Strategic Marketing

Management
Table of Contents
Introduction ..................................................................................................................................... 3
Task 01 ............................................................................................................................................ 3
1.1 The role of the marketing manager ........................................................................................... 3
1.2 A marketing plan for the strategic direction of Pizza hut ......................................................... 4
1.3 Identification of corporate strategy of Pizza hut and how it is linked to the mission statements
of pizza hut...................................................................................................................................... 6
Task 02 ............................................................................................................................................ 7
2.1 Porter’s five forces and SWOT models for Pizza Hut .............................................................. 7
2.2 Marketing tactics used in positioning ..................................................................................... 10
2.3 Relationship marketing to maintain the customer loyalty at Pizza Hut .................................. 11
Task 03 .......................................................................................................................................... 12
3.1 Usage of appropriate marketing techniques to achieve the corporate objectives of Pizza Hut
....................................................................................................................................................... 12
3.2 Strategic options in the restaurant market ............................................................................... 12
3.3 Using the four P’s for the marketing objectives of Pizza Hut ................................................ 13
Task 04 .......................................................................................................................................... 15
4.1 Environmental changes going on in the restaurant market ..................................................... 15
4.2 SWOT analysis of Pizza Hut .................................................................................................. 16
4.3 Marketing responses to the environmental changes ............................................................... 18
Conclusion .................................................................................................................................... 18
References ..................................................................................................................................... 19
WEB References ........................................................................................................................... 20
Bibliography ................................................................................................................................. 20
Introduction
This project report provides details on the strategic marketing management of the Pizza Hut
restaurant chain, which is an American restaurant group as well as an international franchise
which is offering different types of Pizzas with side dishes and deserts too. It was found on the
15th June 1958 by Dan and Frank Carney in their hometown, Kansas. This is a subsidiary of the
largest restaurant company in the world which is Yum! Brands, Inc, By 2012 more than 6000
pizza hut restaurants were available in US. This company has one of the best reputations for
providing new kinds of pizza products which always have a good demand. The mission
statements of the company are “To be the best pizza for every pizza occasion” and “Alone we
are delicious, together we are Yum” (Pizza, 2012). The vision of the Pizza hut company is to run
great restaurants. Further this report provides information on the pizza hut company chain, roles
of marketing managers in pizza hut, marketing plans, corporate strategies, mission statements,
porter five forces and SWOT models for pizza hut, marketing tactics used in positioning,
relationship marketing, marketing techniques, four P’s used in pizza hut, environmental changes
and responses in the restaurant market and SWOT analysis of pizza hut.

Task 01

1.1 The role of the marketing manager

There are many different institutional approaches to marketing in all the businesses. According
to the availability of budget and the skill of the team all the responsibility goes to the marketing
manager. According to Kotler et al. (1999) the key roles of the marketing manager can be
classified as : Instilling a marketing led culture throughout the business, Conducting researches
and then reporting on the external opportunities, Understanding the current and the potential
customers of Pizza hut, Managing the customer relationship, Development of the marketing
strategies and plans in pizza hut, Managing the marketing mix, Agency management,
Management of the budget and measuring the success of pizza hut, Ensuring the deliveries on
time, Writing copy, Approving and developing guide lines, Making decisions by focusing the
customers, Identification of potential markets and New product entries. These are the roles of the
marketing manager of pizza hut. Pizza hut marketing managers are focused on applying the
above-mentioned roles in the most practical ways. In order to perform these roles or functions
effectively and efficiently, they should be in pocess of excellent communication skills and
analytical skills. Therefore, as we can see the marketing manager are in charge of the entire
marketing activities in the organization.

