Subway Subway is a leading sandwich chain, which operates through a wholly-owned subsidiary, Subway Systems India. The caselet provides an overview of the product strategy followed by Subway that involved customization of its recipes and preparation to match the tastes and sensibilities of Indian consumers. The caselet also illustrates the franchising method adopted by Subway in India.
Finally, it provides a brief description of the company’s pricing and advertising strategy As a SUBWAY® store owner, you’ll be part of the world’s largest restaurant chain and one of its most recognized brands, with the support and experience that goes along with it — a brand that keeps customers coming back for better-for-you meals made just the way they want. SUBWAY® is the undisputed leader in fast, healthy food.
Our easy-to-prepare sandwiches are made to order-right in front of the customer – using freshly baked breads, select sauces and a variety of delicious toppings Support network When you join the SUBWAY® Family, you’ll get world-class support before you open your business, continuing as you sell your first sandwich and beyond. Our franchise support system features: * Training * Product development * Advertising * Purchasing cooperative * Field support, and much more History Back in 1965, Fred DeLuca set out to fulfill his dream of becoming a medical doctor.
Searching for a way to help pay for his education, a family friend suggested he open a submarine sandwich shop. With a loan of $1,000, the friend—Dr. Peter Buck—offered to become Fred’s partner, and a business relationship was forged that would change the landscape of the fast food industry. The first store was opened in Bridgeport, Connecticut in August, 1965. Then, they set a goal of having 32 stores opened in 10 years. Fred soon learned the basics of running a business, as well as the importance of erving a well-made, high quality product, providing excellent customer service, keeping operating costs low and finding great locations. These early lessons continue to serve as the foundation for successful SUBWAY® restaurants around the world. SUBWAY®, the Franchise By 1974, the duo owned and operated 16 submarine sandwich shops throughout Connecticut. Realizing they would not reach their 32 store goal in time, they began franchising, launching the SUBWAY® brand into a period of remarkable growth which continues to this day. A Fresh Future
Today,the SUBWAY® brand is the world’s largest submarine sandwich chain with more than 34,000 locations around the world. We’ve become the leading choice for people seeking quick, nutritious meals that the whole family can enjoy. From the beginning, Fred has had a clear vision for the future of the SUBWAY® brand. As we continue to grow, we are guided by his passion for delighting customers by serving fresh, delicious, made-to-order sandwiches Subway and mc donalds Subway is the world’s biggest sandwich chain, and overtook McDonald’s in 2002 as America’s biggest fast-food restaurant by number of outlets.
Growth has been generated partly by Subway’s offer of a healthy alternative to burgers and fries, but also a supremely efficient franchising model organised by parent company Doctor’s Associates. As a franchising machine it has few equals, voted the #1 franchise opportunity in the US an astonishing 16 times in the last 22 years because of its levels of franchisee support and development and the potential for growth. The advantage to customers is the flexibility The advantage to customers is the flexibility of the menu, as well as its made-before-your-eyes freshness.
The privately owned business now has more than 22,300 shops in the US, all franchised. Currently its international profile lags behind the Golden Arches, but not for long. Subway continues to expand with astonishing speed, opening an average of 2,000 new outlets each year between 2002 and 2008 and the business now covers more than 90 countries. At its current rate it could overtake McDonald’s worldwide during 2010. Subway is an American restaurant franchise that primarily sells submarine sandwiches (subs), salads, and personal pizzas. It is owned and operated by Doctor’s Associates, Inc. DAI). Subway is one of the fastest growing franchises in the world with approximately 33,246 restaurants in 92 countries/territories as of August 15, 2010.  It is the largest single-brand restaurant chain globally and is the second largest restaurant operator globally after Yum! Brands (35,000 locations).  Subway’s main operations office is in Milford, Connecticut, and five regional centers support Subway’s growing international operations. The regional offices for European franchises are located in Amsterdam, Netherlands.
Australia and New Zealand are supported from Brisbane, Australia; the Middle Eastern locations are supported from offices located in Beirut, Lebanon; the Asian locations from Singapore; India and the Latin America support center is in Miami, Florida. In the UK and Ireland the company hopes to expand to 2,010 restaurants by some time in 2010 History Fred De Luca borrowed $1,000 from family friend Haydee Pinero and Peter Buck to start his first sandwich shop in 1965, when he was only 17 years old. He was trying to raise money to pay for college.
