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TABLE OF CONTENTS
PAGE
Introduction of eBay.com
3-8
9-14
15
16-19
2. Revenue Model
20-23
3. Competitive Environment
23-27
4. Competitive Advantage
28-29
Recommendation
1. Strategy 1
29-30
2. Strategy 2
31-32
3. Strategy 3
33-34
Summary
35
References
36
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INTRODUCTION OF SUBWAY
i)
Company Background
Subway chain is a fast food chain that comes at third position globally which comes after
McDonalds and KFC. This company came out to be established in 1965 and the originator
of the Subway food restaurant was Fred De Luca, and he was so thoughtful to start is
restaurant business when he was only 18 years old. First and foremost store was established
in Bridgeport, Connecticut. The founder of Subway almost immediately cultured the
fundamentals of management in a business, in addition, the significance of allocation as a
well-made, high eminence item for consumption, on condition of the outstanding customer
service and keeping operating costs low simultaneously by discovering immense position.
Such kind of inventiveness sustained in serving the groundwork for prosperous SUBWAY
restaurants internationally. There are in excess of 36,467 Subway restaurants nearly 100
countries globally and also it can be said as the worlds greatest intensifying authorization
succession. This area monopoly sequence has occupied more than 173,432 inhabitants
(Subway 2011). Subway offers many different kinds of fresh marine sandwiches also known
as subs to their customers. Everything I decided by the consumers s which kind of a product
they want to have in the services The companies motive is to provide the fresh products,
slogan of company, Eat Fresh which says, Subway chain uses only a moment ago baked
bread and fresh constituents. Since a very long time the Subway tried to make every efforts in
the markets to set up again. The Subway chain has also a lot of rivals in every countries
market. As soon as the Subway chain was withdrawing their restaurants from the Danish
market, Sunset Boulevard immediately raised 3 of their branches (Subway Denmark).This
description will provide the sequence about the Subway succession, its consumers and
Subway as a authorization representation. The competition between Subway and its three
biggest competitors McDonalds, Burger King and Sunset Boulevard, are also integrated.
Vision:
Be the #1 Quick Service Restaurant (QSR) franchise in the world, while delivering fresh,
delicious sandwiches and an exceptional experience (Source: Retailindustry.about.com,
1965)
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Mission:
Delight every customer so they want to tell their friends with great value through fresh,
delicious, made-to-order sandwiches, and an exceptional experience. (Source:
Retailindustry.about.com, 1965)
Logo:
Starting in January 2002, Subway started using a modified version of the logo. By early 2003, all
branches had the new look. In this logo, the oval behind the word mark was removed. The slogan
used with this logo was "Eat Fresh.". As of 2016, this logo is still used as a secondary logo.
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ii)
Burger King wants to create and retain a loyal customer who engages in continued profitable
business with them. Customer Loyalty is the measure of success of the supplier in retaining a
long term relationship with the customer. Thus customer loyalty is when a supplier receives
the ultimate reward of his efforts in interacting with its customer. Customer loyalty tends the
customer to voluntarily choose a particular product against another for his need. The loyalty may
be product specific or it may be company specific. When a loyal customer has repetitive
requirement of the same product, such customers may be described as being brand loyal. On
the other hand he may also require different products of the same manufacturer. That is to say he
makes significant purchases direct from the same supplier and that counts as the company
specific loyalty.
Loyalty also means that customer is sticking to the supplier on certain grounds though he may be
having other options also. It may be possible that the supplier may not have the best product or
the customer may be having some problems with the supplier in respect of his supply of the
product but the customer likes to ignore other options and prefers to continue with the same
supplier as the customer thinks the supplier provides him more value and benefit than others.
Such loyal customers tend to spend more money buy more, buy longer and tell more people
about the product or supplier. This type of long-term customer loyalty can only be created by
making the customers feel that they are number one priority with the supplier.
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iii)
Customer loyalty creates money. In the game of customer loyalty, when one business gains a
loyal customer it is at no expense to the other company. Remember, the only time we can make
profit is when the customers return to buy again for second, third, fourth time. If a customer is
always buying from different businesses, there is no loyalty. No one is benefiting from repeat
buying by making a profit from the customer. The customer is forever a new customer as he
changes from one business to another. The customer doesnt even win, because he is not getting
enough satisfaction out of any transaction or relationship to come back to buy from that business
again.
