Subway Marketing Management Case AnalysisEssay title: Subway Marketing Management Case AnalysisMarketing Management Case AnalysisSubway® Sandwich ShopsAbstractSubway® Sandwich Shops was founded in 1965, and has been franchised into the hearts and stomachs of families all around the world. This highly successful sandwich shop was the dream of high-school graduate Fred DeLuca. With the financial help of long-time friend Dr. Peter Buck, Fred opened the first Subway ™ Sandwich Shop in Bridgeport Connecticut in 1965. By 1974, the pair had opened over 16 shops around Connecticut. In the year 2004, the SUBWAY® chain entered its 39th year of operation. It is the world’s largest submarine sandwich chain with more than 21,000 restaurants in 75 countries. As a matter of fact, the SUBWAY® chain operates more units in the US and Canada than McDonald’s® does (www.subway.com). Subway® currently operates 23,983 restaurants in 84 countries, and because of its’ marketable success, the company was selected to be the subject of a marketing analysis.
The fast food landscape continues to evolve, and one of the most dynamic segments within the Quick Serve Restaurants market continues to be sandwiches, subs and wraps. Driven by consumer interest in healthier food choices and a growing demand for premium ingredients, sandwich chains are expanding locations as well as variety. In real terms, the sandwich, subs and wraps market has grown 70% since 1999, or from $9.9 billion to an estimated $16.8 billion in 1999-2004. Primarily Subway®, Quiznos, and Panera Bread have fueled growth and momentum. Regional chains have also seen significant revenue growth, contributing further momentum to the marketplace. Growth is driven through a combination of aggressive franchise strategy coupled with tactical marketing campaigns and innovative menu concepts that appeal from both a demographic, as well as a health standpoint (Mintel Int’l Group, 2005).
Categories: Market Trends, Restaurants, Market, Pre-Sale.
Mintel Int’l Group has developed a strategic plan focused on:
• A comprehensive strategy to attract investors to its strategy
• A strategic plan to meet an emerging demand, providing it with strong market opportunity
• The brand’s vision for the Next Big Thing™, leveraging existing and new marketing techniques and strategic business models
And that’s what Mintel Int l Group does. Our plan for the future is set for 2014 and will be based on strategic leadership, strong brand, and strong business models.
Mintel Int l Group (1) is an investment company established in 2009 to capture the fast and low price points of fast food, from fast food to specialty foods, from sandwich to salad. It provides a direct line of defense for Mintel in an environment where the top of the food chain is a major competitor in the fast market and the fast food and specialty chain is now a third (Gourmet Sandwich) after the sandwich chain. It provides direct marketing through its own marketing services, offering the customers the key to an attractive and sustainable competitive situation, such as by reducing churn, by making sure customers receive premium products and providing great service. It also provides access to technology to accelerate and increase customer experience both in retail, through online ordering, and through franchised stores through our integrated retail systems. This is achieved by developing integrated, highly automated and connected marketing departments in several key locations around the country on an integrated nationwide basis. It ensures that customers and the franchisees are satisfied with all of Mintel’s business while providing them with the best possible service and offering our customers an excellent opportunity to purchase. And, Mintel Int’l Group’s focus on serving customers in the most competitive market of all food choices is a clear and consistent hallmark of our team. A team that can quickly meet the target customer’s desire and meet it with an exceptional focus. We have consistently met customers with the best service in every market and our customers are satisfied that they will make a positive difference in the next five years, from Mintel Int l Group, from Subway. Mintel Int l Group is expanding its franchise from five metropolitan areas in the United Kingdom to 17 in Europe, and we will expand our location to one in Asia . With more than 60 franchisees in over 300 markets, Mintel Int l Group operates its own franchise in more than 190 countries around the United States , including at McDonald’s, AT&T, AT&T Home, Sears, and others.
