Pizza Hut and Dominos marketing strategy

Marketing management - I The brand strategy analysis exercise

In-depth comparative analysis of marketing strategies followed by

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GROUP ASSIGNMENT SUBMITTED BYANITHA KAVERI – 09009 C.SUBBU – 09029 KARTHIK KRISHNAN – 09049 POOJA NAIR – 09069 SANKAR RAJAN – 09091 SUMAN GHOSH – 09111

AMRITA SCHOOL OF BUSINESS, ETTIMADAI. 1   

Contents    INTRODUCTION ....................................................................................................................................... 3  REASONS FOR EMERGENCE .................................................................................................................... 4  MARKET SHARE AND MAJOR PLAYERS ................................................................................................... 5  MAJOR FORCES SHAPING THE TRAJECTORY OF THE INDUSTRY ............................................................. 6  CUSTOMERS .......................................................................................................................................... 12  CORE COMPETENCIES ........................................................................................................................... 13  ACCESS TO CRUCIAL RESOURCES .......................................................................................................... 15  SWOT ANALYSIS .................................................................................................................................... 17  COMPETITORS ....................................................................................................................................... 19  CONTEXT ............................................................................................................................................... 21  SEGMENTATION .................................................................................................................................... 23  TARGETING............................................................................................................................................ 24  POSITIONING ......................................................................................................................................... 25  PRODUCT .............................................................................................................................................. 26  PLACE .................................................................................................................................................... 40  PRICING OF DOMINO’S ......................................................................................................................... 44  PRICING OF PIZZA HUT .......................................................................................................................... 46  PROMOTION ......................................................................................................................................... 48  MARKET FEEDBACK & CONTROL MECHANISMS ................................................................................... 59  ANALYSIS AND INTERPRETATION .......................................................................................................... 67  MARKETING STRATEGIES ...................................................................................................................... 71  SUGGESTIONS ....................................................................................................................................... 75  REFERENCES .......................................................................................................................................... 76   

2   

INTRODUCTION Fast food is one of the world’s largest growing food types. India’s fast food industry is growing by 40% .the multinational segment of Indian fast food industry is up to Rs. 20 billion, a figure which is expected to zoom more than Rs.30 billion by 2010. In last 6 years, foreign investment in this sector stood at rs.3600 million which is about one-fourth of total investment made in this sector. Because of the availability of raw material for fast food, global chains are flooding into the country. The percentage share held by foodservice 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.

Major players in fast food are: •

McDonalds’

•

KFC

•

Pizza hut

•

Dominos pizza

•

Café coffee day

•

Barista

•

Subway

The main reason behind the success of the multinational chains is their expertise in product development, sourcing practices, quality standards, service levels and standardized operating procedures in their restaurants, a strength that they have developed over years of experience around the world. The home grown chains have in the past few years of competition with the mnc’s, learnt a few things but there is still a lot of scope for improvement. *Extract taken from a study of Indian retail food sector

3   

REASONS FOR EMERGENCE

Gender roles: gender roles are now changing. Females have started working outside. So, they have no time for their home and cooking food. Fast food is an easy way out because these can be prepared easily. Customer sophistication and confidence: Consumers are becoming more sophisticated now. They do not want to prepare food and spend their time and energy in house hold works. They are building their confidence more on ‘ready to eat and easy to serve’ kind of foods Paucity of time: People have no time for cooking. Because of emergence of working women and also number of other entertainment items. Most of the time either people work or want to enjoy with their family. Double income group: Emergence of double income group leads to increase in disposable income. Now people have more disposable income so they can spend easily in fast food and other activities. Large population: India being a second largest country in terms of population possesses large potential market for all the products/services. This results into entry of large number of fast food players in the country. Relaxation in rules and regulations, with the economic liberalization of 1991, most of the tariff and non tariff barriers from the Indian boundaries are either removed or minimized. This helped significantly the MNC’s to enter in the country.

*Extract taken from economic reforms in India

4   

MARKET SHARE E AND MAJOR M P PLAYERS S

w Rs.60 00 Crore. Thhe major players in thee market The orgganized pizzza market inn India is worth are pizzza hut and dominos d whhose market share are arround 45% and 35% reespectively. Other players p form m the rest 200%

Brande ed Pizzaa Marke et Share Otherss Pizza Hut Pizza hut Do ominos

Dominos

Otthers

Other players p mainnly are •

Smokin joee’s

•

Garcia’s

•

Papa john’ss

•

Us pizza

Theese players mainly givve competittion to pizzza hut and dominos iin tier I citties like Mum mbai, Banggalore, Chennnai etc. They do not haave much presence p in ttier ii cities

5   

MAJOR FORCES SHAPING THE TRAJECTORY OF THE INDUSTRY

New  Entrants

Supplier  Power

Industry  Competitiors

Buying  Power

Substitutes

Industry competition In tier I city like Mumbai, pizza hut and dominos are facing a stiff competition from these providers (with respect to branded pizzas) •

Pizza corner

•

Smokin joe’s

•

Us pizza

•

Garcia’s

In tier II cities, dominos and pizza hut are still the major players.

6   

Threat of new entrants With the economic reforms and liberalization, many new entrants also want the revenue of the 200 billion Indian fast food industry. There are many new entrants in the branded pizza industry some of them are •

Papa john’s pizza

•

Us pizza

They have captured a lot of customers with their new style and discount offers. Much young crowd flock their restaurants and their taste buds are getting modified. Now the new entrants are also likely to enter the tier ii cities and make their presence. Thus pizza hut and dominos have to rethink their strategies so as to retain their customers. They have to constantly differentiate their services from the newer entrants

Substitutes There are lots of substitutes which are available to choose with respect to the fast food industry some of them are •

Any restaurant

•

Mcdonald’s

•

Barista

•

Cafe coffee day

•

Chinese restaurants ( mainland china)

Largely it depends upon the customers what they want to have. Generally it is assumed that when people dine outside, they think of having pizza at least 25% of time*. Thus if the brand recall of a particular company is good, more people will tend to go there. Higher the quality of food, service, higher will be product recall and sales

* This information is obtained from the primary data

7   

Buyer’s bargaining power Pizza hut and dominos have higher market reach and greater visibility in the market with respect to the pizza industry and hence they command supplies at lower rate. However their counterparts, competitors cannot command such lower prices. Thus the muscle power of pizza hut and dominos is way beyond the others. Supplier’s growing bargaining power Supplies till now were not a problem. But with the advent of the rising food costs (raw material inflation). Suppliers are not ready to supply items at the normal rate. Thus supplier’s muscle power grew only doe to inflation. Thus the company either has to increase the menu costs or reduce the operational costs to recover. Failing to do this will make the company into losses or to lose out in the industry. Trends in the Indian market Marketing to children Fast food outlets in India target children’s as their major customers. They introduce varieties of things that will attract the children’s attention and by targeting children’s they automatically target their parents because children’s are always accompanied by their parents. Low level customer commitment Because of the large number of food retail outlets and also because of the tendency of customer to switch from one product to other, this industry faces low level customer commitment. Attracting different segments of the market Fast food outlets are introducing varieties of products in order to cater the demands of each and every segment of the market. They are introducing all categories of product so that people of all age, sex, class, income group etc can come and become a customer of their food line.

8   

The success of fast foods arose from the changes in the economic conditions 1. Many women or both parents now work 2. There are increased numbers of single-parent households 3. Long distances to school and work are common 4. There's often not enough time or opportunity to shop carefully for groceries, or to cook and eat with one's family. Especially on weekdays, fast food outside the home is the only solution

Brief history of the company, Indian operations (dominos) The domino’s brand was founded in the united states of America in 1960 by Thomas and James Monaghan. Since then, that business has grown into a global network of over 8,500 pizza stores in more than 60 countries, involving over 2,000 franchises. Over its 49-year history, domino’s has developed a simple business model focused on delivering quality pizzas in a timely manner. Domino’s pizza, inc., completed its initial public offering in 2004 and is listed on the New York stock exchange. (source:domino’s pizza, inc.) Domino's pizza India ltd. was incorporated in March 1995 as the master franchisee for India and Nepal, of domino's pizza international inc., of U.S.A. Moreover, the company holds the master franchisee rights for Sri Lanka and Bangladesh through its wholly owned subsidiary. Mr.Shyam.S.Bhatia and Mr.Hari.S.Bhartia of the jubilant organosys group are the promoters of the company. Dominos pizza India has a network of 274 stores, in 55 cities, in 20 states and union territories (as on 31st august 2009). According to the India retail report 2009,dominos are 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. Domino's vision is focused on " exceptional people on a mission to be the best pizza delivery company in the world! ". Domino's is committed to bringing fun, happiness and convenience to the lives of our consumers by delivering delicious pizzas to their doorstep in 30 minutes or less, and its efforts are aimed at fulfilling this commitment towards its large and evergrowing customer base. 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 9   

