Service Marketing and Relationship Marketing: A Case Study of Pizza Hut

This article discusses the service marketing and relationship marketing strategies of Pizza Hut, the world's largest restaurant chain. It includes a blueprint of Pizza Hut's service delivery model, the significance of service encounter, and managerial implications for successful growth of the business.

9/24/2018
Running Head: SERVICE MARKETING AND RELATIONSHIP MARKETING 0
S RV C MAR A D R A S MARE I E KETING N EL TION HIP KETING
izza utP H

SERVICE MARKETING AND RELATIONSHIP MARKETING 1
Pizza Hut Blueprint
Pizza Hut is an American restaurant chain offering many different styles of pizza along with
several other dishes. It was founded by Dan and Frank Carney in 1958 and currently, it is one
of the flagship brands of Yum! Brands. It is also the world largest restaurant chain with over
16,796 restaurants globally.
The brand has positively developed a repeated commitment relating to the product quality.
Building a leading pizza company requires a continuous innovation, advancement in
technology, and dedication to customer service and value (He, Zha and Li, 2013). This is the
reason that why Pizza Hut is one of the leading restaurant chains from the four decades in
spite of having so many competitors. Pizza Hut has a strong strength of its heritage and
culture, which help them in the future, success of the company. The mission statement of
Pizza Hut speaks a lot about its operations as it is based on five aspects (PEARL) – Passion,
Execute, Accountable, Recognize and Listen.
In the course of intense competition, there is a need to achieve a competitive advantage with
the help of new methods and strategies (Gao and Yoshida, 2013). These strategies and
methods can include diversification or improvement in the service delivery model.
In the restaurant chain of Pizza Hut, services are encountered among the employees of the
restaurant and the customers. Every service or roadmap is connected with one another in a
form of organised structure so that to execute the service delivery model in an effective
manner. In Pizza Hut, the services are categorised in these ways –
 Services to the dine-in customers.
 Services to the online customers.
 Recovery of customers.
 Services to the employees.
Now, the blueprint is stated below that is defines as a service innovation technique that
defines various processes within the organization separated in to several components. Pizza
Hut service blueprint includes customer actions, onstage actions, backstage actions, support
processes and physical evidence (Bitner, Ostrom and Morgan, 2008).

SERVICE MARKETING AND RELATIONSHIP MARKETING 2
Line of Interaction
Line of Visibility
Line of Internal Interaction
Physical
Evidence
Customer
Actions
Back- Stage
Employee
Contact
On-Stage
Employee
Contact
Support
Processes
Parking
Bike Waiting
at Cafe
Entering
and
Ordering
Pizza
and Pasta
Leaving
Pizza Hut
CAFE
Eating
Pizza
and
Pasta
Collecting
Order
SOUCE
BOTTLE
WATTER
COOLERTABLECHAIR
Staff greeted
with smile and
take order.
Serving
Order
Cook started
making Pizza
Cook started
making pasta.
Assembling
with sachet and
coke
Dough and Veggies,
Cheese Inventory
Kanban for
Stock

SERVICE MARKETING AND RELATIONSHIP MARKETING 3
 Customer Actions – According to the blueprint, the process starts when I enter into
the area of restaurant and the respective physical evidence service is deliver to me
right from the beginning i.e. parking space, ambience with music, painting on the
wall, employee uniform and other various elements delivered by the employee. In
addition, this process included all the collective actions taken by me during the course
of the service delivery (Prakash and Mohanty, 2013).
The second aspect related to the customer actions includes the service delivered by
the Pizza Hut. It includes various actions like getting menu card, confirming the order,
enjoying the ambience provided by the branch, getting the respective bill and the
feedbacks. In addition, the interaction between me and staff of that branch is also
necessary for the effective service delivery.
 Front Stage Interaction – In this stage of service delivery, there is a face-to-face
interaction between me and the staff. This line of interaction includes the staff
reaction towards my queries. It involves greeting the customers when they enter into
the premises, providing them the menu cards and the necessary suggestion, which will
help them in the process of order, receiving the respective order from the customers
and thus deliver the whole process by getting of the bill.
 Back Stage Interaction – This stage of process is also called as invisible interaction
between the employees, management and processes. Management of services also
included in this invisible interaction to the customer by registration of check in and
check out (Trkman et al, 2015). This involves the process of taking a record of the
customers, order processing, making the food, grievances handling and various other
activities related to the customer support. Generally, in this process, there is no face-
to-face interaction between the staff and the customers as the internal staff or the
system handles every activity. However, this back stage interaction also plays an
important role in the effective delivery of services.
 Physical Evidence – The physical evidence also have a significant impact and it
includes parking facilities and area of Pizza Hut, waiting area, wall colours,
decorative menus, dress code of the staff at Pizza Hut and cleanliness of the pans and
floors.