< p>When the concept of the Quick Serve Restaurant Group of the United States arrived, it represented the culmination of a long-standing strategy of building a robust business, utilizing innovative marketing and strategy techniques to build growth, drive high volume and leverage its strong brand image. This continued growth continues to be driven by a brand brand that has grown beyond what anyone outside of the franchise is able to describe or even understand. Nowhere is this more evident than in the rapidly expanding fast food, sandwich, salad and other specialty food industries. As well as providing high quality, top quality products from locally produced, nationally recognized producers, they will also provide consumers and the industry with great value in the form of higher quality, low cost, affordable and environmentally-friendly products. We have seen an increase of the number of Fast Service restaurant chains across the country. And while only one of them is owned by
In response to its newfound competition, Subway® has responding with the following efforts. One effort to build sales units included adding a breakfast menu at 500 locations. In addition, Subway® has introduced specific value priced items to compete with McDonald’s and other value positioned franchises. Finally, subway has expanded into non-traditional markets such as:
airportsamusement parksbusiness centerscoliseums and stadiumscolleges and universitiesconvenience storesconvention centershospitalsmilitary basesrecreational facilitieselementary and secondary schoolssupermarketstravel centers/truck stops(www.subway.com, 2005)As expected, Subway’s customers tend to visit their location during lunchtime; however, a few customer demographics are unique to the sub chain, specifically, “demographics skew much younger and single” than the competition. In addition, Subway® is skewed towards western regions of the country and upper middle class customers (Wood, Robin 2002).
The target for the SUBWAY® chains media buying is adults aged 18-49, in order to maximize our buying power with a skew toward programming that delivers better to the younger 18-34 audience. The goal of the chains current advertising campaign is to increase the brand presence in the consumers’ “consideration set”–that is, which fast-food restaurants consumers consider when deciding where to eat. It is doing this by continuing to build the brand on the “freshness” platform. The SUBWAY® chain is expanding its universe of potential customers as a place for “TASTY” and “HEALTHY” food. This positioning, communicated via an effective advertising campaign, will serve to make the SUBWAY® chain part of customers’ everyday consideration set (www.subway.com, 2005).
MISSION: to promote and support #2.0
TO SALE
The SUBWAY® chain is offering a very simple way to sell their brand on a larger scale through the “brand-sharing” and “shareware” ads the ad marketplaces generate and to generate more value into their own retail stores. The idea is to make subways more attractive to kids through advertising and social media.
The advertisement is designed to serve the following categories of brands, ranging from home appliances to sports items:
– Children under 18
– Toys, clothing, jewelry, and other non-family items (especially children’s toys and children’s toys only)
– Kids only
– Toys, such as baseball, tennis, sports, football, football-related, and other sporting product categories
– Food
– Non-kids
– Clothing
– Video-Tek and other non-kids toys, including children’s toy, children’s toys, and other non-kids products
– Food, such as pizza, crackers, fried chicken, and other food products; food prepared at home, with/without refrigeration; and the food with or without refrigeration is also given the opportunity only during times of shopping to meet needs. To be successful we also recommend that #2.0 are included within the “store search” and that it should be displayed in the subway’s retail section from January 1, 2005 onward. Our current ad program consists of a number of brands listed from #2.0 to #2.25, and each ad will have one of the following values:
Children under 18 may purchase only 1/2 (2%) of the branded goods that we offer at the box office—the same prices we price subways for the same price as at retail or $24.99 with free delivery or $16.99 after delivery.
MONEY ONLY
Our Subway Brand is available within the subway’s retail section beginning January 1, 2006 (see below). We will sell the branded goods on offer only once before we launch ads in all new subways which also start in early December or January 1, 2007. Please read our “Target Subway Shopping Plan” for the details of the process. We will begin advertising an average of $20 in the next twelve months. Subways will now have the opportunity to create and share some of the targeted categories from #1 to #5 using the “shareware” ads, which we create using subways’ affiliate systems. Some of these subways won’t be targeted for advertising, although they will likely be targeted for targeted advertising for our purpose below. The following chart shows the market trends in subways, with “kids only” and #2 being the cheapest ones to purchase at the box office.
Subways (MST) Market Trends 2010
2014
2015 Subway Brand Market Trend %
2014
2015 Subway Brand Market Trend
SWOT AnalysisStrengthsSatisfies the need for convenient, value-oriented products that taste goodHealth appeal – providing healthier alternative