MS University Of Baroda

Project on

“A Comparative Study Between Pizza Hut And Domino’s”

Submitted By : - External Guide : -

Adarsh Desai Mr. Nishad Nanavaty

PGDMM

PROJECT REPORT

ON

A COMPARITIVE STUDY BETWEEN PIZZA HUT AND DOMINO’S PIZZA

By

ADARSH DESAI (ROLL NO-6)

POST GRADUATE DIPLOMA IN MARKETING MANAGEMENT

FIRST SEMESTER (2013-2014)

DEPARTMENT OF COMMERCE AND BUSINESS MNAGEMENT

FACULTY OF COMMERCE

THE M S UNIVERSITY OF BARODA

VADODARA

UNDER THE GUIDANCE OF : -

MR. NISHAD NANAVATY

Contents

Declaration Certificate Acknowledgement Summary Introduction Core Competencies Competitors STP Analysis Marketing Strategies SWOT Analysis 4P’s Social Media Pizza War

Price list and Offers

Success Factors Conclusion Recommendations References

Declaration

I hereby Declare that the project work entitled “Comparative study between Pizza Hut and Domino’s” submitted to the MS University of Baroda, is a record of an original work done by me under the guidance of Mr. Nishad Nanavaty. The project has been prepared as per the requirements of the university.

Adarsh Desai

Student PGDMM

CERTIFICATE

This is to certify that the project work entitled “A Comparative Study Between Pizza Hut And Domino’s” is a bonafide work of Mr. Adarsh Desai (Roll No. 6) carried out in partial fulfillment of MS University of Baroda under my guidance.

Mr. Nishad Nanavaty

(Project Guide)

Marketing Manager, Newage Eco Solutions Pvt. Ltd.

Acknowledgement

I would like to express my sincere gratitude to My Guide Mr. Nishad Nanavaty for the continuous support to my Report and research, for his patience, motivation, enthusiasm, and immense knowledge. His guidance helped me in the time of research and Making of this project.

- Adarsh Desai

Summary

Fast food is one of the world’s largest fast growing industry types. India’s fast food industry is growing by 40%. The 6000 crore fast food retail industry is mainly dominated by the multinational players and the key players which are active in the research of the food retailing. Because of the availability of raw material for fast food, global chains are flooding into the country. The percentage share held by foodservice of total consumer expenditure on food has increased from a very low base to stand at 2.6% in 2001. Eating at home remains very much ingrained in Indian culture and changes in eating habits are very slow moving with barriers to eating out entrenched in certain sectors of Indian society. The growth in nuclear families, particularly in urban India, exposure to global media and western cuisine and an increasing number of women joining the workforce have had an impact on eating out trends.

Major players in fast food are:

McDonald’s KFC Pizza hut Dominos pizza Café coffee day Barista Subway Papa John’s Smokin Joe’s

Dominos and Pizza Hut are both fierce competitors in the contemporary cultured pizza market. Both have been competing on the same niche market that has same market demographic characteristics and hence comparison between the two is based on a leveled ground. Today, many people take their pizzas more seriously to an extent that they would rather die queuing for their favorite fast food. For lovers of Pizza, it is either Dominos or Pizza Hut, and if not, none. This is an expression on the way in which both companies have been able to craft a market niche for their products.

Domino's and Pizza Hut, the two big US fast food chains entered India in 1996. Each claimed it had the original recipe as the Italians first wrote it and was trying desperately to create brand loyalty. Domino's and Pizza Hut - tried to grab as large a slice of the pizza pie as possible.

While Pizza Hut relied on its USP of "dining experience", Domino's USP was a 30-minute delivery frame. To penetrate the market, both the players redefined their recipes to suit the Indian tastes. Domino's went a step ahead by differentiating regions and applying the taste-

factor accordingly. Domino's also made ordering simpler through a single toll-free number throughout the country.

Introduction

Pizza Hut

Pizza Hut is an American restaurant chain and international franchise that offers different styles of pizza along with side dishes including pasta, buffalo, and garlic bread. Pizza Hut is a subsidiary of Yum! Brands, Inc. (the world's largest restaurant company[) with approximately 34,000 restaurants, delivery/carry-out locations, and kiosks in 100 countries. Currently based in Addison, Texas (a northern suburb of Dallas), Pizza Hut is relocating its headquarters to Legacy Office Park in nearby Plano when the lease on its current building, which it has occupied since 1995, expires on December 31, 2010. The first Pizza Hut is located in Kansas at the Wichita State University Campus. It was opened in 1958 by Frank and Dan Carney, 2 brothers who studied at the university.

The history of Pizza hut began in 1958, when what is now the world's largest pizza franchise was born. Today the Pizza hut company is part of the Pepsi Empire, but back then two brother’s borrowed $600 from their mother and started to forge the history of Pizza hut.

Pizza Hut has subsequently branched out and developed franchises all over the world. In fact it is diversity that has made the history of pizza hut so successful. Their menus and recipes are not the same, different locations use different suppliers and different toppings, according to the demand of their clients. The building block of the history of pizza hut has been this diversity, not often present in such a large concern.

The whole history of pizza hut has been achieved through innovation, but the history of pizza hut really took off with union into the Pepsi Company and more aggressive marketing techniques especially in the take out market

Pizza Hut was founded in 1958 by brothers Dan and Frank Carneyin their hometown of Wichita, Kansas When a friend suggested opening a pizza parlor, they agreed that the idea could prove successful, and they borrowed $600 from their mother to start a business with partner John Bender. Renting a small building at 503 South Bluff in downtown Wichita and purchasing secondhand equipment to make pizzas, the Carneys and Bender opened the first "Pizza Hut" restaurant; on opening night, they gave pizza away to encourage community interest. They chose the name "Pizza Hut" since the sign they purchased only had enough space for nine characters and spaces. Additional restaurants were opened, with the first franchise unit opening in 1959 in Topeka, Kansas. The original Pizza Hut building was later relocated to the Wichita State University campus. Pizza Hut's prototype version of a restaurant (1950–1961) at Wichita State University. This was only used at four prototype Pizza Hut locations. There are only a few menu items on this version.

