Pizza Hut delivering poorly in China

DIAGNOSIS 1
Benjamin Cavender
Principal
China Market Research

In some ways, Pizza Hut is a victim of its own success. While the brand is now almost ubiquitous in China its expansion has come at a cost. The chain has not been able to ensure ingredient quality and safety as it has grownm and the fast rate of store openings has left older restaurants looking dated and run down.

Meanwhile, more premium entrants like Pizza Express, which offer better ambience, and more authentic menus are luring away savvy customers.

For Pizza Hut to find future success in China, it will have to do more than regain consumer trust. Ultimately, the brand will have to rethink its approach to China.

From a branding perspective, Pizza Hut must modernize its image and its restaurant decor. It needs to transition the restaurant from one that is trying to offer something to everyone — including students, families, and office workers — and instead focus on having a clear image and a clear customer target.

From a menu perspective, Pizza Hut also needs to have a clear identity. Currently, the restaurant tries out so many different menu options that customers do not really know what to expect from the dining experience.

Instead, Pizza Hut should focus on authentic tastes and offering something more appealing to consumers who are increasingly health conscious.

DIAGNOSIS 2
Lucien Harrington
Managing director, Greater China
FutureBrand

The Chinese consumer’s understanding about what makes a brand authentic is rapidly evolving. Brands that try to appeal to everyone in search of profits are falling by the wayside as authenticity and values become a driving factor in success.

Pizza Hut has gone well beyond its traditional pizza offerings and promotes a variety of food including Japanese, American and Chinese cuisines. Unfortunately, other brands exist that can deliver superior experiences in each.

Consumers in China have become confused about what Pizza Hut does best. So, when they want an authentic pizza experience, they are much more likely to think of Papa John's or Pizza Express first.

Similarly, if they want a value-for-money pizza, they are likely to think of Dominos. As for Japanese or Chinese cuisine, Pizza Hut is nowhere near top-of-mind.

In terms of brand positioning, Pizza Hut’s marketing seems aimed at selling the venue as a place for youth and families to meet rather than the pizza. It is also extremely hard to find information about pizza on its website.

Pizza Hut needs to find a way to make the pizza the star of its show. Brand localisation cannot be done at the expense of compromising the essence of the brand in the hearts of its consumers.