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 dominos motto. Initiatives such as fun meal and pizza mania have been extremely popular with consumers. The brand positioning of khushiyon ki home delivery (happiness home delivered) is the emotional benefit dominos offer to consumers. Major products they offer are pizzas, appetizers, pastas, cakes and beverages. Brief history of the company, Indian operations (pizza hut) Pizza hut was started in 1958, by two brothers frank and dan carney in wichita, kansas. They had the idea to open a pizza parlour. They borrowed $600 from their mother, and opened the very first pizza hut. In 1959, the first franchise unit opened in topeka, kansas. Ten years later, pizza hut was serving one million customers a week in their 310 locations. In 1970, pizza hut was put on the new york stock exchange under the ticker symbol piz. Until 1997, pepsi owned pizza hut, the company also controlled a vast network of fast-food operations that included kfc, pizza hut, and taco bell. With 29,000 locations across the world, the restaurant group was the largest in the world. However, pepsico decided to spin off its restaurant business as a separate company. Pizza hut is one of the flagship brands of yum! Brands, inc., which also has kfc, taco bell, a&w and long john silver’s under its umbrella. Pizza hut is the world’s largest pizza chain with over 12,500 restaurants across 91 countries In India, pizza hut has 137 restaurants across 36 cities, including delhi, mumbai, bangalore, chennai, kolkata, hyderabad, pune, and chandigarh amongst others. Yum! Is in the process of opening pizza hut restaurants at many more locations to service a larger customer base across the country Pizza hut vision and mission Worldwide and in India, pizza hut has come to become synonymous with the ‘best pizzas under one roof’. This is because at pizza hut the belief is that every pizza has its own magic, thus making it a destination product – which everyone seeks. It is this belief that has ignited the passion to create, innovate and serve the finest product the industry has to offer, while setting standards for others to strive to replicate. 10   

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. A critical factor in pizza hut’s success has been its unique dining experience. Crewmembers at pizza hut strive each day to provide ‘customer mania’ – the kind of service that ensures that every visit of the customer is a memorable one. A critical 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. Over the years pizza hut has also developed and successfully introduced a range of products especially suited to the Indian palate. These products like chicken tikka, spicy korma, picy paneer and the masala and tandoori pizzas have been a tremendous success. What has also given pizza hut acompetitive edge is that in addition to an extensive range of internationally renowned pizzas like the Italian, the proprietary pan pizza and stuffed crust, in India the menu offers the option of a complete meal. It includes appetizers, a salad bar - where the customers can make their own fresh salads, a range of soups, pastas and desserts etc.

11   

CU USTOME ERS For whom m the compaanies exist! Mosstly custom mers come at a Dominos for food an nd the otherrs for enjoyyment as theeir basic requuirement. Mostly M custoomers come to dominoss for take aw way pizzas while they come to pizzza hut for thhe dining exxperience. Their T unsatissfied need is either food or enjoym ment Mosst customers in domiinos are frrom the middle m incom me group or studentss whose dispposable incoomes are relatively low w. Generally y everyone finds the taaste of the pizzas p to be good. g Alsoo the locatioon of the reestaurant maakes a lot of differencee as many ppeople comee to dine due to its strattegic locatioon. Even we w had food d in the resttaurant and we also fo ound the minos for th heir relativeely lower prrice tastee to be greaat! People prreferred dom Influuence in buuying patternn Buyying patternn is also inffluenced byy the preferrred their choices due to their waards but mosstly for singgle adults thheir choices depends up pon them. Alsoo the brand recall off thhe restaurannts makes a lot of diffeerence. A haard core folllower of dom minos will have h food from dominoos only. Genneral buyingg pattern (thhis data is peertaining to coimbatoree city)

From thhe data, we can interprret that onlyy 20% of cu ustomers haave pizza veery frequenttly. (i.e., weekly once).at thee same timee 20% of cuustomers hav ve pizzas veery rarely

12   

CORE COMPETENCIES That which makes them different! Pizza hut Tracing footsteps Pizza hut is akin to the Indian heart and taste buds. Pizza hut has been able to capture the heart and soul of Indians. This, they achieved through rapid Indianization of pizzas. Chicken tikkas, tandoori range and spicy korma were welcomed by pizza lovers. In addition to this, pizza hut takes pride in having the only 100% vegetarian pizza hut in the world at ahmadabad, surat and mumbai’s chowpatty . It also has a special jain friendly menu without root based ingredients and even serves salad dressings without eggs!!! Through the looking glass Thinking out of the box was never new at pizza hut. With the “palat” campaign, they even nudged Indians to eat pizza backwards. The vehicle for this change was the stuffed crust pizza which has become a huge hit. The pizza’s outer crust has a stuffing of mozzarella cheese and one can run into people eating these pizzas backwards in many outlets. Talk about bringing changes!!! Pizza hut is really going global. Tuscani pastas that is truly italian is now at every pizza hut outlet. With changing tastes of Indians and greater acceptance of international cuisines, pizza hut has introduced 30 new items on its menu for this festival season. These include beverages, pasta and desserts. Pizza hut express outlets were launched at malls, airports, department stores and gas stations which offers a reduced version of the menu for globe trotters and busy bees. Moreover pizza hut is not just a hangout zone for youngsters. It organizes birthday bashes, kitty parties and corporate lunches. Pizza hut express outlets were launched at malls, airports, department stores and gas stations which offers a reduced version of the menu for globe trotters and busy bees.

13   

Dreamiing big Pizza hut h aims to be the num mber one resstaurant chaain in Indiaa and expeccts a turnover of $1 billion by 2015. The T yum reestaurants plans p to inv vest $150 million m in tthe next 5 years y to m the existiing 215. expand the numberr of outlets to 1000 from Dominos Pizzas topped t withh cheese annd happinesss, dominos is committed to put ann extra smile on its customeers’ faces, with a mission of “exxceptional people p on a mission too be the beest pizza deliveryy company in the worldd! ".

Tracing foootsteps Many pizzza lovers woould still remember the havocc that occuurred in mid m april 2009 in which ssome dull witted dominos employees posted a kitchen video v of doominos that clearly sho owed the lack of o sanitation in their kkitchen in youtube. y The viddeo attractedd millions of o views inn a few hou urs and was indeed viraal. Dominos did an excellennt job of criisis manageement and used u social media m to sprread a virall video in which w the companny presidennt took conttrol of the situation and a apologiized to the public, ann nounced separatiion of the company c froom wrong doers d and th heir prosecuution. He aalso guarantteed that such isssues will not n happenn again. Doominos cleearly proved that com mmunication n meant engagem ment, transpparency andd responsiveeness to the interactionn with custom mers. Throughh the lookinng glass It has never n been difficult for fo dominoss to find ou ut novel ways w to enthhrall its cusstomers. Delicaccies that do not rip waallets have always gott the crowdd coming baack to the dominos d althouggh its ambieence is not up u to that of its compeetitors. Khusshion ki hom me delivery y, where the ordeer gets delivvered in lesss than 30 minutes. m Alll other activvities, be it new varian nts, great service,, timely delliveries or more for thhe same pricce the efforrt of dominoos has alwaays been directedd towards making m its cuustomers haappy. 14   

ACCESS TO CRUCIAL RESOURCES The players behind the scene Pizza hut 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. The employees undergo extensive training to achieve technical finesse and leadership qualities. The newly chosen chefs are trained by the older and more experienced ones for a period of about 20 days. Pizza hut takes pride in walking the talk with the leadership principles of yum restaurants. These values include customer focus, trust in people, recognition, accountability, excellence, positive energy and team work. The customer focus is so high that they have separate systems in place to satisfy vegetarian customers. Vegetarian dishes are prepared and served using separate green spatulas. Moreover pizza hut is not just a hangout zone for youngsters. It organizes birthday bashes, kitty parties and corporate lunches. Pizza hut considers its employees to be the greatest strength. From the viewpoint of a customer it is the variety and taste of pizzas which is directly tied to its employees! The menu remains constant throughout the country and varieties are just added. The newest entrants into the Indian menu were stuff crust pizzas and cheesy bites Vegetables, meat, and other additives are supplied by one common vendor. Dominos Dominos has been voted as the best employer by leading news daily, times of India for the year 2009. The chefs of dominos pizza India are recruited by the hr department located in noida after careful evaluation. Employees at dominos are also smiling as they get incentives on meeting sales target and are also credited for their performance. Dominos has always been noted for the new items that spring up often in their menu. Marketing department does a careful analysis of growing demands and changing tastes and puts together the new menu that tantalises palates, says marketing head, mr. Harneeth singh.

15   

The menu remains same throughout the country and so do systems and processes. National level suppliers are a part of the dominos family. Dominos firmly believe that it is these systems and processes that enable it to get a better edge over its competitors. Dominos takes pride in its unbeatable delivery system. Delivery within 30 minutes campaign was indeed revolutionary and is the best core competency that makes dominos pizza a better experience than anyone else in the market.

