Pizza Hut vs Papa John’s Product Positioning Deconstruction

Companies and Products


Pizza Hut has expanded into various product lines but their main staple remains cheese pizza. Since Pizza Hut’s opening in 1958, the variety and choice in their pizza has grown exponentially. Today, Pizza Hut offers a “Pizza Builder” experience for its’ customers (“Pizza Hut: About Us”, 2014). Anywhere, customers can choose between four different crusts and a variety of toppings. From a pricing standpoint, a regular large cheese pizza at Pizza Hut is $10.49 (Pizza Hut, 2014). Competitor Papa John’s cheese pizza includes dipping sauce, with their large cheese pizza costing $13.00 (Papa Johns). Even though Pizza Hut does not offer dipping sauce with their pizza, you could still purchase it, along with one topping, and still fall under Papa John’s cost with a total of $12.44. Pizza Hut’s low cost and customizability make it extremely appealing to millennials, the target market they are striving to appeal to today.


Papa John’s, a fellow leader in the pizza market, too now offers a variety of products, but they are still desired for their pizza. Papa John’s offers lots of choices when it comes to customizability of their pizza. No matter what consumers prefer on their pizza, whether it be extra sauce and cheese or thin crust instead of regular, the price of the pizza still stays at $13.00 for a large pizza with garlic dipping sauce (“Set My Address to Order”, 2014). In contrast, Pizza Hut charges for their dipping sauce bringing their overall price to $12.44 (Pizza Hut, 2014). Regardless, Papa John’s pizza is 56 cents more overall but this higher price is offset by their claim of better ingredients, appealing to families.


Market Segmentation


Pizza Hut has implemented a new targeting market strategy towards millennials using new media technology and recreating their menu (Minsker, 2014. Pizza Hut hopes millennials will perceive their pizza as higher quality and gourmet, with unconventional flavor combinations, wants communicated by the current millennial market segment (Lutz, 2014). In addition, Pizza Hut is dedicated to catering to millennials technology dependent lifestyles by using multiple platforms to engage. On the other hand, Papa John’s has always targeted a specific consumer since the day they opened in 1993 (Baer, 2014). This target group includes adults ages 30-50 with kids who value high quality products. Their prices and pizza styles are geared toward families by focusing on product quality and tradition.


Communication Strategies


In order to target millennials, Pizza Hut is utilizing both traditional forms of communication and new media technology. In recent years, Pizza Hut has been accused of ignoring millennials, their ads simply focusing on low prices and deals (Piras, 2014). Yum, the parent company of Pizza Hut, says it is working hard to turn around the recent quarter’s poor performance by overhauling its’ marketing efforts and debuting new menu items that will connect with millennials. Within the past year, celebrity endorsements, movies, tastes, and the company’s increasing ability to harness technology is helping Pizza Hut reengage millennials.


During the release of the live-action Teenage Mutant Ninja Turtle movie in summer 2014, Pizza Hut signed to be the official partner of the movie. The television ads featuring Pizza Hut with the turtles specifically put the company in front of millennials eyes, who are interested in reliving their childhood. By co-branding their product with other pop culture themes, whether it be movies, TV-shows, or another phenomenon, Pizza Hut further embeds their product in the minds of the millennial consumer, who now associates it with these other factors.