SERVICE MARKETING AND RELATIONSHIP MARKETING 4
Significance of service encounter
For a leading restaurant chain like Pizza Hut, the strategic prime factor will be the customer
satisfaction. The company needs to follow global standards of service satisfaction model in
order to deliver effective services. The key determinants of these satisfaction models will be
market share in the industry, profitability, repetition of customers, and customer referrals
(Verhoef et al, 2009). In response to the market share, Pizza Hut may face intense
competition from the rivalries like dominos and McDonald. By applying efficiency in the
service delivery, Pizza Hut may satisfy more numbers of customers and if customers will be
satisfied, the market share in the industry automatically increases. In respect to profitability,
more sales and revenues are a direct determinant of the customer satisfaction. In addition, if
Pizza Hut will be successfully in making customer satisfied, then the customer will choose
Pizza Hut over the other brands and this shows that Pizza Hut is successful in engaging
customer repetition.
At the end of the service delivery, when I have finished with the consumption of the food
delivered by the Pizza Hut, the company raise a feedback form with the help of mobile
messaging. Lower rating in that feedback form may show a red flag to the brand which needs
to be deal with full responsiveness (Heath, DelVecchio and McCarthy, 2011). In last,
customer referral is also a significant key determinant of the customer satisfaction. The
greater level of satisfaction can be derived from the higher numbers of customer referrals.
In a successful service encounter, sometimes a gap is being established which needed to be
sorted out on an immediate basis. The management of Pizza Hut can able to find out this gap
by a management approach related to the RATER MODEL, which stands for Reliability,
Assurance, Tangibility, Empathy and Responsiveness (Larson and Steinman, 2009).
 In terms of reliability, Pizza Hut has to deliver their products according to the
promised service. This promise need to meet in every aspect whether in terms of
quality and quantity.
 In terms of assurance and as a leading restaurant chain, the employees of Pizza Hut
are well trained and knowledgeable to tackle problems without causing any harm to
customers.

SERVICE MARKETING AND RELATIONSHIP MARKETING 5
 Considering the tangibility, in most of the branch of Pizza Hut, the ambience and
design of the branch are maintained at the same level.
 This gap may be analysed with the help of mission statement of Pizza Hut which
focuses on making people happy with the help of quality pizza.
 The gap can be also seen in terms of responsiveness; however, the staffs in the Pizza
Hut are well trained to respond to the queries of the customers.
Managerial Implications
For the successful growth of the business, the management of Pizza Hut needs to deliver
positive service encounter. The management of the Pizza Hut has to critically analyse the
process of delivery model and ensure that the respective service is delivered to the customer
effectively. On the other hand, an unproductive service encounter can lead Pizza Hut to bear
high costs. They also need to compensate for the loss and make customer satisfied due to the
poor performance or else they will lose their large customer base.
This creates the needs for the management to understand the due importance of the positive
encounter with the relation of interaction between the employees and customer (Wall and
Berry, 2007). In the last, it will help the company, as the customer will be more satisfied that
expected and that makes the customer delight. Along with improving the serving encounter
and delivery model, the management of Pizza Hut also focuses on the three main service
recovery areas which include Interaction with customers, processor and management of the
staff.
Considering the firsts recovery area, the management of the branch needs to be responsive
and also have to take immediate action when an interaction between the staff and customer
goes wrong and try to improve the perception of the customer towards the brand relating to
the customer service. The management can use here the grievance handling techniques like
making an apology to the customers for the error committed by the staff. The situation must
be positive in respective with customers as customer needs to feel that the management is
really guilty. This will help Pizza Hut in creating a strong brand identity and also help in the
customer retention. In addition, it will convert the failure encounter into the peaceful
encounter (Jones et al, 2007).
The management of Pizza Hut can also recover their dissatisfied customers by improving the
process that leads to the negative situation. This process is supported by various supported
activities and the management needs to critically evaluate for the effective delivery of the
service encounter. The last technique or strategy is related with the effective management, as
it requires effective skilled staff and workforce who are capable to handle any situation. The
senior management of the Pizza needs to train their staff on a continuous basis so that they
can adapt to the dynamic characteristics of the industry and not lead to any negative
encounter in the future. This will also help them to control their behavioural traits.
The success of Pizza Hut in terms of delivering services to the customers has cleared a solid
ground which stands on a significant point in the race of competitors. Pizza Hut treats service

SERVICE MARKETING AND RELATIONSHIP MARKETING 6
as an attitude and the staffs are trained to treat customer with appreciation, courtesy and
enthusiasm (Michel, Bowen and Johnston, 2009).
Pizza Hut also follows the CHAMPS model which stands for cleanliness, hospitality,
accuracy, maintenance, product and speed (RANA, 2013). For the future perspective, Pizza
Hut needs to focus on diversification in their product mix. In addition, due to the intense
competition in food chain industry and the presence of various dominant players in the
industry like Dominos, McDonald and Starbucks, Pizza Hut needs to improve their service
delivery model so that to achieve economy of scale and competitive advantage.

SERVICE MARKETING AND RELATIONSHIP MARKETING 7
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