Dan and Frank Carney soon decided that they needed to have a good standard image. The Carney brothers contacted Wichita architect Richard D. Burke, who designed the distinctive mansard roof shape and standardized layout, hoping to counter competition from Shakey's Pizza, a chain that was expanding on the west coast. The franchise network continued to grow through friends and business associates, and by 1964 a unique standardized building appearance and layout was established for franchised and company-owned stores, creating a universal look that customers easily recognized.

By 1972, with 314 stores nationwide, Pizza Hut went public on the New York StockExchange under the stock ticker symbol NYSE: PIZ. In 1978, Pizza Hut was acquired by Pepsico, who later also bought KFC and Taco Bell. In 1997, the three restaurant chains were spun off into Tricon, and in 2001 joined with Long John Silver's and A&W Restaurants to become Yum! Brands. The oldest continuously operating Pizza Hut in the world is in Manhattan, Kansas, in a shopping and tavern district known as Aggieville near Kansas State University.

In 2011, Yum! Brands created a separate autonomous subsidiary called Yum! Restaurants India for its India operations. The group’s top management team views its current stage of development in India as being similar to that in China 15 years ago. Pizza Hut currently has 40%(+) market share in China’s pizza market.Pizza Hut Delivery (PHD) was introduced as a separate brand in the Middle-Eastern markets in 2006 and introduced in India in 2008. In 2011, the group has also started the process of segregating operations/resources at both the franchisee level as well as at the store level forPH – Pizza Hut as its dine-in restaurants and PHD as the home delivery chain.

Store Expansion in India:Pizza Hut plans to increase the store count of PHD to 300 by 2015 from 35 inJune 2011 and Pizza Hut’s dine-in restaurants are targeted to increase from 131 currently to 250 by 2015 taking the combined store count of PH and PHD to 550 in India by 2015. Competitor Domino’s is not too far behind and has already said that they will expand in the same manner and have set a target of 750 stores by 2015.

Financials of Yum! in India

Pizza Hut in India currently generates around Rs 4bn of revenues annually. They aim to generate over US$100mn (`5bn) in annual sales only from the home delivery format by 2015. Yum! Brand’s Pizza Hut and Pizza Hut Delivery expansion plans in India form a part of a US$100m capex plan. This includes the expansion of its KFC and Taco Bell outlets as well. Yum! Brand’s decision to fund the capex for expanding their brands in India through their own resources, rather than using franchisees’ balance sheets, suggests that Yum!’s management team is serious about India.

Yum has 471 stores in India comprising 208 KFC stores, 166 Pizza Hut casual dining, 94 Pizza Hut Home Service and three Taco Bells. Pizza Hut Home Service has been growing at the fastest pace (annualized growth of 74%) followed by KFC (annualized growth 41%). More than 80% of these stores are on franchise basis. The company plans to open 100 stores in India in CY12 across these three brands. Focus on Pizza Hut Home Service implies increased competition for Dominos, which specializes in home delivery.Yum’s increased focus on India is reflected in its decision to carve out a separate India division (other divisions US, China, International) despite the country contributing only 1% to its global business. This clearly indicates that competition will intensify hereon, especially in the home service segment.The following Chart shows how India is a Miniscule for Yum! on Global Revenue Basis despite large presence. Thus the company has decided to deepen its focus in Indian Market.

Written by Retail Analyst · Filed Under Retail Research

Domino’s Pizza

Founded in 1960, Domino´s Pizza is the recognized world leader in pizza delivery segment operating a network of company-owned and franchise-owned stores in the United States and international markets. Domino’s Pizza’s Vision illustrates a company of exceptional people on a mission to be the best Pizza Delivery Company in the world. Domino´s started out small with the legendary Tom Monaghan who bought his first pizza store and called it Dominick’s.It was re-christened Domino´s Pizza in 1965. However, in 1978, the 200th Domino´s store opened, and things really began to cook. By 1983 there were 1000 Domino´s stores, rising to 5000 in 1989. Today, there are more than 9000 franchised and company owned stores in the United States and 60 international markets Domino’s is listed on the NYSE under the symbol "DPZ." The Domino’s Pizza® brand was named a Megabrand by Advertising Age magazine. It was also named as "Chain of the Year" by Pizza Today magazine, the leading publication of the pizza industry. In 2009, Domino’s ranked number one in customer satisfaction in a survey of consumers of the U.S. largest limited service restaurants, according to the annual American Customer Satisfaction Index (ACSI). Domino’s has expanded its menu significantly since 2008 to

include Oven Baked Sandwiches and BreadBowl Pasta, and recently debuted its ’Inspired New Pizza’- a permanent change to its core hand-tossed product, reinvented from the crust up with new sauce, cheese and garlic seasoned crust.

Jubilant FoodWorks Limited (the Company) is a Jubilant Bhartia Group Company, The Company was incorporated in 1995 and initiated operations in 1996, The Company got listed on the Indian bourses in February 2010, Mr, Shyam S, Bhartia, Mr, Hari S, Bhartia and Jubilant Enpro Private Ltd, are the Promoters of the Company. The Company & 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)The Company is the market leader in the organized pizza market with a 54% market share (Euromonitor Report 2010) and 70% share in the pizza home delivery segment in India, The Company has strengthened its portfolio by entering into an agreement with Dunkin' Donuts Franchising LLC, for developing the Dunkin' Donuts brand and operating restaurants in India,

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. We 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.

Domino’s vision is focused on " Exceptional people on a mission to be the best pizza delivery company in the world!" We are committed to bringing fun, happiness and convenience to lives of our consumers by delivering delicious pizzas to their doorstep and our efforts are aimed at fulfilling this commitment towards a large and ever-growing customer base.