Pizza Hut also has incorporated a celebrity endorsement with country star Blake Shelton. Millennials are highly interested in the country music culture, which depicts easy going, “good time” people. The endorsement transfers the message of their pizza being symbolic of the country music lifestyle. By choosing the pizza that Blake endorses, millennials believe it will help them further connect with the country music lifestyle they desire.
Pizza Hut is also learning to harness online means of communication. The company sends out emails to its’ “Hut Lovers”, email users who subscribe to receive promotions, updates, and coupons. This is more effective communication strategy for Pizza Hut since millennials no longer cut coupons out of a newspaper, but constantly check for incoming emails. More effective than email marketing however, Pizza Hut has learned to use social media as an effective way to reach their millennial market as customers can now place orders from Facebook. Digital orders now make up 40 percent of the company’s sales (Claveria, 2014). Pizza Hut also uses Twitter and YouTube as other advertising channels to market to millennials.
Pizza Hut also has its’ own app. The app not only allows mobile customers to purchase pizza on-the-go, but uses gamification by allowing consumers to play a pizza themed game while they wait on their order (Young, 2009). In 2013, the company saw 12 times a ROI for customer engagement due to its multiple mobile promotions (Tierney, 2013).
The recent announcement of a “concept table” could change how millennials order pizza in Pizza Hut sit down restaurant. The table itself is a giant touch screen, allowing customers to customize their pizza, pay for their order, and play games all while remaining seated. Millennials love games, convenience, and experience, so this idea could be Pizza Hut’s saving grace for their “sit down” restaurant locations, which millennials don’t prefer (Fromm, 2014). The table will make Pizza Huts pizza more than just food, but an experience.
Beyond basic advertising communications, the strategy of appealing to millennials is causing Pizza Hut to create different recipes and variations of their cheese pizza in order to communicate their position towards millennials. To appeal to millennials growing demand for quality and gourmet, the company recently gave their crusts a lighter, airier feel (Morrison, 2014). In 2013, Pizza Hut gave their stuffed crust option a new recipe, now including three types of cheese (“Pizza Hut rolls out…”, 2013). The company recognizes that millennials crave mixed flavors in foods. The stuffed crust was originally supposed to appeal to mostly kids and families who at the time of introduction wanted a more fun crust option (Horovitz , 2013). The new cheese flavor appeals more to millennials desire for mixed flavors instead.


Papa John’s advertising appeals to consumers who now want a family friendly pizza option, as opposed to just any pizza. While they are not ignoring the millennial market, their success has been in targeting families and those ordering pizza for special occasions. They have achieved this by communicating that they follow tradition and offer the best, highest quality ingredients. For example, their freshly hand-tossed dough has no added “dough conditioners”, such as sodium stearoyl lactylate or mono and diglycerides, and their fresh-packed pizza sauce does not contain high-fructose corn syrup, artificial flavors, or colorings (“About Papa John’s). Parents are more likely to choose “better quality” not only for their health, but for their children.
To remain competitive, in 2001 Papa John’s was the first national pizza brand to establish online ordering (Viveiros, 2014). Statistics show that 45 percent of Papa John’s individual orders are placed online (Viveiros, 2014). While millennials use online ordering to complement their technology based lifestyle, convenience is key for Papa John’s target market. Parents are more willing to order pizza online since it can fit into their busy schedule The benefits of catering to busy parents by implementing online ordering, along with Papa John’s family appeal, have been long lasting.
From an incentive standpoint, Papa John’s has taken a huge step and instituted a rewards program. This program offers members rewards after reaching 25 points or more. After obtaining 25 points, members receive a free large three-topping pizza. This strategic marketing tactic draws consumers, especially parents who love a deal, in, giving them an incentive to purchase more and more in hopes that they reach the 25 point mark. This is how Papa John’s gets customers to come back. Customers are led to believe they are earning something in return. Parents who need to be frugal are drawn to companies that offer rewards programs as they also give coupons and other value offers for returning users.
The top marketing strategy that Papa John’s is using to draw in huge amounts of clientele is their “NFL” promotion. Peyton Manning, a former Indianapolis Colt, owns 25 Papa John’s stores in the Denver market and has been a company spokesperson since 2011 (Bowling, 2014). Peyton Manning is a huge icon in the NFL. Peyton appeals to family households because of his background and humble reaction to success. As a result of linking the company to Peyton and the sport of football, sales increased by 9 percent during the fourth quarter. On draft day, May 8, 2014, Papa John’s offered a promotion that offered consumers a large one-topping pizza, 10-piece chicken poppers, and a side of bread for $16.99 (Bowling, 2014). This communication strategy, in correlation with the football event, encourages families enjoy a meal together.


