is 36%.

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9) Brand which has less waiting time in outlet

The waiting time at outlets of both Pizza Hut and Domino’s Pizza are almost the same, Domino’s Pizza being 52% and Pizza Hut being 48%.

10) Preference between Domino’s Pizza and Pizza Hut in terms of home delivery service.

Domino’s Pizza, who has set its image as home delivering pizzas, leads the consumer preference with 80% followed by Pizza Hut with 20%.

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Strategies of Pizza Hut and Domino’s Pizza Overall both the companies achieved what they wanted to as for Domino’s Pizza they have achieved in positioning themselves as the fastest serving pizza outlet and quenching the hunger. Pizza Hut has come to become synonymous with the “best pizzas under one roof”. They have positioned themselves for their unique dining experience. Thus from the market feedback, it can be seen that even customers feel the same as what the company wants them to.

1) Strategic Formulation Domino’s Pizza: Overall Cost Leadership, Differentiation and Focus This is achieved very effectively by Domino’s Pizza as they do not intend to lose their focus from delivering pizzas at home. 70% of their Domino’s Pizza brand thus relates mainly to service & delivery neither they promote their in dining experience nor they spend revenue for it. Domino's vision is focused on “Exceptional people on a mission to be the best pizza delivery company in the world! ´ Thus Domino’s Pizza is able to provide good pizzas at relatively lower rate as they don’t spend much for the restaurant. Pizza Hut’s: Premium price Pizza Hut is committed for providing uncompromising product quality, offering customers the highest value for money and giving service that is warm, friendly and personal. They stress heavily on the dining experience and the ambience. Thus at each point company charges a premium. Thus Pizzas from Pizza Hut costs a premium hence their customers also changes to high income groups.

2) Creation, Communication and Capturing Value Domino’s Pizza Domino’s Pizza India has always maintained its position in market with its constant product innovation and maintenance of stringent service standards. More importantly, it has established a reputation for being home delivery specialist capable of delivering pizza within 30 minutes. Domino's Pizza constantly strives to develop products that suit the tastes of its consumers and hence delighting them. Domino's believes strongly in the strategy of “Think global and act local” Thus, time and again Domino's Pizza has been innovating with delicious new products such as crusts, toppings and flavors suitable to the taste buds of Indian Consumers. Further, providing value for money at affordable products to the consumers has been Domino’s Pizza motto. Initiatives such as Fun Meal and Pizza Mania have been extremely popular with consumers. The Brand Positioning of ³Khushiyon Ki Home Delivery´ (Happiness Home delivered) is the emotional benefit Domino’s Pizza offer to consumers. Delicacies that do not rip wallets have always got the crowd coming back to the Domino’s Pizza although its ambience is not up to that of its competitors. They have the maximum offers with respect to the discounts they offer throughout the year. Thus the customer has the maximum incentive to come back to Domino’s Pizza. "Hungry Kya?" promotion where hunger gets quelled in less than 30 minutes was a great value proposition. All other activities, be it new variants, great service, timely deliveries or more for the same price the effort of Domino’s Pizza has always been directed towards making its customers happy, creating, communicating and delivering value.

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Pizza Hut Worldwide and in India, pizza hut has become synonymous with the “best pizza under one roof” Pizza hut is committed to providing uncompromising product quality, offering customers the highest value for money and giving service that is warm, friendly and personal. A critical factor in pizza hut’s success has been its unique dining experience. One of the strategies they adapted was that the crewmembers at Pizza Hut break into a Boogie at restaurants in Delhi and Mumbai and do the Bhangra in Chandigarh and Amritsar. While a bell hangs at each Pizza Hut restaurant, which is rung by customers who as they leave wish to thank the servers for yet another memorable visit. Workforce of Pizza Hut is chosen with the motto “Together we grow” with primary concern being quality of service, be it in terms of delivery or quality of pizzas. Another factor in Pizza Hut’s success has been a menu that has constantly evolved and expanded to cater to the changing needs and specific preferences of customers in different parts of the world. In having understood the pulse of the customers in India, Pizza Hut has clearly established itself as a brand with an Indian heart. Besides offering an extensive range of vegetarian pizzas, it was the first pizza chain to open a 100% vegetarian restaurant in India in Surat and later in Ahmedabad and Chowpatty, where it offers a Jain menu sans all root based ingredients. Moreover Pizza Hut is not just a hangout zone for youngsters. It organizes birthday bashes, kitty parties and corporate lunches. They also have a variety of combinations of menu items which a customer can choose so that both the customer and the company can have a win-win situation. The company can have the maximum of the consumer surplus at the same time the consumer might feel that this was the best offer. From the menu card one can see the family size variants and the different pizza combinations in the same one pizza are all the different ways of pricing. Once the customer dines/orders @ home, normally discount coupons are given to the customer so that there is an incentive for the customer to order from pizza hut. Thus customers are forced to maintain loyalty towards pizza hut.

