Pizza Hut

Present

THE PIZZA HUT MARKETING PLAN FOR JULY 1, 2004 - JUNE 30, 2005

TABLE OF CONTENTS

I . S I T U A T I O N AN A L Y S I S 1-16A . M a r k e t O v e r v i e w 1 - 3B . B r a n d R e v i e w 4 - 6C . C o m p e t i t i v e A n a l y s i s 7 - 1 2D . C o n s u m e r P r o f i l e 1 3 - 1 5E . R e s e a r c h 1 6

II . PR O B L E M S & OP P O R T U N I T I E S 17A . K e y P r o b l e m s 1 7B . K e y O p p o r t u n i t i e s 1 7

III . MA R K E T I N G 18A . O b j e c t i v e s 1 8B . S t r a t e g y 1 8

IV. MA R K E T I N G CO M M U N I C A T I O N S 19-20A . O b j e c t i v e s 1 9B . C r e a t i v e S t r a t e g y 1 9 - 2 0

V. CR E A T I V E EX E C U T I O N 21-27

VI. ME D I A PL A N 28-35A . O b j e c t i v e s 2 8B . S t r a t e g y 2 8 - 2 9C . T a c t i c s 3 0 - 3 4D . A d v e r t i s i n g B u d g e t 3 4

VII. SA L E S PR O M O T I O N 36-37A . O b j e c t i v e s 3 6B . S t r a t e g y 3 6 - 3 7

VIII . PU B L I C RE L A T I O N S 39A . O b j e c t i v e s 3 8B . S t r a t e g y 3 8

IX. CA M P A I G N EV A L U A T I O N 39

X. BU D G E T SU M M A R Y 40

XI. AD D E N D U M 41-42A . P r e s s R e l e a s e 4 1B . A g e n c y B i o s 4 2

I. SITUATION ANALYSIS

A. MARKET OVERVIEW

1. Restaurants

The restaurant industry has grown to be an approximately $231 billion/year industry in 2003. It has grown $44 billion in the past 8 years between 1995 and 2003. The Quick Service Restaurant Category is the largest segment, with 55% market share).

• Market Segmentation

($ In billions) (%)QSR $125.0 55%Midscale $59.5 25%Upscale $47.0 20%Total $ 231.5 100%

(Source: Pizza Hut).

2. Quickservice Restaurants

The quickservice restaurant industry grew to a $125 billion industry in 2001, an increase of 4.1 percent over 2000. The National Restaurant Association anticipates the industry to grow another 4.1 percent, to $130 billion in 2002.

Market Size ($ In billions) 2002 130.1 +4.1%2001 124.9 +3.8%2000 120.3 +5.0%1999 114.5 +5.4%1998 108.6

(Source: National Restaurant Association).

• QSR Product Mix

Hamburgers and pizza dominate the QSR product mix.

Hamburgers 36%Pizza 19%Sub Sandwiches 8%Chicken 7%Mexican 6%Frozen Sweet 5%Retail 5%Oriental 2%Donut 2%Fish/Seafood 2%Miscellaneous 8%Total 100%

(Source: Pizza Hut).

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• Media Spending

The Quickservice restaurant industry’s media spending budget increased to $3.75 billion in 2002, up from $3.49 billion the previous year.

(In millions)Diageo (Burger King, etc.) $2,654.5McDonald’s Corporation $653.8Yum! Brands (Pizza Hut, Taco Bell, etc) $280.4Jack in the Box Inc. $98.6Wendy’s International Inc. $72.6Total Quickservice Media Spending $3,759.90

(Source: Euromonitor).

3. Pizza Industry

The pizza industry has grown to $30 billion in 2002. Despite being relatively stagnant over the past few years, the pizza industry has grown approximately $5 billion, an approximate 15% increase, over the past 7 years from 1995. Pizza hut is the leading pizza chain with a 13.4% market share

Market Segmentation •

Pizza Hut 13.4% Domino’s 8.4% Little Caesars 5.3% Papa John’s 4.6% Other 68.3% Total 100%

(Source: USA Today)

• Seasonality

The pizza industry does not have any specific seasonality. However, there are special occasions or days that generate increased sales.

Pizza Peaks 1. Super Bowl Sunday 2. New Year’s Eve 3. Halloween 4. The night before Thanksgiving 5. New Year’s Day

(Source: Domino’s).

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• Geographic Distribution

There is a distinct geographic variation in pizza sales. The north-eastern region of the U.S. has the highest category development index (CDI).

Geographic Area CDI New England Above Average Mid-Atlantic Significantly Above Average East North Central Above Average West North Central Below Average South Atlantic Below Average East South Central Significantly Below Average West South Central Below Average Mountain Average Pacific Below Average (Source: Pizza Hut).

• Pricing

The pricing for pizza ranges from $8 - $20, depending on the size and number of toppings. However, with use of certain promotional coupons, it is possible to buy pizzas for even less.

• Distribution of Sales by Type of Outlet

Restaurants lead the retail sales of pizza with 60.1% of total sales.

Pizza Retail Sales National Chain Restaurants 20.5%Locals/Mom&Pop Restaurants 18.1%Non-Traditional 22.1%Manufacturers 21.0%Delis 13.4%Regional Restaurant Chains 2.8%Casual Dining Restaurants 2.1%Total 100%

(Source: Pizza Hut, 1995).

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B. BRAND REVIEW

1. Pizza Hut History

Pizza Hut is a division of YUM! Brands and is the largest restaurant chain worldwide. The company was started by a couple of entrepreneurs. “Two brothers, mom and $600 turned into the recipe for the world’s largest pizza company in 1958, when a family friend with the idea of opening a pizza parlor approached the two college-age brothers in Kansas” (Source: Pizzahut.com). Pizza Hut has won various awards for its standard of excellence. Services include dine-in, carry-out, and delivery (Source: Pizzahut.com).

