A Comparative Study on Pizza Hut and Domino's; An innovative Health Restaurant.

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A Comparative Study on Pizza Hut and Domino's; An innovative Health Restaurant.

  1. 1. A Comparative Study on Pizza Hut and Domino’s A Project on Consumer Behavior ByRajalaxmi Prakash Roll-011 PGDM 2012-14 IIBM Patna
  2. 2. History  Brothers Dan and Frank Carney founded Pizza Hut in 1958 after a friend suggested a pizza parlor would make a successful business.  The siblings borrowed a mere $600 from their mother, joined with partner John Bender, and purchased used pizza making equipment to open their first restaurant.  One year after its founding, Pizza Hut’s first franchise opened in Topeka, Kansas.
  3. 3. History  Ironically, another set of siblings, Tom and James Monaghan, founded Domino’s. They purchased a pizza shop, DomiNick’s, with a $75 down payment and a $500 loan.  Not long after, James exchanged his half of the business to Tom for a Volkswagen Beetle.  In 1965, the business was renamed Domino’s and the first franchise opened in 1967.
  4. 4. Facts and Figures        Founded: Wichita, KS Year Founded: 1958 CEO: David C. Novak HQ: Plano, TX Number of U.S. Locations: 5,510 Annual Sales: $11.2B Facebook Likes: 10,355,666
  5. 5. Facts and Figures        Founded: Ypsilanti, MI Year Founded: 1960 CEO: J. Patrick Doyle HQ: Ann Arbor Township, MI Number of U.S. Locations: 4,513 Annual Sales: $6.9B Facebook Likes: 8,229,670
  6. 6. Important Figures  The minimum financial requirement to open a  Pizza Hut is $700,000 in net worth and a minimum of $350,000 in liquid assets.  The franchise fee is $25,000 for all franchisees. It does not offer a minority or veteran discount on the franchise fee, but it does offer a minority lending assistance program which guarantees 25 percent of the principal of the franchise business loan up to $3,000,000.  The royalty fee is 6 percent and its
  7. 7. Important Figures  Domino’s does not have a minimal financial requirement.  Its franchise fee is $25,000 for “external” franchisees (those who have not worked as a General Manager with Domino’s) and up to a $25,000 for “internal” franchisees (those who have worked as a General Manager).  It offers franchise fee discounts to qualifying internal minorities and veterans.  The royalty fee is 5.5 percent and its advertising fee is 4 percent of the store’s weekly royalty sales.
  8. 8. Training  Pizza Hut franchisees must complete an 810  week training program.  The training takes place at a certified training restaurant located in Dallas, TX.  Pizza Hut covers the cost of the training, but the franchisee is responsible for travel and lodging expenses.
  9. 9. Training  External Domino’s Pizza franchisees must complete a comprehensive five day franchise development program that covers store operations, finance, marketing, and human resource issues.  They are also required to complete a four day Pizza Prep School.
  10. 10. Financing Options  Although Pizza Hut does not provide financing, it offers franchisees a list of financial institutions that may be interested in lending to Pizza Hut franchisees.  Pizza Hut is listed on the Small Business Administration’s Finance Registry should the franchisee want to apply for a SBA loan.
  11. 11. Financing Options  Just like Pizza Hut, Domino’s stays away from offering direct or indirect financing to franchisees and it is listed on the Small Business Administration’s Finance Registry.  Domino’s also participates in the International Franchise Association VetFran program, which helps veterans obtain special finance rates and options.
  12. 12. Obligations/Restrictions  Pizza Hut recommends, but does not require, the franchisee be involved in daily operations.  However each restaurant must be directly supervised by a manager that has successfully completed the Pizza Hut training program.
  13. 13. Obligations/Restrictions  Unlike Pizza Hut, Domino’s does require that the restaurant be under the management of the franchisee or a controlling person who owns 51 percent or more of the franchise.  The franchisee (or controlling person) must be dedicated to management of the store on a full time basis.
  14. 14. Introduction  It entered India in June 1996.  By January 2001, Pizza Hut had 19 outlets across India.  Presently it has 142 outlets in 32 cities in India.  Pizza Hut is one of the world’s largest pizza chains with over 12,500 restaurants across 91 countries.  It employees more than 300,00 people.
  15. 15. Introduction  It entered India in 1996 through a franchise agreement with VamBhartia Corp.  It had quite a speedy growth (1 outlet in 1996 and 101 in 2001).  Emphasis on home delivery  Today Domino’s Pizza in India has grown into a countrywide network of more than 300 stores with a team of over 9000 people.  Domino’s believes strongly in the strategy of “think local and act regional.”
