Family Life Cycle and SEC

Family Life Cycle

Family Life Cycle concept is something a marketer uses to know the family’s needs outlooks product purchases and financial resources vary over time and how he can pitch his products according to their need. India most of the families are in newly married and the bachelor stages. According to the census , India has large number age group is of the youth .With the increase of disposable income , two income families , there is now more spending tendency in the families . The food habits have also changed to a large extent.  So, this is playing a major influencing factor in pizza hut targeting the youth.

Social Economic Classification

Pizza hut targets the two income families. The age group that it targets is from 13 years -40 years. They target especially the teenagers and youth , as they are the highest population and also are ready to spend . As , pizza hut is in the early maturity stage , it has been doing lot of advertising campaigning in order to sustain in the market . It wants to attract the other segments , which are not a part of its customer base. It is essential that it has as many as loyal customers , as it would help them in later stages to stand in the market .

Services and Services Marketing

  

The 7 P’s of Pizza hut

Product

The first p is the product which includes the variety of products that pizza hut offers to its customers. Along with pizzas it has appetizers, soups , desserts , beverages , pastas , salads , starters etc .  Each product variety has different offerings. In India basically there are two main categories of products , the vegetarian and the non-vegetarian .they emphasize more on the vegetarian as there is a lot of demand for them and they suit the eating habits of Indians .In non- vegetarian , more of chicken products are available compared to the others as it is highly consumed compared to the other meat .

Price

Pizza hut adopts the skimming pricing. They have at first priced their products at high rates and have slowly lowered their rates in order to reach more customers .By pricing them high, they could win the belief of the customers that they offer high quality food and great service. They have lowered the prices so much that , a pizza is available at 65 rupees . Pizza hut is using low price for meal and expensive for high end.

Promotion

They have promoted it by bringing in Indianised vegetarian varieties of pizzas . They have introduced special Jain menu sans root- based ingredients .they had the first pizza delivered outer space. They have done rigorous advertising through television , print and internet. They have started social responsibility project by  “Feed one “ campaign , by feeding the kids and providing them with education .

Place

Since , they are franchise , all the same look is maintained throughout the country in all their outlets . They have their outlets in shopping malls , airports etc. They are entering into the two- tier and three  tier cities .

 People

The people in pizza hut are known for their excellent customer service. They are well trained  and friendly to the customers .

Physical Evidence

The ambience is vibrant and casual to appeal to youth .  The music played is also very appealing to the youth .And Bell in the pizza hut outlet , which says good times in pizza hut , where the customer who is happy rings the bell . This has been its unique significant feature in all its outlets.

Process

The process in the pizza hut is systematic. The sales people would immediately attended to the customers taking their orders delivering them and billing them etc . The process of the door delivery is also quick , just a phone call and the pizza is delivered before 30 minutes to the customers .

Distribution Decision

Distribution Decision

Franchising in India has been consistently growing at more than 30 percent for the past five years, according to the Franchising Association of India.  Several international brands have entered the country through franchising in the last few years. The pizza franchise expanded itself in India and now has the KFC brand beneath its umbrella. The fast food franchise was the first international fast food firm to make an entry into the Indian scene and has thus pioneered the Indian pizza market. Liberalization and economic reforms have had an immense positive impact. The young people in India are reaping the dividends of its economic reforms. It is the customer satisfaction provided by the specialty food franchise that enabled it to position itself at the top of the Indian fast food market. The fast food franchise also ensures that it adds an Indian touch to all the varieties of pizzas that it makes available to Indian customers. Various delicious combinations are tested at the Indian Pizza Hut franchisee outlets by blending the original menu with Indian favorites to make fresh salads, garlic based breads, soups, yummy pastas and delicious desserts.

Pizza Hut will open 300 exclusive outlets under its sub-brand, Pizza Hut Delivery (PHD), by 2015 to tap the demand in fast food home delivery segment. The company is keen on taking the franchise route to expand its retail network. Pizza Hut launched its first PHD in 2008, in Bangaluru on a trial basis. After its success the company now plans aggressive expansion via the format. PHD concept has been in the international markets for a long time but has been introduced in India in the last couple of years.
Currently, Pizza Hut operates 35 standalone PHD outlets and about 145 Pizza Hut casual dine restaurants.

Branding

Brand and Branding

A brand is the idea or image of a specific product or service that consumers connect with, by identifying the name, logo, slogan, or design of the company who owns the idea or image. Branding is when that idea or image is marketed so that it is recognizable by more and more people, and identified with a certain service or product when there are many other companies offering the same service or product. Pizza hut as a brand with its logo and slogan have been apt for what it stands offerr. As, they have repositioned themselves lately, as the best pizzas under one roof and the logo also represents it in an apt way . And the brand pizza hut is marketed to the people, especially the youth in its own vibrant way .Pizza hut as a brand stands for its unique variety of food offered and also its customer service .