2. Product

The Pizza Hut® menu provides a variety of selections, such as:

• 4forAll™ Pizza • Sicilian Pizza • Honey BBQ Chicken® • Pan Pizza • Hand-Style Tossed Pizza • Thin n’ Crispy® • Stuffed Crust Pizza • The Big New Yorker Pizza

Pizza Hut also offers a Lover’s Line and P’Zone Pizzas in addition to the following menu items:

• Appetizers/Salads: • Lunch Buffet: • Breadsticks • Spaghetti with marinara or meat sauce • Wings (hot & mild) • Kid’s meal (PPP w/drink) • Garlic bread • Dessert Pizzas (apple and cherry) • Salad Bar • Beverages – soft drinks, beer, tea,

coffee, and milk

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3. Key Features

a) Dominance in market share and strength of brand equity are two of the most compelling attributes of the Pizza Hut product.

b) Challenges include:

• Expanding growth opportunities for a mature brand in a saturated domestic market.

• Evaluating the “nesting” trend, seeking ways to increase traffic by promoting the dine-in experience

• Transforming the image of pizza as “junk food” in an increasingly health conscious environment.

4. Consumer Perceptions of the Product

• The current perception of Pizza Hut is a phone number rather than a physical location or “destination” (Source: Pizza Hut Case Study).

• Pizza does not have a healthy image. Consumers often label pizza products as “junk food.”

• Pizza contains nutritious ingredients, such as vegetables and already offers several healthy products.

• Efforts should focus on existing positive attributes, finding ways to reinforce them, and bringing this to the attention of the consumer.

• Enhance the value of the product by changing perception, seeking to convert weakness into strength. (Sources: Pizzamarketplace.com – Count a pizza’s sales potential before counting its carbs and calories). (Nation’s Restaurant News - Pizza Hut rolls out new lower-fat pie).

5. Pizza Hut Summary of Performance

Annual Sales ($Million) 1998 (-) 1999 (-) 2000 (-) 2001 (+) 2002

$3,973.0 $3,129.0 $2,469.0 (est.) $1,800.0 (est.) $2,000.0

(Source: Hoovers.com).

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6. Competitive Distinction (Key point of differentiation).

Pizza Hut embraces the entrepreneur spirit. It is the largest chain worldwide in terms of assets and sales revenue. The brand is distinguished from its competitors in three key areas: quality, performance and as a desirable place of employment. Examples of recognition include:

• Honored as best Pizza chain in America in the “Choice in Chains” national consumer survey’s annual publication of Restaurants & Institutions Magazine.

• Nominated “The Best Company to Work For” in Dallas/Fort Worth according to The Dallas Business Journal, 2000 and 2003.

• Noted for accomplishments in business and as pioneers of their industry by publications such as Restaurant Business, Fortune, USA Today and The Wall Street Journal (Source: Pizzahut.com).

7. Geographic Brand Development Index

Region Index County Size Index North East 77 City A 86 Middle Atlantic 86 B 101 East Central 115 C 114 West Central 119 D 124 South East 106 South West 104 Pacific 86

(Source: Spring 1998 BDI figures for Pizza Hut consumers).

8. Channels of Distribution

The majority of Pizza Hut locations are franchises and joint venture partnerships, with over 12,300 units in 84 countries and territories. Pizza Hut operates 20% of these stores (Sources: Pizzahut.com, and Yum.com).

9. Creative Strategy

The current Pizza Hut strategy seeks to establish an experience of sharing pizza, associating Pizza Hut, the product or place with the experience of sharing. The goal is an enhanced value of the Pizza Hut experience, an asset, which appeals to a “consumer trend” of the “strategic shopper.” An example of this concept is the four in one pizza. The positioning strategy is Pizza Experience = Pizza Hut = Sharing. (Source: American Advertising Federation - Pizza Hut Case Study).

The most recent commercial is the Jessica Simpson with Muppets commercial promoting the product.

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C. COMPETITIVE ANALYSIS

Pizza Hut currently ranks #1 in the pizza chain category in terms of sales. Pizza Hut’s main competitors are Domino’s, Papa John’s, and Little Caesar’s. The following is an analysis of each of the major Pizza Hut competitors:

1. Domino’s Inc.

Currently ranked #2 in sales in the pizza chain category and #8 overall in the ‘quick-service’ chain category

Annual Sales ($Millions) 1999 (+) 2000 (+) 2001 (+) 2002

$1,156.6 $1,166.1 $1,258.3 $1,275.0


a) Distribution: (2002 store units)

United States Franchised 4,271.0 Company-owned 577.0 International 2,382.0 Total 7,230.0

b) Sales according to distribution

($ mil) (% of total)Domestic Distribution 676Store Operations 53Company-owned 376 30Domestic Franchising 141 11Total United States 1193 94 International 82 6Total U.S. & International 1275 100

c) Product

• Features several different styles of pizza with a wide array of topping options. • Menu includes additional items such as bread sticks, cheese bread, and chicken

wings

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d) Positioning

• Domino’s prides itself on its delivery services, as its stores are principally delivery locations and generally do not have dine-in amenities

• Stands by its slogan that ‘Domino’s knows the rules of the pizza delivery game’ as it is ranked #1 in the pizza delivery category controlling 20% of that market

e) Strategy

• Domino’s focus on expanding its international operations in recent years while holding the number of domestic locations fairly even.

• The company’s franchises each contribute a percent of their sales to fund both national marketing efforts and local advertising.

• Domino’s places much emphasis on new-product development i.e. Domino’s Dots (launched in 2003) – balls of pizza dough covered with cinnamon and vanilla icing.

• Offers online ordering through franchisees.

f) Strengths

• Leader in pizza delivery • Delivery technology that locks heat into food during travel time. • Competitive pricing that incorporates special promotional offers on one or

more menu items ranging from chicken wings to soft drinks. • Stores have no need for seating, therefore tend to be smaller with less start-

up and maintenance cost making it more appealing to franchisees.

g) Weaknesses

• 1993; $79 million judgment against Domino’s resulting from a 1989 case in which a Domino’s driver ran a red light and collided with another car when he was trying to fulfill the company’s 30-minute delivery guarantee

• Delivery guarantee is revoked. • Lacks sufficient dine-in amenities.

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2. Papa John’s International, Inc.

• Currently ranked #3 in sales in the pizza chain category and #16 overall in the ‘quick-service’ chain category.

Annual Sales ($Million) 1999 (+) 2000 (+) 2001 (+) 2002

$805.3 $944.7 $971.2 $946.2


a) Distribution (2002 store units)

• 2,936 domestic and international locations. 2,342 Franchised 594 Company owned.

