Pizza Hut Research Brief

Research Brief - Pizza Hut 2015 why are we advertising?

1. To position Pizza Hut as the top choice for people who order digitally.

2. To provide the greatest digital ordering experience in the category.

3. To reach the target of 75% of all orders done online/mobile by the end of 2015.

The campaign will run from July 1, 2015 to December 31, 2015. The goal of the campaign is to increase the share of pizza orders that are done digitally by 32% by the end of 2015. Currently, 43% of orders are done digitally.

brand snapshot - who are we?

Pizza is America’s favorite food. But, Pizza Hut is not its favorite pizza brand. Even though Pizza Hut is the world’s largest pizza company, in recent years it has been slipping. Before the rebranding, Pizza Hut experienced eight straight quarters of declining same-store sales.

This wasn’t always the case. Beginning humbly in Wichita, Kansas in 1958, Pizza Hut quickly defined the pizza category. At a time when few Americans outside the Northeast even ate pizza, Pizza Hut showed people how pizzerias should look and how pizza should taste. It didn’t deliver because of the belief that good pizza should be eaten straight out of the oven. Pizza Hut ardently controlled what the franchisees could serve, so they couldn’t add anything like nachos or other trendy foods that didn’t fit the ‘pizza theme’.

By being one of the first to offer pre-designed pizzas (Meat Lovers, Super Supreme, Veggie Lovers), Pizza Hut took the first step in offering customized pizzas, targeting consumers with specific wants and needs. This was the brand’s formula for success.

And this worked great for 30 years, and then pretty well for another 10 to 15 years. During this time, the brand stayed ahead of the competition by using a myriad of spokespeople and gimmicks. As a result, virtually everyone in America learned about Pizza Hut and its product.

But today, in 2015, America’s pizza consumers are bored with Pizza Hut. Increasing competition from the category resulted in an array of new products and services. This led to price wars and promotional saturation (selling two pizzas for the price of one), which equated to eroding profit margins for the pizza category. Pizza consumers stopped caring about Pizza Hut and left it for more appealing options, such as fast-casual brands like Chipotle, Blaze, and Panera. Pizza Hut failed to capitalize on popular food trends and changing appetites. This led to stagnation, a decline in sales and a loss of brand voice.

Pizza Hut needed a change... Enter the rebranding.

recent rebranding The new campaign is Flavor of Now. Flavor of Now aims to modernize Pizza Hut, bring back its lost brand voice, and create a new identity that is more relevant to consumers today. To achieve these goals, Pizza Hut added ten new crust flavors, five premium toppings, six bold sauces, four drizzles, and five Skinny Slice pizzas. The rebranding also includes a redesign of the brand’s logo, packaging and uniforms, in addition to an updated color palette. (SEE NEXT PAGE)

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5 premium toppings

6 bold sauces

10 New Crust Flavors

5 skinny slice pizzas

Peruvian Cherry Peppers Sliced Banana Peppers Fresh Spinach Premium Salami Classic Meatballs

Salted Pretzel Toasted Parmesan Hut Favorite (Garlic/Italian) Honey Sriracha Toasted Asiago Fiery Red Pepper Toasted Cheddar Garlic Buttery Blend Get Curried Away Ginger Boom Boom (Ginger/Garlic/Spice)

Classic Marinara Honey Sriracha Premium Crushed Tomato Creamy Garlic Parmesan Buffalo Barbeque

4 drizzles

Balsamic Honey Sriracha Barbecue Buffalo

Skinny Club Skinny Italy Skinny Luau Skinny With a Kick Skinny Beach

*These pizzas are 250 calories or less per slice.

brand colors

Pizza Hut’s color palette has changed from red and white to red and black. The color theme is inspired by the dark pizza pans, alluding to a sense of freshness and modernity. The new colors are found on the website, app, and packaging.

redesigns

Logo: The new logo is now a marinara-red sauce dollop with a white roof and Pizza Hut’s name in the center. The brand sometimes uses a simplified version with just the roof in the sauce dollop. This is the fourth logo redesign in 15 years.

