PIZZA HUT

SUBMITTED BY

ANAS NP
COMPANY PROFILE

Pizza Hut is an American restaurant chain and international franchise founded in 1958 by Dan and Frank
Carney. The company is known for its Italian-American cuisine menu including pizza and pasta, as well as
side dishes and desserts. Pizza Hut has over 16,000 locations worldwide as of 2015, and is a subsidiary of
Yum! Brands, Inc., one of the world's largest restaurant companies.

HISTORY
The history of Pizza Hut comes a long way from 1958.

On May 31st 1958, the first Pizza Hut restaurant opened in Wichita, Kansas, started by two college aged
brothers who borrowed $600 from their mother. In 1959, Pizza Hut got incorporated in Kansas and the
first franchise unit opened in Topeka, Kansa.In 1964 The basic freestanding design of Pizza Hut was
adopted. In 1966 Pizza Hut’s first Home Office was built in Wichita, Kansas to handle the business of
now 145 Pizza Restaurants.

In 1967 Nine- inch tall Pizza Pete dolls became available at all Pizza Huts restaurants.

In 1969, the familiar top roof was adopted for Pizza Huts restaurants.

In 1971, Pizza Hut became the number one Pizza restaurant chain in the world in both sales and number
of restaurants. In 1972, Pizza Hut Inc. was listed on the New York Stock Exchange under the symbol PIZ,
and restaurant number 1000 opened in Wichita, Kansas. Pizza Huts goes International as a restaurant
opened in Costa Risa. In 1976, The 100th International Pizza restaurant opened in Australia while the
entire number reaches 2000 restaurants. In 1977, Pizza Hut Stakeholders merged with Pepsi Co. In 1983,
Pizza Hut celebrated its 25th Anniversary. In 1986, Pizza Huts started its Home Delivery service. In 1995,
Pizza Hut launched its Stuffed Crust Pizza, which immediately set company’s sales records. In 2007, Pizza
Hut offered online ordering at all of their 65,000 locations. In 2008, Pizza Hut introduced Total Mobile
Access- the ability for customers to order by text messaging or using their web enabled cell phones.
 MISSION
Pizza Huts Mission Statement: “ We take pride in making a perfect pizza and providing courteous
and helpful service on time all the time. Every customer says, "I'll be back!" We are the employer of
choice offering team members opportunities for growth, advancement, and rewarding careers in a
fun, safe working environment.”

Ingridents of Pizza:
 mozzarella cheese
 pepperoni
 sauce
 base
 potato
 vegetables
 wheat
 baby corn
 spices

Products of Pizza Hut :

 Pizzas
 Pastas
 Soups and salads
  Desserts

Outsourcing the Ingridents:

ITEMS PLACE

Wheat Jalandhar(Punjab)

Cheese Karnal, Haryana

Tomatoes Bhubaneshwar, Orissa

Spice South India

Baby corn Nepal

Pepperoni Australia
 mozzarella cheese Spain

Supply chain diagram of Pizza Hut:

Pepsi company and

Cremica bakes

Sauces

Dough Meat market

Filling
Vegetables

Topping

Ware houses

Bakes
Value preposition:

Value proposition determines determines additional ways of adding value to your offer
without affecting the price, so as to create a greater worth for the customer. This is
called ‘value proposition’. The value chain analysis means of increasing customer
satisfaction and managing cost more effectively. This is a systematic approach to
examining the development of competitive advantage. Value chain analysis is
particularly useful tool for looking at competitors, and identifying sources of competitive
advantage.

Pizza Hut entered India in 1996, and opened its first restaurant in Bangalore. Since
then it has captured a dominant and significant share of the pizza market and has
maintained an impressive growth rate of over 40 per cent per annum. Pizza Hut now
has 95 outlets across 24 cities in India; and employed nearly 4,000 people by end of
2004. Yum! has invested about US$ 25 million in India so far; this is over and above
investments made by franchisees. Yum! Brands Inc is the owner of the Pizza Hut chain
worldwide. A Fortune 300 company, Yum! Brands owns Kentucky Fried Chicken, Pizza
Hut, Taco Bell, A&W and Long John Silver’s restaurants worldwide. Yum! generated
more than US$ 25.9 billion in worldwide sales in the year 2003, and has more than
33,000 restaurants in over 100 countries.
There are various factors which gives Pizza hut an edge over its competitors like
Dominos, Pizza corner.

Offering value food:

Employing economies of scale, Pizza Hut has made its offerings more affordable. Its
delivery offer of US$ 4.4 for four personal pan pizzas has been very successful, helping
it grow the business by 25 per cent. They
have recently introduced a range of vegetarian personal pan pizzas for US$ 1.1.
Most Pizza Hut restaurants are located in the metros and smaller metros. In order to
have better market share across the country, Pizza Hut is consolidating its position by
opening more restaurants in the metros where it already has a presence as well as
opening outlets in new markets. Pizza hut is also moving beyond metros these days
and opening its outlets in the cities like bhuvneshvar,pondichery,Nagpur etc in order to
have better penetration.

Low impact:
The bottom left quadrant is the low impact area where the purchases are infrequent and
the analysis are totally based upon prices where it is not necessary to maintain the good
relation with the supplier. In the pizza hut case when they open their new store they
need the well furnished dining which is not purchased frequently and then they go for
that distributor who provide the required product with low prices and in that case it is
not primarily to maintain the health relationship with the distributor.