Domino’s constantly strives to develop products that suit the tastes of our consumers and hence delighting them. Domino’s believes strongly in the strategy of ’Think global and act local’. Thus, time and again we have been innovating with delicious new products such as crusts, toppings and flavours suitable to the taste buds of Indian Consumers. Further providing value for money and affordable products to our consumers has been an important part of our efforts. Our initiatives such as Fun Meal and Pizza Mania have been extremely popular with consumers looking for an affordable and value for money meal option.

Domino’s believes that when a box of pizza is opened, family and friends come together to share the pizza. Hence, our brand positioning: ‘Yeh Hai Rishton Ka Time’

That’s why, all our efforts, whether it is a new innovative and delicious product, offering consumers value for money deals, great service, countrywide presence or the promise to deliver in 30 minutes or free are all directed towards making relationships stronger, warmer

and more fun by giving consumers an opportunity to get together, catch up, reunite and spend more time together.

More rapid overseas growth than its rivals: Domino’s has grown more rapidly overseas than its pizza quick-service restaurant rivals in the recent past. Going forward, continued expansion is likely to boost high-margin royalty revenue for the company. In the past six years, DPZ has outpaced its major rivals, Pizza Hut and Papa John’s, in new unit expansion overseas. It can more than double its current unit count of nearly 4,835 units in the coming ten years. In India, the company has established itself as the largest international brand and makes up 67% of the delivery market. In fact, the company expects the number of its international stores to surpass the number of its domestic stores this year, something that Papa John’s and Pizza Hut haven’t been able to do; overseas stores now constitute about 49.6% of total Domino’s stores. The following pie chart provides a detailed unit break up of Domino’s in different markets.

Company management aims to open 350-450 stores every year, with most of them being in overseas markets. These international stores can help the company reach an EPS growth of 5% and international revenue growth of 10%.

Objective of the study

(i) To find out the market strategies of both the brands.

(ii) To find out the various forces and their results on the industry.

(iii) To find out the comparative analysis between Pizza-hut and dominos-pizza.

(iv) To check out the preferences of the people or the consumers.

(v) To find out which factors are more preferred by the customers.

Market shares and major players

Indian taste buds are demanding more and pizza industry – one of the most intensive industry is all gearing on. People across the country are consuming over three million pizzas a month currently, and the monthly sales figures are projected to double in the next four years. According to industry data, of the total branded quick service restaurant market make a sale of over Rs 1,200 Crore, the pizza chains contribute around 50 per cent of the sales i.e. worth Rs. 600 Crore.

The major players of the Pizza industry are:-

• Pizza Hut• Domino’s• Smokin joe’s• Garcia’s• Papa john’s• Us pizza

Market share as on 1999

PIZZA CHAIN MARKET SHARE (%)Pizza Hut 46.42Domino's 21.67Others 31.91

Source: Financial Express

Market share as on 2000

Pizza Chain 2000 Market Share (%)Pizza Hut 18Domino's 70Others 12

Source: Business Standard, As claimed by the company

Current Market Shares

As per march’12

The major market players are Pizza Hut and Domino’s with market share of 36% and 54% respectively and other shares 10% of the market.

Major forces affecting the Industry

In major cities of India like Delhi, Mumbai, Bangalore Pizza Hut and Domino’s have a competition with Pizza corner, Smokin joe’s, Us pizza, Garcia’s but in small cities Pizza Hut and Domino’s are the major players.

Threat of new entrants

With the economic reforms and liberalization, many new entrants also want the revenue of the 200 billion Indian fast food industries.

There are many new entrants in the branded pizza industry some of them are

• Papa john’s pizza• Us pizza

Some Indian brands are:-

• Pizza Express• Pizza Corner• Slice of Italy

They have captured a lot of customers with their new style and discount offers. Much young crowd flock their restaurants and their taste buds are getting modified. Now the new entrants are also likely to enter the small cities and make their presence. Thus pizza hut and dominos have to rethink their strategies so as to retain their customers. They have to constantly differentiate their services from the newer entrants

Substitutes

There are lots of substitutes which are available to choose with respect to the fast food industry some of them are

• McDonald’s• Barista• Cafe coffee day• Chinese restaurants (mainland china)• Other restaurants

Largely it depends upon the customers what they want to have. Generally it is assumed that when people dine outside, they think of having pizza at least 25% of time. Thus if the brand recall of a particular company is good, more people will tend to go there. Higher the quality of food, service, higher will be product recall and sales

Buyer’s bargaining power

Pizza hut and dominos have higher market reach and greater visibility in the market with respect to the pizza industry and hence they command supplies at lower rate. However their counterparts, competitors cannot command such lower prices. Thus the muscle power of pizza hut and dominos is way beyond the others.

Supplier’s growing bargaining power

Supplies till now were not a problem but with the advent of the rising food costs (raw material inflation). Suppliers are not ready to supply items at the normal rate. Thus supplier’s muscle power grew only doe to inflation. Thus the company either has to increase the menu costs or reduce the operational costs to recover. Failing to do this will make the company into losses or to lose out in the industry.

Trends in the Indian market

Marketing to children

Fast food outlets in India target children’s as their major customers. They introduce varieties of things that will attract the children’s attention and by targeting children’s they automatically target their parents because children’s are always accompanied by their parents.

Low level customer commitment

Because of the large number of food retail outlets and also because of the tendency of customer to switch from one product to other, this industry faces low level customer commitment.

Attracting different segments of the market

Fast food outlets are introducing varieties of products in order to cater the demands of each and every segment of the market. They are introducing all categories of product so that people of all age, sex, class, income group etc can come and become a customer of their food line.

Core Competencies

Domino’s

“30 MINUTES OR FREE” service commitment

Quality foods

Dedicated Workforce

Reachability and Reliability

Price

Responsibility towards society

Association with NGO’s.

