Pizza Hut Case Study Document Transcript 1.

. CASE STUDY / PIZZA HUTPizza Hut Scores Big on Game Day of people from across the organization including, Marketing, Customer Care, andTHE CHALLENGESuper Bowl Sunday is one the of the busiest Menu Innovation. The team was trained onpizza days of the year. Pizza Hut expected to social customer service best practices; theysell over 2 million pizzas on that day alone. prepared a list of top issues/questions toTo deal with the overwhelming number of expect, and learned how to handle theseorders, Pizza Hut had made it possible for questions and comments in an honest andcustomers to pre order pizzas. They could authentic manner.do so by ordering online, at pizzahut.com.Even with pre-orders and pre-planning, theteam at Pizza Hut knew that they needed toprepare in a big way for what would be their THE RESULTSbusiest day of the year. Super Bowl Sunday Game day arrived and the Pizza Hut Bigis such an important day for us, says Tressie Game Squad sprung into action. TheyLieberman, Sr. Manager of Digital Marketing, monitored over 14,000 pizza conversations,we know our customers are going online to including mentions of Pizza Hut as well asfind answers so we wanted to make sure we their competitors throughout Super Bowlwere there to listen and offer solutions. Sunday. The squad was also able to assist over 450 customers on Facebook and Twitter that day. The Game Squad not only answered customer questions and dealt with issues, but they also reached out to provide e-gift cardsTHE APPROACHThere has been a shift in the way customers for those customers that had experiencedlook for customer service. Knowing that delays or issues with their orders. They alsosocial media plays a large part, the team at offered the e-gift cards at random as a way toPizza Hut was anticipating a large spike in reward their brand advocates.the number of online conversations thatmentioned pizza and more specifically Pizza Touchdown! Pizza Hut considered theHut on Super Bowl Sunday. program a huge success. Plans are now underway to look for ways that they canPizza Hut decided to put together their continue with this approach online each andown team for the big game The Pizza every day.Hut Big Game Squad which was made up www.radian6.com 1 888 6RADIAN (1 888 672-3426) Copyright 2011 - Radian6

Company History

1958 The first Pizza Hut opens in Wichita, Kansas.

1959 Pizza Hut is incorporated in Kansas and the first franchise unit opens in Topeka, Kansas.1971 Pizza Hut becomes the number one pizza restaurant chain in the world on both sales and number of restaurants.

1977 PepsiCo buys Pizza Hut, with 3,000 U.S. units.

1989 The Pizza Hut Jobs Plus program expands Nationwide to employ more than 10,000 individuals with physical and developmental disabilities. The Jobs Plus program is recognised as the largest corporate initiative of its kind in the food service industry.

1995 In March, Pizza Hut introduces Stuffed Crust Pizza, the first innovation in the pizza category since Pizza Hut introduced Pan Pizza 15 years earlier. The Deliver Me Home program is created by Pizza Hut and the National Center for Missing and Exploited Children and is tested at the Dallas/Fort Worth International Airport to inform the community of an important identification tool in helping to locate, identify, and return missing children to their families. 1997 On October 6, 1997, Tricon Global Restaurants, Inc. was formed as a result of a spin-off from PepsiCo Inc. of the three restaurant concepts - Pizza Hut, KFC, and Taco Bell. Pizza Hut launches "Totally New Pizzas", a quality initiative putting sliced, fresh vegetables and meatier meat toppings on pizzas. Source: Pizza Hut Website (1998)

Company Profile

Pizza Hut is the worlds largest pizza restaurant company.

Pizza Hut is the recognised leader of the $25 billion U.S. pizza category.

Pizza Hut currently has more than 7,600 U.S. restaurants and delivery units in the U.S. and more than 3,000 units in 86 foreign countries.

Pizza Hut has been voted "Best Pizza Chain" in Restaurants and Institutions consumer choice awards for 10 of the last 12 years.

Source: Pizza Hut Website (1998).

Stage 1: Marketing Audit

By developing a SWOT Analysis, a Company can determine what its distinctive competencies are. This will help determine what the organisation should be in business for, what its mission should be.

