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    pizza hut-report pizza hut-report Document Transcript

    • Report and Marketing Strategies of Pizza Hut A PRESENTATION REPORT ON PIZZA HUT PESHAWAR ACCEPTED TO SIR IMRAN WAZIR ACCEPTED BY: ADNAN KHAN MUJAHID HUSSAIN NAVEED SAEED SHAHZAD TAHIR ZARTASHIA ARSHAD BBA (HONS) - C 1st SemesterInstitute of Management Sciences, Peshawar Pakistan Page 1
    • Report and Marketing Strategies of Pizza Hut TABLE OF CONTENTS S. No. Topic Page Number 1 Letter of acceptance 3 2 Executive summary 4 3 History of Pizza 5 4 Introduction & History Of Pizza Hut 5 5 Pizza Hut Mission Statement 6 6 Comparative Strategy 7 7 PEST 8 8 SWOT 9 9 Segmentation 10 10 Positioning 10 11 Targeting 11 12 Pizza Hut Strategies 11 13 Functional Level Strategy 11 14 TQM (Total Quality Management) 12 15 Business Level Strategy 12 16 Pricing Strategy 12 17 Market Share 13 18 Four Ps of Marketing 14 19  Product 14 20  Price 14 21  Place 15 22  Promotion 16 23 Conclusion 17 24 References 18Institute of Management Sciences, Peshawar Pakistan Page 2
    • Report and Marketing Strategies of Pizza Hut LETTER OF ACCEPTANCETo: Mr. Imran Wazir, Lecturer IM| Sciences, Peshawar.Subject: PREPARATION OF REPORT We are Hereby Presenting the presentation on Company Pizza Hut and assure you submissionof our report in compliance with the instruction envisaged. Name of topic is repeated for readyreference please.“Marketing Plans & Business report on Pizza Hut” Yours sincerely, Adnan Khan Mujahid Hussain Naveed Saeed Shahzad Tahir Zartashia ArshadDate: March 03, 2009Institute of Management Sciences, Peshawar Pakistan Page 3
    • Report and Marketing Strategies of Pizza Hut EXECUTIVE SUMMARYDuring the past four decades Pizza Hut has built a reputation for excellence that has earned therespect of consumers and industry experts alike. Building a leading pizza company has requiredrelentless innovation, commitment to quality and dedication to customer service and value.The qualities of entrepreneurship, growth and leadership have characterized Pizza Hut’sbusiness through more than four decades of success. Through the strength of its heritage, itsculture and its people and franchisees, Pizza Hut looks forward to more success in future.There are different objectives of every organization. In order to achieve these objectivesdifferent targets are set. Targets pass down the hierarchy depending on the nature of thebusiness. Therefore, in order to achieve the objectives, management decides on differentstrategies. These strategies are divided into many sub-parts and are useful for the running ofthe business. The employees and the management know what they have to achieve throughthe targets which have been set to them and the strategies they have adopted help them knowthe way they will achieve the objectives. Similarly, Pizza Hut has different targets set to themand they have adopted different strategies to successfully achieve the targets set. Thesetargets are set by the RSC i.e. the restaurant support centre in Karachi. These targets arepassed on to the RGM (restaurant general manager) and he passes them to the workforce.These targets fall within the organizational structure in which there are many people who havedifferent targets to achieve. In order to successfully achieve the targets they need to co-operate and work in a friendly environment.Institute of Management Sciences, Peshawar Pakistan Page 4
    • Report and Marketing Strategies of Pizza HutHISTORY OF PIZZAAbout Pizza, Some will tell you Italy. Thats wrong. What you know as pizza came into voguearound the time of Napoleon and the French revolution. Italians, known to be lovers of finefood and wines perfected and imported this terrific dish to America. From here it quicklyendeared itself to mass production and re-export to the rest of the world. Bon appetite!INTRODUCTION & HISTORY OF PIZZA HUTIn 1958, Frank and Dan Carney had an idea for a great local pizza restaurant in Wichita Kansas.The small 25 seat restaurant only had room for 9 letters on the sign… the building looked like ahut… so Pizza Hut was born!Fifteen years later, we opened the first UK restaurant and since then weve become the biggestPizza Company on the planet, Let see listen Pizza Hut Story from them! 1958 Frank and Dan Carney open the first Pizza Hut in Wichita, Kansas. 1972 1000 restaurants are open throughout the USA. 1973 Pizza Hut went international with restaurants in Japan, Canada & England. The first UK Pizza Hut opened in Islington, London. 1977 PepsiCo bought Pizza Hut. 1980 Pan Pizza was introduced. 1982 The UK joint venture started between PepsiCo and Whitbread. 1984 Over 50 restaurants so far in the UK. 1986 By now, there were 100 restaurants in the UK and 5000 worldwide. 1987 An average of one restaurant opened each week in the UK. 1988 The UKs First Delivery Unit was opened in Kingsbury, London. 1992 There were 9,000 restaurants in 84 countries. 1993 There were 300 restaurants and delivery stores in the UK. 1994 10,000 Pizza Huts were open for business. 1997 PepsiCo decided to focus on their drinks business. As a result, Tricon Global Restaurants was born, creating the largest restaurant brand in the World. Tricon became the partner company with Whitbread. 1999 Pizza Hut had over 400 restaurants, employing 14000 people. 2002 Tricon Global became YUM! Brands Inc. 2006 Whitbread sold their share of the joint venture to Yum! Brands Inc. Pizza Hut UK Ltd was now 100% owned by Yum! 2008 We bought Godfathers Pizza in Ireland with 28 stores.Institute of Management Sciences, Peshawar Pakistan Page 5
