Subway Overview
This report will focus on analysing the marking mix strategy of “Subway” which is an American fast food chain restaurant. The company is one of the world’s biggest restaurant chains, and it offers its services in more than 100 countries (Subway, 2018). This report will discuss the marketing mix strategy of Subway which will include product, price, promotional, people, process, physical evidence and place strategies. Further, the report will provide recommendations for Subway that can assist in improving its marketing mix strategy in order to provide them a competitive advantage over other firms.
Subway is the world’ largest fast-food restaurant chain and it offers its services in more than 44 thousand locations of 100 counties. The primary strengths of the company include healthy products, fresh ingredients, large investment and availability in multiple locations, whereas, its weakness include expensive products, low sales, and workers’ pay issues (Harwell, 2015). The opportunities of the enterprise include interest in healthy food is increasing, cheaper expansion, and growing interest in vegetarian food, however, various threats include more competition change in customers’ taste and pressure for providing health food (Ming, 2017). The corporation’s segmentation includes young people below 40 years and old people above 40 years who prefer to buy healthy food. The target market includes young people who need to know that healthier food taste good and older customers who prefer healthy food and lifestyle. The position of Subway in fast food market provides that they offer healthier food at relatively cheaper rates.
Marketing mix is defined as a set of factors, actions or policies that are used by corporations to promote its products to its targeted customers in the market (Anitsal, Girard and Anitsal, 2012). It is used by companies to influence customers’ purchasing decision in order to increase their sales. While taking crucial marketing decisions, managers evaluate 7Ps of the marketing which influence company’s strategy and increase its effectiveness (Yasanallah and Bidram, 2012). Following are the 7P’s of marketing which influences company’s marketing decisions.
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7P’s |
Summary |
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Product |
Product defines an item which is produced by a company to satisfy the requirements of its customers. It can be an object or service. Corporations have to ensure that their products are based on customers’ requirements. |
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Price |
It defines a product’s price which is paid by the customer to enjoy such product. Organisations can significantly influence their marketing strategy by changing the price of products. |
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Place |
Distribution is a key part of the marketing mix. The companies ensure that their products are easily accessible to potential customers. |
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Promotion |
Promotion is crucial for an organisation since it can increase brand recognition and sales. Organisations use different methods to advertise their products such as television, radio, online, print media and others (Khan, 2014). |
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People |
Organisations have to research on the potential market to ensure that enough customers are available in target markets who are interested in company’s products and services. |
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Physical Evidence |
Physical evidence of delivery of service and products perceived in the market is necessary which influence company’s marketing mix strategy. |
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Process |
The system and procedure of an enterprise include its method of executing service; therefore, corporations have to ensure that they have a well-tailored procedure which focuses on reducing operating costs. |
This report will discuss Pricing, People and Physical Evidence strategy for Subway to increase their market share by targeting potential customers.
Subway’s Pricing Strategy
Subway is a premium price fast food restaurant because as compared to its competitors, McDonald’s and KFC, its products are high priced (Bhasin, 2018). However, the corporation offers low calories healthy food to its customers which justify its high priced strategy. The company also maintain its restaurants clean and germs free to attract a large number of customers. Thought, the prices of Subway’s products are high; the company provides more quantity than compared to its competitors which justify its prices.
Marketing Mix Strategy of Subway
Strategy
Subway should use ‘Penetration Pricing Strategy’ to increase its market share in restaurants industry and target new potential customers. The strategy will focus on reducing company’s products prices in developing countries such as India, China, Indonesia, Thailand and other to target new potential customers. Many other competitors such as McDonald’s and KFC have implemented similar strategy while entering in new markets (Bhattacharjee and Chatterjee, 2015). Subway should advertise its products as “low-cost healthy food” which attracts its target customer’s bases which include young and old people. Especially, students will prefer to buy healthy food at low cost since awareness about fitness is continuously increasing.
Influences
Subway had to deal with various internal and external influences which affect the company’s pricing strategy. Various influences which affect the pricing strategy of Subway include demand, competition, objectives, costs, suppliers, and others. Following are two internal and external influences which affect Subway’s pricing mix strategy and for details, see appendix below.
