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Ries' Pieces
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"Ries' Pieces
June 30, 2009
The Classic Mistake
Pizza
Hut is now selling chicken wings and pasta as well as pizza. Kentucky
Fried Chicken is now selling grilled chicken as well as fried chicken. Boston
Chicken was once focused on rotisserie chicken, but then they wanted to expand, so
they added turkey, meatloaf and ham to the menu. Then to explain the expanded menu
to consumers, they changed the name of their restaurants to “Boston Market.” And
promptly went bankrupt. It’s
logical, isn’t it? If you want to grow your business then you need to expand your product line to sell
more things to more people. And if your existing category is declining, then it
would be criminal not to expand, right? Wrong. Of course, to
left-brain, logical management people, expansion makes a lot of sense. That’s
why Pizza Hut is not only adding pasta and wings it is also now using a more general name, “The Hut” in its marketing. That's right, they are taking the "Pizza" off the "Hut" on signs and marketing materials. Why? Because management looks at reality and sees the chain as a massive delivery infrastructure machine not a pizza place. Big mistake. Marketing is concerned,
not with reality, but with perception. So right-brain marketing people understand that the place is perceived as pizza. After all Pizza Hut is the leading pizza chain with 18% of the $29 billion category, nearly double the share of the number two brand Domino's. While having more items to sell at Pizza Hut might be
logical, but it undermines the perception of the brand. Everybody
knows what Pizza Hut sells, but what would happen if they changed their name to
The Hut? In
the short run, nothing. But in the long run, some people are going to forget
exactly what a chain like The Hut sells. And then there are the younger people
coming into the market who have never heard "
....
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