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SUBWAY FINAL

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by

Michael Vincent

on 1 October 2013

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Transcript of SUBWAY FINAL

•1965 Fred DeLuca opened up a submarine sandwich shop.
•This business was going to help pay his medical education
•First location: Bridgeport, Connecticut
•Goal: open 32 stores in 10 years
•By 1974, only had 16 opened submarine sandwich shops. Decided to franchise.
History
•Dr. Peter Buck is Mr. DeLuca’s partner
• More than 34,000 locations
15,000 outside the U.S.
(Brazil)
Mission Statement
• “Delight every customer so they want to tell their friends—with great value through fresh, delicious, made-to-order sandwiches, and an exceptional experience.”
• Goal: To be ranked #1 Quick Service Restaurant (QSR) worldwide while maintaining the great-tasting freshness of our products that is our trademark.
Industry
Health Trends
Competitors
Global Market
Health Trends
Target Market
Global Markets
Obesity Statistics
Healthy Fast Food Subcategory
Quiznos at one point had nearly 5,000 stores in the US, now it only has about 2,300
Subway had 33,749 restaurants world-wide, compared with McDonald's 32,737
Promotional Mix Elements
Advertising
Public Relations
Personal Selling
Sales Promotion
Advertising
Subway’s 2010 advertising budget = $400 million
vs.
McDonalds’ 2010 advertising budget = $837 million
Advertising
Developed niche as healthy option among fast-food industry
Breakfast Promotion
“Eat Fresh” and “Fresh-Fit Menu”
Names, products, and health information listed on Subway packaging and marketing material
Opinion Leaders
Sales Promotion: Cause-Related Marketing
Doctors Without Borders
Susan G. Komen for the Cures
The Jared Foundation
Make-A-Wish Foundation
American Hearts Association
Sales Promotion
$2 (6-inch) Meatball and Cold-Cut Sandwich
December typically a slower month for the fast-food industry
April BOGO Free deal before 9am
The Story of the $5 Foot Long
Franchise owner looking for a way to increase slumping weekend sales

$5 Foot-Long Commercial
Pricing
Penetration Pricing – Obtaining large market share their pricing objective
Forced competition into status quo pricing
With about 36,751 stores in 100 countries and territories, with its first location out of the US in Bahrain to all its locations in the UK, Subway has quickly dominated and entered the global market
http://www.subway.com/subwayroot/exploreourworld.aspx
Product
"Eat Fresh"
Lids and bowls made of 95% recycled materials.
Company Image
Reusable Bags
"The SUBWAY® system is committed to providing a wide range of great tasting, healthier food choices while reducing our environmental footprint and creating a positive influence in the communities we serve around the world."
Donations/ Social Responsibility
-Official Sponsor of..
- Improved food choices

-Increased physical activity

-Reduced screen time
-Subway Employees pick 10 different charities
Place
(distribution)
PRODUCE
FISH
BREAD
POULTRY
-Redistribution method


- Fully automated systems

- More facilities (closer)


- Large contracts w/ suppliers
LOCATION:
- Over 35,000 locations worldwide

- Small Size
colleges/ universities
Airports
Amusement parks
Stadiums
Hospitals

- Production-line concept
-Fresh, made-to-order subs

- Soups

- Salads

- Breakfast items

-Cookies

-Kid's Paks
"SUBWAY® brand continues to be the leader of providing nutritious and delicious sandwiches the whole family will love."
Positive
Keeping 2.62 million pounds of plastic from hitting landfills.
Advertising
Social Media Communication
Environmentally Conscious
Eco-Restaurants
Competitors
DeLuca created microlending to assist disadvantaged
More than 36,000 restaurants in 100 Countries
More than 300,000 employees worldwide
Low start-up cost relative to other fast food chains
Low Fat
Branding
Core Values

- Over 35,000 locations worldwide
- Small Size
colleges/ universities
Airports
Amusement parks
Stadiums
Hospitals
LOCATION:
-Production-line concept
Negatives
Negatives
Internal conflict and litigation
Collateral competition
Unhappy owners feel constrained
Supply chain can increase owner costs
Multiple health violations (NY)

Consumer attitude toward portion size
Unnatural Ingredients used in "healthy" items
Azodicarbonamide and ammonium sulfate (plant fertilizer) ingredients in bread
Autolyzed yeast extract, hydrolyzed soy protein, hydrolyzed corn gluten in meat

Recommendations
Scale back domestic growth and address internal complaints
Cheaper isn't always better
Eliminate fillers and additives in menu items
Use higher quality meats and cheese
Allow franchise owners to purchase free market produce when costs are high
Identify and address weaknesses in health code compliance

Social Media Communication
https://www.facebook.com/subway
YouTube
Twitter
Questions? Preguntas?
Dr. George K. Sharghi
Principles of Marketing (MKTG 305)
California State University, San Marcos
Presented by:
Crystal Deuling
Jamie Mancilla
Terri Ramos
Elizabeth Sanchez
Joselin Trujillo
Mike Vincent
Core Values
•Family
•Teamwork
•Opportunity
- More facilities (closer)

- Large contracts w/ suppliers
Penetration Pricing
Partnerships
Supply Chain

Positive
Positive
Menu diversification
Healthier Alternative

Subway uses mass marketing by focusing on high sales with low pricing. Strategies such as demographic, geographic, psychographic/behavioral segmentation.
Teens: Between 14-17
Demographic Segmentation
Different age groups are targeted in different ways:
Kids: Ages 6-14
Young adult: between 18-25
Adult: between 25-30
Geographic Segmentation:
A target marketing strategy that uses location to help promote its product.
Internationally
Psychographic/Behavioral Segmentation:
Subway uses psychographic market analysis ideas to build customer loyalty and healthy lifestyle.
Full transcript