Subway Marketing Strategy

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Introduction

Subway is a leading world fresh-made sandwich provider with 33318 restaurants, distributed in 92 countries. Other than itself operating from a central point, it franchises its name. The restaurant was established in 1965 by Fred DeLuca and Dr. Peter Buck (Subway publication, 2010).

The first restaurant was established in Bridgeport, Connecticut, United States of America. It is known for its fresh quality fast food. This paper analyses the strategy on how I would further update the Subway product line and advertising campaign in light of current macro trends.

Mission Statement

The mission statement of the company, which doubles as its goals statement states that “Our goal is to be ranked the number one Quick Service Restaurant (QSR) worldwide while maintaining the great-tasting freshness of our products that is our trademark”. This is the statement that the company has worked with all along and has led to its strong brand name that facilitated its entry in the franchising business (Dennis, 2004).

Since its incorporation, it has been involved in numerous social responsibilities and all along whether it’s a franchisee or not, it’s guided by the passion to delight customers by serving fresh, delicious, made-to-order sandwiches, as was the dream by its incorporators.

S.W.O.T. Analysis Table

	Strength	Weakness	Opportunity	Threat
Legal and regulatory	Australian trade laws are simplified that they offer good business environment.	Australia has numerous tax that a business need to administer. Abiding to the regulations	Australian has a growing number of youth, both from foreigners and locals. according to Australian bureau of Statistics, 2010 it stands at 22,431,468	Caution from the regulations
Global	Australia has a good reputation with other countries and thus either the franchised or home country stands to benefit. There is a culture that supports the eating at fast food joints.	Due to the felt loss out of the diseases out of junk foods they might have reduced business	Growing and strengthening of globalisation.	New cost effective methods that may make similar products cheap.
Economic	It is unpredictable and thus a negative change can harm the organization	Subway pays high Salaries to their staff. On the other hand their job is labour intensive and thus cost of employees high.	The world economy is not predictable and thus Australia may face a downward fall on its economic positioning. It can change to the loss of the company	Economic Downturn
Technological	Subway has adopted new technology in product line and support departments to ensure that they effectively manage their business.	Staff shortages and in competency the system adopted by Subway are costly to buy and maintain.	Advertisement in Australia has taken a new face of electronic advertising. Subway has embraced technology in its advertising Can offer room for cheaper ways of advertisements	In subways there is need to upgrade the staffs regularly sometimes there is a Shortage of Staff
Innovation	More and more ways of doing things are invented	More dangerous foods can be developed	Ongoing Changes	Limited Funding
Social	Low Costs attract more	Lack of personalized services	Increased health concerns	Varied interests in clients
Environmental	Australian environment has been polluted, thus can be a source of inefficiency in the business. Subway has regulations set by government in its effort to conserve environment.	There are numerous campaigns to cure the dangers in the environment	It can continue to affect the population negatively	It has been depleted but there are campaigns to change the trend.
Competitive	Subway has a strong brand name and has mastered the production methods that it can effectively produce.	The companyNon Profit Objectives	That companies will produce harming goods	Large and well established competitors
Structure	Simple structure	Inexperience	Flexibility of structure	Funding regulations
Processes and Systems	Simple to adjust and learn	They may be the platform to better ones	Clients are aged and financially challenged	Consistency is what will be most important
Resources	Subway has a good management of the available and also the population is willing to help	Limited Funding	Can be scarce or we lack support	Constant Changes
Goals	Mission is achievable	Not very clear	Can be high jacked by profit making goals	Following our objectives to the dot
Strategic Capabilities	Funding will allow expansion	Strategies not competitive	Increased awareness and health concerns	Funding regulations
Culture	Australian has a growing number of youth, both from foreigners and locals. according to Australian bureau of Statistics, 2010 it stands at 22,431,468	Not competitive	Australian Culture is Unique and attracts more clients	External influences from funding organizations
Leadership	Subway has a good management for the central organisation franchised companies.	Lack of experience and same Ideas in marketin.		Funding regulations

(Esquerre, 2005).

Target Market

The company cannot be said to have a specific class or group of people that it targets in its productions, but basically it aims at the whole family production. There are packages that are said to fit more to the young generation, that is the youth and there are those that are meant for children. There are family packages also. However, it aims at establishing the most dominant population composition so as it can produce goods in that line (Neal and Quester, 2006).

Products are divided into different sizes to cater for the economic welfare of the people thus the well to do and the less fortunate in the society are accommodated.

