Pizza Hut Research

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TABLE OF CONTENTS TEAMS......................................................................................................................3 EXECUTIVE SUMMARY..............................................................................4 SECONDARY RESEARCH...........................................................................6 PRIMARY QUALITATIVE RESEARCH..............................................44 PRIMARY QUANTITATIVE RESEARCH..........................................51 NEXT STEPS......................................................................................................63 APPENDICES....................................................................................................64

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TEAMS Research Director

Primary Quantitative

Chloe Gee

Lead: Hayley Mertens Jarrett Tryon

Assistant Research Director

Angela Ford

Ashley Andersen

Cherish Shefield

Secondary Research Lead: Cherie Poertner All Class Members

Primary Qualitative Lead: Kayla Dearing Niki LeGree Julien Walker Anika Johnson Zena Cherian Sarah Purcell

Madeline Miller Jake Kaserman Tim Tillock

Writing and Editing Lead: Ericka Noah Corah Gilickson

Graphic Design Lead: Raven Cabaniss Sam Begemann Jake Gaden

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EXECUTIVE SUMMARY The 2014-2015 National Student Advertising Competition client is

Pizza Hut, a market leading quick service restaurant offering menu items like pizza, wings, and desserts. Pizza Hut wishes to expand it’s digital presence and see a 32% increase in digital sales across digital platforms by the end of 2015. Pizza Hut wants to take the market share in digital ordering over its main competitors, such as Domino’s and Papa John’s. Although an industry leader, Pizza Hut has fallen behind the curve in mobile application ordering, and needs to improve their business presence through this channel to maintain positioning.

The research team was asked to compile information, facts, and

figures about Pizza Hut that could outline and support goals for a strategic communications campaign to be produced by the future AAF team. Over the past three months, the team has collected numerous types of research including on-line and hand surveys, focus groups, and in depth on-line research both on Pizza Hut and it’s two main competitors. Through this data, both research teams have collected a total of 2,055 research impressions.

The team believes they have found a disconnect between Millennials

and Famillenials when ordering pizza through mobile applications. Of our respondents, 84% have used the app, 81% are aware of the app, but only 7% prefer it. Application retention rates are directly related to creating and involving consumer based mobile ordering experience. Key findings suggest that offering more mobile exclusive deals, specifically for pizza, would help in retaining more of the target app users. Improvements to the Pizza Hut

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mobile application are needed in the future, and should be explored by the AAF team along with a WOW factor event.

It is believed that the research conducted can assist in resolving

Pizza Hut’s current issues by identifying for communications strategists the strengths, weaknesses, and market patterns they might be working with when designing and implementing a strategy regarding Pizza Hut and digital ordering.

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SECONDARY RESEARCH In this section, the team conducted an audience analysis to examine the demographics and psychographics of the target audience. The team also examined digital ordering, digital competitors, media consumption habits, app user reviews, and an analysis of the trend of pizza food trucks.

Famillennial audience 18-34 Famillennials are people between 18 and 34. Some single, married, with or without children. This is the target audience that the team is trying to reach with Pizza Hut. A part of this is finding out which social media that they use the most and which kind of brands, shows, and other factors speak to them and influence them the most. Through research the team found that YouTube and Google are daily destinations for consumers in this age range.

YouTube reaches more 18-34 year olds than any cable network, and reaches six times more than top 5 full-episode players combined. The top five fullepisode players being Hulu, ABC, NBC, CBS, and FOX. They choose YouTube because it has videos and brands that ignite their passions and interests. It’s also a place where they can watch videos and tutorials that other people like them are watching and enjoying, which makes it a “fitting in” kind of thing.

Some of the most-watched ads on YouTube were Mercedes-Benz, Budweiser, and Maserati. Companies also sold more beauty products and smartphones through YouTube advertising, which is a big hint about what Famillennials are interested in purchasing.

The team also found an article that said “traditional media” such as TV and print are facing some troubles as compared to the newer medias

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that are out there. The statistics they had in 2010 said that 55% of Americans preferred to get their news stories online. Since then the team can only assume that number has increased. Online media is a lot more convenient because with smartphones, tablets, and laptops it’s so easy to find information on practically anything. The article also said that apps such as Netflix and Hulu are becoming a popular way to catch up on movies and shows as opposed to the traditional TV channels. From this research, it’s pretty clear that the traditional media isn’t really the best way to reach the target audience and that the team needs to take a more modern approach with advertisements using YouTube, Google, Facebook, and possibly the apps such as Netflix, Hulu, Redbox, etc. Better results would most likely come through that approach.

Consumption habits of Famillennials: Traditional media For Millennials, TV captures about 25 hours of their 67 weekly hours of media time, or about 37% share. By comparison, TV accounts for 42% share of total weekly media time among all adults, with its consumption far higher among older generations.

TV is also the device with the largest reach for each generation, with 97% of all adults watching at least some TV on a weekly basis. While TV maintains significant reach across the generations, the same isn’t true for other devices and media. More than three-quarters – 77% – of Millennials own a smartphone, for example, compared to just 48% of Baby Boomers (50-69) and 16% of Seniors (70+).

• A recent MPA study showed that 93% of Millennials have read a magazine in the last 60 days.

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• Recent Arbitron data shows that 93% of Americans over the age of 12 still listen to AM/FM radio at least once per week, with the Millennial generation increasing their radio usage while other generations are falling.

• The newest Pew State of the Media Study found that 23% of Millennials read a newspaper yesterday, which is not that much lower than the general population.

• A new Deloitte study shows that watching TV is still the number 1 media activity for Millennials overall, and they are watching more TV than ever before, although listening to music tops TV viewing for the younger Millennials, and overall Millennials are watching more TV online.

News media plays a role in young adult everyday-life information behavior. This study focused on university students, aged 18–25.

Surprisingly, traditional print media still plays a role for young people. Social media is important for communication with friends rather than being a vehicle to seek news. Young people have a wide range of media needs.

Consumption habits of Famillennials: Social media A study done by Luxury Institute surveyed consumers 21 and older in the U.S. about what types of media they consume. Millennials between the ages of 21 and 34 are 85% more likely than Boomers to use social media, and they use Facebook and Twitter about 3.4 hours a week. Radio is almost as affective at reaching Millennials, whether that is in the car, or online sites like Pandora or Spotify, or even watching videos online.

Millennials want to be more connected with the brands that they like,

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and they enjoy doing so through user-generated content (UGC). If the correct platform is used to promote this connection, then businesses can establish credibility for their brand, and promote viral distribution of the content.

Crowdtap surveyed 18 to 36 year olds, their results highlighted how Millennials connect better with UGC. They spend about 18 hours with different types of media per day, and of those 18 hours 30% is spent viewing UGC. They trust this type of information 50% more than other media forms (like TV), and they remember it 35% more than information gathered from other sources.

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SECONDARY RESEARCH Most popular digital ordering platforms Domino’s reached $1 billion in sales from digital sales in June of 2012 for the first time. Domino’s first released their mobile app in 2008, taking them four years to reach the $1 billion dollar mark. In honor of this milestone, Domino’s offered a 50% off pizza deal to those who ordered online. This deal was only valid for pizza, and to those who ordered online.

In 2012, nearly 30% of Domino’s sales were being ordered digitally.

In the recent months, ordering digitally has become a way of life, especially in the world of pizza. In an article from Pizza Marketplace, many well-known pizza companies, including Pizza Hut, Domino’s, Little Caesars, and Papa John’s, as well as other restaurants were mentioned in regards to the quickness of ordering digitally. In regards to the load time, reports showed that the average load time among the top 50 restaurants and catering companies took more than 70 seconds to load. The restaurant receiving the highest score from this report was Papa John’s with a score of 3.815 (on a scale from 0-5). Papa John’s had a load time of 1.02 seconds.

On top of that they also have click to order button, geo-location, and app download capability. Domino’s, Panda Express, Wendy’s, Chuck E. Cheese’s and Jimmy Johns were right behind Papa John’s. Ranking in the bottom brands were Taco Bell, Olive Garden, Dave and Buster’s, Chipotle, and Little Caesars.

Another key factor in their scores had to do with more than just the load time for these restaurants digital platforms, it also had to do with other features such as geo-location, which gives the user the ability to sync their current location with their order; nearly 100% of restaurant sites have this

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ability. Pizza Hut and Graze were the only two without geo-location ability.

This lengthens the time it takes for consumers to choose the Pizza Hut location they wish to order from, and well as where they want the delivery to go.

In January 2014, Domino’s introduced their own version of Siri called “Dom” this feature gives consumers the ability to interact with the digital app, just like Siri allows iPhone users to do. Although this feature is a break through for apps of their kind, Domino’s CEP Patrick Doyle said that there are still going to be kinks to work out just like any other new technology. In January, Domino’s stated that 40% of their sales were coming from online and mobile ordering increasing their total sales by 5.4%, making this new ability a huge leg up to their competition, which is one of the main reasons Domino’s chose to add the feature. Gamers: “Xbox 360 users bought $1 million worth of Pizza Hut pizzas in just the first four months of using the game console’s newish Pizza Hut app, Polygon reported on Thursday.”

