Outlining the purpose of the report
Discuss About The Journal Of Business And Retail Management.
Subway is an American fast food restaurant which was established in the year 1963. Subway primarily sold the submarine sandwiches and salads. Subway started its journey by 17 years old high school graduate Fred DeLuca and he started its journey with his family friend Dr Peter Buck. They opened its first store in Bridgeport, Connecticut, USA. They decided to open more 32 stores within 10 years; however, it seemed impossible for the duo. They took began franchising and the brand saw the remarkable growth. At present, Subway had more than 44,834 restaurants in more than 112 countries (Subway.com 2018).
This report sheds light on marketing concept and marketing communication of Subway. The components of the marketing communication mix are explained along with the factors of competitive advantage. There are two parts in this report, the first part deals with marketing environment and organisational decision process. The purpose of the first part is to highlight the evaluation of the marketing and the marketing environment of Subway. In part two; communication campaign review has been included.
Market orientation is about a firm’s philosophy focused on meeting and discovering the needs and desires of the customers through product mix. As mentioned by Abdullah et al. (2015), in the previous time, marketing strategies mainly concentrated on creating selling of the existing products; however, marketing orientation now works in reverse, attempting to tailor products to meet the customers’ demands. Market orientation is about coordination of the marketing campaign between the customers and the company. Benefits of marketing orientation are about increasing income and sales. The advantage of market orientation is about enhancing business volume as well as market share. Another benefit of market orientation is to increase the customer loyalty and the customer satisfaction. Market orientation increases the innovation by listening to the consumers and it leads to the continuous development of efficiency and effectiveness (Mondejar-Jimenez et al. 2015). On the contrary, market orientation needs the business to change the direction in order to meet the changing demands. Planning of the marketing can be a challenge in marketing orientation.
As stated by Baker and Sinkula (2015), product orientation is about company’s sole focus on the products and product-oriented organisations put the maximum efforts on manufacturing quality product and fixing the products at the right price. The organisations want the customers differentiate the organisation’s offerings and make a purchase of the products. The advantage of the product orientation is that it allows the organisations to focus on the quality of the products as sometimes small businesses do not worry about the offering of the products. On the other hand, product orientation does not always lead to profit as the customers may not be interested in what the organisations sell and Research and Development cost is high in product orientation.
Describing the marketing and product orientations, highlighting the advantages and disadvantages
Subway is the more market-oriented company; hence it takes the market orientation approach. In market orientation, the business mainly focuses on the market research as it tries to understand the customers’ wants and needs. Subway tries to confirm the desires and needs and the organisation creates what the customers want. The first example of the market orientation of Subway as the company tries to contact with the customers via Facebook, Twitter and Instagram. Through social networking services; Subway is interested to know what the customers want as the organisation has the ordering system (Jaworski and Kohli 2017). In addition, another example of Subway’s market orientation is that Subway provides more options for the customers on the menu as the customers can choose a flavour, bread, amount of cheese, sauce and vegetables when they choose the sub sandwiches. Apart from this; Subway provides the muffins, veg menu and doughnuts.
Subway is in the fast food industry and the Subway has to learn about the political rules of the prevention of the overconsumption of the fast food by the children and hopefully ending up in reducing the child obesity rate. In case of the UK, the UK left the EU and it has created the uncertainty (Heasman and Lang 2017). In the UK, the rules on adverts for junk food are tightened and Subway needs to follow the campaign of reducing the fat and nutritional elements in the food. Therefore, the buying behaviour of the customers can be changed due to the fast food rules.
Environmental factors can impact Subway as the changing rules and regulations regarding the environment scenario pressing the organisations to take more greener and sustainable approach. Subway manufactures the food items and it may emit the waste. Therefore, each of the outlets in the UK must have perfect waste management (Nixon and Doud 2016). In the UK, Environment Act 1995 declared about the waste mitigation. The environment policies in some of the countries talk about the saving of the electricity and energy; therefore, the outlets of the Subway can have the right set of energy policies to tailor the business operation.
