Pizza Hut Study Essay

1. What atomic number 18 the implications of pizza pie Huts big charge cuts for its home run mental image? As utter pizza Huts brand image is neither fast victuals nor full-service. It delivers average quality harvest-tides for average equipment casualtys. Previously, it was marketed as a much(prenominal) for the same abide by proposition (Kotler & Armstrong, 2012). Yet, it has through roundthing that shocked the only market. It has cut the prices up to 50%. Doing that, pizza pie Hut is fully reforming its brand image. They are implementing a Same for less place (Kotler & Armstrong, 2012).In a commercial, an actress playing a restaurant employee says, Weve changed just about everything, keep out how your favorite pizza tastes (ELLIOTT, 2010). This move is collect to a weakened economy and a drop of customers. But initiating a price change is non riskless. customer may figure that the quality has been reduced and pizza pie Hut could lose its loyal customers. e very this being said, I would say that pizza pie Huts price cuts may tremendous increase its revenues and remodeling its brand image making good products for a truly cheap price.2. Can customer homage be generated through low prices? Customer loyalty fire be generated in many ways such as good product quality, otiose dumbfound gots, or cheap prices. Some ways can be very powerful for some products while other are effective for different products. For example, what would you think if Rolex cut its prices in order to generate loyalty? It would non work because loyal Rolex customers are sloshed and would rather have extra feature than a cut in prices. On the other hand, would you pay much more to have a better pizza?The perfect example of a participation who cuts its price is Wal-Mart. For this case, I do think customer loyalty can be generated through low prices. And so does Mr. Nicole foreland marketing officer at pizza pie Hut- We want to build loyalty beyond the pric e. Indeed, with the crisis people tend to be more cost-conscious. Thus, pizza pie Huts near to deliver a good product for a cheap price is a good way of attracting customers. 3. Can pizza pie Hut sustain such dramatically lower prices and still preserve paying?From my point of view, cutting prices by up to 50% is a real challenge. To remain profitable the company forget have to manage its production costs, its marketing channel, and its extra costs. Moreover, as it is said in the textual matter the new pricing mechanism will require some time earlier it proves itself. That is to say that at the beginning Pizza Hut may become tho profitable, but hope to gain more market share that will nurture cut costs through larger volume and increase its revenues.Finally, I powerfully believed that a company like Pizza Hut would not have done such a thing if it were not fully thought out before. ELLIOTT, S. (2010, portentous 18). Pizza hut cuts prices again to antagonize the slow rec overy.Retrieved from http//www. nytimes. com/2010/08/19/business/media/19adco. hypertext markup language? _r=0 Supermarket news. (Marc). Retrieved from http//supermarketnews. com/latest-news/wal-mart-scores-highest-shopper-loyalty-study Kotler, P. , & Armstrong, G. (2012). Principles of marketing, global edition. (14 Int. E. ed. ). Boston Pearson.