Post on 27-Nov-2014
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SUBWAY SANDWICH SHOP CASE
Alika KoshyRibhu Vashishtha
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
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?
FIVE FORCES MODEL
Rivalry Between Competitors-HIGH
Bargaining Power of Suppliers
• LOW
• Volume is critical to suppliers
• Low cost of switching suppliers
Bargaining Power of Buyers
• LOW
• Buyers require special customization
Threat of New Entrants-HIGH
Threat of Substitutes
1. Convenience shops
2. Mid range restaurants
3. Pre cooked food
4. Health food shops
-HIGH
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.
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.
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.
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.
Subway’s Brand Positioning
• Offers “fresh, healthy and affordable fast food”
Who is the average Subway customer?
MALE
Young Single
Busy Professional Resident of north-east
What does he want?
• Quality• Great taste• Value for money• Healthy food• Sufficient quantity
Submarine Sandwich Joint
Eat freshCustomized Product
Loyalty Engagement Attachment
FitGreat tasteFillingCompletely satisfying
Health consciousYoungSingleBusy Professionals
Value for money
4. Relationship
What about you & me?
3. Response
What about you?
2. Meaning
What are you?
1. IdentityWho are you?
Salience
ImageryPerformance
Judgment Feelings
Resonance
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
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.
Promotional Activities
• According to the new “Talking About” option, Subway outranks every brand on Facebook, including Facebook itself.
Promotional Activities
• Focus on:– Food Quality & Food Safety– Sustainable Sourcing Practices– Local Sourcing– Animal Welfare– Forced Labour & Human Trafficking– Streamlining Supply Chain
Thank You.