16   

SWOT ANALYSIS

Pizza hut

17   

Dominos

18   

COM MPETITO ORS Claash of the tittans

Pizza hut The maj ajor competiitors who loock horns with w pizza hu ut are •

Pizza corneer

•

Dominos

•

Mcdonald’s

•

Barista

•

Cafe coffeee day

•

Subway

•

Papa john’ss minos Dom

  The major competitoors of dominos are •

Pizza hut

•

Pizza cornerr

•

Mcdonald’s

•

Barista

•

Cafe coffee day

•

Subway

•

Papa john’s

19   

An analysis of the competitors of pizza hut and dominos

Subway

Pizza corner

Kfc

Weakness

Strength

Still adapting to Indian taste

Kings of sandwich markets

Expensive

Customized preparations

Low investments in ad

Variety

Delivery not satisfactory

Quality

More of chicken, less scope

Variety masters for chicken

for veggies Mcdonald’s

Less variety

Burger leaders Fast service More offers

Papa john’s

Expensive

Excellent quality Variety

Ccd

Concentrate more on

Quality

beverages, less options on snacks

Barista

Expensive

Variety in beverages

Concentrate more on

Excellent ambience

beverages, less options on snacks Expensive

Variety in beverages Quality

20   

CONTEXT Pizza hut Adapting to economic environment In 1991 under the guidance of a visionary narasimha rao and his comrade manmohan singh India marched towards a new era of liberalisation, privatisation and globalisation. Trade barriers were eased and cultural barriers started dissolving. It was at this juncture that pizza hut made its infant steps in India, with its first outlet at bangalore. Today bangalore alone has a striking 19 outlets which remain busy till late night. pizza hut has 140 restaurants across 34 cities in India including metros. With its focus steadily on quality and variety, pizza hut has given a new dimension to regular pizza eat-outs. However the trifle higher prices may remain a concern for middle class Indians with lesser purchasing power and disposable income. The status is steadily improving as more of us embrace fast foods to suit the pace of our life. Embracing technology Locating stores and placing orders has never been easier for pizza hut loyals. With their virtual store kind website, pizza hut offers customers a wide range of options to choose from menu and avail new offers. Now orders can also be placed through mobile phones. High end technologies are used at the cash counters. Across socio-cultural barriers Food has no language. Good food is appreciated across the globe. Pizza hut has outlets in a better part of the world. It has taken immense effort to cater to its customers all over the world.

21   

Dominos Adapting to economic environment Dominos made their entry in India in 1995 when the country was marching into an era of liberalisation, privatisation and globalisation. These years marked the start of some of the greatest socio economic and cultural changes in our country. Dominos focuses on value to customers and offers pizzas and italian delicacies at affordable prices to middle class Indian consumers. Dominos has 274 outlets in 55 cities across 20 states. This is the largest in terms of fast food restaurants. Thus they have adapted to Indian economy in terms of purchasing power and disposable income of middle class Indians. Embracing technology Locating stores and placing orders has never been easier for pizza hut loyals. With their virtual store kind website, pizza hut offers customers a wide range of options to choose from menu and avail new offers. Now orders can also be placed through mobile phones. High end technologies are used at the cash counters. Across socio cultural barriers dominos outlets are prevalent in every small-big town across the world. Dominos has taken cues from changing preferences of its customers and put together a tantalising menu that attracts foodies around the globe

22   

SEGMENTATION Pizza hut Geographic Region – pizza hut outlets in different countries is a way of segmenting their market according to region and finding out potential markets. City – they also segment the cities as class i, class ii, metros, small towns. Demographic age – under 10years, 10 to 18 years, 18 to 25 years, 25 to 40 years, 40+ years. family income – middle class, upper middle class, high class dual income earners – yes/no Psychographic socio-economic class – urban (a1, a2, b1, b2, c, d) Behavioral occasions – birthdays, corporate lunches, marriages, parties, receptions loyalty status – low, medium, high user status – first time, regular, non-user

Dominos Geographic Region – dominos outlets in different countries is a way of segmenting their market according to region and finding out potential markets. City – they also segment the cities as class i, class ii, metros, small towns. Demographic age – under 13years, 13 to 21 years, 21 to 35 years, 35 to 50 years, 50+ years. family income – lower middle class, middle class, upper middle class, high class Psychographic socio-economic class – urban (a1, a2, b1, b2, c, d) Behavioral loyalty status – low, medium, high user status – first time, regular, non-user 23   

TARGETING

Pizza hut •

In geographic segment they targeted countries where there were no pizza hut outlets. Initially opened in class i cities and then have now moved to metros.

•

In demographic segment their main target is the young adults ranging from 25 years to 40 years and also dual income earners family. They aim basically at the upper middle class and the high class income families.

•

In psychographic segmentation they targeted a1, a2, b1 socio-economic classes.

•

In behavioral segmentation they targeted for occasions such as birthday bashes, corporate lunches. It was also found that they were targeting the first time users because they felt that their quality and taste would automatically make them a loyal customer.

Dominos •

In geographic segment they targeted countries where there were no dominos outlets. Initially opened in class ii cities and then have now moved to class i, metros and smaller towns.

•

In demographic segment their main target is the teenagers and college students (13 to 21years), young adults ranging from 21 years to 35 years. They aim basically at the middle class, upper middle class income families.

•

In psychographic segmentation they targeted a2, b1, b2 socio-economic classes.

•

In behavioral segmentation it was found that they were targeting the first time users and also their regular users.

24   

POSITIONING Points of difference The major point of difference between pizza hut and dominos is that pizza hut concentrates on in-restaurant dining. The ambience and decor of all pizza hut outlets are good and the outlets are spacious. When customers think of party and decide to have pizza, pizza hut only comes into their mind. Pizza hut also arranges kitty parties, birthday parties and business meetings in their outlets. Pizza hut has customized birthday party invites with different themes for the customers to choose and use it as invitations. Dominos aims at fast home delivery of pizza. Whenever customers want to have pizza at home, they think of calling dominos and ordering for it because they are experts in home delivery of pizza. “we earn 60% of our revenue from home delivery of pizzas and 40% from the restaurant sales” , says mr.navamani, manager of dominos, coimbatore v.o.c. Park outlet. In case of pizza hut, the major revenue is from restaurant sales. Points of parity Category points of parity – the main food item that is sold in pizza hut and dominos is pizza. As we all know, pizza comes under the fast food category of foods, both the companies must be good in speed of making and service. Irrespective of the cost, both pizza hut and dominos has to deliver or serve pizza in less time as compared to other main course food items served in other restaurants. Competitive points of parity – competitive points of parity in case of pizza hut is that, even though pizza hut is costlier than dominos, they have their own customers, who do not bother about spending, but look for quality and personalized service. When we visit pizza hut, they have restaurant hostess who will assign us tables and introduce the steward who will be taking care of us. This is generally a procedure that is followed in five star category hotels and pizza hut is also following it to emphasize on service quality. In case of dominos, they are not costly as pizza hut and do not offer great ambience to customers, but offer good pizzas at nominal price. They concentrate on turnover of covers and cater to customers who don’t have time to spend on food and just stop over for refreshment. Moreover, dominos mainly looks into home delivery of pizzas and are experts in it.

25   

PRODUCT

Pizza hut

Potential Product‐Pizza hut  Experience as a whole 

All offerings  inclusive

 

Value added  services

Value add ‐Augmented Product   

Hot pizza,good to Eat

Good Taste‐ Expected Product   

Pizza

Food – Basic Product   

Enjoyment

Basic Requirement – Core Benefit 

The customer value hierarchy From the above diagram we can see that pizza hut has enjoyment as a basic product but it provides food for it. Thus a person having a basic need of enjoyment can go to pizza hut and have pizza which is the company’s core product. Hot pizza and good taste are his expectation. Thus the company should ensure this by providing good pizza. The value adds services refer to the overall dining experience, the service quality, ambience etc.