Strengths

One of the strengths of Pizza Hut has been to be a division of PepsiCo since 1977 and now an integral part of Tricon. It is the world's largest pizza restaurant as outlined above. It has a good reputation and a good branding. It can raise the profile of the company to gain the ability to sell at higher price, to recognise its products through the corporate image and to launch new products more easily. However, Pizza Hut has a good franchising development that has risen rapidly since its foundation in 1958 by Dan and Frank Carney. In 1986, 135 individuals, partnerships and/or corporations operated 2,395 Pizza Hut systems restaurants and 96 delivery-only units. Source: Pizza Hut Website (1998)

Weaknesses

Pizza Hut's weaknesses are the complex computer systems and internal conflicts from franchisees.

The complex computer system was contracted to develop delivery pizza service because Pizza Hut management was convinced that the installation of this system was essential to the delivery strategy and would be a significant competitive advantage (the cost of co-ordination and management of such centralised ordering system at Domino's would be prohibitive because about 70% of Dominos franchisees are owned by only one store). Kaufmann (1993)

This system allowed the customers in a particular market to call a single number to place in order. The caller first was asked his or her phone number and the system ascertained whether the caller had ordered. The operator would verify the caller's name and address and ask if the customer would like the

same type of pizza previously ordered. The order would then be forwarded automatically to the appropriate delivery unit where a terminal would receive the order information.

One major issue presented in developing a profitable delivery concept was whether there would be a charge for service taking into account that, for competitive reasons, the Company could not charge for delivery. The solution to this problem was that the size and the price of delivered pizzas would be slightly increased over pizzas in traditional restaurants. Customers would pay approximately 10% more for a small, medium or large pizza but would get more as well. Kaufmann (1993)

But the Pizza Hut franchisees saw no reason for delivery and they openly expressed their disagreement with the company's delivery concept, especially regarding upsizing. They also questioned the necessity of the computerised Customer Service Centres which were so expensive and that Domino's didn't have one. Significant tension arose between the company and its franchisees, which was solved for a while by some incentives to the franchise communities. Kaufmann (1993)

Opportunities

The following: Pizza home delivery and growth into new markets.

After an initial rejection by the franchisees, the number of them which had introduced delivery was growing rapidly and were doing significantly better than the company owned stores. It was a fiercely competitive environment in the delivery service markets (Domino's, Pantera, Little Caesar, Godfathers, Pizza Inn, etc.) But looking at the files in Exhibit 1, we can assert that it is it the leader in Top Pizza Chain and that the positive difference which exists with Domino's will increase in the next years. We cannot forget that in 1990 the sales of the delivery segment (the most important new fast food concept) was U.S. Dollar 21.9 billion. Kaufmann (1993)

In my opinion, Pizza Hut can readily grow in other markets because it has a very good organisation and it has solid market share. Despite it having slightly fallen in 1984,1985 and 1986, it still has quite a good market share implying that people buy Pizza Hut's products simply because they like its products.

But Pizza Hut cannot stop looking after its customer's satisfaction. Consumer research has shown that the standard Pizza Hut pizza served in the traditional restaurants was not as well-suitable to the delivery

environment, causing quality to suffer. Pizza Hut research and development managers were confident that they could solve the problem by developing a new product designed especially for delivery. This would involve an entirely different production process than that used currently in the traditional restaurants.

In the same way that Pizza Hut management intended to pursue vigorously the "exciting opportunities afforded by our new segment of delivery", after the right marketing studies, they can try to diversify growth because it allows Pizza Hut to make better and wider use of their management, technical and financial resources.

Threats

In my opinion the threats to Pizza Hut can be the intense competition and in narrow relationship with it, to cut down the quality of the products, the service and the attention to the customers so as to develop new products as a means of increasing profit. Such a course of action would be a slippery slope to disaster.

Pizza Hut should know as much as possible about its customers' tastes. How do the current customers and prospects judge the company and its competitors on reputation, product quality, service, strength and price? In the same way, it should know how the different classes of customers make their buying decisions.

Pizza Hut should also obtain as much information as possible about its competitors. It must know who its major competitors are and identify what the objectives and strategy of each major competitor are and their weaknesses and its strengths. What are the sizes and the trends in the market share? The study about the competitors should describe the trends that can be foreseen and identify external market threats - substitutes for this product.