Frequency of digital purchases An article titled Report: Restaurants mobile sites slow to load digital orders, explains the speed bumps restaurant and catering companies are running into with digital ordering. Most companies are unable to create an application that can load faster than a minute. However, the necessity of having a digital ordering platform is crucial. “With more than 60 percent of Americans now in possession of a smartphone, and nearly 70 percent of consumers having ordered food via a mobile device, progress should be a priority” (Kelso 2014). The article goes on to discuss a report done by The Search Agency, which analyzed sites for speed, quality, and features. Of the

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websites tested, Papa John’s received the highest score with a load time of 1.02 minutes and helpful features like a click-to-order button.

Similarly Technology, Not Pizza, Helps Domino’s Crush Competitors And Grow Faster Than McDonald’s Overseas discusses the effect of technology on Domino’s growth. In the past several years, Domino’s has done a lot to change their ingredients and offer better tasting food; they are currently changing their focus once again to give more attention to their digital and mobile platform. “CEO Patrick Doyle told Analysts Today that both customer retention and frequency is higher as a result of its digital ordering system” (Touryalai 2013). Of their $2 billion in global digital sales, 35% can be attributed to their mobile app. By offering a mobile app, Domino’s believes they will be able to enhance the loyalty of its consumers over their competitors.

Major players in the pizza industry continue to blow corner pizza shops out of the water in sales. It started with the low prices but recently the use of online ordering is having a major impact on sales. Leading the industry in digital ordering, Papa John’s “generated more than 45% of domestic sales through desktop and mobile orders in the third quarter” (Jannarone The Amazon effect’s next victim: Pizza 2014). Domino’s isn’t far behind Papa John’s with help from their online ordering presence.

One of the sources the team found online was from pizzasalesonline. com. This website asserted that an average online pizza order is 18% higher than orders made by phone. This site explained the advantages of ordering pizza online and how it can be done conveniently.

The next source the team found was on Mashable.com. Info-graphics there showed the percentage of people using the Internet to order pizzas.

SECONDARY RESEARCH The site asserted that 26% of people order fast food online. This number includes various forms of food ordered online, and not strictly pizza. It showed that “Fast Casual” restaurants have a 37.5% increase in people ordering food online versus calling in to dine-in restaurants.

A 2013 article written by the Interactive Advertising Bureau explains the sharp increase in people ordering food from smart phones and tablet devices and why the increase is important. (Dohnert 2013).

An article on cnbc.com explained Papa John’s recent success with online orders. The chain generated 45% of domestic sales through desktop and mobile orders. Domino’s is also using a “Siri”- like system to its mobile app that allows customers to voice order their desired pizza over a mobile device. A press release confirms that this app has been downloaded 10 million times. (Shah 2014).

The various accounts from different articles and websites show that the trend of ordering pizza digitally is on the rise. When researching online however it is clear that buying pizza digitally is growing very quickly. Pizza chains are not the only ones pushing for more customers to order digitally, other restaurants and catering services appear to be doing the same.

The research supports that the frequency of online ordering is quickly on the rise, and the use of applications for mobile devices that can adapt to personalize the way that people are ordering their favorite meals.

Dollars spent in digital pizza sales In 2013 Pizza Hut surpassed $1 billion in digital sales, with 50% of their digital orders coming through Pizza Hut’s mobile site. Pizza Hut’s popularity isn’t just from the online ordering experience - “Pizza Hut has the

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most Facebook fans among pizza companies (10.9 million U.S., 30 million worldwide) and Twitter followers (640,000+ U.S.).”

Pizza Hut restaurants decreased 5.6% in the July 1-ended second quarter, but executives said they were confident in the franchisor’s efforts in advertising and digital platforms to help stem the sales dips. The second quarter of 2014 saw a decrease in sales of 5.6% for Pizza Hut. Thirty percent of Pizza Hut’s sales come from digital channels and half of those orders are from their mobile website. In 2013, Pizza Hut surpassed $6 billion in all-time digital sales after introducing its first mobile app just four years earlier.

In the first two weeks of 2014 Pizza Hut set two digital sales records, with the first two Fridays of the year earning the company the two biggest days in company history for sales received by a method other than traditional phone calls. Roughly 40% of all transactions occurred digitally from January 1st to 10th, with select markets surpassing 50%. Pizza Hut also unveiled recently that they surpassed $1 million in sales in less than four months via Xbox 360.

According to data compiled by American Express Market Briefing, only 11% of consumers have paid for a meal at a restaurant (pizza and non-pizza establishments alike) with a smartphone, with 46% of those respondents using the restaurant’s app for mobile ordering for pickup or delivery. Another 31% used a restaurant’s app at the restaurant itself to pay for a bill, while 25% used Square Wallet, or a similar system, in the restaurant to pay.

A fifth of respondents used a payment app such as Apple Passbook, and another fifth used a restaurant ordering site such as GrubHub or Seamless.

In fact, 98% of consumers who have paid for a bill using a mobile device

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say they would do it again, with 63% “extremely likely” to do so. Pizza Hut surpassed $6 billion in all-time digital sales in 2013. In January 2014, Pizza Hut set digital sales records, with 40% of all transactions between January 1st and 10th occurring digitally.

Same-store sales at Pizza Hut restaurants fell 3.0% while samestore sales at Taco Bell (another Yum! Brands establishment) restaurants increased only 2.0%, thereby missing company expectations. Share price of this leading restaurant has declined 6.0%. Moreover, the stock has gained just about 4.6% year-to-date compared with the S&P 500’s gain of 9.1%.

Yum, the company that owns both Pizza Hut and Taco Bell, has not been able to keep the same pace as other leading companies in their index. Its China division had been facing allegations concerning the quality of chicken supplied to its KFC restaurants since December 2012. Therefore, the division that accounts for more than double of its U.S. revenues, had to face adverse publicity that affected its performance. To add to its woes, the outbreak of avian flu in China in April 2013 also hurt segment sales.

Pizza Hut has done well so far regarding the amount of digital sales accumulated in the last year. Approximately 30-40% of all sales within the first month of 2014, were made digitally. Half of these sales were made from mobile devices, versus the Pizza Hut website. The total online sales hit $1 billion in 2008, this number increased to a total of $6 billion for all of Pizza Hut’s digital sales in 2013.

According to research that franchise help did on the pizza industry in 2014, “Americans eat 350 slices [of pizza] per second.” That is at least 93% of Americans eating at least one pizza per month. With the research that this source gives us it seems that pizza is the number one choice for dinner

SECONDARY RESEARCH in the United States. There are four big pizza franchises that this article discusses they are: Pizza Hut, Domino’s, Papa John’s and Little Caesars.

According to the NPD Group, nearly 50% of pizza sales in 2009 came from franchise chains, 64% of which were attributed to sales from these top four franchises. During 2009, 14% of total sales came from Pizza Hut, compared to 17% from franchises out of this “Big Four,” illustrating the impact that these popular franchises have on the overall industry. Here is a chart to examine more of what the four segments are: SIT DOWN

DELIVERY

Sit-down restaurants serve previously prepared pizza to customers, allowing pizza-lovers to experience the traditional pizzeria feel, but still at a reasonable price. Although most of these establishments are individually operated restaurants, franchises like Pizza Hut also specialize in the sit-down dining concept.

Pizza delivery services allow customers to call in or place their orders online. This concept is a key service of some of the most popular pizza franchises, including the Papa John’s franchise, Pizza Hut, and the Domino's Pizza

franchise. The downside to this service is that costs are highly susceptible to gas prices and climate.

TAKE ‘N BAKE

CARRY OUT

Frozen, pre-made pizzas are available at the franchise and local grocery stores. This service allows customers to take the pizza home and bake it at their own convenience.

Examples include Papa Murphy’s franchise and California Pizza Kitchen.

Approximately 45 percent of customer orders are carry out, making this the most popular service. Pizza carry out services offer the same convenience and quickness as

delivery services, minus the extra delivery tip.

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SECONDARY RESEARCH Competitors on online ordering According to CNBS’s John Jannarone, Papa John’s seems to be in the lead of the social media and online ordering sales. They generate more than 45% of domestic sales through desktop and mobile orders in the third quarter, which is several percentage points more than Domino’s. According to this article they believe that Papa John’s has a good chance of holding on to the lead because it is the only major chain to develop a loyalty program.

Their loyalty program consists of accumulating rewards points for each order that can be redeemed for a free product.

With online ordering expanding and being the most efficient way to order pizza, small chain pizzas now have access to online pizza ordering too. Pizzasys, is an online pizza provider to help small pizza chains make their own websites and have a ordering system for pizzerias. According to Pizzasys their goal is to convert web visitors to revenue generators. They believe that they are different and can help the small local pizza chains by supplying benefits such as: a customized website; the ability to create coupons that can easily be sent to clients through email; an easy online ordering platform that works seamlessly with the main website; restaurant sales tracking so you can measure the performance of your locations, as well as track customer purchasing trends, and generate reports so that the data can be analyzed. These services are offered with no transaction fees or hidden fees, contracts and the business user has the ability to cancel the service at any time, and there is no limit on orders that can be processed through the service. Pizzasys offers these services through a system that can be monitored from anywhere in the world without having to install

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expensive software. Their services also come with free upgrades, and PayPal and SSL Encryption to ensure that the data is secure. While small businesses who take advantage of such services are not an individual threat to the bigger pizza chains (Pizza Hut, Papa John’s, and Domino’s), it is possible that if enough of the small businesses start taking advantage of online business marketing tools, that they could collectively impact the pizza market and challenge the top pizza chains.

Among those who don’t order pizza digitally, are they shopping digitally in other areas?