Store Educational Trust (SET)

CRY (Child Relief and You)

Pizza Hut

Offering value oriented and quality food

Quality work force

Fine Dining Experience

Wide variety of food (International and Domestic)

Responsibility towards Society

Association with world hunger Relief Share a Slice of Hope™ Campaign

Competitors of the Pizza Hut and Dominos

• Pizza corner• McDonald’s• Barista• Cafe coffee Day• Subway• Papa john’s

• KFC

STP Analysis

Segmentation:

Pizza hutGeographic

Region – pizza hut outlets in different countries is a way of segmenting their market according to region and finding out potential markets.City – they also segment the cities as class i, class ii, metros, small towns.

DemographicAge – below 10years, 10 to 18 years, 18 to 25 years, 25 to 40 years, 40+ years.Family income – middle class, upper middle class, high classDual income earners – yes/no

PsychographicSocio-economic class – urban (a1, a2, b1, b2, c, d)

BehavioralOccasions – birthdays, corporate lunches, parties, receptionsLoyalty status – low, medium, highUser status – first time, regular, non-user

DominosGeographic

Region – dominos outlets in different countries is a way of segmenting their market according to region and finding out potential markets.City – they also segment the cities as class i, class ii, metros, small towns.

DemographicAge – under 13years, 13 to 21 years, 21 to 35 years, 35 to 50 years, 50+ years.Family income – lower middle class, middle class, upper middle class, high class

PsychographicSocio-Economic class – urban (a1, a2, b1, b2, c, d)

BehavioralLoyalty Status – low, medium, highUser status – first time, regular, non-user

Targeting:

Pizza hut

In geographic segment they targeted countries where there were no pizza hut outlets. Initially opened in class i cities and then have now moved to metros.

In demographic segment their main target is the young adults ranging from 25 years to 40 years and also dual income earners family. They aim basically at the upper middle class and the high class income families.

In psychographic segmentation they targeted a1, a2, b1 socio-economic classes. In behavioural segmentation they targeted for occasions such as birthday bashes,

corporate lunches. It was also found that they were targeting the first time users because they felt that their quality and taste would automatically make them a loyal customer.

Dominos

In geographic segment they targeted countries where there were no dominos outlets. Initially opened in class ii cities and then have now moved to class i, metros and smaller towns.

In demographic segment their main target is the teenagers and college students (13 to 21years), young adults ranging from 21 years to 35 years. They aim basically at the middle class, upper middle class income families.

In psychographic segmentation they targeted a2, b1, b2 socio-economic classes. In behavioural segmentation it was found that they were targeting the first time users

and also their regular users.

Positioning

Points of differenceThe major point of difference between pizza hut and dominos is that pizza hut concentrates on in-restaurant dining. The ambience and decor of all pizza hut outlets are good and the outlets are spacious. When customers think of party and decide to have pizza, pizza hut comes into their mind. Pizza hut also arranges kitty parties, birthday parties and business meetings in their outlets. Pizza hut has customized birthday party invites with different themes for the customers to choose and use it as invitations. Dominos aims at fast home delivery of pizza. Whenever customers want to have pizza at home, they think of calling dominos and ordering for it because they are experts in home delivery of pizza. “We earn 60% of our revenue from home delivery of pizzas and 40% from the restaurant sales” , says Mr.navamani, manager of dominos, Coimbatore v.o.c. Park outlet. In case of pizza hut, the major revenue is from restaurant sales.

Points of parityCategory points of parity – the main food item that is sold in pizza hut and dominos is pizza. As we all know, pizza comes under the fast food category of foods, both the companies must be good in speed of making and service. Irrespective of the cost, both pizza hut and dominos has to deliver or serve pizza in less time as compared to other main course food items served in other restaurants.

Competitive points of parity – competitive points of parity in case of pizza hut is that, even though pizza hut is costlier than dominos, they have their own customers, who do not bother about spending, but look for quality and personalized service. When we visit pizza hut, they have restaurant hostess who will assign us tables and introduce the steward who will be taking care of us. This is generally a procedure that is followed in five star category hotels and pizza hut is also following it to emphasize on service quality. In case of dominos, they are not costly as pizza hut and do not offer great ambience to customers, but offer good pizzas at nominal price. They concentrate on turnover of covers and cater to customers who don’t have time to spend on food and just stop over for refreshment. Moreover, dominos mainly looks into home delivery of pizzas and are experts in it.

MARKETING STRATEGIES

Overall both the companies achieve what they want to as for Dominos they have achieved in positioning themselves as the fastest serving pizza outlet and quenching the hunger.

Pizza Hut has come to become synonymous with the ‘best pizzas under one roof’. They have positioned themselves for their unique dining experience.

Thus from the market feedback, it can be seen that even customers feel the same as what the company wants them to.

Strategic Formulation

Overall Cost Leadership, Differentiation and FocusThis is achieved very effectively by Dominos as they do not intend to lose their focus from delivering pizzas at home

Dominos Brand thus relates mainly to service & delivery neither they promote their in dining experience nor they spend revenue for it.

Domino's vision is focused on “Exceptional people on a mission to be the best pizza delivery company in the world!”

Thus Dominos are able to provide good pizzas at relatively lower rate as they don’t spend much for the restaurant

Pizza Hut’s Premium pricePizza Hut is committed for providing uncompromising product quality, offering customers the highest value for money and giving service that is warm, friendly and personal.

They stress heavily on the dining experience and the ambience Thus at each point company charges a premium

Thus Pizzas from Pizza Hut costs a premium hence their customers also changes to high income groups.

Creation, Communication and Capturing Value

Domino’s :

Domino's Pizza constantly strives to develop products that suit the tastes of its consumers and hence delighting them. Domino's believes strongly in the strategy of “Think global and act local”. Thus, time and again Domino's Pizza has been innovating with delicious new products such as crusts, toppings and flavors suitable to the taste buds of Indian Consumers. Further, providing value for money at affordable products to the consumers has been Dominos motto. Initiatives such as Fun Meal and Pizza Mania have been extremely popular with consumers.

