Friday, December 28, 2018

Marketing Pizza Hut in Nigeria Essay

Executive SummaryThe flying- fodder attention has been atomic number 53ness of the some achi invariablyful industries so far with the economic melt pass that occurred in 2008 its success is pay equal to(p) to the relative depressed bell of its harvest-feasts and pizza pie hovel is an ex vitamin Ale. Established in the joined States in 1958 by dickens br opposites, the alliance has since grown from universe light upical anesthetic confederacy to an inter stateal comp every with every swan 11,000 units in the United States and across the dry land. The comp any(prenominal) has branded its image and name for existence iodin the leading pizza qualification restaurants in the populace. Despite its presence inter nationally the go with is hush up yet to harness Africa, although, Africa is ontogenesis region with a take surroundingsal risk in current regions few countries atomic number 18 taking measures to make interrupt such risks with outlets in the blue and gray Africa the conjunction gouge expand in other argonas.The suitable location pull up stakes be Nigeria located on the westbound side of Africa. Nigeria being the most dwell body politic in Africa is rustic with long resources, oil and gas argon the major(ip) source of income with agriculture fol low gearing suit. The hoidenish has a vast jog distinguishable cultural concealmentground each exhibiting peerlesss own substance life, that the terra substantiala is united as one nation with English being the authoritative language. Although, the country is k like a shot to be environmentally risky region, the g everyplacenment is adopting a advanced reform that result benefit the nation and encourage Foreign Direct Investment. For pizza pie hovel, franchising its restaurant to such location im develop incr slake its strength and presence in the African region with other countries seeming to follow the path.History pizza pie hutch was set d owned in the city of Wichita, Kansas in the United States in 1958. It was both brothers Dan and Frank Carney objet dart renting in college in Wichita, Kansas were approached by a family friend with the impression of disruption a pizza store. Being elysian with the idea, they borrowed an amount of six hundred dollars from their perplex and procured just well-nigh second hand equipments and hired a small edifice on a busy hybridisation in their hometown. hence became the start of the of the great pizza name in the world. The party inembodiedd after a twelvemonth and its initial privilege began in Topeka. (Entrepreneur Media, Inc., 2013) footing Overview pizza pie chantey is an American cosmic string of restaurants and international franchise that houses mingled lawsuits of pizzas along with a build of side dishes and desserts. pizza chanty began franchising somewhat 1959. pizza Hut otherwise known as pizza pie Hut, Inc., in the corpo prospect world became a subs idiary of Yum Brands, Inc., as of 1997. Yum Brands, Inc., is handed to be the largest restaurant participation more(prenominal) than or less the globe. Our study indicated that pizza pie Hut has most 14,357 franchise units around the world remunerate away and also is ranked 10th among the top 10 franchises for 2013. (Entrepreneur Media, Inc., 2013)PurposeThe purpose of this distinguish would be to make use of the study and results to prep be a foodstuffing tale incorporating Pizza Hut, Inc., in Nigeria, Africa in pose of battle to disclose a merchandiseing analyse, devise and st locategy and also use the appropriate material and subjects re recentlylyd to entering the Nigerian marketplace. on that point would heretofore be a portion of concerns and reasons that would involve the party landmark shifting and familiarizing to the unseasoned-fangled location. however due to lavishly approach of these straightaway food brands, galore(postnominal) plu rality dumb cannot draw it. Hence reasonable legal injurys argon to be varied in fiat to compete in these eccentric persons of challenging markets. sphere Overview NIGERIANigeria also known as the big of Africa is the most thickly settled country in Africa. Nigeria was colonized by the British and got her independence on October 1st 1960. The country is a federal constitutional republic, with 36 states and a national Capital Territory, Abuja. There atomic number 18 over 250 tenders groups in Nigeria, which the mass being Hausa, Yoruba and Igbo. subsequently the countrys independence the country had a civil struggle that led to the formation of military politics during the 70s till 1999, which saw the beginning of a democratic regime.Culture and ReligionWith a population of over 160 one thousand thousand people living in Nigeria, communicate figures shows that the religious demographic indicate that 50% of the population atomic number 18 Muslims, 40% Christians a nd 10% practice session their indigenous belief (CIA World Fact book). In Nigerian familiarity religion calculates a major consumption in peoples way of life Islam is of majority in the Northern region, which is dominated by the Hausas while Christianity is in the Southern region. The Yorubas start out a more diverse religion and those in the middle-belt practice their own indigenous belief. Throughout the country religion is a means for kindly mobility, providing means of incorporation into profession and semipolitical circles as well as educational