Pizza Hut is a top Pizza Chain but it has to maintain its position over its competitors. Domino's clearly intended to gain total market leadership. Kaufmann (1993) Exhibit 1. Pizza Hut should maintain and if is possible, increase the "total quality" of its products creating differential advantages in its service. It showed this when it made the decision to computerise the central ordering system which was a splendid means of improving performance. The differential advantages can be in the product, in its presentation and also in the way that the staff treat the customers. Pizza Hut should never forget that the loyalty

quotient of its customers is very low. However, if another chain, for the same price as Pizza Hut, gives the customer something different and more exciting than those products Pizza Hut is offering, the consumer, following the typical consumer behaviour, will try the other chain. It is a truism to say that it is much more difficult to capture or recapture a customer than to maintain an existing one. Perceptions as price, quality and value are considered pivotal determinants of shopping behaviour and product choice. Valaria A. Zeithaml (1988)

Stage 2: Marketing Objectives

This marketing objective is a statement of what is to be accomplished through marketing activities. My Marketing objectives for Pizza Hut are:

A: To maintain the number one market position

B: To increase the percentage of pizza sales by increasing the number of franchisee delivery units with carryout facilities.

The marketing objectives can be achieved through different ways. One of them can be creating internal campaigns or contests with attractive prizes to achieve the established objectives. In July 1997, Pizza Hut organised a " Serving Up a Million" contest. It was an eight-week long contest among all Companyowned Pizza Hut stores across the country and the Odessa restaurant outperformed more than 4,000 company-owned Pizza Huts in U.S.A. The Pizza Hut manager and his staff received a check for U.S. dollar 100.000. Pizza Hut Website (1998).

Another way could be signing agreements with leading corporations or chains which are operating in the same or in complementary markets such as the agreement signed in 11 February 1997 by Pizza Hut and Hilton Hotels. The objective was to offer hot, tasty Pizza Hut pizzas at select Hilton Hotels and resorts across the United States "To provide travellers with the same food and service that they received at their hometown "Pizza Hut" said Pat Williams, President of PepsiCo Express Restaurant.

In my opinion, Pizza Hut can improve its sales percentage and its profit by opening more delivery units with carryout facilities in strategic places carefully chosen. In comparison with the traditional restaurants, the delivery-units required an estimated U.S. Dollar 128,500 to 198,500. By contrast with

the company-owned delivery units, the franchisee investing in delivery-units typically did not buy vehicles and did not always adopt the company's computer-ordering system. The cost of sales would be lower in the Delivery units due a combination of upsizing and higher prices for order. (Exhibit 2 in relation with Exhibit 4). However, the carryout segment is the segment with a greater percentage of sales. The number of staff required for its functioning should be smaller as well. "When we introduce delivery to a market, we get the business of customers who probably were ordering a competitors pizza simply for the convenience of home delivery" said a senior Pizza Hut manager.

Stage 3: Marketing Strategies

The first objective is:

To maintain the number one market position

Pizza Hut should continue to offer a high quality product with higher price

Pizza Hut could revise all its unnecessary expenses increasing the advertising promotion in local radios and T.V. and more publicity.

In the same way, another marketing strategy could be to start or increase the number of mailings to send homes. The Marketing Department will establish which areas and the frequency with which to send it.

It could be very useful for Pizza Hut to edit a monthly "Pizza Hut Magazine" which will include news of the Restaurants and delivery units either Company-owned and franchisees, customers letters, games with prices, promotions of the month, etc.

In my opinion with the creation of discount cards for loyal customers, it is possible to obtain from them "total " fidelity to Pizza Hut with free advertising ("word of mouth")

Another strategy could be to pay more attention to the senior citizen segment, because its number is steadily increasing and they have more buying power as well. They could join the "Pizza Hut Senior Club" specially created for them. This Club could organise activities, holidays in attractive places in States or abroad in collaboration with Hilton Hotels, organised monthly meetings, etc. However, Pizza Hut in collaboration with the Nutrition Department of a famous American University can launch special menus for them which a perfect balance between health (no fat, no cholesterol, etc.) and taste. Perhaps these menus would be suitable also to vegetarian people. This strategy should be advertised in local radios and T.V.

To achieve this objective, it would be most appropriate to increase staff training to make all fully aware that they are working in the top Pizza chain. To continue maintaining this position the company needs them, needs their professional skills which they should try to improve everyday and needs their friendliness providing the best treatment to the customers (personal selling)

B: to increase the percentage of pizza sales increasing the number of franchisees delivery units with take-away/carry-out facilities which should be carefully picked in areas with strong customers potential.

