Australia Pizza Hut Term Paper

Excerpt from Term Paper :

Pizza Hut Business Assessment

A Marketing Plan for Pizza Hut (Australia)

Marketing Objectives (Assessment Part 2)

This marketing objective is a statement of what is to be accomplished through marketing activities. Marketing objectives for Pizza Hut (Australia) are:

To maintain the number one market position

To increase the percentage of pizza sales by increasing the number of franchisee delivery units with carryout facilities.

The marketing objectives can be achieved through different ways. One of them can be creating internal campaigns or contests with attractive prizes to achieve the established objectives. In July 1997, Pizza Hut organized a " Serving Up a Million" contest. It was an eight-week long contest among all Company-owned Pizza Hut stores across the country and the Odessa restaurant outperformed more than 4,000 company-owned Pizza Huts in U.S.A. The Pizza Hut manager and his staff received a check for U.S. dollar 100.000. Pizza Hut Website (1998).

Another way could be signing agreements with leading corporations or chains, which are operating in the same or in complementary markets such as the agreement, signed in 11 February 1997 by Pizza Hut and Hilton Hotels. The objective was to offer hot, tasty Pizza Hut pizzas at select Hilton Hotels and resorts across the United States "To provide travelers with the same food and service that they received at their hometown "Pizza Hut" said Pat Williams, President of PepsiCo Express Restaurant.

In my opinion, Pizza Hut can improve its sales percentage and its profit by opening more delivery units with carryout facilities in strategic places carefully chosen. In comparison with the traditional restaurants, the delivery-units required an estimated U.S. Dollar 128,500 to 198,500. By contrast, with the company-owned delivery units, the franchisee investing in delivery-units typically did not buy vehicles and did not always adopt the company's computer-ordering system. The cost of sales would be lower in the Delivery units due a combination of upsizing and higher prices for order. However, the carryout segment is the segment with a greater percentage of sales. The number of staff required for its functioning should be smaller as well. "When we introduce delivery to a market, we get the business of customers who probably were ordering a competitors pizza simply for the convenience of home delivery" said a senior Pizza Hut manager.

The first objective is: To maintain the number one market position. Pizza Hut should continue to offer a high quality product with higher price

Pizza Hut could revise all its unnecessary expenses increasing the advertising promotion in local radios and TV. And more publicity.

In the same way, another marketing strategy could be to start or increase the number of mailings to send homes. The Marketing Department will establish which areas and the frequency with which to send it.

It could be very useful for Pizza Hut to edit a monthly "Pizza Hut Magazine" which will include news of the Restaurants and delivery units either Company-owned and franchisees, customers letters, games with prices, promotions of the month, etc.

In my opinion with the creation of discount cards for loyal customers, it is possible to obtain from them "total " fidelity to Pizza Hut with free advertising ("word of mouth")

Another strategy could be to pay more attention to the senior citizen segment, because its number is steadily increasing and they have more buying power as well. They could join the "Pizza Hut Senior Club" specially created for them. This Club could organize activities, holidays in attractive places in States or abroad in collaboration with Hilton Hotels, organized monthly meetings, etc. However, Pizza Hut in collaboration with the Nutrition Department of a famous American University can launch special menus for them, which a perfect balance between health (no fat, no cholesterol, etc.) and taste. Perhaps these menus would be suitable also to vegetarian people. This strategy should be advertised in local radios and TV.

To achieve this objective, it would be most appropriate to increase staff training to make all fully aware that they are working in the top Pizza chain. To continue maintaining this position the company needs them, needs their professional skills which they should try to improve everyday and needs their friendliness providing the best treatment to the customers (personal selling)

B: to increase the percentage of pizza sales increasing the number of franchisees delivery units with take-away/carry-out facilities this should be carefully picked in areas with strong customers' potential.

A market study is required to identify the best areas to install the delivery units. The Finance Department will carry out its study to know the cost of the investment and its possible profitability as well.

The number of franchises who had introduced delivery was growing rapidly and many franchisees that had introduced delivery were doing significantly better than the company-owned stores. Eighteen franchisees opened 65 delivery - only units in 1986, bringing the overall to 96. I think that if it is possible to install carryout facilities, the business' volume could increase in a favorable way.

As I mentioned in previous lines, Pizza Hut must strongly work to develop a new products designed especially for delivery. This would involve an entirely different production process than that used currently in the traditional restaurants.

To obtain total co-operation of employees because they are essential in increasing productivity, providing customer service and beating the competition.

Motivate the personnel to perform effectively through a plan, which should be fair, ethical, and well understood by them.

Hire and maintain high quality personnel and market the organization or service to them because it is people in a service organization who differentiate the organization from competitors.

Establishing rewards to employees and appropriate compensation, promoting and implementing flexible benefits program. Simkim, Ferrel (1994).

Pay more attention to the senior citizen segment creating suitable products and increasing staff attention to them. Creating Pizza Hut Senior Club, which will organize different activities.

Maintain and enhance a high quality product providing value and excellent service. Launching new products and "New Pizzas" to "surprise" the customer as it was with The Edge Pizza which "delivers a phenomenal new taste" and "will consumers will run out of crust before they run out of toppings?" As commented Randy Gear chief marketing officer of Pizza Hut.

Launching periodic Customer Satisfaction campaigns. Staying in touch with and adapting quickly to new preferences. Always providing friendly, helpful service from well-trained staff.

Introducing new improvements in the restaurants' facilities such as introducing lunch buffets to exhibit the pizzas and the salads and unifying its corporate image.

The phrase "Location, location, location" is very often used to describe the most important aspect of any hospitality business. This is especially true for a premier brand that has to be located in the best positions appropriate for its market. Nevertheless, one needs to be realistic with respect to the market position. Pizza Hut maybe a prime Pizza Restaurant marquee but it is not a three-star Michelin French haute cuisine restaurant. Therefore, the locations will not be Park Lane or Bond Street in London or 5th Avenue in New York. Appropriate prime locations for the Pizza Hut marquee will be general consumer shopping areas such as Oxford Street in London or in out of town shopping malls or in High Streets.

As far as the location for the delivery service is concerned, location is not important but it has to be close to the customer residential areas or near offices.

Strengthen the task of the Pizza Hut Advertising Committee and increasing its budget through the increase of the restaurant and franchisees current assessment. In 1986 the current assessment was 2% of the first U.S. dollar 28.000 of monthly sales for each Restaurant and 1% of all monthly sales above U.S. dollar 28.000 Kaufmann (1993).

Pizza Hut should target the senior citizen segment doing some advertising in the local radios and TV. Nevertheless, the main part of advertising in radio and on TV. Of Pizza Hut will be its traditional focus on a large audience of potential fast customers, ranging from children to adults at the effective time and in the right place.

Direct mail will be sent to advertise new products, new Pizza Hut Restaurants or delivery units including in the mailing promotional discount coupons or tokens to encourage use of the new establishment.

Another way to promotion will be "personal selling" trying all the Pizza Hut staff informing customers and persuading them to purchase the most suitable products in that moment.

Sponsorship giving financial support of sports activities and giving financial support to scientific research.

Taking in account that the a major input to the price decision is the cost of producing and marketing the product (Butler, 1996), Pizza Hut should maintain highest price giving the best quality but trying hard to reduced as much is possible, the section of variable costs, such as Semi-variable & premiums in both, Traditional Restaurant and Delivery Unit, or the vehicles section in the Delivery Restaurant improving the routes to delivery, to save petrol.

However, all the sections whose costs are variable, should be…

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