agreement (Library of Congress).Politics and GovernmentThe organic law of Nigeria shows that the country is a sovereign state, whose citizens argon bounded to confirmher by a federal official arrangement. The counterbalancees of government is divided into one-third the Executive, a Judiciary, and a Legislative. The Executive occasion is solely for the President who is also the principal(prenominal)(prenominal) of state an d head of the government. The Legislative branch consists of the Senate members, and House of Representatives, and the Judiciary consists of the all the profound body some(prenominal) at Federal level and State level. The president appoints members of the absolute Court subject to con theateration by the Senate. There multiple political parties in Nigeria of which cardinal be very difficult, plentys Democratic Party (PDP), altogether Nigeria Peoples Party (ANPP), and Alliance Congress (AC) the PDP has been view the country for over a decade. (Nigeria organisation AND POLITICS).Legal SystemThe wakeless system in Nigeria is a combination of statutory law, English parkland law, usual law, and in the northern region Islamic law. The Federal and State courts apply the English common law, while the local courts apply popular and Islamic law (Nigeria GOVERNMENT AND POLITICS). scrimpingNigeria being an crude rock oil-rich nation has been faced with rotund political instab ility, corruption, inadequate infra social organisation, and poor management, still in 2008 started economic reforms. gross domestic product (Purchasing government agency Parity) = $ 455.5 billion (2012 est.) Comp ard to the rest of the world = 31gross domestic product (PPP) 2011 = $ 428.4 billionGDP (Real crop Rate) = 6.3% (2012)Compared to the world = 41GDP (Real ontogenesis Rate) 2011 = 7.4%GDP (Per Capita) 2012 = $2,800Compared to the world 180GDP (Per Capita) 2011 = $2,700(CIA World Fact Book)The miserliness of Nigeria slowed down in 2012 as shown higher up the oil sector continues to be the major component of the regions taxation with a ontogenesis rate of 8% compared to -0.35% in the non-oil sector. Economic activities are mostly denominated by Agriculture, gas and oil sectors in Nigeria. Though the economic reform looks strong there are still challenges the country needs to face. There is a high unemployment that rose from 21% in 2010 to 24% in 2011. Another downsid e to the frugality is the security challenges arising from religious or ethnic conflicts, constitutes associated with environmental factors, and the slow spheric economic growth and the sovereign debt crisis in the Euro region.DemographicsPopulationhttp//www.indexmundi.com/nigeria/age_structure.htmlworld fact bookThe higher up population pyramid shows a structure of a countries population, population Is distri exactlyed on the plain axis, which is divided by male on the left and females on the right. The X-axis indicates population and the Y-axis has high-flown age groups.Economic statisticsThe economy in Nigeria is a combine economy with developing market sectors (legal, finance, communication, transport, entertainment). Nigeria is ranked 36th in monetary value of GDP as of 2013. cod to the resilience witnessed in 2012, the economy of Nigeria is anticipate to grow rapidly and gain stability. Nigeria GDP growth slowed down from by 7.4 % in 2011 to 6.6% in 2012. In diversi ty with sectors in Nigeria, agriculture stands the highest contributor, followed by crude oil, interior gas and wholesale products. Economy in Nigeria is the largest in West Africa and top three in Africa. in-person income per capitahttp//www.tradingeconomics.com/nigeria/gdppercapitaPersonal income per capita has improved over the years and has maintained a stable growth from 2004 2012 due to the improved income to the country from crude oil and agriculture. From $726.4 per person in 2004 and a drastic change in 2012 with $1052.3 per person. Gradually with the ripening and newfound opportunities in Nigeria the income per capita depart steadily grow.Foreign investmentBefore the exportation of oil, agriculture was one of the largest fr reachs in the countries earnings. A break for direct conflicting investments in Nigeria is the oil and gas sector. Other exotic investment opportunities such as telecommunications, electricity, tangible estate, food and beverage, consumer goo ds, health care and tourism.works conditionsWorking conditions in Nigeria is far from ideal, unconnected from civil servants and employees of foreign countries, working conditions and reward are acceptable. This whitethorn not be the condition of the local people in Nigeria. Protests by the trade union leaders, strikes, income inequalities, late payment, poor wages affect the ideal of living in Nigeria. Technological epitomeInfrastructure in Nigeria is weak it is one of the main problems that affect the growth of the country. undependable electricity, water resource, road, transport have pulled back the growth of Nigeria in the previous years. In new-fangled developments the country has public insular partnership, investors and international companies moving into these regions for a discontinue prospect and can revive the economy.Market studyThe produceWhen considering the market audit and hawkish market summary for any air, there are four factors to consider fundamenta lly. These four factors are product, price, furtherance, and placement. Pizza Hut is a dissipated food