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Hotel Industry

  1. 1. HOTEL Industry Subject: Service Sector Management Prof: Hasan Academic Year: 2009-2010 Sydenham College of Commerce and Economics Brains Behind
  2. 2. Zeenia Dumasia 457 Fathima Habeeb 459 Nikita Kothari 473 Rupali More 479 Padmini Patil 484 Madhuri Rasal 487 Saloni Raul 488 Slesha Redij 489
  3. 3. Acknowledgement A This project is the culmination of a study into the gamut of various Service carried on by Pizza Hut and Dominos This project would just not have been complete without the valuable contributions from various people whom we have interacted within the course of its completion. We present our heartfelt gratitude towards respected Prof. Hasan for giving us an opportunity to explore a new aspect of the industry. We would like to thank the management and non-management staff of Pizza Hut and Dominos without whose cooperation wouldn’t have taken form We wish to thank all those people who have lent us a helping hand in finishing this project.
  4. 4. Indian Pizza Market Pizzas account for 5% of the quick service sector, but the market is projected to grow to 40% over the next five years. Branded pizza market stands at about Rs. 275 to 325 crore. The delivery segment is pegged at Rs. 180 crore which is growing at 15-20% annually. 1. Direct Competitors Competitors include Domino’s, Smokin’ Joes, Pizza Corner, etc. Unorganized Organized 2. Indirect Competitors Direct Indirect include Mc Donald’s, Subways, coffee chains, etc.
  5. 5. Pizza Hut is one of the flagship brands of Yum! Brands, Inc. Pizza Hut is the world’s largest pizza chain with over 12,500 restaurants across 91 countries. Yum! Brands Inc., based in Louisville-Kentucky, is the world’s largest restaurant company in with nearly 34,000 restaurants in more than 100 countries. Four of the company's restaurant brands – KFC, Pizza Hut, Taco Bell and Long John Silver’s are the global leaders of the chicken, pizza, Mexican-style food & quick-service seafood categories respectively. An International Brand with an Indian Heart, Pizza Hut made its foray into India with a dine-in restaurant in Bangalore in June 1996. The company found the going tough initially. However, things eased out when Pizza Hut, similar to other global fast food restaurants started Indianising the menu. Tricon provides the marketing support & supply chain management.
  6. 6. Outlets In India, Pizza Hut has 137 outlets across 36 cities in India, including Delhi, Mumbai, Bangalore, Chennai, Ahmedabad, Hyderabad, Pune, Chandigarh, Agra, Surat, Baroda, Jaipur, Kolkata, Mathura, Amritsar, Cochin, Ludhiana, Jalandhar, Coimbatore, Meerut, Lucknow, Pondicherry, Bhubaneshwar, Vishakapatnam and Dehradun. Market Scenario 1. They have a 45% market share in the total market, i.e. delivery plus dining plus takeaway. 2. They have been seeing over 40% growth year-on-year. 3. They have 26% of its restaurants & over 30% of the Pan- India sales in South India. 4. Number of customers on an average on weekdays is 300, whereas it’s about 400 on weekends. Description Of The Brand Service-Product Continuum
  7. 7. Pizza Hut is classified as a ‘Goods + Service’ offering to the consumers. The core product is food, which is tangible. However there are a lot of services attached to this product, which is why it falls in this particular category. The consumer looks for ‘Experience Qualities’. The marketing implication for Pizza Hut therefore is that in addition to taking care of the ‘dinning qualities’ in the core product, they also need to make the ‘experience’ as good as possible. Meeting Customer requirement 1. Variety in Menu: Pizza Hut offers more than just pizzas to its consumers. It offers soups, beverages, appetizers, salads, pastas & desserts both in the veg. and non-veg. category. 2. Pizza Hut Outlets: Pizza Hut has three types of outlets to serve its consumers viz. dine-in, carryout and delivery outlets spread across the country. Thus it has a number of pizza restaurant chains in India that offers "The Best Pizzas under One Roof" to its consumers. 3. Local Specialty Food: Pizza Hut in India integrates pizzas into local contexts and palates while maintaining its international standards of quality and innovation. E.g. Masala
  8. 8. Pizza and Tandoori pizza with Indian toppings and special Jain menu. 4. Personalized Toppings: Pizza Hut offers choices to its consumers to select their own toppings that suit their tastes from wide range of toppings in veg. & non-veg. category. 5. 6. The third level is the Augmented Product. With further high expectations of the consumers & intense competition, the marketer starts offering more & more intangible features to the consumer. Thus, service will become the final differentiator with increased competition 7. Pizza Hut adds the following services in the augmented product for its consumers: 8. Home Delivery: Pizza Hut is just a phone call away. A consumer has the choice of ordering & enjoying the delicious pizza cuisine at home. 9. Pooch Zone: Pizza Hut’s website has a link which is called the ‘Pooch Zone’ that has a variety of games, movies, and other exciting links especially for kids. 10. Special Birthday Party Arrangements: Pizza Hut arranges birthday bashes for kids with beautifully decorated venue, specially trained host/hostess, food packages, games, etc. 11. Good Ambience: Pizza Hut offers more than any fast food restaurant by providing a lovely ambience to dine with your near and dear ones.