Macro-environmental Analysis

The Economic and Political Environment

Of late the world is in a recession period from the world economic crisis that hit at the end of year 2007. This has affected businesses in one way or the other and fast food business is not an exemption. Consumer’s disposable income has drastically reduced. On the other hand, marketing and advertising methods and tools have taken another angle. This is where internet advertising has taken centre stage in almost at least 42% of world’s advertising (Trading Economics, 2010).

More and more fast foods are increasingly being established that offer a different set of products. What has become important is to look for mechanisms to ensure that the company remains competitive. Various mechanisms have been employed to sustain itself in the market, they include, cost reduction mechanism, ensuring that customers are satisfied through offering quality and fresh foods always and establishing its branches in good locations.

Australia GDP growth rate. — *Trading Economics. (2010).*

The Technological Environment

The cost of advertising versus the population reached has reduced with the adoption of internet and social marketing/ advertising. The company is in face book and other social network tools. According to Interactive Advertising Bureau [IAMB] 2009, the revenue from internet advertisement rose to $23.4 Billion in 2008, 10.43% increase from the previous year’s record of $21.2 Billion (Advertising Association, 2010).

The advertising and marketing online gives an interactive environment such that the target customer can be able to communicate with the website. This gives the user the advantage of airing his or her views. This was never possible in the old marketing and advertising models.

The population in the world today, has a majority which is enlightened and knows its rights. In the exercise of these rights, these people need an environment that does not dictate on what they are supposed to do, the way the traditional marketing and advertisement seemed to do (Web Ad.vantage, 2010).

Australia Online Ad Spending by Industry
Industry	Estimated Spending	Share of Spending
Financial Services	$230,449,300	28.8%
Web Media	$145,186,800	18.2%
Retail Goods & Services	$121,089,600	15.1%
Telecommunications	$ 56,400,700	7.1%
Consumer Goods	$ 43,508,300	5.4%
Hardware & Electronics	$ 32,655,400	4.1%
Travel	$ 29,758,800	3.7%
Public Services	$ 28,770,800	3.6%
Automotive	$ 27,182,600	3.4%
Health	$ 25,485,700	3.2%
Entertainment	$ 24,415,300	3.1%
Software	$ 20,968,500	2.6%
Business to Business	$ 13,423,900	1.7%

Web Advantage. (2010).

The Social and Cultural Environment

According to United Nations, 1998 the world is continuously facing an increased population. The numbers of youth and young families, who are continuously adopting modern lifestyle, are on the rise. As a result there is increased demand for junk foods. The company is also reaping the benefits of a strong brand name. A strong brand name assists a company to self market and advertises itself.

World population growth.

Australian population is also in the rise, according to Australian bureau of Statistics, 2010 it stands at 22,431,468. The population is mostly concentrated among the young; these are people who are below the age of fifty years. The following population structure portrays this fact;

Population structure. — *Australian Bureau of Statistics (2010).*

Social Trends/ Improved Living Standards

In this era of industrialization and computers, the living standard of people is on an upward rise. People are adopting modern methods of lifestyle to a point that they are creating recreational time. In these recreations, the foods relied upon are snacks and junk food like those produced by subway.

This has led to an increase in sales. In Australia, health issues are catered for by various programs by the government and thus the general population is healthy without having to spend ones savings. This leads to more disposable income that leads to improved business.

Competitive Landscape

General Strategies

The food industry is one of the fast growing industries in Australia; there are numerous fast foods and hotels that compete for growing population. Fast foods generally sell the following products Hamburgers, Pizza, Other goods, Chicken, Sandwiches, rolls, baguettes, focaccias, Salad and juice bars, Fish and chips, Pies and pasties.. Some fast foods have a strong brand name and are well established they include MacDonald, and Hungry Jack’s. However to curb competition from these established then the following can be done:

Strategy	Action	Who	When
Benchmark with other dealers with the best business practices	Identify benchmarking needs and approaches with other dealers this is in both original businesses and the franchisee. There is a tendency that franchised people may compromise quality and thus this should be looked into by setting standards (Anctil, 2008).	Marketing Executive	1^stQtr
Segment and target profitable and niche Markets	Develop policy guidelines on profitable segments to; Give personalized services Recommend special packages and incentives Enforce implementation of the policy	Marketing Executive	1^stQtr
Introduce Customer Service	Develop Customer Service System	Marketing Executive	1st – 2nd Qtr
	Ensure effective implementation of the Customer Service System	Marketing Executive	1st – 3rd Qtr
	Recommend a reward scheme for customer service staff	Marketing Executive	1st – 2nd Qtr
		Marketing Executive	1st – 2nd Qtr

