Pizza Hut Case Analysis

Pizza Hut Case Analysis

For years now Pizza Hut, Inc. has been the leader of the pizza industry. We have been privileged to have had the opportunity to perform research on advancements we can make to maintain this reputation. Based upon our Economic Analysis we have decided to not launch the BIGFOOT pizza. The following gives a detailed analysis, offers alternatives to improving the Pizza Hut experience, and gives reasons why we came to this conclusion.

Economic Analysis:

First off, we appreciate the opportunity to have had an important role in Pizza Hut's latest product development, BIGFOOT. As you know, over the past five years market shares for the industry have changed much more drastically than in recent years. Our market share has been stagnant, and sales are down 10% this year in relation to last year's numbers.

During the same period, Little Caesars made a strong push and they have continued to grow. Little Caesars' "two for one" marketing approach was effective in infiltrating the "mom's night off" segment, and is seen by customers as a great value. This is adding direct competition into our niche market share. Little Caesars is surely not making headway with the pizza connoisseurs, but it has effectively targeted a market in which Pizza Hut does not currently have a strong presence. 50% to55% of this market is made up of family dining situations. Our marketing team has conducted multiple data analyses on ways in which we can gain market share from Little Caesars within this market. After much thought and many hours of research, we have devised a marketing plan that will potentially improve our market share.

As previously presented, the new pizza being introduced to the public is the BIGFOOT. This product was conceived as Pizza Hut's primary rebuttal to Little Caesars' "two for one," and from our regional market testing it seems to have a good chance of succeeding. BIGFOOT's price point is set at $7.99 because we determined from our research that Little Caesars' target market appreciates the fact they can feed the entire family for less than $10.

The BIGFOOT $7.99 price point will appeal to the lower to middle class families and potentially win over many of Little Caesars' swing group customers. This is the primary economic factor because the key to reaching the target market is price.