  9. 9. 12. Pizza Hut Locater: A consumer can locate any Pizza Hut restaurant by visiting their website. The locater provides information on the various types of cuisine (veg./non-veg.) available at the particular outlet. It also mentions the address and the phone number of the particular outlet. Physical Evidence Process People Public Relations Pizza Hut & film star Pizza Hut uses Service Marketing Mixand  The pizza-making They offer training various process takes programs Madhavan reached elements to communicate about 20 minutes emphasize on out to special children and support the role of its and customers can coaching. One of in Chennai by service to the consumers. expect home their initiatives announcing a six- Customers rate the service delivery within 45 include Quality month initiative for based on the following minutes of placing Control Workshops the deprived factors: the order. with expert chefs children by inviting all its customers to  Pizza Hut pizzas are contribute a sum of  The Logo of pizza Hut is  Pizza Hut defines delivered in special Rs. 5, which will be ranked no.2 in the most the skills, heated pouches to added to their bills, recognized brand. The knowledge and retain temperature for the cause of these roof of Pizza Hut talks training required for and freshness. children. Similar about providing a “Great each position and Dining Experience”.  In cases where the this information is campaigns were traffic situation is communicated to followed in the  Personnel wearing Pizza bad or each Team Member eastern part of the Hut uniforms in the unprecedented, through specific and country with the help restaurant. customers are thorough Job of top film stars and informed over the Maps. models.  All delivery boys wear phone that the They provide An event for exciting new rider delivery could be annual housewives who had uniforms with the delayed. performance to send in their Freshizza logo to create appraisals to let recipes for their best visibility on roads and on In the restaurant, the Team Members pizzas. Based on this ground awareness. customer rings the know exactly what pizza Hut could bell to signify that the expectations are introduce new  The menu card, they are satisfied and what varieties. The winner ambience, signboards with the pizzas and opportunities exist received a holiday & billboards and the service. for improving. package along with delivery scooters of Pizza Hut discount Pizza Hut also make the The staff members It has events like the coupons brand familiar. also sing and dance for customers. They ‘Employee of the month’ award to Pizza Hut launched its dance to disco in reward its internal Pizza Pooch Mumbai and customers. Christmas Blast ‘bhangra’ in program, a 16-day Amritsar. event aimed at attracting teens and kids.
  10. 10. Perceptual Map Value Proposition
  11. 11. Pizza hut understands that the Indian consumer is value conscious, and not just price conscious. Pizza hut’s value proposition talks about its international heritage, its pizza expertise and world class standards of quality and taste along with its ambience. Pricing Strategy Price Premium High Value Super Value H Strategy Strategy Strategy Product Over-charging Medium Value Good Value M Qualit Strategy Strategy Strategy y Rip-off Strategy False Economy Economy L Strategy Strategy H M L • Pizzas were priced at a premium in the introduction stage. However with competition from Domino’s, Pizza Hut introduced discounts, price cuts and freebies. Pizza Hut launched Pan Pizzas for as low as Rs.65 and also introduced the Rs. 50 menu to benchmark its price against the competitor’s cost. • Thus Pizza Hut is gradually shifting from a premium strategy to a high value strategy offering high product quality within the medium price range.