Packaging (Box, Cups, Bags): The box is all black, with the new simplified logo centered on the lid. The cups and bags are designed similarly.

Uniforms: The uniforms are more relaxed, channeling today’s hipster and trendy movements. They include jeans, plaid shirts and vintage graphic tees.

how things are going - consumer thoughts We travelled to eight locations to interview over 120 people, spoke with 48 participants during 10 focus groups, and received over 500 surveys from across the United States. Our research represented varying age groups, genders, and multicultural groups.

When asking respondents what came to mind when they heard the words “Pizza Hut,” they didn’t have much to say. However, the top responses were: • 29% stuffed crust • 9% grease • 7% barbeque wings 0% of respondents mentioned the new menu when asked this question.

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We found that many consumers associated Pizza Hut with old, outdated things. They connected the brand with childhood memories, past promotions and movie partnerships that no longer exist.

During our POTS and focus group discussions, we asked participants if they’ve heard of Pizza Hut’s new rebranding: • 23.5% had heard of it • 76.5% had not In our focus groups, we showed participants the “Old World Italian” commercial and the “Boring, Maryland Bingo” commercial.

Feedback included: “It is really cute. I like the old people - doesn’t make me want to go to Pizza Hut - makes me want to go to Italy and eat their pizza though.” -AIDAN, 18 “It is interesting that they’re willing to put down this product to build it up later. I like the common trend of watching old people try new things.” -ANDREW, 21 “They’re just trying way too hard.” -JOSH, 20 “Entertaining, but it doesn’t speak to me because I’m like those old people!” -ROBERT, 37

PIZZA HUT’S PROBLEMS Pizza Hut has accomplished what most brands strive for: name recognition. Most consumers were able to connect the color red to the brand, but were unable to say much else. There is no clear, common association to Pizza Hut that we can claim makes it unique in the marketplace.

Domino’s has the Pizza Tracker.

Little Caesar’s has Five-Dollar Hot-N-Ready pizza.

Papa John’s has football and Joe Montana.

But Pizza Hut lacks an identifying factor, outside of its name and product, that differentiates itself from competitors like these.

In the era of “Flavor of Now,” Pizza Hut is aiming to be top-of-mind. It is looking to establish itself as a culinarily-innovative and digitally-up-to-date pizza brand.

New, exciting flavors? It’s got them. New, modern image? It’s got it. Pizza Hut has re-introduced itself to a market that has forgotten what makes it unique.

Flavor of Now is the brand’s presented solution. However, it’s just not clicking. According to our research, there is little to no awareness of the rebranding. To claim the top spot in the highly competitive and quickly changing food landscape, it must make a modern, memorable statement that is relevant to customers today.

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competitive landscape We asked survey respondents what their favorite pizza brand is and compiled the following data: 36.4% prefer Mom and Pop Shops 31.3% prefer Domino’s 16.3% prefer Pizza Hut 12% prefer Papa John’s 4% prefer Little Caesar’s

domino’s

Domino’s is Pizza Hut’s fiercest competitor. Currently the number one in online ordering, Domino’s has positioned itself as many customers’ go-to pizza chain.

Ever since Domino’s’ core recipe change in 2009, consumers’ perceptions of Domino’s have improved drastically. Domino’s is able to match Pizza Hut’s low prices and convenience but holds the advantage when it comes to transparency, digital presence and garnering brand trust.

Papa john’s

In our surveys, people consistently associated Papa John’s with garlic dipping sauce, rewards program, and NFL partnership.

Those who favor the brand appreciate the garlic dipping sauce and associate it with better taste and ingredients. In fact, those last two reasons paraphrase the brand’s slogan, showing that Papa John’s’ audience recognizes the brand’s identity.

Little caesar’s

Little Caesar’s was the least preferred in our survey. Respondents that favored Little Caesar’s cited its low prices first and quality second. The chain’s Hot-N-Ready $5 Pizza is a top seller and provides customers a good value.