1.2 A marketing plan for the strategic direction of Pizza hut

Pizza hut is always known for providing high quality pizza. But there is a chance of risk in the
reduction of customers. Therefore, a marketing plan and planning processes for the strategic
direction of pizza hut is necessary. In order to develop a marketing plan for the strategic
direction of pizza hut, first the situation must be analyzed. Quite a number of social and
demographic trends in UK are increasing the demands for these quick service restaurants.
Another such influence is the increased number of women who goes to work. Due to this
situation, the family members have to take fast foods such as Pizzas and this rate is increased in
UK. Let us conduct an environmental factor analysis of the Pizza Hut. Political factors including
the regulatory and the judicial system affects the business. But there are no serious political
issues in the market. The economic slump in UK is affecting the Pizza Hut immensely as pizzas
are very expensive. People of UK are from various backgrounds and different religions and
values. This too affects the Pizza Hut. Pizza Hut is using the internet technology in order to carry
out very effective promotions. This restaurant is having many opportunities in the market today
due to the situation in UK and they are having a huge competition from Domino’s pizza hut,
McDonald and KFC. As Baker (2008) mentions, these situations can be further analyzed by
using Industry analysis, Marketing analysis, Competitive analysis and International analysis.
Pizza Hut Company should now use strategies and tactics to control the situation of Uk for
example introducing new kinds of pizzas at comforting prices and favorable tastes. Next they
should develop a budget in order to achieve the marketing plan created by them. The marketing
plan created here by the Pizza Hut Company must be affective and efficient. Pizza Hut is using
strategic marketing analyses, objectives, perceptual mapping, environmental factor analyses,
evaluations, formulations and implementations and control to create a strategic marketing
planning process at the Pizza Hut.
A market plan for the strategic of pizza hut is also being shown by a diagram below.

Pizza Hut Company Chain

Market

Pizza Hut products

Strategic Direction

Pizza Hut marketing strategies

Pizza Hut pricing

Budgeting and forecasting

Strategic direction plan of Pizza Hut

(Source: Designed by Author)

1.3 Identification of corporate strategy of Pizza hut and how it is linked to
the mission statements of pizza hut.

According to Pizza hut (2013) the mission statements of Pizza hut are “To be the best pizza for
every pizza occasion” and “Alone we are delicious, together we are Yum”. The corporate
strategy of pizza hut is based on the current position of the organization, the future position of
the organization and the plan to achieve this target. Therefore, we can see that in order to keep up
the mission statements of the pizza hut the corporate strategy should be taken into consideration
and the functions of corporate strategy should be carried out accordingly. For example, the
corporate strategy of the pizza hut is concerned with developing the available facilities and
resources so as to achieve its objectives. According to Denison et al. (2004) this strategy will be
affecting the overall direction of the organization including its mission statements and also
establish the future working environment of the Pizza Hut Company. Therefore, corporate
strategy of the company is defining the markets and choosing the methods in which this business
is to operate and it is typically deciding in the context of the Pizza Hut Company’s mission and
vision.
Task 02

2.1 Porter’s five forces and SWOT models for Pizza Hut

Porter’s five forces are: - Bargaining power of suppliers

Bargaining power of customers

Intensity of Existing Rivalry

Threat of Substitutes

Threats of new competitors

These five forces help the marketers to create a more competitive environment. It also has
similarities with other tools for environmental audit such as PESTEL analysis. Let us further
discuss these five forces.

Bargaining power of customers: The bargaining power of the customers is also being described
as the market of the outputs. The customers have the ability of putting the Pizza Hut Company
under pressure. Bargaining Power of suppliers: Here it is described as the market of inputs.
The suppliers who provide raw materials, components, labor and services to the company is
known to be a power source over the firm according to Kotler and Keller (2006). Intensity of
Existing Rivalry: The intensity of the existing rivalry is known to be the major determinant of
this industry’s competitiveness. Threat of Substitutes: Due to the existence of products outside
the original product the chance for the customers to move on to alternative products is more. For
example, if the quality of the pizza is low, the customer may move on to a restaurant providing
more quality pizzas (Porter, 2008). Threats of new competitors: The entering of new
competitors to the market will eventually decrease the profitability of the Pizza Hut Companies
in the industry, unless their own quality and customers keep on increasing.

The table below shows how Porter’s Five Forces influence the Pizza Hut Company.
Bargaining power of suppliers  Diverse distribution channel of Pizza
Hut
 Large number of substitute inputs from
pizza hut
 Inputs are having a little impact on the
cost.
Bargaining power of customers  Availability of a huge number of
customers for Pizza Hut Companies
 Requirements of special customizations
from the buyers.

