A Comparative Study on Pizza Hut and Domino's; An innovative Health Restaurant.

A Project on Consumer Behavior

A Comparative Study on Pizza

Hut and Domino’s

By-Rajalaxmi PrakashRoll-011PGDM 2012-14IIBM Patna

History

Brothers Dan and Frank Carney founded Pizza Hut in 1958 after a friend suggested a pizza parlor would make a successful business.

The siblings borrowed a mere $600 from their mother, joined with partner John Bender, and purchased used pizza making equipment to open their first restaurant.

One year after its founding, Pizza Hut’s first franchise opened in Topeka, Kansas.

History Ironically, another set of siblings,

Tom and James Monaghan, founded Domino’s. They purchased a pizza shop, DomiNick’s, with a $75 down payment and a $500 loan.

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

In 1965, the business was renamed Domino’s and the first franchise opened in 1967.

Facts and Figures

Founded: Wichita, KS Year Founded: 1958 CEO: David C. Novak HQ: Plano, TX Number of U.S. Locations: 5,510 Annual Sales: $11.2B Facebook Likes: 10,355,666

Facts and Figures

Founded: Ypsilanti, MI Year Founded: 1960 CEO: J. Patrick Doyle HQ: Ann Arbor Township, MI Number of U.S. Locations: 4,513 Annual Sales: $6.9B Facebook Likes: 8,229,670

Important Figures

The minimum financial requirement to open a Pizza Hut is $700,000 in net worth and a

minimum of $350,000 in liquid assets. The franchise fee is $25,000 for all franchisees.

It does not offer a minority or veteran discount on the franchise fee, but it does offer a minority lending assistance program which guarantees 25 percent of the principal of the franchise business loan up to $3,000,000.

The royalty fee is 6 percent and its advertising fee is 2.5 to 3 percent of gross sales.

Domino’s does not have a minimal financial requirement.

Its franchise fee is $25,000 for “external” franchisees (those who have not worked as a General Manager with Domino’s) and up to a $25,000 for “internal” franchisees (those who have worked as a General Manager).

It offers franchise fee discounts to qualifying internal minorities and veterans.

The royalty fee is 5.5 percent and its advertising fee is 4 percent of the store’s weekly royalty sales.

Important Figures

Training

Pizza Hut franchisees must complete an 8-10

week training program. The training takes place at a certified

training restaurant located in Dallas, TX. Pizza Hut covers the cost of the training,

but the franchisee is responsible for travel and lodging expenses.

Training

External Domino’s Pizza franchisees must

complete a comprehensive five day franchise development program that covers store operations, finance, marketing, and human resource issues.

They are also required to complete a four day Pizza Prep School.

Financing Options

Although Pizza Hut does not provide financing, it offers franchisees a list of

financial institutions that may be interested in lending to Pizza Hut franchisees.

Pizza Hut is listed on the Small Business Administration’s Finance Registry should the franchisee want to apply for a SBA loan.

Financing Options

Just like Pizza Hut, Domino’s stays away from offering direct or indirect financing to franchisees and it is listed on the Small Business Administration’s Finance Registry.

Domino’s also participates in the International Franchise Association VetFran program, which helps veterans obtain special finance rates and options.

Obligations/Restrictio

ns Pizza Hut recommends, but does not

require, the franchisee be involved in daily

operations. However each restaurant must be

directly supervised by a manager that has successfully completed the Pizza Hut training program.

Obligations/Restrictions

Unlike Pizza Hut, Domino’s does require that the restaurant be under the management of the franchisee or a controlling person who owns 51 percent or more of the franchise.

The franchisee (or controlling person) must be dedicated to management of the store on a full time basis.

Introduction

It entered India in June 1996. By January 2001, Pizza Hut had 19

outlets across India. Presently it has 142 outlets in 32 cities

in India. Pizza Hut is one of the world’s largest

pizza chains with over 12,500 restaurants across 91 countries.

It employees more than 300,00 people.

Introduction

It entered India in 1996 through a franchise agreement with VamBhartia Corp.