Sales according to distribution

Domestic ($ mil) (% of total) Company-owned units 429.8 45 Commissary sales 381.2 40 Franchise Royalties 51.4 6 Franchise and development 1.7 0 Equipment and other 56.1 5 Total 920.2 96 International Company-owned units & Commissary 26.2 3 Royalties and Franchise fees 5.8 1 Total 32 4 Total Domestic and International 952.2 100

b) Product

• Offers a variety of pizza styles and topping choices.

• Offers a variety of pizza styles and topping choices.

• Menu includes a few specialty pies such as ‘The Works’ and ‘All the Meats’.

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c) Positioning

• Papa John’s tries to differentiate itself from its competition through emphasis on the quality of its food.

• Advertises its commitment to using only fresh ingredients.

• Locations typically offer delivery and carry-out service only

d) Strategy

• Marketing to emphasize the ‘freshness’ of ingredients used requires its franchisees to buy key ingredients from the company’s commissary’s.

• In 1997, Papa John’s topped Pizza Hut in a consumer satisfaction survey as the best pizza chain as a result of the ‘freshness’ marketing campaign.

• While keeping expansion to a minimum, Papa John’s began closing underperforming units in 2001 to focus on improving facilities and operations.

• 2002; began offering online ordering for its US locations. • Introduced Papa Chickenstrips (2002) and a dessert – Papa’s Cinnapie

(2003)

e) Strengths

• Regularly beats other chains in consumer satisfaction surveys because of regularly beats other chains in consumer satisfaction surveys because of ‘freshness’ guarantee.

• Reorganized field management structure that allowed downsizing and thereby decreased overhead cost.

f) Weaknesses

• Limited amount of non-pizza items on menu. • “Freshness” claim was revoked after owner admitted the chain used canned

tomato sauce and canned mushrooms, Pizza Hut filed a lawsuit against Papa John’s accusing the company of false advertising.

• Lacks sufficient dine-in amenities.

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3. Little Caesar Enterprises, Inc.

• currently ranked #4 in sales in the pizza chain category and #21 overall in the ‘quick-service’ chain category

Annual Sales ($Million) 1999 2000 2001 (-) 2002

$450.0 $450.0 $450.0 $421.0

a) Distribution

• Little Caesar’s operates and franchises about 3,700 carryout pizza restaurants in more than 20 countries

b) Product

• Little Caesar’s offers a variety of original and deep-dish pizzas along with cheese bread, salads, and sandwiches.

c) Positioning

• The company made its mark most notably through its two-for-one “Pizza! Pizza!” advertisements.

• Reputation for discount prices and promotions.

d) Strategy

• Looks to increase market share by expanding domestically and abroad.

• Decreased delivery services that were becoming to costly.

• Opened up mini-restaurants within larger chain stores including K-mart and Wal-Mart.

• 2001; embarked on a 5-year plan that focuses on expanding market share and improving employee training.

• 2002; company created a $3.5 million advertising budget to help franchisees promote a new menu featuring deep-dish pizza that is cut into triangles.

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e) Strengths

• Little Caesar units typically do not offer dine-in seating, meaning they can be operated in a variety of locations where larger restaurants could not.

• Can function within stores (i.e Wal-Mart). • Cheap pricing. Franchisees are granted extensive input as far as ingredients

and ad budget allowing them to make adjustments according to location and need of their particular customers (a result of a 2001 class action lawsuit).

• Known for its work with Little Caesar’s Love Kitchen (formed in 1985). • A not-for-profit restaurant on wheels that delivers pizzas to soup kitchens and

shelters in the US and Canada.

f) Weaknesses

• ‘Wacky’ advertising created a slump in sales as the company has been branded by its ‘discount pizza’ resulting in the closing of more than 1,000 underperforming company-owned and franchised locations.

• FCB Worldwide resigned in 2000 from its $40 million Little Caesar’s account after one year – bad advertising stigma remains.

• Joint venture with K-Mart ultimately fails as K-Mart declares bankruptcy in 2002.

• Lacks sufficient dine-in amenities.

PIZZA CHAIN MARKET SHARE

Other PizzaRestaurants(non - chain)

68.3%

Pizza Hut13.4%

Domino's8.4%

Little Caesar's5.3%

Papa John's4.6%

Fiscal Year End – December 2002 (Source: USA Today).

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D. CONSUMER PROFILE

1. Target Consumers

The primary Pizza Hut national target market is adults, both men and women, ages 18-55. These customers are generally divided into two groups: Core customers who use Pizza Hut 70%+ of their pizza occasions and Switchers who are not necessarily brand loyal to Pizza Hut but use us 20-69% of their pizza occasions.

In comparison to the total QSR category and its various food types (i.e., hamburgers, sandwiches, Mexican, etc.), the pizza category skews stronger to larger households (5+ members). It has extremely weak usage among eaters and household heads older than 49. There is also a stronger presence of pizza eaters among higher incomes of $40M+. Pizza users have a directional tendency to be better educated and in professional and management jobs.

The following is an MRI report from 1998 on demographic trends for all Pizza Hut restaurants. It provides a good idea of the trends stated above. MRI REPORT 1998- Pizza Hut Restaurant Heavy Users (more than 8 times in the last 30 days)

INDEXMale 95Female 104H/D Income $75,000 101$60,000 –74, 999 113$50,000 – 59,999 108$40,000 – 49,999 99$30,000 – 39,999 103$20,000 - 29,999 98$10,000 – 19,000 88Less than $10,000 90 County Size – A (City) 86County Size – B 101County Size – C 114County Size – D (Rural) 124

(SOURCE: MRI DATA 1998).

It is worth noting that when evaluating the consumers of the Pizza Hut category, demographic descriptors do not clearly separate the users of the various kinds of restaurants and food type. Virtually everyone eats pizza at some time. It is the occasion differences that truly help to explain the different choices consumers make.

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2. Pizza Usage

Pizza has a very low frequency of 1.4 times per month as compared to the QSR category of 3.8 times per month. Consumers may use frequency to control their total expenditures across food choices or the relative cost of pizza may simply discourage more frequent use.

The pizza business skews more to occasions with kids especially under the age of 12 than all QSRs. Of course, the majority of occasions come from adults.