However, when a company learns to give a customer what he wants the customer becomes loyal.
He buys on a repeat basis and creates profit where no profit existed before. This profit is not at
the expense of the competition; it comes from the savings and other benefit derived from selling
to a loyal customer-everyone wins. The competition is no longer losing money on the unfaithful
customer. The businesss that has the customers loyalty is now making a profit, which did not
exist before. The customer is pleased enough with the transaction, relationship, products, or
services to become a loyal customer. The five principles that create customer loyalty are:
Differentiation
Differentiators are the unique features or differences in your
product/solution/service that make it stand out and special. You may not be able to
differentiate your product, but you can differentiate your services and how you
deal with the customer
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Effective communication
Communication is the largest single factor determining what kinds of
relationships you make with others and what happens to you in the world you live
in. Communication is effective when it is two-way. Speaking, listening and
learning are the basis for effective communication.
The message you give to your customers and how you deliver that message is
central in the process of creating customer loyalty. You communicate by what you
say, how you say it, and how you look.
Focus
Focus is the object of your current attention. Focus affects customer loyalty in
three ways:
How you think about yourself and your business. When you make the five
principles that create customer loyalty a part of your deepest thoughts, you
are instructing your subconscious mind to use its infinite powers to serve
your purpose.
How you think about your customers. Developing your ability to focus on
relationships instead of just making a sale is critical in creating customer
loyalty.
How your customers think about you.
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iv)
Subway offers customers a wide selection of sandwiches also called subs. Sandwiches are
always freshly baked, and customers can choose if they want their sandwiches toasted or nontoasted. There are two different sizes of sandwiches, a six inch. (15cm) and a foot long (30cm).
Subway also serves soft drinks along with the sandwiches. Cookies, chips, coffee and chocolate
can be ordered as accompaniments. In Denmark, there are four types of bread to choose from,
the Italian white bread, the honey oat bread, the parmesan/oregano bread and the 9-grain wheat.
The 9-grain bread is the only bread, which contains animal product if honey is considered an
animal-derived ingredient. Wheat free bread cannot be found in Danish Subways. All of the
breads are milk free except the parmesan/oregano bread, which contains cheese. (Subway menu
2009) Subway has a huge sandwich selection. There are more than two million different
sandwich combinations. Healthy and light subs can be enjoyed in Subway restaurants as well.
This fast food chain offers sandwiches, which contain only six grams of fat or less. These
sandwiches became more famous after a Subway guy Jared S. Fogle lost weight of 240 pounds
(109 kilos) due to the Subway diet (check chapter 3.1 history of the Subway chain). On the
Danish menu, customers can find 15 different sandwiches. In the following, a variety of the
menu will be presented. (Subway menu 2009) Customers decide what they want their
sandwiches to include. The filling can be ordered double or some things can be left out. The
Subway chain also has a wide range of dressings that can be chosen from. The customer can
choose between take-away and enjoying the meal at the restaurant. Any sub can also be turned
into a salad. Salads were added to the menu in 1980.In Denmark, Subway does not have any
special menu for children. 18 Birthdays and other occasions can be celebrated in Subway
restaurants. On the menu, customers can find a catering part, which contains sub platters, giant
subs and cookie platters. The giant sub can be made to any length depending on the amount of
people. Sub platters consist of 15 4 inch, Portions and cookie platters contain 36 (minimum)
delicious cookies. (Subway menu 2009)
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v)
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d. Behavioral or attitudinal
By providing catering services to its customer, Subway is segmenting the
market based on the behavioral of its customers. Subway knew that with
hectic and busy lifestyle, catering of fresh, healthy and fast food is required in
everyday life
Subway also make special promotion during occasions like Christmas and
new year by offering gift card, etc. on the purchase of its food. This shows
that they segments he customer based on the occasion under behavioral of its
customer.
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At the point when an organization reliably conveys predominant esteem and wins customers
affection, market share and income increases, and the expense of procuring and serving
customers reduces. Through customer loyalty, Subway will get the benefit as belows:
1. Acquiring a new customer will costs more than maintaining an existing one
Making contact with a customer and attaining the first deals frequently fetches so much
that the net profit for the transaction is insignificant or even negative. At the same time as
the relationship keeps expanding, prompting more business, the customer gets beneficial
to the vender. The longer the relationship, lower the amortized cost of acquisition. When
setting up a new bank account, expenses incurred during credit searches and promotional
expenses to sell the service to a new customer can add up to five times the cost of efforts
that might have enabled the firm to retain a customer.