Psychographic segmentation of the customers is analysed to understand the deeper motivations of purchasing the specific products and the brands. According to Cross et al. (2015), the process of selecting the psychographic segmentation is associated with the customers’ opinion, values, activities and lifestyles. The companies sometimes segregate the customers based on their lifestyle which is reflected in the opinions, interests and activities. The companies often identify the groups of customers with similar patterns of living. The companies sometimes endow the brands with their values and the personality of the customers reflects on their buying behaviour. As opined by Luo et al. (2015), there is a relationship between the personality of the brand and personality of the buyers as the choice of brand showcases the personal values of the customers. On the other side, behaviour segmentation tracks the customers’ purchases to recognise the patterns of the customers’ behaviour. Behavioural segmentation is the practice of segregating the consumers into the groups according to the attributes like loyalties, usage, occasions and liking, knowledge and purchase patterns. Customers may search for different benefits from the product and it is significant that organisations can carry out the benefit segmentation diligently. The manufacturers of the products may advertise of the products based on purchase occasion of the customers. As stated by Maute et al. (2016), customers exhibit different buying behaviour in terms of the time of the buying.
Identifying and explaining the orientation adopted by Subway and providing two examples that demonstrate Subway’s use of the approach
Subway uses mainly demographic segmentation and the characteristics of the demographic segmentation are associated with the race, age, ethnicity, gender, education, religious views, marital status and occupation. According to Hatheway et al. (2017), demographic segmentation is more efficient when targeting the customers in multiple segments. Subway can choose the demographic segment in which they can segregate the target customers through the age group. Age group between 18 and 36 can be the most attractive as this age group is mainly out goers. This age group is also conscious about the calories and nutrition. Subway’s provides fresh and nutritious products to the customers. Subway gives low fat menu to the customers and the young age group will like the products. In demographic segmentation, Subway can segregate the market in income-based where Subway can target the customers who belong to the higher income group. Higher income group can easily afford Subway products. The benefit of demographic segmentation is that it is easy to use as government and the statistical data easily gettable. Suitable data can be gathered quite quickly and demographic segmentation is easy to understand for the marketing team to sell the products. It is easy to make the marketing plan for the demographic marketing segment.
Products offering
Subway takes the strategy of diversified products offering as it serves the products in the restaurants and the outlets. Subway also provides the catering services in some of the countries. In the outlets; Subway’s offers the variety of sandwiches, snacks, breakfast items, drinks, pieces of bread and submarine sandwiches. In addition, the catering services include the food items like Giant Subs, Subway to Go, meals, sides, drinks, desserts and Sandwich Platters. Most interestingly, Giant Sub Sandwiches are long and Sandwich platters are included the food items range like Turkey Breast, Chicken ham. Subway also offers the Subway Club and the Veggie Delight (Subway.com 2018). In addition, Subway provides the baked items like doughnuts, cookies, muffins, wraps also. The best-sellers list of Subway is long and the diversified products offering attract large numbers of customers. The product-line strategy increases the customers’ base for the organisation. In the UK and Indian market; Subway launched the vegetarian products and it sells coffee also.
Pricing strategies
Subway takes the premium pricing strategy and its prices are higher than the competitors in the market. Subway sets the prices higher than KFC and McDonald’s in the market. Subway serves the food items with the best quality and the food items are best-suited for the calorie conscious people as well. Subway claims that it serves better quality food items and its pricing strategy is obvious. It is quite noticeable that the quantity of Subway products is more than the McDonalds and KFC. Subway takes the differential pricing strategy as this value pricing is based on generating of the value in terms of delivering of the quality to the customers in the Subway outlets. Higher pricing strategy increases the general interest of the people and it increases the brand value of the organisation (Wang et al. 2016). Higher pricing strategy obviously enhances the firm’s profit as well.
Identifying and discussing one political factor and one environmental factor that could influence Subway’s business operation and consumer buyer behavior
Place strategy
Subway is currently operating in more than 44,000 outlets and it is one of the fastest growing franchises. Subway has its outlets in more than 112 countries and most of the outlets are in off-beat premium places. Subway outlets are located in the malls, business centres, amusement parks, airports, military base and urban cities. Most of the Subway outlets are in the premium places where the customers can conveniently reach the outlets to have the food items. The customers are mostly calorie conscious and the catering services can be available for the business meetings, birthday parties, holiday gatherings, social gathering and office party.
