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A Study By Group – 09
 MBA (12-15) Section –A
Roll Nos – 28,41,43,45,46
 The Indian fast food market is
  growing at an annual rate of 25-30
  percent, Foreign fast food chains are
  aggressively     increasing     their
  presence in the country.


 The market is dominated by global
  brands like McDonalds, KFC and
  Dominos specially in the organized
  fast food segment.
 Growing trend of consumption of
  new cuisines and increasing brand
  awareness has led to the increase of
  global players. The new age Indian      Source - D‟Essence Hospitality report
  consumers have also played a
  significant role.
 Hard to believe, but the answer is YES !!!
 Let the numbers do the talking……
 Currently, about 250,000 pizzas are being delivered every
  day in India and this is expected to double in the next three
  to four years.
 There were 271 pizza outlets in 2004, and today there are
  95o of them - a 300 per cent growth in just eight years.
 Out of the total organised Quick Service Restaurant
  industry pegged at about Rs 3,000 crores, the pizza
  industry alone is estimated at Rs 1,300-1,400 crores
                                                            QSR Market
                                                                      Pizaa
                                                         Others     Industry
            Source - D‟Essence Hospitality report 2011
                                                          54%         46%
Others           Market Share
 Dominos : 70 %      3%
 Pizza Hut : 27 %
 Others : 3 %                         Pizza
                                       Hut
                                       27%
                                                     Dominos
                                                       70%




                              Source – Jubliant Foodworks Annual Report 2011
 Jubilant Food Works Limited & its subsidiary
  operates Domino's Pizza brand with the
  exclusive rights for India, Nepal, Bangladesh
  and Sri Lanka, The Company is India's largest
  and fastest growing food service company, with
  a network of 500+ Domino's Pizza stores (as of
  31st March, 2012)
 Over the period since 1996, Domino’s Pizza
  India has remained focused on delivering great
  tasting Pizzas and sides, superior quality,
  exceptional customer service and value for
  money offerings.
 They have endeavored to establish a reputation
  for being a home delivery specialist capable of
  delivering pizzas within 30 minutes or else
  FREE to a community of loyal consumers from
  all our stores around the country.
 Pizza Hut is an American restaurant
  chain and international franchise that
  offers different styles of pizza along
  with side dishes
 Pizza Hut is a subsidiary of Yum! Brands,
  Inc. the world's largest restaurant
  company.
 Today, their India business consists of
  more than 200 KFCs and nearly 170 Pizza
  Hut restaurants with strong unit growth.
 Franchisee rights

                               Operates through at least
 Jubilant has exclusive       eight franchisees in India
 rights for the whole          including Devyani and
 country.                      Dodsal.
 Marketing strategy

                               Yum! provides significant
 Jubilant decides and gets    support and Devyani
 it approved by                executes it.
 Domino’s International
 Interactions with
  Franchisor

                                  Yum! Brands has a separate
 Dominos International team
                                   office in India to manage
  visits once every 3-6 months
                                   marketing, real estate and other
  to evaluate business
                                   operational parts of the business
  performance and strategy.
                                   in India.

 Vendor selection


 Jubilant decides and gets it    Yum! decides and Devyani
  approved by                      executes it.
  Domino’s International
 Dough preparations

 Prepared dough distributed from        Pizza Hut Dough is prepared fresh
  commissaries to stores                  in the store kitchens
  under controlled temperatures –
  third party network of cold storage
  vehicles are used
  Beverages


 Domino’s International has signed
  renewable agreements with Coca         Yum! Brands business was owned
  Cola for most countries around the      by Pepsi Co until 1997 and now has
  world.                                  a lifetime contract with Pepsi Co
 Real estate support for
 store openings
                              Yum! Brands’ real estate
 Jubilant’s in-house team    team carries out the
 manages and executes         process on behalf of their
 the entire process.          franchisees
 Dominos by far has the highest penetration in the
  Indian market.
 Pizza Hut is currently limited to Metro & Tier I cities,
  but slowly targeting the Tier II cities




