OBJECTIVES:

To study the entry strategy of an MNC food chain

To conscious people

To study the effect of high priced products on their sale

To find the degree study whether there is a awareness of DIET food or healthy

snacks in India

To study which age group of people are familiarized with the concept of

SUBWAY

To study the niche marketing strategies, because as of now Subway caters a niche

of diet of customization which SUBWAY has introduced in its product mix

Methodology

A] PRIMARY DATA:

80% of project is based the on primary data.

SOURCES OF PRIMARY DATA:

SURVEY:

Visit to Subway outlet at Vashi

A sample size of 100 customers was taken belonging to age group of 20 to

30 years and different doctor.

OBSERVATION:

Keen observation of Sub way helped in making the project more practical.

B] SECONDARY DATA:

Rest 10% of the project was completed with the help of secondary information.

SOURCES OF SECONDARY DATA

Newspaper

Internet.

History of subway

The SUBWAY restaurant chain was founded in 1965 by Fred DeLuca, a 17-year-old

college freshman, and family friend Dr. Peter Buck.

The first restaurant opened in Bridgeport, Connecticut, USA on August 28 and was

called Pete’s Super Submarines.

The first franchised SUBWAY unit opened in 1974 in Wallingford, Connecticut.

There .are more than 28,800 SUBWAY franchises in 86 countries and territories

worldwide.

Doctor's Associates Inc., the franchisor of SUBWAY restaurants, employs more than 600

people at its Milford, Connecticut, headquarters.

Worldwide, its franchises employ more than 150,000 men and women throughout the

system.

SUBWAY chain is a privately held company and is not traded on any stock exchange.

The company is optimistic about its India operations too.

"India has the potential of becoming the largest market for Subway, outside of North

America," says Mahmoud Chahrour, Regional Manager, Middle East and India, Subway.

The company has already established its supply chain network and claims to have

received a positive response from the four franchises that are currently running at

Mumbai and New Delhi

There are 29735 Restaurants in 87 Countries.

HOW SUBWAY OUTLET ENTERED IN INDIA

Subway, the American fast food chain, plans to open 200 outlets in India in the next

seven years. Currently, Subway is operating in India through four franchisee owned

outlets in Mumbai and Delhi. The chain has a presence in 75 countries.

Subway is a relatively new chain in India. It opened the first branch about 3 years back.

Junk food is usually associated with McDonalds, Pizza Hut and the like.

Subway just cannot be included in the same! It is really healthy. There is nothing that is

unhealthy in Subway.

There is whole wheat bread, lettuce, tomatoes, olives, pickles, a bit of mayo, onions and

many other healthy vegetables in it. And still, they are really tasty!

The bread is fresh from the oven. They have country-wise specials. In India, they have

spicy sandwiches such as chicken tandoori, chicken shammi and the like.

Vegetables are covered with plastic lids. Subway also offers many different daily specials

for those on a tight budget.

It is cost effective to go ahead and order the foot-long sandwich and save half for another

meal.

There is no other fast food chain in India that serves the products SUB WAY serve.

Customer interaction is maximum at this stores as the customer can be involved at all

stages of the sandwich-making process starting from choosing the bread to the meat, the

sauces, spices, and so on, which again is unique to them.

Subway has also tied up with Nestle and Pepsi to retail their products at the outlets, and is

in talks with more companies for similar tie-ups.

Subway has more than 17,000 outlets in 75 countries around the world, which makes it

the second largest fast-food chain globally. The privately-held chain of sandwich shops

has recently clasped.

“Subway is globally recognized for its fresh and nutritious sandwiches and salads,

which makes it a healthy option over other fast food restaurants.

Franchisees opened in India

Year Open Restaurants  

Year Open Restaurants

Year Open Restaurants

1965 1 1992 7327 2000 14662

1985 596 1993 8450 2001 15762

1986 991 1994 9893 2002 17482

1987 1810 1995 11420 2003 20260

1988 2888 1996 12516 2004 22500*

1989 4071 1997 13066 2005 24750*

1990 5144 1998 13600  

1991 6187 1999 14162

In Bombay there are 18 outlets opened.