Promotions are an integral part of the marketing and it motivates them to buy the products from the organisation. According to Kitchen and Burgman (2015), the promotional mix includes the set of components which contribute to achieving the organisational objectives. The products offered by the organisation are judged by how the organisation advertises this. The effectiveness of this promotion provides a better idea to the advertisers about where the organisation can improve. The promotional mix has five different elements; direct marketing, advertising, public relations, sales and personal selling. Promotional mix helps the organisation to use the medium like television, radio, mobile and print media to advertise the products.
Subway takes the video campaign as part of the promotional mix. Video campaign of Subway shares the motto of the organisation to attract large numbers of customers. Video campaigns enable the organisation to stream the video content on Google Display Network or YouTube. The advantage of video marketing is that it is free in virtual media and video marketing position the organisation as expert as it is a feast to the eyes. Video campaign exposes the business to the wider audiences with higher brand awareness and it generates more leads to the website traffic. Video campaign promotes better brand recall than other advertising media (Helm and Gritsch 2014). On the other side, video marketing cannot force the viewership as it is all responsible for the content of the video.
Subway uses the slogan named ‘Eat Fresh’ to promote the freshness and high quality of the products. Subway makes the sandwiches in front of the customers in order to increase the transparency of making the product with right ingredients by the Subway Sandwiches Artists. Subway has made itself involve with cartoon character Peter Griffin to promote the new sandwiches. Subway has also uses the promotion series with US TV Series ‘Chuck’. Subway has also run the campaign like ‘Buy one sandwich, Give one sandwich free’ on National Sandwich Day. Subway has used the YouTube video campaign along with it has the blog post named SubCulture. Subway has its Facebook, Twitter and Instagram page to promote their brand. Subway also uses the television media to promote their products.
Explaining psychographic segmentation which differs from behavioral segmentation
The key message of the video campaign is to promote the concept ‘make it what you want’. Subway wants to make clear one thing that all age group customers and all types of customers can enjoy having Subway sandwiches. The video shows the sandwiches are big, epic, hot and tastier and they are fast. The consumers can enjoy the sandwiches in any circumstances. Subway wants to celebrate different mood of life.
Subway generally targets the customers aged between 18 and 38. However, this particular video celebrates the different mood of the human beings. The target audiences of the video belong to all age groups. This video mainly features the young generation who want to live freely. The target audiences are the young generation and the characteristics of the target audiences must be free. The core concept of the video campaign is not to take what are given in life and food. The target audiences must have set of brain where they need to make what they want.
AIDA marketing theory recognises the cognitive stage in which a person goes through during the buying process for the product and services (Khan 2014). The video campaign does aware the customers about the Subway products and the cheerfulness of human being. Video campaign creates the brand awareness with the product and services. The video campaign creates the interest towards having Sandwiches and sufficient interest can encourage having the buyer to start to research further. The core message of the video campaign is to live freely and make customers ready for what they want. Desires for the Subway products can make emotional connection towards the organisation. This video campaign can show the brand personality. Action moves the buyer to interact with the organisation and take the next step to buy the products. Therefore, more customers will engage to purchase the products to make the market share increase.
Subway has its channel on YouTube and they have more than 46k subscribers of the YouTube video. Subway can gather feedback through comments under the video. The comment section of the video will enable the organisation to understand the effectiveness of the video campaign. YouTube Community of Subway will make clear about effectiveness of the video campaign.
Conclusion
It has been noticed that Subway has its own set of marketing channels to which they reach wider customers. Marketing communication is a complex part of the organisation’s marketing efforts. In the first part, it has been observed that Subway targets the demographic segmentation with diversified products and it has higher prices than the competitors in the market. In the second part, Subway’s video campaign clears about the key message of life freely and makes it what individuals want.
Discussing one type of segmentation that can be considered the most valuable for Subway to use when segmenting the market
Reference List
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