Mom and Pop shops

Though Mom and Pop shops can’t usually compete with chain companys’ lower prices, they often make up for it by providing fresher ingredients and a more intimate experience. Our online surveys show that people who choose Mom and Pop shops overwhelmingly prefer taste over any other factor when choosing pizza. In fact, 89% of respondents who chose Mom and Pop shops valued taste the most when selecting a pizza.

digital competitive landscape We asked survey respondents and interview participants if they have ever used apps to order food, and if so, which ones? The responses led us to the following digital competitors:

domino’s

Domino’s’ app is the number one pizza app. The app utilizes a “Siri-like” system, named Dom, for interactive ordering. Dom suggests and orders pizza, and presents deals and coupons. The feature was released in June 2014 and is now promoted in national ad campaigns.

Additionally, Domino’s has a free IOS app called Pizza Hero which challenges users to make pizza quickly and tidily. If the user succeeds, the app suggests they apply for a job at Domino’s. Pizza Hero can be used to order pizzas virtually or just for fun.

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grub hub

GrubHub is a food delivery service that can be accessed online or through an IOS/Android app. The user types in their address and chooses to search by food type, or restaurants near them. They then view a list of local take-out or delivery restaurants near them.

The user can refine their search by food type, what’s currently open, take out, delivery, and online ordering capabilities. If the customer moves forward with an online order, they will select the items they wish to purchase and carry out the transaction through the GrubHub site. GrubHub also features restaurant reviews, coupons, and special deals.

seamless

Seamless is a food delivery service that is partnered with GrubHub. The app is available for a wide variety of devices and platforms including iPhone, iPad, Android Devices, Blackberry, and Mobile Web. Users can get exclusive offers, discounts, and deals as well as save on their delivery favorites.

eat 24

EAT24 is another food delivery app that has various features making it more than just an online ordering service. Users can find out what their neighbors are eating by using “What’s Good” to find the best dishes nearby. EAT24 Notes also lets users let the world know about their favorites, talk smack about their not-so-favorites, or just remind themselves to order or not order something again. The app also has an exclusive new Split the Check feature that allows users to pay each other back through the app. It accepts payments from American Express, VISA, MasterCard, Discover, PayPal, and Google Wallet. It is available on the following devices: iPhone, Android, iPad, Kindle, and Chrome.

postmates

This service is available for more than food. It is applicable for any restaurant or store (like the Apple Store, Starbucks, Staples, etc.). Deliveries are made under an hour and the app includes real-time tracking so that users will “never miss a delivery again.”

It is available from the AppStore (Apple) and Google Play (Android). People can also sign up to be Postmate couriers, who do the delivering from businesses to users.

papa john’s

Papa John’s has a popular rewards program in which you earn Papa Rewards Points on every order from your papajohns.com account, automatically. Additionally, you can track your progress towards a free pizza with Papa’s FREE PIZZA Meter, and watch your points build slice-by-slice.

Users earn 1 Papa Rewards Point for every $5 spent, including tax and delivery, on every purchase from your papajohns.com account. They are eligible for a free large pizza with up to three toppings after earning 25 Papa Rewards Points. This pizza can be redeemed at any time after receiving the necessary points. Members also receive other special offers throughout the year, though they have to opt-in to receive them.

what do they have that we don’t?

Pizza Tracker: Users know that their pizza is being made, who it’s made by and when it’s being delivered. This leads to better interaction with the brand.

Human Interaction: Other brands are creating human contact in the digital medium. It feels as though users are being connected to other humans, even in the digital space.

Rewards Program: Competing rewards programs give incentives to order specifically online or on an app.

New Technology: Competitors are taking advantage of current tech trends.

Partnerships and Promotions: Other brands have stronger associations in regards to philanthropic ties, brand values, promotions and partnerships.

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Split Payments: This is a modern and practical feature for users. Ex: Venmo, Snapcash ApplePay: Brands are beginning to incorporate this capability. There are no pizza brands currently associated with ApplePay. Pizza Hut has the opportunity to be the first.

GPS: By having a current location feature, apps can automatically input the user’s location so they don’t have to enter as much information.