The Brand Positioning of “Khushiyon ki Home Delivery” (Happiness Home delivered) and now followed by “Yeh Hai Rishton Ka Time” (its Time For Relationships) is the emotional benefit Dominos offer to consumers.Delicacies that do not rip wallets have always got the crowd coming back to the Dominos although its ambience is not up to that of its competitors. They have the maximum offers with respect to the discounts they offer throughout the year. Thus the customer has the maximum incentive to come back to Dominos. “Hungry Kya?”, promotion where hunger gets quelled in less than 30 minutes was a great value proposition . All other activities, be it new variants, great service, timely deliveries or more for the same price the effort of Dominos has always been directed towards making its customers happy, creating, communicating and delivering value.

Pizza Hut:

Workforce of Pizza Hut is chosen with the motto “Together we grow” with primary concern being quality of service, be it in terms of delivery or quality of pizzas.

A critical factor in Pizza Hut’s success has been a menu that has constantly evolved and expanded to cater to the changing needs and specific preferences of customers in different parts of the world. In having understood the pulse of the customers in India, Pizza Hut has clearly established itself as a brand with an Indian heart. Besides offering an extensive range of vegetarian pizzas, it was the first pizza chain to open a 100% vegetarian restaurant in India in Surat and later in Ahmedabad and Chowpatty, where it offers a Jain menu sans all root based ingredients. Moreover Pizza Hut is not just a hangout zone for youngsters. It organizes birthday bashes, kitty parties and corporate lunches They also have a variety of combinations of menu items which a customer can choose so that both the customer and the company can have a win-win situation. The company can have the maximum of the consumer surplus at the same time the consumer might feel that this was the best offer.

From the menu card one can see the family size variants and the different pizza combinations in the same one pizza are all the different ways of pricing. The company attains the maximum profit in the meat items, so they give the selection of pizzas slices of different varieties and they are clubbed together to form a single pizza.

Once the customer dines / orders @ home, normally discount coupons are given to the customer so that there is an incentive for the customer to order from pizza hut. Thus customers are forced to maintain loyalty towards pizza hut.

SWOT Analysis of Pizza Hut

SWOT Analysis of Dominos

4P’s of Pizza Hut and Domino’s

PRODUCTPizza hut

The customer value hierarchyFrom the above diagram we can see that pizza hut has enjoyment as a basic product but it provides food for it. Thus a person having a basic need of enjoyment can go to pizza hut and have pizza which is the company’s core product. Hot pizza and good taste are his expectation. Thus the company should ensure this by providing good pizza. The value adds services refer to the overall dining experience, the service quality, ambience etc.

Product differentiationWorldwide and in India, pizza hut has come to become synonymous with the ‘best pizzas under one roof’. This is because at pizza hut the belief is that every pizza has its own magic, thus making it a destination product – which everyone seeks. It is this belief that has ignited the passion to create, innovate and serve the finest product the industry has to offer, while Setting standards for others to strive to replicate. Pizza hut is committed to providing uncompromising product quality, offering customers the highest value for money and giving service that is warm, friendly and personal. A critical factor in pizza hut’s success has been its unique dining experience. Crewmembers at pizza hut strive each day to provide ‘customer mania’ – the kind of service that ensures that every visit of the customer is a memorable one.Pizza featuresPizza hut has many unique features of their product due to which it attracts the customers. The product is classified into non durable goods as it is a food item pizza hut differentiates itself with its competitors with respect to their wide range of offerings (menu items) one can find

besides- pizzas range of, pastas appetizers, cakes, and desserts etc. There are quite a lot number of menu items to chooseSome of the items are

Pizzas ( four different types) American Pan Pizza Stuffed crust Pizza Cheesy bites Masala cheesy bites

Pastas and salads Spicy Tomatoes Arrabbiata Creamy mushroom Spicy tomatoes with smoked chiken Arrabbiata with smoked chicken

Appetizers Garlic bread Cheese garlic bread Garlic bread exotica Garlic bread spicy supreme

Desserts Chocolate truffle cake

Beverages Pepsi, Diet Pepsi, 7up, Mirinda

Conformance quality:Pizza hut’s products have very high conformance quality i.e. All the products produced are identical and meet the promised specificationsStylePizza is delivered in hot pans and served in style. The toppings in the pizzas are also dressed in a good fashion. Thus having ‘food in style’ defines pizza hut’s experience.

Service differentiationOrdering easeOnce one enters the restaurant immediately the assistants initiates the ordering process by providing the menu. All associates are well trained in english and can take order from any customer.DeliveryPizza hut’s style of delivering the pizza to the customer is quite an experience. The restaurant is aesthetically designed; all the staff members are uniquely dressed. Managers dressed in special uniforms. Also the tables, menu, are all placed in a good manner. This on itself is quite impressive. All orders placed in restaurant is served within 15-20 minutes and the take away orders (ordered on phone) is delivered within 30 minutes. Care also has been taken by the company to pack the pizzas in special covers so that it remains hot till the customer haves the

food. Any pizzas delivered outside 30 minutes are given free. Also discount coupons are given to the customer in case one doesn’t want a free pizza

Domino’s

The customer value hierarchyFrom the above diagram we can see that dominos has a food as a basic product but overall it provides an experience. Thus a persxon having a basic need of food can go to dominos and have pizza which is the company’s core product. Hot pizza and good taste are his expectation. Thus the company should ensure this by providing good pizza. The value adds services refer to the overall dining experience, the service quality, ambience etc.

Product differentiationDomino's pizza India has maintained its position in the market with its constant product innovation and maintenance of stringent service standards. More importantly, it has established a reputation for being a home delivery specialist capable of delivering its pizzas within 30 minutes to its community of loyal customers from its entire chain of stores around the country. As the name suggests ‘the pizza delivery experts’ customers can order their pizzas by calling their hotline. Domino's believes strongly in the strategy of 'think local and act regional'. Thus, time and again domino's has been innovating toppings suitable to the taste buds of the local populace and these have been very well accepted by the Indian market. Also they had their promotional campaign “Hungry kya?” which means call up dominos if one is hungry and have the food in 30 minutes.