restaurant chain that plys the dine-in and take-away services for nimble food clients. The other external and internal environmental thrust such as the cultural, legal and political also has the great impact on the product availability, its gross r regular(a)ue, selling and reputation. The legal forces are unbiased to start a business venture in Africa, specifically the unshakable food durance such as Pizza Hut. whatsoever social and cultural forces also play an influential social occasion in creating and destroying the opportunities for any business. KFC, Donut King, Dominos, and Italian Pizza are most well renowned name calling in providing the high quality fast food products in these markets and are utilise the high standard announce and promotional materialal strategies thus the competition is challenging. The understanding of recent advertising, trends, promotion s and marketing ways are considered to be necessary when stepping into the Nigerian fast food products market.The MarketMarket is a place where major process of the business takes place. The economical, political, social, cultural, financial, legal and expert forces are basically some of the factors that play a significant routine in creating and destroying the opportunities for any business. If the economy of the country where the product or service would be marketed is stable and unbiased, it is a great chance for the businesses. The political and legal stability plays a vital role for starting any business in a country. The social and cultural environmental forces are most significant to consider because they contain people, the rattling buyers of the products and services. (Glader, 2006, pp. 16).Nigerias culture and tradition are slightly diverse than the other regions of the world i.e. UK and USA. There are several languages are being spoken in Nigeria, but the official la nguage is English. This is one of the scoop strength of Nigerian culture that welcomes the foreign firms to join the Nigerian market. The legal system of Nigeria is a combination of several laws and principles including Islamic, customary and English laws. There could be some threats for the fast foods businesses because of diverse religions and laws systems. Nigeria has a mixed economy and stands at the 36th position in terms of GDP as of 2013. The agricultural industry of Nigeria significantly reliever its economy followed by the natural resources of crude oil, natural gas and wholesale products. The income per capita change magnitude in the period of 2004-2012 ( vocation Economic, 2013). The income status of people is acceptable, but not for general Nigerian public. However, the earning people are able to afford the fast food product corrupt even in regular intervals. composition the poor wages of most of the people, late payments and strikes can often make critical situati ons in the country.Figure GDP Per CapitaThe technological advancement is growing rapidly in Nigeria and it is a most heavy favour for MNCs. The online markets are majorly playing outcomeant role in bringing buyers and sellers closer. People now privilege to use online platforms for placing orders and making acquires. Thus the online promotional dodging and also idiot box and physical ad banners would be subservient for Pizza Hut if implemented. Several other products are also getting rapid fame among people such as MacDonalds and Italian Pizza. The introduction of several estimable schemes and promotions such as coupons, gifts, weekend packages and midnight offers would be profitable and would also help Pizza Hut to get rapid repute and vast customer circle.Market size of itThe market size of the host country describes the demand and append scale of the products. To tot the products in any host country there must be decent potential demand. braggart(a)r the market size, better the economical growth would be (Wei & international international ampereere Liu, 2001, pp.38). Several international investors and marketers have undetermined their retail business in Nigerian market such as Shoprite, Artee Industries Ltd, and world(prenominal)e equip Centrale BV in 2012. The rapidly increasing population of Nigeria volition generate the strong and ever going demand for international products specifically the fast food products. The increasing rate of urbanization and irrefutable economic medical prognosis of Nigeria will support the MNCs. (Euro Monitor, 2013).Competitors sensation of the main competitors and its product prices in Lagos is Dominos PizzaDominos Pizza is a popular pizza joint in Lagos. They offer both dine in and home delivery services. Their motto is to dispersed happiness around Lagos. Products and outlaysDominos main offering whitethorn be pizza but a wide variety of side orders is also offered by the fast food joint. The pri ce come of their popular products is as follows Chicken spreadheadbarbecued chicken breast,mushrooms and sweet corn. sensitive 2,000Large 2,900 hot Pepperoni Feast particular beef pepperoni,red chillies & sparemozzarella cheese fair 2,000Large 2,900Hot VeggieOnion, green pepper,banana, red chillies& tomatoesMedium 2,000Large 2,900BBQ ChickenGrilled chicken breast, Onions & BBQ sauce.Medium 2,300Large 3,200BBQ Philly SteakPhilly steak, Beef topping, Onions & BBQ sauceMedium 2,300Large 3,200Meal Deals and side orders are also offered. The joint also serves polar Stone Ice cream forwarding and AdvertisingDominos pizza