26   

Product differentiation Worldwide and in India, pizza hut has come to become synonymous with the ‘best pizzas under one roof’. This is because at pizza hut the belief is that every pizza has its own magic, thus making it a destination product – which everyone seeks. It is this belief that has ignited the passion to create, innovate and serve the finest product the industry has to offer, while Setting standards for others to strive to replicate. 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. Crewmembers at pizza hut strive each day to provide ‘customer mania’ – the kind of service that ensures that every visit of the customer is a memorable one. Pizza features Pizza hut has many unique features of their product due to which it attracts the customers. The product is classified into non durable goods as it is a food item pizza hut differentiates itself with its competitors with respect to their wide range of offerings (menu items) one can find besides pizzas range of, pastas appetizers, cakes, and desserts etc. There are quite a lot number of menu items to choose Some of the items are •

Pizzas ( four different types)

27   

•

Pastas and salads

•

appetizers

•

Desserts

•

Beverages

28   

Mass customisation The main advantage of pizza hut is that one can customise his own pizza by selecting the bread and loading it with the toppings which one can select. This creates variety in the customers mind and thus one can enjoy whatever pizza hut can offer. The most unique feature is that there is ‘pan 4 all’ scheme where one can select 4 different types of vegetarian /non- vegetarian combinations of pizza! This is a unique way of offering as there are many consumers who come in groups where someone in the group may want a non- vegetarian pizza can avail the offer. Conformance quality: Pizza hut’s products have very high conformance quality i.e. All the products produced are identical and meet the promised specifications Style: pizza is delivered in hot pans and served in style. The toppings in the pizzas are also dressed in a good fashion. Thus having ‘food in style’ defines pizza hut’s experience. Service differentiation Ordering ease: Once one enters the restaurant immediately the assistants initiates the ordering process by providing the menu. All associates are well trained in english and can take order from any customer. Delivery Pizza hut’s style of delivering the pizza to the customer is quite an experience. The restaurant is aesthetically designed; all the staff members are uniquely dressed. Managers dressed in special uniforms. Also the tables, menu, are all placed in a good manner. This on itself is quite impressive. All orders placed in restaurant is served within 15-20 minutes and the take away orders (ordered on phone) is delivered within 30 minutes. Care also has been taken by the company to pack the pizzas in special covers so that it remains hot till the customer haves the food. Any pizzas delivered outside 30 minutes are given free. Also discount coupons are given to the customer in case one doesn’t want a free pizza. 29   

Product mixes Width: the company’s total width of the product mix includes, pizzas, pastas, appetizers, beverages and desserts Length: the total number of items available in the company’s offerings is 28 •

These are the pizzas available in the menu

Chicken ‘n’ spicy

Kadai chicken

Chicken supreme

Classic

Exotica

Favourite

Veggie supreme

Margherita

Teekha paneer makhani

Simply vegetarian

Country feast

Fiery chicken

Chicken tikka makhani

Veggie crunch

Veggie lovers

Spicy veggie

Paneer el rancho

Chicken hawaiian

Kadai paneer

•

The pastas and the appetizers available are

Arrabbiata

Garlic bread

Spicy tomato

Cheese garlic bread

Creamy mushroom

Garlic bread spicy supreme

Spicy tomato with chicken

Garlic bread exotica

Arrabbiata with smoked chicken

•

The desserts available is choco lava

•

The beverages available are not of pizza hut, they have coke and sprite as their beverages

Thus the total length of the product is 28 which does not include the beverages as it’s not their product

30   

Depth: o pizzas whhich are available in each e variantts. We can see that The deppth refers to the no: of (from thhe menu) foor each variaant a vegetaarian and a non n vegetarrian pizza arre availablee. Consisttency: The connsistency of the produuct is the saame as pizzza hut operrates only inn the brand ded food pizza inndustry. Producct line analyysis The com mpany has a basic plattform for offfering pizzaa and have added on ddifferent mo odules to meet thhe ever channging custom mer requireements. Thu us the major chunk of profits com mes from pizzas and a pastas. While bevverages andd desserts contribution towards prrofits is to a lesser extent. Productt line

Core  C Product

S Staples

Sp pecialities

Co onvenien nce  Items

Pizza

Pastas

Desserts

Beverages and  Apptetize ers

Eg::Pan,Cheese  Pizza 

E Eg:Arrabbiata a

Eg:Trufflee  Cake

Eg:  Pepsi, Garrlic  Bread

•

oduct for Thus pizza hut promottes its pizzaa extensivelly and hence it forms tthe core pro marketing

•

Pastas are classified as a staples as a they do not get proomotion butt they yield d higher margins forr the compaany

•

Specialitiess for pizza hut h is their dessert, d i.e. Truffle cakke which is hhighly prom moted so that the salles of the other items increases i ( birthday paarties). Connvenience ittems are mainly apppetizers whicch have higgher margin and generaally tends foor impulse buying b 31 

 

Co- branding Pizza hut has joined hands with visa for availing various offers. However this offer is only for the in dining i.e. One cannot avail the offers pertaining to visa for take away and home orders. A visa credit card holder can avail offers like family meal for a lower cost and select other combinations of items which would have not been possible otherwise. Thus visa and pizza hut assist each other for branding themselves. Packaging& labelling The packaging of the pizza has been quite extraordinary in the sense that, it serves the basic purpose of ‘serving hot tasty pizza’. In house dining In house dining, the pizzas are not packed, instead they are served in hot pans, and plates are provided to the customers. The extra ingredients like oregano mix, chilli flakes etc. Are kept in a bottle having pores. Thus the customer can easily pour the ingredients into the pizza. Take away orders They are put in a paper box neatly labelled with pizza hut brand logo. Also there is a plastic support given (it’s in the shape of a tripod) at the bottom of the pizza to prevent it from sticking at the bottom. A pizza hut logo is also given in the tripod. The extra ingredients like oregano mix, chilli flakes etc. Are given in a paper pouch which is also branded with the pizza hut logos. Home delivery orders All the pizzas covered in paper boxes described above are packaged into a special delivery bags for retaining the heat. Thus we can observe that from every labelling, packaging the company tries to imbibe the brand of pizza hut in the minds of consumers

32   

dominos

Potential Product-Pizza hut Experience as a whole

All offerings inclusive Value added  services

Value add -Augmented Product

Hot pizza,good to Eat

Good Taste- Expected Product

Enjoyment

Food – Basic Product

Food Basic Requirement – Core

The customer value hierarchy From the above diagram we can see that dominos has a food as a basic product but overall it provides an experience. Thus a person having a basic need of food can go to dominos and have pizza which is the company’s core product. Hot pizza and good taste are his expectation. Thus the company should ensure this by providing good pizza. The value adds services refer to the overall dining experience, the service quality, ambience etc.

33   

Product differentiation Domino's pizza India has maintained its position in the market with its constant product innovation and maintenance of stringent service standards. More importantly, it has established a reputation for being a home delivery specialist capable of delivering its pizzas within 30 minutes to its community of loyal customers from its entire chain of stores around the country. As the name suggests ‘the pizza delivery experts’ customers can order their pizzas by calling their hotline. Domino's believes strongly in the strategy of 'think local and act regional'. Thus, time and again domino's has been innovating toppings suitable to the taste buds of the local populace and these have been very well accepted by the Indian market. Also they had their promotional campaign ’hungry kya?’which means call up dominos if one is hungry and have the food in 30 minutes.

Pizza features Pizza hut has many unique features of their product due to which it attracts the customers. The product is classified into non durable goods as it is a food item. Dominos differentiates Itself with its competitors with respect to their wide range of offerings (menu items).one can find besides pizzas, range of pastas appetizers, cakes, and desserts etc. There are quite a lot number of menu items to choose. The ‘chicken wings’ item has specially struck a chord with a lot of consumers as such a kind of item is not available in any other pizza outlets. This item is also perceived to be the tastiest of the lot. Indecently chicken wings is a side dish. Some of the menu items are •

pizzas

34   

•

pastas and salads

•

Appetizers

•

Desserts

•

beverages

35   

Mass customisation The main advantage of pizza hut is that one can customise his own pizza by selecting the bread and loading it with the toppings which one can select. This creates variety in the customers mind and thus one can enjoy whatever pizza hut can offer. The most unique feature is that there is ‘single slice pizza’ scheme where one can select any vegetarian /non- vegetarian pizza at a lower cost. This is a unique way of offering as there are many consumers who would not afford a regular size pizza and hence they can have a slice of it. Conformance quality: Dominos products have very high conformance quality i.e. All the products produced are identical and meet the promised specifications Style: pizza is delivered in paper boxes and served in style. The toppings in the pizzas are also dressed in a good fashion. Thus having ‘food quickly’ defines pizza hut’s experience. Service differentiation Ordering ease: Once one enters the restaurant immediately the assistants initiates the ordering process by providing the menu. All associates are well trained in english and can take order from any customer. Delivery Pizza hut’s style of delivering the pizza to the customer is not quite great. The restaurant is not so aesthetically designed; all the staff members are dressed in a not so attractive manner. Also the tables, menus are all placed like in an normal Indian udupi restaurant. One can find that dining at dominos outlets is not that good. The food is good but the ambience isn’t. However they are the universal kings in serving pizzas at home. They brand their pizzas in that fashion only. Their motto is to serve the pizza at customers home. Dining for them comes as secondary. The company doesn’t give importance to improve the dining standards. All orders placed in restaurant is served within 15-20 minutes and the take away orders (ordered 36   

on phone) is delivered within 30 minutes. Care also has been taken by the company to pack the pizzas in special covers so that it remains hot till the customer haves the food. Any pizzas delivered outside 30 minutes are given free. Also discount coupons are given to the customer in case one doesn’t want a free pizza. Product mixes Width: the company’s total width of the product mix includes, pizzas, pastas, appetizers, beverages and desserts Length: the total number of items available in the company’s offerings is 29 •

