Marketing - Pizza Industry

Summary

Microenvironment

The four major competitors, Pizza-Hut, Papa John's, Domino's, and Little

Ceasers are the market leaders in the take-out pizza industry. Having a strong brand

equity in the take-out pizza industry allows a company to gain a significant advantage

in the market. Customers in the take-out pizza industry place a high value on the product

quality and price of a company. Maintaining a good reputation is very important in this

industry for companies because customers will build a relationship with the company and

will keep on coming back or ordering from that company if they feel like they are getting

a good deal. Even though the take-out pizza industry is very competitive, many investors

will surely be looking for investment opportunities in the years to come due to the growth

potential in the industry.

Macroenvironment

The demographic factors in the take-out pizza industry have provided new

positive opportunities for companies in the industry. Economic factors can also influence

the industry in a positive or negative way during a good or bad economy. Ecological

factors such as rising prices in gas and rising prices on dairy products has hurt the

industry. Technological factors are helping companies meet new customer needs and

demands and are opening up new opportunities for companies all around the world.

Political and legal factors have not had a tremendous recent impact on companies in the

industry. Cultural factors that have affected the take-out pizza industry have been

primarily the increase in consciousness of health and fitness among the public in the

United States.

Microenvironment

Those factors that are close to a company, that affect its ability to serve its

customers, are called its microenvironment. There are several factors that affect the

microenvironment of a company in the take-out pizza industry mentioned in this report.

They include the industry's market, the industry's competitors, its customers, and

the industry's promotion and distribution of its products.

A. The Market in the Take-Out Pizza Industry in the U.S.

The market for the take-out pizza industry in the United States is fairly large and

not to mention very competitive ( Competitors are talked about later on in this report).

While there are four major companies, Pizza-Hut, Domino's, Papa John's, and Little

Ceasers, that own 31.7% percent of the market in this industry, 68.3% percent of the

market is dominated to what are known as "other" businesses. These "other" businesses,

some of which are well known, include the hundreds of small companies or family-

owned businesses, that most people do not even realize compete in the pizza industry.

The 68.3% percent statistic shows that due to the fact that there is a very large market for

pizza in the United States, the pizza industry is open to a lot of businesses, which causes

the competition to intensify. Another statistic that should intensify the competition in the

next several years is the growth potential that is predicted to occur in this industry.

According to Yahoo Finance, the growth potential for the pizza industry in the next five

years is estimated to be about 12.4% percent. This number or percentage will probably

surprise a good number of people, especially since Papa-John's has just recently

announced that it had to lay-off some employees due to losses in the company.

Regardless of this announcement, the pizza market in the United States is sure to attract

more businesses because of the growth potential in this industry in next several years.

B. Competitors in the Take-Out Pizza Industry

The take-out pizza industry is an extremely competitive industry. The reason this

industry is so competitive is because there are four major competitors in this industry

that not only compete against each other, but also against hundreds of other companies

or private businesses. The four major competitors in the take-out pizza industry are Pizza-

Hut, Papa John's, Little Ceasers and Domino's. Pizza-Hut has a bit of an advantage