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A Project on

Consumer

Behavior

A Comparative

Study on Pizza Hut

and Dominos

By

Rajalaxmi Prakash

Roll 011

PGDM 2012 14

IIBM Patna

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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 Huts first franchiseopened in Topeka, Kansas.

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History

Ironically, another set of siblings, Tom andJames Monaghan, founded Dominos.They

purchased a pizza shop, DomiNicks, with a

$75 down payment and a $500 loan.

Not long after, James exchanged his half ofthe business to Tom for a Volkswagen Beetle.

In 1965, the business was renamed Dominos

and the first franchise opened in 1967.

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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

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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

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Important Figures

The minimum financial requirement to open a

Pizza Hut is $700,000 in net worth and a minimumof $350,000 in liquid assets.

The franchise fee is $25,000 for all franchisees. Itdoes not offer a minority or veteran discount on thefranchise fee, but it does offer a minority lendingassistance 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 advertising fee is2.5 to 3 percent of gross sales.

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Dominos does not have a minimal financialrequirement.

Its franchise fee is $25,000 for external franchisees

(those who have not worked as a General Managerwith Dominos) and up to a $25,000 for internalfranchisees (those who have worked as a GeneralManager).

It offers franchise fee discounts to qualifyinginternal minorities and veterans.

The royalty fee is 5.5 percent and its advertising feeis 4 percent of the stores weekly royalty sales.

Important Figures

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Training

Pizza Hut franchisees must complete an 8-10

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.

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Training

External Dominos 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.

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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

Administrations Finance Registry should the

franchisee want to apply for a SBA loan.

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Financing Options

Just like Pizza Hut, Dominos stays away from

offering direct or indirect financing to franchisees

and it is listed on the Small Business

Administrations Finance Registry.

Dominos also participates in the International

Franchise Association VetFran program, which helps

veterans obtain special finance rates and options.

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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.

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Obligations/Restrictions

Unlike Pizza Hut, Dominos 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.

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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 worlds largest pizza chains

with over 12,500 restaurants across 91 countries.

It employees more than 300,00 people.

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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 Dominos Pizza in India has grown into a

countrywide network of more than 300 stores with ateam of over 9000 people.

Dominos believes strongly in the strategy of think

local and act regional.

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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.

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Success Factors

Door step services.

Low pricing

Customer satisfaction

Great offers

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Similarities

Both claimed to have original recipe of pizzamaking

Both customized their offerings (though pizza hut

followed dominos ) Both concentrated on database marketing

Both introduced coupons, discounts and specialoffers

Both used promotional campaigns involvingcustomers directly

Both wanted to establish themselves as a Brand

Diff L t 1990

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Differences (Late 1990s

early 2000s)

PIZZA

HUT

46%

DOMINO'S

OTHERS

32%

MARKET SHARE 1999 PIZZAHUT

18%

DOMINO

'S

70%

OTHERS

12%

MARKET SHARE 2000

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SWOT Analysis

Strength

Strong brand image

Unmatchable quality and variety

Hygiene

Excellent quality


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SWOT Analysis

Strength

More outlets even in smaller towns.

Less than 30 minutes home delivery.

Low price

Excellent offers


Quick service at outlets

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SWOT Analysis

Weakness

Inadequate advertisements.

Inadequacy of outlets.

High prices

Lack of parking facilities at outlets.

i

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SWOT Analysis

Weakness

Lack of variety

Outlets lack space

Ambience not up to mark

No special option for birthday parties and

corporate lunches.

S O A i

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SWOT Analysis

Opportunity

With growing fast food market- scope for

expansion.

Introduce more offers.

SWOT A l i

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SWOT Analysis

Opportunity

With growing fast food industry- scope for

expansion.

Introduce more variety

Bigger outlets

Introduce take away counters.

SWOT A l i

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SWOT Analysis

Threat

No takeaway counters for pizzas.

Low price points of competitors.

SWOT A l i

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SWOT Analysis

Threat

Better quality and variety of competitors.

No take away counters for pizzas

USP

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USP

Dining Experience

USP

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USP

30-minute Home Delivery Frame

M k ti Mi

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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)

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Marketing Mix

Product

High Localization; even based on different regions.

Trendsetter in localization.

M k ti Mi

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Marketing Mix

Price

Initially high price; as Pizza Hut offer Comeback

Value to our customer because of its USP Dining

Experience.

M k ti Mi

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Marketing Mix

Price

Initially high price; as key ingredients sourced from

Australia and Spain.

Competition with Pizza Hut resulted in Price cuts,

discounts.

M k ti Mi

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Marketing Mix

Place

Not much focused on supply chain; rather focused

on dining Experience

M k ti Mi

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Marketing Mix

Place

Most robust and efficient Supply Chain resulted

into reduce costs.