Intensity of Existing Rivalry  Brand identification of the Pizza Hut

 Large industry size
 Rapid growth rate in the industry
Threats of substitutes  Considerable product differentiation
(Pizza Hut)
 The alternative Pizza is of lower quality
 The alternative pizza may not have the
original tastes or the look.
Threats of new competitors  Pizza Hut’s customers’ loyalty exists to
the brand
 High capital necessities
 Patents limits the new competition
 Higher switching costs for the
customers
 Entering barriers are high

Porter’s Five Forces influence on the Pizza Hut Company

(Source: Designed by Author)

Let us now see a SWOT model for the Pizza Hut Company.

STRENGTHS WEAKNESSES

Marketing campaigns of Pizza hut High price

One of the largest chains of company’s Low salaries

Deliver products efficiently Problems within the Pizza company

Strong brand Name

OPPORTUNITIES THREATS

Emerging markets Economic slowdown

Innovative Pizza The rising cheese price

Different Payment Options Credit card rates

Sports Season Price wars

Competition of Pizza Hut Companies

SWOT model for Pizza Hut Company

(Source: Designed by Author)

After considering all these facts we can see why these are important tools used to develop
marketing plans for the restaurant.
2.2 Marketing tactics used in positioning

Positioning is defining the products according to the needs and buying characteristics of people
who are in need of buying the products. And, it locates the market venue where you can find the
targeted customers. The following dimensions are being considered when a market positioning
strategy is developed: - Brand Positioning strategy, Product Positioning strategy, Competitive
Positioning strategy, Competitive Pricing strategy and Alternatives to marketing consulting
firms. According to Kotler (1997) there are few marketing tactics used in positioning. Some of
the tactics used in positioning are: -

Marketing Tactics

Perceptual Mapping Positioning a product Communication Process Positioning maps

to specific segments

Let us further discuss these. Perceptual Mapping: This is done by the pizza hut company to
show what the customers might be thinking about their products and services. For example:
providing customers with handouts to be filled with their opinion about the company. This
represents both brand and people. The environmental changes too cause changes in positioning.
Positioning a product to specific segments: The next step followed by Pizza hut is the
positioning of the product to specific segments. Pizza Hut Company cannot provide everything
to its customers. They have to classify who their competitors are and plan carefully how to
compete. Communication Process: When the plans are made by Pizza Hut Company, they
consider about how to represent the product, price and services to the customers through a
communication message. Communication helps the marketing managers of the Pizza hut to build
up the image of their product. More than the budget the methods of communication influence the
effectiveness of the Pizza Hut Company’s products. Positioning maps: As Baker (2008)
mentions the products and the services provided by Pizza Hut Company is mapped in a
positioning map. This is allowing products and services to be compared and differentiated. This
is the main strength of the Pizza Hut Company because this helps for the development of the
company’s positioning. For example Pizza Hut Company, can identify their product’s strengths
and weaknesses and the level of competency they face.

2.3 Relationship marketing to maintain the customer loyalty at Pizza Hut

Relationship marketing is one of the strategies designed in order to foster customer loyalty,
communication and long term commitment. This relationship marketing management approach
is focusing mainly on preserving their customer loyalty rather than loosing the customer’s
loyalty (Gordon, 1999). Pizza Hut is using relationship marketing to maintain their customer
loyalty. For example, Pizza Hut provides their customers with all the necessary information.
Also, they communicate openly with their customers. This helps to develop strong connections
with the customers. Currently, the customers of Pizza Hut are informed well about the company
and its products so that relationship marketing has become very important than ever before.
Many businesses do not have clear understanding about relationship marketing but Pizza Hut
does. It also includes emails and online marketing. No matter how greatly the technology has
developed, the personal support will always be the basics in creating a great customer service so
that their loyalty is maintained. For example Pizza Hut has been capable of winning the
customer’s loyalty by providing great customer service (Pizza Hut 2012).
Task 03