3) Brand Building Through Advertisement Domino’s Pizza and Pizza Hut initially restricted their ad strategy to banners, hoardings and specific promotions. In August 2000, Domino’s Pizza launched the “Hungry Kya?” sequence of advertisement on television. A company official said, “We realized that a pizza couldn’t be slotted- it could be a snack, then again it could also be a complete meal. The only definite common link between Domino’s Pizza and eating was hunger platform. This was followed by Pizza huts first campaign in July 2001 which said “Good time starts with great pizzas”. The ad was aired during all important programs on star plus, Sony, max, star movies, Hbo, AXN and MTV

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Conclusion: We come to a conclusion that: Both the companies are good in achieving their goal and are equally good in achieving what they intend to. Pizza Hut is preferred over Domino’s Pizza in terms of • Varity of Pizza’s •

Good ambience

•

Services offered

•

Quality of pizza’s

•

Waiting time in the outlet

Domino’s is being preferred over pizza-hut in terms of: • Door step services •

Low pricing

So, According to our survey, we can say that due to these qualities Pizzah u t d o m i n a t e s Domino’s Pizza

Recommendations For Domino’s Pizza •

Increase varieties in Pizza’s.

•

Make good ambience in outlets: the dining conditions have to be changed drastically if Domino’s Pizza to target premium segment of customer. They are way behind in dining experience compared to pizza hut

For Pizza-Hut . •

Should focus on Low price customers: reduce the menu cats, it is expensive for middle class Indian.

•

Make Door Step services better.

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References • • • • •

http://www.scribd.com/doc/16314990/Comparative-Analysis-Between-Pizza-Hut-andDomminos http://www.scribd.com/doc/25371457/Pizza-Hut-and-Dominos-marketing-strategy http://www.scribd.com/doc/42978212/Pizza-Hut-and-Dominos-A-comparative-analysis http://www.pizzahut.co.in/ http://www.dominos.co.in/

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Questionnaire The objective of this questionnaire is to understand which brand among Domino’s Pizza and Pizza Hut is more preferred and why is it preferred

1. Name: 2. Age: a.

0-15

b.

16-30

c.

31-45

d.

46 & above

3. Occupation: a. Student b.

Service

c.

Business

4. Gender: a. Male b. Female

5. How often do you visit pizza outlets? a. Weekly b. Once in two weeks 18

c. Once in a month d. once in 3 months

6. Which Pizza Outlet you generally visit or order from? a. Pizza Hut b. Domino’s Pizza c. Others

7. Which brand you prefer in terms of quality of food offered? a. Pizza Hut b. Domino’s Pizza

8. Which brand provides more variety/options in pizza? a. Pizza Hut b. Domino’s Pizza

9. Which brand provides more variety/option in menu other than pizza i.e. appetizers, beverages, dessert, etc.? a. Pizza Hut b. Domino’s Pizza

10. What do you prefer in terms of ambience/ a place for dining? a. Pizza Hut b. Domino’s Pizza 19

11. What do you prefer in terms of customer service? a. Pizza Hut b. Domino’s Pizza

12. Which brand is more pocket friendly? a. Pizza Hut b. Domino’s Pizza

13. Which among the two brands has less waiting time in outlet? a. Pizza Hut b. Domino’s Pizza

14. What do you prefer for home delivery service? a. Pizza Hut b. Domino’s Pizza

Thank You

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