Pizza Hut targets value with $10 Dinner Box

 

Nation’s Restaurant News speaks with CMO Kurt Kane about the chain’s price-point strategy
February 13, 2012 | By Ron Ruggless
 

Pizza Hut’s new $10 Dinner Box hopes to appeal to changing value perception among consumers.

The $10 Dinner Box includes one medium rectangular one-topping pizza, five breadsticks with marinara dipping sauce and 10 cinnamon sticks with icing, and was introduced in “digital soft-sell” this past weekend.

Kurt Kane, chief marketing officer for Plano, Texas-based Pizza Hut, said the new limited-time offer plays off the chain’s “Big Dinner Box” promotion from late last year.

“We had huge success with what we called our ‘Big Dinner Box’ that we put on the market in December, which was at a $19.99 price point. It had two medium pizzas, eight wings and breadsticks inside,” Kane told Nation’s Restaurant News. “What we challenged ourselves with is: ‘Can we give consumers even more value than that?’ We wanted to give the smaller group occasion great value as well.”

The $10 Dinner Box would cost $16 if each item were purchased separately, Kane said.

“This uniquely positions us versus our competitors,” he said. “Historically, where people have defined value has been around trying to provide the lowest price on a single pizza and fighting it out on the price point. What we are trying to do is change the nature of that discussion and really turn it into a value conversation around what you get for what you pay.”

The deal got good response in a market test last fall, he said. “Our firm belief is that the competition doesn’t have the same menu variety that we do, so we can leverage that menu variety and bring it to people at a great value,” Kane added.

Pizza Hut, like other chains, is dealing with post-recession views about what makes up value.

“The recession has changed people’s perceptions and expectations for value significantly,” Kane said. “I don’t know that it will ever change back.

“Our brand and our system has come to recognize there is a much higher standard for value than there was just a few years ago,” he said. “What they love is the ‘unlimited variety’ side of it. Their perception of value is that there shouldn’t be limitations on what they can access and the type of experience they can have just because they are looking to spend their money wisely.”

The recession was a jarring event, Kane said. “A whole new generation of consumers has basically been born under a new value mindset, and I don’t see that changing anytime soon,” he added.

Sam’s Club and Publix tops in customer experience

 
February 14, 2012 | By Katherine Field Boccaccio
WABAN, MASS. — Research results released Tuesday by Temkin Group, which rates the customer experience of 206 large companies across 18 industries, showed that only eight companies deliver excellent customer experience: Sam’s Club and Publix led the pack, followed by Starbucks, Subway, Chick-fil-A, Aldi, Winn-Dixie, H.E.B., and credit unions.

According to the 2012 Temkin Experience Ratings, in its second year, 76 companies (37% of the total) earned “poor” or “very poor” ratings.

The research examines customer experience across 18 industries: airlines, appliance makers, auto dealers, banks, car rental agencies, computer makers, credit card issuers, fast-food chains, grocery chains, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, parcel delivery services, retailers, TV service providers, and wireless carriers.

Grocery chains, fast-food chains and retailers are the top three industries, earning an average rating of “good.” At the bottom of the ratings, TV service providers, Internet service providers, and health plans earn an average rating of “poor.” Health plans show up in seven of the bottom 14 spots in the ratings.

“While many companies aren’t delivering experiences that meet customers’ needs, it’s an epidemic for TV service providers, Internet service providers, and health plans,” said Bruce Temkin, author of the report and managing partner of Temkin Group.

The research by Temkin Group also analyzed the changes in ratings between 2011 and 2012. Among retailers, Kohl’s had the largest decline.