Exploring Services Management - Subway Restaurants and Its Customer - Assignment Example

Exploring Services Management Exploring Services Management a) Provide an overview of the case study organization Subway Company overview The organization is dedicated to client contentment by providing top quality food with distinct good and service value. The company works to enhance in all that it carries out. The firm values a sense of exigency and stress an entrepreneurial creative view to the venture. It anticipates mutual and fairness respect throughout all its functions. This is because the organization understands well that achievement relies over the initiative they take personally and its capacity to work as a team. Subway is a US based sandwich chain trading on Subs, a short name for submarine designed bread rolls. By 2005, the organization had more than 400 Subway stores all within the UK and the company was expanding and aims at attaining 800 stores within the next two years. Within an extensively competitive market, qualitative study indicated that Subway was misinterpret and went to being harassed by non-users. Further to the present £1.99 ‘Daily Special’, sandwich offer, required to boost tryout and develop frequency, was decaying. Marketing was required to propel modern clients and develop trust (Milford, 2011). The transition that was implemented within the organization, nonetheless, changed and brought tremendous success to the organization that was at the edge of collapsing. A local text turned into a national awareness, offering phenomenal numbers and move forward to international proposition. The real product traded by the firm did not change – rather it was re-branded repositioned, and re-launched. Within the initial local examination, a venture of £400,000 within 11 weeks produced a boost up of similar store sales of 12% yearly and 12% return on investment. For three consecutive flying and a year later, the trial region income rose to 30% (Liutu, 2010). Such successes are attributed to the Subway chain owner Fred Deluca who opened the initial store in 1965. He went ahead to built a multi-billion dollar franchisee business. Varied with its main competitor McDonald, there are no “firm possessed stores.” The notion of modernly produced Subs drove the chain to its grade as a real market leader within the largely competitive US market mainly on fast-food industry. In 2006, the company had more than 25,000 stores and the sole proprietor Fred was on a list and positioned 242 out of the 400 richest Americans. The initial store in UK was introduced in 1996, and by 2004, a mean of fifteen fresh stores were launch monthly and existence along Top Street was planned to double within the next two years. Regardless of having fries and burgers, Subway was ranked as section of t7eh USA ‘fast-food’ market. Within the UK, study and ordinary logic assisted them understand things were not somewhat similar again – sandwich market clients were perceptible varied in behaviors, attitudes, and forms. Brand trailing illustrated only 22% of UK adults from 15 to 50 were impulsively aware of Subway. Item test was reduced with just 13% of UK adults that are constantly being visited. The UK sandwich market was packed and valued at £3.6 billion; the Quick Service Restaurant (QSR) market had some £2.8 billion. Therefore, Subway had to establish a region in order to scoop part of the pie (Milford, 2011). New UK objectives To remain in business, Subway based in UK had to device new approaches of countering the stiff competition. Therefore, the company and marketing goals were striving for 2006. The following were the key goals set to achieve its position: Open more than 150 fresh stores, a rise of 25%, and include a third to the enterprise (sales and profit) from 2006 through to 2008. Strongly set Subway as possessors of “Subs” only as McDonald’s had a significant KFC and Mac contain the Bucket, the company required an item or language, which they own initially. Develop and improve brand advertisement and purpose to visit with 20%. For this, Subway had to hone client’s appetite. The market at the end of 2005 The initial to mid-nineties encountered the start of an era of environmental adjustment for the food sector. Seven out of ten clients were puzzled as to what amounted to a healthy diet. Superfoods, Genetically modified, Organic, Additive-free, Low-carb, Low-salt, as well as Low-fat no surprises they were mystified. It was to such unambiguous environment that Subway decided to introduce itself within the UK as a determined contender (McQuilkin, 1997). The brand was determined by its American legacy from the off. Blatantly American fast-fast prompts did not fit well with the largely anti-American British citizens. From this end, it was fast obvious that Subway had to transfer on from its American QSR base. Subway was determined in business and the organization took a new turn that ensured it attained its success. In fact, the company concentrated on advertisement that other competitors had capitalized on with a bang. Subway realized they needed to create awareness on their products and this was one of the most successful approach carried out by the company. For instance, the new brief demand for an immediately identifiable good and required to be viewed as fresh and accessible. The product and services prices were all customer friendly and this attracted a good number of clients to opt to try on Subway items. Furthermore, the new look and language opened up to the start of the company brand and personality (Milford, 2011). The other aspect that made the organization attain its core objectives and targets was the client study, which marked the significance of the in-store encounters alongside the TV advertisement. The fresh campaign, therefore, was wholly incorporated across staff uniforms, point of sale, flyers, menus, as well as on local PR support. Nonetheless, the organization was still young in the industry and could not out-buy its competitors such as Burger King, McDonald’s, and KFC. Therefore, Subway through its marketing strategies had to outsmart these market giants through innovation and creativity; development of “Sub of the Day.” The other approach the firm outsmart its competitors was through non-traditional retail approach, investing largely on Sunday to Thursday to eliminate the peak airtime weekend clutter (Liutu, 2011). Radio had a crucial role in the media mix, enabling the organization to forge some existence through the morning – the all-essential lunchtime decision-making time. Such approaches were so impressive that Subway boost of fueled sales after September 2005. After this period, sales increased as follows – Yorkshire +8% Granada +17%, and afterwards Scotland +25%, resulting to enhanced annual like for like (McGhee et al., 2007). b) Identify the challenges that the organization faces when offering its service-marketing package to its customers. In any market, organizations must face a number of challenges. Subway was not an exception; the fast-food industry