Awareness: Other brands have gained more awareness when making brand changes.

target audience Since the campaign has a digital focus, we narrowed the target market to ages 18-49. From this, we cut our audience pie into three saucy slices that each represent a purchasing habit our campaign will address. This first segmentation is purely behavioral.

traditionalists

Those who order pizza on the phone.

digital enthusiasts

Those who order pizza digitally from digital competitors.

loyalists

Those who order pizza digitally from Pizza Hut.

What makes them order differently? traditionalists

Traditionalists enjoy human interaction, as it leads to easy personalization and strong relationships. They are creatures of habit and struggle to break away from the phone because it’s what they’ve always done.

They also believe the phone is more convenient, leading to faster and easier ordering.

digital enthusiasts

Digital Enthusiasts, in contrast to Traditionalists, prefer no human interaction. They believe ordering digitally is more convenient because it’s faster and easier. They also appreciate the opportunity to catch promotions and deals that are only offered digitally.

loyalists

Loyalists continue ordering digitally from Pizza Hut because they like the quality and taste. They also fall into a habit because they believe the digital platforms are easy to use.

The second segmentation focuses on demographics. This is how we will reach the above targets.

By targeting the above three behaviors, we will use quadrant marketing to reach women below 25, women ages 25-44 (primarily moms), males ages 18-24 (primarily independent gamers) and males over 25. Additionally, we will reach a diverse multicultural audience by carefully addressing their unique needs and wants.

opportunities to reach our target flavor of now

We have the opportunity to leverage and embrace Flavor of Now and use the momentum to drive our campaign. This rebranding gives users the ability to customize their orders, and we can emphasize that this can be best done on a digital platform.

color palette

Since switching its color palette, Pizza Hut has the opportunity to own red and black, as it’s main competitors have different palettes. For example, Domino’s owns blue and white, and Little Caesar’s owns orange and black.

brand equity

Pizza Hut has significant brand equity. Despite problems it is currently facing, Pizza Hut remains a well-known brand.

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Barriers keeping us from our target identity disconnect

There is a disconnect between Pizza Hut and the consumer. External communication is not effective which causes a lack of awareness. Customers only think of the old perceptions of the brand, even though it is on the path to modernity.

lack of digital incentive

Our targets currently have no reasons to change their ordering habits. Pizza Hut’s digital experience includes no incentives, such as exclusive features, rewards or an intuitive interface, to entice people to exclusively order digitally.

low digital awareness

There is a lack of awareness surrounding the digital experience. The majority of people we interviewed did not know Pizza Hut had an app. Those who knew about it were usually not convinced of its benefits over traditional ordering. When asked what would make them switch from phone ordering, they listed features they’d enjoy having, many of which are already part of Pizza Hut’s digital ordering system.

mandatories Based on our research, our campaign needs to mention or include the following: • • • • •

A rewards program that is exclusively available digitally.

The digital experience needs to be more convenient and user friendly than other ordering methods.

The app needs incentives, including discounts and free items, for brand retention.

Brand partnerships to increase relevancy in pop culture.

Digital features need to go beyond gimmicks, instead performing functions that truly benefit our target audience, including split payments, pizza profiles, GPS/current location feature for the app, and simple, intuitive design. This will lead to exclusivity as well as brand retention.

• Pizza Hut needs to provide customers with beginning-to-end experience rooted in distinct, defined values. The millennial consumer especially is drawn to brands that look further than the crust, provide beginning-to-end experience that aligns with their values and an honest and compelling argument for why they should spend their hard-earned dollars on that restaurant.

what’s happening during our campaign?

Movie Releases

Terminator: Genisys - July 1, 2015 Minions - July 10, 2015 Ant-Man - July 17, 2015 The Fantastic Four - August 7, 2015 Spectre - November 6, 2015 The Hunger Games: Mockingjay, Part 2 November 20, 2015 The Good Dinosaur - November 25, 2015 Star Wars: Episode VII - December 18, 2015 Mission Impossible 5 - December 25, 2015

video game releases

Halo 5 - Q3 or Q4 Assassin’s Creed Victory - Q3 or Q4 Star Fox - Q3 Legend of Zelda WiiU - TBD

Holidays

Fourth of July Halloween Thanksgiving Christmas, Hanukkah, etc.

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