1. Pricing
Pricing is an important function in Marketing. It is about setting the right price to a product. Pricing is
the process of determining what a company will receive in exchange for its products. Pricing factors
are manufacturing cost, market place, competition, market condition, and quality of product.
Consumer psychology and pricing
Pizza hut uses price cues. It prices its products in an odd number. Example :Beverages like Cold coffee is
priced at rupees 89, mango delight is priced at 69 .Appetizers like chicken skewers are priced at 99 .This
is method as it conveys a notion of a discount or bargain .And also , as consumers tend to process prices
in a left –to – right manner rather than by rounding.
Setting price
The price of the products of pizza hut is set in following steps:
Step 1: Price Objective
The main pricing objective adopted by pizza hut is maximum market share. They set a price that
maximizes the market share that they hold. They practice the market – penetration pricing. It aims at
the product – quality leadership .It aims to be the product – quality leader in the market.
Step 2: Demand Determination
Pizza hut tries to charge a higher price compared to its competitors and still get the business .They
convinces the customers that they offer the total cost of ownership. They prefer customers who are
fewer prices sensitive.
Step 3: Cost Estimation
The costs involved in pizza hut are the variable costs and the fixed costs. The average cost is
determined .And the pricing of the products are based on the price that covers the costs at the given
level of production.
Step 4: Competitor’s costs, prices and offers analyzed
The competitor’s prices that are pricing by dominos, papa johns, u.s pizza etc are compared for different
products before the pricing is done. It is also made sure that the price objectives of the pizza hut are
met.
Step 5: Selection of Pricing Method
The pricing method that is followed by pizza hut is the mark up pricing. In this method, standard mark
up price is added to the product’s cost.

2. Step 6: Final Price
Pizza hut is able to high pricing. Pizza hut has a relative high quality and high relative advertising, which
enables it to go for high pricing compared to its competitors.
Adapting the Price
Geographical Pricing
Geographical pricing is when the company prices different prices to different prices to its different
customers in different customers in different locations. Pizza hut International prices differently
compared to pizza hut India. The pricing varies in different countries. Example: A pan size pizza is priced
is 3$ to 5 $, whereas in India it is 120 rupees.
Promotional Pricing
Pizza hut adopts the special- event pricing and the psychological pricing. The special – event pricing is
usd especially adopted in festive times. Example: Pizza hut launched 15 new Indian varieties on its 15 th
year in India, and special pricing on diwali festival etc. And psychological pricing is the ending the price
with an odd number, as explained earlier.