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June 2009

Comments

Jeff Halmos

They're not changing the name to The Hut fully. Only select stores where, I'm gathering, the market they feel can handle a "shorter, hipper" name. Nickname is what it sounds like they're going for. So The Hut stores will sell the wide menu, and, I'm guessing, Pizza Huts (or Pizza Hat as my daughter calls it, because of the logo) will sell a more pizza-related menu. Having said that, it's a stupid strategy. Another sign that agencies and companies have come to a wall.

Yaacov

I agree that the line extension idea is a bad move. However, the name change from Pizza Hut to The Hut is not necessarily a bad thing. All brands, if they continue to improve their brand image to the point of becoming “cult brands” want people to start calling them by some sort of nickname. Hence, we have FedEx, KFC, CNN etc. To the person who wrote “Say I'm from outerspace and land on Earth today.” The fact of the matter is you’re not from outer space. Pizza Hut has a place in every Americans mind and that is a solid foundation for launching into nickname status. However in order to maintain The Hut as a nickname, they need to still use the complete name, every now and then.

Snarker

To Cynthia: It's very easy, if you're from outer space. "The Hut" serves... Jabba the Hut, prepared 15 different ways. Hut and sour soup, Prime Rib of Jabba, Louisiana hut sauce, Chicken fried hut, Hut and kidney pie, hut sausage pizza, spit-roasted hut rubbed with garlic, lemon and rosemary, hut cutlets... all manner of things. Of course the connoisseur's choice is the Hut sashimi-- this week only, half-price for the day old portions.

I think "Hut" is too generic and they should go ahead and rename themselves "Yurt."

Kevin

Okay, I understand that unadulterated brand extensions are the mother of all brand mistakes. But can someone please explain Nike to me? Is apparel all the same thing? Nike has gone into countless sports. It also doesn't just make sports wear, but casual, and even dressier styles.

So if Nike can turn all of apparel into the same category, why can't Pizza Hut (without the name change) turn all of food into the same category?

Ed Burghard

Stand for something or you stand for nothing. Line extensions that help advance the core equity of a brand work well. Line extensions that confuse or detract from the core equity of a brand result in failure. The question is - Has Pizza Hut stretched their brand too far?

Sunil S Chiplunkar

Very right, if Pizza Hut is changing over to 'The Hut', it is losing its basic foundation brand identity. Pizza Hut people seem to be very desperate for sales. Economic recession = corporate desperation?

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Cynthia

The HUT? Say I'm from outerspace and land on Earth today. I know a little bit about Earthling food and want to try it. I see The Hut. How am I supposed to know what they serve??

vishvesh

 Over 80 per cent of marketing directors in a recent brandgym survey said that brand extension would be the main way of launching new innovation in the next two to three years. (Taylor 2004).

 Following are three main advantages Taylor describes in his famous book:
 Consumer knowledge
 Consumer trust
 Lower cost

 Launching new products can be an attractive growth strategy; however this is not without risks. Some estimate that 30-35% of all new products fail (Montoya-Weiss & Calantone1994; Booz, et’ al 1982, cited in Hem et’al, 2001) whereas some researches cites that only two out of ten new launches succeed.

 High advertising costs and the increasing competition for shelf space, it has become more difficult to succeed with new products (Aaker 1991; 1996, cited in Hem et’al, 2001).

 An increasingly popular approach to reducing risk when launching new products is to follow a brand extension strategy. This is followed in as many as eight out of ten new product launches (Ourusoff, Ozanian, Brown, & Starr 1992, cited in Hem et’al, 2001).

 Virgin moving into radio stations, airline, financial services, and bridal services (Keller 1998, cited in Hem et’al, 2001).

 Researchers (e.g. Aaker and Keller 1991, cited in Hem et’al, 2001) have argued that greater similarity between the parent and extension category should encourage successful brand extensions. Further it is found that: Perceived Similarity and the Reputation of the parent brand are crucial factor influencing the likelihood of a successful brand extension.

 Because brands that are already known and recognized require lower new product introduction expenses, such as advertising, trade deals, or price promotions (Collins-Dodd & Louviere 1999, cited in Völckner & Sattler, 2004a, 2006b).

 “A richer brand identity is a more accurate reflection of the brand. Just as a person cannot be described in one or two words, neither can a brand. Three word taglines or an identity limited to attributes will simply not be accurate” (Aaker, 2000, p. 54).


What do you want to say about each topic? Any comment?

Xavier Paz

Narrowing and focusing are nice, but what should a company do when its market is shrinking, competition is growing and its name is tied to a specific product? I am not sure Pizza Hut's moving to The Hut is clearly that bad.

Xavier Paz
http://www.xavierpaz.com

Dr Wright

The hut is making a bad move. They are clearly not thinking it through.

Dr Wright
www.wrightplacetv.com

Hugo Ottolenghi

Dunkin' Donuts could get away with dropping "Donuts" because the verb and logo tell the story. What do you think, Ms. Ries, about McDonald's foray into coffee sales? Does it make sense for the hamburger king to take on Starbucks, or has the economy created an opportunity to create more breakfast traffic (brand extension) with a lower-priced option?

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David Locke

That's like Jack! There will be a few Huts our there to bite them back. The existing Huts have state trademark rights, so they can prevent Pizza Hut's name change.

Whataburger had the same problem. The San Antonio chain caused trademark problems for the national chain.

So what does it mean now that Jack has lost his box?

Matt Visser

Great post, the old marketing mantra rings true - niche thyself!

Chris Houchens

They also have a customer relations problem. I discussed it a few weeks ago -- http://shotgunconcepts.com/2009/06/rebranding-the-hut/

Kip

you can add CNN to the list of companies who may have lost their way trying to change something that wasn't broken in response new competition.

Kevin Delaney

Hey, Pizza Hut: Jabba called -- he wants his nickname back!!!

Great post, Laura.

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