  16. 16. Success Factors       Offering value food Moving beyond metros Developing the local supply chain Good ambience Offering more than the international menu Aggressive marketing and tie-ups with local and popular brands.
  17. 17. Success Factors     Door step services. Low pricing Customer satisfaction Great offers
  18. 18. Similarities  Both claimed to have original recipe of pizza making  Both customized their offerings (though pizza hut followed domino’s )  Both concentrated on database marketing  Both introduced coupons, discounts and special offers  Both used promotional campaigns involving customers directly  Both wanted to establish themselves as a Brand
  19. 19. Differences (Late 1990s – early 2000s) OTHERS 32% DOMINO' S 22% MARKET SHARE 1999 OTHERS 12% PIZZA HUT 46% DOMINO 'S 70% MARKET SHARE 2000 PIZZA HUT 18%
  20. 20. SWOT Analysis  • • • • • Strength Strong brand image Unmatchable quality and variety Hygiene Excellent quality Customer satisfaction
  21. 21. SWOT Analysis  • • • • • • Strength More outlets even in smaller towns. Less than 30 minutes home delivery. Low price Excellent offers Customer satisfaction Quick service at outlets
  22. 22. SWOT Analysis  • • • • Weakness Inadequate advertisements. Inadequacy of outlets. High prices Lack of parking facilities at outlets.
  23. 23. SWOT Analysis  • • • • Weakness Lack of variety Outlets lack space Ambience not up to mark No special option for birthday parties and corporate lunches.
  24. 24. SWOT Analysis  Opportunity • With growing fast food market- scope for expansion. • Introduce more offers.
  25. 25. SWOT Analysis  Opportunity • With growing fast food industry- scope for expansion. • Introduce more variety • Bigger outlets • Introduce take away counters.
  26. 26. SWOT Analysis  Threat • No takeaway counters for pizzas. • Low price points of competitors.
  27. 27. SWOT Analysis  Threat • Better quality and variety of competitors. • No take away counters for pizzas
  28. 28. USP  Dining Experience
  29. 29. USP  30-minute Home Delivery Frame
  30. 30. Marketing Mix  Product • Recipe redefining as per the Indian taste. • Following Dominos in localization. • Opened 100% vegetarian restaurant. • Customization based on: Religion – Jain  City specific – Hyderabad (Halal meat)
  31. 31. Marketing Mix  Product • High Localization; even based on different regions. • Trendsetter in localization.
  32. 32. Marketing Mix  Price • Initially high price; as Pizza Hut offer “Comeback Value to our customer” because of its USP – Dining Experience.
  33. 33. Marketing Mix  Price • Initially high price; as key ingredients sourced from Australia and Spain. • Competition with Pizza Hut resulted in Price cuts, discounts.
  34. 34. Marketing Mix  Place • Not much focused on supply chain; rather focused on “dining Experience”
  35. 35. Marketing Mix  Place • Most robust and efficient Supply Chain – resulted into reduce costs. • Strategic set up of commissaries for raw material supply. • Tie up with real estate consultant. • Targeting on non traditional outlets like Corporate office, railway stations, cinema halls etc.