It had quite a speedy growth (1 outlet in 1996 and 101 in 2001).

Emphasis on home delivery Today Domino’s Pizza in India has grown

into a countrywide network of more than 300 stores with a team of over 9000 people.

Domino’s believes strongly in the strategy of “think local and act regional.”

Success Factors

Offering value food Moving beyond metros Developing the local supply chain Good ambience Offering more than the international

menu Aggressive marketing and tie-ups with

local and popular brands.

Success Factors

Door step services. Low pricing Customer satisfaction Great offers

Similarities

Both claimed to have original recipe of pizza making

Both customized their offerings (though pizza hut followed domino’s )

Both concentrated on database marketing Both introduced coupons, discounts and

special offers Both used promotional campaigns

involving customers directly Both wanted to establish themselves as a

Brand

Differences (Late 1990s – early 2000s)

PIZZA HUT 46%

DOMINO'S22%

OTHERS32%

MARKET SHARE 1999 PIZZA HUT18%

DOMINO'S70%

OTHERS12%

MARKET SHARE 2000

SWOT Analysis

Strength• Strong brand image• Unmatchable quality and variety• Hygiene• Excellent quality• Customer satisfaction

SWOT Analysis

Strength• More outlets even in smaller towns.• Less than 30 minutes home delivery.• Low price• Excellent offers• Customer satisfaction• Quick service at outlets

SWOT Analysis

Weakness• Inadequate advertisements.• Inadequacy of outlets.• High prices• Lack of parking facilities at outlets.

SWOT Analysis

Weakness• Lack of variety• Outlets lack space• Ambience not up to mark• No special option for birthday parties

and corporate lunches.

SWOT Analysis

Opportunity• With growing fast food market- scope for

expansion.• Introduce more offers.

SWOT Analysis

Opportunity• With growing fast food industry- scope

for expansion.• Introduce more variety• Bigger outlets• Introduce take away counters.

SWOT Analysis

Threat• No takeaway counters for pizzas.• Low price points of competitors.

SWOT Analysis

Threat• Better quality and variety of

competitors.• No take away counters for pizzas

USP

Dining Experience

USP

30-minute Home Delivery Frame

Marketing Mix

Product• Recipe redefining as per the Indian taste.• Following Dominos in localization.• Opened 100% vegetarian restaurant.• Customization based on:-Religion – JainCity specific – Hyderabad (Halal meat)

Marketing Mix

Product• High Localization; even based on

different regions.• Trendsetter in localization.

Marketing Mix

Price• Initially high price; as Pizza Hut offer

“Comeback Value to our customer” because of its USP – Dining Experience.

Marketing Mix

Price• Initially high price; as key ingredients

sourced from Australia and Spain.• Competition with Pizza Hut resulted in

Price cuts, discounts.

Marketing Mix

Place• Not much focused on supply chain;

rather focused on “dining Experience”

Marketing Mix

Place• Most robust and efficient Supply Chain –

resulted into reduce costs.• Strategic set up of commissaries for raw

material supply.• Tie up with real estate consultant.• Targeting on non traditional outlets like

Corporate office, railway stations, cinema halls etc.

Marketing Mix

Promotion• Campaigns like Pan in your Name• Innovative Menu – Pizza Pooch menu and

Pizza Pooch Birthday Package• One Rupee Pan deal• Barah nahin to Tera scheme

Marketing Mix

Promotion• Introduced Pizza mania• (Large Pizza – Rs.129/-)• Discount coupons• Tie-up with Discovery Channel – Co

branding• Direct Mailing and Pizza Training Classes

Marketing Mix (Current Scenario)

Product• Casual dining experience as well as fast

delivery (PHD & Restaurants)• Also offers a wide variety of pasta,

salads, soups, desserts, beverages, etc.• Less than 50% of sales is from pizzas


Product• Pizza with promise of fast delivery• Offers mainly Pizza along with pasta,

cakes and few other side dishes• Mainly focused on pizza


Price• Starts from lower end and goes up to an

upper end• Caters to many price and taste segments• Lowest offering is at Rs. 44


Price• Concentrates mostly on the lower to

middle band• Caters mainly to price sensitive

segment.• Lowest Offering is at Rs. 39


Place• 121 stores across 34 cities• Located at places where people visit

more for leisure (Casual Dining)• Opened PHD for catering to home

delivery• Also encourages online ordering


Place• 500 stores across 110 cities• Conveniently located for fast delivery• Encourages online ordering