    • Report and Marketing Strategies of Pizza HutPizza Huts Mission StatementWe take pride in making a perfect pizza and providing courteous and helpful service on time allthe time. Every customer says, "Ill be back!"We are the employer of choice offering team members opportunities For Growth,Advancement, And Rewarding Careers in a Fun, Safe Working Environment. • P.E.A.R.L.S  PASSION for excellence in Doing everything  EXECUTE with positive energy and urgency.  ACCOUNTABLE for growth in customer satisfaction and profitability.  RECOGNIZE the achievement of others and have fun doing it.  LISTEN and more importantly, respond to the voice of the customer.Institute of Management Sciences, Peshawar Pakistan Page 6
    • Report and Marketing Strategies of Pizza HutCOMPARATIVE STRATEGY: This forced competitors to look for new methods of increasing their customer bases.Many pizza chains decided to diversify and offer new non-pizza items such as Buffalo wings,and Italian cheese bread. The current trend in pizza chains today is the same. They all try tocome up with some newer, bigger, better, pizza for a low price. Offering special promotionsand new pizza variations are popular today as well. For example, chicken is now a commontopping found on pizzas. In the past, Pizza Hut has always had the first mover advantage. Their marketingstrategy in the past has always been to be first. One of their main strategies that they stillfollow today is the diversification of the products they offer. Pizza Hut is always addingsomething new to their menu, trying to reach new markets. For example, in 1992 the famousbuffet was launched in Pizza Hut restaurants worldwide. They were trying to offer manydifferent food items for customers who didnt necessarily want pizza. Another strategy they used in the past and are still using is the diversification of theirpizzas. Pizza Hut is always trying to come up with some innovative way to make a pizza intosomething slightly different - different enough that customers will think it’s a whole newproduct. For example, lets look at some of the pizzas Pizza Hut has marketed in the past. In1983, Pizza Hut introduced their Pan Pizza, which had a guarantee of being ready to eat in 5minutes when dining at Pizza Hut restaurants. In 1993, they introduced the "Bigfoot," whichwas two square feet of pizza cut into 21 slices. In 1995, they introduced "Stuffed Crust Pizza,"where the crust would be filled with cheese. In 1997, they marketed "The Edge," which hadcheese and toppings all the way to the edge of the pizza. Currently, they are marketing "TheBig New Yorker," trying to bring the famous New York style pizza to the whole country. Lastly, Pizza Hut has always valued customer service and satisfaction. In 1995,Pizza Hut began two customer satisfaction programs: a UAN (in USA 1-800) numbercustomer hotline and a customer call-back program. These were implemented tomake sure their customers were happy, and always wanted to return. In our plan, wewill first give a situation analysis of current and relevant environmental conditionsthat affect our plan. Next, we will give a brief analysis of the current fast foodindustry, and any trends or changes that might occur in the future.Institute of Management Sciences, Peshawar Pakistan Page 7
    • Report and Marketing Strategies of Pizza Hut ENVIRONMENTAL AND INTERNAL ANALYSIS OF PIZZA HUTIn our visit to Pizza Hut we conducted research on PEST (Political, Economic, Social and Technological)Analysis.In the internal analysis of Pizza Hut we have considered SWOT of the Company. PEST (Political, Economic, Social & Technological) i. POLITICAL ISSUES:Political issues include regulatory frame work operating in judicial system which may affect thebusiness in different ways. There are not many political factors in Peshawar affecting Pizza Hut as islack of competition. Factors such as laws on business employment, pollution and taxation apply on theorganization which it has to follow regarding the rules. ii. ECNOMIC FACTORS:If the county’s economy is better so the GDP of the country will be good, this is a green signal for thebusiness as the per capita income of the people will be increased and they will spend more money. Inour survey we came to know that most of the people in the beginning of the