Marketing Research of Subway Essay

Executive Summary Subway was founded by Buck and DeLuca in 1965. With just over 45 years of history, the company is one the world’s leading automakers and the largest fast-food trademark in the modern world. With a broad branch spread of 27583 shops in 85 countries, Subway secures consumer trust by offering freshness guarantee, 20 alternative combinations, and the personalized-sandwiches strategy to suit both individual and multiple parties’ needs. Monthly incentives should be made available by the management to encourage individual staff motivation and team spirit.

Advertising partners should be established for the growth of popularity in different aspects of the current culture. For example, new Subway deals are updated through TXT by the Telecom network. This report concludes the results of the interview. It firstly identifies the aims and objectives of the company. Secondly it shows from environment analysis that the company is affected by several of environment factors. Competition is increasing in the industry situation so that the company should improve their market research skills in relation to customer and the markets from both secondary sources and primary sources.

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Also the company can segment according to the area and ethnicity, and new target market suggested to the company is the primary school around Wellington centre. Introduction As Subway is distinctively well-established in the fast-food domain, we propose to study not only the key ingredients of its success, but also its integrated procedures that have brought upon such high level of performance on the business ground. The main purpose for this assignment is to investigate Subway’s past and present marketing goals and objectives, taking the co-operation branch located on Courtenay Place as the analysis template.

Furthermore, justifications subjected to the marketing environment will be carried out, inclusive of comprehensive SWOT analysis on topics such as marketing research requirements, the features of Subway’s current focal market and future development targets and goals. Finally, a summary indicative of the influential factors – in negative and positive aspects – that have acted upon the business will be given, followed by optimistic recommendations on Subway’s future objectives. Personal observations of Subway Subway is the restaurant that serves sandwich, wrap, salads, deli choices, in combination with vegetarian options. * Consumers are giving the option to either dine in or take away their order(s). * The price range is relatively affordable for the majority of income categories. The average price for a small size sandwich (six inch) is six dollars; average price for a large size sandwich (12 inch) is nine dollars. * Subway operates seven days a week, without public holidays’ exceptions, from approximately 7 am to 10 pm (Monday to Friday), 24 hours in the weekend. Subway Courtenay Place possesses one of the best business locations in the great Wellington City out of the total of 11 branches regionally. It is the main street of Wellington around by Wellington CBD, surrounded by numerous popular trading outlets. * From a comparative point of view, Subway, generally speaking, is less in size and reputation than a trademark such as Mc Donald’s, but it is established enough to be recognized as global enterprise business group. * Meal orderings are available to consumers in many ways: TXT order, online order, phone order and Code Sever representatives. Subway restaurants have many competitors, with the most obvious being the fast-food services, of all cultural origins (Western, Asian etc. ) For example, Subway Courtenay Place is located among the Cinema Food Court, Mc Donald’s, Burger King, and a number of Asian restaurants. Background As stated in the executive summary, Subway restaurants are a firm that has a famous, well-built reputation upheld by the current generation. However the reality of the fast-food market presents Subway with three major competitors/competition categories – KFC, Mc Donald’s and the Fish’ N Chips takeaway businesses as a whole.

Many strategies through different methods of output have been developed by each firm in order to challenge the others for the role of dominant fast-food provider for the public. For example, Subway has established its name to be the most well known “eat fresh” specialist. Aim and Objectives From the interview with the Subway Courtenay Place’s manager Bob, it was identified with much clarity that their priority is to keep food fresh and health-orientated to the maximum, for the benefit of the consumers.

The short term objective is to increase 10% of their sales in comparison with last year’s (2009) outcome, by increasing the number of regular customers. For the long term objective they expect to expand the branch reach in Wellington city, as well as Wellington districts such as Petone, Karori, and Lower Hutt. Marketing Environment SWOT Analysis Strengths There are many strategy used in the Subway. Firstly, managers recruit staff very carefully. Staff are required many skills, they need to have good communication skills in order interact with customers appropriately.

This includes always smiling to create a pleasant interpersonal environment. The manager reports that occasionally, it is necessary to disobey some of the restaurant rules in attempt to ensure customer satisfaction. For example, when the customers suddenly change their mind after a sandwich is already made, and the situation is severe, the staff is ordered to prepare a fresh order without extra charges. This strategy also increases the number regular customers as the good service is often memorable, and very likely to be passed on from one to another.

Weaknesses However, weaknesses of the Courtenay Place Subway exist too. According to Bob, many travelers are hired for the business because they tend to be more lenient and positive with overnight shifts. However, travelers are mostly temporary, therefore new staff is often in demand, and hence extensive amount of training time and cost are required. This results the reduction of business operation speed. Also international students are hired by this shop, mostly from strong Asian backgrounds, due to the owner belief that Asian people are hard workers.