Pizza hut has been continuously re-positioning itself every two years .They believe that with the constant re positing of the brand they can establish themselves well in the market and also have the new appealing look to their customers who are also quick changing and desire new . They want to cement themselves as the market leaders in their space. They are also promoting the dine-in experience through its latest branding. They want to prove that they are not just a fast food chain , they are a perfect dine in food chain .

Product Life Cycle

Product life cycle 

Product Life Cycle

A product life cycle has four stages .Introduction, Growth, Maturity and Decline are the four stages in the product life cycle . Right now pizza hut is in the maturity stage .

Introduction –Initially when pizza hut was first started in India in 1996, it was an introductory stage . There were no players, essentially it was the only major player in the market. And it had the basic products were sold, that is the same products that were sold in US.

Growth –  In the later stages , there were new entrants in the market like dominos , papa johns and local city based entrants .There was product innovation done by pizza hut .They started more Indianised products .There was also increase in the amount spent for advertising .

Maturity – Right now it is in the early maturity stage , where there is lot of competition , rigorous advertising and product innovation is being done. The competitors are trying to enter new unexplored markets, especially the two tier and three tier cities .

Decline – This would be in the later stages when the weak competitors would leave the markets as it has become highly competitive and very less profit is earned.

Competition

Competitors

Pizza hut faces a stiff competition in India .Its major competitor has been Dominos. The other competitors are U.S Pizza, Smokin Joe’s, Papa John’s and the local city pizza shops. It faces both direct and indirect competition .In direct competition all the above mentioned pizza centric competitors can be taken into count. Since pizza hut belongs to the fast food sector, it competes’ with the other fast food chains like KFC, MC Donalds etc. So, they become the indirect competition.

Porters Five Forces

According to the five forces model , there are five major elements that effect the company .They are the Industry competitors , substitutes , suppliers , buyers and new entrants . For pizza hut, the industry rivalry the existing rivalry between dominos, pizza hut, U.S pizza, and the others is high. It has to sustain the competition .Coming to the next force, the new entrants. Since there are new international companies investing in India, there are chances of the other international companies to enter the Indian market. There are mat be substitutes like easy to make home pizzas etc , which might affect the pizzas business . Customers might prefer them instead of pizza hut. And if the buyers have ore bargaining power , that would be a threat to pizza hut. For example, if there are is more choice for the customer in pizza , the customer would be very picky and lot of effort has to put in to pull the customers to  pizza hut .

Product Mix

Product Mix

Product mix denotes product development; packaging, branding and research .Pizza hut packing was standardized in a pizza box so that the pizza is delivered without losing its shape and look of a pizza. Pizza hut is known to be an innovator .It had been innovating its products by bringing in new varieties in the product offerings. Pizza hut not only offers pizzas , it has appetizers , pastas , desserts , beverages etc .

There are different types in each pizza variety. That is the are many varieties under the Indian pizza varieties, Mexican and Italian etc .The following the detail breakdown of the country’s products .

Set	Meaning	Pizza hut products
Product Line	Group of products in the product class	Pizzas , deserts , appetizers , beverages
Product Width	Different  product lines in the company	There are 12 in case of pizza hut
Product Depth	Number of variants available in product line	Depth of it is about 120
Product Length	Total number of items in the mix	220 number of varities

Beverages

• ·         Very Berry Daiquiri
• ·         Orange Strawberry Spritzer
• ·         Mango Delight
• ·         Mango Banana Smoothie
• ·         Mocha Cold Coffee
• ·         Caribbean Choco Shake

Appetizers

• ·         Garlic Breads Range Classic
• ·         Platter Two each of Plain, Cheese and  Spicy Supreme
• ·         Potato Wedges
• ·         Fish ‘n’ Wedges
• ·         Chicken Skewers Jamaican Jerk Spiced Chicken
• ·         Chicken Skewers Thai Chicken 
• ·         Chicken Wings

