Pizza Hut Study Essay

1. What argon the implications of pizza pie hovels big worth cuts for its crisscross cypher? As stated Pizza Huts brand paradigm is neither fast food nor full-service. It hucksters average quality products for average prices. Previously, it was marketed as a more for the same value proposition (Kotler & Armstrong, 2012). Yet, it has done something that floor the whole market. It has cut the prices up to 50%. Doing that, Pizza Hut is richly reforming its brand image. They are implementing a Same for less positioning (Kotler & Armstrong, 2012).In a commercial, an actress playing a restaurant employee says, Weve changed just about everything, and how your favorite pizza tastes (ELLIOTT, 2010). This move is due to a weakened providence and a drop of customers. But initiating a price change is not riskless. Customer may think that the quality has been reduced and Pizza Hut could lose its loyal customers. All this being said, I would say that Pizza Huts price cuts may tremendous i ncrease its revenues and remodeling its brand image making good products for a really cheap price.2. give the sack customer committedness be generated through low prices? Customer loyalty can be generated in many shipway such as good product quality, special features, or cheap prices. Some ways can be very effective for some products while early(a) are effective for different products. For example, what would you think if Rolex cut its prices in ready to generate loyalty? It would not work because loyal Rolex customers are cockeyed and would rather have extra feature than a cut in prices. On the other hand, would you pay much more to have a better pizza?The perfect example of a company who cuts its price is Wal-Mart. For this case, I do think customer loyalty can be generated through low prices. And so does Mr. Nicole chief marketing officer at Pizza Hut- We want to build loyalty beyond the price. Indeed, with the crisis people feed to be more cost-conscious. Thus, Pizza Huts approach to deliver a good product for a cheap price is a good way of attracting customers. 3. Can Pizza Hut sustain such dramatically lower prices and still remain economic?From my point of view, neat prices by up to 50% is a real challenge. To remain profitable the company will have to manage its production costs, its marketing channel, and its extra costs. Moreover, as it is said in the text the new pricing appliance will require some time before it proves itself. That is to say that at the beginning Pizza Hut may become barely profitable, precisely hope to gain more market share that will make headway cut costs through larger volume and increase its revenues.Finally, I strongly believed that a company like Pizza Hut would not have done such a thing if it were not richly thought out before. ELLIOTT, S. (2010, August 18). Pizza hut cuts prices again to deprave the slow recovery.Retrieved from http//www. nytimes. com/2010/08/19/business/media/19adco. html? _r=0 Supermar ket news. (Marc). Retrieved from http//supermarketnews. com/latest-news/wal-mart-scores-highest-shopper-loyalty-study Kotler, P. , & Armstrong, G. (2012). Principles of marketing, global edition. (14 Int. E. ed. ). capital of Massachusetts Pearson.