But, complaints about the fact that the employees communicate to each other in their native language while working have been received, as it is understandably agitating to some. The manager recalls that 90% percent of their customers are Kiwis, and during dining, some do feel uncomfortable to be in an environment of foreign language. The owner and her manager now have to deal with this issue to find a solution. The final weaknesses of Subway is that its sandwich more expensive than that of Mc Donald’s and Burger King’s. This is due to the higher food cost which is unavoidable to some extent because of the fresh promotion contract.

Thus as a predictable outcome, number of consumers is reduced. Threats Threats will be the cost increase, such as water, rents and electricity cost. It will decrease the profit of the business. Government policy change could lead to increase the cost and lost customers. The policy or Act might said, the food safety level should be increase, therefore the subway need to be buy more equipment to comply with the policy. Opportunities We have lot of historical or long term customers. Many people go to subway become a habit. It is part of their life. Marketing Research

Marketing Research is the systematic gathering of data for business purpose, either to answer a business question, or to learn more about the target market. In contrast, marketing research is the advancement of the knowledge of the marketing theory, practice and application. It tends to be conducted for academic and research outcomes, rather than as an analysis of a specific target market (Introduction to Marketing, Dann&Dann). For the Subway Courtenay Place, it should have marketing research which can increase the business getting more customer demand.

For example, in the raining days or the winter time, Subway business is not good as usual, because people doesn’t want to go out or they might also thought Subway is not the good choice for the winter time. They might choose Chinese food or pizza delivery rather than Subway; this would decrease the demand of the Subway. Also people could get sick if they eat same thing for a long time. Marking research will help Subway to find out what people like to have, or what flavor they want to add, as well as what promotion they want to get. It is also important to do marketing research on the business environment.

It helps Subway to understand their situation in business. Such as to know how inflation influence the food cost. And how New Zealand Dollars exchange rate increased which make Subway food may become cheaper or expensive than before to international or Kiwi customers. Research should be done at least once a year. From the research business people can have their plan ready; they could establish their goals or may be new strategy for the following year. Subway Courtenay Place could have established some data sources research. There are two kinds of data source.

One is the secondary data, and another one is the primary data. The different between secondary data and primary data is secondary data always have the information previously collect or published for the purpose unrelated to those of the project, but the primary data is the information specifically collect to the solve a current problem. For the secondary data research they can have one within the company which means last year’s company file, intranet and report they did before, also included the marketing information system, people, sales, and cost data.

Also, they can do some research outside of the company, which is collecting information from internet, library, government, trade associations, university, private research organization. For the primary data, Subway should have observation which means the mechanical approaches, or the person approaches. They also can use the questioning, like in-depth and focus group interviews, mail, phone, personal surveys. For example, free cookie reward promotion if customer spent a bit time to complete a simple survey on the Subway website.

Report will be carry on after research completed. Table or graphic should be made to make people easily understand what’s going on and how this business running. Also they can gather ideas from customers. For example, some consumer might think Omla and French toast are taste really nice, but its normally stay on the breakfast menu only and it took too long time to cook which most consumer don’t have that much time to wait in the morning rush, So consumer is thinking is why don’t Subway have the Omla or French Toast for all days.

This idea will be carry on by the manager and report to the head office, if the head office of Subway permit this request, French toast and Omla will be on the menu for all day as customer demand proved. Fact is that now from the research the manager told us this idea might not work because at busy lunch time, staff had no time to cook food like French toast. It shows that make a Sandwich only take 2 minutes to do, but the Omla and French toast took 6 or more minutes. From a research of their competitor like Mc Donald, Subway could also have some new strategy in mind.

As Mc Donald has the special dinner deal which increases their demand, some consumer thinks why Subway never has any special deal. From this case, Subway decides to have the super deal with two 6 inch sub and 2 drinks only ten dollars. Also the strategy is to start this super deal before 4pm so it gets ahead before Mc Donald’s start their super deal. * Marketing segmentation and targeting market Marketing segmentation is the practice of dividing a heterogeneous market into a series of homogeneous submarket.