Product Strategies

Strategy	Action	Who	When
Increase the number of products made in the company	Develop sales force policies and procedures. Implement and enforce the policies and procedures	Marketing Executive	1^st– 4^thQtr
Improve the current conditions of all franchised companies	Develop a proposal for branding our outlet to communication all over the world. Submit proposal to Chief Sales & Marketing Officer and pursue	Marketing Executive	1^st– 2^ndQtr
Devise a standard of operation which should be uniform in all companies	Raise requisition for purchase of sets and accessories Submit to Finance Executive & follow up	Marketing Executive	1^st– 4^thQtr

Pricing Strategies

Strategy	Action	Who	When
Devise means that will enable for a stronger brand name	Creating uniformity in the standards and the quality of products produced. They should also be fresh and made in the lowest cost possible (Anon, 2010).	Marketing Executive	1^stQtr 3^rdQtr1^st– 4^thQtr
Embrace research tools to enable the make more informed decisions.	The research department should be requirements that all companies regardless of the country that they are operating from should have.	Marketing Executive	1^st– 2^ndQtr

Promotion Strategies

Strategy	Action	Who	When
Effectively communicate through word of mouth and brochures	Develop promotional materials and items through Brochures, fliers, give-away, catalogues.	Marketing Executive	1^st– 4^thQtr
	Personal selling	Marketing Executive	1^st– 2^ndQtr
	Stimulate service utilization	Marketing Executive	1^st– 4^thQtr
	Direct mail Cyber-marketing	Marketing Executive	1^st– 4^thQtr

Distribution (Place) Strategies

Strategy	Action	Who	When
Increase product availability and penetration	Identify suitable sub-dealers.	Marketing Executive	1^st– 2^ndQtr
	Effective use of sales force.	Marketing Executive	1^st– 4^thQtr

Assessing the Current Position

Subway is currently the world largest sandwich company. It has its branches in 92 countries both as franchised names and original company. To attain this position the company has embarked on policies that ensure that it remain competitive. Some of these ways are ensuring that it has satisfied its customers in all means (Kaplan, 2008).

This is by offering quality and fresh food at all time times. Its location’s is another factor that has given the company an upper hand. All franchised companies are supposed to abide to regulations set by the central company. Fast food joints should provide fresh foods at all times to attract more customers. This will make them more competitive (IBIS World, 2010)

Current Marketing campaign

Today many companies have entered in fast food business; these companies include McDonald and Hungry Jack’s. To curb this competition and remain competitive subway has engaged in aggressive marketing and advertising methods. These methods include; online advertising where the company is on face book, twitter, has a well updated website. A person can assess its menu over the internet as well as a 24hour call centre.

To advertise and ensure that customers get the message, the company uses television and video advertising that are put on electronic advertising boards located at different corners in towns. Some of the audio-visual adverts are show people enjoying various brands by the company and states the offer price which may vary by seasons.

In print media, other than in the daily papers, the company advertises in magazines and use of brochures. In united States of America, it has offered some of its products like Humbuggers to be used as cover page on food and nutritional magazines. the companies brochures’ are found in supermarkets, cinema halls, some hotels, beaches and along streets.

Product line

Subway company specialises in making of fast foods, it mainly concentrates with making of Sandwiches, but due to changing population, it has diverted to other products like Pizza, Other goods, Chicken, rolls, baguettes, focaccias, Salad and juice bars, Fish and chips, Pies and pasties.

The development is to ensure that it can satisfy its customers and have a competitive edge in the market. At any one time, the company tries to ensure that its products are of high quality and can be spotted among others. It is very concerned about the feeling that a customer derives after visiting it.

There is a new product line that the company is trying to adopt, this is in the area of pizza, Chicken, chips and fish. This is an area that it is incorporating in the old line of sandwiches. To venture in this market, the company need to ensure that customers get more satisfied when they take these products from the restaurants. On the other hand to move as a block, all franchised companies should be taught on how to cook these products to the standards required by the company.

The following chart shows classified fast food joints in Australia according to the products that it sells;

Though a sandwich is not among the leading fast foods products in Australia, it accounts for a good percentage that if well targeted will give enough market share to the company. A sample sandwich by the company looks like;

Subway sandwich sample. — *Subway publication (2010).*

A franchising company requires its brand name be placed in a visible position by a franchisee (Entrepreneur, 2010). A sample brand name looks like;

Entrepreneur (2010).

