ECONOMICS PROJECTTopic: Pizza Hut v/s DominosPresented by: NIDHI DEDHIA FYBBI - Roll No. 5 For the academic year 2011-2012 MITHIBAI COLLEGE
IntroductionFast food is one of the world’s largest fast growing industrytypes. India’s fast food industry is growing by 40%. The 6000corer fast food retail industry is mainly dominated by themultinational players and the key players which are active inthe research of the food retailing. Because of the availability ofraw material for fast food, global chains are flooding into thecountry. The percentage share held by foodservice of totalconsumer expenditure on food has increased from a very lowbase to stand at 2.6% in 2001. Eating at home remains verymuch ingrained in Indian culture and changes in eating habitsare very slow moving with barriers to eating out entrenched incertain sectors of Indian society. The growth in nuclearfamilies, particularly in urban India, exposure to global mediaand western cuisine and an increasing number of womenjoining the workforce have had an impact on eating out trends.
Major players in fast food are: McDonald KFC Pizza hut Dominos pizza Café coffee day Barista Subway Papa John’s Smokin joe’s
Market shares and major playersIndian taste buds are demanding more and pizza industry – oneof the most intensive industry is all gearing on. People acrossthe country are consuming over three million pizzas a monthcurrently, and the monthly sales figures are projected todouble in the next four years. According to industry data, of thetotal branded quick service restaurant market make a sale ofover Rs 1,200 Crore, the pizza chains contribute around 50 percent of the sales i.e. worth Rs. 600 Crore.Market share as on 1999 PIZZA CHAIN MARKET SHARE (%) Pizza Hut 46.42 Dominos 21.67 Others 31.91 Source: Financial ExpressMarket share as on 2000 Pizza Chain 2000 Market Share (%) Pizza Hut 18 Dominos 70* Others 12 Source: Business Standard, As claimed by the company
Current Market Shares Branded Pizza Market Share Pizza Hut Dominos OthersThe major market players are Pizza Hut and Domino’s with marketshare of 45% and 35% respectively and other shares 20% of themarket.
PIZZA HUT Good time start with great Pizza It entered India (Delhi) in June 1996 By Jan 2001 pizza hut had 19 outlet across India Presently it has 142 outlets in 32 cities in India Pizza Hut is the world’s largest pizza chain with over 12,500 restaurants across 91 countries. Employing more than 300,000 people. Pizza Hut is one of the flagship brands of Yum! Brands, Inc., which also has KFC, Taco Bell, A&W and Long John Silver’s under its umbrella.
DOMINO’S PIZZA Hungry Kya ? It entered India (Delhi) in 1996 through a franchise agreement with VamBhartia Corp. Speedy growth (1 outlet in 1996 & 101 outlets in Feb 2001) Emphasis on home delivery Today Dominos Pizza India has grown into a countrywide network of more than 300 stores with a team of over 9,000 people. According to the India Retail Report 2009, Domino’s were the largest Pizza chain in India & the fastest growing multinational fast food chain between 2006-2007 and 2008-2009 in terms of number of stores. Dominos believes strongly in the strategy of Think local and act regional
Competitors of the Pizza Hut and Dominos • Pizza corner • McDonald’s • Barista • Cafe coffee Day • Subway • Papa john’s • KFC Pizza Hut and Domino’s competitor analysis
4P’s of Pizza Hut AND DOMINO’S 1. PRODUCT PIZZA HUTThe customer value hierarchyFrom the above diagram we can see that pizza hut has enjoyment as abasic product but it provides food for it. Thus a person having a basicneed of enjoyment can go to pizza hut and have pizza which is thecompany’s core product. Hot pizza and good taste are his expectation.Thus the company should ensure this by providing good pizza. Thevalue adds services refer to the overall dining experience, the servicequality, ambience etc.
Domino’sThe customer value hierarchyFrom the above diagram we can see that dominos has a food as a basicproduct but overall it provides an experience. Thus a person having abasic need of food can go to dominos and have pizza which is thecompany’s core product. Hot pizza and good taste are his expectation.Thus the company should ensure this by providing good pizza. Thevalue adds services refer to the overall dining experience, the servicequality, ambience etc.
2. PLACEOnce the product has been decided upon and the market segmented,targeted and the product positioned, it is time to decide how andwhere the marketer can deliver the value (product) to the customer.This is done through marketing channels that make the productavailable for consumption to the customer.Push and pull strategies in channel marketing:In a push strategy, the manufacturer uses his sales force, tradepromotion, money or other means to induce intermediaries to carrypromote and sell its products to end users. In a pull strategy, themanufacturer uses advertising, promotion and other forms ofcommunication to persuade the customer to demand the product fromintermediaries, thus inducing the intermediaries to order it.Pizza hut: masters at pull strategyPizza hut follows more or less the opposite strategy. Pizza hut hasmastered the art of pull strategy. It pioneered the practice ofadvertising and promotion in the fast food industry. Pizza hut achievedthis remarkable feat by adopting a different marketing strategy thatinvolved increasing ambiences and amusement for the customers.Domino’s: pursuing a push strategyDomino’s pursues a medium push strategy in its channel marketing.The advertising layout for Domino’s is minimal in India. Domino’sconcentrates on incentivizing customers instead off advertising andpromotion. As a result, domino’s regularly introduces sell-in schemes(promotional schemes for dealers), promotional coupon, festival offersetc.