He chose a mediocre location for his shop, the corner of East Main Street and Boston Avenue in Bridgeport, Connecticut, but by noon on opening day, customers were pouring in. On the radio advertisement they had promoted the name as Pete’s Submarines, which sounded like “Pizza Marines”, so they changed the name to “Pete’s Subs”; eventually it adopted the “Subway” name and decorating the store with maps of the New York City subway system; a theme that continues to this day. As of December 30, 2008, the company has 32,401 franchised locations in 91 countries and produced US$9. 5 billion in sales every year. In 2007, Forbes magazine named De Luca number 242 of the 400 richest Americans with a net worth of $1. 5 billion. In addition to traditional restaurants, Subway operates in many non-traditional locations. For instance, there are over 900 Subway locations inside of Wal-Mart stores and 200 on military bases, including several in Iraq and Afghanistan, in addition to three located inside The Pentagon, as well as an increasing number on college and university campuses. In UK and Ireland some Subways are located inside Londis tores.  Subway restaurants have been consistently ranked in Entrepreneur Magazine’s Top 500 Franchises, and was selected as the #2 overall franchise in 2008. Additionally, it was ranked as the #3 “Fastest Growing Franchise”, and the #1 “Global Franchise” as well.  Subway`s marketing model In totting up to its strong positioning as a more health-conscious restaurant, much of Subway`s rapid growth can be credited to its somewhat unique business model. Unlike most franchisors, the parent company does not operate any restaurants.
Local franchisees operate the stores, and in most markets Subway enters into a contract with a franchisee to be its `development agent` for that market. The development agent is then responsible for developing the territory, new locations, evaluating stores on a monthly basis and assisting franchisees with whatever needs they may have. Development agents act as the interface between the company and the franchisees. “For Subway franchise, the start up cost is lower as fewer equipment and small area is required and involves lower operating costs”, says Purnendu Kumar, Associate Vice President, Technopak Advisor.
These factors enable Subway to open a lot more outlets than any other QSR company. Manpreet Gulri, Development Agent, Subway Systems India, says, “We franchise directly to the individuals who run Subway restaurants as per the guidelines laid down by the company. ” Today in India, many people are aspiring to become entrepreneurs, hence beneficiary to Subway model. Subway, having aggressive marketing strategy expects development agents to target more outlets than any other franchise in the same territory. This strategy enables Subway to build visibility in the region and making them the only market leader in the sandwich sector.
On the flip side, aggressive franchising can result in a loss of control. As a critical success factor the model is selecting the right business partner, as it is important that the franchisee shares the same strategic vision as that of the company. As development agents are given the task to grow the company regionally, they at times saturate markets with Subway restaurants in a region and have two restaurants so close in location that they end up competing with one another. Although this may lead to lower profits per Subway location, it leads to overall higher profits for the entire chain and the Development Agent.
However, Gulri clarifies, “When market is busy and shows potential for customers, then only we open more than one outlet. It purely depends upon the pull of customers. ” Development of Subway in India India is offering a vast opportunity for global franchise driven players and Indian franchisees alike. For instance, India`s F&B space is packed with global food giants such as McDonald`s, Subway, Domino`s and Baskin Robbins and newer entrants like Nando`s and Starbucks have lined up to take the franchise route into India. Gulri says, “Fast food market is still at a nascent stage in India and the real growth is yet to come.
The sandwich market will continue to grow within that space. ” Like just a decade ago, it might have been hard to imagine that the take-out food of choice for millions of Indians would be a baked pizza. But since then, calling for a pizza has become quite the urban ritual. Same goes for a sandwich market in India. Subway entered India with a new concept of health and diet foods. And expanding a brand into a new market isn`t just about translating the tagline; it takes time to establish new products and brand name. Subway vis-a-vis competition
Subway has maintained strong growth over four decades through franchising at individual level. Whereas chains like McDonalds and Pizza Hut have appointed master franchisees who have set-up stores with approval from the company. On the branding front, Subway is lacking far behind international QSR companies like Domino`s, McDonalds and Pizza Hut. As players like these are heavy spenders on advertising and marketing activities, whereas Subway is planning to follow a rather novel marketing strategy in India. The competition is doing a lot more activities on their promotional tactics to get the flavour of localization.
On the basis of anonymity a Subway franchisee says, “We pay 4. 5 per cent to the company for advertising fund, but the company does the branding only at the national level. Locally we only need to take care of our outlet. There is much scope of increase in branding Subway can do in India. ” But on the contrary the segment at which Subway based on the health platform has a unique positioning which shall emerge stronger in the long run. Other QSR companies have begun to offer healthier alternatives to cope up with the trend. Subway has managed to retain a healthy image in the fast food section all across the world.