Heavy eShoppers: The most common shopping-related uses of mobile devices by consumers are as follows: product research, price comparisons, and mobile coupon redemption. In a survey conducted by Deloitte, consumers were asked to use their smartphone while they were in various retail stores. 35% of consumers used their smartphones in food/beverage stores which had a 5.7% influence on the purchases.

AYTM Market Research performed a survey in May 2013, which found that smartphone users have downloaded shopping apps to their mobile devices as follows (percentage of respondents): SHOPPING APPS FOR PARTICULAR STORES LOCAL STORE LOCATOR GENERAL COUPON APPS DAILY DEAL APPS OTHER SHOPPING APPS

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Sixty eight percent of customers use their smartphones while they are in their homes, versus using their smartphone while away from home.

Instead of socializing and mobile shopping being the most common activity, but consumers tend to engage in what researchers at BBDO and AOL call “me time� meaning pure entertainment as their way of relaxing. Only 12% of smartphone interactions are used for shopping, averaging 126 minutes per month per user. Mobile shopping app ads are 39% effective.

The people of Miami make five times more online transactions than the national average, despite having lower Internet usage and fewer distribution centers than other cities. Sales tax rates seemed to have little bearing on the popularity of online shipping, with Minnesota and California being home to three of the top ten cities that shop most online - Minneapolis, St. Paul and San Francisco, in spite of being two of the states with some of the highest tax rates.

Many shoppers look online before actually purchasing their products.

This means that many of them will look online and then go to the store itself to purchase the product. An article titled Half of 2013 Web Orders at Pizza Hut come from Mobile Devices, said that about 65% of shoppers do this (Evans, K. 2014). The online survey of 500 U.S. consumers conducted in September also finds that about half (47%) of shoppers will make purchases through their PCs or laptops (Evans, K. 2014). A new company claims that users are now spending 2 hours and 42 minutes per day on mobile devices as of March 2014, up from 2 hours and 38 minutes as of a year ago (Perez, S. 2014). According to a graph from statista.com people are increasing their purchases online (Statista, 2014). Another article noted that many young Americans don’t want to have to deal with the hassle of looking up a

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number, so they turn to mobile apps to find what they are looking for, and having an app to order pizza makes it 10xs easier for them to purchase pizza (Toledo Blade, 2014).

Why consumers do not order pizza digitally (awareness, preference, convenience, etc.)

There are a couple of reasons why people choose not to order Pizza Hut digitally. The first is a motivational conflict arises for many people when thinking of going to Pizza Hut. Many people see Pizza Hut as a fast food restaurant, and fast food restaurants are associated with unhealthy food and therefore obesity.

The second reason is brand loyalty. Many quick service restaurants have mobile loyalty program. These programs seamlessly integrate brand, rewards, promotions and analytics in one place. Consumers get excited about coming to a business because they know that they can look forward to things like free appetizers and exclusive coupons. Businesses are able to collect information about their most loyal consumers such as, how often they visit, how much they spend, their favorite food item, and as a result you can create more personalized communications with them. Through this information businesses have the ability to increase the likelihood that customers will become brand ambassadors for their restaurant. One reason many people do not order pizza from Pizza Hut is because they are not brand loyal to the company. Some customers who are brand loyal simple will not use the e-commerce site, because they have never done it before.

The third reason is customer preference. According to the number

SECONDARY RESEARCH of customer ratings in the iOS and Google Play stores (January, 2014), Domino’s pizza tracker is seen as more advanced digital experiences.

Domino’s came in first place while Pizza Hut was number 2 on the twelve most popular restaurant chain mobile apps. Many people choose other quick service restaurants because of the advanced digital experience.

Competition in digital ordering Domino’s smart phone app has been downloaded over 7.5 million times, bringing in over $3 billion in online revenue just last year alone.

Nearly half of all Domino’s and Papa John’s pizza orders are completed digitally.

Pizza Hut was the first pizza chain to accept an order over the Internet. In 1994 (a full year before Amazon.com was even created), Pizza Hut’s “PizzaNet” accepted an order for a large pizza with pepperoni, mushrooms and extra cheese and the Internet age was born.

Roughly 40% of all transactions occurred digitally from January 1st10th, 2014, with select markets surpassing 50%. Pizza Hut offers the broadest suite of digital ordering options in the pizza category, including mobile site, Android App, iPhone App, Windows App, iPad, Xbox360, and PizzaHut.com. Pizza Hut also unveiled recently that they surpassed $1 million in sales in less than four months via Xbox 360.

In 2013 approximately 50% of all digital orders for Pizza Hut came through smartphones and tablets, with the greatest growth coming via the Pizza Hut mobile site, not the chain’s mobile apps. Sales through Pizza Hut via mobile devices (mobile commerce site and apps) have grown 4,000% in

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the last three years.

On January 2, 2014, 30% of Pizza Hut’s sales came from digital channels. Half of the sales came from mobile devices. The company recently reintroduced its mobile apps for Android, iPhone and tablets, as well as its mobile sites to the public. According to the company, these new apps allow for faster ordering and are GPS enabled to offer deals based upon user location.

Consumer Mindsets on Pizza vs. other QSR’s Americans decide to eat fast food in order to save time. Fast-food purchasers are more likely to eat on the run - such as while working or driving. They also spend more time traveling from place to place so they typically eat quickly and spend less time sleeping, watching television and doing homework.

In a study conducted by Hayden Stewart, consumers were asked what they valued most while deciding on whether to eat out or cook at home. Consumers responded with three categories that they valued most: taste, nutrition, and convenience (in that order). Other categories included entertainment value, price, and timeliness.

Insight on Simmons The table below represents people’s different attitudes towards various QSRs based on whether they agree with the statement. The QSRs includes two popular pizza places as well as other popular fast-food restaurants in order to compare the two categories. With that being said, Burger King, KFC, McDonald’s, Subway and Taco Bell will be considered as a whole and Pizza Hut and Domino’s are considered a whole, distinguishing between

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pizza places and other QSRs. When it comes to coupons, consumers of both categories are persuaded to try new foods with a discount. Same with calorie consumption, both categories show almost the same result: it doesn’t matter how many calories the food contains, if they like it, they’ll eat it.

The next attitudes are where the categories start to differ. Those with busy life styles are less likely to order from a pizza place and more likely to go through other QSRs to fit their busy schedules. Consumers are more likely to purchase pizza in order to stay in their budget, and because they like the trend towards healthier fast food.

SECONDARY RESEARCH Brand Equity, Brand Loyalty and Customer Satisfaction, goes into detail to describe what factors into a consumer decision to buy or use a certain product, good or service: This study aims to investigate the mediating effects of consumer satisfaction on the relationship between consumer-based brand equity and brand loyalty in the hotel and restaurant industry.

Based on a sample of 378 customers and using structural equation modeling approach, the five dimensions of brand equity—physical quality, staff behavior, ideal self-congruence, brand identification and lifestyle-congruence—are found to have positive effects on consumer satisfaction. The findings of the study suggest that consumer satisfaction partially mediates the effects of staff behavior, ideal selfcongruence and brand identification on brand loyalty. The effects of physical quality and lifestyle-congruence on brand loyalty are fully mediated by consumer satisfaction.

The Attitude–Behavior Relationship in Consumer Conduct: The Role of Norms, Past Behavior, and Self-Identity, also goes into detail, albeit from a more psychological approach implementing not only the aforementioned focuses in the previous article, but topics such as self-identity and past behavior: The authors used a revised planned behavior model in the consumer domain. The revised model incorporated separate measures of descriptive and injunctive/prescriptive norms, self-identity, and past behavior in an effort to improve the predictive power of the theory of planned behavior (TPB; I. Ajzen, 1985) in relation to a selfreported consumer behavior: purchasing one’s preferred soft drink.

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At Time 1, respondents (N = 112) completed self-report measures of (a) attitudes, (b) perceived behavioral control, (c) descriptive and injunctive/prescriptive norms, (d) self-identity, (e) past behavior, and (f) intentions. The authors assessed self-reported behavior 1 week later (Time 2). Attitudes, injunctive/prescriptive norms, descriptive norms, past behavior, and self-identity were all positively related to purchase intentions, and intentions were predictive of self-reported behavior at Time 2. These findings highlight the utility of the TPB in the consumer domain.

Mindset of those who choose pizza versus other QSRs (consideration/purchasing mindset when deciding to eat/order out) NOTE: The following information was taken from a survey that was given in the United Kingdom, but is arguably relevant because the United States and the United Kingdom share a similar culture.

Forty eight percent of respondents said Trustmark would help them decide to shop at a particular site. Trustmark can be effective for smaller retailers. Clear contact details were cited by 46% of respondents, while 41% would use a site if recommended by friends or colleagues. Design factors, such as a professional look to the site and good performance and load times also help to engender trust. Ideally, product pages should convey all of the information that customers need to see before they can decide whether or not to make a purchase.

An online ordering experience can be enhanced with use of video, 360 product views, effective cross-selling, and so on. Among the ‘other’ responses given were alternative payment methods, details on size and

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measurements, and reassurances about security. There is plenty that retailers can do to optimize the checkout process, including enclosing the process to concentrate the customer’s mind, and handling checkout errors effectively.

The main issue cited by respondents was hidden charges. Retailers should be upfront about total prices and delivery costs well before the checkout. Revealing the change in price late in the process does not guarantee that the customer will continue with the purchase. In fact, revealing the price change late in the ordering process is likely to make them more annoyed. Security concerns (58%) and technical problems (44%) also cause customers to abandon the checkout, followed by a long process (37%) and lack of contact details (33%).

