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... e is excellent. C) Promotion The main theme that will be used to promote "The Extreme" is youth. Fun, excitement, danger, and even the term "extreme" all appeal to our target market. Mountain Dew, which has already successfully appealed to this target market, will be included in "The Extreme" promotions. The main promotion will be a coupon to purchase "The Extreme" for $ 9. 99 and receive a free two-liter bottle of Mountain Dew.
The objectives of this promotion are to introduce a new product, stimulate demand, change the short-term behavior of the customers, and encourage repeat or greater usage by current customers. This promotion will be distributed mainly by mail, but also by fliers on college campuses around the country in order to reach the target market. "The Extreme" will be introduced on Super Bowl Sunday, 2001, in a television commercial. Although Super Bowl television ads are expensive, Pizza Hut has enough financial resources for one. This commercial will be similar to the current Mountain Dew advertising campaign. Several young people will be performing exciting, high-risk activities such as snowboarding, rock climbing, and bungee jumping. The young people will then eat "The Extreme" and drink Mountain Dew.
There will also be similar ads in magazines that are popular with the target market such as Surfer, Snowboarding, YM, and Maxim. This advertising campaign will create awareness of the new product in our target markets. D) Distribution The type of distribution channel used by Pizza Hut is the direct channel. The direct channel is successful when there is an extremely large market that is geographically dispersed. The direct channel is also useful when there are a large number of buyers, but a small amount purchased by each. Pizza Hut uses three different methods of selling its products directly to the market.
The first method of distribution used by Pizza Hut is delivery. Customers can call Pizza Hut ahead of time, place an order, and the order is delivered to the customer's home. Another method of distribution is for customers to dine-in. Customers can go to the nearest Pizza Hut, place an order, and either leave with the order or eat at the restaurant.
One of Pizza Hut's largest competitive advantages is its restaurant style facility. Pizza Hut offers a clean place to sit down and enjoy the variety of pizzas, salads, and sandwiches in a fun, family atmosphere. The third method of distribution is! online ordering. Customers can now go on the Internet and place an order.
This method is useful because it allows customers to view the entire menu, download any special coupons, and order without having to disclose any credit card numbers. The market coverage for "The Extreme" will be nationwide. Customers all over the country will be able to order "The Extreme" by one of the three distribution methods. 8) Control Stage First, we will address who will be responsible for the control measures we plan to take. The Marketing Vice President in the Corporate Headquarters, the local / regional Marketing Vice Presidents and the Pizza Hut restaurant managers will all play a role in being responsible for the control. Our success or failure will be determined in a couple of ways.
One main way is to compare results to our objectives. If our objectives are not met, steps to meet them will be taken in the future. We will also look at profits, sales revenue, unit volume of the "Extreme Pizza" promotions used. If our budget allows, perhaps we could give a survey to our customers and get some direct feedback about our new pizza. Ongoing research is essential for our success. Since our plan is for one year, we feel that every 3 months we should do some type of evaluation and control to see how we are doing.
Also, during the maturity state of the product life cycle, we will improve the quality and distinguish ourselves well from competitors. Hopefully, this process of control will be monitored on a monthly basis. 9) Summary and Conclusion Pizza Hut has a successful history of introducing new products to increase sales and reach new customers. This introduction of new products to the market on a regular basis is what makes Pizza Hut the leader in their industry. The level of success that the "Extreme Pizza" will bring Pizza Hut depends heavily on the correct promotions mix. As we had stated earlier, the segment of the market that we have targeted is a very diverse group. This means that the promotion of the product must be done in a diverse fashion.
This will result in a more expensive advertising campaign than in past campaigns, but the potential for a successful product will cover the costs and bring in substantial profit. The advertising campaign is going to be budgeted to use 8 % of projected sales. We are forecasting that the introduction of the Extreme Pizza will increase sales by 7 %. This forecast is based upon other new products that Pizza Hut has introduced and the impact that they have had on Pizza Huts revenues. A 7 % increase in sales for Pizza Hut will bring a total of $ 547 million dollars in revenue, making the advertising budget $ 43. 76 million.
This kind of advertising budget will allow for a mass media blitz of promotions featuring our new "Extreme Pizza." Our target market spends many hours a day in front of the TV and computer, so the constant messages being played will allow our product to generate a high level of awareness. The advertising of the product is very important but the promotion of this product along side Mountain Dew will help to put our product in a more specific category. Mountain Dew has targeted our target market for several years and is by far one of the leaders in this market. With this in mind promotions with Mountain Dew will be crucial to the success of the "Extreme Pizza." With competition being so strong in this industry the threat of imitation products will surely be a problem to be dealt with.
Pizza Hut will however have the first mover advantage with this product. With the entry of imitation products into the market, Pizza Hut will have to adjust its mixes to accommodate change. The promotions may have to be bigger and better than the competition, or the product may need to be altered to give it that little bit of an edge over the competition. For example stuffing the crust with cheese or giving a free topping with the purchase would help give Pizza Hut an edge over the competition.
Basically, Pizza Hut will need to remain flexible in the maturity stages of the product life cycle in an attempt to continue to be the market leader. Overall, this is a product that is not much unlike any of the other new pizza's that Pizza Hut has introduced. What makes this new product so exciting is the marketing plan that is directing the product at a new segment. We are taking a large pizza with a lot of toppings and marketing it as an "Extreme Pizza" to a generation of younger adults that are consumed by this marketing tool. This is what will make this a success. The mix of promotion and advertising we will be using will target a very profitable, sometimes overlooked market segment known as generations X and Y.
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Research essay sample on Product Life Cycle Pizza Hut