  12. 12. Customer Relationship Management 1. It optimizes profitability by building long-lasting relationship with customers through CRM 2. The birthday party packages offered by maintaining the database of children visiting the outlet contributes almost around 8 to 10 % to their overall sales turnover. Thus, it has been effective. 3. They have been successful in identifying one of the influencer segments i.e. kids. Thus, they have made best use of the technology by introducing ‘Pooch Zone’ in their website through which they directly reach out to them. 4. It not only cares for its external customers but also looks after its internal customers- employees by running award programs to recognize outstanding employees and celebrating their success. Thus, employees take pride in making and serving perfect pizzas Pace
  13. 13. • Domino’s is the market leader in the delivery market. To match similar competition and to tap its potential in this market, Pizza Hut started focusing on the delivery market. • Pizza Hut introduced a scheme called ‘barah nahin to tera’ (if not served in 12 minutes, it is yours free). The scheme offered a speed lunch in 12 minutes for Rs.89. One second over 12 minutes guaranteed that the customer would get it for free. • This offer is available only in the dine-in outlets. However, in the delivery market, they lose out to Dominos because of their Poor Logistics. Advertising Strategy 1. In the introduction stage, Pizza Hut used Public relations over advertising. In the first week of its launch and to build credibility, Pizza Hut decided to use the print medium by issuing “free pizza passes” to journalists. Journalists were taken to the kitchen and a lot was written about Pizza Hut’s fresh quality pizzas along with its hygiene. 2. Pizza Hut went about distributing pamphlets, which contained mouth-watering images of pizzas. The pamphlet also contained information relating to the making of a pizza, its ingredients, nutritional value, etc. 3. The promotional campaign focused on creating awareness about the product. The communication was about a girl choosing pizza over other snacks in its first TVC. Thus,
  14. 14. initially it followed “Informative Advertising Strategy” to build the primary demand. 4. However, in the growth stage, they seek to establish the superiority of the brand through specific emphasis on one or more attributes in the product class. In this stage, the attributes targeted were price and freshness. This was conveyed through their TVCs featuring Zayed Khan (Rs. 50 menu) and Malaika Arora (Freshizza). 5. Thus they currently follow ‘Persuasive Advertising Strategy’ to differentiate itself in intense competitive environment. 6. But the promotional campaign focusing on the Price aspect has not been effective as customer still perceive Pizza Hut as an elite outlet Service Life Cycle
  15. 15. The introduction stage focused on concept awareness. • Pizza Hut aimed at providing a great dining experience targeting the high-end consumer following the strategy of premium pricing. • Pizza Hut launched its first outlet in Bangalore in 1996. The success of its Bangalore outlet helped Pizza Hut to focus long term. After a few months, they opened outlets in Delhi, Mumbai, Kolkatta & Chennai.
  16. 16. • In the growth stage, it realized the need to include delivery in addition to providing a great dining experience. So it decided to extend its reach in SEC A & B cities. • In 2000, number of outlets increased from 5 to 25 in 13 months. Currently it has 98 outlets in 25 cities. • Realizing the potential of delivery outlets, it increased the no. of delivery outlets. However, it has a long way to go to beat the delivery market leader-Dominos. • It started localizing menus to cater to the Indian palate. • To further promote its brand among the Indian consumers Pizza Hut used celebrities for the first time (Zayed Khan & Malaika Arora). With their target being the youth of the country, Zayed & Malaika were the ideal choice. • As the competition intensified Pizza Hut followed the price cut strategy to increase its target consumers and thus included consumers from the medium-end segment.
  17. 17. OT Analysis Opportunities • As Pizza Hut consolidates their base by expanding rapidly in new towns, it would provide them with a better bargaining power with the suppliers. This benefit can be passed on to the consumers by further reducing the prices & thus tackle the competition effectively. • Pizzas are still viewed as snacks in India. However changing the existing eating habits is not impossible. With pressure of less time among the people & potential to improve accessibility to Pizza Hut outlets, consumers will be willing to adapt to this new lifestyle. Pizza Hut can thus widen the pie by extending their brand as a meal from being just a snack. Threats • There has been a shift from joint families to nuclear households. Population of the working women has risen (13% of women population in the urban area) and now with
  18. 18. both parents working, the disposable income has also increased. Also to alleviate the feeling of guilt of not being able to spend more time with their children, weekends have become important. Thus, Pizza Hut still has an opportunity to cash on a huge consumer base. • The accessibility of Pizza Hut is a question mark. It also lacks in effective supply chain management. Pizza Hut is not time-bound in the delivery aspect as compared to its nearest competitor-Domino’s. Domino’s has penetrated the market better due to its efficient logistics. So, Pizza Hut faces the threat of letting off its numero uno status to Domino’s. • Pizza business is projected to grow at the rate of 40% per year. Recognizing India as a lucrative market, many other companies are looking at starting their operations here and all the existing companies are expanding to get a larger market share. Thus, threat of new entrants like US Pizza and the existing competitors can increase the bargaining power of the consumers. • The Indian consumer is getting health conscious. There has been a global outcry against Mc Donald’s linking junk food served by them to the rise of obesity. Pizza Hut may also face these phenomena in India.