A market study is required to identify the best areas to install the delivery units.

The Finance Department will carry out its study to know the cost of the investment and its possible profitability as well.

The number of franchises who had introduced delivery was growing rapidly and many franchisees that had introduced delivery were doing significantly better than the company-owned stores. Eighteen franchisees opened 65 delivery - only units in 1986, bringing the overall to 96. I think that that if it is possible to install carryout facilities, the business volume could increase in a favourable way.

As I mentioned in previous lines, Pizza Hut must strongly work to develop a new products designed especially for delivery. This would involve an entirely different production process than that used currently in the traditional restaurants.

Stage 4: Detailed implementation plan

Objective A: To maintain the number one market position

Product-Service / Target Market

To obtain total co-operation of employees because they are essential in increasing productivity, providing customer service and beating the competition.

Motivate the personnel to perform effectively through a plan which should be fair, ethical and well understood by them.

Hire and maintain high quality personnel and market the organisation or service to them because it is people in a service organisation who differentiate the organisation from competitors.

Establishing rewards to employees and appropriate compensation, promoting and implementing flexible benefits programme. Simkim, Ferrel (1994).

Pay more attention to the senior citizen segment creating suitable products and increasing staff attention to them. Creating Pizza Hut Senior Club which will organise different activities.

Maintain and enhance a high quality product providing value and excellent service.

Launching new products and "New Pizzas" to "surprise" the customer as it was with The Edge Pizza which "delivers a phenomenal new taste" and "will consumers will run out of crust before they run out of toppings?" as commented Randy Gear chief marketing officer of Pizza Hut.

Launching periodic Customer Satisfaction campaigns.

Staying in touch with and adapting quickly to new preferences. Always providing friendly, helpful service from well trained staff.

Introducing new improvements in the restaurants facilities such as introducing lunch buffets to exhibit the pizzas and the salads and unifying its corporate image.

Place

The phrase "Location, location, location" is very often used to describe the most important aspect of any hospitality business. This is especially true for a premier brand that has to be located in the best positions appropriate for its market. Nevertheless, one needs to be realistic with respect to the market position. Pizza Hut maybe a prime Pizza Restaurant marque but it is not a three-star Michelin French haute cuisine restaurant. Therefore, the locations will not be Park Lane or Bond Street in London or 5th Avenue in New York. Appropriate prime locations for the Pizza Hut marque will be general consumer shopping areas such as Oxford Street in London or in out of town shopping malls or in High Streets.

As far as the location for the delivery service is concerned, location is not important but it has to be close to the customer residential areas or near offices.

Promotion

Strengthen the task of the Pizza Hut Advertising Committee and increasing its budget through the increase of the restaurant and franchisees current assessment. In 1986 the current assessment was 2% of the first U.S. dollar 28.000 of monthly sales for each Restaurant and 1% of all monthly sales above U.S. dollar 28.000. Kaufmann (1993).

Pizza Hut should target the senior citizen segment doing some advertising in the local radios and T.V.. Nevertheless, the main part of advertising in radio and on T.V. of Pizza Hut will be its traditional focus on a large audience of potential fast customers, ranging from children to adults at the effective time and in the right place.

Direct mail will be sent to advertise new products, new Pizza Hut Restaurants or delivery units including in the mailing promotional discount coupons or tokens to encourage use of the new establishment.

Another way to promotion will be "personal selling" trying all the Pizza Hut staff informing customers and persuading them to purchase the most suitable products in that moment.

Sponsorship giving financial support of sports activities and giving financial support to scientific research.

Price

Taking in account that the a major input to the price decision is the cost of producing and marketing the product (Butler, 1996), Pizza Hut should maintain highest price giving the best quality but trying hard to reduced as much is possible, the section of variable costs, such as Semi-variable & premiums in both, Traditional Restaurant and Delivery Unit, or the vehicles section in the Delivery Restaurant improving the routes to delivery, to save petrol.

However, all the sections whose costs are variable, should be reduced as much is possible, to obtain the maximum profit, maintaining high quality, high price and high standard service.