months spend more andthey visit pizza hut very often. When the inflation rate increases the cost of raw material also increasesand this leads towards high prices of the products and vice versa. iii. SOCIAL FACTORS:Pizza hut is a multinational and it is basically originated from America so the organization isoverwhelmed by western culture. There are social forms of society which consist of Upper class,middle class, middle upper class, lower class and lower class. Every country has cultural norms, values,beliefs and religion which can affect the organization. iv. TECHNOLOGICAL FACTORS:Now a day’s technology is improving so as baking and heating ovens will be of new and efficienttechnology and will provide efficient service. Due to new technology there are new ways of marketinglike internet; telemarketing and the organization can advertise their products with much more fasterpace. Computer based customer data that is MIS (managing information system) helps in collectingcustomer data, daily transactions, future forecasting and decision making. New vehicles will make theirservice more efficient.Institute of Management Sciences, Peshawar Pakistan Page 8
    • Report and Marketing Strategies of Pizza HutSWOT ANALYSIS:Every organization has its strengths, weakness, opportunity and threats. So, the SWOT analysis forpizza hut is as under: Strengths:Pizza Hut is the market leader in providing different products of pizzas as there are no competitors inthis sector. There good image makes the organization more strong. Pizza Hut is providing good taste,quality products with qualified staff, good atmosphere and hygienic environment. They are specializedin pizzas. Motivation level of staff is very high which make the organization more prosperous. They areISO (International Standard Organization) certified. They have enough resources for operating differentactivities of the organization. They are providing free home delivery service. They have createdmonopoly in this sector. Another big Strength and even a Competitive Advantage is the fact that theyhave a full service restaurant as well as delivery services. Most of Pizza Huts competitors do not haverestaurants. Because of the restaurant, Pizza Hut can market too many different segments that otherpizza chains cannot. For example, Pizza Hut can market to families much easier than Dominos or LittleCaesars. Weaknesses:However, the fact that Pizza Hut does have a restaurant to run is also a weakness. Pizza Hut has higheroverhead costs, due to the restaurant that other competitors dont have to deal with. Another result ofhigher overhead costs is higher prices Pizza Hut must charge. Obviously, Pizza Hut is not the low costproducer. They rely on their quality pizza and good service to account for their higher prices. They areproviding less range of products comparatively with high prices. They are more focused on Westerntaste instead of Eastern. Opportunities:New markets can be explored and new opportunities they can gain. Pizza Hut can come up with thenew products considering the Eastern taste of the people as like McDonalds. Diversification of newproducts can increase their market share. They can reduce their prices because of more resources. Threats:Pizza Huts number one threats are from their competitors. Currently, i. Their closest competitor is Dominos Pizza who is working to open their Branch at Karachi. Dominos main competitive advantage over Pizza Hut is their Lower price. ii. Little Caesars who is establishing their self in India and might move to Pakistan is another one of Pizza Huts competitors, right behind Dominos in market share. Little Caesars is famous for offering large quantities of pizza for less money. iii. New entrance like Dominos pizza in Pakistan market can affect their market share. iv. Other local restaurants can affect their market share by providing pizzas with lower price.Institute of Management Sciences, Peshawar Pakistan Page 9
    • Report and Marketing Strategies of Pizza Hut v. Social factors can affect their image as a Western organization.SEGMENTATION: Main segments which Pizza hut has captured are the combination of higherincomes and dual career families , due to higher income consumer have moredisposable income , allowing them to eat out more often . Pizza Hut holds the most market share in the Pizza industry, the perceivedquality and service of the company will help to ensure a better the average chance ata successful introduction of a new product. The introduction of a product that keepswith today trends is also important to reduce the risk of failure. Pizza Hut maximum market segment is younger generations. These generationranges from 12 to 30, the overall spending of these generations is mostly on nonessential items, the higher amount of spending has been done on eating out.POSITIONING Pizza Hut was among the first multinational brands to enter the food retail sector inPakistan. When the first Pizza Hut