Leverage:
The upper left quadrant represents larger purchases from suppliers who have a routine
relationship with the firm. This is the area of leverage buys and the analysis is based on
cost because you are buying the quantity in bulk and little careful purchasing makes a
big difference in cost and on the other hand you have to maintain the good relationship
with the supplier .In the case of pizza hut they outsource their Pepperoni and
mozzarella cheese from Australia and Spain respectively which are their main
ingredients and they pay a heavy amount for these materials because they give a great
impact on the product cost and they have to maintain the good relationship with the
suppliers in order to get flexible supply chain and also cost effective.
Strategic:
The upper right quadrant represents more important supplier relationship. The term
strategic means that you are dealing with issues that are going to make a difference in
your companies competitive success and generally relate to items you buy that are
used to create the product or service that your firm sells. In the pizza hut their strategic
decision is to form a chain of local suppliers to reduce their cost. Now the company
buy 95% of the ingredients from the local vendors. A strategic development on the
cards now is the sourcing of all ingredients locally, which is likely to lead to a significant
reduction in prices. The chain is currently working closely with suppliers in India to
source cheese locally. Tricon has been importing the mozzarella cheese and dough
blend all these years, and has some 75 domestic suppliers. The key ones include
Bharat Bor Factory Ltd (for Pizza Hut boxes), Elmac Agro India Pvt x Ltd (for
sauce, baby corn and red bean among other ingredients), McCain Foods (for fries
and smileys), Midas Foods (for soups and cornmeal), Western Hatcheries and
Venkys (both for chicken toppings, patties and wings
7 P’S
Pizza hut is one of the leading pizza fast food chains in India. The pizza chain was
one of the first entrants in India for pizza and was soon followed by Dominos.
However, the pizza chain continues to maintain its premium image. This article
discusses the marketing mix of Pizza hut which falls in services marketing and
hence 7 P’s of Pizza hut are mentioned herewith.

products, viz Pizzas, breads and pastas. But at the same time, due to increasing competition from
Dominos, McDonalds and KFC, Pizza hut has gone local as well with its Birizza which is a type
of Biryani. However, the pizza hut chain is most known for its tasty variety of Pizzas. The
product characteristic of Pizza hut pizzas is that the pizzas are high quality and are served in
sizeable portions. Thus, people love the rich taste of pizzas and pastas of Pizza hut. Another
companion of Pizza hut is the Pizza hut delivery, which like Dominos, is concentrated on
delivering the pizzas at home.

Price in the marketing mix of Pizza hut – The pricing of Pizza hut is premium / skimming
pricing. Pizza hut knows that it is the first entrant for pizzas in India. On top of it, Pizza hut
provides higher quality food as compared to its competitors and at the same time the ambiance of
the pizza hut chain is better and richer than most of its competitors who serve Italian products.
Thus, even though Pizza hut has a premium pricing, people prefer Pizza hut over others.

Place in the marketing mix of Pizza hut – Pizza hut is present in most of the A grade places
across urban areas. This placement helps Pizza hut maintain its premium positioning in the mind
of people, because B grade town people will have to go to the A listers area to actually have a
pizza hut pizza. On the other hand, A grade towns are more likely to have pizza from pizza hut
than from dominos because of the price positioning. Due to a higher price, and a higher quality
of food, pizza hut has to be present in A grade towns only. In B grade towns, people would more
likely prefer the more affordable Dominos.
Promotions in the marketing mix of Pizza hut – Pizza hut is known to be a smart promoter for
its own products. The ATL promotions mostly concentrate on introduction of new products as
well as to build brand equity. During festivals, the ads take a different route and promote
discounts and offers on products to attract customers. At the same time, pizza hut does several
enterprise discounts as well and gives discounts to corporate customers. Finally, the success of
the chain depends on local marketing. And local marketing depends on the local pizza hut outlet
which may use BTL activities like hoardings, newspaper inserts, guiding customers to the outlet
and lollipops.

People in marketing mix of Pizza hut – The best part of Pizza hut are the people. Pizza hut
introduced a novel way of showing customer appreciation – the bell. Anyone who rings the bell
on exiting from Pizza hut is greeted with a loud thank you from all the waiters in Pizza hut.
These people also do performances frequently on celebrations and most important of all, the
pizza hut chain has the most polite and well mannered people in the fast food industry.

Physical evidence in the marketing mix of Pizza hut – The only reason Pizza hut is able to
demand premium pricing is because of its physical evidence and the ambiance. The cutlery of
Pizza hut is fantastic and it is an enjoyable experience to have the pizza out of the pan right into
our plate. The bowls served along with pasta are also good. The glasses are big. And the seats
and tables are comfortably spaced giving people the complete experience of luxury dining.
Combine that with the excellent people in Pizza hut and you have an excellent afternoon or
evening of dining out for Italian cuisine.

Process in the marketing mix of Pizza hut – Pizza hut serves only freshly made Pizza and
pastas. The process of Pizza hut involves having the raw materials half prepared in the kitchens
of Pizza hut. Once the order is received, the pizza is immediately prepared and served hot. In
case of pizza hut delivery, pizza hut has gone a further length and introduced a hot mark on all
their packaging for Home delivery. If the mark is not red, than the pizza is not hot and it can be
returned to the outlet. Furthermore the outlet also promises 30 minutes delivery for which it has
to maintain a slew of drivers who deliver the pizza.

This completes the marketing mix of Pizza hut. The reality of the market is that Pizza hut is a
fantastic food chain, but it is slowly being overtaken by Dominos because of the presence of
Dominos to deliver pizzas to even B grade towns and cities. Ignoring the B grade towns is a
deliberate marketing strategy of Pizza hut. But in the long term, whether this marketing strategy
is right or wrong, only time will tell.
ORGANIZATION STRUCTURE