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Internal Influences |
External Influences |
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Cost |
Competition |
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Predetermined Objectives |
Suppliers |
People Strategy
Subway has more than 490,000 employees working across its restaurant chains; generally, around 8 to 12 employees are needed in one Subway restaurant. The company provides 33 hours on-job training and 62 hours of classroom training to its employees (Entrepreneur, 2018). In order to target potential customers, company has to implement new guidelines for employees. The workers are requiring being friendlier in order to attract old people. The employees are requiring having ‘customer education’ in order to attract consumer in the restaurant; the company can provide that by giving appropriate training to the workers. The enterprise should also introduce reward and incentive policies which motivate employees to perform better.
Physical Evidence Strategy
Physical Evidence is referred as the elements of the physical environment of the restaurant which is experienced by customers and visitors. The physical evidence influence customers’ perspective about the company and the way it functions (Ryu, Lee and Gon Kim, 2012). Subways should maintain clean and hygienic interiors to attract potential customers. The company should offer a self-service system with easy to understand the system, and the employees must wear similar attract cloths. The design of the restaurant should be simple to ensure that old people did not face any problems and it must provide large sitting space. The company should also offer online ordering and home delivery facility to attract students and other local customers.
- Subway should implement above-mentioned strategy because it assists in increasing company’s market share in the restaurant industry and assists them to target their potential customers.
- The pricing strategy enables Subway to increase in markets of developing countries. In developing countries, generally customers did not prefer to buy highly expensive food products. Therefore, penetrating strategy allow Subway to attract such customers and increase their market share.
- Highly trained employees increase brand image of the company and customers’ loyalty. Employees assist in maintaining a positive relationship with customers which assist company in targeting their potential customers.
- Physical evidence such as large setting space, easy restaurant layout, and well-dressed employees increase company’s brand image which assists in increasing its sales. Therefore, Subways should implement the above-mentioned strategy since it assist in increasing company’s market share and customer base.
References
Anitsal, I., Girard, T. and Anitsal, M.M. (2012) An Application of Services Marketing Mix Framework: How do Retailers Communicate Information on Their Sales Receipts?,„. Business Studies Journal, 4(2), pp.77-90.
Bhasin, H. (2018) Marketing mix of Subway. [Online] Marketing91. Available at: https://www.marketing91.com/marketing-mix-of-subway/ [Accessed 21st January 2018].
Bhattacharjee, N. and Chatterjee, S. (2015) Fast food rivals expand, hitting Yum sales in India. [Online] Reuters. Available at: https://in.reuters.com/article/yum-results-kfc-pizzahut-india/fast-food-rivals-expand-hitting-yum-sales-in-india-idINKCN0S11P420151008 [Accessed 21st January 2018].
Entrepreneur. (2018) Subway. [Online] Entrepreneur. Available at: https://www.entrepreneur.com/franchises/subway/282839 [Accessed 21st January 2018].
Harwell, D. (2015) The rise and fall of Subway, the world’s biggest food chain. [Online] The Washington Post. Available at: https://www.washingtonpost.com/business/economy/the-rise-and-fall-of-subway-the-worlds-biggest-food-chain/2015/05/29/0ca0a84a-fa7a-11e4-a13c-193b1241d51a_story.html?utm_term=.49b943490604 [Accessed 21st January 2018].
Khan, M.T. (2014) The concept of’marketing mix’and its elements (a conceptual review paper). International journal of information, business and management, 6(2), p.95.
Ming, C. (2017) Trends for 2017 show wellness and foods link to grow. [Online] CNBC. Available at: https://www.cnbc.com/2016/12/30/trends-for-2017-show-wellness-and-foods-link-to-grow.html [Accessed 21st January 2018].
Ryu, K., Lee, H.R. and Gon Kim, W. (2012) The influence of the quality of the physical environment, food, and service on restaurant image, customer perceived value, customer satisfaction, and behavioral intentions. International Journal of Contemporary Hospitality Management, 24(2), pp.200-223.
Subway. (2018) About Us. [Online] Subway. Available at: https://subway.is/en/umsubway/ [Accessed 21st January 2018].
Yasanallah, P. and Bidram, V. (2012) Studying the Status of Marketing Mix (7Ps) in Consumer Cooperatives at Ilam Province from Members’ Perspectives. American Journal of Industrial and Business Management, 2(4), p.194.
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