Market Segmentation of Pizza Hut and Dominos

The food and beverage industry is keen to stay loyal to traditions and evolves slower compared to others. In contrast, food-providing companies need to stay relevant by adopting new technologies and walking with progress. The basic need for nutrition lies beneath the constant and guaranteed demand for food. From a business perspective, the companies in the food and beverage industry cannot operate by only relying on the demand. Domino’s Pizza and Pizza Hut are the largest international pizza restaurant chains, both cherishing the value of continuous progress. Surely, accurate segmentation and strategically thought-out positioning strategies ensure their global success. For uncovering the reasons behind their worldwide dominance, let us conduct a thorough analysis of the segmentation strategy of these brands.

We should start with the segmentation strategy of Pizza Hut.

Let us look at the following commercial and run an analysis for understanding the segmentation strategy of Pizza Hut.\

The commercial features famous American actor and comedian Craig Robinson. The scene of the commercial gives nostalgic vibes, decorated with vintage arcade machines, one of which is played by our hero. Craig associates the game of Pacman with pizza.

Emphasis is that the love of pizza, like the love of Pacman to eating dots, remained unchanged throughout many years. While Pacman always eats the same dots, Pizza Hut offers a big variety with the option of adding any topping.

Pizza Hut’s choice of the actor and scene are not random. The hero of the commercial is a stay-at-home man, loving his pizza, enjoying playing old, but classic games without company.

It is visible how he enjoys the comfort and safety of his shelter, accompanied by favorite activities and food. Pizza Hut targeted segment matches the characteristics of Materialistic Wannabees.

Target audience: Materialistic Wannabees

Lifestyle and Values.

Materialistic Wannabees strive for recognition from their friends and family. They give strong importance to materialistic goods and consider money the best metric of success and aspiration. Saving is not typical to them, and managing finances is more challenging because of that.

Unnecessary purchases are common for them and they usually spend money without thinking. Materialistic Wannabees value well-arranged life, avoiding risks, challenges and changes, striving for safety and comfort.

Attitude to Shopping.

Representatives of this segment give little value to their styles and rather give preference to comfortable and traditional clothing. This affects their shopping behaviors greatly, as they are hunting for quantity and not willing to pay more for quality.

Shopping as an activity itself is boring and presents no interest for them. They would rather save time and effort in shopping, preferring items that can be purchased quickly and prove their worth. Novelty and variety present no value for them, referring back to their desire to be in comfort and safety.

Interesting facts about Materialistic Wannabes

• Materialistic Wannabees are active users of TV, mainly for entertainment like sports and movies, also for getting information. They plan their evenings by looking through the TV programs.
• It is typical for people in this segment to visit cinemas, theatres, and other cultural events rarely. They prefer the safety and comfort of their home, and enjoy alone time rather than inviting friends.
• Reading books is of less priority, mainly light literature. In contrast, reading dailies is a great source of information for getting local and international news, and on interest areas.

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Positioning Plan of Pizza Hut

Capturing a share of the highly saturated pizza market is a challenge. Moreover, keeping that share is more complicated with powerful rivals and constantly evolving market conditions. Pizza Hut has succeeded to become one of the global leaders by positioning itself as a brand for the whole family.

Customers know that they can reach out to Pizza Hut and have the meal they want. Ranging from pizza, pasta, dessert, and drinks to a rich vegetarian menu, Pizza Hut is a place for everyone.

Let’s continue with the Marketing Mix of Pizza Hut to analyze their marketing strategy.

Marketing Mix touches in detail the majority of aspects that explain brands performance and strategy. Discussing 4Ps of the Marketing Mix will give us more insight into how Pizza Hut holds its market share.

Product: PizzaHut provides a wide range of products, mainly revolving around Italian cuisine. The menu features Italian pizza, kinds of pasta and bread. Additionally, Pizza Hut always tried to broaden its menu to satisfy a wider range of customers with different food preferences.

That is why the menu includes a vegetarian section and desserts, making the Pizza Hut experience more diverse. Pizza hut’s product line is complex, combined with flexible delivery service and integration of new technology. Customers can customize pizza ingredients to fit their preferences and maximize satisfaction.

Price։ Pizza Hut emphasizes providing quality food and relatively premium pricing follows that strategy. They use the “price skimming” strategy, which is entering the market with a higher price, then lowering it to match with competitors.

This way Pizza Hut improves its chances of winning customers from the market. Overall, Pizza Hut positions itself as a high-quality restaurant with fair pricing for its product proposition.

Place։ Pizza Hut is the world’s largest pizza restaurant chain, being present in more than 100 countries. Touchpoints of sales need to cover every channel to maximize both customer reach and purchase frequency.

Pizza Hut expanded its coverage to be as close to the customers as possible. This helps maintain existing clients and increase the probability of gaining new ones.

Being at the top of international restaurant chains, Pizza Hut adjusts its menus and ingredients based on the location.

Promotion։ The promotional strategy of Pizza Hut reaches an as wide range of customers as possible. As follows, they use the most widespread channels such as TV and social media. As a global brand available in almost every market, product placement in movies and shows is common.

Pizza Hut uses most of the channels with diversified and adapted content to get as much targeted advertising as possible. Promotional activities often include discount deals or special offers, designated for direct sales.

