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The use of innovation at pizza hut commerce essay

Hire Writer Grumpert, 1989 Almost ten years later, Pizza Hut would be serving one million customers a week in their 310 locations. In 1986, Pizza Hut introduced delivery service, something no other restaurant was doing. Competitors started to look for new methods of increasing their customer bases. Many pizza chains decided to diversify and offer new non-pizza items such as Buffalo wings, and Italian cheese bread.

Pizza Hut Strategies Essay

The current trend in pizza chains today is the same. They all try to come up with some newer, bigger, better, pizza for a low price. Offering special promotions and new pizza variations are popular today as well. For example, chicken is now a common topping found on pizzas. In the past, Pizza Hut has always had the first mover advantage. Their marketing strategy in the past has always been to be first. One of their main strategies, which they still follow today, is the diversification of the products they offer.

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Pizza Hut is always adding something new to their menu, trying to reach new markets. For example, in 1992 the famous buffet was launched in Pizza Hut restaurants worldwide. Another strategy they used in the past and are still using is the diversification of their pizzas. Pizza Hut is always trying to the use of innovation at pizza hut commerce essay up with some innovative way to make a pizza into something slightly different. In 1983, Pizza Hut introduced their Pan Pizza, which had a guarantee of being ready to eat in 5 minutes when dining at Pizza Hut restaurants.

Customer Loyalty Program Pizza Hut has always valued customer service and satisfaction. In 1995, Pizza Hut began two customer satisfaction programs.

A 1-800 number customer hotline was set up to hear from customers who visited dine in restaurants. Customers would receive the hotline number on the back of receipts and offer coupons for participating in surveys and also for expressing comments about experiences good or bad. A customer call-back program was put into place to get feedback from customers of Pizza Hut delivery stores. Customers were called back within 36 hours of purchase and asked about satisfaction and room for improvement.

The goal of the company was to create loyalty among its customers. With customers being loyal, they would return again and again. They would also be inclined to recommend the restaurants to friends who would in turn do the same.

In order for the strategy to be successful, the customer experience had to paramount, and the information gathered from the surveys put into action to better the process. A bonus plan was put into play for store managers which were tied to the value score received from their stores patrons. This bonus plan forced managers to focus on customer service and the customer experience.

Pizza Hut was on to something with the entire plan except, the bonus structure had its flaws. The company found that some store would have high customer service ratings and those managers would receive large bonuses even though the revenue generated from those store were not particularly stellar. Macroenvironment Variables A number of demographic and societal trends in the United States contributed to increased demand for food prepared outside the home.

Because of these factors and many others, the single-person household is a growing segment of the population. This trend shows that individuals are choosing to eat out more often than eat at home. Another factor to consider is the increased number of women working outside the home today compares to 1958 when Pizza Hut was founded. As a result of more women in the workforce, household incomes are now combined and are growing. The combination of higher incomes and dual-career families result in less time in the home, therefore less time to cook food at home.

Also due to higher incomes, consumers have more disposable income, allowing them to eat out more often. The slowdown in growth intensified competition for market share and lead to consolidation. Many chains found that their market share could be increased by buying an existing company rather than building new units.

Mergers and acquisitions had a powerful effect on the the use of innovation at pizza hut commerce essay food industry. Microenvironment variables Six major segments make up the fast food segment of the food service industry. Pizza chains are ranked third. International sales have become more and more important to the fast food industry.

In 1990, Pizza Hut opened two restaurants in Moscow where 20,000 customers were served a week, about the amount serviced by 10 American Pizza Huts. Wikipedia, 2007 As profitable as the fast food industry is, there has always been one problem that many fast food companies cannot seem to overcome. Nutritional value of fast food is a huge problem. For many people, fast food automatically means low nutritional value.

A problem facing all of the pizza chains is that they share the same competitive advantages. Most if not all the top pizza chains offer free delivery, and always have some sort of promotional deal offering large pizzas at reduced prices.

Other competitors to take into consideration are frozen pizzas and make-it-yourself pizzas that are purchased in grocery stores. They can increase revenue with their new innovative pizzas, and increase brand loyalty with good customer service. An opportunity that Pizza Hut has is their new ordering online system. Anyone with internet access can order whatever they wish and get it delivered to their house without even speaking to someone.

Weaknesses However, the fact that Pizza Hut does have a restaurant to run is also a weakness. Another result of higher overhead costs is higher prices Pizza Hut must charge. Obviously, Pizza Hut is not the low cost producer. They rely on their quality pizza and good service to account for their higher prices. An indirect weakness that Pizza Hut has is that they have lost a lot of their customers and market share due to such intense competition with competitors.

Strengths Pizza Hut has many different strengths. Name recognition is an obvious strength for Pizza Hut. Pizza Hut has been around for a long time, and consumers know the name well.

Another big strength and even a competitive advantage is the fact that they have a full service restaurant as well as delivery services. Because of the restaurant, Pizza Hut can market to many different segments that other pizza chains cannot. Pizza Hut offers a sit-down, conversational type restaurant where families can take their children for birthday parties for example.

If you can create loyalty among customers, then you business will definitely grow. The problem with the survey system is that they incorrectly rewarded the restaurants for providing good service. The bonus program for the managers needs to be changed. The bonus should be based on the value score as well as store profitability. The ultimate goal of the customer loyalty program is to increase revenue.

The use of innovation at pizza hut commerce essay

The revenue component should be a crucial part of the bonus structure. The bonus should be based half on profitability and half on customer service. The bonus also needs minimum standards for each in order to qualify for any percentage of the bonus. This should prevent stores who are very profitable, to forget about building value through customer service and vice versa.

Pizza Hut Malaysia E-Marketing Essay Sample

Pizza Hut also needs to use the information gathered from the customers and use the information for marketing products to certain market segments. The segment which they should consider exploiting and promoting, is ecommerce. The company needs to be ahead of the competition with accepting orders via the internet.

By being the first to truly revolutionize the way customer order pizza, they will continue to be the top pizza make in the industry. Being that Pizza Hut holds the most market share in the pizza industry, the perceived quality and the use of innovation at pizza hut commerce essay of the company will help to ensure a better than average chance at a successful introduction of a new product.

The pizza industry firms are famous for introducing new products to spark short-term sales. Pizza Hut has been very successful at accomplishing this. In recent years there has been an increase in the marketing of products with an extreme twist to them.

Mountain Dew, which is a brand name owned by Pizza Huts parent company, Pepsico, has been very successful at repositioning itself to this segment of the market, which has sparked new interest in the soft drink. Many other imitators have followed in there footsteps and have been successful as well. Pizza Hut has the resources available to research and implement a new product with great success.

Today they are an industry giant with name recognition and restaurants spanning the globe. The company has been able to retain market share despite efforts by competitors due to introduction of new products and services and the customer focus.

Pizza Hut strives to achieve customer satisfaction and loyalty.

The Use Of Innovation At Pizza Hut Commerce Essay

They created a system in order to receive customer feedback in order to improve service. They also created a bonus structure which makes individual store managers focus on the customer experience. The bonus structure needs to be restructure to avoid the current situation of managers of poor performing stores receiving bonuses while managers of very profitable stores, receiving less if not nothing at all.

The focus on the customer experience is a contributing attribute which separates the company from the rest of the competition. If your customer is satisfied and feels you are delivering good value, then loyalty will grow your business. A loyal, satisfied customer, is you best form of advertising.

Author not available 2007. Retrieved March 15, 2007, from Wikipedia Web site: Pizza Hut, 1989 4. Author not available 2006. Retrieved March 13, 2007, from Answers. Cost Of Capital views: