Director-Marketing, Indian Subcontinent, Yum! Restaurants International | 05 Aug 2004
"Considering that the pizza is a food foreign to the Indian palate, Pizza Hut tried to develop a bond with the Indian consumer. What has worked for Pizza Hut is the strategy to ‘think global and act local’. It is an international brand with an Indian heart, in terms product, quality of service as well as pricing."
The world’s largest pizza chain with over 12,500 restaurants across 91 countries, Pizza Hut is the highest-flying brand of Yum! Restaurants International, which also has KFC, Taco Bell, A&W and Long John Silver’s under its umbrella. Pizza Hut made its foray in India with a dine-in restaurant in Bangalore in June 1996. Starting with six restaurants in its first year, Pizza Hut has expanded to 73 restaurants in 19 cities and plans to scale up to 100 restaurants by end-2004. Pankaj Batra, Director-Marketing, Indian Subcontinent, Yum! Restaurants International, shares his views on the pizza market with Ashish Singh of exchange4media. Excerpts:
Q. Can you recap Pizza Hut’s journey towards connecting with the Indian consumer?
Pizza Hut is the world’s largest pizza chain, and it made its entry in India in 1996. It also brought into India its international heritage, its pizza expertise and world-class standards of quality and taste. Pizza Hut is a successful brand today. Considering that the pizza is a food foreign to the Indian palate, this is no small feat. Pizza Hut tried to develop a bond with the Indian consumer. We learnt that if we are to make an impression on the complex Indian palate, we had to become relevant to the Indian consumer. This kick-started the Indianisation campaign at Pizza Hut.
We created Indian toppings and vegetarian pizzas. The success of flavours like Chicken Tikka, Spicy Korma and the Tandoori range has been beyond our expectations. The world’s only 100 per cent vegetarian Pizza Hut restaurants located in Ahmedabad, Surat and Mumbai’s Chowpatty, and a special Jain menu sans root-based ingredients are again a reflection of our adaptation to local preferences. Root-based pizzas do not contain onion and garlic. Instead of garlic bread, special Jain bread is served. Moreover, dressings on our salads are completely egg-less.
What has worked for Pizza Hut is the strategy to ‘think global and act local’. It is an international brand with an Indian heart, in terms product, quality of service as well as pricing.
Q. What is the advertising strategy for Pizza Hut? What is your ad-spend?
Over the years, Pizza Hut has invested time and resources in understanding the market and customer preferences. The advertising strategy for Pizza Hut is two-fold. Firstly, laying emphasis on it being an international brand with an Indian heart, Pizza Hut’s communication is reflective of family values, family bonding, etc. Take for instance, Pizza Hut’s arranged marriage commercial in Indian settings, and the Palat pizza commercial in Hinglish. Secondly, highlighting the premise that the pizza is a catalyst that brings people together ensures that this is a brand that connects with the Indian consumer. Today, Pizza Hut spends approximately Rs 10-12 crore on advertising annually using a media mix of print, television and radio.
Q. You are talking of 100 stores in 2004. How deep into the country are you going?
Currently, Pizza Hut is present in 18 cities. By the end of the year, we will be present in over 25 cities, which will include Dehradun, Bhubaneswar, Nagpur, Pondicherry, Nasik and Kanpur. These are towns with a population of 1 million or more. The entry into smaller towns is in response to the latent demand for international standards and quality food in these towns. We will continue to open restaurants wherever we see potential.
Q. What is the ‘Palat’ theme all about? Has it worked?
The ‘Palat’ concept was launched in 2002, with the launch of Pizza Hut’s innovative range of ‘Stuffed Crust’ pizzas. An unconventional and fun product, the ‘Stuffed Crust’ pizza has a crust that is filled with a ring of mozzarella cheese that magically transforms the crust edge, compelling one to eat the pizza backwards – i.e., crust first or ‘Palat ke’. Supported by communication on the advertising front, many consumers at Pizza Hut restaurants across the country actually eat this pizza backwards.
Q. India is a price-sensitive market. Do you think Pizza Hut’s pricing is out of sync with the market?
We understand that the Indian consumer is value conscious, and not just price conscious. At Pizza Hut we have been continuously reinforcing our product quality and standards to remain in sync with the Indian consumer. So while we have maintained the highest quality standards, we also believe in delivering affordability. For example, Pan Pizzas start at just Rs 65, which is probably among the lowest in the world. The recent `Pan 4 All’ initiative is also an example of good value for money, where you can actually get four pizzas beginning Rs 200!
Q. Teenagers throng your outlets in huge numbers. Are you cashing in on the diversified taste factor of urban youth or cashing in on the well-to-do youth in the metros?
Our pricing makes dining an affordable and enjoyable experience. With products available at various price points, we have something for everyone who walks in through our doors. We recognize the young adult (18 – 29 years) as our target customer. As a result our overall strategy is formulated keeping this significant group in mind -- whether it is the launch of innovative new product ranges every couple of months or the frequent introduction of exciting customer initiatives or communication that strikes a chord with this age group.
Q. What is the strategy behind Pizza Hut’s offerings like ‘crew member boogie’ and Pooch birthday parties? How much do these birthday parties contribute to your sales?
In India, eating out has evolved into a form of entertainment. In an effort to provide that overall dining experience, Pizza Hut not only serves the best pizzas under the roof to our customers, but also sings and dances for them. As a result, you will see our staff members dancing to disco in Mumbai and ‘bhangra’ in Amritsar. Families with young children are also recognized as an integral segment of our target audience. By taking care of all aspects of a birthday party the parents are saved the time and effort of organizing on their own. Pizza Hut hosts at least one birthday party almost every day of the year. However, it will be difficult to say exactly what percentage is contributed by these parties, as relatively large groups of customers also choose Pizza Hut as a venue for get-togethers.
Q. How is the fast food industry growing in India?
The fast food industry is growing at a tremendous pace in India. Currently it is a Rs 400-500 crore market and is expected to hit double-digit growth.
Q. Who are your target audience?
Our target audience is basically anyone and everyone who loves to eat pizzas. Pizza Hut’s marketing strategy is very simple: we want to satisfy our customer by offering him the best. This for Pizza Hut is a "mania". That’s why each Pizza Hut employee is a "customer maniac" and the resultant marketing strategy is a product of this belief.
Q. Who are Pizza Hut's major competitors in India? Does it face greater competition from international brands or domestic pizza chains?
Pizza Hut does not face direct competition from any pizza chain as we exist in all three segments – restaurant, takeaway and delivery. The delivery segment does have other international players like Domino’s and a couple of regional, local chains like Pizza Corner and Smokin’ Joes. Since our restaurant outlets also deliver pizzas and offer takeaway, our average sale per store is 3-4 times that of the delivery operators. We are clearly the market leader with over 50 per cent share.
Q. Is Yum!’s brand building strategy in India in line with its international trend?
The brand strategies are designed in line with international guidelines, but keeping the local environment in mind. We have found that the challenge in managing a brand’s product/market scope is to allow the necessary flexibility for it to be strong in different and varied product markets, yet capturing cross-market and cross-product synergies. While brand anarchy in the long run creates inefficiency and ineffective brand marketing efforts, rigid lockstep brand strategy risks handicapping the brand in some product markets where competitors are less fettered and vigorous.
Q. Why do you serve beer at certain outlets?
At Pizza Hut, the belief is to offer the best times around the greatest pizzas. So, our customers can enjoy a selection of beverages including iced tea and beer along with beer at our outlets.