1.

Introduction
Since the boosting of obesity rate especially in western countries, peoples awareness with
regard to healthy food has risen considerably. Many fast food restaurants have launched
healthy menus and low fat choices, and Pizza Hut is not an exception. Over recent years,
Pizza Hut has slept while its competitors, and consumer demand for healthier food, have
grown stronger (Macdonald, 2008, P8). As the main long term objective Pizza Hut has
announced to re-brand 30 of its UK outlets as Pasta Hut (Cohen, 2008). Furthermore, Pizza
Hut invested GBP 100 million for a six years rebranding program aiming at shifting the brand
perception from the usual quick and convenient treat to that of a healthier premium image
(MarketWatch, 2008).

More specifically, the above can be achieved by enhancing the nutritional value of the
existing food and adding a variety of new pasta dishes to the menu. Hence, Pizza Hut faces
the challenge of acquiring new customers and retaining existing customer base. Finally, re-
branding would pose two key problems for Pizza Hut. This is because the company focuses
on improving its premium image via emphasizing the quality of its ingredients, whilst the
price rises as a result at the same time (MarketWatch, 2008). On the other hand, the current
economic downturn is having an impact on the consumer consumption, and Pizza Hut is more
likely to attract young families trading up for a fun meal out than consumers seeking a formal
dining experience. The question is: `Is Pizza Hut branding strategy effective and efficient?`.

2.
2.1 Brand Management Concept
Promoting a brand as appealing to any basic consumer needs such as functional needs,
symbolic needs and experiential needs, is the main method to accomplish a brand concept
(Shimp, 1993). Firstly, functional needs solutions should be delivered through communicating
the specific attributes or benefits that are going to solve consumers problems and that are
possessed by the brand (Shimp, 1993). Secondly, symbolic needs involve psychological
needs including role position and group membership. These types of needs aim at associating
the brand with people and places, for instance (Shimp, 1993). Thirdly, consumers experiential
needs represent desire for products providing sensory pleasure, variety and stimulation
(Shimp, 1993).

2.2 Branding Means Adding Value
There are three main sources that can provide added values such as: experience of using the
brand (e.g. reliability, personality and character), the types of people that use the brand (e.g.
young and glamorous), and the belief that the brand used is effective (e.g. reduced risk of
using a brand with continued use) (Bradley, 1995). The company identifies and stresses
functional and differentiated benefits, with the final meaning focusing on the brand itself
(Bradley, 1995).

Branding in general is about distinguishing and differentiating a company from others and
such differentiation is achieved by focusing on issues that are fundamental when deciding
whether to make a purchase or not (Hague and Jackson, 1994). Such issues are known as
brand values which are at the core of successful branding (Hague and Jackson, 1994).
Branding also can provide a company with a great competitive advantage within a given
industry (Boo et al., 2009; Dibb et al., 1997).

Branding Added
Values
Experience of use
Risk reduction
Facilitates decision
User association
Fostered by
advertising
Effectiveness
Promise satisfaction
Deliver uniform and
consistent quality
Appearance
Consumer products
Industrial products
Functional
benefits
focused on
product class
Differentiated
benefits
focused on the
brand
(Source: Bradley, 1995, p.519)



2.3 Brand Mismanagement
Even established brands, which have survived for quite a long time, may be affected by brand
erosion and eventual demise of the brand itself (Bradley, 1995

Short-term focus

Because of companies pressure to generate specific amount of profit, the impact of
advertising on the companys image is often difficult to see, which result in a quick, easily
measured sales response. This in turn leads to brand being turned into a commodity, sold on
the basis of price only (Bradley, 1995).


Lack of marketing support
Less expenditure into advertising contributes to the erosion of brands due to a decline of the
brand (Bradley, 1995). Hence, companies have no choice but to turn to in store price and sales
promotion (Bradley, 1995). Although this can provide the company with immediate benefits
in terms of the short-term financial objectives, this can ultimately bring negative long-term
effects (Bradley, 1995).


Impact of recession
Due to the general economic downturn, consumers have become less receptive, consumer
loyalty to brand has eroded and many products are seen as commodities distinguished only by
price (Bradley, 1995, p.549).








3. Customer and Public Reaction
The customers were invited to give their opinion on the name change at its Pasta Hut website,
and Piscitelli (2008) found out the customer response after the day of the rebranding
announced, there were 22% people voted for Pasta Hut and 78% against the change. Also,
according to Jo (2008), more negative response about its pasta dishes than the name change.
This implies that people care more about the food served than the name of the restaurant. In
addition, some other market watchers from the public also express their opinions.
DATAMONITOR (2008) highlighted that, the rebranding causes the company face
difficulties of remaining existing customers and attracting new customers because of the
current economic recession and uncertainty.

Moreover, a recent news report proved that the rebranding was not a success. Pizza Hut (2009)
released that over 91% of its online poll wanted to keep the name Pizza Hut, and therefore
Pasta Hut trial was ended in January, 2009. However, the good news is that the customers
love its new pasta menu (Pizza Hut, 2009).