Pizza Hut should not forget that environmental factors such as legislation, trade union, or consumer pressure, together with the current business climate, influence the price decision. Butler (1986)

Objective B: To increase the percentage of pizza sales by increasing the number of franchisee delivery units with carry-out facilities, which should be carefully picked in the areas with strong customers potential.

Product-Service / Target Market

Improve the standard Pizza Hut served in the traditional restaurants to be well-suited to the delivery environment to avoid quality to suffer. Kaufmann (1994).

Develop and research of new products designed specially for delivery, involving an entirely different production process than that use currently in the traditional restaurants

All the products and he services should have some differentiation, something unique and superior, to the competence products

Establishing a performance standard, that means, an expected level of performance. Examples of a performance standard might be the reduction of the time to serve a customer the food who he or she ordered or to try persuasively but gently to get the customer to ask for new product (new recipe pizza), etc..

Quickly resolve any problem in providing Pizza Hut service, to avoid damaging the firm's reputation for quality.

Use high technology to provide improved services at lower cost. Continually evaluate how to customise the service to each consumers unique needs. Simkim, Ferrell (1994)

Consider whether carry-out should be available from delivery units, restaurants or both. Anecdotal evidence suggests that some eating-in and carry-out customers feel uncomfortable with carry-ut in restaurants.

Consider drive-in locations for both delivery and carry-out.

Place

Location is one of the most important of the strategic retailing issues, because it dictates the geographic trading area limits from which a store must draw its customers. Simkim, Farrell (1994)

Pizza Hut should pick carefully the place to open the new franchisees delivery units in areas with strong customers potential. Parking should be appropriate to the delivery needs and as to whether carry-out will be included. Another point to consider is the transport network (major thoroughfares and public transport must be able to accommodate customers and delivery vehicles. Pride, Farrell (1994)

Promotion

Increase the advertising in local T.V. and radios announcing the opening of the news delivery units in commercial areas such as shopping malls, shopping centers, etc.

In the same way to start or increase advertising in print media such as newspapers, consumer publications and business publications and even other media as such transport, posters and cinema. Buttle (1986)

Price

Maximisation of profit.

Reducing as much is possible, the variable costs but maintaining a high quality product, high price and excellent service, obtaining in every way, customer satisfaction.

Projection (* represents projected figures)

Stage 5: Review and Control

Sales analysis to evaluate Pizza Hut performance to be compared with forecast sales, specific competitors sales or the cost to achieve the sales volume. Simkim, Ferrell (1994).

This analysis sales data can be daily and weekly examioned for each outlet to see if they are performing to the established objectives.

Periodically sending different Pizza Hut controllers who should be completely unknown to the personnel, even by the outlet manager. The controllers behaviour will be exactly as s/he is a normal customer but her or his work will check all the stages of the service, the way that the staff ask the customers, the way to serve him, the condition and cleanliness of their uniform, the relationship between the manager and the personnel, the condition of the Restaurant, its tables, its chairs, the hygiene of the utilities, etc.

The Pizza Hut controllers should have complete "Check List" which will contain in detail all the points referring to the Restaurant or delivery-unit going.

Another way to control the performance of the Restaurants or the delivery-unit is knowing if the customer is satisfied with the product and the service provided.

Through the Franchise Holders Association, Pizza Hut can collect feedback from the outlet operators and through the International Pizza Hut Holders Association to know the degree of the shareholders satisfaction with the company's progress

Pizza Hut ran a Text Campaign during April 1-29, 2009 offering Pizza for a Year. Pizza Hut wanted to make its pizza & pasta dishes stand out among other brands. Pizza Huts target audience were consumers between the ages of 18-35.

The strategy was to quickly build a database using television. Fox ran the television spots promoting the shortcode & keyword with the call to action.

Coupling SMS text & great prizes, such as the first prize of free pizza once a month for a year & a second prize of chicken alfredo. Other prizes included Pepsi or a large pizza for forwarding to friends.

Friend-forwarding was also used to further drive participation & put individuals in control of their ability to win prizes, taking the element of luck out of the equation. By forwarding the text to five friends, they received a free two-liter of Pepsi & by forwarding to 10 friends they received a free large pizza.

Pizza Hut received over 12,000 entrants in the first two weeks & more than 3,000 texts during the commercial alone. The rest of the entrants were driven by the friend-forwarder.