3.1 Usage of appropriate marketing techniques to achieve the corporate

objectives of Pizza Hut
The market techniques used by Pizza Hut to achieve the corporate objectives are: defining the
target market, positioning of the product, pricing, promotion and distribution. Let us now discuss
them in brief. Pizza Hut target market should be defined so that the message could be sent to the
right market. Pizza Hut management should be aware about exactly who their target is.
Regarding the positioning of the product, factors such as features, names, packing, services and
guarantees are being considered by the Pizza Hut team. The next is the pricing technique. Pizza
Hut should consider this very carefully because only if the price is appropriate the customers will
consider about purchasing the products. Then the promoting campaigns are being carried out by
the Pizza Hut Company which can result in an immense increase in their business. Finally they
should see about an effective and efficient way of distributing their products. According to
Homburg (2009) these are the appropriate marketing techniques used by the Pizza Hut Company.

3.2 Strategic options in the restaurant market

Porter’s Generic strategies, the core competencies and the competitive advantages are the
strategic options available in the Pizza Hut restaurant according to Sanson (2009). Let us first
take Porter’s Generic strategies into consideration. Focus, cost leadership and differentiation are
the strategies in the Porter’s generic strategies. As we discussed above we identified that the
social situation of UK is having a high demand for fast food. Therefore, Pizza Hut is focusing
more on satisfying these demands of the people. Under the cost leadership strategy, the company
can produce a large quantity of products at lower costs. Owing to this the companies such as
Pizza Hut are having internal strengths such as access to capital, skills in designing the products
and very efficient distribution channels. Finally, Pizza Hut is having a wide range of pizzas
which satisfies the customers very well. This differentiation strategy is the best strategy used by
Pizza Hut. Building strong relationships with the customers by the brand image, positioning,
unique merchandize, the customer service of Pizza Hut and the customer relationship
management programs is a competitive advantage of Pizza Hut. Achieving efficient internal
operations by the use of CHAMPS in Pizza Hut, building of strong relationships with the
suppliers using the YUM! Brand and the locations of this business are also features of the
competitive advantage of Pizza Hut.

3.3 Using the seven P’s for the marketing objectives of Pizza Hut
The seven P’s are the components of the extended marketing mix. These 7 P’s can be used for
the gaining of marketing objectives of Pizza Hut. The following table below shows how the 7 P’s
are used for the marketing objectives of Pizza Hut.

PRODUCT  The varieties of Pizza products

 The quality of the Pizza Hut
 Designs
 Features available in Pizzas
 The brand and packing
 Different sizes
 Services provided by Pizza Hut
 Warranties and returns
PRICE  The price list of Pizza Hut
 Discounts given by Pizza Hut
 Allowances provided by Pizza Hut
 Payment period
 Terms of credit
PLACE  Channels
 Coverage areas
 Assortments
 Inventories
 Locations and transport
PROMOTION  Sales promotion of Pizza Hut
  Advertising campaigns carried by Pizza
Hut
 Sales force
 Public relationships
 Direct marketing
People  Pizza Hut are having trained employees
 They are always appearing well cleaned
and groomed
 They are maintaining the customer and
employee relationships very well
 The Pizza Hut restaurant is having a
standard uniform for their employees
Process  The process of manufacturing food at
the Pizza Hut is transparent
 The customers are being invited to test
on the ingredients used to manufacture
pizzas
 Delivery is on time or it will be free the
next time
Physical evidence  They are having a very nice looking
environment
 The interior decorations makes it look
quite rich
 Focuses mainly on a clean and a neat
environment
 They believe they provide quality
services to their customers
How Four P’s are used in Pizza Hut? (Source: Designed by Author)
Let’s discuss these in brief. According to Borden (2013) the P’s are a practical formula to
achieve objectives in an organization such as Pizza Hut. The first P which stands for product can
be either tangible or intangible which helps to fulfill the needs and wants of the customers. Price
determines the profit margins, supplying quantities, demands and marketing strategy of Pizza
Hut. Then as the product and the price is available the product of Pizza Hut must be promoted by
using methods such as advertising campaigns, leaflets, or telecast advertisements. Finally let’s
see about the place. This is all about putting the right product at a right price in the right place on
the right time. This is how the Four P’s are used to achieve marketing objectives such as a target
market, good profits, customer loyalty and etc.

