Pizza Hut Company Presentation the Term Paper
- Length: 11 pages
- Sources: 18
- Subject: Business
- Type: Term Paper
- Paper: #16167106
Excerpt from Term Paper :
However, the main segment of Pizza Hut customers is consisted of people aged 16-35, with medium incomes, medium education, and low gastronomic education. In addition to this, secondary segments are consisted op people aged 35-55, with medium to high incomes, and medium to high education. Pizza Hut is also addressing the vegetarian segment, by developing products for vegetarians, like Veggie lover's pizza, various types of salads and desserts. Also, by continuously developing its product range, Pizza Hut is trying to gain other customer segments, with more sophisticated preferences.
Besides having satisfied employees, Pizza Hut is trying to maintain its customers as satisfied as possible as well. In order to improve its customer relationship management, and therefore, to improve customer loyalty, Pizza Hut has implemented Avaya's Enterprise Manager program, since "fulfilling our promise of fast delivery of hot pizzas to all customers is crucial to maintaining our leadership in this highly competitive market, requiring all our business processes to function faultlessly" (Scodellaro, 2002).
In order to improve its customer relationships, Pizza Hut, along with Domino's, has addressed media channels, the Internet respectively. It seems that "through the cross-utilization of television, the Internet and cell phones, both companies put on unprecedented first quarter blitzes to, in the words of their spokespersons, get core customers to interact with each brand" (Coomes, 2007).
Results from Customer Comment Cards have revealed the following: food quality - 44% good; employees' attitude - 48% good; speed of service - 45% good; unit cleanliness - 61% excellent; value received - 46% good. The customers' top four complaints were: impolite or inattentive service, slow service, food quality, and unconcerned manager. As one may observe, most of the complaints regard the quality of employees, and not the quality of food. This shows that Pizza Hut is dealing with certain problems regarding its employees and their abilities. It proves that the human resources selection, recruitment, training, and retention strategy is inadequate and it calls for immediate measures to correct it.
Pizza Hut Strategies
In order to ensure the company's future well-functioning, Pizza Hut has applied several strategies, regarding cost consciousness, international markets, product innovation, pizza distribution, service delivery systems, or the breakthrough program.
Regarding cost consciousness, Pizza Hut had to rethink its price strategy, due to powerful new entrants on the market that were a threat to the company's well-functioning. Therefore, "Pizza Hut reacted to increased production costs by implementing changes in operations in its restaurants to improve efficiency and control waste" (Middaugh and Saladin).
Regarding international markets, strong competition on the domestic market has somehow forced Pizza Hut to expand abroad. Due to the fact that the company's products were generally appreciated across the world, it did not take long until Pizza Hut became the largest pizza chain in the world. The company's international outstanding position has determined significant positive changes in the company's position on the domestic fast food market.
Another very successful strategy for Pizza Hut is product innovation. The company is continuously using this strategy to counteract competition both on the internal and external market, competition that is becoming stronger and stronger. Pizza Hut is acknowledged to be one of the most innovative restaurants in this industry. Product differentiation has become Pizza Hut's competitive advantage over other major players in this industry that the company has successfully managed to overpass. Due to its continuous product range expansion, the company is also expanding the number of customers.
Significant changes have been produced in Pizza Hut's distribution strategy. In the beginning, and for a long time since then, Pizza Hut was a regular restaurant. However, things have changed in the past 15 years, the company expanding into alternative delivery systems for Pizza Hut products. As a consequence, Pizza Hut has become an important player on the home delivery and carry-out operations market. This market was at the time dominated by Domino's, but Pizza Hut managed to obtain a strong position on this market also.
Although customer relationships have improved significantly over the past few years, there is still room for improvement. One of the segments of the company that needs special attention and immediate changes is related to employees. The main reason for which customers are not fully satisfied with Pizza Hut's services is the fact that employees are not rising to the standards that Pizza Hut has imposed over the years on the market.
