Case study on Amuls Pizza Foray

Preamble:
Amuls pizza is one of the beginners who wanted to rule the pizza marketing and is lead by R.S.KHANNA, assistant general manager (north zone),Gujarat cooperative milk marketing federation (GCMMF) .

Many investors like Mr. N.K.Kochhar want to invest in this venture, have been calling Mr. R.S.Khanna.
They opened the first outlet in Delhi; their main aim was low price high volume entry which set records in pizza marketing. Amuls pizza are competing with the high rated brands like pizza hut , dominos pizza , nirulas pizza which have set the limit in pizza marketing, but selling the pizza at very less cost will attract the customers. Only providing the pizza at cheaper rates will not be very helpful, as customers these days also give importance to ambience, home delivery, speed of service, convenience of location & service provided and other important criteria is about quality monitoring of the product.

Important Issues:
I am ready to take dominos says N K kocchar owner of a departmental store next to dominos outlet. On July 20th Amul opened its 1st outlet in Delhi selling a 6-inch pizza for rs.20. This offer had a great demand from many investors like N.K.KOCCHAR who deluged with requests for business details. To cope with the pizza onslaught, Khannas assistants have been handling unusual assignments, like his personal secretary Premlata Dua is conducting 2-hr training sessions on how to make pizzas at franchisee outlets. Amuls audacious low price high volume entry set the Rs 200 crore Indian pizza markets on fire. For Indian customer who is conditioned to Rs.40 plus pizza this news of well known brand like Amul breaking the price barrier is of great excitement.

Will Amuls strategy of low price high volume really work?? After all Indians have got used to brands like dominos, pizza hut etc.. The main reason for amul moving into pizza making was to create demand for its mozzarella cheese. Amul has 70% share in Rs.80 crores cheese market. Retailers in Amul had a very good profit, as the pizza which cost about rs 12 was priced at rs20 with a one time investment for an ordinary oven. Amul providing pizza at Rs.20 is a stealing price for customers as other brands are selling at higher cost like Pizza hut Rs.75, Dominos Rs.42, Nirulas Rs.59. Amul also is facing losses initially, but it is minimizing costs like advertising, marketing, manpower and rental costs.

At the end Amul is just planning to supply pizza bases, frozen pizzas to

Questions:
1.Which of the following weigh most in minds of customers while buying ready to eat food items price, speed and efficiency of service, convenience of location, ambience, why?

Price: It is one of the most important factors in the minds of the customers. As we know that 50% pizza consumers is the youth, so the prize factor is very important for them as their budget is less. The amount should also not be above the common man budget if it does the sales of the product decreases this leads to loss in business.
Speed and efficiency of service: The factor speed and efficiency come into account mainly when home service is provided. This factor is like image of the company by which it is recognized. The customer needs the pizza early that is speed; he needs the pizzas hot n obviously in good shape that is efficiency this factor has to be done perfectly by the dealers. If these both factors are worked out efficiently then the sales of the company will be high and hence it will make a mark in the pizza market.

Convenience of location: This factor has to be taken into account because if the location is not in the required place then the customers are unable to reach the location; this will reduce the number of customers. Ambience: Ambience also plays a very important role; this includes proper and comfortable adjustments for sitting. The place also should have a great and attractive look which will attract all kinds of customer. Looks also come into play because people also need a place to hang out where they can sit talk and enjoy with their family members and friends. When all the above objectives are met the sale will increase. All the four things are equally important in my point of view, because a customer has all four things in mind when he has to select a pizza place.

2.Do you think the low-price; high volume strategy pays in a fiercely competitive market? Yes low-price, high volume strategy pays in a fiercely competitive market. Each company has its own strategy to get the success in the market. And as the Indian pizza market has very less pizza outlets compared to the demand, in this condition if Amul provides pizza with quality control, affordable price, speed and efficiency of service, convenience of location and great ambience this will attract the customers and increase the profits. They have made a great strategy of low price high volume, they are providing a 6inch pizza at Rs.20/-. They are preparing the pizza at Rs.12 with margin of Rs.1 per pizza including the price of oven. Amul will succeed in providing pizzas at cheaper rates by minimizing costs like advertising, marketing, manpower and rental costs. This will help amul making a benchmark in the pizza market.

3.Will amuls audacious foray into pizza marketing bring home the beacon? Why? Why not? Yes, this confident move by the amuls workers will bring home their success now or later but success is sure. Because they have studied the market condition and have planned out a perfect strategy by learning from the drawbacks of other pizza organizations. The main drawbacks of the market are: Supplying pizza at higher cost keeping large profits. Supplying costly pizza and using that money for advertisements etc. Speed and efficiency of service. Ambience As the main drawback is price, amul has efficiently worked on this problem as its strategy is low price high volume. It is also minimizing the cost of advertisement and labor and trying to provide better service with good ambience. But amuls success could be achieved a bit late due to the cost in advertising in less, but soon or late amul will bring home the beacon.