Growth rate of subway in India

Reasons for increase in growth rate

People became aware about the food outlet Subway.

Customer choice and preference changed as awareness increased.

People started accepting western culture.

Sandwiches were made according to Indian taste.

Many middle class people attracted because of rate cuts and indianised menu.

NUMBER OF GROWTH RATE WORLDWIDE

Core Values and Philosophy of subway

They are committed to customer satisfaction through offering high quality

food with exceptional service and good value.

They take great pride in serving each other, customers and their communities.

They seek continuous improvement in all that they do.

They value a sense of urgency and emphasize an innovative, entrepreneurial

approach to business.

They expect fairness and mutual respect in all their activities.

They know their success depends upon the initiative and they take

individually and their ability to work as a team.

Market segmentation

Geographic segmentation

As people residing in urban areas is more diet conscious, and is exposed to different food

outlets, so subway has targeted the people of urban areas.

Demographic segmentation

Age: all

Social class: upper middle and higher class.

Psychological segmentation

Life style: very futuristic approach. It is for the people who are hygienic and diet

conscious

Benefits

Quality

Hygienic

High quality products

Customized according to taste and preference of customer.

Target audience:-

Upper middle class and higher class people.

Diet conscious people.

Health conscious people

Product

The raw material of sub way outlet is purchased from Delhi. Turkey Breast, Italian

B.M.T. Tuna and the Subway Club are some of the brand's most popular

Sandwiches.

"Apart from salads, the menu has

about 20-25 non-vegetarian and eight

vegetarian sandwich combinations, in

which we have added varieties like

chicken tikka, paneer tikka, spicy veg

and so on, to Indianise the menu.

Fresh Toasted favorites include Meatball Marinara, the Chicken & Bacon Ranch, and

our Subway Melt subs. Jared Fogle's favorite SUBWAY sandwich is the Sweet Onion

Chicken Teriyaki sub - especially when it's toasted.

There are more than two million different sandwich combinations available on the

SUBWAY menu.

In the USA, the chain serves nearly 2,800 sandwiches and salads every 60 seconds. If you

place all of the sandwiches made by SUBWAY restaurants in a year, end to end, they

would wrap around the Earth at least six times.

SUBWAY restaurants offer a delicious variety of foot

long and 6-inch sandwiches, salads and wraps that are

made with a wide assortment of meats, cheeses,

vegetables and toppings. All SUBWAY sandwiches are

made on freshly baked bread and are prepared right

before your eyes, just the way you like. “Customers not

only have a wide variety of sandwiches and salads to choose from, but they can also

customize their meals according to their preferences. Subway has already introduced

Paneer Tikka sandwich, Chicken Tikka sandwich, Garden Pizza Sub, Bistro Garden

patty, Corn and Peas, Spicy Veg and Hummus & Falafel,“ said Gulri.

Comment:-

Sub way outlet has offered a wide variety of products and sandwiches.

Increased in variety of product means increase in customers.

The sub way outlet offers there product for upper middle class and high class

people.

The entire product offered by subway is very hygiene.

The customer who is very loyal towards health and hygiene will prefer sub way

products.

Place mix

The place mix is mostly considered with the location and distribution channel of the stores.Location:

The fast food corner of subway is located at metropolitan cities. Selection of subway in metropolitan cities is because to meet their

demand of their target audience. Target audience of subway is all youths, upper middle class and

higher class people. Corner of subway is at all crowded places such as near colleges, malls

etc.

Distribution channelAs outlet of subway is of centralized distribution, the main raw material of subway comes from Delhi.