The combination of a great prize free pizza for a year combined with other compelling consolation prizes that are easy to attain free two-liter soda or large pizza for forwarding with the use of mobile phones led to tremendous participation numbers.

Pizza Hut did not realize how popular & successful the friend-forwarding would be, with participation numbers much higher than anticipated

Case study in in india Pizza Hut entered India in 1996 and introduced pizzas to the Indian customers. But it was not a smooth sail for the international giant. Its large dine-ins, high prices and positioning of pizza as meal put-off customers. Meanwhile. Dominos Pizza that entered India in the same year was able to gain ground by positioning Pizza as a snack and supporting it with its efficient home delivery system. Even homegrown pizza chains like Pizza Corner and Smokin Joe ate into Pizza Hut's market share.

We have come a long way from the initial days when some of these fast food giants like KFC were attacked, to the situation where no mall in the country is complete without the presence of these food outlets. Though many of them made their initial entry with their international menu but today after

staying here for many years their changed to serve the Indian palate.

menu has

First among them was McDonalds which changed its kitchen and menu to suit Indian tastes, on which I have written earlier too, link. But the same is being followed by Pizza hut , a look at their menu shows us how many special exclusive Indian pizzas they have , for vegetarians they a host of Panner offerings and for Non-vegetarians the Kabaab and Chicken Tikka Pizzas. Posted by Rajesh Aithal at 2:23 AM Labels: Indian Consumers, Indian Market 2 comments: Ankush Samant said... We have come a long way from the initial days when some of these fast food giants like KFC were attacked, to the situation where no mall in the country is complete without the presence of these food outlets. Though many of them made their initial entry with their international menu but today after

staying here for many years their changed to serve the Indian palate.

menu has

First among them was McDonalds which changed its kitchen and menu to suit Indian tastes, on which I have written earlier too, link. But the same is being followed by Pizza hut , a look at their menu shows us how many special exclusive Indian pizzas they have , for vegetarians they a host of Panner offerings and for Non-vegetarians the Kabaab and Chicken Tikka Pizzas.

March 19, 2009 1:08:00 PM PDT Pawan Kumar said... We have come a long way from the initial days when some of these fast food giants like KFC were attacked, to the situation where no mall in the country is complete without the presence of these food outlets. Though many of them made their initial entry with their international menu but today after

staying here for many years their changed to serve the Indian palate.

menu has

First among them was McDonalds which changed its kitchen and menu to suit Indian tastes, on which I have written earlier too, link. But the same is being followed by Pizza hut , a look at their menu shows us how many special exclusive Indian pizzas they have , for vegetarians they a host of Panner offerings and for Non-vegetarians the Kabaab and Chicken Tikka Pizzas.

Businesses become more agile, responsive and performance-focused

With over 120 outlets employing about 5,000 staff in Singapore, KFC and Pizza Hut found its business intelligence (BI) system wasn't coping with its rapid growth. It did not measure up to corporate reporting requirements, benchmarking store performance, and reducing the time and costs spent on day-to-day reporting across multiple business systems.

"We faced daily challenges in producing timely reports and complex analysis across our many restaurants and product lines to make informed decisions," said Mr Tan Teng Sern, System Analyst with KFC/ Pizza Hut in Singapore.

At the restaurants, day-to-day operational reporting is required to calculate the pay to daily-rated workers, like delivery staff. Using the old BI system, it could take restaurant managers hours each day to tally the number of deliveries that each rider had made, resulting in managers working overtime, and riders waiting for payment. The system was difficult to use and rigid in design. A few days each month could also be tied up generating reports to meet corporate requirements. The problem in producing timely reports also hindered KFC/ Pizza Hut's ability to respond quickly to changes in the business. What they needed was a solution that would allow different objectives for different departments, and monitor each department's performance.

Solution KFC/Pizza Hut sought an affordable, high-performance and easy to maintain business intelligence and data warehousing solution.

These requirements led KFC/Pizza Hut to Zap and its solution, Zap Business Intelligence, a web-based BI solution for the Microsoft SQL Server platform.

"We chose Zap Business Intelligence because it offers powerful functionality and proven scalability, and yet is easy to install, maintain, and use," said Mr Tan.