Positioning Statements and Hypothesis


After examining both company’s communication strategies and products, we developed positioning statements which we believe state the company’s intentions and call to their respective target market. Following the development of the positioning statements, we developed three hypotheses, per company, to test during our research conduction. By testing the hypotheses developed, we hoped to approve or disapprove of the company’s efforts to communicate their product to an intended target market. The following are each company’s respective positioning statement, followed by hypotheses:
Pizza Hut
To trendy, technologically savvy millennial consumers, Pizza Hut is the leading pizza chain in creating easy, modern ways to order and enjoy the classic cheese pizza.
Hypotheses:

  1. Pizza Hut is the most recognized pizza choice of millennials.
  2. Millennials use mobile ordering when ordering pizza.
  3. Millennials view Pizza Hut as a “modern” pizza company.
    Papa John’s
    To families and other social groups, Papa John’s is the leading pizza company who values the importance of social interactions and celebrations by remaining dedicated to quality, tradition, and service.

Hypotheses:Consumers view Papa John’s as family oriented.

Consumers prefer Papa John’s in social situation.

Consumers view Papa John’s as a high service / high quality pizza company.
Data Collection and Analysis


The questions in the Papa John’s survey (See Appendix 1.2) were positioned to gain further insight as to whether Papa John’s was viewed by consumers as a family friendly, high quality pizza company. In order to not give away any bias towards Papa John’s, the company’s name was not used in any of the questions. While the sample can be regarded as non-probability due to convenience, based on accessibility to ask college students, this may actually have lead us to much deeper insights. By getting a college student’s perspective on Papa John’s, we may be able to determine whether the millennial generation themselves views Papa John’s as the “family/quality” pizza company, as opposed to the millennial positioning of Pizza Hut, putting both companies under positioning discrimination by the same type of consumer.
The Papa John’s survey was administered to a 20 year old, male student. By answering the first question favorably that he regularly purchased Papa John’s, allowed for interesting insight into his remaining answers. The respondent listed that he ordered pizza more than three times a month and listed “Movie night” as the choice of event he orders pizza, which has a basic connotation of being a family activity. Further, the respondent chose Papa John’s as the highest quality pizza with the best quality service. Taking these factors into account, it can be concluded that our hypotheses of Papa John’s being a “family/high quality” pizza company were precise, among college students who are not their intended target market. This in mind, more accurate results to determine whether families feel the same way would best be reached by conducting the survey on a person within that market segment.


To test the hypothesis stated about Pizza Hut, we conducted another survey (See Appendix 1.1). The purpose of this survey was to determine the awareness of pizza preferences and ordering methods among the target market of millennials. The respondent who answered the Pizza Hut survey was a 19-year old female that was randomly chosen from the MacDonald-Kelce library. The respondent did not choose Pizza Hut as her regular pizza choice. Even more unsupportive of our hypothesis, she has used online ordering but not from Pizza Hut. Further concerning, is that she was not aware the Pizza Hut allows customers to order online, but stated that she would if she was aware.


Conclusions and Recommendations


Based on the findings from each survey and after analysis, Pizza Hut needs to re-evaluate their techniques for reaching their new target market and communicating to them. While the results from the Papa John’s survey can at least lightly support the hypothesis we established for them, Pizza Hut was does not seemingly appeal to their target market, millennials. In order for Pizza Hut to better communicate their image to their target market, they should look at advertising specifically about their online and mobile ordering capabilities.

The main problem based on the survey seemed to be that millennials are not aware that Pizza Hut has this capability. Papa John’s on the other hand, based on our results, appeared to have accurately communicated their positioning statement to their target market. If Pizza Hut does not target this market effectively in the future, they run the chance of losing it to Papa Johns, as our findings and Papa John’s current marketing efforts show that they are already starting to cater to this market.

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