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Positioning The Production System Marketing Essay

Paper Type: Free Essay Subject: Marketing
Wordcount: 2539 words Published: 1st Jan 2015

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Pizza Hut is famous all over the world for long times ago. Dan and Frank Carney established it in the year 1958. It seems become familiar to many people, especially busy people. Here is a convergence of the famous dishes Pizza Hut brand such as: seafood Pizza, sausage Pizza, ham Pizza. Besides, there are pasta dishes, rice, salad, dessert and ice cream is made quite eye catching and delicious will make you feel good. Furthermore, Pizza Hut is famous because it meets the need of customers by up dating the menu everyday and also gives many new dishes. In addiction, Pizza Hut is a friendly service attitude and comfort to children and restaurant facilities are designed in the style family. There are also have menu of nutritious for children. Moreover, all of children come to Pizza Hut also receive a special gift bag including a coloring book and crayon pen. The prices are focus to the Pizza Hut brand and the brand’s objective is provides quality meals and a simple price the same as fast food outlets (recipepizza.com).

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Elements of Operations Strategy

There are two types of product design: custom product and standard product. Products of Pizza Hut are standard products. At the beginning, this restaurant is only concentrated on “Pizza” products. One year later, Pizza Hut was incorporated and opened new franchise in Topeka, Kansas (Fundinguniverse.com). After that, it continued to develop the size of business with more than 100 units. Until now, Pizza Hut becomes one of famous restaurants in the world. They developed their business outside of America by opening units in Europe, Australia, Asia…Besides that, Pizza is delivered fast to customers when you order products by phone. What is more, Pizza Hut used acquiring strategy to decrease production costs. They acquired Franchise Services, Inc, which is a restaurant supply company, and J & G Food Company, Inc, which is a food and supplies distributor. (Fundinguniverse.com). These helped the company increase profit surprisingly. Their production process is product-focused. They invested to buy equipments and hire employees to produce many kinds of pizza. They want to push up the competition with new pizza restaurants that are Dallas-based Pizza Inn, Denver-based Shakey’s, Phoenix-based Village Inn and Straw Hat. (Fundinguniverse.com). Pizza Hut is a chain of fast food restaurants. For this reason, their finished-goods inventory policies are produce to order. They will make pizzas after customers order the kind and size of pizza. The customers are going to wait a few minutes to have their finished foods.

Product Plans

Planning for new products is one of important parts of business strategy towards a company. Pizza Hut gave their new products, which is “Pan Pizza”. It is also a kind of Pizza that is thicker crust made in deep pan. It became so popular and brought good profit for company. They wanted to give this new product that can compete with their competitors. They produced “Pan Pizza” because Pizza is one of their strength points in past many years. On the other hand, Pizza Hut merged with PepsiCo in 1977 (Fundinguniverse.com). This brought many advantages for Pizza Hut. PepsiCo supplied marketing resources to Pizza Hut. It helped this new product succeed easily.

Outsourcing Plans

Nowadays, more and more big companies carry out outsourcing plans. They consider outsourcing plans are one of key parts in their operation strategy. For this reason, Pizza Hut also implemented their strategy in the same way. They always want to expand their business by opening more new restaurants in America and outside USA. They purchased some companies that were concerned with their products. For examples, they acquired 80 percent stake in Ready Italy, a frozen crust maker, and a joint venture to Sunflower Food Processors, formed with Sunflower Beef, Inc (Fundinguniverse.com). That means they can purchase all the raw materials. Moreover, they could design a new product “sandwiches to the staple “Thin ‘n Crispy” pizza offering” (Fundinguniverse.com). These brought good sales for Pizza Hut. As a result, Pizza Hut became the world’s largest pizza chain. The strong development of Pizza Hut seemed to have many difficulties because they began not to control their operation. They thought that a long-term business plan is necessary in that time. Therefore, they merged with PepsiCo in 1977 (Fundinguniverse.com).