restaurant opened in Karachi the quick service industry wasat a nascent stage and the pizza category was dominated by a sole regional player who had amarginal presence. Pizza Hut went on to play a significant role in pioneering and developingthis category in Pakistan. Worldwide and in Pakistan, Pizza Hut has come to become synonymous with the bestpizzas under one roof. This is because at Pizza Hut the belief is that every pizza has its ownmagic, thus making it a destination product – which everyone seeks. It is this belief that hasignited the passion to create, innovate and serve the finest product the industry has to offer,while setting standards for others to strive to replicate. Pizza Hut is committed to providinguncompromising product quality, offering customers the highest value for money and givingservice that is warm, friendly and personal. A critical factor in Pizza Huts success has been its unique dining experience. Crewmembers at Pizza Hut strive each day to provide CUSTOMER MANIA - the kind of service thatensures that every visit of the customer is a memorable one.Pizza Huts constant endeavor to provide extra value – whether it is pizzas which are availableto suit every price range, new promotions or the introduction of innovative product ranges -that puts a Yum on every customers face - has allowed it to increase its presence in Pakistanto the current 38 restaurants across 9 cities.Institute of Management Sciences, Peshawar Pakistan Page 10
    • Report and Marketing Strategies of Pizza HutMarket Targeting:Pizza hut targeted market defines them as a family product. This is because they don’t really directlymarket their customers. They are target everyone whereas their competitors target a certain gender orage. But pizza hut targets a wide range of customers. This is because they want to make the mostmoney and who blames them.They have many competitors and they are bound to try everything to cope up tops. Their competitorsare everywhere. There are just a few that are main competitors and pizza hut will always try to be thebest and get the most money by making their products better quality but also cheaper.They try to offer something different with their product as well. They offer a range of stuffed crusts totry and attract customers. They also do vegetarian options with meet free pizzas and a salad and pastabar. Not a lot of restaurants offer a salad and a pasta bar. This is another competitive idea to attract orcustomers.STRATEGIES ADOPTED BY PIZZA HUT:A businesss strategy is the pattern of decisions and actions that are taken by the business to achieveits goals. A business has a variety of goals and objectives. All businesses need to organize their businessactivities in order to achieve their business objectives. Running a business involves planning the currentas well as future activities. Hence, in order to achieve the business objectives, all businessorganizations adopt different strategies. Similarly, Pizza Hut has adopted many strategies which helpachieve the targets set by the main office to the local store opened at Peshawar. Changes are theexternal as well as internal environment has led Pizza Hut rethink their past strategies and hastherefore designed new strategies after noticing the changes in the environment. These environmentalchanges are seen through the PEST and SWOT analysis. After considering all the factors Pizza Hut hasdecided upon the strategies and their current strategies are divided into five main categories andfurther have sub-parts. These strategies are: -Functional Strategies: -These are strategies designed to improve the efficiency of a businesss operations. They often focus onan area, such as marketing, human resource etc. All business organizations adopt strategies atfunctional level as once the functional objectives are achieved, corporate objectives become easy. Inorder to make the functional strategy efficient, Pizza Hut has made all the functional departments co-operate with each other.Institute of Management Sciences, Peshawar Pakistan Page 11
    • Report and Marketing Strategies of Pizza HutTotal Quality Management (TQM): -This is the most important for a food chain like Pizza Hut. All the employees’ back-of-the-house i.e. thekitchen assistants are trained accordingly. They are given extra classes in order to meet the qualitystandards set by Pizza Hut around the world. This strategy is important in order to satisfy the CHAMPS.This strategy is strictly implemented in Pizza Hut in order to fulfill the quality standards. Differentquality management staff is also there at Pizza Hut. The shift managers have the task to observewhether the quality standards are met or not, whereas there are a total quality managementdepartment at the main office in Karachi. This department has the task to implement quality standardsand know whether they are achieved or not.Business Level Strategy: -Business level strategies are plans made to gain a