Task 04

4.1 Environmental changes going on in the restaurant market

There are environmental changes going on in the restaurant market. The fashionization of the
markets, the rising expectations in the market, the technological changes, competition,
globalization impacts, the importance of the customer services, the erosion of the brands and new
constraints are some of the environmental changes that are going on in the restaurant market
(Gilbert et al, 2004). Let us discuss some of these changes in brief. First let us see some of the
rising expectations in this market environment. Changing the face of these fast food restaurants,
using more advanced technology to make fast deliveries and production and food quality
revolution are some of the rising expectations. Providing of good and quality customer services
changes the environment competitiveness. That is because the customers are attracting to the
restaurants with best customer services. If the restaurant doesn’t satisfy the customer’s needs
they go elsewhere. Therefore, the customers should be well served in a well kept and a clean
environment. And finally, the technological changes are highly influencing the market
environmental changes. If the company is not using the most up to date technologies the other
companies in the industry will definitely beat up and win the market. These are the
environmental changes.
4.2 SWOT analysis of Pizza Hut
Here we are going to conduct a SWOT analysis on Pizza Hut. The table below represents this
analysis.

STRENGTHS  Popular brand name

 Brand leader in UK
 Various kinds of new pizzas under
the same roof
 Good financial situation and
international turnover
 Very good advertising and
marketing system
 More than 20,000 franchises around
the world
 Part of the largest restaurant chains
in the world
 It is placed on top of the global full-
service restaurant tree

WEAKNESSES  The loyal customers feels that the

satisfaction gained by pizzas is
declining
 Franchise management
 Unavailability of organic pizzas
which will cause a limitation in the
target market
 As Novak has mentioned that the
expansion of Pizza Hut into China
is doing extremely well there is a
big problem in New Zealand and
Australia.
OPPORTUNITIES  New pizzas of various crust size
and flavors
 Pizza Hut expands the Indian
market menu while looking to old
favorites to support the sales in US
 Pizza Hut target upscale the
products and a downscale consumer
base

THREATS  Threats from other restaurants such

as Dominos pizza and McDonalds
 People who are conscious of their
health
 The price increase in ingredients
like cheese, which is essential for
pizzas

SWOT analysis of Pizza Hut. Author designed

(Source: Designed by Author)

4.3 Marketing responses to the environmental changes
All the businesses are operating within an environment of changes. The most important aspect of
change is the changing of the market place with the high demands of the customers. In order to
survive in the rising competitive market businesses should have the ability to respond to the
environmental changes (Aaker, 2008). Here we can see how the environmental changes get its
response. In order to minimize the chance of an unknown setback due to the environmental
changes, the companies should be able to make some changes in their typical strategies. The
marketing responses provided due to the environmental changes are: simplifying, diversifying,
Avoiding aggressive strategies and considerations. The environmental changes on going in the
restaurant market as mentioned above in activity 4.1 could be handled with these responses.
These responses might help the Pizza Hut Company through rough patches or it might also cause
to miss golden opportunities. These are the marketing responses to the environmental changes.

Conclusion
This assignment provides a detailed report on the Pizza Hut Company. It provides information
on the role of marketing manager in Pizza Hut, marketing plans for the strategic direction of
Pizza Hut, corporate strategy of Pizza Hut and how it is linked with the mission statements of
Pizza Hut, the importance of Porter Five forces and SWOT model in developing marketing
planning for the restaurant, the marketing tactics used in positioning Pizza Hut, how to maintain
customer loyalty using relationship marketing, marketing techniques used to achieve the
corporate objectives of Pizza Hut, Strategic options, Four P’s, environmental changes going on
in the restaurant market, SWOT analysis of Pizza Hut and marketing responses to the
environmental changes. According to my point of view this report covers the entire section of
strategic marketing management of the Pizza Hut Company and shows that it would be more
appropriate if Pizza Hut Company had more accurate delivery service.
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30/12/2013)

[Link] (2013) – Official website (Accessed on 31/12/2013)

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