  19. 19. In the mid 1990’s a spate of global fast food chain entered hoping to capture a part of Indian fast food segment but they found it difficult to establish themselves. Dominos Pizza Hut Ltd. was incorporated in March 1995 as the master franchisee for India and Nepal, of the dominos Pizza International Inc... Of USA. Moreover, the company holds the master franchisee right for Sri Lanka and Bangladesh through its wholly owned subsidiary. MR. Shyam S. Bhartia and Mr. Hari S. Bhartia of the Jubilant Organosys Group were the promoters of the company. Since inception, Dominos Pizza Hut Ltd. had proceeded to became one of the largest and the fastest growing international food chains in South Africa. The first Dominos Pizza store in India opened in January 1996 at New Delhi. Today, Dominos Pizza India has grown into a country wide network around 220 outlets 42 cities and is the leader in the fast food delivery segment. Ever since it was established, Dominos Pizza India has maintained its position of market leadership with its constant product
  20. 20. innovation and maintenance of stringent service standards. More importantly, it has established a reputation for being a home delivery specialist capable of delivering the pizza within 30 minutes to its community of loyal customers from its entire chain of stores around the country. Customers can order their pizzas by calling a single countrywide Happiness Hotline = 1800-111-123. In fact, Dominos was the first to start this facility to its customers and their slogan is also towards customers loyalty, they respect time responsibility i.e. Dominos delivery in 30 minutes or else pizza is free of cost. Dominos Pizza SWOT analysis Strength • Leading pizza Delivery Company in US with more than 5,000 stores in the US. • Global franchisee operations – more than 3500 in over 50 countries. • Strong brand equity supported by heavy advertising and marketing campaign. • Supply chain and distribution network Weaknesses • Slow growing and declining same – store sales • Weakening bottom line Opportunities • Growing presence in emerging markets, particularly in India, China
  21. 21. • Leverages supply chain & distribution system to introduce new products Threats • Changing consumer habits towards healthier food choice • Franchisee operations affected by currency exchange fluctuations • Intensive competition from a fragmented number of small competitors. 30 minutes guarantee At one point, Dominos pizza had a guarantee that a customer would receive their pizza in within 30 minutes of ordering, or they would receive their pizza free and Dominos still guarantees delivery within 30 minutes, failing which the customer is given his order free of cost. • They do not take the order if the customers are calling from distance places where it is impossible to deliver the pizza in 30 minutes • If suppose the customer is ordering a pizza cost for Rs. 500/- & if they are unable to deliver the pizza within time, suppose they are late for another 6 to 10 minutes , then they give discount of Rs. 300 and provide pizza for only Rs. 200
  22. 22. • They believe in the service called TSG (Total Service Guarantee ) • From home delivery of home cooked food in South Delhi. We offer both non- veg and vegetarian home –cooked food for small get together. Our costs are very reasonable and the food is hygienic and low fat Bulk Orders Dominos Pizza also takes bulk orders for its corporate customers as well as for any big gathering. Any order can be placed 2 days in advance to avoid inconvenience. Payment can be made in cash or by Cheques in favour of “Dominos Pizza India ltd”. Dominos involves itself in various community activities like blood donation campaign, clean up drive etc. We arrange for different competition like painting, essay, junior pizza making etc. at our store level for children. We also cater to different college functions/events depending upon its location. Housekeeping operations inside the restaurant For house keeping dominos use UT service, they provide proper check on cleanliness of the restaurant, maintain cleanliness for washrooms etc. • They makes sure that all fittings are in good working order • They check that all supplies such as toiletries & minibar stock have been replenished • Ensuring that tables & other areas are cleaned & polished
