Subway Sandwich Shops Situation Analysis
Subway Sandwich, as presented in the Case Study presented in the Marketing Management MGT 551 class, is an undisputed market leader in a segment that is “firmly established as a nationwide food item for which there is plenty of room in all areas” (University of Phoenix, 2008). However, with a growing competition, changing consumer trends and increased product specialization, Subway’s real strategic marketing challenge is to be able to develop and maintain a differential advantage while sustaining sales growths and profitability.
Subway Sandwich effectively competes with other fast-food restaurants by including and promoting healthier meals into its menu, as demonstrated by singling out its
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With its aggressive global growth strategy, Subway was able to reach in 2006 $11.3 Billions in revenues from its franchises around the World. Subway’s marketing strategy remains the promotion of health through fresh ingredients, while still targeting young adults (16-39 years old) as its main consumers (Subway, 2008).
Demographics
The profile for Subway’s present and potential consumers consists in the following factors:
Geographics:
Subway’s international expansion reached 28,000 outlets in 86 countries in 2007. Their strategy consists in “low start-up costs, ease of operations and healthier menus” (Anderson, 2007), which makes it attractive to franchisees around the World to adopt the concept. Subway primarily targets booming sandwich markets such as United Kingdoms, Germany and other Western Countries with increasing obesity problems.
Subway exercises an aggressive growth strategy by expanding globally, but also nationally in non-traditional locations such as college campuses, hospitals, gas stations, military bases, for example. Geographical saturation is believed to play a great part in Subway’s marketing plan to make customers perceive them as number one fast food chain (Chamis, 2001). Although saturation affects other regional Subway franchises, it boosts the sales and revenues of the entire chain, which is detrimental
One of the most important reasons that the food advertising market is so large include the following: food captures 12.5% of US consumer spending and so there is vigorous competition, food is a repeat-purchase item and consumers' views can change quickly, and food is one of the most highly branded items, which lends itself to major advertising. More than 70% of US grocery products are branded. Mcdonald’s is a household name in America and throughout the world. It is the leading global foodservice retailer with over 33,500 restaurants in 119 countries. It remains at the top of its market by delivering a remarkably consistent customer experience while still allowing for locally relevant menu and service variation. The article I would like to share with you today focused on the integrated marketing
In Jessica Lundgren’s essay, “Eating Fresh” in America: Subway Restaurant’s Nutritional Rhetoric, has stated many different strategies Subway uses in their commercials to persuade consumers that they are choosing the healthier choice when getting food at their fast food restaurants. Americans today are worried about what they can do to lose weight and maintain a good diet. Lundgren did a great job mentioning the five aspects to Subway’s nutritional claims that they follow which includes: the making of nutritional claims, a visual rhetoric that makes the restaurant’s “healthy” food options appear to be numerous and exciting, the comparison of the Subway product with the products of other, less “healthy” fast food restaurants, the clear indication
REFERENCES•www.mcdonalds.com, accessed on 18 July, 2008•www.mcdonldsindia.net, accessed on 18 July, 2008•en.wikipedia.org/wiki/McDonald's, accessed on 19 July, 2008•http://www.associatedcontent.com/article/263943/mcdonalds_strategic_marketing_mix.html?cat=4, accessed on 19 July, 2008•www.kfc.com, accessed on 25 August, 2008
Subway found that providing nutritional information not only helped to market their sandwiches, but it was a way to inspire their customers to eat smarter and stay healthy.
