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1. Executive Summary
Pizza Inn Incorporated is a family-oriented restaurant that offers great food and services to their customers. Their corporate headquarters is located in Dallas, Texas. Pizza Inn has locations all over the United States and other countries including the Philippines and Iceland. The company was started in 1958 and incorporated in 1961 by two Texas brothers. The purpose of the company was to provide fresh, great tasting pizza to their community.
Our customers are people and families who enjoy freshly made pizza and pizza products. Pizza Inn offers a variety of pizzas through their full service, delivery/carryout, and the express services. Pizza Inn is unique because they stay involved in the community while providing a service. It was Pizza Inn who introduced the first dessert pizza in 1986. They provide quality and freshness.
The Pizza industry is ever growing because consumers continue to crave it. Sales in the pizza market average about $31.2 billion dollars. The pizza restaurant market is very developed. They represent 7.1 percent of all the “eat in” restaurant sales in the United States. We hope to increase the sales of Pizza Inn Inc by increasing their advertising. Television and newspaper ads would be a good start for the company, or even advertising on the radio. Pizza Inn’s customers are any and everyone who enjoys freshly made and first-rate quality pizza and pizza products.
Like most businesses, Pizza Inn has some major competition, including Pizza Hut Inc, Dominoes, and Papa Johns, but Pizza Inn is set apart from those restaurants. With its unique buffet style restaurants and the other services they provide on college campuses and airports. What could be labeled as an advantage or disadvantage is the taste preferences of the different consumers.
In 1958, two Texas brothers opened the first Pizza Inn across from the Southern Methodist University campus in Dallas, TX. As word spread of the restaurant’s exceptional pizza and friendly service, so did Pizza Inn locations. From 1960–1990, taste buds across the southeastern and southwestern U.S. were able to experience first–hand the made–from–scratch crispy, crackery Original Thin crust, and tangy signature sauce that are still hallmarks of the Pizza Inn brand today.
Pizza Inn’s key personal are Timothy Taft, who it the President and CEO, Charles Morrison who is the Chief Financial Officer, Ward Olgreen who is the Senior Vice President of Franchise Operations and Concept Development, Danny Meisenheimer who is the Vice President of Brand Management, Michael Iglesias who is the Vice President of Franchise Development, jack Odachowski, who is the Vice President of Supply Chain Management, and Darrell Smith who is the Vice President of Development.
Pizza Inn Inc’s marketing intent is to take full advantage of its expansion and unique taste potential in order to expand its already set customer base and to increase profits.
2. Description of Company
In 1958, two Texas brothers opened the first Pizza Inn across from the Southern Methodist University campus in Dallas, TX. As word spread of the restaurant’s exceptional pizza and friendly service, so did Pizza Inn locations. From 1960–1990, taste buds across the southeastern and southwestern United States were able to experience first–hand the made–from–scratch crispy, crackery Original Thin crust, and tangy signature sauce that are still hallmarks of the Pizza Inn brand today.
Throughout its 49–year history, Pizza Inn has prided itself on freshness and innovation, introducing the Taco Pizza in 1979, the first dessert “pizzert” pizza in 1986 and the chain’s hallmark bacon cheeseburger pizza by the 1990s.
In 1994, Pizza Inn was named the #1 Pizza Chain in the United States by Restaurants and Institutions magazines annual “America’s Choice in Chains” consumer poll.
And today, Pizza Inn, headquartered in the Dallas area, operates more than 360 restaurants domestically and internationally. Five are company owned and 366 are franchised restaurants. These units are currently located in 18 states and nine foreign countries. Pizza Inn Inc offers three concepts. Buffet restaurants offer dine-in and carryout service and, in many cases, also offer delivery service. They also offer pasta, salad, sandwiches, appetizers, desserts and beverages, including beer and wine. Delivery/Carry-out restaurants offer delivery and carryout service only and are located in shopping centers or other in-line retail developments. Express restaurants are located in a convenience store, food court, college campus, airport terminal, athletic facility or other commercial facility.
3. Strategic Focus and Plan
This section covers three aspects of corporate strategy that influence he marketing plan: (1) the mission/vision, (2) goals, and (3) core competence/sustainable competitive advantage of Pizza Inn Incorporated.