Twenty three percent cite security measures such as Verified by Visa are now widespread on e-commerce sites, and retailers seem to implementing security measures more effectively than before - embedding the measures into branded pages, advising customers etc. This process itself still presents a major barrier for some. Remembering one more password can be an issue, which means that customers have to go to the trouble of resetting the password. A quick search on Twitter shows that many online shoppers are frustrated with the extra step of logging into a secondary pay service when ordering online.

SECONDARY RESEARCH Digital usage trends (the rise and fall in digital ordering in the last 3 years) Over the past three years, ordering pizza has become simpler. It was recorded in 2014 that out of a group of 300 plus pizza chains 50% of them are now providing online ordering. Cutting out the middleman has made online ordering easier for both customer and proprietor. Restaurants see this method to benefit them in two ways - it creates another channel to order food though rather than ordering at the store, and it provides more menu options. Human interaction is becoming less important to the customers and companies alike. Digital ordering allows businesses to capitalize on this change in the market. This change is another factor that has contributed to the rise in digital ordering in the past three years.

Steve Coomes, a writer for National Restaurant News, finds that out of those 50% of the pizza companies that do use digital ordering all fall under the large chain category (Pizza Hut, Dominoes, Papa John’s, etc.) These companies have databases that can handle the influx of customers ordering pizzas. Also by providing a system that remembers the customer’s name, number and what pizza was ordered last time companies have created a faster ordering system. These methods will draw in new customers, and continue to ensure the loyalty of existing customers.

According to Franchise Chatter, sales in 2014 are reporting that 40% of customers are ordering pizza online. Social media pages, run by each respective company, contributes to the growth in online pizza sales. Offering deals, links, or other information drives traffic to their main websites and brings in customers for their online ordering systems. Along with that,

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SECONDARY RESEARCH prices, coupons, and other deals have influenced 20% of orders.

Lastly, according to the Wall Street Journal, 2.9 billion orders have been made in a combining total of all major pizza chains. This has led to a 2% increase of sales since 2011. This number will continue to grow as businesses continue to expand their online digital ordering databases.

What part of all orders are digital at present?

Many of the leading pizza companies are vying for the top position in terms of the percentage of digital orders. Digital usage trends for most major companies are steadily rising. These large pizza chains are mostly only competing between themselves. Small chains and local shops cannot afford the costs associated with online ordering. Carrie Walsh, the Chief Marketing Officer for Pizza Hut explains that, “Technology is playing a bigger and bigger role in the lives of our consumers and we want to meet them where they are, and where they are right now is online and on mobile devices.”

At 43%, Pizza Hut is in danger of being on the lower side of digital sales in comparison to the other top pizza companies. They have many different options for mobile and online ordering. Pizza Hut was actually the first company to sell something on the Internet in 1994. Today they have many different ordering options including Hulu, Xbox, Android, Apple/iPad, Windows, and a mobile site.

Domino’s online and mobile orders are 40% of their sales according to the Domino’s website. Domino’s has even tried testing out doing online orders only in one town. The CEO, Patrick Doyle said, “Technology is advancing our brand. The flexibility and convenience (it offers), we feel, is

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important for us to offer our customers”.

Papa John’s online and mobile orders make up 45-50% of their sales according to Alicia Kelso on pizzahutmarketplace.com. “With more than 45% of our sales currently coming through our digital channels, we are confident we will be the first pizza company to hit 50% this year, which is a major industry milestone,” said Tony Thompson, president and COO. According to Interactive Advertising Bureau and Viggle, about 69% of people order food online using a mobile device. The study then goes to say, that 50% of consumers surveyed have downloaded a restaurant-branded app on their mobile device. According to IAB and Viggle 28% of them will use a mobile device to order food online during the Super Bowl. The survey said that pizza was the most popular foods to get through an Internet connected mobile device. The survey was from a 573-member survey conducted on Viggle users, which was conducted in over 3 days in January.

According to Money Crashers Personal Finance Domino’s and Papa John’s pizza chains are now receiving 30% of their overall business from online ordering.

In 2013, approximately 50% of Pizza Hut’s web orders are placed from a mobile device according to Internetretailer.com and according to Pizza Hut their online sales have increased 4000%, over the last 3 years on its online commerce site and mobile apps. According to the InternetRetailers.com Pizza Hut mobile ordering apps are available on 95% of smartphones, which include Windows phones, Apple iOS, and Android. PizzaMarketplace.com also noted that 30% of sales for Pizza Hut come from a digital channel and half of that 30% is from a mobile device.

Pizza companies who offer online ordering options for customers

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see an increase in sales and return orders. According to an Advertising Age article by Emily Bryson, 20-30% of business for major pizza chains comes from online sales. Bryson notes that this drive in sales is a result of customers spending more and being more satisfied with their orders. (2009) Ordering pizza online is popular because of the convenience factor as well.

An article on Pizzasalesonline.com, denotes some of the factors that entice customers to use online ordering options, “The person placing the order can do it from anywhere with Internet access, taking his own time to place the order and browse options.” This allows the customer to customize their order to their exact desires and specifications. Add to this the zero wait time, and the option to reorder what was purchased the last time and the customer has a more simplified experience. (Pizzasalesonline.com, 2014) For Pizza Hut, the increase in online orders has increased significantly. In an article for InternetRetailer.com, Katie Evans says that, “Nearly one-third of U.S. orders are placed via the desktop site and the mobile site and apps.” (2013) In the same article, Pizza Hut’s CEO Scott Bergren noted that their focus on online ordering came in an attempt to meet their customers where they are spending the most time. (Evans, 2013) Customer service also plays a large part in consumer’s willingness to use the online ordering platform. Tamara Omazic, QSR Magazine.com, remarks that part of Pizza Hut’s success with their online ordering is tied to their social media outlets because it allows customers to offer feedback. (2014) The larger pizza chains are showing that 25% of their sales are being generated from online or through application orders. Most people these days, especially in the younger generations rely heavily on their smartphones to look up phone numbers, address, general information, and now pizza

SECONDARY RESEARCH ordering. Domino’s and Papa John’s are even showing that as much as 30% of their sales are coming from smartphone app orders.

Online pizza ordering is the what is driving sales to higher marks than ever before; even smaller stores and lesser-known pizza shops are showing a significant increase in sales due to online orders. Most people are spending more time ordering their pizza online versus traditional phone orders, because they have access to the entire menu at their fingertips.

Pizza Hut was actually the first of the big chains to adopt online application ordering, and has since seen a great increase in sales because of this shift.

Although this new way of ordering has increased sales in a big way, it also has a drawback. There are so many mobile devices and consumers are always upgrading to a newer device thus, these companies are spending a lot of time on updates and upgrades to make sure that their app works on every new device and new operating system. The days of just making a great tasting product are over. If companies like Pizza Hut do not constantly evolve their technology, keeping their app simple and user friendly, they will quickly get left behind in this ever-growing market.

Pizza Hut has no worries with this though since the introduction of this technology over three years ago, they have seen a 4,000% increase in sales due to their app. They are now generating more than 50% of their sales from their online ordering apps. This is a significant increase over the competition, and their only concern is making sure that the app. works across multiple platforms. Pizza Hut has covered issue as well, their app works on over 95% of all devices in today’s market.

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App analysis of Pizza Hut, Domino’s and Papa John’s apps After analyzing the latest version of the Pizza Hut app on the Google Play store, the majority of the reviews are positive. Out of the 146,166 reviews available, 90,292 of them were five star reviews. 34,221 of them were four-stars. The iOS app store displays almost 130,000 reviews, with the majority being either five-stars or just one star. This information displays that the app appears to be an overall a success and the customers enjoy using it to order their pizza, but that isn’t exactly the case. After diving further into the actual written app reviews it was noted that most reviews receiving a high star rating may still have left the customer dissatisfied with overall ease of use.

Most users want the app to be easier. Most users who gave the app a bad review did so due to the lack of the app being “user friendly.” Some users were upset because you couldn’t “create an account” or save credit card information for future orders. They also reported a glitch that kept deleting the card information before they could check out. Other glitches people complained about were the app crashing and that it may have never been properly tested before launching. Some were even upset because they had to “search for specials” instead of just being offered them in checkout or prior. Explaining how the cart system is very confusing for the purchase, the only time the customer can see the price of the item is when they are at the checking out page. The application lacks in memory, and former users of the application find themselves re-registering for the same application that they have already registered for some time ago. When corrections on a pizza item is needed to be made, rather than going back and fixing the pizza,

SECONDARY RESEARCH users have to go and remake the pizza all over again. Also, new iPhone 6 users do not have an updated version of the application. Apple pay is yet to be supported, so that is another problem for iOS users of the app. Over all, these problems are mostly technical difficulties due to slow server, and complications. The Pizza Hut application varies from rating to rating, but the most common factors were included in the reviews over the past few days since its update October 26th 2014.

Looking at Pizza Hut’s two main competitors, there are a few insights to be had. Domino’s just released their fastest, easiest, and most appetizing ordering experience. After analyzing the latest version of the Domino’s app on the Google Play store, majority of the reviews are positive. Out of the 358,934 reviews available, 281,499 of them were five-star reviews.

60,414 of them were four-stars, this information displays that the app is overall a success and the customers enjoy using it to order their pizza.