These are the pizzas available in the menu

Marghetita

Deluxe veggie

Cheese and tomato pizza

Gourmet

Double cheese marghetita

Cheese and barbeque chicken

Fresh veggie

Barbeque chicken

Country special

Spicy chicken

Farm house

Chicken mexican red wave

Peppy paneer

Kheema do pyaasa

Mexican green wave

Chicken golden delight

Vegetarian extravanza

Meatzaa

Non-vegetarian extravanza

Cheese and pepperoni

Cheesy white •

The pastas and the appetizers available are

Cheesy white pasta

Garlic bread

Tangy red pasta

Chicken wings Cheese dip

37   

Depth: o pizzas whhich are available in each e variantts. We can see that The deppth refers to the no: of (from thhe menu) foor each variaant a vegetaarian and a non n vegetarrian pizza arre availablee. Consisttency: The connsistency of the produuct is the saame as pizzza hut operrates only inn the brand ded food pizza inndustry. Producct line analyysis The com mpany has a basic plattform for offfering pizzaa and have added on ddifferent mo odules to meet thhe ever channging custom mer requireements. Thu us the major chunk of profits com mes from pizzas and a pastas. While bevverages andd desserts contribution towards prrofits is to a lesser extent. Productt line

Coree Product

S Staples

Sp pecialitiess

Convenien C nce Items

Pizza

Pastas

Desserts

Beverages and Apptetizeers

Eg:Pan,Cheese Pizza

Eg:Tangy Red E d Pasta

Eg:Choco o Lava

Eg:Chick ken wings, Gaarlic Bread

•

Thus dominnos promottes its pizzaa extensively y and hencee it forms thhe core pro oduct for marketing

•

Pastas are classified as a staples as a they do not get proomotion butt they yield d higher margins forr the compaany

•

Specialitiess for them is their dessert, i.e. Cho oco lava whhich is highlly promoted d so that the sales off the other ittems increases ( birthdaay parties)

•

Conveniencce items aree mainly apppetizers an nd chicken wings in particular wh hich has higher marggin and gennerally tendss for impulsse buying 38 

 

Co- branding Dominos does not have any co branding or any tie ups with banks or credit cards. However they promote only products of coca-cola. Packaging& labelling The packaging of the pizza has been ordinary in the sense that, it serves the basic purpose of ‘serving pizza’. In house dining In house dining, the pizzas are packed in paper box. Plates are not provided to the customers. The extra ingredients like oregano mix, chilli flakes etc. Are given in a pouch which the customers have to open manually. Thus the customer can finds this quite a task to open the pouches as they are not easily removable. The main reason behind this is dominos classifies itself as a take home / order from home pizza and hence dining is not encouraged. Each paper boxes are designed to deliver the branding of dominos and labelling is done quite well. All ingredient pouches are also labelled. Take away orders They are put in a paper box neatly labelled with dominos brand logo. The extra ingredients like oregano mix, chilli flakes etc. Are given in a paper pouch which is also branded with the dominos logos. Home delivery orders All the pizzas covered in paper boxes described above are packaged into a special delivery bags for retaining the heat. Thus we can observe that from every labelling, packaging the company tries to imbibe the brand of dominos ‘pizza delivered in 30mins’ in the minds of consumers.

39   

PLACE

Once the product has been decided upon and the market segmented, targeted and the product positioned, it is time to decide how and where the marketer can deliver the value (product) to the customer. This is done through marketing channels that make the product available for consumption to the customer. Push and pull strategies in channel marketing:

In a push strategy, the manufacturer uses his sales force, trade promotion, money or other means to induce intermediaries to carry promote and sell its products to end users.

In a pull strategy, the manufacturer uses advertising, promotion and other forms of communication to persuade the customer to demand the product from intermediaries, thus inducing the intermediaries to order it.

1) Domino’s: pursuing a push strategy

Domino’s pursues a medium push strategy in its channel marketing. The advertising layout for domino’s is minimal in India. Domino’s concentrates on incentivizing customers instead off advertising and promotion. As a result, domino’s regularly introduces sell-in schemes (promotional schemes for dealers), promotional coupon, festival offers etc.

2) Pizza hut: masters at pull strategy

Pizza hut follows more or lesss the opposite strategy. Pizza hut has mastered the art of pull strategy. It pioneered the practice of advertising and promotion in the fast food industry. Pizza hut achieved this remarkable feat by adopting a different marketing strategy that involved increasing ambiences and amusement for the customers.

40   

Direct and Indirect channels:

Direct channels: The type of distribution channel used by Pizza Hut is the direct channel. The direct channel is successful when there is an extremely large market that is geographically dispersed. The direct channel is also useful when there are a large number of buyers, but a small amount purchased by each.

Domino’s The Company was incorporated in March 1995. The First Domino's Pizza store in India was opened in January 1996,at New Delhi and today after fourteen years Domino's Pizza India has grown into a countrywide network of over 274 outlets in 55 cities, in 20 states and union territories (as on 31st August 2009) . According to the India Retail Report 2009, we 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, which includes:North - Delhi, Gurgaon, Chandigarh, Ludhiana, Amritsar, Jallandhar, Dehradun, Shimla, Agra, Kanpur, Lucknow, Noida, Faridabad, Mussoorie. South

-

Chennai,

Bangalore,

Hyderabad,

Coimbatore, Mangalore, Cochin,

Secundrabad, Manipal, East - Kolkata West - Mumbai, Pune, Ahmadabad, Goa

Pizza hut 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. The pizza hut Peshawar is situated out of the market area near Army Stadium and Shami road. This site has been chosen keeping in view the following factors. It is in an out of centre location on retail or Leisure Park with good parking accessibility. Secondly the catchment area is of a specified minimum size and within a given drive time to the site. Pizza Hut uses three different methods of selling its products directly to the market.

41   

•

The first method of distribution used by Pizza Hut is Home. Office delivery. Customers can call Pizza Hut ahead of time, place an order, and the order is delivered to the customer's home.

•

Another method of distribution is for customers to dine-in. Customers can go to the nearest Pizza Hut, place an order and either leave with the order or eat at the restaurant. One of Pizza Hut's largest competitive advantages is its restaurant style facility. Pizza Hut offers a clean place to sit down and enjoy the variety of pizzas, salads, and sandwiches in a fun, family atmosphere.

•

The third method of distribution is to order Online. Selective County Customers can now go on the Internet and place an order for Pizza. This method is useful because it allows customers to view the entire menu, download any special coupons, and order without having to disclose any credit card numbers.

Indirect channels: Indirect channels consist of one or more intermediaries between the manufacturer and the final customer. In India both Domino’s and Pizza hut do not introduce any indirect channel.

company Raw material from warehouse Dealer

Consumer

42   

Pizza huts in India

Single and multiple channels: Most organizations today employ multichannel marketing i.e. selling to different consumer segments through different channels. the fast food industry too follows this method.

Channel length: Channel length refers to the number of channel intermediaries between the manufacturer and the end user in the fast food industry, based on the target customer,

43   

PRICING OF DOMINO’S Indians are value-sensitive, not price-sensitive. The price was attributed to the high quality of ingredients used. For instance, Domino’s sourced its Peperoni and Jalapeno needs from Australia and Spain respectively. However, with competition increasing from Pizza Hut, Domino’s introduced price cuts, discounts and freebies to attract the customers. In 1998, Domino’s introduced the Pizza Mania scheme where it offered a large pizza for Rs.129/-. The demand was overwhelming and the company sold close to 5000 pizzas in the first week of its launch.

During late 1998, both Domino’s and Pizza Hut were trying to lure the customers with discount coupons by issuing such coupons through several schemes. However, both Domino’s and Pizza Hut were concentrating more on data base marketing and below-the-line activities and special offers.

In India Domino’s is trying to attract the middle class and lower middle class people who are interested to spend their money on pizza but in low price. Those people are eager to go for a outing in any festival and as a cheap family restaurant Domino’s would be most preferable. They do not need high class ambiences or amusement in the shop so the establishment cost is 44   

low for the dealers and the price of pizza is very reasonable for the customer. Domino’s do not have any fixed customer though they are one of the main competitors of the Pizza hut. The Domino’s Pizza franchise constantly keeps on inventing ways through which it can make a greater impact on the fast food market. That is how the fast food franchise came up with 'Fun Meal for Four' offer. Through this method, the pizza franchise is able to produce more variety in the food delivered to its customers at their door steps. Through its 'Fun Meal for 4’ pack the Domino’s Pizza India offers four pizzas at the rate of Rs 180. This means charge of one pizza will be just Rs 45. This has helped the speciality food franchise to enhance the strength of its customer base. Mainly offers are more attractive for the Domino’s , mainly student and middle class people are the main customer and they targeted that customers.