Mission/Vision
The mission and vision of Pizza Inn Inc is to serve its neighbors with great tasting, fresh made pizza, each and every day. Pizza Inn’s principal activity is to franchise and distribute food to a system of restaurants operating under the trade name "pizza inn".
Goals
For the coming five years Pizza Inn Inc seeks to achieve the following goals:
· Nonfinancial goals
- To build on its present image as a high quality producer of pizza and pizza products in the food categories in which it competes.
- Continue to support community–based programs that focus on the needs of its neighborhood schools, churches, seniors and many other local care–giving organizations.
- To expand to new location, including locations outside of the United States
- To be among the top pizza restaurants
· Financial goals
- To obtain a real (inflation-adjusted) growth in earnings per share of 5 percent per year over time
- To obtain a return on equity of at least 10-15 percent
- To have public stock offering by the year 2009
Core Competency and Sustainable Competitive Advantage
In terms of core competency, Pizza Inn Inc. seeks to achieve a unique ability to (1) provide distinctive, high quality pizza and desserts by using freshly made dough and their unique buffet style way of serving and (2) deliver these products to the customer’s table or home using effective manufacturing and distribution systems that maintain the Company’s quality standards.
To translate these core competencies into a sustainable competitive advantage, the company will work closely with key suppliers and distributors to build the relationships and alliances necessary to satisfy high taste standards of our customers.
4. Situation Analysis
This situation analysis starts with a snapshot of the current environment in which Pizza Inn Inc. finds itself by providing a brief SWOT (strengths, weaknesses, opportunities, threats) analysis. After this overview, the analysis probes ever-finer levels of detail: industry, competitors, company, and consumers.
SWOT Analysis
Figure 1 shows the internal and external factors affecting the market opportunities for Pizza Inn Inc. Stated briefly, this SWOT analysis highlights the great strides taken by the company since it first opened 1958. In the company’s favor internally are its strengths of high quality food, a variety of different experiences and foods, a family atmosphere, and decreasing debt. Favorable external factors (opportunities) include room for expansion through out the United States and into more International countries, and new technology to increase awareness and increase business opportunities for Pizza Inn.
Figure 1. SWOT Analysis for Pizza Inn
Internal Factors / Strengths / WeaknessesManagement / Experience, Family Atmosphere, Train Franchisee / New Management
Offering / High quality, variety, offer buffet, express, table service, delivery, carryout / Nation wide chains have more money to offer more coupons
Marketing / Franchises pay a certain amount to headquarter to market for them which goes towards developing, creating, and subsidizing marketing and promotional materials for franchisees. / No national awareness, competitors have more money for marketing
Personnel / Quick service, strong work force, treats employees as family / If employees leave
Finance / Debt decreasing over the past years from 19 million to 11 million / Revenue decreasing
Manufacturing / Have their own food supplier (Delco) / Must use Delco
R & D / New combinations, Add more variety / Expansion, newer faster way to cook pizza
External Factors / Opportunities / Threats
Consumer/Social / Expand to new areas / Families cooking dinner at home
Competitive
/ Name brand- known for quality / Competitors can copy
Technological / Ordering online, publicity / Competitors have online ordering
Economic / Four different economic class settings / Eating In
Legal/ Regulatory / U.S. Food & Drug Administration / Mergers
Among unfavorable factors, the main weakness is the limited areas that Pizza Inn is located in compared to their competitors that are located nationally and some even worldwide. With Pizza Inn’s main focus being in three U.S. states (Texas, North Carolina, and Arkansas). Another weakness that Pizza Inn is experiencing is that in this past year it has all new management. Threats include nation wide chains such as pizza hut who are better known and have bigger budgets and that also offer ordering online.
Industry Analysis: Trends in Pizza housed businesses
Pizza industry. According to PMQ’s annual pizza industry analysis report, consumers are still ever increasing their craze over pizza. Just from the year of 2004 to 2005 pizza sales overall in the United States raised about $309,054,060. That increase was equal to about a one percent increase in the annual sales of all pizza volume, which comes to an average of about $31.2 billion dollars. Even more surprising is that this sale of pizza represents about 7.1 percent of the “eat in” restaurant sales in the U.S., “which according to the NRA was $437 billion”. Interestingly enough, this increase in sales was not hindered by the decrease in around 458 pizzerias, which brings the total to about 69,386 total units.
