During the Delivery Sengoku period, differentiate yourself by promoting quality over quantity.

Strengthening the digital field across the entire marketing department

Q. Please tell me your responsibilities.

I am the manager of the Digital Marketing Division of the Marketing Department, and I am in charge of the entire digital field. My main mission is to increase sales through digital advertising. In addition, as the importance of digital transformation has come to be understood throughout the company, the Digital Marketing Division also handles digital-related tasks other than advertising. Specifically, when recruiting new franchise owners, I utilize my knowledge of digital marketing to distribute job advertisements and create job pages on the corporate website.

We've only become aware of digital transformation in the last year or two, and COVID-1 has had a major impact. COVID-2 has increased the proportion of orders placed online, and we needed to strengthen our digital domain more than ever before. As part of this, we also strengthened our organizational structure.

Currently, the Marketing Department is divided into five departments: Digital Marketing, Planning, Product Development, IT Store Business, and IT Back Office. I think it is very rare for an IT department to belong to the Marketing Department. However, since the IT department manages all data on the website and POS system, they often cooperate with each other to collect data when conducting analysis. By placing the IT department under the Marketing Department, there is an advantage in that this cooperation can be carried out quickly. In addition, there was a vertical division of the department, and it was sometimes difficult to cooperate with other departments, but now horizontal cooperation is being strengthened, and the digital area is being strengthened across the organization, and plans are being made and data analysis is being carried out.

Kohei Yabuuchi, Manager of the Digital Marketing Division, Marketing Department

The market has changed dramatically due to the effects of COVID-19 -- Pizza Hut's strengths in the delivery warring states era

Q. Please tell us about the changes and characteristics of the market.

The delivery industry has seen rapid expansion due to the effects of COVID-2. On the other hand, the pizza delivery industry has remained flat for the past few years. There are two main reasons for this.

The first is that delivery has become easy, regardless of the type of food. Major restaurant chains that previously only offered dine-in or take-out options are now offering delivery. Another factor is the emergence of many external platforms that specialize in delivery. While we have built collaborative relationships with external platforms, products other than Pizza Hut are considered competitors, so the number of competitors in a broader sense is increasing. With the increase in competition, it feels like the delivery industry is entering a period of warring states.

The second reason is that the concept of individual meals has become more widespread than ever before due to the impact of COVID-2. Until now, pizza has tended to be ordered for events where large numbers of people gather once or twice a year, such as birthdays and Christmas. Therefore, with the number of opportunities for people to gather decreasing these days, the growth rate of the pizza delivery industry has been slow.

While the demand for delivery is increasing, the demand for takeout is also increasing year by year. This is also due to the impact of COVID-19, but more people are choosing to eat at home instead of eating out. Another advantage of takeout is that there are no delivery costs, so you can purchase at a discount.

With the increase in takeout demand, the location of the store has become important. Until now, the ratio of delivery was high, so it was no problem to set up a store in a back alley. However, now it is important to set up a store in a place that is visible and can be seen by customers. Store opening plans are also changing, not only to meet customer demand for takeout, but also to increase awareness.

Q. You mentioned the Sengoku period. What were your company's strengths in that period?

There are two strengths.

The first is, of course, deliciousness. We are confident in the taste, and believe it is the biggest differentiator from our competitors. However, because pizza tends to be primarily an "experience" of eating with a large group of people, unfortunately not many people remember where they had pizza last time. In addition, brand switching is difficult, so it is important that it is remembered first. Therefore, we are running advertisements that feature the color red all over, so that people will think of "Pizza Hut" when they hear the color "red," and we are differentiating ourselves from our competitors.

The second is that we have a lineup of products that cater to individual meals. Although there are still not many people who order pizza on a daily basis, we offer a product called "MY BOX" so that people can enjoy pizza even when they are alone. In this way, products that cater to the demand for individual meals are a strength that differentiates us from our competitors.

"MY BOX," a pizza set for one person, has sold over 100 million units (as of October 2021).

Issues in visualizing advertising effectiveness across multiple campaigns

Q. Please tell us about the marketing challenges you have had up until now and why you decided to introduce MAGELLAN.

Until now, we had been facing the issue of not being able to visualize the advertising effects across measures, whether online or offline. Although we were able to analyze each measure separately, such as TV commercials, flyers, and digital ads, we were not able to integrate them all and analyze them on the same level. For example, even if we got results showing how many orders came from digital ads, we had invested a lot in TV commercials and flyers for many years, so we didn't know whether the effect was purely due to digital ads, and we felt it was difficult to explain to higher-ups. In that respect, we thought that MAGELLAN could solve this problem firmly because it allows for integrated on-off analysis. In addition, the fact that it has the No. 1 track record of implementation in Japan was also a deciding factor.

Another reason for the introduction was that we were being asked by Pizza Hut's parent company in the United States to carry out attribution analysis. In fact, a common attribution analysis tool (MMM tool) had already been introduced globally. However, the tool was not available in Japanese, so we felt that there were issues with ease of use. In addition, with overseas tools, it is difficult to conduct analysis that corresponds to the unique environment and culture of Japan, so we were looking for a tool in Japan. We believe that the correct output cannot be obtained unless the qualitative aspects are properly input, so we thought MAGELLAN was the perfect choice in that they thoroughly understood and could absorb our prerequisites in Japan.

Q. Please tell us your impressions about the analysis results of MAGELLAN.

First of all, I felt that the true effect of digital advertising was clearly visualized in numerical terms. Up until now, we had been able to grasp the direct effect of digital advertising on results to a certain extent, but we had not been able to analyze not only the direct effect but also the indirect effect. Since TV commercials have long been the core of our industry, it has been difficult for people to understand the effect of digital advertising, but by using MAGELLAN's analysis results, I think we can now provide a clear numerical justification to explain the results to higher-ups.

Additionally, the more local the area, the more phone orders there are, and many franchise owners still believe that TV commercials are their main method of purchase. However, the ratio of orders placed online is increasing nationwide, so we are extremely grateful to be able to use the results of this analysis to show franchise owners the effectiveness of digital advertising in numerical terms.

For other measures, we were also able to visualize the cost-effectiveness in numerical terms, something that we could only grasp intuitively up until now. Based on these analysis results, we plan to reconsider our future promotion strategies and tactics and work to improve efficiency.

Q. How do you plan to use MAGELLAN in the future?

In the future, I would like to conduct analysis every quarter and incorporate the results of that analysis into measures, and quickly implement the PDCA cycle. In fact, I have previously used a different tool to perform multiple regression analysis, but at the time, I was only able to analyze about once a year, and I felt that it lacked speed.

There is an overwhelming difference in advertising volume between us and our competitors and external platforms, and it is difficult to compete in terms of the amount of promotion. Therefore, by using MAGELLAN to quickly turn the PDCA cycle, we hope to improve the efficiency of our promotion and compete in terms of quality.

Strengthening collaboration across departments and conducting customer-focused marketing

Q. Lastly, please tell us about your goal in marketing.

Convenient tools are increasing year by year, but we think the key is not to be satisfied with just introducing them, but to think about how to use them effectively. In our case, our point of contact with customers is the field, such as our stores and operations teams. Therefore, no matter how much we try to reflect the suggestions obtained from the tools, there is no point in taking action if the field is not fully prepared to accept them. Rather than just looking at the numbers, we need to strengthen cooperation by taking a good look at the field, and think about what actions we should take in the future from the customer's perspective. I want to keep this in mind and keep this in mind.