The fast food industry has been growing dramatically during the last few years. For this reason, we should try to find out what are the several factors why fast food consumption keeps growing among young people and adults. Therefore, as we have seen, the popularity of fast food is spreading rapidly among many people due to the following three main reasons: good taste, convenient time, and price. Personally, working for a fast food restaurant for a brief moment in my life, I can attest to this. Marketing also plays a big part to more people eating fast food. It’s in our culture in America to expect fast food companies to market and strategize their ways to make us, the consumers, to buy more food and consume more food so they can make more profit. Especially now with commercials and social media. The fast food industry has thrived in the modern era. It’s thriving so much, the industry is growing faster than the U.S economy, at
Comparing McDonald’s, Burger King and Wendy’s I started to see some interesting aspects to their marketing strategies. First by focusing on their main economic characteristics, secondly looking more in depth at the competition and driving forces, and lastly their key success factors. They have been striving to make changes to increase market shares as well as trying to dominate a global fast food industry by competing in the products, places, prices, and promotions they offer and geographic markets as well. These competitors mature at different life cycles whether it be from growing in the existing market opportunities, developing new diversification into related business striking for sustainable growth, or
Every day while sitting on the couch eat a burger, and soon many people learn what the obesity hype is all about. Fast food companies are advertising more food for less money with fast service. The media tends to change images for their target customers, to make the food more appealing to those that are watching. Laziness is one of the main causes of obesity in our country. Obesity in the United States is at a high due to the increasing fast food chains, media influence, and a lack of exercise. The idea of having a meal made for them in less than five minutes is somewhat exciting to the view of many individuals.” fast food firms introduced these alternative meals in response to changing consumer tastes”(Buchholz). Many fast food stores offer the customer fast service, and a great tasting meal. They provide their service with a smile and a meal that can cost less than 10 dollars. When people mix poor diet with poor
For Subway Sandwiches, the global leader in franchised subway sandwich shops, the segmentation criterion that affects target market selection varies significantly within each community, city and metropolitan area chosen for expansion. At their most fundamental level, segmentation strategies at Subway are based on a broad base of assumptions with regard to socio-economic and demographic factors including age, income, mix of genders in a given region, ethnic composition of a community, vehicle ownership versus mass transit use, and media habit including social media use. All of these factors are included in the foundational elements of the Subway Sandwich market planning, marketing strategy and store planning. Additional factors that segmentation strategies are often based on are discussed in this analysis.
In United Kingdom, they forecast that Subway will have more stores than McDonald’s by 2008 (Kemp 2007). Much of Subway’s success can be attributed to its strong health message and with many cultures in the middle of wellness boom (Bounds, 2006). People now want fast food without the fat.
Subway Sandwich effectively competes with other fast-food restaurants by including and promoting healthier meals into its menu, as demonstrated by
This case study determines the critical success factors used by Subway Restaurants Corporation to expand nationally, which the corporation wants to use also to expand internationally. In addition, this paper describes the competition and the prospect success in Asia-Pacific and Latin America. In general, the fast food industry is discovered with respect to the history and future plans of fast food chain Subway international for expanding and accretion in Asia-Pacific and Latin America, containing the four factors that Subway should use to compete and success in those markets. Each proposed country market has unique cultural and religious requirements should be realized by Subway, as well as the consumption patterns, market trends, and the franchise values which determine from the local traditional fast food compared to the viewpoint of Subway’s healthy alternatives and low expansion costs.
I do not believe that Subway should make any drastic changes to their promotion element. They are a great company and exhibit that through their success. Their $5 Footlong promotion was originally set to be a four-week promotion, but has been running for over two years. Their product tastes great and is healthy and fresh. I believe that they’re doing a great job and have created a big name for their company, but if they went out into the community to hand out coupons that would be great. I think if they went to college campuses and handed out coupons to students, it would create bigger sales for them. College students are always looking for ways to save a buck or two, and there are locations in and around college campuses, so I think this is a great idea.
Subway try to provide new concept with the idea of “Healthy Fast Food” by using the excellent product as their product differentiation strategy, with good taste, fresher and high quality of ingredients and clean process.
Another segment of the fast-food industry is comprised of a number of non- hamburger fast-food restaurants. Major players in this segment include Pizza Hut, KFC (Kentucky Fried Chicken), and Taco Bell. Sales in these restaurants have grown faster than hamburger chains in recent years. A growing trend is the move by customers to non-hamburger sandwiches. Subway dominates the market with more than 13,200 U.S. outlets. Prepared meals and sandwiches available in supermarkets, convenience stores, and gas stations are competitors as are the variety of microwave meals available to consumers.
Since McDonald’s is the most well know fast food chain in the world with a market cap of 69.35 billion, brand recognition is their biggest strength. The secret of McDonald’s success is its willingness to innovate and maintain consistency in the operation of its many outlets. In recent years McDonald’s has introduced Premium Salads, Snack Wraps, fresh Apple Dippers in the United States, and Corn Cups in China. Also, McDonald 's products are priced so low that economic conditions are almost insignificant.