The following tables provide more detailed information noted above. Pizza Hut generally reflects the pizza category and how it compares to the QSR category. (All data is based on percent of traffic on an average annual basis).

3. Usage Data 1997 DEMOGRAPHIC ANALYSIS (PIZZA HUT VS. QSR)

ALL INDEX TO ALL HH Size Rest. QSR Pizza Hut Restaurants One 12.5% 11.1% 6.3% 50 Two 30.3% 26.5% 17.2% 57 Three-Four 41.9% 44.8% 51.6% 123 Five+ 15.3% 17.6% 24.9% 163 ALL INDEX TO ALL Income Rest QSR Pizza Hut Restaurants Under $10M 6.0% 6.4% 6.1% 102 $10-14999 7.3% 7.4% 10.1% 138 $15-19999 6.6% 6.8% 5.5% 83 $20-29999 17.3% 17.7% 14.1% 82 $30-39999 16.7% 17.1% 16.6% 99 $40-49999 16.1% 26.3% 18.8% 117 $50-59999 10.6% 10.4% 10.4% 98 $60M+ 19.3% 17.9% 18.5% 96 AGE OF ALL INDEX TO ALL HH Head Rest. QSR Pizza Hut Restaurants Under 25 6.7% 7.4% 9.5% 142 25-34 27.2% 30.0% 34.9% 128 35-49 34.0% 36.3% 40.0% 118 65+ 11.8% 8.9% 3.6% 31 DISTRIBUTION ALL INDEX TO ALL Of Parties Rest. QSR Pizza Hut Restaurants Adults Only 80.2% 76.5% 53.8% 67 Adults w/ 12 & Under 12.0% 14.1% 30.6% 255 Adults w/ 13-17 2.7% 3.1% 4.9% 181 Adults w/ both 2.1% 2.6% 6.3% 300 Under 18 Only 3.0% 3.8% 4.4% 147

(SOURCE: American Advertising Federation 1997)

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4. Brand Attitudes

In order to gain a better grasp on the consumer awareness and attitudes for the Pizza Hut Brand and its advertising strategies, two agency teams conducted a personal intercept survey in the United States during the weeks of 2/2/04 through 2/13/04. The survey concentrated on interviewing a total of a hundred pizza consumers, asking questions regarding their frequency of consumption, brand awareness, brand attitude, as well as awareness of Pizza Hut advertising.

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JANUARY 2004 NATIONAL PIZZA HUT SURVEY

(Percentages are also total responses)

1. How many times do you eat pizza in a typical 30-day period? 1-2 times 44% 3-5 times 40% 6 times or more 16% Total 100%

2. Who do you usually eat pizza with? (You may choose more than one). Self 53% Friends 60% Family 40% *Total 153% 3. Awareness: Top of Mind 14% Unaided 66% Total Unaided 80% Aided 20% Total Awareness 100% 4. Have you ever eaten at PIZZA HUT? Yes 83% No 17% Total 100% 5. How would you rate PIZZA HUT on a scale of 1-10 (1= poor, 10= excellent)?

(1) 6.8% (6) 16.5% Averages (2) 5.5% (7) 16.5% Mean 5.3%(3) 4.1% (8) 8.1% Median 5.0%(4) 13.7% (9) 5.5% Mode 5.0%(5) 20.6% (10) 2.7% Total 100%

6. Have you seen any PIZZA HUT advertising lately? Yes 53% No 47% Total 100% 7. If respondent said “yes” to Question 9, ask Can you describe the advertising you have

seen? 4 for 4 Family 20% 4 for 4 Muppets/J. Simpson 11% Newspaper/Coupon 5% Other 8% Don’t remember 9% Total 53% 8. Where did you see the advertising? (% of 53) TV 94.3% Newspaper 9.4% Other 3.9% *Total 107.6% 9. Demographics Male 50% Female 50% Total 100% >18 34% >35 20% >25 32% >45 14% Total 100% White 58% Hispanic 13% Black 15% Asian 12% Other 2% Total 100%

*Add up to more than 100% because of multiple answers from interviewees.

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II. PROBLEMS & OPPORTUNITIES

A. KEY PROBLEMS THAT MUST BE OVERCOME

• Consumers perceive pizza products as fattening and unhealthy.

• Consumer attitudes toward PIZZA HUT brand are a “5” on a scale of 1-10.

• The PIZZA HUT brand does not effectively convey high quality taste.

• Consumers perceive PIZZA HUT as a phone number rather than a restaurant.

• PIZZA HUT sales have declined with only moderate increases in 2002 and 2003.

B. KEY OPPORTUNITIES TO BE MAXIMIZED

• PIZZA HUT is the leader in the pizza chain industry.

• PIZZA HUT is the leader in dine-in pizza restaurants.

• Unaided brand awareness of PIZZA HUT is 80%.

• Over 50% of population is aware of PIZZA HUT advertising.

• 50% of population has viewed PIZZA HUT TV ads.

• People usually eat pizza with friends and family.

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III. MARKETING ( J U L Y 1 - 2 0 0 4 - J U N E 30 2005 )

A. MARKETING OBJECTIVES

• Increase annual sales revenue from $2.0 billion in 2002 by 15% ($300 million) to 2.3 billion in 2004-5.

• Increase market share from 13.4% to 14.0%.

B. MARKETING STRATEGY

1. Target Market

• The target market for Pizza Hut includes men and women, 18-55, and an annual income over 20k throughout the U.S.

• More specifically, this includes professionals, large families with young children, and college students.

2. Brand Positioning

• Pizza Hut is the best pizza experience for busy lifestyles. • Pizza Hut achieves this position by giving the consumer a choice, offering

traditional pizza selections in addition to a wide variety of unexpected products.

3. Products Recommendations

• Introduce “Sweet pies,” a delicious apple dessert. • Continue uncheesy pizza, offering healthy alternatives.

4. Price

• Remain competitive.

5. Distribution

• Continue current distribution strategy.

6. Promotional Strategy

• Advertising • Sales Promotions • Public Relations

7. Budget

• $100 Million

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IV. MARKETING COMMUNICATIONS

C. MARCOM OBJECTIVES

• To increase unaided brand awareness from 80% to 90%.