Pizza featuresPizza hut has many unique features of their product due to which it attracts the customers.The product is classified into non durable goods as it is a food item. Dominos differentiates Itself with its competitors with respect to their wide range of offerings (menu items).one can find

besides pizzas, range of pastas appetizers, cakes, and desserts etc. There are quite a lot number of menu items to choose. The ‘chicken wings’ item has specially struck a chord with a lot of consumers as such a kind of item is not available in any other pizza outlets. This item is also perceived to be the tastiest of the lot. Indecently chicken wings are a side dish. Some of the menu items are

Pizzas Deep Dish Classic hand tossed Pizza

Pastas and salads Appetizers Desserts

Choco lava cake Beverages

Coke

PLACE

Once the product has been decided upon and the market segmented, targeted and the product positioned, it is time to decide how and where the marketer can deliver the value (product) to the customer. This is done through marketing channels that make the product available for consumption to the customer.

Domino’s is India's largest and fastest growing food service company, with a network of 500+ Domino's Pizza storesYum has 471 stores in India comprising 208 KFC stores, 166 Pizza Hut casual dining, 94 Pizza Hut Home Service and three Taco Bells. The company plans to open 100 stores in India in CY12 across these three brands. Focus on Pizza Hut Home Service implies increased competition for Dominos, which specializes in home delivery.

But The main Strength of Dominos Pizza India. Is, Its chain of stores while pizza hut has very few and limited outlets when compared to dominos. Here, Dominos move ahead as it has its outlets in so many locations that it is very easy for people to spot one and is very convenient for pizza lovers to have a bite there too, as dominos specializes in Delivering their food on your doorsteps, it is very convenient for them to deliver the pizza to delivery location which is nearest to an outlet which helps them delivering within 30 minutes and much convenient for people to visit than Pizza Hut.

PRICE

Tricon International said, “Indians are value-sensitive, not price-sensitive. We need to offer comeback value to our customer.” The high price was attributed to the high quality of

ingredients used. For instance, Domino's sourced its Peperoni and Jalapeno needs from Australia and Spain respectively. However, with competition increasing from Pizza Hut, Domino's introduced price cuts, discounts and freebies to attract the customers.

Company Price Range (Rs)Domino's 44-535Pizza Hut 44-659

Pizza Price Comparison (without Taxes*)

Domino's was spending 50% of its total marketing budget on special offers and discounts along with delivered direct mailers and pizza training classes. Domino's also had a tie-up with Discovery Channel under which the channel advertised its pizzas while Domino's put the channel's name on its mailers. Domino's conducted Pizza making classes for school students. In 1998, it offered a clock to all its customers who had bought Rs.15,000 worth of pizzas throughout the year. Said a company official, “Database marketing is an important part of our strategy. We have a special cell analyzing our database to look for repeat and loyal customers.”

Promotion: Brand building through advertising

Domino's and Pizza Hut initially restricted their ad strategy to banners, hoardings and specific promotions. In August 2000, Domino's launched the “Hungry Kya?” (Are You Hungry) sequence of advertisements on television. A company official said, “We realized that a Pizza couldn't be slotted – it could be a snack; then again, it could also be a complete meal” The only definitive common link between Domino's Pizzas and eating was the hunger platform.

The launch of ‘“Hungry Kya?” campaign coincided with “Hunger Helpline”. The helpline enabled the customers to dial a toll-free number (1800-111-123) from any place in India. The number automatically hunted out the nearest Domino's outlet from the place where the call was made and connected the customer for placing the order. The number also helped Domino's to add the customer's name, address and phone number to its database.

Domino's is committed for bringing fun and excitement to the lives of our customers by delivering delicious pizzas to their doorstep in 30 minutes or less, and all its strategies are aimed at fulfilling this commitment towards its large and ever-growing customer base.

Promotional and advertisement campaignsThe pizza delivery business had traditionally been promotion driven. Coupons and discounts were offered by all pizza delivery chains to woo customers. Since its inception, Domino’s had been known for its unique promotions that included fast delivery and innovations to cater to a varied palette.

Use of technologyOnline sales accounted for over 70 percent of its total sales in 2008. Dominos planned to further exploit the increasing potential of the online medium as one of the promotional and distributional channels in the downturn.

Creative strategyLatest in domino’s

Kwality wall’s ice-creams in dominos- For the first time dominos started offering ice creams .Selling ice cream in Domino’s is also a new sales promotion strategy to attract more customer in a new perceptive /innovative way.

Domino’s has also come up with New recipes campaign like pasta mania, choco lava cake, Taco Indiana, etc....

This was followed by Pizza Hut's first campaign on television in July 2001, which said, “Good times start with great pizzas”. The ad was aired during all the important programs on Star Plus, Sony, Sony Max, Star Movies, HBO, AXN, and MTV. Pizza Hut planned to spend between Rs.70-75 million on the ad campaign in 2001, said Pankaj Batra, The first ad campaign on TV defines Pizza Hut as a brand, and what it offers to its existing and potential customers.

Brand awareness Pizza Hut was among the first multinational brands to enter the food retail sector in

India. When the first Pizza Hut restaurant opened in Bangalore the quick service industry was at a nascent stage and the pizza category was dominated by a sole regional player who had a marginal presence.

The strength of Pizza Hut’s success globally lies in a marketing strategy that builds connections with customer’s everyday in different parts of the world. Many customer service initiatives have been uniquely developed for India and have been greatly instrumental in building an emotional bond with the customer.

The crewmembers at Pizza Hut break into a Boogie at restaurants in Delhi and Mumbai and do the Bhangra in Chandigarh and Amritsar. While a bell hangs at each Pizza Hut restaurant, which is rung by customers who as they leave wish to thank the servers for yet another memorable visit.

