Subway
Marketing Plan
Marketing Plan, Part I Summary
Subway
was started in Subway’s
mission statement is “to provide the tools and knowledge to allow
entrepreneurs to successfully compete in the QSR (Quick Service Restaurant)
industry worldwide by consistently offering value to consumers through
providing great tasting food that is good for them and made the way they like
it” (Subway.com). We have been able to do this by unique
qualities that include fresh ingredients, the ability to watch your sandwich
being made to order, and seven subs with six grams of fat or less. We feel that this has set us apart from our
major competitors who include Wendy’s, McDonalds, Taco Bell, Burger King, and
Blimpie (Subway.com). The
major goals of Subway are to maintain customer satisfaction and to become the
largest fast-food chain in the world.
Currently, we are second only to McDonalds in size. Other goals include offering high-quality
food with good service and good value, continually improving all that we do,
and serving each other, our customers, and our communities (Subway.com). We feel that if we do this, we will have a
good chance of becoming the largest fast food restaurant in an industry that
makes more than $110 billion dollars a year.
This is more money than customers spend on
movies, books, magazines, newspapers, videos, and recorded music all combined
(Nytimes.com). Marketing Plan, Part II Summary For Subway to be
successful, we must meet the needs and wants of our customers. We feel that we can meet those needs and
wants with our variety of sandwiches.
However, it is important to know who our potential customers are and
what they desire. The majority of our customers will be the students,
faculty, and guests of the Technology
is also helping Subway serve its customers, and is also helping to run our
operation to be more efficient. By
January 2001, all Subways had a PC-based point-of-sale cash register. It now is not necessary for customers to
pry with cash like they did a few years ago. They can now use debit cards for
their purchase. On this same note, we
hope to work with This past year, despite the economy being in a recession, Subway has had one of its most remarkable years. In 2001, Quick Service Restaurant Magazine named Subway as outpacing Arby’s, Sclotsky’s Deli, Blimpes, and others. We expect the healthy aspect of the restaurant to give us a competitive edge due to the fact that teens and young adults are very self-conscious about their appearance, and therefore, when away from home like to have a healthy alternative in food choices. The emphasis on eating healthy is not to overshadow the fact that no matter whether you want to eat healthy, or eat something that is maybe not so healthy, Subway has something for every type of consumer that tastes great. Subway offers hot sandwiches and cold sandwiches of all different types. Some that would be for the less health conscious consumer and some for the “healthy eater.” This option for either type of consumer is a feature most fast food restaurants do not have. We would like to differentiate our product in the consumer’s mind from traditional “fast food” restaurants. When the consumer is looking for a fast, nutritious, and satisfying meal Subway hopes to be the only logical choice. ProductSubway’s product is considered a shopping good because most consumers compare price, quality, style among other things when looking for a place to eat. Due to this, Subway offers a variety of benefits to the customers to make them choose Subway. We feel that our greatest benefit lies in the healthiness of our food. Subway offers seven sandwiches with six grams of fat or less. Our combination of sandwiches that taste great and are good for you, along with the added benefit that they are “made to order” right in front of you, differentiates us from our competitors. Subway has recently begun trying to associate the nutritious features of Subway with its brand name in the mind of the consumer. Subway’s packaging goes along with the quick service and healthy aspect of the product it serves. Subway’s sandwiches are wrapped in deli paper and placed in a plastic bag, both of which have the Subway name on them. This is convenient for consumers due to its sturdiness compared to paper sacks that tend to tear when soaked with grease, which is another problem Subway doesn’t have. These bags leave room for chips if the consumer so chooses so everything can be carried in one bag. Last, the cups that drinks are served in along with the napkins advertise the low-fat sandwiches and list the fat grams in them as compared to a BigMac or a Whopper. PricingSubway prices vary with each product. Six-inch classic subs range in price from $3.25 to $4.75. Six-inch low-fat subs range in price from $2.75 to $4.75. Six-inch Subway selects are priced around $4.75. To make any of the subs mentioned a foot-long you add $1.50 to the price of the six-inch. You can make any sub a wrap for the same price as the six-inch sub price. You can also make any sub a salad for the same price as the six-inch plus an additional $0.50. Deli-style sandwiches range in price from $1.50 to $2.00. Cookies are $0.39 each or three for a dollar. Last, you can make any sandwich or wrap a meal by adding $1.25. We plan to have a 75% mark-up on our product. Our
location of Subway, since it will be located on the In comparison to our major Quick Service Restaurant competitors, our prices are higher. However, this is due to the higher quality of product we have compared to our competitors. When compared the only other sandwich restaurant in Clinton, McAlister’s, consumers can get more food for the same monetary amount. PlaceSubway uses direct marketing channels since it deals directly with its consumers. Although Subway’s product is a shopping good, it uses selective distribution. This is due to the fact that Subway only allows its products to be sold in corporate approved Subway locations as apposed to selling Subway products wherever possible as in intensive distribution. The location we
have chosen for our Subway is near the coliseum on the PromotionAdvertising plays a role in the marketing of almost every business, including Subway. The grand opening advertising budget for Subway is required to be $2,000. Owners need to spend a portion of gross receipts to promote the individual store. This is to increase personal sales. Also, all franchisees contribute a percentage of weekly store sales to the Subway Franchisee Advertising Fund Trust (SFAFT). SFAFT operates for the advertising benefit of all Subway restaurant owners. Systemwide promotions, media plans and professional materials are developed and implemented by SFAFT with assistance from the national ad agency to promote Subway restaurants and their quality products to millions of consumers around the world (Subway.com). We
plan to do local advertising in the Collegian, on the new MC television
station, in the Breakeven Projections In order to open a Subway restaurant there are capital requirements that must be financed. Most of these requirements are one-time expenditures but are very expensive expenditures. These capital requirements along with the total required invested capital are listed in Table 1 (Subway.com). Start-Up Costs
Table 1 Next in the breakeven analysis was to project the net operating income for each month of the first year as shown on the following page in Table 2. As can be seen we are expecting to have a profit starting the first month. The salaries and wages were based on the three owners being paid $50,000 a year and the eight sandwich artists being paid $6.00/hr. Rent, Utilities, Maintenance, and Insurance are projected figures for all Subway franchises. Royalties are 8% of sales and Advertising costs are 3.5% of sales. The loan payment was calculated by subtracting the owner’s investment from the total capital requirements and by assuming an 8% interest rate for the payback period of 15 years. Inventory and Supplies costs were based on the 75% mark-up. Last we calculated our net operating income for the first five years of operation based on our projected sales as shown in Table 3. In this calculation we assumed a 5% sales increase each year on the previous years sales. Also, we assumed a 3% pay increase on salaries each year on the previous years salaries.
Table 3
Organizational Chart
The Organizational Chart of our Subway has simple management structure with a total of eleven employees. As co-owners of our Subway franchise Keith, Ross, and Stacey earn a yearly salary of $50,000 a year. Our organizational structure is likely to change due to the fact that we as owners plan to manage the store; however, as we grow and expand to other Subway stores we will have to add a management staff. The eight Sandwich Artists that are on our staff are paid a salary of six dollars per hour, and overtime accrued after an employee has worked over forty hours in a week.
Bibliography Subway Restaurants. Home page. The New York Times. Home page. |