competitive advantage over its rivals in a market.Hence, all the businesses need to adopt business level strategies in order to compete in a competitiveenvironment. If we take a look at the Pakistani market, there are no large competitors of Pizza Hut butunlimited small competitors exist in the market. The threat of competitors is very low as there is nointernational food chain offering pizza in Pakistan at present. Therefore, present strategies adopted byPizza Hut are keeping in consideration the present competition. Whereas, in future this competitionwill increase and Pizza Hut will have to change all its business level strategies in order to compete withits rivals. In very near future Dominos is opening its first branch in Karachi. This would be a threat forPizza Hut and hence, the strategies would be changed.Pricing Strategy: -The level of competition a business faces determines its pricing strategy. Sometimes a business has thescope to set its price and sometimes a business cannot. When a business has the scope to set its pricethere is a number of pricing strategies or policies it might choose. As there are no such competitors ofPizza Hut which could compete with the quality of pizza produced at Pizza Hut, therefore, the pricingstrategy adopted by Pizza Hut is market skimming. Pizza Hut has adopted this pricing strategy as theywant to hold maximum share of the market by maximum profit. This is a golden era for Pizza Hut, asthere are no competitors and hence, Pizza Hut is free to charge any price they want. They are charginghigher prices due to the uniqueness of the product. They satisfy the target market as the food quality isworth the price paid. The pricing strategy is not just to get the worth of quality but also to gainmaximum profits before any competitor enters because then Pizza Hut will have to change its pricingstrategy. Although the prices would be lowered with the new entrants in the market but not to agreater extent as the quality food products are not home-produced. They are imported from differentcountries keeping in view the best quality.Institute of Management Sciences, Peshawar Pakistan Page 12
    • Report and Marketing Strategies of Pizza HutMarket Share:As there are Dozens of Pizza Suppliers Globally Providing Services in different part of the World, butPizza Hut is the One who got the Bigger Market Share Globally.This is the Survey taken by www.survey.com that Pizza Hut is having 48% of Overall Pizza Market in theWorld. After that Dominos is leading with a percentage of 20% while the rest 32% is divided in theRemaining Pizza Providers Globally.Institute of Management Sciences, Peshawar Pakistan Page 13
    • Report and Marketing Strategies of Pizza Hut FOUR P’S OF MARKETINGPRODUCT: Product refers to the actual program you are planning. The goal of pizza hut isto develop the best product with the resources available. Pizza Hut sells pizzas in fourdifferent sizes: personal (an individual serving), small, medium and large, thoughmost stores have done away from with the small size. A variety of toppings areavailable, plus "specialty" styles, including Meat Lovers, Pepperoni Lovers, CheeseLovers, Veggie Lovers, Double Cheeseburger, Supreme, Super Supreme and the newlyintroduced Pizza Mia. The pan pizza has a thicker crust than most other commerciallyavailable pizzas .so their products have help them to retain their customers and toincrease them .they provide their customers with complete nutrition plan andhealthy food is guaranteed. The nutrition plan also clearly tells diabetes patients canuse what range of food at pizza hut. Over weight patients are also satisfied and thepizza with less cholesterol can be ordered. This encourages the customers to visitpizza hut rather than going elsewhere. As pizza hut has to boost its sales in theexisting markets, so they the new food products are introduced in all branches line-by–line because all branches are operated in co-operation with one another.Different products for different regions are also developed as there are choicedifferences. Pizza hut offers a long list of products and never afraid to offer newproducts like in Peshawar according to market they introduce the very first "ChapliKabab Pizza" which was very healthy product by Pizza hut in this region. There are alot many products according to different geographical places. Like in India they havegot there vegetable pizzas, which has a large market there BUT not the Cow MeatPizza.Institute of Management Sciences, Peshawar Pakistan Page 14
