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Pizza Hut Brand Audit Report, Essay Example

Pages: 10

Words: 2750

Essay

Introduction

The below essay is focusing on the strengths and weaknesses of Pizza Hut New Zealand’s  marketing and branding strategies, in relation with customer perceptions about the company, and the brand’s value. The author of the current study will use surveys and online research to determine the brand’s value, equity, and the public image of Pizza Hut. Using advanced marketing research methods and reliable  reports, the author would like to work towards creating a branding recommendation for Pizza Hut in particular focus on the unique characteristics of the market in New Zealand. Before analysing the individual brand, however, it is necessary to review the restaurant and fast food industry’s characteristics in New Zealand. The Restaurant Brands Report of 2015 (2015) tells readers that based on financial performance, Pizza Hut is the second most  successful company on the market, with 46 stores, down from 91 back in 2010 (Restaurant Brands, 2015). In 2015, Pizza Hut’s in store sales increased by more than 6 percent. In 2014, the company opened 465 international units (Yum.com, n.d.).  The main challenges that the brand is currently facing are: high competition, declining customer satisfaction, high staff turnover. The above challenges can be overcome by successful brand management approaches, and the current essay is focusing on analysing the brand Pizza Hut, its strengths and weaknesses, and the opportunities that lie in further branding marketing.

4P Analysis

In order to reveal customers’ perception about the brand, it is important to examine the 4P analysis of the brand, relevant to the market of New Zealand.

Product

The products of the company are designed to offer convenient and nutritious food for those who are looking to dine or lunch in a friendly atmosphere. The company is the largest pizza restaurant chain in the world, specializing in speciality pizzas, such as hand crusted, pan, and thin crust (Yum, 2008).

Place

Pizza Hut currently has 90 stores in New Zealand (Pizza Hut, n.d.). The first restaurant opened in 1974. Stores are located in city centres and busy travel hubs, providing customers with convenience and ease of access. All stores have the same menu, and feature the same discounts.

Price

Reviewing the menu of New Zealand’s Pizza Hut chain, it is clear that the meals and deals are set in the median price range. Large stuffed crust pizzas cost $13.50, and the company also offers $5 and $10 deals for customers across all the stores.

Promotion

Looking through the YouTube channel of Pizza Hut examining previous promotions, it is clear that the company is promoting the speciality menu and crusts as a brand differentiation. Every time a new menu  or food item comes out at the restaurants, it is featured in a short movie, such as the Pizza Hut Cheeseburger Crust, the Mexican Range, and other recipes. Customers can see the close-up images of the colourful and tasty pizzas. The promotions are designed to create an emotional connection with customers, and make them desire the product based on the images.

Consumer Knowledge

Consumer knowledge about the brand was measured through questionnaires designed to find out how familiar individuals are with the brand, products and how they judge Pizza Hut. The questions and answers are presented below. Consumer knowledge has an impact on brand knowledge, represented by the “Brand knowledge pyramid”. The first layer, at the base of the pyramid is the most superficial one: brand awareness across the target market. Some of the questions are designed to simply measure how many customers know and recognize the logo, the brand, and can associate it with the industry. The second layer is the functional image and benefits, as well as the emotional image and benefits. Questions related to promotions, products, and customer service will cover this layer. The next step of measuring brand image is to assess how customers evaluate the brand on the emotional and rational level. Questions related to the atmosphere of the restaurant, the customer service, and credibility will measure this aspect. Attachment, on the top of the pyramid is the hardest layer to measure, as it consists of loyalty, engagement, and community.                                                                                                                              

Based on the answers collected, it is evident that customers have positive images related to the brand of Pizza Hut. The respondents were randomly selected from a pool of 100 participants, aged between 19 and 40. 42 percent of the respondents were male, and 58 percent were female. The participants were provided time alone to complete the surveys and return them to their local restaurant at a convenient time. 45 percent of respondents visited the restaurant with friends, 28 percent with their partner, 17 percent with family members, and 10 percent with business partners. Given the fact that Pizza Hut has recently moved towards a more serious brand image, the responses seem to represent the target market.