4. Evaluation and Analysis of the Strategy
The objective of the new strategy that Pizza Hut has applied is to create a healthier brand
image to acquire middle-class customer by offering healthier choices.

Short-term promotions are often considered to be detrimental to long-term brand building
while different in the fast food business (Cohen, 2008). Pizza Hut changed the names of 30
outlets in the UK to Pasta Hut as a temporary tactic to promote the new menu and attract
new customers, while this has resulted in the loss of existing customers. Another issue that
could be drawn regarding Pasta Hut is whether the name is powerful enough to deliver a
healthier image to customers and to outbid competitors in the fast food business. By changing
the strategy temporarily, and then going back to the previous strategy the traditional target
market might loose focus on what Pizza Hut is actually offering them as an overall dining
experience. Is it the exclusive fresh food ingredients, the price or the overall experience of
having a meal at Pizza Hut that makes the final so special compared to the existing
competitors in the food market?

In actual fact, Pizza Hut has improved the quality of ingredients to offer better and healthier
food to customers, along with which the menu prices have also increased. Nevertheless,
consumers have reduced their spending owing to the effect of current economic uncertainty. It
seems that Pizza Hut made a price rising decision in an inappropriate time period in which
consumers are looking for less expensive alternatives. As a result, a `value for money` issue
may arise even though the quality of food has improved. The direct negative effect for the
company is the creation of an unstable brand image that lack of focus on customers
perception with regard to the company itself.

Lack of marketing support could cause brand erosion, while Pizza Hut has lots of marketing
support, such as promotion done through 1,650 ATM in UK (Marketing, 2009), in order to
raise especially families awareness of deals and strengthen a new brand image during a time
of recession. However, it is because of the final that people doubt the value of advertising and
show lack of trust towards branding. Thus, consumers are less influenced by promotions.

In effect, even whereas promotional campaigns revealed to be effective these could only
generate short-term profits rather than bringing long-term benefits to the company in terms of
sales. Overall, in the long run promotion is likely to strengthen the companys brand image
and maybe increase customers loyalty.







5. Conclusion & Recommendations

1. Create a New Brand Name
To create the new brand image, Pizza Hut is going through a challenging phase that may
dilute the existing customer base. Hence, in order to retain existing customers and enter the
middle-class market, Yum group could create a new brand to tap into such market.

2. Focus on Managing the Existing Customer Base
Pizza Hut should focus through a specific devised strategy on retaining the existing customer
base rather than focusing on a premium market. This is because the final would attract a
hugely less potential number of customers. Hence, the mass market for Pizza Hut is likely to
be more lucrative than a niche premium audience that has more freedom to switch to other
superior restaurants given a greater disposable income.

3. Provide value for money
In such time of recession Pizza Hut should rather focus on providing reasonably quality meal
at cheaper prices than those charged by competitors within the same category e.g. Dominos
- and generally improving the service such as delivery times.














References:
Books and Journals:
Boo, S., Busser, J. & Baloglu, S. (2009). A model of customer-based brand equity and its
application to multiple destinations. Tourism Management. Vol. 30, p219-231.

Bradley, F. (1994). Marketing Management: providing, communicating and delivering
value. London : Prentice Hall.

Cohen, V. (2008). Sauce of conversation. Brand Strategy, Issue 228, p42-43.

Dibb, S., Simkin, L., Pride, W. M. & Ferrell, O. C. (1997) Marketing: Concepts and
strategies. Boston: Houghton Miofflin.

Hague, P. & Jackson, P. (1994). The Power of Industrial Brands: An effective route to
competitive advantages. London: McGraw-Hill.

Macdonald, C. (2008), Brand in the news: Pizza Hut/Pasta Hut. Marketing, p8.

Marketing (2009), Pizza hut in ATM activity, Marketing, p 10.

MarketWatch (2008), Pizza Hut: focus on re-positioning, Vol. 7 Issue 11, P16.

Roberts Jo (2008), The penne is mightier Brand Strategy Nov2008 Issue 227, p8-8

Shimp, T. A. (1993), Promotion Management & Marketing Communication, 3
rd
ed. US: The
Dryden Press.









Websites:
News.scotsman.com (10/03/2009) Pasta way to do it Pizza Hut gets healthy publicity from
new name stunt Available: http://news.scotsman.com/latestnews/Pasta-way-to-do-
it.5050075.jp [Accessed: 11/03/2009]
Piscitelli, N. (2008) Pizza Hut rebrands as Pasta Hut (The Institute of Commercial
Management Website) Available:
http://news.icm.ac.uk/leisure/pizza-hut-rebrands-as-pasta-hut/669/ [Accessed: 11/03/2009]

Pizza Hut (19/01/2009) Customers vote for Pizza Hut Available:
http://www.pizzahut.co.uk/restaurants/news/customers-vote-for-pizza-hut.aspx
[Accessed: 11/03/2009]