Customers may also use their iPhone, iPod touch, and iPads to build or order pizza from the menu. Special features allow users to order from over 5,000 locations nationwide, find coupons and deals for specific stores, order faster with “pizza profile” and “easy order,” and tracking the order from make line to delivery /pickup. Domino’s created a new app for iPads. It features a realistic pizza builder, an updated pizza tracker, and redesigned the ordering experience. Many reviewers gave the app a four-or five-star rating. Customers state they love how quick and easy it is to use the app.

They have said it takes less than 30 seconds. A con about the app is that some users have said is that the app is redundant. You have to register before you create an order then re-input your information before you check out for delivery. However, most of the reviews were largely positive. Those

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that praised the app praised it for its overall functionality and quick and easy interface. Those that seemed disappointed were so because they were new to using apps for ordering pizza or those that had prior bad experiences ordering from Domino’s regardless of the app.

Papa John’s app in the Google Play store for Google and Android Reviews had a 4.2 star rating. The app contained a total of 18,805 reviews.

11,312 viewers rated the company 5-stars and 1,529 gave it only one star.

Papa John’s in the Apple IOS Store has a two-star rating in the current version, with a 2.5-star rating overall. The primary complaints were on design functionality, price changes from app to payout, and the lack of an order status feature such as a tracker bar. From browsing the reviews, all of the negative ones mostly have the same problems. Apparently the app has connection problems. It does not easily recognize store locations in the area of the customer and the order never processed or the app terminated before being able to confirm the order. There were also many complaints about using credit cards or debit cards and the fact that the app does not accept them. Domino’s name appeared in many of these negative reviews, saying Papa John’s needs to take notes from them.

Pizza Hut app features

Added ability to reorder with only 5 clicks Guest check out Order up to seven days in advance Find locations near Pay with cash, credit, or gift card Available in Spanish

SECONDARY RESEARCH

• Convenience

• Navigation

• Smart phone and tablet

• Coupon accessibility

accessible

• Payment info recognition • Only available in the US

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Pizza Hut app - bad reviews

Unfortunately the app freezes whenever I try to select a saved address, or place a carryout order. I was hoping this update was going to actually make this app usable.

“After 10 Minutes, the app freezing each time I attempted to complete an order, I have up and called the store…not stable.”

“App looks nice but it’s super slow and unresponsive in a lot of cases.”

Pizza Hut app - good reviews

“It’s better than the last one they had. It is easier to order and very simple which makes it easier for people to use. Definitely going to keep the app!”

“It not only works perfectly and is incredibly user friendly, but it also has fantastic deals none of the other pizza places can compete with.”

“Always comes in handy. I love it that it remembers previous orders and what it saves my information or locations where I usually order from.”

“Great and easy to use. All the options are there if your order is wrong, it’s all on you!”

“Very simple to use, don’t have to worry about getting someone new or rude to deal with. “

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Pizza food trucks Research was conducted to understand how many pizza food trucks there are, where do they sell, what are their prices, and what do they sell.

This research was conducted to gain a better understanding of the pizza industry in conjunction with the growing popularity in food trucks.

Mobile Cuisine describes the demographic as “Foodies,� which is a term given to those whom enjoy mobile food trucks, but also consider the quality of the meals. These foodies, are usual technologically savvy with a keen sense of where and when to find these trucks. These individuals are around the 18 to 34-target audience and usually live in more urban and busy areas, where restaurants are prominent, but their profession does not allow them to seek eating establishments in the confines of a 30-minute lunch break.

Along with that, these individuals spend a majority of their time in their respective downtown metropolitan areas. In regards, to pizza food trucks, it has yet to be clearly defined to a specific demographic, but the demographic reflecting the previous statement seems as though it would fit. Food trucks mostly conduct most of their business within large metropolitan cities. From what was found, the areas that are most prominent for food trucks are located on the edges of the United States seaboards. Mostly these trucks reside mostly in East coast cities such as New York, Washington D.C., Miami, and Orlando. They can be found along the Mid-South, such as Dallas, Austin, Houston. In the West coast, San Francisco, Seattle, Portland, and San Diego.

A majority of these businesses should be local in a sense that they are not thinking of expanding past their local home markets. These trucks do have a sense to move to different parts of the city or possibly state, but in the end

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the food trucks are mostly local, so they can cater to their specific target audience. By keeping their local audience, they will find profit rather than looking to enter unfamiliar markets.

Below is a complete list of what cities are best for food trucks. This provides an analysis of the number of food trucks in comparison with the number of the population, and the ratio of the number of food trucks to every 10,000 people. Information can be taken from this in regard to what region of the United States is more successful for food trucks.

CITY

# OF FOOD TRUCKS

POPULATION

FOOD TRUCKS PER 100,000 PPL

1.

Orlando, FL 94 249,562 37.67 2.

Miami, FL 140 413,892 33.83 3.

Washington, DC 172 646,449 26.61 4.

Minneapolis, MN 87 392,880 22.14 5.

Austin, TX 156 842,592 18.51 6.

Denver, CO 113 634,265 17.82 7.

Atlanta, GA 78 443,775 17.58 8.

San Francisco, CA 127 837,442 15.17 9.

Tampa, FL 51 347,658 14.67 10.

Honolulu, HI 44 374,658 11.74 11.

Seattle, WA 71 634,535 11.19 12.

Nashville, TN 66 624,496 10.57 13.

Cleveland, OH 39 390,928 9.98 14.

Boston, MA 59 636,479 9.27 15.

Las Vegas, NV 52 596,424 8.72

SECONDARY RESEARCH CITY

# OF FOOD TRUCKS

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POPULATION

FOOD TRUCKS PER 100,000 PPL

New Orleans, LA 32 369,250 8.67 16.

Portland, OR 17.

51

603,106

8.46

Indianapolis, IN 70 834,852 8.38 18.

Dallas, TX 19.

94

1,258,562

8.30

Sacramento, CA 39 475,516 8.20 20.

Kansas City, KA 34 464,310 7.32 21.

San Jose, CA 71 982,765 7.22 22.

Los Angeles, CA 269 3,857,799 6.97 23.

Columbus, OH 52 809,798 6.42 24.

San Diego, CA 75 1,338,348 5.60 25.

Philadelphia, PA 81 1,547,607 5.23 26.

Houston, TX 97 2,160,821 4.49 27.

San Antonio, TX 61 1,382,951 4.41 28.

Phoenix, AZ 59 1,488,750 3.96 29.

Chicago, IL 80 2,714,856 2.95 30.

66 3,114,353 2.12 31. Orange County, CA New York, NY 110 8,336,697 1.32 32. *Courtesy of Roaming Hunger ** US Census Bureau Data (2013 or 2012 estimates)

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Below is a list of the best mobile pizza vendors ranked by the website Serious Eats. By looking through this short list, it has become evident that in order to run a successful pizza truck, the truck needs to be in either the best pizza places in the country, or the best food truck cities. From this list half are from New York while the rest are from the New Jersey area, as well as the food truck city capitals: San Francisco, Portland, and L.A. This may be a small sample, but it does give a good insight to where the majority of pizza specific food trucks are located. This can be grouped into the regions along the East coast, and in popular food truck cities on the West coast.

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Catering companies are now purchasing mobile ovens that can be towed with a trailer hitch. These ovens are called Mugniani ovens. They cost $23,000 and can cater to 300 people in one setting. This seems interesting because more catering companies are developing, which could open up an entirely new market for pizza companies. Trucks could also downsize in terms of quickness of equipment. A couple of the companies that are providing these services are The Halls Pizza Kitchen, The Saucee Sicilian, and Giordano’s.

The Halls Pizza Kitchen is a pizza truck that is located in Oklahoma City. Their prices range from $3.50 per slice to a whole pizza for $18.

Offering pizza by the slice provides low prices for their customers. They also serve gluten free crust pizza, which is two slices for $7. The Halls Pizza Kitchen’s food truck does not serve from the same location; instead their location varies based on the day of the week. This leads customers to keep up to date on where to find The Halls Pizza Kitchen food truck. They also serve beverages, salads and desserts, such as cookies, brownies, and sweet treats. Lastly, they have a “Keep it Local” special, which is a slice of pizza, side salad, drink, and a dessert. This appeals to local costumers and encourages them to eat from a local pizza establishment.

The Saucee Sicilian delivers an old-world Italian pizza from a thousand degree wood-fired oven. They serve their pizza from a food truck in Oklahoma City and Stillwater. The Saucee Sicilian provides seating outside of the food truck with fifteen wrap-around tables that are placed in the shade.

Also, three satellite TVs are provided for viewing. They specialize in pizza, fresh pasta, and panuozzo sandwiches.

Giordano’s is a favorite among Chicago deep dish pizza lovers.

SECONDARY RESEARCH Recently, Giordano’s released a pizza truck for the restaurant. They claim to be the first pizza truck licensed by the city of Chicago. “The Giordano’s food truck will sell pizzas, salads, soft drinks and other menu favorites, all served in green packaging.” Giordano’s has a Twitter account that keeps customers up to date on where the truck will be. As stated on the menu on their website, their prices ranges from $13 to $35 depending on toppings and size, this does not reflect the prices that will be offered for their food truck.

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PRIMARY QUALITATIVE Focus Groups The qualitative team conducted four focus groups over Pizza Hut and the pizza industry. The first focus group was conducted in the evening on Monday, November 3, 2014 at Frontline Church in Oklahoma City, Oklahoma.

