2. What is the case about ?
• Subway Sandwich Shops around the world.
• The Sandwich Restaurant Industry
• Subway History
• Subway’s Customer Analysis
• Subway’s Promotion Strategy
3. What is the case about ?
• Three big questions for deli firms:-
– How to develop and keep a differential advantage
in a highly competitive and dynamic market while
maintaining:
• Sales Growth
• Profitability
– What mix of the 4Ps to adopt and why?
– How to deal with the growing competition?
9. Threat of Substitutes
1. Convenience shops
2. Mid range restaurants
3. Pre cooked food
4. Health food shops
-HIGH
10. Symptoms, Issues, Problems
• Bad management
• Poor location
• Franchisees are battling franchisors for more
control over their businesses.
• Franchisors are fighting back to preserve their
profits.
11. Actions taken
• In addition to individual location efforts to
increase sales, all Subway franchises
contribute 2.5 percent (some markets elect to
contribute more than this percentage) of
weekly sales to the Subway Franchisee
Advertising Fund Trust (SFAFT).
• 99% of this advertising budget is allocated for
TV advertising and the remaining 1% for print,
radio, digital, outdoor advertising.
12. Actions to be taken
• To increase per outlet sales, Subway should:
– Promote their offerings for hours other than lunch
and snacks as well, for e.g. breakfast, dinner, late
night meals.
• To expand outlets, Subway can:
– Open outlets in supermarkets, malls, multiplexes,
schools, colleges, amusement parks, hospitals,
airports, bus stops, etc.
13. Actions to be taken
• Increase the variety of their subs and
sandwiches pertaining to various markets of
the world.
• Offer their food & beverages at various price
points (low, medium and high) in major
markets like India and China.
• Introduce a combo of meals like kids meal,
health meal, etc.
16. What does he want?
• Quality
• Great taste
• Value for money
• Healthy food
• Sufficient quantity
17. Loyalty
Engagement
Attachment
Value for money
Eat fresh
Customized Product
4. Relationship
What about you & me?
Fit
Great taste
Filling
Completely satisfying
Health conscious
Young
Single
Busy Professionals
Submarine Sandwich Joint
3. Response
What about you?
2. Meaning
What are you?
1. Identity
Who are you?
18. Customer Profiles
1. Subway: Prefer take away
2. Quizno’s: Prefer eat-in
3. McDonald’s: Prefer eating with family
4. Blimpie Drive-in: Young adults with children
19. Promotional Activities
• Sponsoring of the New York marathon.
• “Love your heart” campaign in Ireland.
• Donations to Heart Research UK and the Subway
Healthy Heart grant scheme, which supports
communities to help them lead healthier
lifestyles.
• Endorsement by Michael Phelps and his portrayal
as Subway’s “Famous Fan”
• Formulation of the “Subway Diet” plan to help
people lose weight.
20. Promotional Activities
• According to the new “Talking About” option,
Subway outranks every brand on Facebook,
including Facebook itself.
21. Promotional Activities
• Focus on:
– Food Quality & Food Safety
– Sustainable Sourcing Practices
– Local Sourcing
– Animal Welfare
– Forced Labour & Human Trafficking
– Streamlining Supply Chain
A surprising 78.7 percent of all adults have patronized a fast-food or drive-in
restaurant in the last 30 days (Table 1–1). And, some 31 percent of those same
adults went 14 or more times to such a restaurant during that same time period
(Table 1–1), making heavy users of the category. Demographically, heavy users are
also more likely to be male, young, single, and live in the Northeast (Table 1–2).
When suppliers are reliant on high volumes, they have less bargaining power, because a producer can threaten to cut volumes and hurt the supplier’s profits. This can positively affect Subway.
The easier it is to switch suppliers, the less bargaining power they have. Low supplier switching costs positively affect Subway.
When customers require special customizations, they are less likely to switch to producers who have difficulty meeting their demands. Buyer customization positively affects Subway.
When there are large numbers of customers, no one customer tends to have bargaining leverage. Limited bargaining leverage helps Subway.