    • Report and Marketing Strategies of Pizza HutPRICE:. As there are no such competitors of Pizza Hut which could compete with the quality of pizzaproduced at Pizza Hut, therefore, the pricing strategy adopted by Pizza Hut is marketskimming. Pizza Hut has adopted this pricing strategy as they want to hold maximum share ofthe market by maximum profit. This is a golden era for Pizza Hut, as there are no competitorsand hence, Pizza Hut is free to charge any price they want. They are charging higher prices dueto the uniqueness of the product. They satisfy the target market as the food quality is worththe price paid. The pricing strategy is not just to get the worth of quality but also to gainmaximum profits before any competitor enters because then Pizza Hut will have to change itspricing strategy. Although the prices would be lowered with the new entrants in the marketbut not to a greater extent as the quality food products are not home-produced. They areimported from different countries keeping in view the best quality. First, this pricing strategy will help segment the market. Different groups ofcustomers are willing to pay different prices for the same product. The high/lowpricing strategy will also create excitement. The pricing strategy adopted by PizzaHut is market skimming. Pizza Hut has adopted this pricing strategy as they want tohold maximum share of the market by maximum profit. This product will emphasizeproduct and service qualityPLACE/DISTRIBUTION: It refers to the best place to offer program. That is the place where it islocated and through what channels are we distributing programs and the competitiveadvantage lies in distribution. The pizza hut Peshawar is situated out of the marketarea near Army Stadium and Shami road. This site has been chosen keeping in viewthe following factors. It is in an out of centre location on retail or Leisure Park withgood parking accessibility. Secondly the catchment area is of a specified minimumsize and within a given drive time to the site.Distribution The type of distribution channel used by Pizza Hut is the direct channel.The direct channel is successful when there is an extremely large market that isgeographically dispersed. The direct channel is also useful when there are a largenumber of buyers, but a small amount purchased by each. Pizza Hut uses three different methods of selling its products directly to themarket. i. The first method of distribution used by Pizza Hut is Home. Office delivery. Customers can call Pizza Hut ahead of time, place an order, and the order is delivered to the customers home.Institute of Management Sciences, Peshawar Pakistan Page 15
    • Report and Marketing Strategies of Pizza Hut ii. Another method of distribution is for customers to dine-in. Customers can go to the nearest Pizza Hut, place an order and either leave with the order or eat at the restaurant. One of Pizza Huts largest competitive advantages is its restaurant style facility. Pizza Hut offers a clean place to sit down and enjoy the variety of pizzas, salads, and sandwiches in a fun, family atmosphere. iii. The third method of distribution is to order Online. Selective County Customers can now go on the Internet and place an order for Pizza. This method is useful because it allows customers to view the entire menu, download any special coupons, and order without having to disclose any credit card numbers.Institute of Management Sciences, Peshawar Pakistan Page 16
    • Report and Marketing Strategies of Pizza HutPROMOTION: The objectives of promotion are to introduce a new product, stimulatedemand, change the short-term behavior of the customers, and encourage repeat orgreater usage by current customers. Pizza hut uses many promotional strategies. Themain promotion is a coupon to purchase. This promotion is also distributed mainly bymail, but also by fliers on college campuses around the country in order to reach thetarget market. They are using billboards on main stream places to get therecustomer. They are also distributing door to door brochures to capture more andmore customers. Pizza huts also using marketing techniques. These are the strategiesPizza hut is using for its marketing. Pizza huts trys to attract the younger generationas their main market segment. Apart from this Pizza Hut is using intense marketingstrategies they are also giving ads in magazines. Advertising camping will createsawareness of the products in our target markets.Institute of Management Sciences, Peshawar Pakistan Page 17
    • Report and Marketing Strategies of Pizza Hut CONCLUSIONPizza Hut has many targets which it has achieve in a given period of time. The time-period is mostly ayear. Therefore, in order to fulfill the targets different strategies are adopted by Pizza Hut. It can beconcluded that these strategies have been successful and there is flexibility in the strategies, as theycan be changed with the changes in the market conditions as well as the targets.Institute of Management Sciences, Peshawar Pakistan Page 18
    • Report and Marketing Strategies of Pizza Hut REFERENCESMr. Amir Zeb, Shift Manager, Pizza Hut, PeshawarMr. Hamad Zeb, Shift Manger, Pizza Hut, PeshawarLower staff of Pizza Hut, PeshawarGoogle Search Enginewww.definitions.comwww.answers.comwww.about.comwww.wikipedia.orgwww.pizzahut.comInstitute of Management Sciences, Peshawar Pakistan Page 19