Process and Technology Plans

Pizza hut was intending to continue the development of commissary system. They would keep their menu was simple. It was including traditional and thin-crust pie. What was more, they were going to invest more capitals on technology. They were testing a new delivery bag, which could keep pizzas hot and crisp in the delivery time. Besides that, they were applying a new system for their operation. This system permitted customers to order pizzas on the Internet (Louisville).

Facility Plans

Pizza hut planned a system of commissaries and distribution centre in their growth strategy. These facilities were providing every restaurant in the chain with fresh ingredients, including pizza dough, cheese, sauce and others. When Pizza hut enters a new region, they will build a facility, which can supply ingredients there. A smaller commissary can serve more than 150 restaurants. It costs from $3 million to 4$ million. A larger one can serve more than 350 units. It costs from $8 million to $10 million. In the future, the strategy of Pizza Hut is expanding and upgrading their research and development facilities (Louisville).

Designing and developing products and services

All of existing Pizza chains, Pizza Hut has the largest market. However, nowadays some of the important steps in many companies designing and developing new products to competition with Pizza Hut. Many pizza chains have decided to diversify and offer new products. All are trying to come up with some newer, bigger, better, pizza for one low price. With special promotions, and new pizza variations are popular today as well. For example, chicken is now a popular pizza stands daily. Furthermore, Pizza Hut has always had first advantage from the past so one of their main strategies that they still follow is to diversify the products they offer. Pizza Hut is always adding something new to their menu, trying to reach new markets. Thus, Pizza Hut always has valued customers services and satisfaction. With high competition from other leading companies in the industry, the birth of a new product is necessary to keep one step ahead of the competition. Next, Pizza Hut created a joint marketing plan more, to attract more customers. In order for marketing strategies to work, needs to Pizza Hut this target one market segment and pizza is a quick substitute for dinner, and fun way for friends to eat together. Pizza has long been targeted to families, because the convenience is now serving pizza to a group. Moreover, teenagers and young people spend times with their friends on the team, Pizza Hut will satisfy the needs of young generation with a product designed just for them (Trevarthen Bruce 2001).

Operation quality management and nature of quality

Operation quality management at Pizza Hut is important. The quality of the way services are provided and the quality of the services and products need for restaurant. High quality products and services is the objective of the operations facility review. All Pizza Hut restaurants improve the quality of the foods from all their outlets and make it consistent. Customers have come to expect through all Pizza Hut restaurants. General management at each restaurant has to standardized operations facility review form. Therefore, they must training programs for restaurant employees; maintain facilities, and equipment (Gaither and Frazier 2002). If any Pizza Hut restaurants have one or two lousy foods, it will make full down the name of Pizza Hut. For example, a person has phoned to order the Samballicious Pizza. Restaurant’s menu has Crunch anchovies with fresh, green peppers, but he received the Sambalicious Pizza is different. He cannot even see any fresh, green pepper or anchovies like advertised. It is very bad from other Pizza restaurants, because that pizza that comes from him area did not check and failed its quality control many times. A lot people do not want to eat Pizza here. High quality products, services and cleanliness are necessary for all Pizza restaurants (Best Recipes, Food and Travel 2007).

In business, if there are many competitors from other company, this will help that company more develop in the future. And qualities of company change over time. A world class company is that each product and service will be best in class to customers. Pizza Hut sells pizzas in four different sizes: personal (an individual serving), small, medium and large. A variety of toppings are available, specially style including Meat Lovers, Pepperoni Lovers, Cheese Lovers, Veggie Lovers, Double Cheeseburger, Supreme, Super Supreme and the newly introduced Pizza Mia (pizzahut.com). Customers are important for company, so they have to design following what its customers want from products and services. Company wants to be popular and improve. They must check quality product and service. If products are defective, they have costs of quality. The costs include the cost of scraping, repairing, reworking and retesting defective products. Company will have problem and loss in business when their products are shipped to customers. This will become serious and can not measure. Therefore, they must have the cost of training to study trends and improve quality. These will help company prevent defects (Gaither and Frazier 2002). According to live well and Feel Great 2005 and Calories and Nutritional information about our food Pizza Hut 2006, Pizza Hut Company provides their customers with complete nutrition and healthy food is assured. In addition, there is less cholesterol in Pizza Hut. This encourages the customers to come Pizza Hut rather than going elsewhere. When Pizza Hut increases their products to existing markets, their new food products will be introduced in all branches line-by-line. Beside that, all branches are operated in co-operation with one another. This will become advantageous for company.

