Marketing & Advertising
Essay Preview: Marketing & Advertising
Report this essay
INTRODUCTION
Until 1996, Pizza in India was synonymous only a bready dough base slathered with some ketchup. Since 1996, there was a proliferation of high-priced branded pizzas in the market, with the entry of international pizza chains. Dominos and Pizza Hut, the two big US fast food chains entered India in 1996. Each claimed it had the original recipe as the Italians first wrote it and was trying desperately to create brand loyalty.
Dominos and Pizza Hut – tried to grab as large a slice of the pizza pie as possible. (Refer Table II and I for market shares). While Pizza Hut relied on its USP of “dining experience”, Dominos USP was a 30-minute delivery frame. To penetrate the market, both the players redefined their recipes to suit the Indian tastes. Dominos went a step ahead by differentiating regions and applying the taste-factor accordingly.
Dominos also made ordering simpler through a single toll-free number through out the country. Dominos and Pizza Hut expanded their market ever since they entered India. Dominos had grown from one outlet in 1996, to 101 outlets in April 2001. Pizza Hut too, which began with just a single outlet in 1996 had 19 outlets in 2001.
TABLE I – MARKET SHARES (1999)
PIZZA CHAIN
MARKET SHARE (%)
Pizza Hut
46.42
Dominos
21.67
Others
31.91
Source: Financial Express
TABLE II – MARKET SHARES (2000)
Pizza Chain
2000 Market Share (%)
Pizza Hut
Dominos
70*
Others
Source: Business Standard, *as claimed by the company
BACKGROUND
Dominos entered India in 1996 through a franchise agreement with Vam Bhartia Corp. The first outlet was opened in Delhi. With the overwhelming success of the first outlet, the company opened another outlet in Delhi. By 2000, Dominos had a presence in all the major cities and towns in India. Pizza Hut entered India in June 1996 with its first outlet in Delhi. Initially, the company operated company-owned outlets.
However, keeping in line with its worldwide policy where Pizza Hut was gradually making a shift from company-owned restaurants to franchisee owned restaurants, Pizza Hut made the shift in India too. Pizza Hut had four company-owned franchisees – Universal Restaurants Pvt. Ltd. (Delhi, Uttar Pradesh and Rajasthan), Specialty Restaurants Pvt. Ltd. (Punjab), Dolsel Corporation (Gujarat, Karnataka and Andhra Pradesh), Pizzeria Fast Food Pvt. Ltd. (Pune and Tamilnadu) and Wybridge Holdings (Mumbai).
POSITIONING WARS
When Dominos entered the Indian market, 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 prevalent. To penetrate the Indian market, Dominos introduced an integrated home delivery system from a network of company outlets within 30 minutes of the order being placed.
However, Dominos was not the trendsetter so far as home delivery was concerned. Delhi based fast food chain, Nirulas was the first to start free home delivery in 1994. But where Dominos stole the market was its efficient delivery record. Goutham Advani, Chief of Marketing, Dominos Pizza India, said, “What really worked its way into the Indian mind set was the promised thirty minute delivery.” Dominos also offered compensation: Rs.30/- off the price tag, if there was a delay in delivery. For the first 4 years in India, Dominos concentrated on its Delivery act. For its delivery promise to work, Dominos followed a 11-minute schedule: one minute for taking down the order, one minute for Pizza-making, six minutes oven-time, and three minutes for packing, sealing and exit.
Pizza Hut, on the other hand, laid more emphasis on its “restaurant dining experience.” It positioned itself as a family restaurant and also concentrated on wooing kids. Its delivery service was not time-bound. A company official said, “The Pizza making process takes about 20 minutes and since we dont usually deliver to places which are beyond the reachable-in-half-an-hour distance, customers can expect home delivery within 45 minutes.” Moreover, analysts felt that Pizza was something that just was not meant to be delivered. Said Vivek Sure, Projects Manager, Pizza Express, “If you dont eat pizza fresh, it turns cold and soggy.” However, Dominos seemed to have overcome this problem through its delivery pack called “Dominos Heatwave”.
LOCALIZING THE MENU
Since its entry into India, Dominos introduced nine new toppings for Pizzas to cater to the local tastes. Different flavors were introduced in different parts of India. Advani said, “The Indian palate is very definitive – people are extremely finicky and choosy, not too willing to experiment. Food tastes vary from region to region. To capture the market, we had to localize flavors.”
Thus, Deluxe Chicken with Mustard Sauce and Sardines were confined to the East, Mutton Ghongura and Chicken Chettinad to the South and Chicken Pudina to Mumbai. Butter chicken, Makhani Paneer and the Chatpata Chana Masala were confined to the North. Very soon, Pizza Hut followed Dominos and offered customized Spicy Paneer and Chicken Tikka toppings.
Apart from this, it also opened a 100% vegetarian restaurant at Ahmedabad, a one-of-its-kind worldwide. The restaurant also offered a special Jain menu, which did not have a single root-based ingredient to fit in with the food habits of Jains. Another city-specific adaptation of its menu by Pizza Hut was the restaurant in Hyderabad, (Andhra Pradesh) which offered Halal meat and chicken only with no beef and pork products in the menu.
PRICING AND PROMOTIONAL WARS
Dominos sold a 12″ Pizza for Rs 265. (Refer Table III for price range). Commented Pankaj Batra, Manager (Marketing), Tricon International said, “Indians are value-sensitive, not price-sensitive. We need to offer comeback value to our customer.” The high price was attributed to the high quality of ingredients