45   

PRICING OF PIZZA HUT

In the past, Pizza Hut has successfully used the high/low pricing strategy when setting the retail price of its products. The high/low retail pricing strategy allows Pizza Hut to charge a price that is above the competition, but also promote frequent sales to lower the price below them. The high/low pricing strategy has several advantages. First, this pricing strategy will help segment

the market. Different groups of customers are willing to pay

different prices for the same product. The high/low pricing strategy will also creates excitement. Customers will be able to try something new when they purchase Finally, this strategy will emphasize product and service quality. Pizza Hut sets a high initial price for its products to send a signal to customers that its products are quality and the service is excellent. As there are no such competitors of Pizza Hut which could compete with the quality of pizza produced at Pizza Hut, therefore, the pricing strategy adopted by Pizza Hut is 'market skimming'. Pizza Hut has adopted this pricing strategy as they want to hold maximum share of the market by maximum profit. This is a golden era for Pizza Hut, as there are no competitors and hence, Pizza Hut is free to charge any price they want. They are charging higher prices due to the uniqueness of the product. They satisfy the target market as the food quality is worth the price paid. The pricing strategy is not just to get the worth of quality but also to gain maximum profits before any competitor enters because then Pizza Hut will have to change its pricing strategy. Although the prices would be lowered with the new entrants in the market but not to a greater extent as the quality food products are not home-produced. They are imported from different countries keeping in view the best quality. First, this pricing strategy will help segment the market. Different groups of customers are willing to pay different prices for the same product. The high/low pricing strategy will also create excitement

46   

In India Pizza hut is targeting the rich and higher middle class people with a great ambiences of enjoyment and amusement. They are offering an organized restaurant system and demanding the higher price for the pizzas. In the pizza hut different types of foods are available like appetizer, soup & salad, beverages, pasta etc. So for the varieties kind of food the pricing strategy is different in the pizza hut. Their customers are more or less fixed and they are price insensitive.

47   

PROMOTION

DOMINO’S Promotion, which is known as marketing communication, is a major attribute for any product or service. In modern marketing it is more than developing a good accessible product or exact pricing. Ever since it was established, Domino’s Pizza India has maintained its position of market leadership with its constant product innovation and maintenance of stringent

service

standards. More importantly, it has established a reputation for being a home delivery specialist capable of delivering its pizzas within 30 minutes to its community of loyal customers from its entire chain of stores around the country. Customers can order their pizzas by calling a single countrywide Happiness Hotline 1800-111-123. In fact, Domino's was the first one to start this facility for its customers. Domino's is committed for bringing fun and excitement to the lives of our customers by delivering delicious pizzas to their doorstep in 30 minutes or less, and all its strategies are aimed at fulfilling this commitment towards its large and ever-growing customer base.

Communication objectives Category need Domino’s master franchise model Industry analysts believed that Domino's master franchise model was one of the reasons for its success in international markets even in light of the global economic slowdown in 2008. How domino's international bucked the trend The strong performance of Domino's international master franchises in the midst of the global economic slowdown was a widely debated topic among analysts. While some analysts believed that the recession had helped the growth of these chains due to the 'trading down 48   

factor' of people preferring to eat at home rather than dine out at expensive restaurants, others believed it was a combination of aggressive marketing and the franchise model that had helped the company buck the trend. Brand awareness Promotional and advertisement campaigns The pizza delivery business had traditionally been promotion driven. Coupons and discounts were offered by all pizza delivery chains to woo customers. Since its inception, Domino’s had been known for

its unique promotions that included fast delivery and

innovations to cater to a varied palette. The '30 minutes' promise In the year 1973, Domino's began a guarantee scheme that its pizzas would be delivered in 30 minutes or less of ordering failing which the customer would receive the pizza free. Brand attitude Use of technology Online sales accounted for over 70 percent of its total sales in 2008. Dominos planned further

exploit

the

increasing

potential

of

the

online medium as

promotional and distributional channels in the downturn. Brand purchase intention What makes domino’s pizza better than its competitors • Varity of Pizza’s • Services offered • Quality of pizza’s • Location of the Outlet • Waiting time in the outlet • Door step services

49   

one

of

to the

• Low pricing

Developing effective communication Target to age group/class Domino’s target audience is a consumer who belongs to age group of 14 to 35 years from the Economic Class A or B and preferably one who has been exposed to the western culture as well as the western style of eating. They are people who are upwardly mobile and don’t mind to pay for convenience. In this category teenagers are the most affected by western culture and its eating habits. The age group has been restricted to the range of 14 to 35 years as this age group accounts for about 70% of the total sales volume of pizzas in India. As far as the socio Economic class

is concerned, since Domino’s pizzas are priced from

about Rs.80 onwards. However, Domino’s have now come out with pizzas ranging from Rs.39 onwards to target the ever-increasing middle class consumers. Domino’s has also segmented

the market geographically by deciding to initially cater to

only the metropolitan cities and urban areas. They have left out

the rural areas due to the

low level of awareness regarding western dishes as well as typical Indian patter of eating. 30 min campaign This is a campaign in which Domino's offers its customers free Pizzas if they are not delivered in 30 minutes from the time of order. They have a store in a radius of 3 kms in major metropolitan cities. Anything which is far away from 3 kms doesn’t fall in this category. Domino's latest special offer promises a hot and piping pizza delivered on door under 30 minutes, or it's free. But 30 minutes is a very short time for a typical Dominos Pizza local delivery, but it's the latest special offer from Dominos in an effort to outdo the competition. Still, there are some cities where it must be really tough to make a Dominos Pizza local delivery, the cities where traffic congestion is a natural way of life. Can a Dominos pizza local delivery survive the daily traffic jams? Is the question to be asked.

50   

Design the communication: Message strategy Offers by dominos • With every order of pizza and coke/Garlic bread sticks get a domino’s pasta for Rs. 39 instead of Rs 69. • Pasta is available in 2 variants: cheesy white and tangy red veg Rs 69/- & non veg Rs 79/• Get garlic bread for only Rs 30/- with any of the pizza mania combinations. • Dominos start providing coke/fanta/sprite. • Dominos started pizzas mania which starts from Rs 35 and we get the toping according to our choice. • Web coupons available at web site www.dominos.co.in • Discount coupons are being provided with every item purchased. • New schemes at regular interval of time according to the taste of the Indian customer. Creative strategy Latest in domino’s • Kwality wall’s ice-creams in dominos- For the first time dominos started offering ice creams .Selling ice cream in Domino’s is also a new sales promotion strategy to attract more customer in a new perceptive /innovative way. • Domino’s has also come up with pasta mania. Communication mix Every company must follow the eight major marketing communication modes. For Domino’s direct selling and interactive selling is not needed though they are involved in internet and cable TV promotions. Domino’s always search for ways to gain efficiency by replacing one communication with others. The sustainability among communication tools explains why marketing function need to be coordinated.

51   

Advertising It reaches geographically dispersed buyers. Domino’s vision is focused on “Exceptional people on a mission to be the best pizza delivery company in the world! ". Domino's is committed to bringing fun and excitement to the lives of our customers by delivering delicious pizzas to their doorstep in 30 minutes or less, and all its strategies are aimed at fulfilling this commitment towards its large and ever-growing customer base. It’s all advertisement are image of core competencies. Their taglines “The Pizza Delivery Experts” and “Hungry kya?” are showing their focusing area in promotion.

Events/ Experiences They are sponsoring some college fest, cultural program and promotional events throughout the country for promotion.

Public Relation Domino's constantly strives to develop products that suit the tastes of its customers, thereby bringing out the Wow effect (the feel good factor). Domino's believes strongly in the strategy of 'Think local and act regional'. Thus, time and again Domino's has been innovating toppings suitable to the taste buds of the local populace and the Indian market has very well accepted these.

52   

Personaal Selling Dominoo’s constanntly strive to make the comp pany an inttegral part of the lives of the tarrget audiennces by gettting involvved with thee clientele att the emotioonal level an nd buildingg long-term m relationsship with them. Thus, Dominoo’s concenntrate more on carryingg out below--the-line acctivities in thhe area it seerves.

Sales Prromotion a)

In India, Doomino’s hass been assocciated with the NGO’s devoted too the cau use of

underprrivileged Chhildren’s. Domino’s D coonducts Storre Educationnal Tour (SET) for the t underprrivileged chhildren time-to-time. b)

Domino’s Pizza P India also boasts about its co ommitment to serve itss customers on time

by impllementing thhe “30 MIN NUTES OR FREE” serv vice comm mitment. c)

They are coontinuouslyy offering neew incentivees to the customers.

