Pizza Hut New Menu Marketing

Current Event The marketing mix contains four elements -- product, price, promotion and place. Thus, a key element in attracting customers is the product. Managers must frequently evaluate the mix of products that they offer their customers. Sometimes, new products are a means to recapture the attention of former customers who may have lost interest in a business. Other times, new products reflect a pattern of modernization at the business, a response to a changing environment.

There is little doubt, however, that managers at major corporations take their product decisions seriously. Pizza Hut has a test kitchen dedicated to creating and trying out new recipes. For the manager, the decision is which product to proceed with. They use a number of techniques, including their own taste tests, measures of economics like how much a certain pizza costs to make, or if it requires any extra effort to produce.

In other instances, they will just use a test market or a focus group to provide feedback that is used to help determine which speculative new products make it to market. Pizza Hut is currently in the test-marketing phase with 11 new flavors. These range from curry flavor to honey sriracha to barbeque sauce, a panoply of unique flavors that are taking the company away from traditional pizza flavors but are more in line with the offerings of competitors (Alesci, 2014).

The company's move to experimentation highlights how managers need to pay attention to the competitive landscape, and craft responses when there are new threats. The pizza industry is saturated, so many new competitors are seeking to differentiate themselves with unique flavor offerings -- things that customers can gravitate to but that they will not be able to get anywhere else. With that in mind, Pizza Hut is experimenting with things like asiago cheese, spinach and Peruvian cherry peppers.

They are working a new menu that will be launched shortly with some fanfare. The changes in the external environment have driven Pizza Hut to make this decision to modernize its menu, and to respond to the changing needs of its target market, which today has been raised on exotic, international flavors and thinks nothing of mixing food concepts.

There is a sense within the company that the menu overhaul is a massive project -- it has taken over a year thus far -- and that there is a lot at stake because the changes are so dramatic. This is generally a conservative company that does not change much, but now they are making strategic decisions based on new market realities. In essence, Pizza Hut has been forced by virtue of competition to come out of its comfort zone.

The underlying premise is that its customers are already there, out of the comfort zone waiting for Pizza Hut to join them in a celebration of modern and creative flavors. Nevertheless, the risk in this strategy highlights that there is always an opportunity cost for making such decisions. Pizza Hut has to.