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Technology is also important thing and it is improving each day. New technology will provide efficient services. Furthermore, there are many ways to advertise their products such as internet or news television. If there are new vehicle, their services will deliver faster. Beside that, everyone only needs to have a computer and they search on internet to find Pizza Hut. According to Gaither and Frazier 2002, total quality management programs are the most important for Food Company. Organizations changed and they are given extra classes in order to meet the quality standards set by Pizza Hut around the world and quality programs toward becoming global quality leaders. Business in company has to continue to develop and achieve best in class in quality.

Operation Strategies for Services

According to Gaither and Frazier 2002, Firstly, standard or custom in Pizza Hut, services notes everything when customers orders. Customers who come first will be serving before someone. They have to be flexibility and serve all customers. Furthermore, services should write exactly what customers order and behaviors of service must satisfy when customers welcome. In Pizza Hut restaurant, services should be worn uniform have name badge, neat and tidy. Secondly, amount of customer contact on telephone or Internet for Pizza Hut are increasing each day. Pizza Hut has a website to help customers or receive comment from customers such as contacthelp.com. Beside that they can call 8009488488 to contact. Finally, the mix of physical goods and intangible services, customers can use chili sauce, tomato sauce or something have on table can use for their Pizza. If you order a Pizza medium size, employees will tell you time you get Pizza. After that, they will cook and after they will give you. “Domino’s produces a tangible product (pizza) as well as providing intangible services (e.g., free delivery in 30 minutes or less)” (Michael D. Richarda; D. S. Sundaramb; Arthur W. Allawayc, 2002) . However, Pizza Hut’s services sometimes are not fast delivery. There is little complaint for Pizza Hut.

Types of Service Operations


When you go to Pizza Huts restaurant, you are going to order food and wait about fifteen to twenty minutes to have your meals. The waiters will take your order and go to the kitchen. Then, the chief bakes your pizza here. We call this place back-room operation where the restaurant make their products and bring them to customers in a short time.


it means that the customers are going to take part in your service operation. In Pizza Huts, they put a small booth, which has got many kinds of salad. If you want to eat these salads, you will pay money. Then, the servers bring a plate or bow to you. You have to go the booth, choose salad and get them by yourself. This is the type of service operation.

Customers as product

Pizza Hut used three different methods to sell their products directly to market. The first method of distribution used by Pizza Hut is delivery. Customers can call service to order then they will bring to their house and they can come to pizza restaurant to have luch. Pizza Hut is one of the biggest competitive advantage is the basis the style restaurant, one more thing is when they come to restaurant pizza they can take salad and sandwiches by themselves. Next methods is online ordering, and customer can go in the internet then order products, this methods is really useful because it allows customers see all the menu.


Generally, Pizza Hut is one of the best chains of fast food restaurants in the world. They can attain declining profit in mid of 1990s. Until now it is still the first choose of customers who want to eat outside their homes. We realize that their operation strategy is good. Even though, they encounter some difficulties, they know how to solve these problems. The size of their business is more and more to be opened and upgraded. However, if they manage too many units, they will encounter disadvantages of operation. They are going to lose the control over quality and production. We think that they must pay more attention to overcome this matter. On the other hand, Pizza Hut has good plans about outsourcing, technology and facility. They are continuous to improve quality and technology. They always want to create best products that can compete with their competitors. As a result, the earnings of Pizza Hut franchisee is about $1.9 billion for the quarter that ended September, 2007 (Kansas City Business Journal, 2007).


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