  36. 36. Marketing Mix  Promotion • Campaigns like Pan in your Name • Innovative Menu – Pizza Pooch menu and Pizza Pooch Birthday Package • One Rupee Pan deal • Barah nahin to Tera scheme
  37. 37. Marketing Mix  • • • • • Promotion Introduced Pizza mania (Large Pizza – Rs.129/-) Discount coupons Tie-up with Discovery Channel – Co branding Direct Mailing and Pizza Training Classes
  38. 38. Marketing Mix (Current Scenario)  Product • Casual dining experience as well as fast delivery (PHD & Restaurants) • Also offers a wide variety of pasta, salads, soups, desserts, beverages, e tc. • Less than 50% of sales is from pizzas
  39. 39. Marketing Mix (Current Scenario)  Product • Pizza with promise of fast delivery • Offers mainly Pizza along with pasta, cakes and few other side dishes • Mainly focused on pizza
  40. 40. Marketing Mix (Current Scenario)  Price • Starts from lower end and goes up to an upper end • Caters to many price and taste segments • Lowest offering is at Rs. 44
  41. 41. Marketing Mix (Current Scenario)  Price • Concentrates mostly on the lower to middle band • Caters mainly to price sensitive segment. • Lowest Offering is at Rs. 39
  42. 42. Marketing Mix (Current Scenario)  Place • 121 stores across 34 cities • Located at places where people visit more for leisure (Casual Dining) • Opened PHD for catering to home delivery • Also encourages online ordering
  43. 43. Marketing Mix (Current Scenario)  • • • Place 500 stores across 110 cities Conveniently located for fast delivery Encourages online ordering
  44. 44. Marketing Mix (Current Scenario)  • • • • Promotion Coupons Bundling Offers Encourages online ordering
  45. 45. Marketing Mix (Current Scenario)  • • • • Promotion Coupons Bundling Offers Encourages online ordering
  46. 46. Positioning      Conversation Memories Laughter Togetherness Enhanced dine-in concept
  47. 47. Positioning Great tasting Pizzas and sides Superior quality Exceptional guest care Value for money offerings A home delivery specialist capable of delivering pizzas within 30 minutes or else FREE  Brand Tag Line Hungry Kya?  2008 - “Khushiyon Ki Home Delivery” – A reflection of the role Domino’s plays in the lives of the consumers  2012 - “Ye Hai Rishton Ka Time” – To take the engagement with the consumers to the next level     
  48. 48. My Innovation A Healthy Restaurant
  49. 49. Santé Goyt Health + Taste
  50. 50. Segmentation GeographicDemographicAgeGenderPsychographic AIO Activities – working professionals Interests – Eating out with family, grabbing a quick meal before work hours or in the lunch time  Opinions – Broad-minded people   • •  •  
  51. 51. Targeting      People more conscious for their health Mothers of young children Vegetarian people Also for infants and toddlers Special emphasis on babies, adolescent girls, pregnant women, senior people, people suffering from certain chronic diseases like diabetes, heart problems, etc.
  52. 52. Positioning  Healthy but tasty food  Fresh ingredients  Organic ingredients
  53. 53. Marketing Mix Product Fresh ingredients Organic ingredients Hormone- and antibiotic-free chicken, mutton, fish, shrimp, and organic tofu • Whole-grain bread, fresh sandwiches and hearty, healthy soups and salads • Baby food such as milk, porridge, cereal, etc. • Own greenhouse space for growing vegetables and orchards for fruits  • • •
  54. 54. Marketing Mix  Product • Nutritional information right on the back of its tray liners • Customized recipes • Ultra-healthy sandwiches • Low-cal soups • Low-fat milk or fruit juice instead of soda • Ambience - Funky but serene, Artful • Separate kitchens for vegetarian and nonvegetarian cuisine • Play shop for kids
  55. 55. Marketing Mix  Price • Ranging from Rs 50 to Rs 1500 • Regular sandwiches and eatables are lowpriced • High prices for exotic cuisine, and recipes for the extra-health conscious lot • High prices are justified because of the usage of organic and fresh ingredients and on account of the genuine care, concern and that extra mile covered for individual customers.
  56. 56. Marketing Mix  Place • Introductory outlets in the metro cities • Gradually, move on to the tier I and tier II cities • 2-3 outlets in metros and tier I cities • 1-2 outlets in tier II cities • Take home facility • Home delivery facility • Online order and delivery
  57. 57. Marketing Mix Promotion Reduced prices on combos Discount coupons Ads on TV, radio, social networking sites Hoardings, billboards Newspapers, pamphlets Schemes like Happy Hours for mock tails Discounts for the price-conscious lot on Wed • Free snackers, mock tails, juices, etc. in the campaigns  • • • • • • •
  58. 58. A Glimpse into the Menu Card  Sambar dal • A solid stew made with chickpeas, legumes, and a variety of spices. • One serving includes approximately 50 calories, 2.6gms carbohydrates, 15.0gms protein, and 1.8gms fat.  Tandoori chicken • Marinated in yogurt and seasoned in tandoori masala, and a combination of various spices. • One entire leg piece includes approximately 260 calories, 13.0gms fat, 5.0gms carbohydrates and 30.5gms protein.
  59. 59. A Glimpse into the Menu Card  Rajma • A North Indian dish made of red kidney beans in thick gravy with lots of spices and usually served with rice and roti. • One serving of 114gms cup consists of approximately 120 calories and 5gms proteins.  Hara bhara kebab • A vegetarian crispy kebab, a recipe full of aromatic spices, healthy ingredients and an marvelous taste. • Per serving includes approximately 73 calories and 2gms protein.