                                   Source - D‟Essence Hospitality report
 We believe the JFW to command pricing strength (i.e.
  is a price leader) due to:
 Association with well-known international brand:
  Domino’s Pizza Inc has been operational from last 60
  years with total 9400 operational stores (as of 31st Sept
  11) worldwide and has a presence in more than 70
  international market.
 Thus, Domino’s is a well-recognised international
  brand and this helps JFW to command premium and
  thereby pricing strength over other players in this
  segment.
 Delivered in 30 minutes: JFW is the market leader in
  organized pizza home delivery segment in India with
  over 70% market share.
 The service proposition created by Dominos is very
  difficult to replicate by the small, unorganised players
  as well as the organised players.
 We believe the market leadership along with the quick
  service proposition enables the company to be a price
  leader.
 Deep pockets for advertising and promotion: The
  well-established brand Domino’s will always have a high
  recall factor as compared to other small players due to
  ability of the company to spend heavily on advertising
  and promotion expense.
 Having invested into the brand over the last few years,
  and delivered on the product quality and the timelines,
  it has build the right perception of khusyion ki home
  delivery;
 Business model similar to FMCG player…
 Introduced products in all the price range starting from
  Rs 39 to Rs 455 on the upper side, so as to cater to all
  strata
 Has introduced add-ons like to Pastas, Nutty Choco-
  lava cake and Butterscotch Mousse so as to increase the
  product range, to counter competition
 Has recently introduced 3-Cheese Pizza and Cheese
  Burst Pizza to cater to high end taste conscious
  consumers
 The most recent offering by Pizza Hut is an extended
  menu of 15 localised pizzas derived from regional tastes
  like Sev puri, Chettinadu paneer, Chicken achari,
  Nimbu mirchi, to name a few……
 The new offerings, marketed heavily through a 360
  degree campaign celebrates the Kansas based chain’s 15
  year anniversary in India. It also reflects the brand’s
  aggression in a market where several new brands have
  entered the fray.
 Pizza Hut wants to focus on more than just pizzas. It
  has offerings like pasta, appetisers and a larger
  collection of beverages. This is part of its strategy to
  make the transition from a quick service restaurant
  (QSR) to a casual dining.

 In terms of reach, Pizza Hut is targeting a store count of
  250 (existing 171) by 2015

 As Pizza Hut expands, a key part of its strategy will be
  to maintain the in-store dining experience
 Domino’s is the market      Pizza Hut is playing
  leader in Home Delivery     catch up in the Home
  of Pizzas                   Delivery game through
                              its Pizza Hut Delivery
 Domino’s stores have        Stores (PHD)
  very limited/cramped
  seating                     Pizza Hut specializes in
 No possibility of           fine dinning restaurants ,
  parties/events at outlet    with good ambience,
                              waiter services
 Significant scope of expansion in new cities and within
  the existing cities…
 JFW may consider cities with population of at least 3 lakhs
  and above, so that the city has immediate capacity for 1 store
  and will have further potential of 1-2 stores over the next 2-4
  yrs. This logic is keeping in mind the economic viability,
  scale and cost of logistic infrastructure to service the store
  from the nearest commissary
 Number of cities with population of 3 lakhs and above
  is 147, indicating that in short to medium term the
  company can target additional 47 (potential 147 –
  existing 100) new cities for opening of Dominos stores.
Source – Jubliant Foodworks Annual Report 2011
 Pizza Hut plans to open 25 more outlets that serve wine
  and beer along with pizzas.
 The company currently operates 10 such stores in Delhi
  and Bengaluru.
 Pizza Hut has seen a growth of nearly 20 to 25 per cent
  in this format.
 The expansion will also help the brand in diversifying
  their offering and adding more value-added services.
 The company, also plans
  to take its casual dining
  restaurant presence to
  250 stores by
  2015. Currently, the
  pizza chain has 131
  stores spread in 34
  cities.

 The expansion plans is
  part of the global
  expansion strategy of
  Yum! Brands
Age Group
                                                                   Above 40
  Gender Analysis                                                  years
                                                 1
                                                                   Between
               8            Female     14                          26-40

      21                    Male                         14        Between
                                                                   16-26
                                                                   years
Consumer work class                                  Frequency of visit
   segmentation
                                                     3
                   1       Business
  4        3           1
                           Housewife                          12      Monthly

                           Others                                     Occasionally
                                                                      Weekly
                           Service          14
  20
                           Student
25
20
15
10
 5   Dominos
0    Pizza hut
Dine In preference


         9
                     dominos
                     pizza hut
    20
                                         Overall
                                        rating for
                        3.31            Pizza Hut
                                 3.79    Overall
                                        rating for
                                        Domios
The study displays a very good example of                         Dominos on       Pizza hut on
monopolistic competition.                                          increase of
                                                                 price for Pizza
                                                                                    increase of
                                                                                     price for
                                                                       hut           Dominos

The study also shows that the Indian customers are   Mean Of
                                                     Responses
                                                                      6.03             6.45

not price sensitive when they get good product,
quality and services

Dominos and Pizza Hut offer pizza but they are differentiated on the basis of
ingredients, recipes and taste.

Companies within the industry can gain monopoly over their competitors by
offering superior products or better service.