Now, let’s get more insight into the Segmentation Strategy of Domino’s Pizza.

The analysis of this commercial will give us more understanding of Domino’s segmentation strategy.

The commercial features a warm family atmosphere of a father and daughter. Dad is describing the ingredients of Domino’s pizza with a child-like expression to spark similar emotions in his child. He characterizes food playfully and joyfully to get daughter’s excitement in trying the new Black Angus Steak pizza.

The little girl loves the pizza, and wants more of it, leading to the laughter of the commercial crew to her cute reaction. The figure of the father looks caring, as he cherishes the joy of her child even in the smallest moments of life. The analysis of the commercial and characters lead to the conclusion that Domino’s focuses on the Sharers segment.

Target audience: Sharers

Lifestyle and Values: People in this segment find enjoyment even in small life events and share them with family members. Their adventurous nature drives them to escape from everyday routines and move to other realities.

Taking care of the home is typical to Sharers, looking after the garden, making sure that it is always nice and cozy. TV is the main media type and a bridge to a life they dream of, helping them to escape from darker reality. Sharers do not travel a lot, they rather stay at home, and that is why it is important to build a comfortable atmosphere. The eating habits of their family is of much importance, and they emphasize the importance of healthy food.

Attitude to Shopping: Visiting shopping centers regularly is a great pleasure for representatives of this segment. As Sharers like to stand out in small circles, their buying behaviors change accordingly. Sometimes they prefer higher-end brands for that purpose. The Discovery of new products, brands, and special deals is fulfilment for them. On the other hand, they are followers in terms of adopting new products and services, and they are rarely pioneers.

Interesting facts about Sharers

• Sharers tend to choose magazines with product samples a lot more often compared to others
• They are not proficient on the Internet and are uncomfortable with new technologies and computers.
• People in this segment are rarely interested in politics, economics, or societal news. They rather prefer programs on health and beauty, clothing, film industry and lifestyles.
• Love to switch between brands, merely out of curiosity or excitement of trying new things.

Positioning Plan of Domino’s Pizza

The clear and strong positioning of Domino’s Pizza guaranteed that customers know what to expect from the company. Throughout the years, Dominos positioned itself as a company that brings people together through the best bonding food: Pizza.

They make every moment special, and they make sure people get their pizza quick and tasty. With pizza being the most famous food to share, it brings people closer. At Domino’s, they make sure they are a part of every special moment.

Let’s discuss the Marketing Mix of Domino’s Pizza for uncovering the success behind the brand.

A global brand like Domino’s needs to have an all-around tactic of presence in the market to ensure stable growth. Analyzing the Marketing Mix will make clearer what principles lie under each marketing activity of Domino’s.

Product։ Domino’s Pizza provides a rich menu with a variety of pizza for every customer. Throughout its history, Dominos have always tried to adapt its products to evolving needs of clients. That is why the product range includes vegan menus, dessert, famous pizzas, customizable pizzas, toppings and side dishes.

Pizzas come in three sizes: small, medium and large. Alongside the diversity in the menu, Dominos provides digital solutions for simplifying order processes and enriching the experience of pizza ordering. Domino’s pizzas come in a special packaging that keeps pizzas hot and fresh.

Price։ The pricing strategy targets low and middle-income level population. The prices of Domino’s products follow the logic of best quality with reasonable pricing.

With Pizza Hut being the top competitor, Domino’s Pizza also takes into consideration its pricing tactics. As Domino’s pizzas come in three different sizes, the prices differ accordingly.

Additionally, the non-vegan menu features higher prices because of the ingredients used in cooking. The customizing option is different as the price depends on the chosen toppings, crust, size and other options.

Place։ Domino’s operations are franchise model-based, with the vast majority of stores being franchise-owned. Operating in more than 90 countries, Domino’s cannot apply the same business model to every location. Subsequently, they localize menus in every location to meet the taste preferences of the domestic population.

Besides the physical presence, Domino’s integrated new technology into their sales. Currently, apps and websites generate the majority of sales through orders received online. The customization options are also available on all of the platforms, and the online services are accessible in most locations.

Promotion։ As a global brand, Domino’s uses almost every channel to reach its customers. Their promotional activity ranges from social media advertising to TV ads, from product placement in movies to integration in shows. Domino’s considers the quick delivery its competitive advantage, and advertisements accents that.

One of the commercials shows how conveniently a mini self-driving car delivers pizza, and additionally, they promote a special deal. Domino’s Pizza also uses celebrity endorsement, and often the CEO David Brandon plays as the face of the brand.

Summing up, both Pizza Hut and Domino’s pizza are the leaders in the global pizza market. They are the top-of-the-mind names when thinking about pizza brands. Logically, their marketing activity, segmentation and positioning strategies ensure their success. Providing a quality product is a point of parity, but staying relevant and growing globally is surely a challenge. Pizza Hut and Domino’s Pizza achieved worldwide popularity by adjusting their business to the dynamic changes around their companies. With the help of new technologies and progressive thinking, they transformed and simplified the experience of pizza. A simple thing like enjoying a pizza has become easier with these two. Check out our main page for more blog posts like this.

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