They usually segmentation are geography, demography, lifestyle and behaviour. Geographic segmentation implies dividing the market on the basis of where your customers are which means organizations to develop separate marketing mixes based on physical location. For example, promotion needs to be country-specific if organizations export products to other different countries. Subway is come from America, it is a little bit different as a Kiwi food, so New Zealand Subway was make the taste close to the Kiwi style. (2002 questionnaire conduct by subway)

Demographic segmentation means the broad characteristics of a population and includes variables such as age, sex, income, household size, and education levels. There are 4 million people in New Zealand, and nearly everyone buy a sandwich a day. From the interview, the manager just gives some information about their consumer. Age between 20 and 40 is the most consumers they have, because there is the most offices area in the Courtenay Place, and most of them are the age between 20 and 40. So have the breakfast before the work, having the health lunch Subway.

Now day, male are start looking after their health. In Subway there is male consumer more than female. (Bob say that)Also because most of the consumers are age between 20 and 40, I guess the income level will between $25000 and $50000, and they all work for a big company like Telecom, so their education level is quite high. Lifestyle segmentation is based on an analysis of activities interests and opinions. These variables can be combined to form a tightly defined group that may have specialist needs and therefore require specialized products.

Also for the behavioral segmentation divides the market on the basis of attitudes towards, knowledge of and use of a particular product . It includes 4 types of categories that can be used to segment the market, which are user status, usage rate, loyalty status and benefits sought. These backgrounds will help the consumer make the decision to choose Subway, because they need a healthy, quality-ensured, fast and affordable food service, which Subway has to offer.

Target Market is a marketing mix is tailored to fit some specific target customer (Marketing creating and delivering value). Overall from the interview, it was giving the ideas what kind of market Subway should develop. Subway Country Place already have the consumer group during the everyday, however, they must find some new target market which can improve their sales. So the suggest is they should try to get the new target market which between age 5- 20. These age consumer are the new future main consumer.

For example, kids love Mc Donald’s so they will often go there and get it, when they purchase any Mc Donald, they parents will get the same as well, In my point of view, Subway is more health than Mc Donald’s. Another way is they can contact all the schools in Wellington and try to make the kids pack which can get more consumers. Conclusion Based on the interview with the manager at Courtenay Place Subway, this report concludes the results of the interview. It firstly identifies the aims and objectives of the company.

Secondly it shows from environment analysis that the company is affected by several of environment factors. Competition is increasing in the industry situation so that the company should improve their market research skills in relation to customer and the markets from both secondary sources and primary sources. Also the company can segment according to the area and ethnicity, and new target market suggested to the company is the primary school around Wellington centre. Recommendations Overall from the interview with Subway Courtenay Place manager, some recommendations can be given as below.

Management recommendation Cross-culture learning procedures should be used to train the staff at Subway, so that internal conflicts are kept at minimum between staff, while communication between staff and customers is enhanced. Monthly incentives should be made available by the management to encourage individual staff motivation and team spirit. Sales recommendation At breakfast time, $5. 9 special deal promotion should be made available as a kids-pack meal. That includes a four inch sandwich of individual choice, one cookie and one small drink (milk should be a possible option also).

Allow pre-order for schools at lunch time. Discount will be made if over 15sales are made. For a limited period of time, free delivery during winter should be on offer for orders of 30 dollars and over purchases. Advertising partners should be established for the growth of popularity in different aspects of the current culture. For example, new Subway deals are updated through TXT by the Telecom network. Reference: William M. Pride and O. C Ferrell (2004), Marketing Core Concepts &Applications, Asia-Pacific Edition, John Wiley & Sons Australia Ltd.

McGuiggan, Robyh L (2004), Marketing, Creating and Delivering value, Fourth Edition, McGraw-Hill Australia Pty Ltd Dann, Susan J. & Dann, Stephen, (2004) Introduction to marketing, Asia-Pacific Edition, McGraw-Hill Australia Pty Ltd Appendixes Interview Question list Question 1 Please briefly describe your company? Question 2 What factors do you think will affect the company? Question 3 How many staff are under employment at the moment? More specifically, please state their ethnicity and their capability of languages. Question4

Do you think their culture difference (if any) affect this company? If so, how? Question 5 Is the business technology-dominated? What are the major technological devices under operation and how are they advantageous to the firm? Question 6 What priorities do you place upon your customers? Why? Question 7 Who are the major suppliers of the business and why are they chosen over other supplementary companies? Question 8 To what extent do you train your employees in order to achieve the wanted level of customer service and where on the continuum of importance would you place that? Question 9

What are the most upheld values of the company and why? Question 10 How many competitors are the company facing at the moment? Who are they? E. g KFC, MC? Question 11 How and why did your company use the marketing research strategy? Question 12 From all aspects, what are some the main concerns of the firm? Question 13 Are there any new market targets under investigation? Question 14 How do you segment your target market while ensuring consumer satisfaction and appeal in a general sense? Question 15 Are there any future expansions/developments so far in awareness? Please give reasons.