• To achieve 50% awareness of the new ad campaign.

• To increase traffic.

• To increase brand loyalty and preference.

• To improve attitudes about the quality of PIZZA HUT products from 5 to 6 on a scale of 1-10.

• To communicate PIZZA HUT as the healthy alternative to other quick service products.

• To communicate the wide variety of choices at PIZZA HUT.

D. CREATIVE STRATEGY

1. Target market

• Males and females 18 to 55.

• Families with young children, college students, and young professionals.

• Income of $20k and above.

• Consumers with busy lifestyles are more likely to be heavy users of quick service products (Source: BDI spring 1998).

2. Consumer benefit

• PIZZA HUT offers the consumer a great pizza experience.

3. Support/Reason why

• Busy lifestyles require a wide variety of products, providing choice and convenience.

• Choice between traditional products and non traditional.

• Quality assured from a number one pizza chain.

• Valued experience with family and friends.

• Quality taste, great service, and participating in what has become an American tradition at a competitive price all add up to a joyful pizza experience.

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IV. MARKETING COMMUNICATIONS

4. Tone:

• People pleasing atmosphere with an abundance of healthy, fun, convenient choices for family, co-workers, and friends.

5. Campaign Theme:

• Pizza Hut - where you’ll find “everything pizza…and more.”

6. Rationale:

• By offering a variety of menu choices, PIZZA HUT fulfills the needs of consumers with busy lifestyles.

• Everything expected from a traditional pizza restaurant, in addition to progressive menu items leads to the joy of a great pizza experience.

• The tagline combines the consumer benefits of quality choices and convenience with traditional values for busy consumers.

• The phrase embodies these ideals by conveying the PIZZA HUT experience as pleasurable with plenty of options and personal preferences.

• Therefore, the theme includes the rational appeal of necessity and choice as well as the emotional value of ease and pleasure accompanying these options.

7. Mandatories:

• The PIZZA HUT red should be matched to the color PMS 186 • Approved colors of PIZZA HUT logo include:

Red roof, red letters. Red roof, black letters. Red roof, white letters. Black roof, black letters. White roof, white letters against red or black background.

• Do not alter the red roof, the PIZZA HUT logo or the logo typeface; keep them clear of other words, designs or marks.

• The red roof can be used alone as a mark, but it cannot have any other words or designs under, above or near it so as to create a new logo or design.

• Do not use PIZZA HUT in the plural or possessive form; do not combine into one word or make one word into two; do not add hyphens or apostrophes. (Source: Pizza Hut Case Study).

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V. CREATIVE EXECUTION

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V.

Everything Pizza…And more…

LS: Pizza Hut Restaurant CU: Donna creases her brow quixotically. CU: Shelby overlapping Donna.

Oh Donna. Come on, I’m starved.

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I don’t know. What do you have that’s not too fattening, but taste really good? I’m trying to get in that new dress in time for Tina’s party…

Welcome to Pizza Hut. What can I get you ladies today?

XCU: Donna flirts back with Frank the waiter.

CU: Shelby CU: When Frank says Donna, he winks at her.

I don’t want any diet. I love your cheese pizza. This is Pizza Hut. We have something for

everyone, Donna. Really?

CREATIVE EXECUTION

30 Second CommercialCreative Execution

CU: Frank the waiter

Don’t worry we have lots of choices. You should try our un-cheesy pizza. It has 1/3 the fat and 60 fewer calories. It tastes great too. You’ll love it.

XLS: Voice over

Try our cheeseless pizza and experience the joy of choice. Yeah! Pizza Hut, where you’ll find everything pizza…and more…


Everything Pizza…And More… Billboard and Print Advertisement

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Radio Script Product: Pizza Hut Length: 30 seconds Title: Little League Champions

MVO: (Announcer) We’re live at the Valley Little League Championships where the Bears and the Dodgers are tied at the bottom of the ninth with bases loaded and Bobby Smith up at bat.

MVO: (Coach) C’mon Bobby it’s up to you…2 outs…bring ‘em home…and if we win you know where we’re going.

SFX: Cheers from the crowd.

MVO: (Announcer) Bobby steps up to the plate…and the pitcher winds up…here’s the pitch…

SFX: Sound of the bat smacking the ball.

SFX: Cheers of joy from Bobby’s teammates.

FVO: (Waitress) Hey guys welcome to Pizza Hut…can I take your order?

MVO: (Announcer) What makes the best the best…Pizza Hut…Everything Pizza…and More.

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VI. MEDIA PLAN

A. MEDIA OBJECTIVES

1. Target Audience

• To deliver a target audience of men and women, ages 18- 55. Preferably in households with three or more persons and children.

• Special attention will be given to those with middle and upper income and education.

2. Geography

• To provide a base of advertising nationally, with additional advertising placed in areas that have historically had the greatest sales.

• Special attention will be given to areas based on developing brand potential as the preferred fast food and delivery service.

3. Continuity

• To deliver advertising throughout the year. Flighting and pulsing strategies will be arranged in accordance with specific periods of peak sales.

4. Reach and Frequency

• To emphasize reach for the new campaign and maximize frequency within budget.

B. MEDIA STRATEGY

Develop a media mix as follows:

1. Television

a) Television will be the primary medium for the new Pizza Hut campaign.

b) Network television outlets allow national coverage and expanded reach to all target audiences.

c) Through national cable television the campaign can reach special demographics, and run more targeted commercials.

d) Different times, dayparts, and shows allow for further selectivity.

e) Allows great creative flexibility with the integration of sight, sound, and motion, and makes possible dramatic representations of the product.

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VI. MEDIA PLAN

2 Radio

a) Radio will support television advertising.

b) It allows for more frequency than the other media.

c) Stations are already segmented so it is easy to target specific markets by different station formats or programming.

d) Radio is less expensive than television.

3 Newspaper

a) Newspapers will also be used for the Pizza hut campaign.

b) It is a medium capable of reaching numerous market segments.

c) It allows for individualized local advertising.

d) Allows greater control of geographic placement.

e) Also serve as a medium to supply promotional material such as Sunday coupons and special offers.