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Customer loyalty is consistent with a positive demeanor towards the service provider
endorsing positive word-of-mouth. The customers who builds relationships with their
sales associates tends to spread an extensive positive word-of-mouth.
4. Loyal customers have a greater tendency of purchasing products with a little effort of
marketing
The longer a customer stays with an organization; there is a high probability that they will
place their business share with that organization, even to an extent of single sourcing.
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Subway has positioned its products based on the health and nutritional aspects which can be
said to be positioned at a different level to that of the competitors. Subway is able to offer
enhanced value proposition to the customers by providing healthier and nutritional food along
with quality and similar to the food products offered by other fast food chain such as Burger
King, Kentucky fried chicken etc. Customers of these fast food restaurants are getting attracted
to Subway because of the unique value proposition. Hence it may be said that the healthier food
option along with the service is the unique value proposition for the customers. Moreover the
franchisees are trained to provide excellent customer service.
When analyzing from the aspect of targeting of the customers it can be seen that Subway is
targeting the between age 18-50 years segment of the population who are health-conscious and
the increasing trend of eating healthy food is being utilized by Subway in its marketing and
promotional campaigns. It should also focus on the target groups such as teenagers and students
as these target groups spend lot of time on social networking sites or other sites. So subway can
add banners on such networking sites which are regularly visited by the target groups so
concerned. The website of the Subway includes lot of information about the nutritional aspect of
the food products offered by the Subway.
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B. Differentiation
The fast food chains such as Subway offering differentiated products can be developed
based on a differentiated focus approach with a target group of higher class of the society,
upscale lifestyle and status of customers. Unlike in the developed countries, the stores of Subway
in developing nations have to be in the upscale areas rather than distributed in different
geographies. The franchisees can be provided to high-quality individuals and groups who have
prior experience in providing and developing such retail outlets. The stores have to be located in
upscale shopping malls and business areas. The specific target segment of the population would
be families and individuals in the upper social classes. Based on the social and cultural
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parameters of the developing nations, innovative products have to be developed. Burgers and
sandwiches are not the common food consumed by the customers in the developing nations.
Particular stress and focus should be provided on geographic locations where vegetarianism and
halal food concepts are prevailing. The burgers and sandwiches can be offered as differentiated
products for the customers who would like to have some kind of differentiation. Along with
burgers and sandwiches, Subway can also develop innovative products based on the social and
cultural aspects of the developing nations. Subway should also set up delivery service, which
KFC and McDonalds have already done it.
C. Value and assurance
Since the present pricing of Subway is affordable for the target customer, and could
manage with a high profit margin for franchisers and the head company, it wouldnt alter the
price greatly. However, prices would be lower for downsized sandwiches to provide a large price
range and capture more customers.
D. Effective Communication
If Subway want to see higher amount of revenue from existing customer and reduced customer
falloff, focus on persuading consumers to become brand loyal. Implement the Turnstyle
initiative program (WIFI) Subway have recommended an updated communications strategy that
will utilize the trends, Subway identified to further tailor and amplify the program.
Understanding the customer segments has allowed Subway to evaluate the existing
program and make changes that will resonate with the targeted customers. Turnstyles platform
has proved to be incredibly useful for attracting and retaining the customers, particularly
millennials. Subway has also gained very deep insights about the customers. The existing
customers who sign-in to the Turnstyle powered Wi-Fi return 1.8x more frequently than the rest
of customer base. As the program progressed, Subway observed an increase in visit frequency
amongst opted-in customers suggesting that Subway were able to form a tighter bond with their
customer. It is a fully organic solution that addresses several of the communications objectives at
SUBWAY; understanding more about what makes the customers unique, offering public facing
Wi-Fi, increasing customer loyalty and retaining customers.
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E. Focus
Subway must establishments use analytical software programs to track customer buying
activity. Doing so enables Subway to make personalized recommendations, send targeted e-mail
and mail promotions, and assess what products, services and price points customers prefer.
Card-based loyalty programs also are used by some fast food chains to lure customers with
promises of bulk discounts or rewards for repeat purchases.
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