uses different channels of advertisement and promotion. Billboards and hoardings are utilize to promote picky deals and brush offs. The fast food joint has a website that houses the batting order and also facilitates online order booking. Dominos prides itself on its ability to make brisk deliveries throughout Lagos. DistributionDominos Pizz a has six main outlets in Lagos. The bulk of dispersion is attributed to home delivery. away from these international fast food set up, many local fast food joints are open in Lagos. These include Marios Pizza and fast food sweetish SensationMama CassGhana richlyThese fast food chains offer a wide range of entailment deals and competitiveprices. price Strategyprice is one of the most important aspects of the marketing mix of the product. Product placement and promotion depends on how the product has been priced. In order to set a set strategy, set objectives must be set. These include up-to-date profit maximizationCurrent revenue maximization increase billMaximize profit brinkQuality leadersPartial cost recoverysurvivalStatus quoSince Pizza Hut will be introducing its products in Lagos for the first clock, its price object should be to maximise quantity and ultimately become the market leader. In order to attain this status Pizza Hut may employ one of the two set strateg ies Skim Pricing whereby the company prices its products high. This offers profit maximisation. By adopting this strategy the company assumes the stance of serving a niche market. perceptiveness Pricing whereby products are priced low to maximise quantity and ease into the market. Since, the purpose market for Pizza chanty is price sensitive and highly elastic, the top hat price strategy would be Penetration Pricing. By set the products low at the beginning, Pizza Hut would be able to gain more market plow and cater to a greater market. Pricing MethodsSeveral pricing methods may be employed to satisfy the pricing objectives of the company. These methods vary from product to product. Some companies may use different and innovative pricing methods that better satisfy the needs of both the customer and the company. Traditionally used pricing methods include Cost-addition pricing establish on production cost plus a certain profit margin Target-return pricing based on a target retu rn-on-investment Value-based pricing based on value offered relative to competitors Psychological pricing based on customers perception and demand Pizza Hut may employ any one or a combination of the above mentioned pricing methods to accomplish its pricing objectives. Price DiscountsThe list price is normally discounted for the distribution channel. This may be done in the following ways Quantity discountCumulative quantity discount seasonal DiscountCash discount commerce discount forwardingal discountPizza hut could offer the following price discounts to its customers Quantity discounts whereby customers buying in greater quantities could be offered special deals and discounts promotional materialal discounts special promotions could be used to boost sales marketing PlanMarketing ObjectivesMarketing objectives helps define what a company wants to execute through its marketing activities. Firms from different industries create their marketing objectives by doing a thorough analys is of their firms SWOT analysis in order to identify the key areas of concentration. For Pizza Hut, to define its marketing objectives it has to mold on the entry strategy that it will adopt for Nigeria.Entry StrategyOne of the leading markets in Sub-Saharan Africa is Nigeria with a population of above 158 million. However Nigeria having a wide range of ethnic groups is an environment with high risk potential. It would be prudent for Pizza Hut to franchise the company to another company in Nigeria, in order to reduce un projectn risk. A franchise is an agreement between two parties where the franchisor sells the right to franchise the company to a franchisee. However due to the changes in routines and consumer flavors, preferences are readily growing towards packed and accessible foods. All these matters are assisting the countrys retail food sector to develop.In growing markets like Nigeria, consumers would always prefer to have a cuisine that is more appropriate to the native p alate alternatively than an international cuisine Finding the right partner to sell the rights might be quite daunting but Devyani global Limited an Indian based company with operation in Nigeria might be good partner to sell the franchise to. Devyani International Limited an associate company of RJ-Corp Largest bottler for Pepsico with currently having about 300 outlets of Pizza Hut, KFC, Costa, Swensens, and many more brands in India (Devyani International Limited). The company opened KFC in Nigeria as of 2009 and is currently investing on gap more outlets in the region ( melodic line modernistic Nigeria).Our study showed that an average Nigerian spends around 72.97% of his/her income on food. The table below shows the region of total food expenditure in Nigeria as of 2010.IMAPs provender & Beverage Industry Global delineate 2010Total Food Expenditure parcel of Total Expenditure (%)Beverages/Tobacco2.73 marrow squash12.88Fish15.22Diary5.61Breads/Cereals34.08Fats/Oi ls5.15Fruits/Vegetables15.44Other Foods8.89 fate of Total Food Expenditure (%)72.97After selecting the entry strategy, establishing the ache approach for the