4 Internet

a) Internet advertising will run in the Pizza Hut website.

b) The campaign will consist of embedded banner ads in the Pizza Hut and Pizza Hut sponsored websites.

c) Pizza Hut has used their website in order to reinforce their advertisements and product promotions.

d) It allows for cross-promotions.

e) Allows an interactive campaign with direct feedback potential.

f) Proximity to purchase, promotions are offered when consideration for an internet delivery order is taking place.

g) Integrates all types of media thus establishing the integrated marketing strategy

h) Since it is using the Pizza Hut website it is considerably inexpensive.

5 Outdoor (Test)

a) Outdoor advertising will consist entirely of billboards.

b) They are permanent and can not be turned off by consumers.

c) There is a greater reach and frequency than other media for the cost.

d) Billboards allows for geographic and demographic flexibility.

e) There is a low cost per thousand.

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VI. MEDIA PLAN

C. MEDIA TACTICS

Television – 30 Seconds

1. Network

a) Daypart: Primetime.

b) Flighting: two weeks in, two weeks out, with additional runs during especial programming such season finale, and sports playoffs, finals.

c) Stations: CBS, NBC, FOX, ABC.

d) Programming:

Sitcoms: Will & Grace, Raymond, That 70s Show •

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Dramas: Boston Public, CSI, The OC Reality TV: American Idol, Survivor, The Apprentice Sports: NFL, College Football, NBA, Baseball

e) Special event spot: SuperBowl.

A specific advertisement will be developed for Pizza Hut to air during the SuperBowl. It is a $2M cost for the 30 second spot.The Super Bowl’s reach exceeds 90 million people nationally.

2. Syndicates

a) Dayparts: Early Fringe.

b) Flighting: two weeks in, two weeks out..

c) Stations: ABC, FOX, WB

d) Programming:

Sitcoms: Friends, Will & Grace, Seinfeld, The Simpsons Dramas: Law & Order, ER. Game Shows: Wheel of Fortune, Jeopardy

3. Cable

a) Dayparts: Early Fringe and Primetime.

b) Flighting: two weeks in, two weeks out.

c) Stations: MTV, ESPN, TNT, Comedy Central.Programming:

Reality Television: Newlyweds, The Osbournes, TRL Sitcoms: Chappelle’s Show, South Park Sports: NBA, NFL, College Football, Baseball

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VI. MEDIA PLAN

Top 25 TV Markets Ranked by TV Households, 2003 Rank Designated Market Area (DMA) TV Households % of US 1 New York, NY 7,301,060 6.924 2 Los Angeles, CA 5,303,490 5.030 3 Chicago, IL 3,360,770 3.187 4 Philadelphia, PA 2,801,010 2.656 5 San Francisco-Oakland-San Jose, CA 2,426,010 2.301 6 Boston, MA (Manchester, NH) 2,315,700 2.196 7 Dallas-Ft. Worth, TX 2,201,170 2.088 8 Washington, DC (Hagerstown, MD) 2,128,430 2.019 9 Atlanta, GA 1,990,650 1.888 10 Detroit, MI 1,878,670 1.782 11 Houston, TX 1,831,680 1.737 12 Seattle-Tacoma, WA 1,647,230 1.562 13 Minneapolis-St. Paul, MN 1,573,640 1.492 14 Tampa-St. Petersburg (Sarasota), FL 1,568,180 1.487 15 Miami-Ft. Lauderdale, FL 1,549,680 1.470 16 Phoenix, AZ 1,536,950 1.458 17 Cleveland-Akron (Canton), OH 1,513,130 1.435 18 Denver, CO 1,381,620 1.310 19 Sacramento-Stockton-Modesto, CA 1,226,670 1.163 20 Orlando-Daytona Beach-Melbourne, FL 1,182,420 1.121 21 Pittsburgh, PA 1,148,340 1.089 22 St. Louis, MO 1,143,690 1.085 23 Portland, OR 1,069,260 1.014 24 Baltimore, MD 1,023,530 0.971 25 Indianapolis, IN 1,013,290 0.96

(Source: Northwestern University Center for Media Management www.mediainfocenter.org).

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VI. MEDIA PLAN

4. Radio - 60 second spots

a) Markets: top 25 markets (see list below)

b ) Formats: top 40 radio, news, talk c) Daypart: am/pm drive, weekend sports broadcasts.

d) Flighting: Monday through Friday; three weeks on, one week off; 3 spots per daypart/per station.

Top 20 Radio Markets Ranked by Metro 12+ Population, 2003 Rank Market Name Metro 12+Population 1 New York 15,060,900 2 Los Angeles 10,195,600 3 Chicago 7,470,100 4 San Francisco- Oakland- San Jose 5,835,100 5 Dallas-Ft. Worth 4,314,800 6 Philadelphia 4,229,200 7 Houston-Galveston 3,973,100 8 Washington, DC 3,862,000 9 Boston 3,846,100 10 Detroit 3,825,600 11 Atlanta 3,526,800 12 Miami-Ft. Lauderdale-Hollywood 3,360,100 13 Seattle-Tacoma 3,067,200 14 Phoenix 2,647,600 15 Minneapolis-St. Paul 2,494,400 16 San Diego 2,384,200 17 Nassau-Suffolk (Long Island) 2,308,400 18 St. Louis 2,183,500 19 Baltimore 2,156,700 20 Tampa-St. Petersburg-Clearwater 2,098,600


5. Newspapers

a) Markets: top 50 markets (see list next page)

b) Ad size: full page (8 x 11), 4-color inserts with coupons.

c) Type of papers: metropolitan.

d) Flighting: weekend editions, according to promotion schedule determined.