Pizza Hut strategies have proven to be successful no only for the company, but for the entire Yum International, that owns Pizza Hut and other major players in the field. The result of Pizza Hut strategies was that "Dallas-based Yum! Restaurants International has added more than 700 stores abroad in each of the past four years, helped by a rapid expansion in China that resulted in the region's being made a separate reporting division" (Ruggless, 2005). Therefore, Pizza Hut is not just an individual success, as it provides resources that help develop new markets.
Another specific strategy implemented by Pizza Hut and Yum International was creating a "Pizza Hut prototype, located in Columbia, which features a larger and warmer interior with softer lighting to enhance the restaurant's dine-in atmosphere" (Lohmeyer, 2003). One may observe the two opposite types of strategy implemented by Pizza Hut: the company tries to preserve the traditional idea of dine-in restaurant, only modernizing it a little, on the one hand, while adding modern distribution means to its strategy, like online ordering, on the other hand.
Future strategies for Pizza Hut are expected to rely on promotions, since "Pizza Hut is probably the most susceptible to volatility. it's more dependent on promotions than the other chains" (Spielberg, 2005). Some expect that the strategic direction will focus on developing new products, and not on discounts (Garber, 2004).
The Future at Pizza Hut
Back in 1991, Pizza Hut strategists had considered that the company's future relied entirely on diversification, as "even as it faces a downturn in dine-in business, Pizza Hut is pushing ahead with a comprehensive distribution strategy that executives hope will carry the chain well into the next century and solidly establish its dominance at all levels" (Frumkin & Howard, 1991). Since then, Pizza Hut has continued on the diversification direction, which will be followed in the future as well.
A novelty that Pizza Hut has come up with in order to attract more customers and to expand its customer segments to lower age averages relies on sponsoring certain programs. Such a program is called Book it. The program is based on rewarding "22 million young readers each year with free personal pan pizzas" (Damlo, 2007). The program has, however, its share of opponents that do not agree with such and incentives program, under the argument that it will only stimulate children to win free pizza.
Also as a direction to be continued in the future, one must take into consideration Pizza Hut's distribution strategy that started to focus on online ordering also. One mean for making this strategy to be successful is the partnership between Pizza Hut and EverQuest II. The company grants Pizza Hut access to its customers, which should help Pizza Hut expand its market share (Liddle, 2005).
Another future step for Pizza Hut in certain countries where it is present is the acquisition of Pizza Hut restaurants by Yum International. It is the case of Pizza Hut UK. Only 50% of it was owned by Yum International. The reason for this total acquisition is that "Pizza Hut is a powerhouse brand around the globe and the leader in casual dining in the United Kingdom, which has historically been one of the strongest markets for Yum! Restaurants International" (Business Wire, 2006). Although UK sales for Pizza Hut have not met the company's expectations, it is considered that the future changed by this acquisition will increase sales in this country.
In the future, Pizza Hut will have to concentrate more on customer satisfaction, whose rates have significantly decreased over the past few years. The American Customer Satisfaction Index for Pizza Hut decreased 5.3% in 2005 (Garber, 2005). This decrease in customer satisfaction is not due to the quality of the company's products, proven by the increased sales, but it is due to the quality of the company's employees, that do not meet customers' requirements in this area. The future of Pizza Hut involves even soccer, by building a stadium, which became the third soccer-specific stadium in Major League Soccer (Edward, 2005).
Also, in the future, Pizza Hut will try to modernize its strategies and techniques, as "the next advances will come around technology. Technology allows us to streamline the cooking process in our restaurants. Technology allows us to place orders on cell phones" (Ruggless, 2005). This is proof that the company will focus on increasing customer satisfaction and comfort.
Pizza Hut (2007). Wikipedia, the free encyclopedia. Retrieved October 1, 2007 at http://en.wikipedia.org/wiki/Pizza_Hut.
Our Full Menu (2007). Pizza Hut. Retrieved October…