The focus group had 15 attendees in the 18-34 age range. The focus group was a good mix of males and females, married and single people. The second focus group was conducted in the morning of Monday November 10, 2014 at the University of Central Oklahoma. The focus group has 12 attendees with everyone in the 18-34 age range except for one. The group was predominately male, and most of the people in this focus group were single. The one person not in the assigned age range was 36. The third focus group was held on November 10, 2014 in the Mass Communication building at the University of Central Oklahoma as well. All 12 participants were within the target age range of 18-34, and only two participants were married. None had children. The last focus group was conducted the evening of Tuesday November 11, 2014 at the University of Central Oklahoma. This focus group has 18 attendees with everyone being 18 to 24. The group was a good mix of men and women that were predominately single.

In the focus group conducted at Frontline Church, the most liked pizza was Hideaway Pizza, a local pizza restaurant. When asked why the order pizzas a vast amount of answers were given about the quality, cost, location, style of pizza and how fast it is. The group agreed that they would rather support a local pizza company over a national pizza company when ordering

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pizza. They also choose local restaurants because quality is important to them and felt that local restaurants have fresher and better quality products.

However, they did say that specials or coupons do sway what pizza company they choose.

When asked about ordering pizza for home delivery two thirds of the group had used the internet to order pizza and 1 have used an app. But most of the participants agreed that they do not use the app because they do not want to use space up on their phone for the app. Most of the group liked that Papa John’s “pizza tracker” they have on the app, saying it was fun to watch and use. Most of the group preferred to order by phone because they felt it was easier than ordering online or from an app. Coupons, less storage space and if the pizza was actually good were all answers to how to motivate people download the app. Everyone in the group had Smartphone’s with Instagram and Facebook being the top downloaded apps.

The main concept of this focus group was how important local pizza shops are. The focus group was skewed towards local because it was held in a downtown atmosphere, where there are a lot of local restaurants. Also, they would like to have fresher ingredients at pizza chain or sponsor local events and be part of the community.

The first question posed to the whole group was – what is your favorite brand of pizza? And followed by the question - from whom do you buy from the most. There were a large variety of brands that were received, but the brand that was heard more than once was Little Caesars because it was quick and easy. Others mentioned being Pizza Hut, Papa John’s, Domino’s, and some of the local pizza restaurants. The group was then asked what the most important factor was that drove them to order from a certain

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brand of pizza. The top four motivators answered by the group were price, discounts, taste and quality. The group was asked why some tend to order pizza instead of other food like burgers and such. The responses dealt with family meals, some just don’t want to spend time cooking, while others said the easy share ability within a group setting. While other pizza brands were discussed, the group was then asked what makes those different from the other brands? Humble Pie, Hideaway, and Upper Crust, all being local pizza restaurants, were all mentioned for the great taste of the product. While discussing the topic about national against local brands it was asked who has the best taste and quality. The majority of the group said local was the best, but for price and delivery national was the better choice.

The group was asked about where they typically order pizza for delivery with responses being Papa John’s because in their opinion they had the best quality, taste and crust. Other restaurants being Pizza Hut and Domino’s. The group was split on how they ordered pizza, being digitally or over the phone. The individuals who chose the online option were more for having the options in front of them and to make sure they have everything right. Some mentioned that they just do not like having to talk on the phone. Others chose the phone option because they mentioned being a “people person,” and to make sure that they get the order they want right.

A few then said that they would use both outlets because, it may be a busy day and the phones are busy making the on-line option available.

Most people in the group didn’t like ordering online because it takes too much time. But the people that had ordered online liked it because of how easy it was. Most of the group agreed that they would be more likely to order digitally if they had coupons or special offers. Everyone in the focus

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group said they had a Smartphone, with the most popular apps used being Instagram, Twitter and Netflix. The members stated that they like to see companies involved in education, and children based local causes. While most of the focus group said they preferred local restaurants most of them ate at national chains because of the cost difference.

The third focus group had some great insights as well. The most ordered brands mentioned were Domino’s, Little Caesar’s, Hideaway, Mazzio’s, Pizza Hut, and Little King’s. Half of the group had a taste preference that was not their most ordered from. The variation in frequency was most often due to the price of the taste preference. 10 participants said that the most important factor in the decision to order pizza was most often the price. When a participant was sharing their opinion about price and pizza the majority of the group was seen nodding at their comments in agreement.

When deciding to order food, participants were mostly swayed

to order pizza because of quantity, the occasion, and variety. Pizza was the most likely candidate for large gatherings.

All participants also noted that there is a difference in the taste of pizza based on the brand. Pizza Hut was mentioned for their variety of crusts available as well as a “no sauce” option. Empire Slice, a local brand, was noted for its variety of sauces (alfredo, marinara, tomato basil, etc.)

Overall, the participants all seemed to be concerned with price and taste. Their purchasing decisions are most likely determined by price, but taste was still an important factor to them. They all agreed that a discount on future pizza purchases would encourage them to download apps.

The team should take these things into consideration when devising the

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campaign for Pizza Hut. Most participants said they ordered pizza at least once a month.

Only three participants had used an app to order their pizza. The three said that the app makes ordering repeating orders more convenient. The other participants mentioned that they had no desire to download the apps required and that they were accustomed to their method of ordering.

Those who didn’t order through apps said that they would be motivated by discounts on pizza, not appetizers or desserts. All participants were aware that ordering by app was an option. Every participant in the group had a smart phone and said they only downloaded apps that were worth downloading.

When the group was asked about their favorite brand of pizza was the top answers were Pizza Hut and Domino’s pizza. Some of the important things people considered when they ordered pizza included but not limited to price, ease of ordering process, best deal and location.

When asked about how people ordered the group was pretty split between ordering online and calling in the order. When asked about why the order online most people said that it was because that they liked it to customize the order and it saves past orders. People who order the pizza over the phone said it was because it was easy and because it made sure that they got the order. Most people wanted better deals to order online like free pizza coupons after so many orders. Several said they used the app most because it made the process quicker and that they “didn’t have to deal with incompetent people.”

The group’s dynamics changed when asked if they would eat local pizza restaurants over chain restaurants. Fifteen out of the 18 people in the

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focus group said that they would prefer to eat a local pizza restaurant over a national pizza chain. When asked why most people said it was because of the taste, quality (freshness), friendliness of staff, supports local business, and was handmade. Although most changed their minds when specifically asked about local pizza restaurants, this response leads to the assumption that local is not the first place Millennials are thinking of when they think of pizza. This could be something useful for the campaign when considering the younger portion of the demographic. It seems what is put in front of them more often is what they think about, which in return is what they choose to order.

Something mentioned that stood out to the research team was one person in who mentioned that Love’s was his favorite brand of pizza. From what was gathered, it had something to do with it being from his hometown, so the pizza there was probably personally made by this particular Love’s.

When talking about different types of pizza apps, one person mentioned a third party app that allowed the consumer to digitally order from pizza companies that don’t have their own app. Another thing that stood out was when the group was asked what they automatically thought of when they heard the name Pizza Hut. Specifically a participant had said she thought of a program Pizza Hut had when she was in elementary school called “book it.” The program was used to encourage children to read more, and they got free pizza the more they read. This shows how involved Pizza Hut was with the education of children, which is something that could turn into a good tactic for the campaign next semester, given some of the feedback received from other focus groups held about community involvement, and giving back to the community. When others thought of Pizza Hut, the responses were

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“the crust”, “the $10 box”, and “greasy”.

Overall, the participants all seemed to be most concerned with price.

Their purchasing decisions are most likely determined by price, but taste was still an important factor to them. Price and taste being the primary concerns of most pizza buyers, Pizza Hut should consider providing coupons for future pizza purchases when customers download the app. Concerning taste, Pizza Hut would do well to continue to market their new pizza options heavily, since many participants in the focus groups preferred local pizza places to national brands. Pizza Hut should also consider becoming more invested in their local communities to compete with local chains that have consumers’ loyalties in part because of their local sponsorships of local school sports teams and the like. The AAF team should take these things into consideration when devising the campaign for Pizza Hut.

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PRIMARY QUANTITATIVE

For qualitative primary research, electronic and hand held surveys

were distributed. In these surveys, the question about marital and family status excluded the option of “single with kids.� This error should be noted when analyzing the results.

Qualtrics (electronic) Survey The electronic survey was conducted through Qualtrics. The surveys were distributed throughout social media, email, and direct contact. There were 1,515 respondents. Of that 1,515, 73% were female and 27% male.

Sixty-three percent of the responders fell into the target market of ages 18-34 year olds. Seventy- three percent of those respondents were female.

Fifty-six percent of the respondents were single. Ten percent of them were married with children. Thirty-four were married without children. Looking at geography, most of the respondents (68%) live in the suburbs. Only 19% live in urban areas, and 14% live in rural areas.

The target audience made up 63% of respondents. Among the target audience, 71% were female while 29% were males. Focusing on just 18-34, 73% are single, 11% are married with no children, and 16% were married with at least one child. Geographically, the 18-34 respondents did not differ much from the total: 68% live in the suburbs, 21% live in urban locations, and only 11% live rurally.

When reviewing how often consumers eat pizza, the answers ranged from less than once a month to 4-6 times monthly, with over 50% of the surveys reporting that consumers eat pizza 1-3 times monthly with 4-6

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times and less than once a month following second and third. What they can see with this trend is that pizza consumers eat pizza anywhere from one to three times a month which others believe if increased there would be a sky rocket in pizza sales.

“When you buy or order pizza, why do you typically do so?”