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http://www.mediainfocenter.org/

VI. MEDIA PLAN

Top 50 Newspaper Markets Ranked by Population, 2003 RANK POPULATION NAME 1 21,199,865 New York-Northern New Jersey-Long Island, NY, NJ, CT, PA CMSA 2 16,373,645 Los Angeles-Riverside-Orange County, CA CMSA 3 9,157,540 Chicago-Gary-Kenosha, IL, IN, WI CMSA 4 7,608,070 Washington-Baltimore, DC, MD, VA, WV CMSA 5 7,039,362 San Francisco-Oakland-San Jose, CA CMSA 6 6,188,463 Philadelphia-Wilmington-Atlantic City, PA, NJ, DE, MD CMSA 7 5,819,100 Boston-Worcester-Lawrence, MA, NH, ME, CT CMSA 8 5,456,428 Detroit-Ann Arbor-Flint, MI CMSA 9 5,221,801 Dallas-Fort Worth, TX CMSA 10 4,669,571 Houston-Galveston-Brazoria, TX CMSA 11 4,112,198 Atlanta, GA MSA 12 3,876,380 Miami-Fort Lauderdale, FL CMSA 13 3,554,760 Seattle-Tacoma-Bremerton, WA CMSA 14 3,251,876 Phoenix-Mesa, AZ MSA 15 2,968,806 Minneapolis-St. Paul, MN, WI MSA 16 2,945,831 Cleveland-Akron, OH CMSA 17 2,813,833 San Diego, CA MSA 18 2,603,607 St. Louis, MO, IL MSA 19 2,581,506 Denver-Boulder-Greeley, CO CMSA 20 2,395,997 Tampa-St. Petersburg-Clearwater, FL MSA 21 2,358,695 Pittsburgh, PA MSA 22 2,265,223 Portland-Salem, OR, WA CMSA 23 1,979,202 Cincinnati-Hamilton, OH, KY, IN CMSA 24 1,796,857 Sacramento-Yolo, CA CMSA 25 1,776,062 Kansas City, MO MSA 26 1,689,572 Milwaukee-Racine, WI CMSA 27 1,644,561 Orlando, FL MSA 28 1,607,486 Indianapolis, IN MSA 29 1,592,383 San Antonio, TX MSA 30 1,569,541 Norfolk-Virginia Beach-Newport News, VA, NC MSA 31 1,563,282 Las Vegas, NV, AZ MSA 32 1,540,157 Columbus, OH, MSA 33 1,499,293 Charlotte-Gastonia-Rock Hill, NC, SC MSA 34 1,337,726 New Orleans, LA MSA 35 1,333,914 Salt Lake City-Ogden, UT MSA 36 1,251,509 Greensboro-Winston-Salem-High Point, NC MSA 37 1,249,763 Austin-San Marcos, TX MSA 38 1,231,311 Nashville, TN MSA 39 1,188,613 Providence-Fall River-Warwick, RI, MA MSA 40 1,187,941 Raleigh-Durham-Chapel Hill, NC MSA 41 1,183,110 Hartford, CT MSA 42 1,170,111 Buffalo-Niagara Falls, NY MSA 43 1,135,614 Memphis, TN, AR MSA 44 1,131,184 West Palm Beach-Boca Raton, FL MSA 45 1,100,491 Jacksonville, FL MSA 46 1,098,201 Rochester, NY MSA 47 1,088,514 Grand Rapids-Muskegon-Holland, MI MSA 48 1,083,346 Oklahoma City, OK MSA 49 1,025,598 Louisville, KY, IN MSA 50 996,512 Richmond-Petersburg, VA MSA


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VI. MEDIA PLAN

6. Outdoor - Advertising will be tested in two markets

a) Outdoor increases brand awareness as well as nearby franchise location awareness.

b) Markets: Denver, CO and Buffalo, NY.

c) Placement: High traffic highways and freeways and near franchise restaurants.

d) Schedule: December – March.

e) Total Reach/Frequency: 100GRPs.

7. Internet

a) Channel: Pizza Hut website. www.pizzahut.com.

b) Ad types: Flash Animated, embedded, banner

c) Schedule: Year-round.

d) Most advertisements on television and print will feature a Pizza Hut website reference.

e) Potential advertisement exposure throughout 24-hour period.

D. ADVERTISING BUDGET - $82.5 Million

Media ($-millions) (% of 82.5mil) Expense Amount Percent Total Budget Television $50. 0 60.4% Newspaper $20.0 24.6% Radio $10.5 12.4% Internet $1.0 1.3% Outdoor $1.0 1.3%

Total Media $82.5 100% of 82.5 Production $15.0 15% Total $97.5 100% of 97.5

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VI. MEDIA PLAN

ADVERTISING FLOW CHART

July through December 2004 Month JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER Week 4 11 18 25 1 8 15 22 29 5 12 19 26 3 10 17 24 31 7 14 21 28 5 12 19 26 Media Television

Network Syndication Cable

Radio Newspaper Outdoor Internet

January through June 2005 Month JANUARY FEBRUARY MARCH APRIL MAY JUNE

Week 2 9 16 23 30 6 13 20 27 6 13 20 27 3 10 17 24 1 8 15 22 29 5 12 19 26 Media Television

Network Syndication Cable

Radio Newspaper Outdoor Internet

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VII. SALES PROMOTION

A. OBJECTIVES

• To build traffic in order to achieve the increase in Pizza Hut sales by 15%, from $2 billion to $2.3 billion.

• To help achieve marketing communications objectives. • To reach potential new consumers. • To encourage trial of Pizza Hut’s new Sweet Apple Pie desert. • To build online traffic of the Pizza Hut website in order to maintain brand

awareness and encourage an increase in pizza consumption.

B. STRATEGIES

1. Online Jessica Simpson Sweet-stake: Pizza Hut will organize an online sweepstake that will simultaneously be promoted with the new Sweet Apple Pie campaign. The two grand prize winners of the sweepstake will receive backstage passes and a chance to meet Jessica Simpson and Nick Lachey at a taping of their new variety show. The second place prize will give the entirety of Jessica Simpson’s new “Desert” cosmetic line to ten people. In addition, Jessica Simpson’s new CD will be given to another 500 entrants of the sweepstakes. Both the television and insert advertisements will encourage customers to visit pizzahut.com to enter the sweepstake.

Because research shows that the Jessica Simpson and Muppet Babies commercial that aired during the 2004 Super Bowl is one of the more memorable Pizza Hut commercials, utilizing this familiarity with Simpson in an online sweepstake will prove very beneficial. Also Simpson will be re-releasing her newest album, Sweetest Sin, and a new cosmetic line named “Desert,” which is related to the Pizza Hut “Sweet” campaign.

2. Discount Coupon Inserts: Two different inserts advertising new or existing products with discount coupons will be in the Sunday Newspapers of the top 50 markets.