 

Word of o mouth This toool is very poowerful for promotion in the fast food f industrry. Low pricce and good d behavioor gave them m the edge in i India.

53   

PIZZA HUT Promotional Strategy: Promotion

is

various methods

a form of corporate communication that

uses

to reach a targeted audience with a certain

message in order to achieve specific organizational objectives. Nearly all organizations, whether for-profit or not-for-profit, in all types of industries, engage in some form of promotion. Efforts may range from multinational firms spending large sums on securing high-profile celebrities to serve as corporate spokespersons to the owner of a one-person enterprise passing out business cards at a local businessperson’s meeting. Consequently, promotion decisions should be made with an appreciation for how it affects other areas of the company.

Communication objectives Category need Worldwide and in India, Pizza Hut has come to become synonymous with the ‘best pizzas under one roof’. This is because at Pizza Hut the belief is that every pizza has its own magic, thus making it a destination product – which everyone seeks. It is this belief that has ignited the passion to create, innovate and serve the finest product the industry has to offer, while setting standards for others to strive to replicate. Pizza hut uses many promotional strategies. The main promotion is a coupon to purchase. This promotion is also distributed mainly by mail, but also by fliers on college campuses around the country in order to reach the target market A critical factor in Pizza Hut’s success has been its unique dining experience. Crewmembers at Pizza Hut strive each day to provide ‘customer mania’ - the kind of service that ensures that every visit of the customer is a memorable one.

54   

Brand awareness •

Pizza Hut was among the first multinational brands to enter the food retail sector in India. When the first Pizza Hut restaurant opened in Bangalore the quick service industry was at a nascent stage and the pizza category was dominated by a sole regional player who had a marginal presence.

•

The strength of Pizza Hut’s success globally lies in a marketing strategy that builds connections with customer’s everyday in different parts of the world. Many customer service initiatives have been uniquely developed for India and have been greatly instrumental in building an emotional bond with the customer.

•

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.

•

Pizza hut organized the Jig n Jeeto contest in Delhi for the first time, it received a phenomenal response with super star Fardeen Khan judging the show. Pizza Hut hopes to continue this contest as a tradition for the years to follow.

Brand attitude

International brand with an Indian heart Pizza Hut is one of the first international pizza chains with purely vegetarian dine-ins at Chowpatty (Mumbai), Ahmedabad and Surat, which also serve Jain menus. Pizza Hut has even opened two all-vegetarian restaurants

in the western state of Gujarat to cater to the

Jain religious community, whose members prefer not to eat at places where meat is served. Offering more than the international menu International food chains typically offer only a few localised products in other parts of the world. However, Pizza Hut’s local menu is as large as the international one. According to Pizza Hut, the Indian food heritage is very rich, and hence Indians like local flavors.The Tandoori range of pizzas, which was developed locally, has a menu mix of over 20 per cent.

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Brand purchase intention Why Pizza-hut is preferred than other •

Varity of Pizza’s

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Good ambience

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Services offered

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Quality of pizza’s

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Location of the Outlet

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Waiting time in the outlet

Communication mix Advertising Pizza Hut’s communication has also always struck a chord with the Indian customer. Its very first television commercial in India featured a boy and girl, who meet at a Pizza Hut restaurant in a traditional arranged marriage concept. They lose their inhibitions when the pizza arrives. When the sequel went on air featuring the same couple, now married, with the girl’s father consoling her over a pizza as her bridegroom waits outside the restaurant to escort her after their wedding - the customer’s involvement was so complete that several wrote in to inquire whether the couple had children. The more recent campaign that was launched with the introduction of the Tandoori pizzas featured a typical Indian wedding procession abandoning the bridegroom when enticed by delicious aromas from a Pizza Hut restaurant. While the famous ‘Good times start with great pizzas’ slogan has been prominent in the communication, the focus has remained on the best and most distinct pizzas.

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Sales promotion Pizza Hut laid more emphasis on its “restaurant dining experience”. Pizza Hut localizes it menu to capture local Indian Market. In 2000 Pizza Hut launched its innovative Pizza Pooch menu and Pizza Pooch Birthday Party package exclusively for kids in the 6-10 age groups. It positioned itself as family restaurant and also concentrated on wooing kids.

Public relations In India, eating out is perceived as a form of entertainment. Which is why Pizza Hut servers not only serve our customers great food, they also sing and dance for them. And many of Pizza Hut’s customers would, we are certain, love to participate in this process. Giving them an opportunity to showcase their talent in the Jig n Jeeto contest.

Events and experiences Pizza hut use their events to reach to the customer and often it is used as brand building as well as product selling.

Direct and interactive promotion Pizza hut provide many services online such as Birthday reminder service- here people can save the birthday date of their friends, relatives , and pizza hut will remind you the birthday date and birthday parties discount. Customer can book online E-coupon and discount offer available to online customers

Hot

line number – pizza hut hot line number also provide at online which is 39883988. Even customer can do online order of pizzas.

Personal selling Pizza huts try to attract the younger generation as their main market segment but they mainly target high and higher middle class customer. They actually bother about customer’s enjoyment and food not the price. Thus Pizza hut’s concentrate more on carrying out abovethe-line activities in the area it serves.

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Word of mouth It is one of the traditional promotion for any industry. Pizza hut also get benefit from it.

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MARKET FEEDBACK & CONTROL MECHANISMS  

On visiting Dominos and Pizza Hut we had the opportunity to interact with lot of customers. All the analysis is based upon the customers of Coimbatore (Tier II city) perceptions may change in different cities where the competition is more. For example, in Mumbai these two pizza outlets faces stiff competition with other pizza companies (US Pizza, Smoking Joe’s, Papa John’s, Garcia’s) which do not exist in Coimbatore. Questions pertaining to the 4p’s were asked some of the questions are as follows 1) Do you have pizza 2) How frequently do you like to have pizza .Where do you like to have your pizza? 3) What is the frequency of each 4) If yearly or rarely what are the reasons 5) If you think of pizza which brand of pizza are you thinking of? Why ?( Product recall and Brand recognition) 6) Which pizza do you prefer dominos/ pizza hut / any other and for what reason? 7) Who are the principal decision makers in the buying process 8) What is the 1st thing that comes into your mind when you hear about Dominos? 9) What are expected benefits apart from food like enjoyment service offers? 10) Suggestions if any

•

All the answers were jotted down and analysis was made. Interestingly there were a lot of correlation between the customers of Pizza Hut and Dominos. These are all explained in this section.

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Also a common section of customers are observed at each place. Dominos attract people who have a little less disposable income than the customers at Pizza hut

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There were many such instances where people preferred their choices due to their wards

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Coimbatore being a Tier II city also made a huge difference in the customer buying pattern.

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A few excerpts from the visit to Dominos and Pizza hut (Coimbatore) Place: VOC Park & PSG Coimbatore .

•

As the name suggests the primary focus is on the pizza delivery

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Their pricing is targeted towards the middle income group who form the bulk of the Indian population

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Pizzas are less in cost as compared to pizza hut prices which charges a premium

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Thus mostly cost conscious people form the major chunk of the clientele

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From the 1st photo one can see that there are no tissue papers in the wash basin

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From the second photo we can also see that the tissues for use are placed unhygienically

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Actually the greatest surprise is in the next picture watch out!

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•

People are dining right beside the place for washing hands! One may have thought that there are separate washrooms which are not the case.

•

Also there are no separate washrooms

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The outside area of the restaurant is also not maintained properly, the place is quite stingy and there are lot of foul smells

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•

This is really pathetic for a restaurant of Dominos brand

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People who generally have low disposable income, who doesn’t care about these things generally visit Dominos

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Thus Dominos doesn’t attract people from the higher income groups as they do not prefer such dining conditions

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One more which is noticeable is that everything is designed for fast delivery, Pizzas are not served in plates, its served in paper box ( which is used for deliveries)

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The ingredients like pepper, chilli flakes and oregano mix are served in paper and plastic pouches even in restaurant which should not be the case as the user finds difficult to remove the pouches with one hand once he starts eating the food

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At PSG, Dominos have a separate washroom but water was not available at two separate instances!

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In Mumbai also one can find Dominos restaurants having such conditions

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Even one can find very small Dominos outlets where one cannot even have food inside the restaurant

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Observations and customer reviews for Dominos Pizza •

Mostly 60% of the customers come here for food and the others for enjoyment as their basic requirement

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Mostly customers come to dominos for take away pizzas

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Most customers are from the middle income group or students whose disposable income are relatively less

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Generally everyone finds the taste of the pizzas to be good

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Also the location of the restaurant mattered a lot as many people come to Dominos since its located besides VOC park

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Even we had food in the restaurant and we also found the taste to be great!