Brand Knowledge                                                                                                             

For the first question, only 38 respondents answered that they would go to Pizza Hut for a pizza night. The rest of the respondents selected small local chains or private pizza restaurants for their event. Still, it is important to note that the brand knowledge of customers is high. Deeper knowledge about the restaurant’s menu, however, was significantly lower. Only 21 percent of the respondents were aware of current promotions at Pizza Hut, and 28 percent knew about the stuffed crust offer.

Brand Experience and Reputation                                                                                 

Questions 5-8 of the first, qualitative survey revealed that Pizza Hut has a mixed reputation among the consumer group. Only 45 percent of respondents said they would recommend the restaurant to their friends, and only 27 percent believed that Pizza Hut was an ethical company. 15 percent believed that Pizza Hut was relevant to New Zealand’s traditions, and 64 percent thought that the company was knowledgeable about pizzas.                        

Respondents’ scores were the lowest for the questions related to customer service (1.9), trustworthiness (1.8), and knowledgeably (2.1). That translated to brand image, it is evident that while customers believe that Pizza Hut offers convenient dining option and a good variety of meals at a good atmosphere, in attractive restaurants, they do not believe in the brand’s commitment to customer service, quality, and fair treatment of resources. Based on the above results, the development areas of Pizza Hut can be identified as follows:

a. Making sure that the brand is associated with good customer service

b. Emphasizing the quality elements of meals

c. Building meaningful connections with customers through branding and social responsibility public relations campaigns.

Brand Elements Analysis

In order to determine the branding strengths and weaknesses of Pizza Hut in New Zealand, it is important to look at the different elements of the brand. According to Keller (2008, p. 140), brand elements are “those trademark device that serve to identify and differentiate the brand”. The main brand elements are brand names, logos, symbols, colours, slogans, store appearance, and packages.

Name

Pizza Hut, as a brand name is relevant to the upmarket, young customer, which is a good choice, given that the majority of young people prefer fast food out with their friends. The brand name contains the name of the main product, pizza. The second part of the brand name, “hut” refers to a casual place to meet. Overall, the name of the brand suggests that it offers convenient location, easy to order and consume food, and a casual meeting place for customers.

Logo                                                                                                                          

The logo of the Pizza Hut brand has gone through several changes since 1958, responding to the trends of the market, and the target customer segment’s perceptions and preferences. According to the Logpedia website (n.d.), between 1958 and 1968 the logo had a friendly chef featured, holding the two words in each hand. Between 1968 and 1999, the logo became simpler, consisting of only two colours: black and red. The text was written in black, topped with a “red roof”, symbolizing the  “hut element”. Between 1999 and 2010, the logo became more colourful, and more modern, with yellow and green elements added. After 210, due to the change of menus, and shifting towards an image of a real restaurant, instead of a fast food place, the logo became more sophisticated, less colourful, and pizza-shaped. The history of logos can be found in Appendix A.

Website

The company’s website is clear and provides information about all aspects of the business. Knowledgeability is communicated through the  list of ingredients and nutritional information accessible on the website. The website certainly creates an image of a transparent and knowledgeable company, and this image should certainly be matched in the restaurants by providing staff with relevant training. The company also has a store finding facility, and allergen information. It seems like the website matches the new image of Pizza Hut, and the communication has moved from communicating fast food serving options to real eating out and fine dining experiences.

Brand Marketing Analysis                                                           

One of the main selling points and points of brand differentiation that is available for Pizza Hut is product innovation, according to the Restaurant Brands (2014) report. While the company’s profitability rose, customer service satisfaction levels dropped. All advertisement featured in New Zealand media focuses on the food experience, product innovation, and taste, with little or no information about the experience itself. This is where Maslow’s  hierarchy of Needs (Appendix B) can be relevant. Customers who chose  to eat out or order pizza do not necessarily only seek the satisfaction of their hunger. They are looking for added value, and good customer service can provide this. There are no images featured in the marketing materials of Pizza Hut regarding togetherness, love/belonging, and self-actualization, which are higher level needs. As the results of the survey showed, the majority of customers visited the restaurant with friends or loved ones, therefore, apart from the taste – the atmosphere, customer service, and presentation mattered as well.