The differentiated nature of these firms products permits them to charge
prices above marginal cost.
Monopolistic competition is a market structure characterized by a
large number of firms selling products that are close, but not
perfect, substitutes. Products across firms are different enough that
each firm's demand curve slopes downward.


The pizza market seems to fit this description, with a few large firms
but tens of thousands of Mom-and-Pop operations. One way that
monopolistic competitors try to differentiate their products is based
on physical differences.
But, Please Watch your Calories !!!

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Microeconomic study about Dominos and pizza hut

  • 1. A Study By Group – 09 MBA (12-15) Section –A Roll Nos – 28,41,43,45,46
  • 2.  The Indian fast food market is growing at an annual rate of 25-30 percent, Foreign fast food chains are aggressively increasing their presence in the country.  The market is dominated by global brands like McDonalds, KFC and Dominos specially in the organized fast food segment.  Growing trend of consumption of new cuisines and increasing brand awareness has led to the increase of global players. The new age Indian Source - D‟Essence Hospitality report consumers have also played a significant role.
  • 3.
  • 4.  Hard to believe, but the answer is YES !!!  Let the numbers do the talking……  Currently, about 250,000 pizzas are being delivered every day in India and this is expected to double in the next three to four years.  There were 271 pizza outlets in 2004, and today there are 95o of them - a 300 per cent growth in just eight years.  Out of the total organised Quick Service Restaurant industry pegged at about Rs 3,000 crores, the pizza industry alone is estimated at Rs 1,300-1,400 crores QSR Market Pizaa Others Industry Source - D‟Essence Hospitality report 2011 54% 46%
  • 5.
  • 6. Others Market Share  Dominos : 70 % 3%  Pizza Hut : 27 %  Others : 3 % Pizza Hut 27% Dominos 70% Source – Jubliant Foodworks Annual Report 2011
  • 7.  Jubilant Food Works Limited & its subsidiary operates Domino's Pizza brand with the exclusive rights for India, Nepal, Bangladesh and Sri Lanka, The Company is India's largest and fastest growing food service company, with a network of 500+ Domino's Pizza stores (as of 31st March, 2012)  Over the period since 1996, Domino’s Pizza India has remained focused on delivering great tasting Pizzas and sides, superior quality, exceptional customer service and value for money offerings.  They have endeavored to establish a reputation for being a home delivery specialist capable of delivering pizzas within 30 minutes or else FREE to a community of loyal consumers from all our stores around the country.
  • 8.  Pizza Hut is an American restaurant chain and international franchise that offers different styles of pizza along with side dishes  Pizza Hut is a subsidiary of Yum! Brands, Inc. the world's largest restaurant company.  Today, their India business consists of more than 200 KFCs and nearly 170 Pizza Hut restaurants with strong unit growth.
  • 9.  Franchisee rights  Operates through at least  Jubilant has exclusive eight franchisees in India rights for the whole including Devyani and country. Dodsal.  Marketing strategy  Yum! provides significant  Jubilant decides and gets support and Devyani it approved by executes it. Domino’s International
  • 10.  Interactions with Franchisor  Yum! Brands has a separate  Dominos International team office in India to manage visits once every 3-6 months marketing, real estate and other to evaluate business operational parts of the business performance and strategy. in India.  Vendor selection  Jubilant decides and gets it  Yum! decides and Devyani approved by executes it. Domino’s International
  • 11.  Dough preparations  Prepared dough distributed from  Pizza Hut Dough is prepared fresh commissaries to stores in the store kitchens under controlled temperatures – third party network of cold storage vehicles are used Beverages  Domino’s International has signed renewable agreements with Coca  Yum! Brands business was owned Cola for most countries around the by Pepsi Co until 1997 and now has world. a lifetime contract with Pepsi Co
  • 12.  Real estate support for store openings  Yum! Brands’ real estate  Jubilant’s in-house team team carries out the manages and executes process on behalf of their the entire process. franchisees
  • 13.
  • 14.  Dominos by far has the highest penetration in the Indian market.  Pizza Hut is currently limited to Metro & Tier I cities, but slowly targeting the Tier II cities Source - D‟Essence Hospitality report
  • 15.  We believe the JFW to command pricing strength (i.e. is a price leader) due to:  Association with well-known international brand: Domino’s Pizza Inc has been operational from last 60 years with total 9400 operational stores (as of 31st Sept 11) worldwide and has a presence in more than 70 international market.  Thus, Domino’s is a well-recognised international brand and this helps JFW to command premium and thereby pricing strength over other players in this segment.