The first will promote Pizza Hut’s new desert, the Sweet Apple Pie. The insert will promote the Jessica Simpson online sweepstakes, giving a few details and encouraging customers to visit pizzahut.com to enter the contest. It will also provide four discount coupons that include a free apple pie with purchase of different types of pizzas. Ultimately, it will be an incentive for customers to try the new product.

The second will promote the cheese-less pizza, emphasizing the healthier benefits for health conscious consumers. This insert will also include four discount coupons of different combinations that will allow customers to try their favorite pan pizza without cheese.

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VII. SALES PROMOTION

C. BUDGET

• $1,500,000

D. CALENDAR

• Online Jessica Simpson Sweet Sweet-take will begin in July, 2004 and end October, 2004

• Discount Coupon Insert for the new Sweet Apple Pie will coincide with the online sweepstake and be inserted in newspapers from January, 2005 through May, 2005.

• Discount Coupon Insert for the cheese-less pizza will run June, 2004 through October, 2004

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VIII. PUBLIC RELATIONS

A. OBJECTIVES

• To reposition Pizza Hut as a more healthy food brand. • To enhance public opinion of the Pizza Hut brand. • To provide public with information about new campaign and products. • To get magazines to publish articles about Pizza Hut’s new campaign and

products.

B. STRATEGIES

• Continue distributing press kits, press releases, new product announcements, etc., to the media.

C. BUDGET

• $100,000

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IX. CAMPAIGN EVALUATION

A. MEASURE SALES OF NEW PRODUCTS

By analyzing the monthly sales figures of Pizza Hut, it will be possible to see if the sales are meeting the project sales figures needed in order to increase sales by 15%. Also, in order to measure the effectiveness of our marketing plan, it is important to evaluate the media to assess whether we are reaching the desired demographic.

B. CONDUCT SURVEY

• To measure: Brand Awareness. Advertising Awareness. Product Attitude.

C. FOCUS GROUPS

• To conduct focus groups every three months to determine the consumer’s opinion of Pizza Hut, its new products, and its new advertising.

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X. BUDGET SUMMARY

A. TOTAL CAMPAIGN BUDGET

Television $50,000,000 60.4

Newspaper Insert $20,000,000 24.6 Radio $10,500,000 12.4 Internet $1,000,000 1.3 Billboard $1,000,000 1.3

Total Advertising $82,500,000 100% of $82.5 Sales Promotion 2,000,000 2.0 Public Relations 100,000 0.1 Evaluation 400,000 0.4

Total $2,500,000 2.5 Production 15,000,000 15

Total Campaign $100,000,000 100%

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XI. ADDENDUM

PIZZA HUT ANNOUNCES THE RELEASE OF THEIR NEW SWEET APPLIE PIE TO BE

PROMOTED WITH NEW JESSICA SIMPSON “SWEET” CAMPAIGN

FOR IMMEDIATE RELEASE Contact: DeVillartiss & Shrader March 29, 2004 (212) 555-1234

New York (March 29, 2004)—Pizza Hut has once again joined forces with America’s

newly-wed “Sweet” hearts, Jessica Simpson and husband Nick Lachey, to promote their

brand new desert product—the Sweet Apple Pie®. By adding a desert item to their

growing menu, Pizza Hut further provides a greater number of choices for the Pizza Hut

customer. Pizza Hut’s “Sweet” campaign will be heavily promoted through television

commercials, newspaper inserts, and an online Sweepstakes. The Sweet Apple Pie will

be available for both delivery and at Pizza Hut restaurant locations for $5.99.

Research has shown that the most memorable Pizza Hut advertisement of recent

years has been the Jessica Simpson and Muppet Babies® commercial that ran during the

2004 Super Bowl. To highlight the “Sweet” campaign, Pizza Hut’s online sweepstakes will

give two lucky winners backstage access to the couple’s new upcoming variety show and

the chance to meet Nick and Jessica while sharing a great-tasting Sweet Apple Pie®. The

second place prize of Simpson’s entire new cosmetic line—Desert—will be given to ten

lucky winners. Finally, Pizza Hut will give away Simpson’s new CD to 500 lucky winners.

The sweepstake will be promoted through television advertisements and newspaper

inserts/discount coupons, encouraging viewers to go to www.pizzahut.com and enter the

sweepstake for a chance to win the fantastic prizes.

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XI. ADDENDUM

AGENCY BIOGRAPHIES

Michael K. Artiss - Account Executive Prior to joining the DeVillartiss & Shrader team as an Account Executive, Mr. Artiss gained valuable marketing experience through his work at Universal/Motown Records and Disney/WABC-TV. He received his undergraduate education in New York University’s esteemed Department of Culture and Communication.

Sharon DeGennaro - Copywriter A graduate with honors from New York University, Ms. DeGennaro holds a Bachelor of Science in Communications Studies and earned Dean’s List status all four years. As a copywriter for DeVillartiss & Shrader, she brings her experience from Dreamworks Pictures, SKG’s National Marketing Department and wrote a column, which was published in Zagat’s 2003 Guide to the Best Long Island Restaurants. During her time at NYU, she was a University Athletic Association 1st Team All-Conference and All-Academic Team selection as a member of the Women’s Varsity Soccer squad. She currently resides in Manhattan.

Charlsey Shrader - Creative Director Ms Shrader’s most recent experience was as Marketing Coordinator for Salomon Smith Barney where she researched the performance of stocks, bonds, and mutual funds then generated financial documents and presentations to communicate methods for growing client assets. At Credit Suisse First Boston, she worked on the trading floor producing presentations in a fast-paced environment for executives. In addition, she has worked at Ketchum Advertising and is an active member of the Screen Actor’s Guild, having prior experience as an actor. Ms. Shrader received her Bachelor of Science in Communication Studies at New York University, where she graduated with high honors as a member of Lambda Pi Eta and wrote an article for the paper, Medium Cool. She also holds an Associates degree in Business Administration from City University of New York and has attended Vassar College.

Aimee Villalona - Media Planner Ms. Villalona will be completing her Bachelor's in Communication Studies from New York University in May. She has concentrated in Advertising and has taken a number of advertising and marketing studies to prepare her for her career in this field. This is her first experience as media planner and working within an agency. She is proud to be a part of the amazing team of DeVillartiss & Shrader.

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