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COMPARATIVE ANALYSIS OF
SUBMITTED TO
Ms. Kanika Jhamb
SUBMITTED BY
Anand Dhawan RA17B1A03
Introduction
Fast food is one of the worlds largest fast growing industry types. Indias fast food industry is growing by 40%. The 6000 corer 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 inc reasing number of women joining the workforce have had an impact on eating out trends. Major players in fast food are:
y y y y y y y y y
McDonalds KFC Pizza hut Dominos pizza Caf coffee day Barista Subway Papa Johns Smokin joes
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. Domino's and Pizza Hut expanded their market ever since they entered India. Pizza Hut is the world's largest casual dining restaurant chain with over 13,000 restaurants across 97 countries and 143 stores across 34 cities in India., including Delhi, Mumbai, Bangalore, Chennai, Kolkata, Hyderabad, Pune, and Chandigarh and Yum! is in the process of opening Pizza Hut restaurants at many more locations to service a larger customer base across the country. Today Domino's Pizza India has grown into a countrywide network of more than 300 stores with a team of over 9,000 people. According to the India Retail Report 2009, Dominos were the largest Pizza chain in India and the fastest growing multinational fast food chain between 2006-2007 and 2008-2009 in terms of number of stores.
Objective
(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 share as on 1999 PIZZA CHAIN MARKET SHARE (%) Pizza Hut 46.42 Domino's 21.67 Others 31.91 Source: Financial Express Market share as on 2000 Pizza Chain 2000 Market Share (%) Pizza Hut 18 Domino's 70* Others 12 Source: Business Standard, As claimed by the company
The maj market players are i a Hut and Dominos with market share of 45% and 35% respecti ely and other shares 20% of the market
In major cities of India like Delhi Mumbai Bangalore i a Hut and Dominos have a competition with i a corner, mokin joes, Us pi a, Garcias but in small cities i a Hut and Dominos are the major players.
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 yo ung 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 McDonalds 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
30 MINUTES OR FREE service commitment Responsibility towards society Association with NGOs. Store Educational Trust (SET) CRY (Child Relief and You)
Pizza Hut
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Psychographic Socio-economic class urban (a1, a2, b1, b2, c, d) Behavioural Occasions birthdays, corporate lunches, marriages, parties, receptions Loyalty status low, medium, high User status first time, regular, non-user
Dominos
Geographic 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. Demographic age 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 Psychographic socio-economic class urban (a1, a2, b1, b2, c, d) Behavioral loyalty status low, medium, high user status first time, regular, non-user
Targeting
Pizza hut
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y y
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.
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Positioning
Points of difference The 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 only 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 parity Category 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 dont 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 Focus This is achieved very effectively by Dominos as they do not intend to lose their focus from delivering pizzas at home y Dominos Brand thus relates mainly to service & delivery neither they promote their in dining experience nor they spend revenue for it. y 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 dont spend much for the restaurant Pizza Huts Premium price Pizza Hut is committed for providing uncompromising product quality, offering customers the highest value for money and giving service that is warm, friendly and personal.
y They stress heavily on the dining experience and the ambience y 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.
PRODUCT
Pi a hut
The customer value hierarchy From the above diagram we can see that pi a 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 pi a hut and have pi a which is the companys core product. Hot pi a and good taste are hisexpectation. Thus the company should ensure this by providing good pi a. The value addsservices refer to the overall dining exper ience, the service quality, ambience etc. Product differentiation Worldwide and in India, pi a hut has come to become synonymous with the best pi asunder one roof. This is because at pi a hut the belief is that every pi a 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, whileSetting standards for others to strive to replicate. Pi a hut is committed to providing uncompromising product quality, offer ing customers the highest value for money and givingservice that is warm, friendly and personal. A cr itical factor in pi a huts success has been its unique dining experience. Crewmembers at pi a hut strive each day to provide customer mania the kind of service that ensures that every visit of the customer is a memorable one. Pi a features Pi a hut has many unique features of their product due to which it attractsthe customers. The product is classified into non durable goods as it is a food item pi a hut differentiatesitself wit h its competitors with respect to their wide range of offer ings menu items) one can find besides pi as range of, pastas appeti ers, cakes, and desserts etc. There are quite a lot number of menu items to choose Some of the items are y Pi as four different types) American Pan Pi a Stuffed crust Pi a Cheesy bites
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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 huts products have very high conformance quality i.e. All the products produced are identical and meet the promised specifications Style Pizza 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 huts experience.
Service differentiation
Ordering ease Once 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. Delivery Pizza huts 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 doesnt want a free pizza
Dominos
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. Push and pull strategies in channel marketing: In a push strategy, the manufacturer uses his sales force, trade promotion, money or other means to induce intermediaries to carry promote and sell its products to end users. In a pull strategy, the manufacturer uses advertising, promotion and other forms of communication to persuade the customer to demand the product from intermediaries, thus inducing the intermediaries to order it. Dominos: pursuing a push strategy Dominos pursues a medium push strategy in its channel marketing. The advertising layout for Dominos is minimal in India. Dominos concentrates on incentivizing customers instead off advertising and promotion. As a result, dominos regularly introduces sell-in schemes (promotional schemes for dealers), promotional coupon, festival offers etc. Pizza hut: masters at pull strategy Pizza hut follows more or less the opposite strategy. Pizza hut has mastered the art of pull strategy. It pioneered the practice of advertising and promotion in the fast food industry. Pizza hut achieved this remarkable feat by adopting a different marketing strategy that involved increasing ambiences and amusement for the customers.
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.
Pizza Price Comparison 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.
Creative strategy
Latest in dominos y Kwality walls ice-creams in dominos- For the first time dominos started offering ice creams .Selling ice cream in Dominos is also a new sales promotion strategy to attract more customer in a new perceptive /innovative way. y Dominos has also come up with pasta mania. 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 y 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. y The strength of Pizza Huts success globally lies in a marketing strategy that builds connections with customers 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 attitude
International 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 menu International food chains typically offer only a few localised products in other parts of the world. However, Pizza Huts 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 y Pizza Hut laid more emphasis on its restaurant dining experience. y Pizza Hut localizes it menu to capture local Indian Market. y 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. y It positioned itself as family restaurant and also concentrated on wooing kids. Word of mouth It is one of the traditional promotions for any industry. Pizza hut and Dominos both get benefit from it.
Success Factors
Pizza Hut
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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
Dominos
y y
Reference
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