  • 16.  Delivered in 30 minutes: JFW is the market leader in organized pizza home delivery segment in India with over 70% market share.  The service proposition created by Dominos is very difficult to replicate by the small, unorganised players as well as the organised players.  We believe the market leadership along with the quick service proposition enables the company to be a price leader.
  • 17.  Deep pockets for advertising and promotion: The well-established brand Domino’s will always have a high recall factor as compared to other small players due to ability of the company to spend heavily on advertising and promotion expense.  Having invested into the brand over the last few years, and delivered on the product quality and the timelines, it has build the right perception of khusyion ki home delivery;
  • 18.  Business model similar to FMCG player…  Introduced products in all the price range starting from Rs 39 to Rs 455 on the upper side, so as to cater to all strata  Has introduced add-ons like to Pastas, Nutty Choco- lava cake and Butterscotch Mousse so as to increase the product range, to counter competition  Has recently introduced 3-Cheese Pizza and Cheese Burst Pizza to cater to high end taste conscious consumers
  • 19.  The most recent offering by Pizza Hut is an extended menu of 15 localised pizzas derived from regional tastes like Sev puri, Chettinadu paneer, Chicken achari, Nimbu mirchi, to name a few……  The new offerings, marketed heavily through a 360 degree campaign celebrates the Kansas based chain’s 15 year anniversary in India. It also reflects the brand’s aggression in a market where several new brands have entered the fray.
  • 20.  Pizza Hut wants to focus on more than just pizzas. It has offerings like pasta, appetisers and a larger collection of beverages. This is part of its strategy to make the transition from a quick service restaurant (QSR) to a casual dining.  In terms of reach, Pizza Hut is targeting a store count of 250 (existing 171) by 2015  As Pizza Hut expands, a key part of its strategy will be to maintain the in-store dining experience
  • 21.  Domino’s is the market  Pizza Hut is playing leader in Home Delivery catch up in the Home of Pizzas Delivery game through its Pizza Hut Delivery  Domino’s stores have Stores (PHD) very limited/cramped seating  Pizza Hut specializes in  No possibility of fine dinning restaurants , parties/events at outlet with good ambience, waiter services
  • 22.
  • 23.
  • 24.  Significant scope of expansion in new cities and within the existing cities…  JFW may consider cities with population of at least 3 lakhs and above, so that the city has immediate capacity for 1 store and will have further potential of 1-2 stores over the next 2-4 yrs. This logic is keeping in mind the economic viability, scale and cost of logistic infrastructure to service the store from the nearest commissary  Number of cities with population of 3 lakhs and above is 147, indicating that in short to medium term the company can target additional 47 (potential 147 – existing 100) new cities for opening of Dominos stores.
  • 25. Source – Jubliant Foodworks Annual Report 2011
  • 26.  Pizza Hut plans to open 25 more outlets that serve wine and beer along with pizzas.  The company currently operates 10 such stores in Delhi and Bengaluru.  Pizza Hut has seen a growth of nearly 20 to 25 per cent in this format.  The expansion will also help the brand in diversifying their offering and adding more value-added services.
  • 27.  The company, also plans to take its casual dining restaurant presence to 250 stores by 2015. Currently, the pizza chain has 131 stores spread in 34 cities.  The expansion plans is part of the global expansion strategy of Yum! Brands
  • 28.
  • 29. Age Group Above 40 Gender Analysis years 1 Between 8 Female 14 26-40 21 Male 14 Between 16-26 years Consumer work class Frequency of visit segmentation 3 1 Business 4 3 1 Housewife 12 Monthly Others Occasionally Weekly Service 14 20 Student
  • 30. 25 20 15 10 5 Dominos 0 Pizza hut
  • 31. Dine In preference 9 dominos pizza hut 20 Overall rating for 3.31 Pizza Hut 3.79 Overall rating for Domios
  • 32. The study displays a very good example of Dominos on Pizza hut on monopolistic competition. increase of price for Pizza increase of price for hut Dominos The study also shows that the Indian customers are Mean Of Responses 6.03 6.45 not price sensitive when they get good product, quality and services Dominos and Pizza Hut offer pizza but they are differentiated on the basis of ingredients, recipes and taste. Companies within the industry can gain monopoly over their competitors by offering superior products or better service. The differentiated nature of these firms products permits them to charge prices above marginal cost.
  • 33. Monopolistic competition is a market structure characterized by a large number of firms selling products that are close, but not perfect, substitutes. Products across firms are different enough that each firm's demand curve slopes downward. The pizza market seems to fit this description, with a few large firms but tens of thousands of Mom-and-Pop operations. One way that monopolistic competitors try to differentiate their products is based on physical differences.
  • 34. But, Please Watch your Calories !!!