The deployment aced its test with KFC/Pizza Hut when Zap was rolled out in the production environment. Here, users wanted to incorporate other data sources to complete the corporate data warehouse, including Pointof- Sale, Marketing, HR/Payroll, and Supply Chain Management.

The Zap solution supports close to 400 users, including restaurant managers, operations managers, and back office directors. It brings together key BI capabilities including dashboards, analysis, reporting, KPIs and scorecards, all in a user-friendly web portal.

Benefits Zap's Business Intelligence has resulted in many significant benefits for KFC/Pizza Hut.

"Improving reporting and analysis across our restaurants and head offices offers considerable gains in efficiency and will enable our businesses to become more agile, responsive and performance-focused," said Mr Tan.

The BI system contributes to greater business agility in several ways:

Optimizing marketing spend: The system allows KFC/Pizza Hut to immediately adjust marketing campaigns to target them more effectively. Enabling strategic restaurant planning: By analyzing sales and demand, KFC/Pizza Hut can conduct more effective strategic planning when opening restaurants. Enhancing customer service: The system analyzes delivery punctuality, and correlates it with parameters such as restaurant and rider, allowing management to make decisions to fine-tune operations, and improve customer service. Improving sales: The analysis of point-of-sale data enables KFC/Pizza Hut to measure the effectiveness of their package deals in order to improve sales.

Cost Savings Mr Tan estimated that KFC/Pizza Hut will gain a return on investment from Zap Business Intelligence within 12 months, chiefly in reducing the amount of staff time spent on daily reporting. The Zap solution has resulted in cost savings in several areas, including improving labor efficiency. With Zap, the time taken for restaurant managers to check reports has been reduced from 30 minutes to about five minutes, and while operation managers and administrators used to spend about an hour a day retrieving reports, this can now be done almost instantly. Another cost saver has been reducing the reliance on IT. DOMINOS BACKGROUND NOTE contd...

Domino's philosophy rested on two principles limited menu and delivering hot and fresh pizzas within half-an-hour. In 1967, it opened the first franchise store in Ypsilanti, and in 1968, a franchise store in Burlington, Vermont. However, the company ran into problems when its headquarters (the first store) and commissary were destroyed by fire. In the early 1970s, the company faced problems again when it was sued by Amstar, the parent company of Domino Sugar for trademark infringement.

Thomas started looking for a new name and came up with Red Domino's and Pizza's Dispatch. However, there wasn't any need for it because Domino's won the lawsuit in 1980. In 1982, Domino's Pizza established Domino's Pizza International (DPI) that was made responsible for opening Domino's stores internationally.

The first store was opened in Winnipeg, Canada. Within a year, DPI spread to more than 50 countries and in 1983, it inaugurated its 1000th store (Refer Exhibit II for worldwide revenues). Around the same time, new pizza chains like Pizza Hut and Little Caesar established themselves in the US.

Domino's Pizza faced intense competition because it had not changed its menu of traditional handtossed pizza. The other pizza chains offered low-priced breadsticks, salads and other fast food apart from pizzas. Domino's faced tough competition from Pizza Hut in the home delivery segment also. Little Caeser was eating into Domino's market share with its innovative marketing strategies.

By 1989, Domino's sales had reduced significantly and cash flows were affected due to the acquisition of assets. In 1993, Thomas took measures to expand Domino's product line, in an attempt to revive the company and tackle competition. The company introduced pan pizza and bread sticks in the US. In late 1993, Domino's introduced the Ultimate Deep Dish Pizza and Crunchy Thin Crust Pizza. In 1994, it rolled out another non-pizza dish Buffalo Wings.

Though Domino's did not experiment with its menu for many years, the company adopted innovative ways in managing a pizza store. Thomas gave about 90% of the franchisee agreements in the US to people who had worked as drivers with Domino's. The company gave ownership to qualified people, after they had successfully managed a pizza store for a year and had completed a training course.

Domino's also gave franchises to candidates recommended by existing franchisees. Outside the US, most of Domino's stores were franchise-owned. Domino's was also credited for many innovations in the pizza industry and setting standards for other pizza companies. It had developed dough trays, corrugated pizza boxes, insulated bags for delivering pizzas, and conveyor ovens.

