Marketing Assignment

Marketing Assignment Words: 2085

Subway operates in the Quick Service Restaurant (USSR) market which includes all “fast food”, Including franchised brands and Independent businesses. The Subway marketing orientation has made significant changes, in the earlier days the ‘SUBWAY brand had little impact or meaning. It had an American centric feel, very little was known about the products a Subway store sold and confusion with the underground railway stations was evident in earlier amateurish surveys.

The focus was that of a Selling Orientation, since consumers had little education about the product, therefore squiring a heavy selling approach to persuade purchase In recent times, the market education process has matured and the brand is now synonymous with a healthy fast food option. This continues to be evident in much more advanced market research conducted by external companies. The orientation has now shifted to a predominantly Market Orientation.

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This is evident by the large investment in market research such as focus groups, customer feedback, franchisee feedback and a new Initiative titled ‘Mission Impossible’ whereby the in store customer experience Is broken down into 5 zones and each is analyses from the customers eyes. This last initiative has been the most successful in terms of driving the market orientation and has subsequently lead to Improved results from feedback forms and surveys. Issue 2 Company – Subway operates on a model that offers value for money and good quality products confirmed by 40% of surveyed fast food customers. Sprout Research, 2013). On the basis of price Subway and McDonald’s are considered to offer the most competitive prices amongst fast food franchises (Sprout Research, 2013). The focus of Subway is to maintain its competitive advantage,that is, eating healthy and fresh food t affordable prices. Strengths unique fast food market position-“Heath’. Strong brand association Strong corporate partnerships such as. Independent Purchasing Company (PICA). Fresh products including vegetables, bread baking and made to order operations.

Weaknesses Delayed Internal communication strategies between franchiser and Marketing. US maintain ultimate control of new product development. Marketing decisions are made by Franchisees not necessarily qualified or experienced In the field. Opportunities Expand marketing strategy to incorporate other day parts egg: Breakfast Expand menu ND product offering to maximize equipment use inshore. Development of digital Threats Changing consumer habits particularly influenced by TV shows such as Mismatches.

Technological advances in communication mediums such as Internet TV, Catch-up TV, Foxhole GO etc. Customers – The Subway customer was born as a result of the heavy media focus on health and fitness over the last 15-20 years. Coupled with longer working hours errs/ week more than in 1997) and less time spent eating, a healthy fast food option was an ideal solution (ABS, 2008). Subway operates predominantly in a BBC market and he typical customer will visit a store 1-2 times/week. Recent research has shown that the average dollar spent by a USSR customer on an occasion is $15. 0 whereas the average Subway customer spend on an occasion is $9. 80, with 41% stating price has become more important in July 2013 compared with March 2013 and October 2012 (Sprout Research, Gauge. 2013). This an important implication that highlights the consumer’s price elasticity when it comes to not only Subway, but the USSR market as a whole. In a recent IBIS Shrapnel report titled ‘Fast Food in Australia’, it was found 56% of the fast food market were women. Contrary to earlier results where males were predominantly the fast food customer.

Furthermore, 35% were in the higher income bracket which bucks the prior belief that fast food is for the working class’. This will have implications when market segmentation is discussed, and confirms the notion of continually reevaluating and redefining the customer and market segments (Hanoverian and Mere, 2006). Collaborators – A visible strength of Subway is the creation of the PICA, a purchasing company entirely owned by individual franchisee. The PICA negotiates farm to door’ contracts with most appliers which includes hedging and futures on commodities such as sugar, flour etc.

This ensures price stability for franchisees and ultimately food cost control to service a price elastic consumer. The PICA are an integral partner in the Subway system, ensuring not only price control but ‘Gold Standard’ quality of produce. This gold standard is the essence of franchising, maintaining the same level of quality worldwide in each and every store. In recent times the PICA has further expanded to implement programs such as Quality Net which ensures that all supply chain ratters are held accountable for delays and errors that may have a direct impact on franchisee profitability.

Franchisees are an integral part of the company, not only do they have a vested financial interest but they are the difference between an average and a great internal marketing campaign. The franchisees will have a predisposition to supporting the brands marketing strategy since they voluntarily committed financially to the business. It’s the franchisees ability to communicate to their individual staff members the companies direction, values, strategies etc, in order to achieve an effective marketing strategy.

The staff at store level are responsible for what Delano 2010, referenced from the McKinney Quarterly as the “consumer decision Journey’ (CDC). At Subway the CDC was inadvertently defined in the ‘Mission Impossible’ initiative described earlier. The touch points Delano refers to, have been defined by Subway market research to be at store level and therefore at the ‘Evaluate’ stage in the CDC. In the fast food market, the consumers buying decisions consumers highlighted were external store appearance, internal cleanliness, staff appearance, product quality, uncomplicated menus and final product delivery.

These elements were described by consumers to portray a discrepancy between media product images and the actual inshore experience (Sprout Research, 2010). This was addressed utilizing the ‘Mission Impossible’ initiate and subsequent results have shown improved metrics such as Value’, ‘brand consideration’ and ‘likely to purchase’ to name a few. Competitors – The USSR industry is extremely competitive and in recent times the non franchised independent operators have taken a significant market share. This was predominantly due to the rise in popularity in Thai food and now Mexican food.