  23. 23. • Make sure that furnishing & fitting including light fittings are clean & in good condition. • Ensure the windows are cleaned regularly • They also told us that in housekeeping is also responsible for décor, the selection of furnishings & wall covering is very important • Thousands of rupees are spend on décor & these decisions are not taken lightly • In housekeeping operations there is flexibility in there operations Maintenance housekeeping in the wet areas Top to bottom, all corners and edging is done on carpeted and on non-carpeted floors. Every thing is moved to the counter, cleaned behind it, items cleaned and move back. Kitchen cabinets are cleaned for fingerprints and food spills that have occurred recently and can be recovered with wiping a wet or damp cloth. On an as need basis, the floor is washed by hand around the edges. We can do the whole package pulling out a fridge or oven or wiping them clean and everything in between. All of our work is 100% guaranteed. If the customers are not happy with the Dominos cleaning, simply call them within 24 hours. • During summer session their sales increases, • Numbers of staff is more as compared to winter seasons,
  24. 24. • Total number of staff is around 35-40 • Income per month s around 35 lakhs. Comparison of Pizza Hut and Domino’s PIZZA HUT PARAMETERS DOMINOS Need Understanding, Customer SERVICE Friendly, Individual attention Neatness Congenial environment Open Kitchen, lack ,cleanliness, no valet of space parking Less affordability by Pricing Given value for the common man money pizzas Inability to explain Augmented Attending phone the offerings, slow calls with patience, service taking the order with a smile Service charge is Equipments, Credit Card, High Customization Customization, Services
  25. 25. Model of Service Quality Gaps There are seven major gaps in the service quality concept, which are shown in Figure: Gap1: Customers’ expectations versus management perceptions: as a result of the lack of a marketing research orientation, inadequate upward communication and too many layers of management. Gap2: Management perceptions versus service specifications: as a result of inadequate commitment to service quality, a perception of unfeasibility, inadequate task standardization and an absence of goal setting. Gap3: Service specifications versus service delivery: as a result of role ambiguity and conflict, Poor employee-job fit and poor
  26. 26. technology-job fit, inappropriate supervisory control systems, lack of perceived control and lack of teamwork. Gap4: Service delivery versus external communication: as a result of inadequate horizontal communications and propensity to over-promise. Gap5: The discrepancy between customer expectations and their perceptions of the service Delivered: as a result of the influences exerted from the customer side and the shortfalls (gaps) on the part of the service provider. In this case, customer expectations are influenced by the extent of personal needs, word of mouth recommendation and past service experiences. Gap6: The discrepancy between customer expectations and employees’ perceptions: as a result of the differences in the understanding of customer expectations by front-line service providers. Gap7: The discrepancy between employee’s perceptions and management perceptions: as a result of the differences in the understanding of customer expectations between managers and service product
  27. 27. Conclusion We can conclude that both Pizza hut and Domino’s are known for their best services and according to GAP model we can summarize the whole that Employees behavior is the major factors which influence the customer perception most about the pizza outlets while they are followed by environment, parking space and external factors.
  28. 28. Recommendations 1. Tie up with Hotel Management Institute Retail is a booming sector in India. However, looking at the management education scenario in India, retail management has not been given its due. As far as retail professionals are considered, there is a dearth of talent in India. Pizza Hut can have a tie-up with leading hotel management institutes to provide a win-win situation for the company as well as the community. This would be a training ground for all budding managers of Pizza Hut and the operational staff. 2. No Hidden Cost In the Indian context, Pizza Hut is still perceived as an expensive place to dine. This is because of the various ‘hidden costs’ that prevails. When Pizza Hut advertises pizzas for Rs.50 and Rs.65, it is exclusive of taxes which later add on to the actual price which forms a significant part. Pizza Hut should compute and communicate the prices after including taxes and other service charges. 3. Outsource Real Estate Services While choosing the location outlet, a lot of real estate factors have to be taken into consideration. Some of the factors are real estate prices, electricity, maintenance, water supply, parking space, sewage and waste-disposal facilities, conditions of roads, etc. Therefore, they can outsource real estate services to specialized consultants to increase accessibility of their outlets. This will help Pizza Hut focus on their core competency i.e. to provide a “great dining experience”.