In 1993, Domino's withdrew the guarantee of delivering pizzas within 30-minutes of order and started emphasizing on Total Satisfaction Guarantee (TSG) which read: If for any reason, you are dissatisfied with your Domino's Pizza dining experience, we will re-make your pizza or refund your money. Domino's entered India in 1996 through a franchise agreement with Vam Bhartia Corp[2] in Delhi. With the overwhelming success of the first outlet, the company opened another outlet in Delhi.

By 2000, Domino's had outlets in all major cities in India. When Domino's entered India, the concept of home delivery was still in its nascent stages. It existed only in some major cities and was restricted to delivery by the friendly neighborhood fast food outlets. Eating out at branded'restaurants was more common. To penetrate the Indian market, Domino's introduced an integrated home delivery system from a network of company outlets within 30 minutes of the order.

Goutham Advani (Advani), Chief of Marketing, Domino's Pizza India, said, What really worked its way into the Indian mind set was the promised 30-minute delivery. Domino's also offered compensation: Rs.30/- off the price tag if there was a delay in delivery. For the first 4 years in India, Domino's concentrated on its Delivery'strategy.

Businesses become more agile, responsive

A PR case study: Dominos Pizza and coping in crisis Posted on January 4, 2011

After a flirtation with social media, for a time, Dominos seemed to abandon its Twitter page entirely. Theres no shame in trying social media and deciding its not right for your business or marketing strategy, but leaving a branded page up with just a few outdated messages is the online equivalent of a deserted, run down shop front and can be damaging. If you intend to use social media, its important to commit to using it regularly or close your profile down.

Now Dominos has a strong online presence; it has pioneered online ordering and has a dedicated social media team that respond and engage with customers and potential customers daily, building brand loyalty and advocacy. However, Dominos truly realised the importance and value of social media when it landed them in crisis. The restaurant chain was forced to adapt quickly to the problems social media can pose when two of its staff filmed a disgusting video of themselves messing with customers food in the US and uploaded the video to YouTube, reaching a global audience.

The onus is on businesses to monitor the online environment and engage with the conversation, because existing legal frameworks are simply not set up to protect businesses from damage new social media can cause.

What is Crisis Management?

Good crisis management is about doing the right thing operationally when the worst happens. It requires effective leadership within a clearly defined structure.

In the modern world of social media, little isolated incidents are increasingly becoming big news, as everyone can become a publisher. Its a good idea to assign specific spokespeople to comment on different events or incidents which may occur. Some spokespeople will be better at demonstrating the importance of new products, while others may be better at downplaying the relevance of potentially damaging news. Different spokespeople are likely to connect with different audiences, based on factors such as age and gender.

In order to be able to communicate effectively with the media and your stakeholders in a crisis, its important to build lines of communication in peacetime. If you have contacted or contributed to journalists articles and features before, they are far more likely to listen and respond positively in a crisis.

What Dominos did

The company realised that staying silent about the incident and hoping it would blow over was not an option. Dominos sensibly decided to engage in the conversations about the brand following the incident. Within 24 hours, the company had distributed images of the offending staff to all of its US restaurants in order to quickly identify the team members and franchise involved. The company contacted the police and health department voluntarily. Dominos tried to get the video removed from YouTube, but failed to do so, as it was not the publisher. Instead, it engaged with bloggers and its online audience to make it clear to them how seriously the company took the matter and the steps it was taking to resolve the issues. It also posted videos of its own on YouTube to apologise for the incident and explain the measures being taken in response.

Statements and press releases were sent to all relevant media and spokespeople with the appropriate level of seniority responded to press enquiries. As well as communicating effectively with the media, internal communications were used to keep staff across its branches updated and to reinforce the severity of the situation to ensure such incidents would not occur again in future.

Key PR messages that Dominos got across in its communications

Dominos didnt do this it was done to the company. The video was the action of two idiots who were swiftly found and fired. They are not representative of Dominos staff. Nothing is more sacred to Dominos than the well being and trust of its customers.

By responding to the incident decisively and authoritatively, Dominos communications following the incident said more about the company than the incident itself. The publicity generated positively impacted sales following the damaging video being published.

Our golden PR rules for effective crisis management

Engage wisely (choose your battles) Being silent is a form of communication. It communicates disinterest. Dont be too clever Retain perspective Plan in peacetime Be a part of the conversation before problems occur dont be reactive Use appropriate language and style Engage with the appropriate level of seniority Live up to your brand values Listen