Pizza hut organized the Jig n Jeeto contest in Delhi for the first time, it received a phenomenal response with super star Fardeen Khan judging the show. Pizza Hut hopes to continue this contest as a tradition for the years to follow.

Brand attitudeInternational brand with an Indian heart Pizza Hut is one of the first international pizza chains with purely vegetarian dine-ins at Chowpatty (Mumbai), Ahmedabad and Surat, which also serve Jain menus. Pizza Hut has even

opened two all-vegetarian restaurants in the western state of Gujarat to cater to the Jain religious community, whose members prefer not to eat at places where meat is served.

Offering more than the international menuInternational food chains typically offer only a few localised products in other parts of the world. However, Pizza Hut’s local menu is as large as the international one. According to Pizza Hut, the Indian food heritage is very rich, and hence Indians like local flavours. The Tandoori range of pizzas, which was developed locally, has a menu mix of over 20 per cent.

Sales promotion Pizza Hut laid more emphasis on its “restaurant dining experience”. Pizza Hut localizes it menu to capture local Indian Market. In 2000 Pizza Hut launched its innovative Pizza Pooch menu and Pizza Pooch Birthday

Party package exclusively for kids in the 6-10 age groups. It positioned itself as family restaurant and also concentrated on wooing kids.

Word of mouthIt is one of the traditional promotions for any industry. Pizza hut and Domino’s both get benefit from it.

Social Media Pizza War: Domino’s vs. Pizza HutIn the fight for market share, the top pizza brands have launched a social media blitz attempting to capture audience and deepen customer engagement. But, who will be king? Track Social has analyzed

pizza brands across hundreds of social media metrics. We found two brands significantly dominate the competition and are locked in a heated battle for the top spot.

This can only mean one thing: Social Media Pizza War!

Round 1: Audience

Audience measures the total number of relationships a brand has formed with consumers through LIKES.

Total AudienceNew Likes Per Day on posts on Facebook Page

Domino’s 4.4 million 3108

Pizza Hut 1.2 million 3314

Winner: Domino’s

With an overall greater number of total relationships across Facebook, this first round goes to Domino’s. While these are impressive numbers, even for a brand, Domino’s spot might not hold for long given Pizza Hut’s ability to generate more new Likes per day. Results as on 26th june 2013.

Round 2: Presence

Presence measures a brand’s visibility online, how well established, complete, and active it is on social media platforms.

Facebook Posts Per Day Facebook Tabs Tweets Per Day

Domino’s 4 5 20-23

Pizza Hut 4 - 5 3 7-10

Winner: Domino’s

Domino’s claims the prize for Presence by establishing a dynamic and multi-faceted online footprint. For example, Domino’s makes good use of Facebook Tabs, creating special apps designed to engage consumers in different ways. And More tweets per day as compared to pizza hut.

Round 3: Engagement

Engagement is about how successful a brand’s social media interactions are with consumers. When a brand posts or Tweets, do fans respond with comments, likes?

Comments Per Day Per Post Likes Per Day

Domino’s 293 3108

Pizza Hut 168 3314

Winner: Close to call

With more users responding to each Facebook Post than Domino’s, Pizza Hut is getting more bang for it’s engagement buck. They consistently deliver clever, fun and creative posts that encourage users to hit the Like button or share them with their friends. As a rule, when it comes to inline posts, short and simple is better – but we did like this rather complicated flow chart highlighting the dilemma of who gets the last slice.

in a series of humorous – and even cheeky – posts that have been generating some impressive numbers of likes, shares, and comments.

Engagement can also be about more than clever posts, cool apps or fun promos. It can also exhibit how well a brand uses technology to reach out to consumers to respond to a PR debacle. Which is why we have to give credit to Domino’s and Pizza Hut for creatively employing social media .

Round 4: Buzz

Buzz is a measure of how much people are talking with, at, and about a brand in the Social Media Universe.

User Comments Per Day on Facebook

Mentions Per Day On Twitter Twitter follows

Domino’s 293 NA 18,605

Pizza Hut 168 NA 2,274

Winner: Domino’s

When it comes to Buzz, Domino’s takes the lead, exceeding Pizza Hut in both Facebook User Comments Per Day and Twitter Follows. In many ways, a brand’s Buzz score reflects the cumulative result of a

brand’s success (or failure) in the other three categories. How much other people are talking about your brand is a measure of your online relevance and a verdict on how well your overall strategy is working.

And the winner is…Domino’s!

Although it was a close call, Domino’s got the higher Overall Performance ranking on our Track Social Leaderboard because of a better performance across the board in individualmetrics. Both brands deserve recognition for their success in harnessing social media to build and engage active online audiences. We’re sure this rivalry will see many more twists and turns.

Price List and Offers :

Tricon International said, “Indians are value-sensitive, not price-sensitive. We need to offer comeback value to our customer.” The high price was attributed to the high quality of ingredients used. For instance, Domino's sourced its Peperoni and Jalapeno needs from Australia and Spain respectively. However, with competition increasing from Pizza Hut, Domino's introduced price cuts, discounts and freebies to attract the customers.

Company Price Range (Rs)Domino's 44-535Pizza Hut 44-659

Pizza Price Comparison (without Taxes*)Dominos offers Rs100 of on buying any large/medium pizza on your second buy if you buy a

large/medium pizza in the first place. And a free choco lava cake if you buy a large/medium

pizza with garlic breadsticks on your second buy.

Whereas, pizza Hut offers what they call a ‘family fun meal’ for Rs659 stating its original price

as Rs1007. Which includes, two medium pizzas, two desserts and one portion of garlic bread..In

which you can add two 500ml pepsi bottles by paying Rs50 extra.

And 4 Pan Pizzas at Rs295 for veg, Rs345 for veg category two and Rs455 for Non-vegetarian

pizzas, And 2 veg and 2 non-veg pizzas for Rs455. Another challenge which pizza hut offers that

when a pizza gets delivers you can check a dot on its box for whether its hot or not. If you find

the dot to be ‘not hot’ then you get the pizza for free.