Promotion• Coupons• Bundling• Offers• Encourages online ordering


Promotion• Coupons• Bundling• Offers• Encourages online ordering

Positioning

Conversation Memories Laughter Togetherness Enhanced dine-in concept

Positioning

Great tasting Pizzas and sides Superior quality Exceptional guest care Value for money offerings A home delivery specialist capable of delivering

pizzas within 30 minutes or else FREE Brand Tag Line Hungry Kya? 2008 - “Khushiyon Ki Home Delivery” – A

reflection of the role Domino’s plays in the lives of the consumers

2012 - “Ye Hai Rishton Ka Time” – To take the engagement with the consumers to the next level

A Healthy Restaurant

My Innovation

Santé GoytHealth + Taste

Segmentation

Geographic- Demographic-• Age-• Gender- Psychographic• AIO Activities – working professionals Interests – Eating out with family, grabbing a

quick meal before work hours or in the lunch time

Opinions – Broad-minded people

Targeting

People more conscious for their health Mothers of young children Vegetarian people Also for infants and toddlers Special emphasis on babies, adolescent

girls, pregnant women, senior people, people suffering from certain chronic diseases like diabetes, heart problems, etc.

Positioning

Healthy but tasty food Fresh ingredients Organic ingredients

Marketing Mix

Product• Fresh ingredients• Organic ingredients• Hormone- and antibiotic-free chicken,

mutton, fish, shrimp, and organic tofu• Whole-grain bread, fresh sandwiches and

hearty, healthy soups and salads• Baby food such as milk, porridge, cereal,

etc.• Own greenhouse space for growing

vegetables and orchards for fruits

Marketing Mix

Product• Nutritional information right on the back

of its tray liners• Customized recipes• Ultra-healthy sandwiches• Low-cal soups• Low-fat milk or fruit juice instead of soda• Ambience - Funky but serene, Artful• Separate kitchens for vegetarian and non-

vegetarian cuisine• Play shop for kids

Marketing Mix

Price• Ranging from Rs 50 to Rs 1500• Regular sandwiches and eatables are low-

priced• High prices for exotic cuisine, and recipes for

the extra-health conscious lot• High prices are justified because of the usage

of organic and fresh ingredients and on account of the genuine care, concern and that extra mile covered for individual customers.

• Based on the objective of product quality

Marketing Mix

Place• Introductory outlets in the metro cities• Gradually, move on to the tier I and tier

II cities• 2-3 outlets in metros and tier I cities• 1-2 outlets in tier II cities• Take home facility• Home delivery facility• Online order and delivery

Marketing Mix

Promotion• Reduced prices on combos• Discount coupons• Ads on TV, radio, social networking sites• Hoardings, billboards• Newspapers, pamphlets• Schemes like Happy Hours for mock tails• Discounts for the price-conscious lot on

Wed• Free snackers, mock tails, juices, etc. in

the campaigns

A Glimpse into the Menu Card

Sambar dal• A solid stew made with chickpeas, legumes,

and a variety of spices.• One serving includes approximately 50

calories, 2.6gms carbohydrates, 15.0gms protein, and 1.8gms fat.

Tandoori chicken• Marinated in yogurt and seasoned in tandoori

masala, and a combination of various spices.• One entire leg piece includes approximately

260 calories, 13.0gms fat, 5.0gms carbohydrates and 30.5gms protein.


Rajma• A North Indian dish made of red kidney beans

in thick gravy with lots of spices and usually served with rice and roti.

• One serving of 114gms cup consists of approximately 120 calories and 5gms proteins.

Hara bhara kebab• A vegetarian crispy kebab, a recipe full of

aromatic spices, healthy ingredients and an marvelous taste.