Developing Marketing Capabilities of Updating the Subway Product Line

One of the strategies that the company should embrace is diversification. Instead of concentrating in one line of business i.e. sandwiches, it should venture in other areas that can blend with sandwiching (Kuhn, 1998). In striking for the right opportunities, the company will have to analyze its main market rival.

The strategies being employed by the competitor should be critically assessed and evaluated for necessary counter action. In addition, the general plan of the competitor in a bid to control the market is a vital toolkit which this company can use to estimate the competitive edge of the market. Similarly, the product being offered to the market at lower price should be investigated to determine its type and nature (Cook, 2008).

Why, for instance, is the company lowering the price of this commodity? Do they have access to cheaper raw materials or is it that quality of the product has been compromised and can be offered at a lower price than normal market value?

Finally on opportunities, the marketing department will have to investigate the company’s managerial structure both current and in the past and give a detailed finding as well as possible conclusions on the same (Hanssens, Rust & Srivastava, 2009). The following is an example of some foods available in the market that the company can adopt;

Subway burgers. — *Subway publication (2010).*

Conclusion and Recommendation

Despite that the company is enjoying as the leading sandwich provider, there are other companies that have come up with the aim of entering the same business. To ensure that it maintains its stand, then it has to utilize its available opportunities well. Opportunities for the company are dependent on both the internal and external assessment criteria of its operations profile.

Similar to the weaknesses discussed above, the company can still optimize on the various opportunities available to bring about sustainable growth through effective competition. Some of the underlying opportunities for this company in regard to the macro environment are the diversification of its activities.

The company may opt to not only run on large scale but also produce variety of products. This concept of variety may be approached from different angles like design and suitability (Paley, 1999). The advertising campaigns should be made to fit the target market. The advertising campaign should be tailored to cover the following.

The adverts are placed on the most likely places that the target market is likely to be at any one time, for example they are expected to spend on tourist hotels, at the gate of the hotel, a poster should be put that gives a connection of the soft drink and the customer; “have a world class feeling at Subway”.

There are public transporting companies, a contract with them should be put in place so that the company is allowed to paint the cabs with its known color and a persuasive message about the company. The electronic sign boards are other areas of advertising, since they have the advantage of being formatted to bring different issues, the issues to bring are the replays of the last Olympic Games. T-shit advertisement; T-shirts should be produced that pass a message to the consumer that advertises the company.

Reference list

Advertising Association. (2010). Advertising Industry Statistics Web. Web.

Advertising Bureau [IAMB] 2009. Internet advertising Revenue Report Archive. Web.

Anctil, E. (2008). Marketing and Advertising the Intangible. ASHE Higher Education Report, 34(2), 31-47. Web.

Anon (2010). Buy a franchise: Advantages and disadvantages of franchising. Web.

Australian Bureau of Statistics.(2010). Australia’s Population. Web.

Cook, S. (2008). Customer Care Excellence: How to Create an Effective Customer Focus. London, Kogan Page Publishers.

Dennis, G. (2004). “Subway sets out to torpedo McDonald’s“. The Daily Telegraph (London). Web.

Entrepreneur (2010). Franchise 500. Web.

Esquerre, B. (2005). Have You Done Your S.W.O.T.? Today? Fitness Business Pro, 21(12), 24. Web.

Hanssens, D., Rust, R., & Srivastava, R. (2009). Marketing Strategy and Wall Street: Nailing Down Marketing’s Impact. Journal of Marketing, 73(6), 115-118. Web.

IBIS World. (2010). Takeaway Food Retailing in Australia. Web.

Kaplan, D. (2002). “Jared’s Back Plugging for Subway,” Adweek Eastern Edition.

Kuhn, S. (1998). “#13 Lucky for Subway Restaurants and Its Customer 7/6 Campaign Proves to Be a Winner,” Total Food Service.

Neal, C. and Quester, P. (2006). Consumer behaviour: implications for marketing strategy. Australia, McGraw-Hill.

Paley, N. (1999). The manager’s guide to competitive marketing strategies. New York, CRC Press.

Subway publication (2010). “Official SUBWAY Restaurants Web Site”. Subway Restaurants. Web.

Trading Economics. (2010). Australia GDP Growth Rate. Web.

United Nations (1998). Australian Bureau of Statistics. Web.

Web Ad.vantage. (2010). Web Advantage is an agency solely specializing in online marketing and advertising, and therefore we do it really well. Web.

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