Soups

·         Tomato Soup

·         Non Vegetarian Cream of Chicken

·         Vegetarian Tomato ‘n’ Basil

Pasta

·         Spicy Tomato Vegetarian

·         Arrabbiata Vegetarian

·         Creamy Mushroom

·         Arrabbiata Non Vegetarian

·         Arrabbiata Vegetarian

Pizzas

• ·         Margherita Personal, Classic
• ·         Zesty Chicken Personal, Classic
• ·         Fiery Chicken Personal, Classic
• ·         Vegetarian Tuscani Margherita
• ·         Vegetarian Verde
• ·         Vegetarian Gardiner
• ·         Non Vegetarian Florence Chicken
• ·         Non Vegetarian Pesto Pepperoni
• ·         Vegetarian Margherita Personal, Medium, Family
• ·         Exotica Personal, Medium, Family
• ·         Vegetarian Kadai Paneer

Deserts

·         Ice-Creams

·         Chocoholic Symphony

·         Fruit Duet

·         Choco Chip Cookie Sundae

Promotion

Promotion

An activity designed to boost the sales of a product or service. It may include an advertising campaign, increased PR activity, a free-sample campaign etc. Pizza hut uses a wide assortment of promotion tools to achieve increase market share, sales volume, re- purchase and to induce new customers. Promotion mix used by them:-

Advertising

Their main objective behind every campaign that they conduct is to encourage potential customers to visit pizza hut, increasing loyal customer base, counter attacking the competitors etc. For example, they launched ‘The Great Indian Feast ‘and have signed Javed Jeffery for its commercial .The showed a teenage boy treating his girlfriend with something and affordable. This they have used during the launch of the 50 rupees pan pizza .There was also a counter attack by them  on their competitor Dominos in the year 2005, with a campaign named “Freshizza “.

Internet advertising is also a major sales promotion medium used by them. They have a deal with the yahoo internet portal. Clicking on the ads about how to make a pizza, the recipes of it, they are promoting their products. The print advertising is also done by pizza hut. They have special coupons, and especially when pizza hut celebrates a theme, like the Valentine’s Day and Diwali they largely advertise in the print media .Radio advertising has also been used. The campaign “Pizza hut and Cheesy music hour “was a successful in driving awareness that built excitement in the local market . The outdoor advertising is very aggressive in Pizza hut. Balloon advertising, Space marketing, Banner Advertisement, Poster Advertisement etc are done by them.

Sales Promotion

Sales promotion refers to a variety of short term incentives to encourage trail or purchase of the service .They have sweepstakes, point of purchase material, contests, sampling, premiums & gifts , coupons and rebates as a part of their sales promotion .Pizza hut offers gift vouchers for special occasions like birthdays etc .Pizza hut during the launch of the cheesy bites pizza had conducted contest where they could meet Lara Dutta , the famous heroine .

Personal Selling

Personal Selling refers to the face to face interaction between the service deliverer to the service receiver. Entertaining the customers in the restaurant and etiquette to the crew members are a part of personal selling . The crew members at pizza hut broke into metros like Delhi and Mumbai and have performed bhangra in Amristar  .

Customer Value

Customer Value

Customer value can be defined as the amount of benefit that a customer will get from a service relative to its cost. It is also the difference between what a customers gets from the product and what had to be delivered.  In pizza hut it stands for the best pizzas under one roof. So, from pizza hut what a customer expects is to deliver all kinds of cuisines pizzas, especially best ones. The customer value is created by the service that they provide to them, whether they delivered what is expected of them.

Associated Customer value

Pizza hut believes in creating value by providing them best customer service. They bank on their customer service in creating value among their customers.

Product

Pizza hut is known for its wide range of varieties in pizzas, appetizers, desserts and pastas. They have constantly added new varieties to their menu card. They have Indianised them and also haven’t compromised on the other traditional Italian, Mexican varieties which they are famous for.

Service

As mentioned earlier, they concentrate on the customer service a lot. This has brought them a major differentiating factor compared to their competitors. They are also quick in delivering the home deliveries.

Price

Pizza hut adopts a skimming price strategy .At first it had high prices, and now it started lowering its prices. They priced them high earlier in order to make the customers believe that they are having high quality products and offer the best service. It is now concentrating in penetrating into the market.  It has come up with different offers, which makes them more affordable by many customers.

Packaging or Image 

The packaging of the pizzas for delivery , it has been designed such away they are bright and vibrant .They also represent their quick delivery , especially , the flames on the PHD , shows that they are really fast in delivering the pizzas

Organizational Buying Behaviour

Organizational Buying

The decision making process by which formal organizations establish the need for purchased products and services and identify , evaluate and choose among alternative brands and suppliers .In pizza hut the organizational buying process is the purchase of the ingredients  for the food and the furniture. Since, it is a franchise the furniture is a standardized furniture that has to be same any franchise in India. So, the franchises have to contact the head to buy the furniture for the store. The ingredients most of them are from India. Few ingredients like jalapenos, olives etc, which are not cultivated in India are imported from the other countries. Professional purchasing is done in the franchises. They have fixed dealers as per decided by the main head franchise, and the franchisers have to follow it.