Success Factors

Pizza Hut

Offering value food

Aggressive marketing and tie-ups with local and popular brands

Moving beyond metros

Developing the local supply chain

International brand with an Indian heart

Offering more than the international menu

Good ambiance

Domino’s

Door step services

Relatively Low pricing

Combo offers while deliveries

New recipes in the menus (with promotion to let people know)

Better Option for Non-Vegetarians

Dozens of outlets

Promotions (of brand, product and service)

Noticeable points of difference between these two Brands.

First of all, Domino’s is a Junk food plaza and pizza hut is more stressing over a restaurant.

Domino’s is cheaper than Pizza Hut. But the real difference came here, real difference in taste is there. Dominos is more towards crispier but pizza hut creates ‘the ultimate softness with soft

‘n’ hot cheese in there pizza. One can go to domino’s every weekend either with their friends or family. But one can only go to Pizza hut once in a month (if for an outing or a family meal). Pizza hut is really cheerful place for fun with family. Domino’s is always open for a couple or for friends. Pizza hut is somehow royal, they think customer should come to them at their own.

Conclusion:

Comparing both pizzas lies on certain criterias. It is quite evident that Pizza Hut is more superior to Domino’s Pizza when it comes to taste, while Domino’s Pizza boasts at its affordability and average but satisfying product. But other things still matter in winning over a customer or an avid pizza-eater. One is convenience. Since Domino’s has a lot of branches worldwide, one can easily spot a Domino’s outlet compared to Pizza Hut, thus people tend to go for what is closest. Another is value and obviously Pizza Hut gives more value thus more costly. Menu selection also matters to people who want variations and Domino’s basically fail in this category if compared to Pizza Hut.

But to remember one of the main factors which sell a product/service especially in India is Price, Convenience, and affordability. On which Dominos scores ahead, they ticked all the right boxes which makes their products and services sell. And not to forget their effective promotions via different channels which makes the biggest difference. So, Domino’s might not have some of the Strengths of pizza hut but they are the winner in this argument as chosen by most of the consumers in its segment, Thanks to their marketers.

Justification:

Pricing strength due to strong brand franchise.

More and more listings in this space likely to lead to compression of the scarcity premium

JFW is the only listed company in the Indian Food Service Industry. Hence, stock has been trading at premium to other listed FMCG companies. with listing of businesses like Café Coffee Day (CCD), Devyani International Ltd (DIL) (franchise partner of Pizza Hut, KFC, Costa Coffee in India) and Starbucks (JV with Tata Global Beverage Ltd) and other specialty restaurant chains over the next two years, the investors would have alternate opportunities to invest within Indian Food Service space. This is likely to lead to a squeeze the valuation premium for JFW

Delivered in 30 minutes:

JFW is the market leader in organized pizza home delivery segment in India with maximum market

share. The service proposition created by Dominos is very difficult to replicate by the small,

unorganised players as well as the organised players. 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

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; JFW is well positioned

to take reasonable price hikes. As strong brand with high recall factors don’t deter consumers to

pay premium, as its give him complete satisfaction in terms of quality, service and mental

satisfaction of being associated with big international brand.

Recommendations: -

For Dominos

Increase varieties in Pizza’s.

Focus on location of the outlets.

Increase the quality of Pizza’s

Create a good ambiance in outlets for those who want to eat there.

Better options foe combo-meals please.

More innovations in pizzas

For Pizza-Hut

Should focus on all class of customers.

Make the delivery services better

Should look after marketing and promotion of the brand and its services

Focus on the Brand Value

Change the price tag

Should Focus on the “location” of their outlets..ala more outlets recommended

More Promotions (of the brand and the product)

References:

http://www.retailmantra.com/yum-brands-pizza-hut-focus-in-india/

http://www.indiatribune.com/index.php?option=com_content&view=article&id=9544:fastest-growing-market-for-dominos&catid=123:business&Itemid=489

http://www.pizzanews.co.uk/dominos-pizza-plans-to-double-its-number-of-branches-in-india-122800/

Clifford, S. (2009). Video prank at Domino’s taints brand. Retrieved January 25, 2010, from http://www.nytimes.com/2009/04/16/business/media/16dominos.html

Kotler, P. & Armstrong, G. (2008). Principals of marketing. Pearson Prentice Hall. Upper Saddle River, New Jersey.

Laukens, D. (2010). The history of Domino’s Pizza. Retrieved January 23, 2010, from http://www.recipepizza.com/the_history_of_dominos_pizza.htm

Miranda, E. (2009). Internet marketing – Franchises: Domino’s Pizza. Retrieved January 23, 2010, fromhttp://www.wsicorporate.com/article/Franchises_dominos_pizza

http://www.sanjeevinsan.com/2010/11/pizza-hut-vs-dominos.html

http://tracksocial.com/blog/2012/05/social-media-pizza-war-dominos-vs-pizza-hut/

http://www.labnol.org/india/corporate/dominos-pizza-expanding-to-concentrate-on-dine-in/1252/

http://www.pizzahut.co.in/dinein/aboutpizzahut.php

http://en.wikipedia.org/wiki/Domino's_Pizza

http://www.dominos.co.in/about_dominos.jsp

http://marketography.com/2010/03/09/dominos-pizza-beyond-the-dough/

Kotler, P. & Armstrong, G. (2008). Principals of marketing. Pearson Prentice Hall. Upper Saddle River, New Jersey.

Laukens, D. (2010). The history of Domino’s Pizza. Retrieved January 23, 2010, from http://www.recipepizza.com/the_history_of_dominos_pizza.htm

Miranda, E. (2009). Internet marketing – Franchises: Domino’s Pizza. Retrieved January 23, 2010, from http://www.wsicorporate.com/article/Franchises_dominos_pizza

http://www.icmrindia.org/free%20resources/casestudies/pizza-wars7.htm

http://vedanti.com/News/history_of_pizza_hut.htm