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Pizza Hut has always been known for innovation. After all, it takes a lot of creativity to find a new place to insert mozzarella into a pie. That's how the "Stuffed Crust" pizza was born.
But the restaurant business has been through some tough times since the economic downturn of 2008, which arrived just over a year after Brian Niccol moved from vice president of national brand marketing and strategy into the chief marketer spot at the Plano, TX, pizza powerhouse. Recession-plagued customers cut back on their restaurant spending, to the extent that same-store sales at U.S. Pizza Hut outlets were off by 12% during the last quarter of 2009 and by 8% the quarter before that.
But by dint of innovation and savvy marketing, Pizza Hut looks like it has begun to flip that script. The most recent quarterly report from its parent company Yum Brands - which also owns KFC and Taco Bell - revealed that same-store sales for Pizza Hut's first quarter of 2010 rose 5%.
Niccol stresses that the key to the turnaround started with heightened attention to the chain's basic value for consumers and then moved out to discovering ways to let them access that value easily and conveniently.
"You have to have a value proposition that gets their attention, and then you have to deliver it via media in that they're open to receiving," he says.
Clarifying Value
Pizza Hut under Niccol has responded to those changes with a four-fold strategy concentrating on consumer value, menu variety, access innovation and participation in the conversations going on every day in new media.
In value terms, price is the crust in the pizza; it all starts from that base. While it dominates the pizza segment, Pizza Hut has always had challenges in branding itself as a low-price leader, a position that rival Domino's seems to occupy in the popular awareness. By contrast, Pizza Hut's restaurant background tended to encourage associations with sit-down dining - although the chain's 15,000 global units now include dine-in, carryout and delivery-only stores.
But Pizza Hut has embarked on a number of initiatives to promote "every day low price" menu items clearly and indelibly to customers. Starting in June 2009, the chain began to promote its...