3. PRICETricon International said, “Indians are value-sensitive, not price-sensitive. We need to offercomeback value to our customer.” The high price was attributed to the high quality ofingredients used. For instance, Dominos sourced its Pepperoni and Jalapeno needs fromAustralia and Spain respectively. However,with competition increasing from Pizza Hut,Dominos introduced price cuts, discounts and freebies to attract the customers. Company Price Range (Rs) Dominos 39-265 Pizza Hut 75-350 Pizza Price ComparisonDominos was spending 50% of its total marketing budget on special offers and discounts alongwith delivered direct mailers and pizza training classes. Dominos also had a tie-up withDiscovery Channel under which the channel advertised its pizzas while Dominos put thechannels name on its mailers. Dominos conducted Pizza making classes for school students. In1998, it offered a clock to all its customers who had bought Rs.15,000 worth of pizzas 4. PROMOTIONPromotional and advertisement campaigns The pizza delivery business had traditionally been promotion driven. Coupons and discounts were offered by all pizza delivery chains to woo customers. Since its inception, Domino’s had been known for its unique promotions that included fast delivery and innovations to cater to a varied palette.Use of technology Online sales accounted for over 70 percent of its total sales in 2008. Dominos planned to further exploit the increasing potential of the online medium as one of the promotional and distributional channels in the downturn.
Creative strategyLatest in domino’s Kwality wall’s ice-creams in dominos- For the first time dominos started offering ice creams .Selling ice cream in Domino’s is also a new sales promotion strategy to attract more customer in a new perceptive/innovative way. Domino’s has also come up with pasta mania.Latest in pizza hut Pizza Huts first campaign on television in July 2001, which said, “Good times start with great pizzas”. The ad was aired during all the important programs on Star Plus, Sony, Sony Max, Star Movies, HBO, AXN, and MTV. The first ad campaign on TV defines Pizza Hut as a brand, and what it offers to its existing and potential customers.Sales promotion Pizza Hut laid more emphasis on its “restaurant dining experience”. Pizza Hut localizes it menu to capture local Indian Market. In 2000 Pizza Hut launched its innovative Pizza Pooch menu and Pizza Pooch Birthday Party package exclusively for kids in the 6-10 age groups. It positioned itself as family restaurant and also concentrated on wooing kids.
Success Factors Pizza Hut Offering value food Aggressive marketing and tie-ups with local and popular brands Moving beyond metros Developing the local supply chain International brand with an Indian heart Offering more than the international menu Good ambiance Domino’s Door step services Low pricing
SURVEY Name: Gender: M/F Age Group: a) Below 18 b) 18-28 c) 28-40 d)Above 40Occupation: a) Student b)Business c)Service d)Housewife e) Any other : 1. How often do you visit Pizza Hut OR Dominos ? (i) Weekly (ii) Monthly (iii) Occasionally 2. Through which media you are getting information about Pizza Hut? (i) TV (ii) Newspaper (iii) Pamphlets (iv) Bill Boards (v) Other’s (specify)…
3. Put a tick against the following with respect to following parameters? Parameter Pizza Hut Dominos Quality Price Store Ambiance Service4. Compare Pizza Hut and Dominos with the following food chains and rate them on a scale of 10. Name Quality Store Service Ambiance Pizza Hut Domino’s Pizza Corner Nirula’s Smoking Joes U.S Pizza5. Would you try a new food item launched Pizza Hut or Dominos : (e.g Conniza , Freshizza ) (i) YES (ii) NO6. In your view what suggestions you have for Pizza Hut?
ConclusionsKeeping up the sentiments of Indian customers and services offered byPizza-houses and Keeping our study focused on some of the key –areasof sensitivity of customers preferences (analysis of factors whichaffects the preferences).We come to a conclusion that : - Pizza Hut is preferred over dominos in terms of Varity of Pizza’s Good ambience Services offered Quality of pizza’s Location of the Outlet Waiting time in the outlet Domino’s is being preferred over pizza-hut in terms of Door step services Low pricingSo we can say that due to these qualities PizzaHut dominates Domino’spizzaIn different areas and capture the market share and gain rapidly.
Recommendations For Dominos Increase varieties in Pizza’s. Focus on location of the outlets. Increase the quality of Pizza’s Make good ambiance in outlets Should focus more on market zing itself confidently. For Pizza-Hut Try to attract more number of Ladies customers. Should focus on Low price customers. Make the door step services better
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