A surprising 48% said convenience while 39% stated taste and other factors such as cost or occasion were rated very low (9% combined). Seeing that convenience was almost half of the responses is fascinating to see that everything else taken into consideration wasn’t as much as a factor that they once believed in the beginning.

“How do you buy/order pizza typically?”

The numbers were much more closely related than the previous answers, as 41% stated they used their phones, 25% used a website, 22% purchased in store, and interestingly enough only 7% of users took advantage of the Smartphone apps that are offered by pizza chains. This statistic is interesting as many live in such a digital age that so many customers still use the phone to order and go into stores.

“When deciding who to buy/order pizza from, which factor is the most important?”

An astonishing 61% of responses stated taste was a factor for buying pizza most was interesting compared to the 39% that stated taste was the reason they usually do so in question #6 from the survey. Coupons and discounts came in second with 22%, followed by menu options, other, and speed of delivery falling beneath 10%. The trend that may be happening is that although most consumers buy pizza due to the convenience the taste is still an overall factor in their decisions.

PRIMARY QUANTITATIVE “Which of the following brands do you think tastes the best?”

When analyzing this survey question number 9 with all demographics included, it is apparent local pizza stores are typical consumer’s first choice with 33% of the vote. The top three pizza chains take the next top spots with Papa John’s as second choice with 16%, Pizza Hut third choice with 13% and Domino’s with 9%. The rest of choices (Little Caesar’s, Marco’s, Mazzio’s, store-bought brands, and Godfather’s) got no more than 7% of the vote with the lowest two at 2% (Godfather’s and Store-bought brands).

The choice “other” was the only one that tied Domino’s at 9%, but most participants answered the other question by typing in their favorite local restaurant.

When looking at this question with only the 18- 34 year old target demographic included, the answers change some. Local pizza still remains the unquestionable favorite, but now Papa John’s has a substantial lead at 19% and Pizza Hut and Domino’s are neck and neck at 12% and 11%, respectively. Pizza Hut still beat Domino’s narrowly.

“Regardless of your answer to the last question, who do you buy from most often?”

When analyzing what pizza brand was purchased most often, local pizza still received a majority of the votes with 22%. Combined, the top three national pizza chains received 40% of the overall vote. Interestingly, despite Papa John’s being respondent’s “favorite” chain in the previous question, it has now fallen into last place, though they are all close. Pizza Hut received the most votes with 15%, Domino’s in second with 13%, and Papa John’s with 12%. What is most surprising about this question is that Little Caesars who received only 3% of “favorite brand” votes, now receives

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PRIMARY QUANTITATIVE 16% of actual purchases according to this survey.

When looking at this question solely through the target demographics’ responses, the answers are somewhat different. In fact, local pizza stores are tied with Little Caesar’s at 18%. Papa John’s and Domino’s are tied at 15% with Pizza Hut falling behind at 14%.

Have you ever ordered pizza digitally –that is, through a website or an app?

1,072 responders answered yes on this question, leaving 336 that answered no. This makes up 76% of people that have ordered digitally.

Among the target audience, 84% of people have ordered digitally, with a total of 731 people, leaving 16% of people who haven’t, with a total of 142 people. Of the responders, in the target demographic, 50% used the Pizza Hut app, 48% used Domino’s, 45% used Papa John’s.

“Did you know that major chains like Domino’s, Papa John’s, and Pizza Hut have a smartphone app?”

Of the 18-34 target audience, 81% of respondents knew that major chains like Domino’s, Papa John’s and Pizza had smartphone apps. This is higher than the 76% that answered yes for all respondents. The target market is more aware of the smartphone apps than all respondents. Based on past experiences, respondents are 35% more likely to use their apps again.

If a pizza chain wanted you to download and use their app for ordering pizza, which of the following would be the best way to persuade you to do so?

Seventy three percent of people said exclusive discounts for app users would persuade them, followed by coupons for future pizzas at 18% and the third leading answer was a charitable donation by the pizza chain every time

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PRIMARY QUANTITATIVE when an order is placed via the app with 5% of the surveyors.

“How important is it to you that as a customer that the companies you do business with give back to their communities” Of all respondents, 80% answered that companies they do business with gives back to their communities. It is important to some positive degree; very important (30%) or somewhat important (50%). There was hardly any deviation from these figures when viewing only responses from the target age group; 28% and 50% respectively. Being associated with a cause is very important to most people, regardless of age.

“What word or phrase comes to mind when you think of Pizza Hut?”

question.

A word cloud was created to summarize the responses to this

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PRIMARY QUANTITATIVE

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“Which social media sites do you spend the most time on?”

The top the media site that accumulate the most time from the survey takers include Facebook at 90%, Instagram at 44%, and Pinterest at 32%.

The “others” category brought in a few new media called Reddit with a surprisingly high amount of comments for it. Other media included Vine at 4%, Twitter at 28%, Tumblr at 7%, Snapchat at 20%, and LinkedIn at 12%.

For those falling between 18 and 34, Reddit, Twitter, Snapchat follow closely together after Facebook, Instagram, and Pinterest.

“What is the most effective way for a company to get your attention with product advertisements?”

Of the percentage given online and TV combined made up 62% of the most effective ways for a companies to reach survey takers with advertisements. Email came in at 3rd place with 15% and all other ways dropped below 10% as follows. Mail inserts 9%, radio 5%, billboards 3%, mobile ads 3%, other at 2%, and newspapers bringing in the final 1%.

Hand surveys There were 317 handheld surveys filled out. Of that 317, 61% were female and 39% male. Eighty eight percent of the respondents were single; and married with and without children both received 9% of responses. Looking at geographical terms, most of the respondents (69%) live in the suburbs. Only 25% live in urban areas and 9% live rurally.

The team was able to focus on the target audience with 82% of respondents being between ages 18 and 34, totaling 279 surveys. Focusing on just 18-34, 89% are single, 8% are married with no children, and 7% were married with at least one child. Geographically, the 18-34 did not differ

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much from the total amount of surveys: 69% live in the suburbs, 24% live in urban, and only 7% rurally. “How do you buy/order pizza typically?�

Looking at the results including all demographics, ordering pizza over the phone was the most popular way with 65%. Using the website was next popular with 15% and ordering at the store in person received 12%.

Ordering from the app and from the grocery store had the lowest responses with 6% and 2%.

Using the 18-34 respondent filters, the results were a little closer.

Forty four percent preferred ordering by phone, 25% by website, and 18% in person at the store. Using apps increased to 11% in the 18-34 target but going to the grocery store remained with 2% of responses.

Out the 18 to 34 age group, we were able to filter the surveys into the urban, suburb and rural living areas. Two of the three living areas preferred using a phone to order pizza with 44% in urban areas and 46% in suburbs; rural had 28% in respondents for the phone. The website is the second most common ordering form in urban and suburbs areas with 25% in urban areas and 28% in suburban areas. The third most common ordering form for the urban and suburban areas is the most common ordering form for the rural area: in person at the store. Urban and suburban areas both received about 17% of respondents and rural areas received 38% of respondents. As for ordering from apps, urban areas receive 14%, rural area 10% and suburbs are 9%.

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TOTAL: 279 18-34 AGE GROUP

PHONE WEB APP IN PERSON

URBAN

GROCERY

PHONE WEB APP IN PERSON

SUBURBS

GROCERY

PHONE WEB APP IN PERSON GROCERY

RURAL

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“Have you ever ordered pizza digitally through a website or an application?”

Of the total surveys, 67% have ordered digitally and 37% have not. Of the 18-34 groups, 71% have and 29% have not ordered digitally. In urban areas, 50% have ordered digitally and 50% have yet to use an application.

Seventy four percent have used the app or website in suburban areas and 26% have not. In rural areas, 44% said yes, and 46% have not.

“Did you know that major pizza chains like Domino’s; Papa John’s and Pizza Hut have smartphone apps that you can download for free and use to place orders?”

With the entire surveys, 81% said yes, 19% said no. Of the 18-34 totals, 84% said yes and 16% said no. Urban area residents totaled with 85% saying yes, and 15% saying no. In the suburbs, 84% said yes and 16% said no. Within the rural areas, 78% said yes and 22% said no.

“If a pizza chain wanted you to download and use their app for ordering pizza, which of the following would be the best way to persuade you to do so?”

Looking at the survey without filtering any demographics, 49% of respondents wanted to receive exclusive discounts for apps. Twenty six percent were interested in coupons for future pizza orders. Receiving coupons for other non-pizza products had 11% of respondents interested.

Having the pizza chain donate to a charity every purchase had 12%. The option of ‘other’ received 2% and it included giving away free pizza as well as using a rewards card system.

As for comparing just the 18-34 age group, 51% wanted to receive exclusive discounts for apps. Coupons for future pizza orders received 25%

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and both coupons for non-pizza purchases and charitable donations from the pizza chain received 11%. The responses for ‘other’ were the same as responses above.

2%

TOTAL: 279 18-34 AGE GROUP

11% receive exclusive discounts

11% 51% 25%

coupons for future pizza orders for non-pizza purchases charitable donations other

Conclusions from surveys After analyzing the surveys, responses reflected that consumers choose pizza when looking for a convenient meal option, but that taste plays an important role in choosing where the pizza will come from. Based on taste, Pizza Hut came out second among the top three national pizza brands only falling closely behind Papa John’s yet beating out Domino’s.