PRICING

To open a new franchisee following cost are need to be made

Bread freezer – 100000

Meat freezer – 4, 50000

Toaster – 3, 50000

Opening a new Franchise it cost 25lakh and it cost 40 lakh along with all machinery. The

turnover of a sub way outlet is around 8 to 10 lakh and in very high sophisticated area the

turnover is around 11 to 15 lakh. The daily earning of 1 individual outlet is around 20

thousand.

The pricing strategy of sub way food outlet is skimming. There prices are high as they

this outlet is for upper middle class and high class people.

Comment for pricing

Customers are very price sensitive

The sub way outlet offers there product for upper middle class and high class

people who are very health and hygiene conscious.

Prices are very high in comparison to other food outlet, so lower middle class

people cannot afford to visit subway food outlet.

Promotion

The SUBWAY chain recruits minorities through advertisements in major magazines and

newspapers, such as Black Enterprise. , the chain

offers the SUBWAY FRESH FIT FOR KIDS meal.

It is a specially designed meal package for children

that includes a sandwich prepared on a Mini Sub roll,

a FRESH FIT side choice - sliced apples, raisins, or

strawberry yogurt; a drink - 1% low fat white milk,

2% reduced fat chocolate milk, or a 100% juice box;

and a toy premium.

The SUBWAY FRESH FIT FOR KIDS meal is recommended for children, because of

its smaller portion size. However, any customer may purchase a SUBWAY FRESH FIT

FOR KIDS meal. Children need not be present at the time of purchase.

The target for the SUBWAY chain's 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 chain's 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.

The majority of the advertising is done via national TV during prime time, sports and

late programming on major broadcast networks and cable networks. Additional

advertising is done via local markets on TV, radio and in print. SUBWAY restaurants

also promote advertising messages and specials in-store with point-of-purchase material

such as posters, menu translates, etc.

Comment: -

Today is the world of Advertisement

The customer remembers you only when he sees you or listens about you

So definitely the owners get the benefit of their high promotional expenditure.

Many people are still unaware of the food outlet Subway.

The modes used for advertising has not proved very effective

People

The first impression attempts to influence the attitude of a guest towards the services or

facilities offered by the hotel.

At the same time the last impression lingers in a guests mind.

So the staff plays very important role.

The staff of Sub way are trained properly and they are been trained at Delhi.

Total number of staff required in one outlet is 8.

Comment

Staffs are the assets of the organization- following this principle the subway outlet

are giving special attention to their employees.

The employees of the outlet are well mannered which pleases the customer.

The employees are well educated so they can properly handle the customers.

The employees do not interfere in any of the decision; they only assist the

customers when needed.

Good employees with proper clean and neat uniform depict the culture.

Well uniformed employees show hygiene

Process

THE Process of making sandwiches

1. Shaping and baking of bread: Firstly the dough of bread is given a proper and a standard shape. The

shape is given in the franchise itself. The dough is directly imported from new-Delhi (main plant).the bread gets ready in 45 min, which is been shaped and kept in the refrigerator.

2. Baking of meat: chicken is also made and fried which gets read in 15 min.

3. Procedure to make sandwiches: sandwiches are made in front of customer according to their choice and preferences. All vegetables are boiled and kept in front of customers in special fridge.

4. The bread is baked 4 times a day and is oven fresh. We have a choice of settling for a 6” sub or a foot long. We have a choice of 4 breads which is Italian, Wheat, Parmesan Oregano and Honey Oats. Once we have made the basic choice about the bread, the length of the sub and the type, we can personally choose how much or how less of the veggies we want in your sub. There is an array of ingredients for the sandwiches right from the veggies to the sauces spread in both counters and you decide may decide what exactly and how much of those we want in your sub.

Comment

The process of making sand witches at subway is very fast

The choice of selection of bread is in hands of customer.

The process is entirely done with the customer choice so they attract many

customers.