Brand Equity Assessment of Marketing Programme Effectiveness

Pizza Hut utilizes the product differentiation strategy to gain a competitive advantage on the restaurant chain market, and increase its brand equity. The company is widely known worldwide, and this creates a high brand equity and recognition. Consumers’ response to marketing, however – at least in New Zealand – is low, and the respondents’ answers revealed that they had only superficial knowledge about the different menu offers, quality assurance systems, and promotions. This means that the brand needs to work harder on connecting with the target market, and create long term positive associations with the brand. The image of Pizza Hut needs to be strengthened to make the company’s marketing more effective. Marketing, however, should be carried out within multiple channels. As the 4P analysis of the brand has already been completed in the previous part of the paper, it is important that the company focuses on the place, promotion, and price offers, as well as the product innovation. The main source of brand equity lies in the popularity of the product, the strong brand knowledge of customers. Product differentiation through innovation is another source of a positive association. Customers stated that they were happy with the location and the atmosphere of the restaurants, however, the majority had limited knowledge of the products and menus. The depth of brand knowledge, therefore, is low. Due to the recent changes of Pizza Hut, and the focus on new products, differentiation, and quality, the most important customer associations related to the brand are related to location, setting, and taste. However, the emotional connection with the dining and takeaway purchase experience need to be strengthened through effective advertising that focuses on added value.                                                  

As the above review of customer perceptions about the brand’s image and personality has revealed, the company is considered to be a good place for eating out with friends and loved ones, offering a relaxed atmosphere. On the other hand, the brand has recently failed to build trust in customers, and this is one of the development points identified by the current report. In order to gain trust and create positive associations with the brand, the company has to go further than featuring the new menu and products in its advertisement. As the majority of stores operate on a franchise basis, customer service satisfaction rates have dropped, and this issue needs to be addressed urgently. As only 15 percent of the respondents believed that Pizza Hut’s menu was relevant to the country’s traditions, and the mean score for the Likert scale question “Pizza Hut is relevant to me” was only 3.2, it might be time to match  the offerings to the local market more, by creating not only international menus, but food items that customers can relate to. Adding value is one of the best methods of product and service differentiation, and Pizza Hut has recently been focusing too much on the product, and less on value-added services, such as home delivery, catering orders, and serving in restaurants. It is, therefore, recommended that the management of Pizza Hut takes into consideration the following suggestions, created based on the results of the survey among customers in the restaurant chain’s target market.

Recommendations

Based on the Brand Knowledge pyramid’s analysis, the above survey has revealed that positive brand associations need to be strengthened through effective marketing campaigns that focus on deeper needs of customers. While featuring the products will promise customers the satisfaction of their hunger, it does not address their higher level needs, such as a sense of belonging, self-actualization, and safety. The main recommendation of the current report, therefore, is to strengthen the emotional associations of customers with the brand, by using an imagery in the advertisements that makes them feel good about the brand: friendly atmosphere and service, spending time with friends, and a  quality dining experience. It has been found that the majority of respondents believed that the atmosphere and location of  the restaurants was great, and this can be a strong selling point for a future branding and marketing campaign. It is also important to note that since Pizza Hut has started focusing on product level differentiation, the customer service satisfaction levels have dropped. Customers who are not happy with the service they receive in the restaurant and from delivery personnel will be less likely to have positive emotional associations with the brand. While the majority of outlets are franchised, the brand can still have a strong influence on the training of personnel, and setting standards for customer service. Further, focusing on service level differentiation, as well as product differentiation can improve the brand’s equity, as well as customers’ brand loyalty. While the above survey has not measured brand loyalty directly, only 38 percent of previous customers chose Pizza Hut for pizza night with friends. By strengthening brand image and equity, the company could also increase its reputation and customer loyalty, realizing long term growth.

References                                                                                                                            

Business Balls (n.d.) Maslow’s Hierarchy of Needs. Retrieved from http://www.businessballs.com/maslow.htm

Logopedia (n.d.) Pizza Hut. Retrieved from http://logos.wikia.com/wiki/Pizza_Hut

Pizza Hut YouTube Channel. (n.d.) Retrieved from: https://www.youtube.com/user/NZpizzahut

Pizza Hut NZ (n.d.) Website. Retrieved from: http://www.pizzahut.co.nz/

Restaurant Brands. (2015) 2015 Annual  Report. Retrieved from 

Yum! Brands  (2014) Yum! Brands 2014 Annual Report. Retrieved from         http://www.yum.com/annualreport/pdf/2014yumAnnReport.pdf 

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