Case Number One - Subway Sandwich Shops Situation Analysis
Case Number One - Subway Sandwich Shops Situation Analysis
Subway Sandwich, as presented in the Case Study presented in the Marketing Management MGT 551 class, is an undisputed market leader in a segment that is “firmly established as a nationwide food item for which there is plenty of room in all areas” (University of Phoenix, 2008). However, with a growing competition, changing consumer trends and increased product specialization, Subway’s real strategic marketing challenge is to be able to develop and maintain a differential advantage while sustaining sales growths and profitability.
Subway Sandwich effectively competes with other fast-food restaurants by including and promoting healthier meals into its menu, as demonstrated by singling out its submarines with 6 grams of fat or less, and through its advertising campaign featuring Jared “the Subway guy” who lost 245 pounds in one year on a strict Subway diet (Subway, 2008). However, as demonstrated below in a market summary complemented by a SWOT Analysis, it is determined that Subway must attract a clientele beyond its traditionally health-conscious consumers in order to overcome their marketing challenges and increase its individual stores’ volumes and profitability.
Market Summary
The Sandwich Market – a Growing Industry
Consumers’ interests for hamburgers and fries have been steadily decreasing to favor sandwiches, which gives Subway a competitive advantage over competition such as MacDonald’s or Burger King, for example. While most fast food restaurants react to this phenomenon by modifying their menus to include healthier choices, Subway benefits from the 15% annual sales growth of sandwiches compared to a lean 3% growth for hamburgers and steaks (McCarty, 2007). The United States sandwich industry is estimated at more than $121 Billions as of the end of 2007 (Eyre, 2008).
Target Markets
Since 1992, Subway’s sales grew from $2.2 Billions to $6.27 Billions in 2004 in the United States alone (Apuzzo,
Subway Sandwich, as presented in the Case Study presented in the Marketing Management MGT 551 class, is an undisputed market leader in a segment that is “firmly established as a nationwide food item for which there is plenty of room in all areas” (University of Phoenix, 2008). However, with a growing competition, changing consumer trends and increased product specialization, Subway’s real strategic marketing challenge is to be able to develop and maintain a differential advantage while sustaining sales growths and profitability.
Subway Sandwich effectively competes with other fast-food restaurants by including and promoting healthier meals into its menu, as demonstrated by singling out its submarines with 6 grams of fat or less, and through its advertising campaign featuring Jared “the Subway guy” who lost 245 pounds in one year on a strict Subway diet (Subway, 2008). However, as demonstrated below in a market summary complemented by a SWOT Analysis, it is determined that Subway must attract a clientele beyond its traditionally health-conscious consumers in order to overcome their marketing challenges and increase its individual stores’ volumes and profitability.
Market Summary
The Sandwich Market – a Growing Industry
Consumers’ interests for hamburgers and fries have been steadily decreasing to favor sandwiches, which gives Subway a competitive advantage over competition such as MacDonald’s or Burger King, for example. While most fast food restaurants react to this phenomenon by modifying their menus to include healthier choices, Subway benefits from the 15% annual sales growth of sandwiches compared to a lean 3% growth for hamburgers and steaks (McCarty, 2007). The United States sandwich industry is estimated at more than $121 Billions as of the end of 2007 (Eyre, 2008).
Target Markets
Since 1992, Subway’s sales grew from $2.2 Billions to $6.27 Billions in 2004 in the United States alone (Apuzzo,
References: Hoover’s, (2008). Doctor’s Associates Inc. Company Profile. Retrieved June 17, 2008 from http://www.hoovers.com/subway/--ID__40450--/free-co-competitors.xhtml Horovitz, Bruce, (2002, March 04) Horovitz, Bruce, (2007, February 20). Fast-food rivals suit up for breakfast war. USA Today. Retrieved June 17, 2008 from EBSCOhost database. Levin, Amelia, (2008, January). Sandwiched between sales. Foodservice Equipment and Supplies, 61 (1), p.42. Retrieved June 17, 2008 from EBSCOhost database. Subway, (2008, June). Frequently Asked Questions. In About Us. Retrieved June 17, 2008 from http://www.subway.co.uk/ Subway (2008, June) University of Phoenix, (2008, June). Case 1: Subway Sandwich Shops. In MKT 551 – Marketing Management rEsource webpage. Retrieved June 17, 2008 from https://mycampus.phoenix.edu/secure/resource/resource.asp Wilson Quarterly, (Winter 2008)