Packaging

Along with making napkins with 100 percent recycled materials – of which 60 percent is

post consumer recyclable, saving an estimated 147, 000

trees annually - the brand has also: switched the materials

used for the manufacturing of its cutlery and 32 ounce

plastic drinking cups from polystyrene to polypropylene.

The change resulted in an annual resin savings of more than

610,000 pounds and saves an equivalent of 13,000 barrels

of oil.

Other areas of packaging improvements have been

made in deli paper cartons, salad packaging and

catering trays, specialty sandwich bags, 4-cup carriers

and lunch box, and the reduction of sandwich wrap

wax.

Swot analysis

S STANDS FOR STRENGTH:-

1. Excellent ambience:-

This factor is the biggest strength of sub- way. The ambience

factor includes music juke box, TV, and video juke box and special decoration during the

time of festival and arranging themes for different occasions.

2. International standards:-

This is the biggest strength of sub way that they have

international standard due to which they provide quality products, hygienic products and

best service.

3. Brand image:-

This outlet have well set brand image and have already penetrated

peoples mind by more than 50%.

4. Marketing strategies:-

Now days, firms carefully market product, understand consumer

behavior and demands, which act as best strength and also tie ups and specials discounts

to customers act as attraction to the customer.

5. Hygiene:-

Sub way outlet offers very hygiene product in comparison to all. Other

food outlet. Customers order is been made in front of them.

6. Diet food:-

Sub way outlet offers very diet conscious food. The persons who are

very health conscious prefer sub way for there snacks. Customer can select its sand wich

on there own choices. It is customize according to customers taste and preference.

W STANDS FOR WEAKNESS

1. Pricing strategy:-

These outlets have international brands, hence along with the product. They

have brought the high prices of them. These outlets have low value for money and have

high prices for their products.

2. Differentiation between outlets

There are a lot differences in outlets of sub way at different places. For e.g. they

provide lounge facility at some outlets and hence this differentiation confuses customers.

3. Lack of awareness among people:-

Many people are still unaware of food outlet Sub Way. They don’t have the

idea that a die conscious outlet is been opened.

4. Lack of promotion

The proportion of the advertisements or the marketing which is done by SUBWAY is

very low.This leads to unawareness among the masses..

O STANDS FOR OPPPORTUNITIES

To increase geographical boundaries

To increase variety of sand wiches;

SUBWAY has a variety of sand wiches in its outlet

To increase promotion

SUBWAY has a lot of promotional tools but players such as McDonald's and Pizza Hut

are rather heavy spenders on advertising and marketing activities, Subway is planning to

follow a rather novel marketing strategy in India.

To target middle class people also:-

Subway’s main target is upper middle class and high class people. Due to the increasing

demand of products of SUBWAY, SUBWAY is now planning to target middle class

people, so that they can have increase in profit.

Home delivery

Subway outlet doesn’t have the facility of home delivery.

T STANDS FOR THREAT

MCD and other local food outlet:-

The major threat to subway outlet is MC.D and the other local outlets. The price of

MC.D is very feasible for middle class people in comparison of sub way. Sub ways

pricing is high in comparison to MC. D and other food outlet.

Easy acceptance of Indian market:-

Indian people easily accept the changing of taste and new product getting available

in the market. Indian market easily accepts the changes of taste in

the market.

Changing preference:-

o Indian people have a habit of changing its taste. Due to changes in taste

and preference of customers the demand of the existing products gets

reduce. The change in taste and preference of any product affects the

demand and thus it is the threat for any outlet.

Unindianised menu:

o Initially there should be little more indianisation (Customization) in the

Menu to suit the Indian customers taste, as the competitors have

customized as per Indian taste (egg McD Aloo tikki burger)

Future prospects;-

SUBWAY restaurants’ goal is to be ranked the number one restaurant by consumers and number one in restaurant count in every market that we serve.

Subway also has plans to enter markets in Punjab, Goa, Kolkata, Chennai, Kochi and Hyderabad over the next few years.

