Product Evaluation and Analysis
The level of competition in the fast-food restaurant industry sets higher standards of performance for its active players. Competitors should permanently develop new offers and improve the existing ones in order to maintain their leading positions in the market. The customer-oriented character of the selected industry and the necessity to develop the positive experience in clients makes the marketing the key factor of the business success. Pizza Hut Inc. is one of the leaders in the fast-food industry, the experience of which in the sphere of marketing has proven its effectiveness and is worth being studied by competitors.
The Company and the Product
Pizza Hut is one of the leading companies in the global fast-food industry. During its business history, this company has experienced periods of the rapid growth and demonstrated the ability to overcome the crisis events in the market successfully. The company’s marketing strategy had always been an integral part of its success story. From this perspective, it can be an effective basis for the formation of an effective marketing managers’ opinion about the actions that are to be made in order to reach success in the selected industry.
Pizza Hut Inc. was founded in 1958 in Wichita, Kansas (“Pizza Hut Inc. History,” 2017). In 1968, the company established the international franchise. The business experienced periods of the rapid growth and decline in the 1990s that were caused by the growth of rivalry and decline of sales in the fast-food industry. Today, Pizza Hut is the world’s fourth biggest fast-food restaurant chain according to Forbes (“The 10 Global,” 2017). The success of the company can be explained by its peculiar attitude to customers and the highest level of the service quality. The worldwide character of the business is one of the features that ensure the profitability of Pizza Hut, as well as its sustainable position in the industry.
Naturally, the product of the greatest interest in Pizza Hut is its pizza. According to the information obtained from the company’s official website, it focuses on the production and distribution of five types of pizzas. Here, it is necessary to discuss the specific of the company’s product based on the four marketing P’s.
First of all, it is important to pay attention to the specific approach to the formation of the company’s product. In addition to traditional pizzas’ recipes, Pizza Hut provides customers with an opportunity to create a unique one according to their preferences and tastes. This option is definitely an advantage of its product in comparison to the competitors that offer only fixed recipes.
Another aspect of the discussed product is a considerably low pricing policy of Pizza Hut that focuses on the provision of goods that can be available to people from any social groups and in any country. The average price of pizza is $6-$8. If compared to the biggest competitor in the industry, McDonald’s, Big Mac of which costs $4, such price for Pizza Hut does not seem extreme for buyers, especially taking into account the higher quality of its products.
Pizza Hut has developed a sensible and holistic promotion strategy that includes the organization of festivals with the demonstration of its products, the provision of a discount system for corporate customers, and the local marketing campaigns. Such approach to the promotion also singles out the company among competitors in the market.
The place is of utmost importance in operations of Pizza Hut. In order to reach the desired level of customers, the company offers three methods of its product distribution. Among them, there is the delivery and carry out services. The presence of a delivery function allows Pizza Hut to attract a bigger number of buyers in comparison to its competitors.
Positive and Negative Aspects of the Company and the Product
The general information about the company’s position in the industry is presented in the form of SWOT analysis in Appendix 1. The strong sides of the Pizza Hut include a strong brand name, an effective cost structure that is based on the economies of scale, a diversified structure of offered products, a developed system of customer service, and a competitive distribution strategy.
The weak sides of Pizza Hut include the absence of a strategy that would allow the company to win a market share in B-grade towns. In this way, the focus on the most developed cities limits the number of potential customers. Another weak side of the company is that the quality of its products has decreased over time. Pizza Hut should discuss the ways of improving the quality of its goods with the view to maintaining the current position in the market.
When speaking about the product, it is necessary to highlight that it also has certain strong and weak sides that require detailed discussion. Among the strong sides of the company’s pizzas, there is the high level of service, low price of products, presence of a diversified discount system for customers, and the fast delivery option. One of the main aspects of the Pizza Hut products that create a positive experience about the company is the system of deals that can be ordered via its official site. These offers provide a very attractive product for a relatively low price. Such approach to services guarantees the growth of the number of loyal customers of Pizza Hut.
Nevertheless, the certain negative experience is also present in the operations of Pizza Hut. The main complaint that customers send to Pizza Hut include the low quality of the product, the problems with the delivery system, and the long waiting time at the Pizza Hut restaurants (“Pizza Hut,” 2017). From this perspective, the optimization of production and delivery processes seems to be the best solution for the company.