Seventy six percent of respondents had at least tried ordering digitally before and were aware of the national pizza brand apps. Forty one percent of consumers said they used the phone as their main tool to order pizza compared to the 32% that said they order digitally. Though respondents are

PRIMARY QUANTITATIVE

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not using the digital methods the most, the survey also showed discounts would be especially useful to convince consumers to download and try mobile apps.

In order to reach the target market of Famillennials (Millennials 1834, with families), the survey showed it would be best to reach them online, through websites and social media. Social media sites most commonly used by our target market include (listed in descending order): Facebook, leading by a large margin, Instagram, Pinterest, YouTube, Twitter and Snapchat. In addition to having a substantial social media presence, the target demographic wants companies they invest in to give back to their communities.

It’s safe to say that the phone is still the most common way to use to order pizza, in and outside of the target audience. The app is used more by those within the target age range, but is still the fourth-most common way to order pizza. Although it’s the fourth-most common way pizza is ordered, one third of the target age group respondents has used either the app or the website. Pizza purchasers have either tried the app/website and did not enjoy their experience, or just simply prefer another way of ordering. Eighty one percent claims to know about the apps of major pizza chains but only 67% have used it, so even though they know about it, they’re still not driven to use it.

Those who live in suburban areas are the highest percent of those who have tried the app, but are also the least likely to refer others to the apps. This shows that those who live in the suburbs have most likely tried ordering through the app or website but still prefer to order pizza over the phone. Suburban residents take up the majority of the target group and yet

PRIMARY QUANTITATIVE are the least likely to order from the pizza app.

As for persuading people to use the app, every age group and every demographic said they would be persuaded most by exclusive discounts for app orders. It seems if they knew using the app would be the only way to get them a certain deal, they would be persuaded to use it. When using coupons, people are more interested in saving money on future pizza orders rather than non-pizza orders such as breadsticks or desserts. Charitable donations by the pizza chain appear to be a factor that affects the decision of many.

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NEXT STEPS The team suggests that the AAF team follow up with supplemental research pertaining to the thought process consumers go through when they decide to download a particular app. Along with this research, they should also look into app retention rates. While companies may be able to convince a consumer to download the app, they need to know how to make them keep it on their phone for future use. The app retention research was information the team felt was lacking after going through the secondary that was already found.

The only limits the team ran into when attempting to conduct the research was time. The “WOW Factor� idea was simply not organized enough for the team to conduct this semester. However, when brainstorming ideas for WOW Factor, keep in mind that anything involving ordering actual pizzas will require appropriate funding.

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APPENDICES FOCUS GROUP QUESTIONS..................................................................65 QUALTRICS SURVEY QUESTIONS...................................................68 HAND SURVEY................................................................................................75 WORKS CITED.................................................................................................77

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Focus Group Questions: 1. Let’s start by getting a feel for who everyone is. a. How many of you are between 18 and 34? b. How many of you are married? c. How many of you have children? d. Let’s go around the room. Please tell me what is your favorite brand of pizza – in other words, who do you buy pizza from most often – and why?

2. What’s more important to you when ordering pizza - coupons and discounts, or taste and food quality?

3. When you order or buy pizza, why do you typically choose that over other options like burgers, tacos and so forth?

4. How many of you think that there is a significant difference in the flavor and food quality of one pizza brand vs. another? a. Which one(s)? What makes it/them different from other brands?

5. Show of hands: Who here has ordered pizza for home delivery? a. (Go around the room to people who raised their hand.) How often do you typically order pizza for delivery? b. How do you typically order it for delivery – in person, by phone, or on line? c. Why do you order it that way (as opposed to the other options)?

6. Is there anything about the ordering process that you would change, if you could?

7. Let’s go back and look at those of you who said you have ordered pizza through the Internet?

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a. Did you do it via a website or through an app? b. What company did/do you order pizza from digitally?

What was the ordering experience like? (Use the follow-up questions to

draw out responses as needed) i. Was it difficult or easy to complete the order? ii. What would you change about the online ordering process, if you could? iii. How did the delivery time compare to ordering by phone? iv. Would you order digitally again? Why or why not?

8. For those of you who said you have never ordered pizza online (ask for a

show of hands): a. Did you know that you could? b. If yes, why haven’t you tried it? c. What could a company like a Domino’s or Papa John’s do to motivate you to try online ordering? d. If people say that digital-only discounts could sway them, read the

top three app-only offers on the PH app and ask them: Tell me if any of these offers are good enough that they might motivate you to order digitally.

9. How many of you know that most of the major pizza chains have their own app? Have any of you downloaded it? Why or why not? a. For those who have not done so, what might it take to motivate you to download it and use it?

10. Show of hands: Who here has a smartphone (iPhone, Droid, etc.)? a. What types of apps do you have on the phone, and which ones do you use most often? (Go around the room to people who raised

APPENDICES their hand.)

11. Changing gears now: Is it important to you that companies give back to the community? That is, that they support charitable causes? a. If yes, how important? To what extent is it/can it be a deciding factor in whether or not you do business with a company? b. If yes, what type of causes do you like to see companies support?

12. Go around the room: When you think about Pizza Hut pizza specifically, what are the first one or two words that come to mind?

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APPENDICES Qualtrics Survey Questions 1. How old are you?

Under 18

18-34 35-49

50 or older

2. What is your gender?

Male Female 3. What is your family status?

Single

Married, no children

Married with children

4. Where do you live?

Urban area (i.e., downtown)

Suburbs

Rural area (i.e., remote regions, farm area)

5. How often do you eat pizza?

Never

Less than once per month

1-3 times monthly

4-6 times monthly

7+ times monthly

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6. What you buy or order pizza, why do you typically do so?

Convenience Cost

Special occasions

Taste Other 7. How do you buy/order pizza typically?

Phone Website

Smartphone app

In person from pizza store

Grocery Store

8. When deciding who to buy/order pizza from, which factor is the most important?

Coupons/discounts

Menu/product variety

Speed of delivery

Taste Other

APPENDICES 9. Which of the following brands do you think tastes the best?

Domino’s Godfather’s

Little Caesar’s

Marco’s Mazzio’s

Papa John’s

Pizza Hut

Local pizza store (not listed above)

Store-bought brands (not listed above)

Other 10. Regardless of your answer to the last question, from whom do you buy most often?

Domino’s Godfather’s

Little Caesar’s

Marco’s

Mazzio’s

Papa John’s

Pizza Hut

Local pizza store (not listed above)

Store-bought brands (not listed above)

Other

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APPENDICES 11. Have you ever ordered pizza digitally – that is, through a website or an app?

Yes No 12. If you answered yes to the last question, from whom have you ordered digitally in the past? (Check all that apply) N/A Domino’s Godfather’s

Little Caesar’s

Marco’s Mazzio’s

Papa John’s

Pizza Hut

Local pizza store (not listed above)

Other 13. Did you know that major pizza chains like Domino’s, Papa John’s and Pizza Hut have smartphone apps that you can download for free and use to place orders?

Yes

No

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APPENDICES 14. When I order pizza digitally (via website or app), I am usually satisfied with the ease and convenience of the website/app.

Strongly Agree

Agree

No opinion

Disagree

Strongly disagree

N/A – I have never ordered digitally

15. If a pizza chain wanted you to download and use their app for ordering pizza, which of the following would be the best way to persuade you to do so?

Exclusive discounts for app orders

Coupons for future pizza purchases

Coupons for other (non-pizza) products

A charitable donation by the pizza chain every time I order via the app

Other 16. How important is it to you as a customer that the companies you do business with give back to the community (i.e., support good causes)?

Very important

Somewhat important

Not very important

Not important at all

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17. What charitable causes are important to you? (Check all that apply) Animals

Children’s Health

Homelessness Hunger Environment Education

Men’s health

Military/veteran’s

Women’s health

Other 18. What word or phrase comes to mind when you think of Pizza Hut? 19. Which social media sites do you spend the most time on? (Check all sites that you visit often) Facebook Instagram LinkedIn Pinterest Snapchat Tumblr Twitter Vine YouTube Other

APPENDICES 20. Based on my past experiences, I am likely to order digitally again in the future.

Strongly Agree

Agree

No Opinion

Disagree

Strongly disagree

N/A – I have never ordered digitally

21. What is the most effective way for a company to get your attention with product advertisements?

Billboards Email

Mail inserts

Mobile ads

Newspapers

Online (Websites, social media)

Radio

TV Other

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Hand Survey Please complete this brief survey about the pizza industry. It is being done as part of a research class at the University of Central Oklahoma. It should take no more than two to three minutes to complete. No personally identifying information (i.e., name) is required.

1. How old are you?

Under 18 18-34 35-49 50 or older 2. What is your gender: Male Female 3. What is your family status: Single Married, no children Married with children Where do you live?

Urban area (i.e., downtown) Suburbs Rural area (i.e., remote regions, farm area)

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4. How do you buy/order pizza typically?

Phone Website Smartphone app In person from pizza store Grocery store 5. Have you ever ordered pizza digitally – that is, through a website or an app?

Yes No 6. Did you know that major pizza chains like Domino’s, Papa John’s and Pizza Hut have smartphone apps that you can download for free and use to place orders?

Yes No 7. If a pizza chain wanted you to download and use their app for ordering pizza, which of the following would be the best way to persuade you to do so? (Check all that apply.)

Exclusive discounts for app orders Coupons for future pizza purchases Coupons for other (non-pizza) products A charitable donation by the pizza chain every time I order via the app Other ___________________________________________________

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