Pizza Wars

PRICING AND PROMOTIONAL WARS contd...

In 1998, Pizza Hut also launched a promotional campaign to attract the customers. It had a ‘Pan In Your Name'contest where it offered a free pizza to anybody with the word Pan in his/her name – for example, Pankaj or Panandikar. In April 2000, Pizza Hut launched its innovative Pizza Pooch Menu and a Pizza Pooch Birthday Party package exclusively for kids in the 6-10 age group. Batra said, “There is a specific reason to cater to this segment. Though, at this age, children are under their parents'guidance, they perceive themselves to be teenagers - and have the ability to choose or demand a particular brand of their own choice.”

The Pizza Pooch menu included a wholesome delicious meal and a gift for the child. The menu was intricately designed with pictorial games. A free set of crayons was also provided to keep the children occupied while their parents dined. The campaigns were eye-catching with cartoon characters on the mailers, hoardings and print advertisements where the cartoon characters were aimed at matching varying moods of kids. The Pizza Pooch birthday package was full of fun and excitement. The birthday party included a well-decorated area within the Pizza Hut outlet with several gifts for the children. The party was conducted by a trained host with lots of games, prizes and a special gift for the birthday child.

In March 2000, Domino's slashed prices of Pizza by 40%. The price of a regular Pizza with three toppings was cut from Rs.225 to Rs.130. In October 2000, Domino's ran a scheme, where it gave away two pizzas for the price of one, within five days of placing an order. During the same time, Pizza Hut launched a ‘one rupee pan deal'scheme. Under the scheme, for every pan Pizza purchased, another was given away for Re.1. In November 2000, Pizza Hut introduced a scheme called ‘barah nahin to tera (if not served in 12 minutes, it is yours free)'. The scheme offered a speed lunch in 12 minutes for Rs.89. One second over 12 minutes guaranteed that the customer would get it for free.

Domino's supply chain management enabled it to cut costs. In late 2000, it revamped its entire supply chain operations (Refer Exhibit I). This enabled Domino's to slash prices. For instance, the price for a no-frills cheese pizza was down from Rs.75 to Rs.49. A 10” pizza with at least three toppings was available for Rs.119 as against the earlier price of Rs.225.

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