• Per serving includes approximately 73 calories and 2gms protein.


Arhar dal• A dish made with beans. The nutritional

content of one serving is approximately 53 calories, 1.2gms fat, 8.0gms carbs, and 2.8gms protein.

Bhindi ki sabji• Tastes great with hot chapattis or parathas

and there you've got a terrific vegetarian meal.

• Servings of 50gms consists of approximately 80 calories and 5gms protein.


Sol kadhi• A pink-colored appetizer drink from made

from the Kokum fruit and Coconut Milk.• Also good for your stomach after a Hot and

Spicy meal. One glass consists of 138 calories.

Chickpea and spinach curry• Lots of fresh spinach brings the green color to

this chickpea dish, and curry livens up the flavor.

• Full of fiber. Per serving consist of approximately 142 calories.


Lobhia• A popular north-Indian dish, where the

soaked and cooked black-eyed beans are boiled in tangy tomato

gravy, with the right blend of spices.• One serving of medium bowl consists of

approximately 198 calories. Palak-da-Saag• A very famous and healthy Punjabi recipe

usually served with roti or naan.• Per servings includes approximately126.2

calories and 6.3gms proteins.


Daliya• A very light and healthy option for breakfast.• An excellent source of fiber that helps to

maintain healthy digestive system.• Whole wheat daliya consist of approximately

85 calories per 170gms servings. Aloo palak• Stuffed with mashed potatoes, mixed with

finely chopped spinach or any leafy green vegetables

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


Moong bhaji• Sprouted moong bhaji is a quick, easy and

healthy dish. The protein rich sprout is very health-friendly.

• Per serving of moong bhaji includes approximately 125 calories and 4gms fats

Baigan bharta• A North Indian specialty of roasted brinjals,

skinned and made into a simple and exotic preparation.

• Serving size of 100gms consists of approximately 102 calories and 5gms fat


Red pumpkin bhaji• Tastes so good & is excellent with soft

chapattis, phulkas or with any Indian bread. It goes well with rice too.

• One serving includes approximately 151 calories

Kobi chi bhaji• A very famous dish in Maharashtrian meals,

and can be cooked in a variety of ways by adding tomato or green peas.

• One serving consists of approximately 65 calories and 2.2gms protein


Patrani machhi• Masala coated fish steamed in banana

leaves.• One serving consists of approximately

290.3 calories and 13.6gms total fat Chicken dhansak• This delicious and popular Parsi dish is

made with chicken. Dhansak is traditionally served with brown rice and kachumbar salad.

• Per serving includes approximately 505 calories


Raita• A simple preparation made by adding

fruits, vegetables or any other thing to beaten curd.

• One serving includes approximately 60 calories

Buttermilk• 100 calories and 2grams per cup

SWOT Analysis

Strength• Healthy food

SWOT Analysis

Weakness• High-priced menu• Narrow target

SWOT Analysis

Opportunity• Untapped market• Growing percentage of health-conscious

people

SWOT Analysis

Threat• Low-priced restaurants• Other established fast-food chains

Learning

Through the tagline “Health + Taste” and the brand logo

Personality

The people with following personalities will be the focus:-

• People with busy lives• Outgoing people• Health-conscious people• People willing to try new things

Attitude Formation

A positive attitude formation towards the restaurant can be done by:-

Consistently showing the ill effects of junk food, high calorie diet, etc. in the long run through media and personalized hand-outs

Justifying the high priced menu in accordance with the fresh and expensive ingredients and special treatment to customers especially people with certain health issues or people with babies

Motivation

A campaign to spread awareness, contests, etc.

Celebrity endorsements Play shop for kids along with staff to

look after

Perception

There is a negative perception towards the food from restaurants and eateries. It’s believed that they cannot be healthy as improper and unhealthy cooking oil, meat, vegetables and other ingredients are used (which is true more often than not).

This perception need to be changed. It can be done by effective promotional

campaigns, accurate nutritional and hygienic information about the food and by giving customers a visit to the kitchen and storage areas.

Date post:	01-Nov-2014
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