The physical evidence is also an important part of the customer’s experience about the product. For Pizza Hut, the approach to physical evidence does not seem to be different from its competitors. The firm pays particular attention to the physical quality and attractiveness of its products. In this regard, it is important to distinguish the physical evidence that is provided to customers at the Pizza Hut restaurants, as well as the experience that the buyers earned during the delivery. In the delivery process, the majority of customers meet the attentive and courteous staff, which is ready to help in processing and receipting the order. Some degree of manager’s personal involvement is also attractive to a client.
The Recommendations about the Product
The recommendations about the product of Pizza Hut are based on the earlier discussed aspects of its performance. First of all, it is necessary to improve processes that are connected with the production and delivery of pizzas. Here, a new approach to the customer experience should be adopted. Clients should not feel abandoned and forgotten by the restaurant’s personnel under any circumstances. The main issue is associated with a long time of cooking and delivering pizza. Therefore, if a customer has to wait for more than thirty minutes at a restaurant, he or she should be able to get some extra products from the manager for free as an apology for the long waiting. This initiative is not going to earn high revenues for a restaurant since such situation is considerably rare, and the share of prices of free products in the customer’s cheque cannot be high. On the other hand, such approach to the customer management will definitely result in a positive experience about the restaurant. Even if a customer has to wait long in Pizza Hut, such initiative is going to increase the possibility of a return visit. It can be an effective way of encouraging the customer loyalty. At the same time, monitoring the costs that are connected with such operations can help a restaurant’s manager define the effectiveness of the kitchen work. In this way, the free compliments from the manager can be an effective tool for monitoring the performance of a particular restaurant.
For the delivery operations, the system of discount can be provided in order to guarantee the positive experience to each customer. For example, if a restaurant guarantees receiving an order within half an hour after its submission, the violation of the deadline will result in a discount for the customer upon receipt of the order. The discount rate will vary according to the delay in the delivery time. This initiative will help managers monitor the performance of the delivery personnel. If there are no valid reasons, the costs associated with the discount for a client will be deducted from the salary of the delivery staff.
The External Environment
The details of the external environment of Pizza Hut are also demonstrated in the SWOT analysis presented in Appendix 1. Opportunities for Pizza Hut in the external environment include the opportunity for the sales growth in the B-grade towns. Here, the diversified structure of products can guarantee the success of business among clients with a lower level of income. At the same time, another opportunity can be the further diversification of products with the view to guaranteeing the sustainability of the business. Nevertheless, the main external advantage of Pizza Hut is that there is no strong competition in the global market of the Italian fast-food. Most competitors of the company, including KFC or McDonalds, focus on another product line.
Among the threats for Pizza Hut, it is possible to name the competition with cheaper Dominos, which markets in B-grade towns. Another threat is the availability of a variety of cuisines with the possibility of delivery. The last important threat is the growing trend of health concerns among customers that require healthy food.
The Strategy Levels of the Company
Under the contemporary business conditions, it is possible to speak about two levels of any company’s strategy: the corporate and the business ones. The corporate level determines the general vector of the firm’s development, while the business level considers the organization of processes inside the firm. For Pizza Hut, the corporate level of strategy is described with the value-creating strategy. The company focuses on the increase of its market share by the sales revenue growth and diversification of its product line. This tendency is described by the integration of wings and sides to the restaurant menu. Despite the high level of competitiveness in the fast-food industry, Pizza Hut managed to occupy the niche with the product that does not have any significant competitors. This fact gives possibilities for the growth that is impossible for such companies as KFC and McDonalds.
In its business level strategy, Pizza Hut focuses on the effective management of its human resources and optimization of costs. The specifics of the industry define the high requirements for the professional qualities of its personnel. Here, Pizza Hut integrates the principles of coordination of unit activities and utilization of human resources. The effective actions in the development of distinctive advantages over competitors allowed Pizza Hut to maintain the leading position in its niche of the fast-food market.
The analysis of the marketing strategy of Pizza Hut allows defining the features that have helped the company reach success in its niche. The factors of the firm’s success include a high quality of its products, competitive pricing strategy, unique model of customer services, and the competitive model of the distribution. The main issues that the company will have to solve in the near future include the improvement of the pizzas’ production and delivery processes with the view to guaranteeing the best possible experience for the customers.
Pizza Hut. (2017). Consumer Affairs. Retrieved from https://www.consumeraffairs.com/food/pizza-hut.html
Pizza Hut Inc. history. (2017). Funding Universe. Retrieved from http://www.fundinguniverse.com/company-histories/pizza-hut-inc-history/
The 10 global fast-food brands. (2017). Forbes. Retrieved from https://www.forbes.com/pictures/feji45hfkh/top-10-global-fast-food-brands-2/#327b3d3d580c