Subway needs to have lot more promotional activities to create a bigger segment of health conscious people in India. Outlook: Looking to grow both from their existing franchisees and new ones, and aiming to have 200 Subway locations in India by the end of 2009, the sandwich chain is on a fast-track expansion mode, throwing up immense opportunities for the prospective franchisees. Gulri says, “Subway sees India as a growth engine in the coming. ” The sub shops Industry Intensifying competition with hamburgers chain like Hardees and Burger King introducing sub sandwiches in their menu. •
McDonalds, KFC also getting into competition with the subs. SUBWAY •First Shop was opened in Bridgeport in 1965. •Primary aim was to avoid bankruptcy. •In 1982, planned to open 5000 subs by 1994. •Expansion was fast and steady. •Topped the list of Franchises inEn trepr eneur in 1991. •Undisputed market leader with 10 times more location than other competitors. Operated 7825 units by mid 1993 with 7750 units in North America alone. •No. 2 fast food chain in the United States. •Sales grew from $360m to $2. 2b by 1992. •In terms of sales, it was ranked 12th with only 15% sales of McDonalds. Expansion was done in Non Traditional sites. •Steps taken to improve business during dinner and late night sales, and marketing to children Customer Analysis •78. 7% of adults were patronized to fast food of which 31% went 14+ times in the last 30 days. •Heavy users are usually male, young adults, and single. •Subway is more skewed towards middle to upper income customers than competitors. •Lunch in most popular occasion. •Subway is the least patronized restaurant amongst competitors strenth brand value •Wide distribution network across the country. •Healthier food range which is resh and light. •International presence of units WEAKNESSES •Small menu list •Increasing operational cost for franchisees •Location cannibalizing the sales of other stores OPPORTUNITIES •Industry is still growing despite slowdown in the Economy. •Customer target group from middle and upper middle class. •People turning health conscious. •Growth in other Virgin markets very much possible. THREAT •Competition from other forms of fast food chains •Easy entry into the industry. •Patronage of heavy customers is very less Marketing strategies •Nutrition Factor- Fresh and so much healthier than others. •More value for oney- improving quality will increase the value of value of the product. •Reposition themselves as an upscale sandwich chain- wider menu, better quality fresh products, healthier life style, ambience in convenient location. •Target virgin International markets using the Brand name Brand Strategy •Brand position as a very healthy fast food chain providing healthier and fresher food – brand Value •Positioned between a stripped down version of subs and a full theme restaurant. •Service is more like a fast food style but in terms of food quality, quantity, presentation and fresh puts it closer to a theme restaurant
The 4 P’s of marketing PRODUCT •Wider menu providing variety. •Fresh and better quality products. •Introduce products like salads, pasta dinners, soups, desserts, kidz meal etc PRICE •Upscale pricing- little higher than normal subs. •Differential pricing strategy with value pricing. •But create value products by service in terms of quality, ambience, variety, convenience. PLACE •Market research on the location preferences, close down poor and predatory franchisees. •Upscale to stripped down shops to quasi deli restaurants. PROMOTION •Health related events, dance, ports events. •Awareness campaign on obesity •More campaign for children, young adults. •More promotions to increase the sales during evening and dinner time Dealing with the Competition • Use differential advantage of satisfying customers needs for convenient, value oriented products that taste good. • The customers may change the mix of which they consume fast food, so provide them with the variety. • Decrease operational costs • Loyalty programs for heavy users to make them stay with Subway. • Promotion campaigns like FRESHBUZZ, FRESHFIT, SUBWAYKIDS. •
Events like sponsoring sports events, training youths for it, weight loss programs, hold brand ambassadors like Michel Phelps, Shilpa Shetty ( in Indian Context) etc SUBWAY has come a long way in India since it opened its first restaurant in New Delhi in 2001. Over the past five or six years, the distinctive Subway Sandwich logo has sprung up on high streets in cities across the subcontinent (for the full restaurant listings, scroll down the page. ) Young Indians have warmed to the image of the American chain, and made it one of their favorite places to swarm to, and hang out in.
Meanwhile, Subway (a transnational brand with nearly 30,000 franchises around the world) has developed a unique menu to appeal to the Indian taste. If you are a foreigner visiting India, you might be interested in indulging in some of the Indianized treats at Subway — for example, the legendary paneer tikka sandwich. If you are Indian, you might be interested in some of Subway’s Mid Eastern themed dishes, such as the falafel and humus… … Of course, this ain’t fine food, and it ain’t streetfood delight either — many purists would consider Subway an agent and a symptom of cultural imperialism.