is a highly competitive and poses a great risk especially to new entrants since old operators have taken a huge market share. McDonald‘s, KFC, as well as Burger accounted for more than 90% of QSR 2005 media spend. Other competitors within the industry that cause a lot of competition to Subway include M&S, With Gregg’s, Pret, and others were very aggressive within the market and for Subway to penetrate it, they had encountered a number of challenges. In fact, McDonald’s by 2005 was the leader in the QSR market more than 50% voice share. Additionally disturbing for Subway, 88% of cost from the three big leaders was on sandwich (not burger) campaigning (Subway). With the cultural fast-food market reducing, McDonald’s responded immediately, introducing a variety of “healthy alternative,” comprising a toasted deli sandwich, which appeared noticeably as Sub. Burger King introduced a baguette, while KFC followed suit with the launch of a KFC Sub! All these competitors’ strategies were worrying for Subway and had to seek other approaches of remaining in the market. The competition within the prolonged roll market was thumping up as greater and greater chains having set and well-known brands, huge supports with rooted pockets attempted to take a bite from Subway’s main venture having equivalent products (Marshall, 2009). In addition, the largest spenders had previously turned to sandwich/sub market at the fall of September 2005 of which they lured most of the clients through heavy weight advertisements and campaigns. Apart from the big players venturing into the sandwich industry, study illustrate that there was an extra barrier: addition to the existing base aficionados, clients were frequently unsure on Subway’s provision (that entails unfamiliar fasteners like the Meatball Marinara sandwich). Furthermore, more critics were that customized ordering was discouraging mainly to the first time users. In addition, Subway management was having a number of drawbacks where the sole proprietor controls all the functions and tasks of each store. For that, other employees depend solely on his directives and cannot initiate others terms of operations since they have no powers. Leading companies embrace knowledge and skills diversity to ensure great performance is attained. Subway stores were not owned by the organization and that led to poor control and management of sales. This results to slow rate of growth for the organization and subsequent delay in attaining its goals and objectives (McGhee et al., 2007). c) Make possible recommendations as to how the organization can adjust its service-marketing offer to address the needs of its customers better. Subway realized that they were in a tough market where any decision being taken could result to the company being thrown out of business. For that, the firm had to come up with immediate strategies to win back their customers’ trust and maintain loyalty through provision of high quality goods. The firm, therefore, need to carry out more extensive research on clients eating habits often. This will be beneficial since as the number of business operators increases within the sector, they have a base where they can act above new entrants. By that, they know the kind of clients they are targeting and what they like most. Understand customers within the food industry are a necessity since clients’ taste and preference change from time to time. Through research, the firm will get an opportunity to work at satisfying clients. For instant, the management will know the ideals that are crucial for the product and service delivery (Subway). On the other hand, the Subway had embarked a plan of launching over 150 new stores in different regions. However, such a plan is not appropriate unless they are sure of the market. Therefore, they need to study the market over some time before introducing a store. This is because customers are unpredictable and their likes and dislikes changes from time to time. This will be promoted by the application of custom-made factors of subway, which is highly advantageous to discard (Liutu, 2010). In addition, since some products discouraged first timers to the store, the addition of a number of varieties will be significant since customers will request what they want instead of being forced to take something new. The introduction of at least 16 crucial fillings, five kinds of bread, foot long or six inch, toasted or not, salads and eight sauces was an essential step to ensure clients had a variety to choose from and have what they like. Diversity of skills and resources also need to be emphasized in order to boost ideas sharing and new approaches of business operation being introduced and initiated. Free communication and interaction of members within the organization needed to be promoted to ensure free zone where everyone is responsible and accountable for their deeds. Such an environment ensures that members of the organization assist one another in times of need especially in marketing their company goods and services (Kuhn, 1998). Modern marketing approaches such as use of social media need to be embraced in creating awareness and advertisement of the company products. The current society is technologically advanced and will like or prefer items being introduced to them through their technologically advanced devices. This will create an upper hand advantage to Subway since it is comparatively cheaper and reaches a wider area within the shortest time possible by the click of the button (Marshall, 2009). References list: Entrepreneur Magazine Names Subway Restaurants in Franchise 500, DeLuca Cites Company Goals, PR Newswire, December 16, 1999. Retrieved from Kuhn, Susan, #13 Lucky for Subway Restaurants and Its Customer 7/6 Campaign Proves to Be a Winner, Total Food Service, February 1998. Retrieved on December 3, 2012 from Liutu, Riina. (2010). SUBWAY MARKET RESEARCH – Theseus, retrieved on December 3, 2012, from Marshall, Charlee. (2009) Six Grams of Fat Still Adds Up to a Good Tasting Sub, Index-Journal (Greenwood, S.C.). McGhee Gillian, Debbie Kiely, Nikki Gilmour, and Merry Baskin. (2007). Subway - On a roll: how the regional trial of a repositioned and re-branded existing product for UK sandwich chain Subway led to a fully integrated global communications success story. USA: Institute of Practitioners in Advertising. McQuilkin, Steve, Subway Founder Shares Recipe for Success, Journal (Winston-Salem, N.C.), November 12, 1997. Milford, G. (2011). Subway - Company Profile, Information, Business Description, History, Background Information on Subway. Retrieved on December 3, 2012, from Morse, Dan, School Cafeterias Are Enrolling As Fast-Food Franchisees, Wall Street Journal, July 28, 1998. Retrieved On December 3, 2012 from Source: BMRB Omnibus Benchmark Tracking Survey, Jan 2006. Subway Studentguide. Non-traditional Development. http://www.subway.com/StudentGuide/ (Accessed on 28 March 2009). Subway. Studentquide, National Advertising. http://www.subway.com/StudentGuide/ (Accessed on 23 April 2009). Read More