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Price war between dominoes and pizza hut for the Indian fast food market share
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Pizza WarDominos & Pizza HutRaj Kumar Singh
Introduction• Both Dominos and Pizza Hut entered in 1996.
• Both are US based fast food chains.
• Faced competition from street food corners, fast food chains and restaurants.
SIMILARITIES• DOMINO’S & PIZZA HUT• 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
Positioning- Dominos• Over the period since 1996, Domino’s Pizza India
has remained focused on delivering great tasting Pizzas and sides, superior quality, exceptional guest care and value for money offerings. We have endeavored to establish a reputation for being a home delivery specialist capable of delivering pizzas within 30 minutes or else FREE to a community of loyal consumers from all our restaurants around the country. (Source- Dominos Site)
• Brand Tag Line Hungry Kya?
Source: Corporate Communication Dominos and Jubilant Food Works-Sylvia Dutta (Corporate Relation)
Positioning- Pizza Hut• Restaurant Dinning Experience Conversation, Memories, Laughter, Togetherness
Repositioning in 2008
Dimension of Comparison
Dominos Pizza Hut
Unique Selling Proposition
(USP)
30-minute Home Delivery Frame
Dining Experience
Market Penetrations strategy –
Redefining their recipes
a)Customizing the recipe as per the
“Different Regions”; then adding taste
factor.b) Simplified ordering system – SINGLE toll
free number.c) Very fast growth in terms of number of
outlets:from 1(1996) to
101(2001)
a)Redefining the recipes suiting the
Indian tastes“No differentiation
region-wise”b) No such provision in Pizza Hut’s case.
c) Pace of growth was slow.
Juts 19 outlets in the same period of time
4P
Dimension of Comparison
Dominos Pizza Hut
Product Pizza - High Localization; even based on different regions.Trendsetter in localization.
Recipe redefining as per the Indian taste.Following Dominos in localization.However; opened 100% vegetarian restaurant.Customization based on Religion – JainCity specific – Hyderabad(Halal meat)
Price Initially high price; as key ingredients sourced from Australia and Spain.Competition with Pizza Hut resulted in Price cuts, discounts.
Initially high price; as Pizza Hut offer “Comeback Value to our customer” because of its USP – Dining Experience.
Dimension of Comparison
Dominos Pizza Hut
Promotion Introduce Pizza mania(Large Pizza – Rs.129/-)
Discount couponsTie-up with Discovery Channel – Co brandingDirect Mailing and Pizza
Training Classes
Campaign like – Pan in your Name
Innovative Menu – Pizza Pooch menu and Pizza Pooch Birthday
PackageOne Rupee Pan dealBarah nahin to Tera
scheme
Place Most robust and efficient Supply Chain – resulted in to
reduce cost.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.
Not much focused on supply chain; rather focused on “dining
Experience”
Current ScenarioDominos Pizza Hut
Product •Pizza with promise of fast delivery•Offers mainly Pizza along with pasta, cakes and few other side dishes•Mainly focused on pizza
•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
Price •Concentrates mostly on the lower to middle band•Caters mainly to price sensitive segment.•Lowest Offering is at Rs. 39
•Starts from lower end and goes up to an upper end•Caters to many price and taste segments•Lowest offering is at Rs. 44
Dominos Pizza Hut
Promotion •Coupons•Bundling•Offers•Encourage online ordering
•Coupons•Bundling•Offers•Encourage online ordering
Place •500 stores across 110 cities•Conveniently located for fast delivery•Encourages online ordering
•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
Menu
Promotion- Dominos
Promotion- Pizza Hut1 2
Schemes for High value customer from their Life time
value study
Consumer Evolution
Self Actualization - Happiness
Basic Need - Hunger
“Khushiyon ki home delivery”
“Hungry Kya”
Experimental phase with brands
Not demanding in terms of taste &
flavoursSwitched on - offers
OLD CONSUMER
Experimental phase with taste
Extremely demanding in terms of taste &
flavoursDifferent brands for different occasions
Switch on – occasion vs deal tradeoff
NEW CONSUMER
MULTIPLE TARGET POINTS General eating out –
friends / casual General eating out - family Personal occasions - birthdays etc celebrations Corporate occasions
Competition
DIRECT COMPETITION• Nirulas’• Papa Jones
INDIRECT COMPETITION• Local food stands / shops• McDs• KFC• Food sections in malls• Coffee shops • Other Restaurants (Big
Chills etc)
Brands moving from ‘Single segment target’ towards ‘Multi segment target’
US based Papa John's, which entered the country in 2006, has decided on a major shift in strategy - to convert its dine-in
outlets to a delivery format, called 'Delcos' since the former was simply not that profitable.
FUTURE SCOPE
250,000 PIZZAS BEING DELIVERED EVERYDAY
THIS NUMBER IS EXPECTED TO DOUBLE IN NEXT 3-4 YEARS
INDIANS SPEND 20% ON EATING OUT