Customer Buying Decisions

The Buying Decision Process

The above diagram represents the buying decision process. Each step can further explained in the following way:

Problem Recognition

In this stage, the individual faces a problem of hunger. So, he would have a need of having food.

Information Search

This is the next stage, where the individual looks for information .he might look for different cuisines that he can have. He might end up deciding on the cuisine that he wants to have. He will then look for the possible options in that particular cuisine. Example, if he wants to have Italian, he might find out about all the Italian restaurants, food courts.

Evaluation of Alternatives

In this stage he evaluates the alternatives that are available.  He might take the final decision based on things like the time factor, reach of the restaurant, prices, food variety etc comparing it in different places. He would evaluate the alternatives like pizza hut, dominos, U.S pizza, and local Italian restaurants.

Purchase Decision

The next stage is the final stage of buying the service. The individual would finally decide on the place where he wants to have his food. He might go to the convenient place to him. He might go to pizza hut, for its food, prices and services offered.

Post Purchase behavior

The final stage is the post purchase stage, where the individual decides whether to go to the place or not. If he is happy with the service, he would re visit the place. He might also suggest people to go to the place if he likes the service that is offered. If not, he might not visit the place and would also suggest others not to go.

STP & Marketing Strategies

Segmenting

The process of grouping customers into relatively homogeneous sets such that customers within a segment are similar to one another in the way they respond to marketing effort directed at them. A market segment is a specific group of customers with similar needs, purchasing behaviors, and identifying characteristics. Their segmentation includes identifying the people who have high disposable income. They mainly target youth, two income families. And age group of 13 – 40 years. The two main segments are geographic segmentation and psychographic segmentation .Under the first segmentation, localizing the products, advertising, promotion and sales effort to fit in the needs of the different regions in the country.

Targeting

The process of evaluating various segments and then deciding how many and which segments to serve is called as targeting. The main target of the pizza hut is middle class and upper middle class people. The main target college graduates, since they are ready to spend compared to the other target audience identified.

Positioning

 Positioning is the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. Pizza hut has done its positioning in the market by two main factors quality and frequency. Especially their tag line “Best pizzas under one roof “.And also the unique dining experience , the so called customer mania also helps pizza hut to position themselves.

Marketing Strategy

A strategy that integrates an organization's marketing goals into a cohesive whole. It focuses on the ideal product mix to achieve maximum profit potential. The marketing strategy of Pizza hut is “we want to satisfy our customer by giving them the best “.They believes in C.H.A.M.P.S. They stand for cleanliness, hospitality, accuracy, maintenance, product quality and speed. They also follow 2f’s .They stand for friendly and familiar. These are followed in all the pizza hut places.

Customer service

According to AMA “ ,A customer-oriented corporate philosophy that integrates and manages all of the elements of the customer interface within a predetermined cost-service mix “ .In pizza hut they mainly concentrate on the customer service. It is known for its customer service. They believe in providing uncompromising product value , offering customers the highest value for money and giving service that warm , friendly and personal .They also provide  unique dining experience . They believe in “customer mania” , the kind of service that ensures that every visit of the customer is a memorable one.

Sales Management

Sales management

According to AMA “The planning, direction, and control of the personal selling activities of a business unit, including recruiting, selecting, training, equipping, assigning, routing, supervising, paying, and motivating as these tasks apply to the sales force”. 

Sales Management in  Pizza hut

In Pizza hut the sales management is two types of sales forces .One who work indoor and the others who work outdoor. The outdoor sales forces are responsible for the door delivery of the orders. They are given each area, where they have to deliver the orders from that particular area. The company provides them with a bike with the company logo and a box which is used to carry the deliveries. They have to be extremely quick in delivering them. They have to inform to the head after each delivery.  They concentrate on only one area in the area of circle covered by the outlet in a city. The indoor sales force is the one which works in functioning of the outlet smoothly. Right from greeting them at door to taking orders and billing it, all the activities are carried out by them. They are specially trained in communication skills. They are trained to be customer friendly, giving them a good dining experience. Thus , they achieve the one of the objectives of pizza hut .

Holistic Marketing

Holistic Marketing

This is a strategy that is developed by thinking about the business as a whole, its place in the broader economy and society and in lives of its customers, to develop and maintain multiple perspectives of the company’s commercial activities. Holistic marketing recognizes that everything matters in Marketing and that in Integration. It argues that all stakeholders of an organization including the Product and Brands are interdependent and tightly knit.  This strategy is advantage exists when a firm is implementing a value-creating strategy not simultaneously being implemented by any current or potential competitors and when these other competitors are unable to duplicate the benefits of this strategy. The sustainability of a competitive advantage depends upon the possibility of competitive duplication. Invisible assets may allow a firm to sustain a competitive advantage.

Holistic marketing in Pizza hut India

When pizza hut was started in India, they mainly had pizzas in their menu. It has slowly added different new dishes to its menu .This included the chicken kebabs, different vegetarian pizzas with lots of vegetables that are very much related to the Indian food habits. They also included paneer , corn pizzas along with few Indianised beverages like the lemon , orange flavored drinks. This has helped the company to have an edge over its competitors. It also enabled them to reach to a wider range of customers. It also offers the Italian , Mexican cuisines also , so that it doesn’t loose out on its other customers who prefer and come to pizza hut for the other cuisines.

Pricing

Pricing

Pricing is an important function in Marketing. It is about setting the right price to a product. Pricing is the process of determining what a company will receive in exchange for its products. Pricing factors are manufacturing cost, market place, competition, market condition, and quality of product. 

Consumer psychology and pricing

Pizza hut uses price cues. It prices its products in an odd number. Example :Beverages like Cold coffee is priced at rupees 89, mango delight is priced at 69 .Appetizers like chicken skewers are  priced at 99 .This is method  as it conveys a notion of a discount or bargain .And also , as consumers tend to process prices in a left –to – right manner rather than by rounding.

Setting price

The price of the products of pizza hut is set in following steps:

Step 1: Price Objective

The main pricing objective adopted by pizza hut is maximum market share. They set a price that maximizes the market share that they hold. They practice the market – penetration pricing. It aims at the product – quality leadership .It aims to be the product – quality leader in the market.

Step 2: Demand Determination

Pizza hut tries to charge a higher price compared to its competitors and still get the business .They convinces the customers that they offer the total cost of ownership. They prefer customers who are fewer prices sensitive.

Step 3: Cost Estimation

The costs involved in pizza hut are the variable costs and the fixed costs. The average cost is determined .And the pricing of the products are based on the price that covers the costs at the given level of production.

Step 4: Competitor’s costs, prices and offers analyzed

The competitor’s prices that are pricing by dominos, papa johns, u.s pizza etc are compared for different products before the pricing is done. It is also made sure that the price objectives of the pizza hut are met.

Step 5: Selection of Pricing Method

The pricing method that is followed by pizza hut is the mark up pricing. In this method, standard mark up price is added to the product’s cost.

Step 6: Final Price

Pizza hut is able to high pricing. Pizza hut has a relative high quality and high relative advertising, which enables it to go for high pricing compared to its competitors.

Adapting the Price

Geographical Pricing

Geographical pricing is when the company prices different prices to different prices to its different customers in different customers in different locations. Pizza hut International prices differently compared to pizza hut India. The pricing varies in different countries. Example: A pan size pizza is priced is 3$ to 5 $, whereas in India it is 120 rupees. 

Promotional Pricing

Pizza hut adopts the special- event pricing and the psychological pricing. The special – event pricing is usd especially adopted in festive times. Example: Pizza hut launched 15 new Indian varieties on its 15^th year in India, and special pricing on diwali festival etc. And psychological pricing is the ending the price with an odd number, as explained earlier.

Customer Behaviour

Consumer Behavior

Consumer behavior is  how individuals, groups select buy, use, dispose the products and services offered by pizza hut, in order to satisfy their wants and needs. Following are the factors that influence the consumer behavior of the individuals or groups:

Cultural Factors
The cultural factors like, the individuals who are not acquainted with the pizza culture may not be willing to try pizza hut. The different culture upbringing effects the buying decision of the customers. An individual who is brought up in a traditional south-Indian family may not be acquainted with the pizza culture his might influence him. Whereas, an individual brought up in a metro, would be acquainted to it and would be more willing to try pizza hut.

Social Factors

The social factors like the references the reference groups, aspiration groups would have a direct influence on the individual. The family, role and status of the individual also affect the buying decision process. Example, in a family the father might decides where to go to dine on a weekend; the other members are bound to follow. So, this affects the choice of the other family members also.

Personal Factors

The personal factors include the age and stage in life cycle, occupation and economic circumstances, personality, life style and values effect the buying decision of the person. A person, who likes to have Italian cuisine, would come to Pizza hut .here the personality plays the factor which is influencing the individual.