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Also people preferred Dominos for their relatively lower price

Most Common Answers (from customers)

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Prices are Low , Great Discounts

Pizzas are Tasty and Good Variety

Product Recall Relates to Food and Delivery

Ambience for Dining are all found to be satisfactory

Generally 65% of the orders are either take away orders or placed from outside. In dining contributes only 35% of the revenue

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The company’s product recall 95% of the times relates to Delivery in 30 minutes or food (which pertains to their ‘Hungry Kya ?’promotional campaign)

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Enjoyment is perceived to be achieved after having the food quickly

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Dominos Brand thus relates mainly to service & delivery neither they promote their in dining experience nor they spend revenue for it.

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Place: Pizza- Hut R.S Puram, Coimbatore

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As the name and tag line ‘good friends great pizza’ suggests the primary focus is on the pizza dining experience

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Their pricing is targeted towards the higher income group who prefer ambience/ environment as their core need and food as secondary. The BMW X-5 parked outside the Pizza hut justifies this fact!

•

Pizzas are costly as compared to Dominos

•

The major chunk of the clientele are mostly premium customers who are willing to shell money for good environment and for great food

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One unique feature of Pizza Hut is that one can always find Pizza Hut in the posh areas of the city

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One can never find a small Pizza Hut outlet. Pizza hut outlets are always big with plush interiors having great ambience.

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• • • • •

•

Having food in such good plush interiors is an enjoyment in itself Menu card, Ingredients (like oregano mix) are placed in porous bottles which is aimed for ease of use The outside of the restaurant also is pretty good and the place is maintained very nicely Unlike Dominos there are separate washrooms fully equipped with the necessary items The most unique feature is the ‘Bell’ which is kept outside every Pizza Hut. Customers can ring the bell if they had liked their service and the associates scream ‘Thank you’ unanimously This actually is a feel good factor for the customers after having great food

Observations and customer reviews for Pizza- Hut •

Mostly 80% of the customers come here for enjoyment, ambience and the rest for food as the basic requirement

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Mostly customers come to Pizza-Hut for dining experience

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Most customers are from the higher income group

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The customer service in the restaurant is also good

•

Generally everyone finds the taste of the pizzas to be good

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Most Common Answers (from customers)

•

Prices, No Problem

Amazing Dining Experience

Product Recall Relates to ambience and enjoyment

In dining Service is good

Generally 70% of the orders are in house orders i.e. dining. Orders which are either take away or placed from outside contributes only 30% of the revenue

•

The company’s product recall 90% of the times relates to ambience and enjoyment

•

Pizzas are secondary to enjoyment

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Pizza Hut as a brand thus relates mainly to ambience and enjoyment with pizza. Hence they promote their in dining experience with the tagline ‘good friends great pizza’

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ANAL LYSIS AN ND INTER RPRETA ATION (Primarry data colleected from Coimbatore C e city. Thesee data may vary v with ciities)

v to a resstaurant 1) How many times one visit

•

Half of the customers visit restauurants only once o in a month. m At tthe same tim me, 10% of the custoomers visit restaurants r daily.

2) Preference of cuisines

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t customeers who dinne out, 30% of customeers prefer hhaving pizzaas. Pizza Out of all the sales have now grownn in the food market an nd has crosssed Chinesse cuisine fo ood also which standds with 20% % customer preference. 67 

 

3) Frequency of having pizza p

•

From the data, we can c interprret that onlly 20% off customerss have pizzza very frequently. (i.e., weekkly once).Att the same time 20% of o customerrs have pizzzas very rarely

4) Location Prreference foor having Piizza

•

80% of thee customers like to havve dominos pizza at ouutlets whereaas 20% of dominos d customers like l to havee it at homee. 85% of th he customerrs like to haave Pizza Hut H pizza at outlets whereas w 15% % of Pizza Hut H customeers like to have it at hom me.

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5) Preferred Brand B of Pizzza

•

40% of pizzza consumeers prefer Dominos wheereas 60% prefer p Pizzaa Hut

H 6) What is thee brand recaall of Pizza Hut

•

Enjoyment and diningg experiencce is the grreatest factor that com mes into cu ustomers mind whenn they think about pizzaa hut. One in nteresting fact f about piizza hut is that 10% customers like l the conncept of ringging the belll kept in alll pizza hut ooutlets as a mark of satisfied serrvice and thhe stewards all togetherr thanking them t

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7) What is thee brand recaall of Dominnos

Food quality q and affordablee price is what w comees in to thhe mind off 60% of dominos d customeers. The enjjoyment andd experience factor is lesser here when w compaared to Pizzza Hut.

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MARKETING STRATEGIES  

Overall both the companies achieve what they want to as for Dominos 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.

Strategic Formulation Overall Cost Leadership, Differentiation and Focus This is achieved very effectively by Dominos as they do not intend to lose their focus from delivering pizzas at home •

Dominos 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 Dominos are 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.

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Creation, Communication and Capturing Value Dominos 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 Dominos motto. Initiatives such as Fun Meal and Pizza Mania have been extremely popular with consumers. The Brand Positioning of Khushiyon ki Home Delivery (Happiness Home delivered) is the emotional benefit Dominos offer to consumers. Delicacies that do not rip wallets have always got the crowd coming back to the Dominos 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 Dominos. ‘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 Dominos has always been directed towards making its customers happy, creating, communicating and delivering value.

Pizza Hut 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. A critical 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-

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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. The company attains the maximum profit in the meat items, so they give the selection of pizzas slices of different varieties and they are clubbed together to form a single pizza. 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.

Sustaining, building relationships and Exploiting Changing Conditions Over the years Pizza Hut has also developed and successfully introduced a range of products especially suited to the Indian palate. These products like Chicken Tikka, Spicy Korma, picy Paneer and the Masala and Tandoori pizzas have been a tremendous success. What has also given Pizza Hut acompetitive edge is that in addition to an extensive range of internationally renowned pizzas like The Italian, the proprietary Pan Pizza and Stuffed Crust, in India the menu offers the option of a complete meal. It includes appetizers, a Salad Bar - where the customers can make their own fresh salads, a range of soups, pastas and desserts etc. Pizza Hut also has a community called as ‘VIP- Members’ joining this club is at no extra cost one can avail greater offers. Meanwhile Dominos are not behind Pizza Hut in introducing local delicacies they have different menu in different cities in India. 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 flavours suitable to the taste buds of Indian Consumers. Further, providing 73   

value for money at affordable products to the consumers has been Dominos motto. Also sizes of the pizzas are relatively large as compared to that of Pizza Hut. The discount offers at Dominos are the main incentive to build long term relationship. Dominos also courier discount coupons at consumers home. This serve as an incentive for the customers to visit Dominos time and again

Rating of the Marketing Strategy •

Both the companies are good in achieving their goal and are equally good in achieving what they intend to

•

Tastes of pizzas of both the companies are good equally in their own sense

•

Marketing strategy of Pizza Hut is better than Dominos because they offer customers a holistic approach.

•

Pizza hut markets their product not only as a food but as an experience which is worth enjoying. People tend to remember experiences more than the food.

Thus, overall Pizza Hut’s marketing strategy has and edge over Dominos.

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SUGGESTIONS Dominos •

The dining conditions have to be changed drastically if Dominos have to target the premium segment of customers.

•

They are way behind Pizza Hut in the dining experience. Some of the Dominos restaurants lack even basic amenities

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Due to this a condition can occur where customers judge the quality and taste of the pizza with respect to the restaurant environment and ambience

•

Thus to have a greater market share and tap premium segment of the market, Dominos can provide good quality restaurants

•

There should also be provision for music, TV’s, kids zone etc in the restaurant

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By doing this they can even charge a little bit more on the food items

Pizza hut •

Reduce the menu costs; it is way too expensive for a middle class Indian.

•

Middle class forms the maximum population of India and hence reducing the costs of pizza can increase the elasticity of demand greatly

•

Invariably there are no discounts, or discounts if offered are very less. Thus Pizza hut should offer more discounts to tap more customers

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Their reach is very less as compared to Dominos (as they have only premium restaurants) which deprives far off customers from having Pizza Huts experience. Hence they should increase their presence

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REFERENCES  

Electronic References: Electronic Media and URLs (2009). Retrieved December 25,2009 from dominos website, www.dominos.co.in Electronic References: Electronic Media and URLs (2009). Retrieved December 30,2009 from pizza hut website, www.pizzahut.co.in Electronic References: Electronic Media and URLs (2009). Retrieved December 26,2009 from exchange4 media website, www.exchange4media.com Journal : Economic Reforms India, 1992 Electronic References: Electronic Media and URLs (2009). Retrieved December 25,2009 from esnips website,www.esnips.com/A Review on Indian retail food industry.pdf Telephonic conversations: Mr.Harneeth Singh, Marketing Head, Dominos Pizza India Ltd., Noida Telephonic conversations: Mr. Rahul Varma, Chief Manager, Pizza Hut, Bangalore Telephonic conversations: Mr.Asok Kumar Sahu, Dominos Pizza India 

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