Strategic set up of commissaries for raw materialsupply.

Tie up with real estate consultant.

Targeting on non traditional outlets like Corporateoffice, railway stations, cinema halls etc.

M k ti Mi

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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

Marketing Mi

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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

M k ti Mi (C t

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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, etc.

Less than 50% of sales is from pizzas

Marketing Mi (C rrent

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Scenario)

Product

Pizza with promise of fast delivery

Offers mainly Pizza along with pasta, cakes and few

other side dishes

Mainly focused on pizza


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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


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Scenario) Price

Concentrates mostly on the lower to middle band

Caters mainly to price sensitive segment.

Lowest Offering is at Rs. 39


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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


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Scenario)

Place

500 stores across 110 cities

Conveniently located for fast delivery

Encourages online ordering


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Scenario)

Promotion

Coupons

Bundling

Offers



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Scenario) Promotion

Coupons

Bundling

Offers


Po itioning

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Positioning

Conversation

Memories

Laughter

Togetherness

Enhanced dine-in concept

Positioning

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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 LineHungry Kya

2008 - Khushiyon Ki Home Delivery A reflection of therole Dominos plays in the lives of the consumers

2012 - Ye Hai Rishton Ka Time To take the engagement

with the consumers to the next level

M I ti

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A Healthy Restaurant

My Innovation

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Sant Goyt

Health Taste

Segmentation

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Segmentation

Geographic-

Demographic-

Age-

Gender- Psychographic

AIO

Activities working professionals

Interests Eating out with family, grabbing a quick mealbefore work hours or in the lunch time

Opinions Broad-minded people

Targeting

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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, heartproblems, etc.

Positioning

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Positioning

Healthy but tasty food

Fresh ingredients

Organic ingredients

Marketing Mix

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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

Marketing Mix

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Marketing Mix

Product

Nutritional information right on the back of its trayliners

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 non-vegetarian cuisine

Play shop for kids

Marketing Mix

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Marketing Mix

Price

Ranging from Rs 50 to Rs 1500

Regular sandwiches and eatables are low-priced

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 thegenuine care, concern and that extra mile covered

for individual customers.

Based on the objective of product quality

Marketing Mix

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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

Marketing Mix

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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 thecampaigns

A Glimpse into the Menu

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Card Sambar dal

A solid stew made with chickpeas, legumes, and avariety 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 260calories, 13.0gms fat, 5.0gms carbohydrates and30.5gms protein.


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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.


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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.


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A Glimpse into the MenuCard

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 Spicymeal. One glass consists of 138 calories.

Chickpea and spinach curry

Lots of fresh spinach brings the green color to thischickpea dish, and curry livens up the flavor.

Full of fiber. Per serving consist of approximately

142 calories.


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Card Lobhia

A popular north-Indian dish, where the soaked andcooked black-eyed beans are boiled in tangy tomato

gravy, with the right blend of spices.

One serving of medium bowl consists of approximately198 calories.

Palak da Saag

A very famous and healthy Punjabi recipe usually servedwith roti or naan.

Per servings includes approximately126.2 calories and6.3gms proteins.


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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 finelychopped spinach or any leafy green vegetables

One serving of 142gms consists of almost 100calories and 3gms proteins


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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 125calories 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


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Card Red pumpkin bhaji

Tastes so good & is excellent with soft chapattis,phulkas or with any Indian bread. It goes well withrice 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 orgreen peas.

One serving consists of approximately 65 caloriesand 2.2gms protein


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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 calories


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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

SWOT Analysis

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SWOT Analysis

Strength

Healthy food

SWOT Analysis

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SWOT Analysis

Weakness

High-priced menu

Narrow target

SWOT Analysis

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SWOT Analysis

Opportunity

Untapped market

Growing percentage of health-conscious people

SWOT Analysis

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SWOT Analysis

Threat

Low-priced restaurants

Other established fast-food chains

Learning

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ea g

Through the tagline Health + Taste and the brand

logo

Personality

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y

The people with following personalities will be the

focus:-

People with busy lives

Outgoing people

Health-conscious people

People willing to try new things

Attitude Formation

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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 mediaand personalized hand-outs

Justifying the high priced menu in accordance with

the fresh and expensive ingredients and special

treatment to customers especially people withcertain health issues or people with babies

Motivation

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Motivation

A campaign to spread awareness, contests, etc.

Celebrity endorsements

Play shop for kids along with staff to look after

Perception

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p

There is a negative perception towards the food from

restaurants and eateries. Its 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 thefood and by giving customers a visit to the kitchen and

storage areas.

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Documents

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