  60. 60. A Glimpse into the Menu Card  Arhar dal • A dish made with beans. The nutritional content of one serving is approximately 53 calories, 1.2gms fat, 8.0gms carbs, and 2.8gms protein.  Bhindi ki sabji • Tastes great with hot chapattis or parathas and there you've got a terrific vegetarian meal. • Servings of 50gms consists of approximately 80 calories and 5gms protein.
  61. 61. A Glimpse into the Menu Card  Sol kadhi • A pink-colored appetizer drink from made from the Kokum fruit and Coconut Milk. • Also good for your stomach after a Hot and Spicy meal. One glass consists of 138 calories.  Chickpea and spinach curry • Lots of fresh spinach brings the green color to this chickpea dish, and curry livens up the flavor. • Full of fiber. Per serving consist of
  62. 62. A Glimpse into the Menu Card  Lobhia • A popular north-Indian dish, where the soaked and cooked black-eyed beans are boiled in tangy tomato gravy, with the right blend of spices. • One serving of medium bowl consists of approximately 198 calories.  Palak-da-Saag • A very famous and healthy Punjabi recipe usually served with roti or naan. • Per servings includes approximately126.2 calories and 6.3gms proteins.
  63. 63. A Glimpse into the Menu Card  Daliya • A very light and healthy option for breakfast. • An excellent source of fiber that helps to maintain healthy digestive system. • Whole wheat daliya consist of approximately 85 calories per 170gms servings.  Aloo palak • Stuffed with mashed potatoes, mixed with finely chopped spinach or any leafy green vegetables
  64. 64. A Glimpse into the Menu Card  Moong bhaji • Sprouted moong bhaji is a quick, easy and healthy dish. The protein rich sprout is very health-friendly. • Per serving of moong bhaji includes approximately 125 calories and 4gms fats  Baigan bharta • A North Indian specialty of roasted brinjals, skinned and made into a simple and exotic preparation. • Serving size of 100gms consists of approximately 102 calories and 5gms fat
  65. 65. A Glimpse into the Menu Card  Red pumpkin bhaji • Tastes so good & is excellent with soft chapattis, phulkas or with any Indian bread. It goes well with rice too. • One serving includes approximately 151 calories  Kobi chi bhaji • A very famous dish in Maharashtrian meals, and can be cooked in a variety of ways by adding tomato or green peas. • One serving consists of approximately 65 calories and 2.2gms protein
  66. 66. A Glimpse into the Menu Card  Patrani machhi • Masala coated fish steamed in banana leaves. • One serving consists of approximately 290.3 calories and 13.6gms total fat  Chicken dhansak • This delicious and popular Parsi dish is made with chicken. Dhansak is traditionally served with brown rice and kachumbar salad. • Per serving includes approximately 505
  67. 67. A Glimpse into the Menu Card  Raita • A simple preparation made by adding fruits, vegetables or any other thing to beaten curd. • One serving includes approximately 60 calories  Buttermilk • 100 calories and 2grams per cup
  68. 68. SWOT Analysis  Strength • Healthy food
  69. 69. SWOT Analysis  Weakness • High-priced menu • Narrow target
  70. 70. SWOT Analysis  Opportunity • Untapped market • Growing percentage of health-conscious people
  71. 71. SWOT Analysis  Threat • Low-priced restaurants • Other established fast-food chains
  72. 72. Learning  Through the tagline “Health + Taste” and the brand logo
  73. 73. Personality  The people with following personalities will be the focus:• People with busy lives • Outgoing people • Health-conscious people • People willing to try new things
  74. 74. Attitude Formation  A positive attitude formation towards the restaurant can be done by: Consistently showing the ill effects of junk food, high calorie diet, etc. in the long run through media and personalized hand-outs  Justifying the high priced menu in accordance with the fresh and expensive ingredients and special treatment to customers especially people with certain health issues or people with babies
  75. 75. Motivation  A campaign to spread awareness, contests, etc.  Celebrity endorsements  Play shop for kids along with staff to look after
  76. 76. Perception  There is a negative perception towards the food from restaurants and eateries. It’s believed that they cannot be healthy as improper and unhealthy cooking oil, meat, vegetables and other ingredients are used (which is true more often than not).  This perception need to be changed.  It can be done by effective promotional campaigns, accurate nutritional and hygienic information about the food and by giving customers a visit to the kitchen and storage areas.

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