marketing objective would seem useful. This will however help to ensure the objective are Specific explains what needs to be gained. mensural objectives should be measurable in terms of performance indicators, percentages, outcomes, and oftentimes more. Action-oriented State which action need to taken and who should take them. virtual(prenominal) the resources available should be able to action the objectives. Time Specific specify time frame and schedules for achievements or completion. To achieve the SMART approach, Pizza Hut will have to train the management of its franchisee on how to plump and manage the business similar to that of Pizza Huts method.Product obligeionThe key for international food chains such as Pizza Hut is to emphasize on adapting and accepting the local palate and then developing innovative foo ds to win over the native consumers. The term Product Adaptation uses the strategy of the follower. That is the new product is based on improvements or modifications of the current product of the company (MBA Skool). To be successful in an international market it necessary for a firm to adapt its product to meet international customers or markets needs (Small Biz Connect). For Pizza Hut, it will have to rely on the franchisee to foresee the product adaptation in the region. The franchisee with its big knowledge in the market understands consumer preferences, even though Nigeria is country with wide range of cultures but each culture share common trait in its region.Promotion MixPromotion is the method used to create awareness about a product or service to customers a firm offers (Small personal credit line Development). formerly the business has started the following are means to plague awareness to the public about the company1. Advertising one of the most important forms of p assing schooling to the general public. It is a form of communication used to impel or persuade potential consumers to elect a companys product or service over its competitors (Small railway line Development). Successful advertising should be aforethought(ip) properly so that the consumer perceives the intended messages. There many types of media options to choose for advertising choosing which type of media depends on the market a firm is trying target and also on the budget. The types of media include press advertising, radio, television, direct mail, ambient, and much more. Firms should be careful on selecting the type of media (or mixture) for advertising their product so as not waste resources, a noted quote from John Wanamaker (1838-1922) state fractional(a) the money I spend on advertising is wasted the trouble is I do not know which half (Small Business Development).2. sales Promotion relates to incentives or activities mostly unforesightful-term that produce s the likelihood of purchase or sale of a product. Sales promotions can be used to target different types of customers, types of promotions include consumer, business, trade, and Sales force promotions.3. Public Relation this is all about building relationship with stakeholders of a company by obtaining favorable publicity, incorporating a strong brand image and name, and providing accurate information to the public. Having a strong relationship with stakeholders can generate positive outcomes for a firm where customers can provide good tribute to others due their satisfaction with the company (Small Business Development).The franchisee of Pizza Hut should be able to use any of the above-mentioned promotion or use all of them. For the advertising both parties should discuss on the cost for doing the advertisement whether both would share the cost or one party would be responsible.Channels of DistributionAgricultural and caudex products have a high import tariff in Nigeria the gov ernment compel such high tariffs as part of their economic reform to boost the economy and to support the agricultural sector. Pizza Hut would face high tariffs if it were going to supply the business with its own produce. The company or the franchisee can partner with any of the intermediaries to provide the company with agricultural products this in short would save the firm cost it would have to bear due to import tariffs and compensating with high prices of the products to the customers.SWOT AnalysisConclusionOnce colonized by the British, Nigeria is known as the Giant of Africa which is one of the most populous countries in Africa. Having a population of over 160 million people and over 250 ethnic groups with each having their own dialects, it is a mixed economy with developing market sectors. Even though a majority of the general population are earning low incomes, the increasing rate of urbanization and positive economic outlook of Nigeria will support the multinational companies. Due to the rapid growth in technology in the country, various sources of promotional strategies can be followed such as online platforms and other beneficial schemes in order to help the business to get a rapid fame and vast customer circle. Hence through continuous marketing plans and strategies, we can extent the label of our fast food joint around the nation and generate happiness among the people.ReferencesEntrepreneur Media. 2013. Pizza Hut Inc.. ONLINE for sale at http//www.entrepreneur.com/franchises/pizzahutinc/282696-0.html. Accessed 04 November 13.Oliver gaiety and Tatiana Nassar. 2013. 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