  29. 29. 4. Mascot The popularity of the Pooch Zone is increasing. Pizza Hut can cash on this popularity by having one of its Pooch Zone characters as a mascot. The mascot can act as a brand personality to increase brand awareness and recognition. 5. Different Pizza Shapes In order to attract the kids, Pizza Hut can introduce pizzas in the shape of ‘Pooch Zone’ cartoon characters & other cartoon characters. This concept can also be promoted through kids channel like Cartoon Network and Hungama with communication directed at children – one of their main influencer segment. 6. Game Counters Kids act as a major influencer in choosing the location of a family outlet. Pizza Hut can introduce game counters in some selective outlets. Thus, Pizza Hut can combine dining with entertainment. 7. Wi-Fi Pizza Hut can introduce Wi-Fi technology in selective outlets. This can provide convenience to customers thus increasing customer loyalty and sale. Login/password for a set time can be given to customers. If the person wants more time, they can place another order and get additional time. Paying customers get XX minutes of Wi-Fi access before the Authentication Server cuts them off. (E.g. Customer placing an order within a range of Rs. 50- Rs.100, can get 30 min. of net access.) 8. Click to order Pizza Hut can focus on selling pizzas via their website. Customers can then select the pizza base & toppings to make
  30. 30. it customized. Customers will be only a click away to get their required pizzas. 9. Diet Pizza Indian consumers are becoming health conscious. So Pizza Hut can promote its offerings on a health platform by introducing low fat and low calorie pizzas. 10.Nutrition Chart It can have helpful communication informing the consumer that certain items on the menu fulfill x% of an adult’s daily requirement of various nutrients. Nutritional information can also be mentioned in their website. The idea that the food at Pizza Hut isn’t complete junk would be really quite comforting. 11. Improve Logistics When you are hungry you cannot wait. If Pizza Hut can peg consumer’s expectations at the right time and beat it, chances are one would be more than happy. Not because the food is tasty but because the expectations have been met. Thus, they should work on the logistics by following the principle of ‘distance orbit from a retail outlet’ i.e. to select the location, decide on the radius within which the outlet will operate Pizza Hut does not stick to a time-bound delivery. To tackle this, the store personnel can be trained to work within a fixed time-frame to prepare the pizza. Before a shop is set up, the delivery staff can go through a routine ‘test grind’ to be well accustomed with the location. 12.Pizza Card
  31. 31. Pizza Hut can introduce loyalty programs for its customers in the form of ‘Pizza Card’ where they can avail of discounts, freebies, and prizes etc. Customers will be awarded points based on the frequency of pizzas they order. Once they reach a set number of points, they will be given free prizes and other gift accessories. This can be instrumental in building up ‘Brand Loyalty’. 13.Alliance with Airlines For Pizza Hut, sky can be the limit by delivering hot, fresh pizzas everywhere, anytime. They can have a tie-up with major airlines. The deal will help Pizza Hut in its expansion plans by adding to its market penetration. 14.Rent outlets at fuel stations Pizza Hut can rent outlets at fuel stations at selective locations for setting up restaurants across the country in a phased manner. Such drive-in-drive-out outlets can save on real estate costs and at the same time give the brand greater visibility without entailing large investments. 15.Variety in menu Variety in menu by way of fruit juices would be preferred by the customers as now most consumers do not prefer cola drinks. This will also add to the promotion of the brand through the ‘health’ format. 16.Location Based Advertising LBA envisages sending electronic marketing messages to consumers located proximately to an outlet. For example, Pizza Hut can send SMS to all passer-byes in a specific
  32. 32. radius. This SMS serves as a marketing message informing the customer about the nearest outlet, its menu, discounts, schemes etc. for any order within limited time. Those who are closer to the point of sale will be more likely to make use of this offer and thus allure new customers to their selling points. Keeping its ears close to the ground and reinventing and adapting itself with consumers’ needs, Pizza Hut can emerge as a leader in the food retail sector
  33. 33. Bibliography WEBSITES • • • • • • • • • www.agencyfaqs. com • BOOKS • Marketing Management – Philip Kotler • Services Marketing - Woodruffe