It is certainly true that for many young Indians, restaurants like Subway represent the freedoms and cool of the West. They are a place to hang out, like Lotteria in Vietnam. As Mouth Shut reviewed it: “I tend to eat at Subways when I’m out with a bunch of friends and we need a place to sit, eat and drink and rest our tired behinds for hours. Good thing about Subways here are they are never really jampacked so there’s never a line to enter or place your order like at McDonalds and Baristas. Also, you could buy a sandwich and sit for hours and you’lll never get that dirty Get outta here look form those who work there.
I speak from experience, I was with friends at the Subway at Bandra for 7 hours, while there was a mad rush of people trying to get into the Barista’s next door! … “The ambience at Subway outlets are neat, the seats are well spaced out, just the perfect place to kick back and rest a while and have your lunch or a small snack and move on. However, the sandwishes don’t come cheap, certainly not the non-veg ones, the cheapest Sub would be 59 bucks and nowadays you can add 8% service tax to that.
It’s certainly NOT the place I’d go to treat a bunch of friends!!! But it’s a place I’d come to with a bunch of friends. ” … | i s – s u b w a y – r e a l l y – s o – l o w – c a l ? FOR quite some time the media in India has been debating the claim that eating Subway Sandwiches is good for maintaining or even reducing weight. This puts Subway in a league apart, from other calory highloaders like McDonald’s and Burger King. The debate, not officially resolved in India at least, originates from the story of Indiana University (USA) student Jared Fogle.
Fogle, who once weighed a monstrous 435 pounds, credits a strict Subway diet for helping him shed his enormous bulk. Fogle had experimented with other diets for years, to no avail, before he happened upon a nutritional information brochure at a Subway outlet, which mentioned how you could lose weight by eating two subway sandwiches that contained less than 6 gm of fat daily. Soon he was hooked! As unbelievable as it may sound, Jared walked 2 kms a day and consumed those sandwiches with an occasional binge on a bag of baked chips and diet coke.
He lost 245 pounds (nearly 100 kilograms! ). not sure of home delivery but 3 places in mumbai to get subway sandwiches -Lokhandwala, Bandra and Juhu. You can get subway at high street phoenix at lower parel …. you can call 28888888 to get the no The sandwich will be accompanied by a soft drink of choice and chips. Items like Kali Mirch Chicken, Chettinad Chicken, Chicken Tikka, Paneer Tikka, Aloo Tikki and Spicy Vegetarian Seekh have also been introduced within the menu to suit the Indian palate.
So what is the pocket pinch? A vegetarian would have to shell out anything between Rs 50 and Rs 60. For meat lovers, the prices can go up to anything between Rs 90 and Rs 100. ?Most people are under the impression that the sandwiches at Subway cost a fortune. But you must realise that you are not merely having a sandwich but a complete combo meal in itself with your preferred choice of meat and vegetables. So the pricing has been done keeping in mind the amount of money that is spent on a meal,’says Bajoria.
FOR THE BEST AND MOST UP-TO-DATE INFORMATION ABOUT RESTAURANTS IN MUMBAI — OR FOR ANY CITY IN THE WORLD FOR THAT MATTER — FORGET THE NEWSPAPERS: As well as being packed with beefy content and saucy commentary, the explosion of digital camera technology means there are some really great photographic dining guides on the Web these days — and as they say a picture tells a thousand words, and some of the photos are almost good enough to eat. Here are some of the blogs offering a glimpse of the everchanging Mumbai dining scene, and excerpts from their latest reviews:| conclusion
India is growing home to international fast food chains like McDonalds and KFC Though such fast foods propagate unhealthy eating trends, they can be much of a relief for tourists who are not able to adjust with the Indian spice Abstract: With the rising disposable income, living standards and western influence, more and more Indian consumers are shifting towards lifestyle products and one among them is ‘fast food restaurants’. Growing at a rate of 25%–30%, the INR 11 billion Indian organised food and retail sector attracted various global food chains. Besides, liberalisation made their entry more attractive and easier.
As a result, many major food chains like McDonald’s, Pizza Hut, Subway and KFC forayed into the country through franchisee route. However, their global business model faced a major challenge as the country traditionally has had a rich and diverse fast food culture as well as eating habits. This forced them to adapt to the local environment and tailor their menu offerings to make a mark in the industry, dominated by local food chains specialising in Indian snacks. Hence we can conclude that these global food giants will be able to make a mark in the country