Figure 2. A graphic representation of annual sales between distributors
As shown in figure 2 on the previous page, the majority of pizza sales are attributed to independent sellers not under a nationally known brand name. The brand name most recognizable in the pizza industry is that of Pizza hut, with a firm holding of 17.06% of all U.S. sales. Understandably so considering the amount of marketing associated with Pizza Hut, Inc and their “Red Roof” commercialization. Pizza industries ten to try to market to any consumer but do zoom in on specific categories to individualize pizza’s or buffets to their consumers wants, such as the veggie pizza to vegetarians and offering barbeque for the “rib lovers”. The increasing variety of pizza styles, flavors, and buffet choices continue to help the pizza industry grow and take out a larger chunk of the U.S. consumer’s disposable income.
Competitors in the Pizza Market
The pizza industry, as previously stated, represents over $31.2 billion in annual sales. The entirety of the pizza market can be subdivided into a few broad categories, which include but are not limited too: timeliness of both deliveries and “in house”, seat in customers, cost efficiency and price of pizza’s, and taste preference. The major competitors of Pizza Inn, with an actual market share of just over 17%, is Pizza Hut Inc, the next in line is Dominos with a little over 10%, and followed up by Papa Johns with a close 6% as compared in 2005. The ranges of many of these pizza products range with quantity and location, which is evident in the differentiating prices of a small, medium, and large pizza ranging from $5-$16.99. Another variable to factor into the equation is buffets which also range in price depending upon the company and location of the facility.
A major disadvantage that occurs within the pizza industry is taste preferences. Taste preferences, made by either a continual revisiting of eating at the same pizza restaurant or just a differential in flavor, plays an important role in where consumers will chose to eat. In addition, location plays a critical factor in the ability to distribute and market a product, especially for Pizza Inn, Inc. because of their lack there of.
A last, but very highly domestically instilled competitor is frozen pizza products. The most prevalent and widely known frozen pizza brand is that of DiGiorno and Tombstone, a product of Kraft Foods, Inc. The introduction of new types of pizzas under both brand names has resulted in an exponential revenue growth of 2.5 pp. dollar share gain in one quarter. The competition becomes extremely compelling when you average in the long list of different flavors and varieties of both brand names with a price of only about $4.99 per every 12-in pizza.
Company Analysis
Pizza Inn, incorporated in 1961, has a vast amount of experience both in managing and franchising their name out to small business owners and entrepreneurs around the country. The now acting president of Pizza Inn Inc was actually hired on first as a consultant in the liquidation of the company when the corporation had severe problems with its last president who, while under his management, bottomed out the company with liabilities of over $81.7 million.
Currently, Pizza Inn Inc.’s stores and franchises are set up mainly in southern states and in, as stated on their website, about ten other countries including Saudi Arabia, UAE, Kuwait, and others. Unknown to many consumers, the pizza industry is fierce in competition and quality and time efficiency means everything when gaining a consumers business and loyalty. Pizza Inn, although not well known through many regions, has an exceptional and unique taste to many of its pizzas and is continually renovating and creating new pizza styles and unique flavors that will lead to improved market share as well as increases in expansion.
Customer Analysis
In terms of customer analysis, this section describes (1) the characteristics of customers expected to make purchases at Pizza Inn locations and (2) health and nutrition concerns of Americans today.
Customer Characteristics. Pizza Inn markets to a wide variety of consumers depending upon the geographic location of the particular restaurant. To include as many variations of social and income classes as possible, the company introduced four different types of restaurant structures. The first is a full service restaurant, produced mainly in high quality environments, which seats 130 to 185 customers that offers carry out, delivery, pasta, sandwiches, desserts, beer, and even wine! The second on the list is a self-serve buffet that seats approximately 60 to 70 customers and also offers carry out, but this type is mainly used in small town districts and counties. The third is solely a pizza delivery and carry-out which is mostly located in heavy business areas. Lastly, there is an express serve at airport terminals, convenience stores, and on college campuses. A self-serve buffet in small town shows it carrying for the community.