The recent study has shown that in March 2013 34% of diners visited an independent compared with 13% visiting a Subway store and 20% visiting a McDonald’s store (Sprout Research, 2013). The threat of new entrants in a competitive market is relatively high according to Porters 5 forces (MM, handout unit 1, 2013). Although for large companies significant barriers include capital outlay, gaining market share and availability of franchisees. These barriers reduce the threat from new entrants but do not totally remove it. Conventionally, it was thought that the main competitors to Subway were McDonald’s, KEF, Porto, Hungry Jacks and

Domino’s Pizza. As can be seen above, the independents had the largest market share in March 2013, although this has declined to 29% in July 2013. The direct threat from independents emphasizes the need for Subway to continue researching their customers needs and deliver on the antidemocratic traits such as values, tastes and purchasing behavior (Hanoverian and Mere, 2006). Subway is strategically placed in an advantageous position when it comes to its competitors, given the ‘Health” halo held by the brand. In the past McDonald’s and others attempted to enter the health space and anecdotal evidence shows this was a failure.

Clearly evident by the withdrawal of the McDonald’s healthy choices menu within 12 months of launching. Context – The recent SGF was a classic example of the Economic environment affecting marketing strategy. It is a well known fact that in tougher economic climates consumers trade down from restaurants to fast food. This is now followed by a tighten of consumer budgets and a net decrease of 41% in visits to fast food outlets in 2012 (IBIS Shrapnel, 2013). This further reinforces the need to have a dynamic marketing strategy. Subway did this by implementing a digital strategy with a heavy focus on Social Media (SMS).

The results arena trending positively but the strategy has slowed the decline quite significantly. The focus on sodium Loveland saturated fat and has been front and centre in the Political environment. The slow and arduous communication process between the Subway product development team and marketing team is a significant weakness needing to be addressed.. The need to develop products that do not flag high levels of sodium or saturated fats yet meet consumer taste needs becomes a challenging marketing task. For example high levels of sodium in a production be perceived as a contradiction for a “Healthy’

Subway image, given the viral effects of SMS this could potentially be disastrous. An integrated approach between the marketing team and the franchiser would be beneficial in ensuring product development and the communication strategies effectively address these political issues. Subway has not managed to overcome pork products for heavily populated Muslim and Jewish areas, such that careful consideration to promotional activity in order not to disadvantage franchisees in these areas. As the digital strategy develops there may be ways to communicate different strategies by suburb rather than by region or state.

At this stage technological advances would have insignificant impact on the marketing strategy for Subway. Issue 3 Initially Subway was performing dados market research with no regard for bias, accuracy or control. A turning point was when the market research was outsourced and the orientation moved from selling to a market orientation. The current research structure includes a ‘State of Play study conducted biannually to establish a tracking device on key metrics of the Australian fast food market. These metrics include top of mind (TOP), brand consideration, fast food visitation frequency, brand loyalty and ore brand metrics.

The ‘State of Play study is conducted online with a randomly selected sample size of 1251. State of Play studies are benchmark against the previous and current market weighting scores are collected for analysis and strategic purposes. The data is collected and presented to the marketing team both in graphical and statistical formats along a narrative of the key findings. The marketing will commence a series of indents analysis with state marketing representatives before a roads is utilities as a key internal marketing tool to gain franchisee buy n.

A more regular market research tool (Brand DIP) is commissioned following each promotional window (usually every 6 weeks) to analyses and gain insight into customers perceptions on promotional communications, advertising and creative. These studies are undertaken on a national and state level. A random sample size of 600 is utilities for this study and data is presented graphically with a key point narrative and presented to each state representative board. These Brand Dip studies are used by the state boards to disseminate the effectiveness of current marketing traceries as well as altering or manipulating upcoming promotional windows.

This is an example of a dynamic marketing strategy, whereby promotional windows are planned and locked in Upton 12 months ahead but new market research is implemented as required. A Sensory testing study is commissioned several times are year to evaluate new ‘Limited Time Offers’ for the Australian Market. The taste testing is conducted in person amongst a sample size of 200 representing the companies market segmentation. This study is conducted by independent researchers under the guidance of Subway representatives purely for the operational aspect, the Subway representatives have no contact or influence on participants.

Initially the concept statements are rated in terms of liking and intention to purchase. Respondents are then required to taste each concept individually and rate the products on number of different indicators. These indicators include but are no delimited to taste, value, health etc. Further to these studies, Subway outsource its media buyers and from this source reports on competitor media spend, radio survey reports, digital page impressions, digital data trends and backbone and twitter competitor activity is reported both at a national and state level.

This source of this data is from Nielsen and Nielsen online tomato spends are approximations, but a significant tool for direct comparison of Subway media spend against its competitors. PICA. These reports give the marketing time a realities look at stock levels and an indication of ordering patterns from a national level down a local supply chain distribution warehouse. The implications of these reports allow the marketing strategy to be manipulated in real time including changing communication strategies, changing media strategies and mediums and at the extreme withdrawing campaigns.

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