Subway Targets 200 Franchisees by 2009(Future), Subway International wants to have at least 200 Indian franchisees by the end of 2009.

At present the company has only four in the country, one in New Delhi, the others in Mumbai. But the company that has spent two years getting its cold chain in order is not deterred by the current number of outlets

. “Though sub way have one outlet in Delhi, we have just signed on 20 more franchisee for that region (National Capital Region - NCR). Therefore, you see that the 200 franchisee target by 2009 is very feasible,” says Mahmoud Chahrour, regional manager, Middle East and India.

At present, Subway has identified 10 regions in India in which it wants to establish its presence. They include the NCR, Goa and Maharashtra, Karnataka and Tamil Nadu, Uttar Pradesh, Haryana, Jammu and Kashmir and Gujarat.

The company has intentionally left the North Eastern region out of its present plans. Of the 200, Mumbai city is expected to have 38.

MISSION STATEMENT OF SUBWAY

"To provide the tools and knowledge to allow entrepreneurs to successfully

compete in the QSR industry worldwide by consistently offering value to

consumers through providing great-tasting food that is good for them and made

the way they like it." SUBWAY restaurants’ goal is to be ranked the number one

restaurant by consumers and number one in restaurant count in every market

that we serve

Survey at VASHI branch.

Name of Proprietor: - Mr Haresh

Outlet I visited: - Vashi (city center mall.)

Franchise opened on: - 1995

Cost of opening franchise: - 40lakh with machinery.

Term of agreement: - 20 years renewal

Management: - Centralized.

Annual Turnover: - Approximately Eight to Ten lakh.

Number of employees

Working: - 8

Competitor: - Mc donald’s.

Most popular sandwich: - Sub way club sandwich

Conclusion

Finally this is concluded that the marketing mix is method, by which any product or services can be top of success if properly followed

If any food outlet concentrate properly and give proper weight age on every “P” of marketing mix than any company/food outlet can cover major portion of market share in respect of any product or services.

So follow the marketing mix and capture the market through magic of “P” power.

BIBLIOGRAPHY

Primary data

This project is completed through primary data such as visit to “Sub Way outlet at Vashi, Marketing Management by Philip Kotler, consumer survey, (sample size 100, 20-30 yrs…)

Secondary data

www.google.com

www.subway.com

`

QUESTIONNAIRE(FOR CONSUMER)

1. Name:

2. Origin:

3. Franchise opened on:

4. Cost of opening franchise:

5. Term of agreement:

6. Management:

7. No. of employees:

8. No. of branches in Bombay:

9. Timings:

10.Annual turn over:

11.Approximate % profit margin:

12.From where do you purchase the product?

13.Do you have stores management?

14.Mode of advertisement?

15.Feature better than other food outlet?

16.Most popular sandwich: -

17.How do you cope up with the pressure from competition?

18.Do you provide home deliveries?

19.Pricing strategy?

20.What are your strength, weakness, opportunities and threat?

QUESTIONAIRE:-

Name:-

Age:-

Sex:-

Contact number:-

Locality:

1. Have you heard about sub way (food outlet)?

2. How did u come to know about sub way?

Advertisement

Word of mouth

Hoardings

Friends

3. How often do you visit sub way?

Daily

Once a week

Twice a week

fortnightly

4. How you differentiate sub way from other food out let?

5. Give ratings in order of your priority?

Quality

Rate

Variety

Diet

6. How are the prices of sub way?

Very high

High

Moderate

Low

7. In terms of hygiene and quality, how would you rate sub way, (out of 5)?

8. How you feel the ambience of sub way?

Highly appealing

Pleasant

Moderate

Needs to be improved

9. How is the staff of sub way outlet?

10. What according to you is the USP of sub way (unique selling preposition) / specialty?

It’s been suggested that the Subway outlet must improve their

marketing mix.

It should offer product which middle class people can also afford.

The differentiation between outlets must be avoided.

To increase geographical boundaries.