Subway: The Restaurant - Research Proposal Example

Table of Contents Background of Subway 2 Mission and Vision ment 4 Research Problem 5 Research Question 5 Aims and Objectives 6 Research Design and Methodology 7 Survey design 7 Sampling 7 Data Collection and Analysis 8 Significance 9 Bibliography 10 Research Proposal Background of Subway Subway as a brand was introduced by Fred DeLuca in 1965 and the first restaurant was opened in Bridgeport, USA (Subway). Subway has proved through its growing demand that success in this segment is not that easy. The decline in the number of submarine shops opened in 1992 and the entrance of hamburger like Burger King showed a changing trend in the market. DeLuca’s has always aimed to increase the average sales of each outlet of Subway while controlling the operations costs which shows that along with the objective to grow further, the volume and profitability of each outlet has been also important for DeLuca (McDonald, 1998). Subway has been able to grow in the tough competition because of its easy service, low cost and healthy sandwiches. For a fast food brand to be successful the factor such as brand consistency, franchisee support, convenience and low operational costs are very important and Subway is actually seeking to achieve the same aim (McCarty, 2006). However, one weakness of Subway is the inconsistency of services from store to store and it because of more independence of Subway franchises. The major factors which are contributing to the success of Subway include the locations of its outlets and operational performance such as late opening hours (Butler, 2008). Healthy fast food, affordability and real estate strategy are the major factors which are contributing to the popularity of Subway brand (LaPorta, 2010). It is because of the healthy food offered by Subway that it was enjoying high profits and sales whereas, the other fast food chains such as McDonalds was suffering from lawsuits (Euromonitor International). Although Subway promises to deliver high quality to customers, still a significant portion of customers complain about the quality and range of its products. Subway only offers seven types of white bread and two types of whole grain bread and still it claims to offer healthy food (From the Mind of J Website, 2008). Similarly, various blogs talk about the need to improve décor and ambient of Subway (Yelp, 2010). It means that even being a market leader in healthy food, Subway needs to improve its certain areas. The fast food industry appears to be a recession proof industry therefore, more and more restaurants are entering into this business. The demand of consumers for convenience food and the increasing concerns of obesity are the factors which are further facilitating the growth of Subway. The fast food companies have also started introducing healthy foods by revising their menus, which pose a major threat to Subway franchises. Therefore, the major issue which Subway faced nowadays revolves around marketing issues. In this report, a strategic analysis of Subway will be done to develop a specific marketing mix that may help it to sustain its differential advantage while maintaining its sales volume and profitability in the highly competitive and dynamic market. Moreover, the specific promotion and distribution strategies will be proposed and the recommendations will be provided to the company to deal with the growing competition. Mission and Vision Statement "To provide the tools and knowledge to allow entrepreneurs to successfully compete in the QSR industry worldwide by consistently offering value to consumers through providing great-tasting food that is good for them and made the way they like it (Subway, 2006)." The above mentioned mission statement of the company has been revised in 2006 and it is the current mission statement of Subway. However, in specific terms after conquering the U.S. market, the next strategic plan of Subway proposed in 2003 was to increase its international growth by having 7500 stores internationally by 2010 (Torres, 2003). In other words, the company is focusing on international expansion and growth. Research Problem Being a market leader in healthy food, Subway faces a strong strategic marketing challenge. The challenge for Subway is to sustain its differential advantage by coming up with a specific marketing mix while maintaining the growth, profitability and sales volume. Although Subway has been effectively competing with national and international burger chains however, putting more intensified efforts to improve the business operations have become a need for the organisation. Research Question The following research question will be investigated in this report: What are the marketing challenges faced by Subway and which specific marketing mix strategy the company can adopt to improve its selling during the dinner hours? Aims and Objectives The aim of this report is to assist the organisation in meeting its current marketing challenges. After achieving the targeted aim, an organisation is more exposed to marketing challenges; therefore, following aims and objectives will be achieved after conducting this research. This report aims to come up with a strategic analysis of Subway, so that the company may continue to grow its global business Another aim of this report is to come up with a specific marketing mix, that may help the company to meet its current marketing challenges with a special focus towards ambient and décor of Subway franchises Since the business of Subway is growing through its increasing number of outlets however, it has become difficult for the company to keep a consistency in its service delivery from store to store, therefore, through this report, the reasons for the unhappiness of franchises will be highlighted The report will also highlight what the customers want and how do they perceive this brand. It will help Subway in developing the strategy to achieve its mission of providing consistent value to the customers Research Design and Methodology It is a qualitative research study, in which the strategic marketing analysis has been done to develop a specific marketing mix for the company that could provide differential advantage to the company. In the market analysis, the external and internal analysis will be done. A survey will be designed to get an in input of the customers whilst developing the marketing mix. The survey questionnaire will be circulated in the organisations near the outlets of Subway, in university and colleges and among households. Survey design Since the aim of this report is to develop a specific marketing mix that may give differential advantage to the company, therefore, a survey will be designed to get the input of customers. The questionnaire will be designed by using Likert Scale and other such tools. Moreover, it is going to be a one-point-time study. Sampling The survey sample will consist of 200 individuals including male and female. The sample’s age range will be from 18 to 65 years. Since the idea is to target the largest market segment, therefore, this age bracket has been introduced. The selected individuals may belong to various categories including single, married, divorced, parents and children. The survey will be conducted in a city or region where a few outlets of Subway will be operating and other fast food and restaurants will be also carrying out their operations. The sample will be selected regardless of their income range. Data Collection and Analysis The variables of this study include convenience, price, healthy food, décor and number of outlets. These will be the independent variables and the only dependent variable will be the sales volume of Subway’s outlets. The data regarding the sales of the company will be selected from electronic sources such as published information. The data collected through surveys will be analysed through SPSS software to make the important conclusions. Cross tabulations and frequency method will be used from SPSS software to predict the findings. Based on the results collected through surveys and the external and internal analysis of the company, the marketing strategy for the company will be developed. The aim of this report is not to develop an entire marketing strategy but to highlight the loopholes in the existing marketing strategy and revision of the strategy. Significance This research study will be really significant because it will highlight the reasons for the popularity of Subway other than health, convenience and price. The external and internal analysis of the company will assist the company to analyse the major strengths based on which the company can explore more opportunities. Moreover, it will also highlight the weaknesses which can increase the external threats for the company. No doubt, Subway is a known and growing brand however, to maintain its current position and to achieve its mission, conducting a study like this will be very significant for the organisation. This study is also significant from learning perspective because it will contribute to my understanding to the concepts of strategic marketing analysis. Bibliography Butler, S. (2008) How Subway Overtook McDonalds. [Online] Available from: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/3410294/How-Subway-overtook-McDonalds.html [Accessed 18 May 2010]. Euromonitor International (n.d.) Corporate Insight: Subway success dives in Asia-Pacific. [Online] Available from: http://www.marketresearchworld.net/index.php?option=com_content&task=view&id=817&Itemid=77 [Accessed 18 May 2010]. From the Mind of J Website (2008) Why I’m smarter than the execs at Subway (and Quiznos). [Online] Available from: http://fromthemindofj.wordpress.com/tag/subway/ [Accessed 18 May 2010]. LaPorta, M. (2010) Reasons for Subways Exponential Growth. [Online] Available from: http://becomingwhoyouwanttobe.com/2010/03/reasons-for-subways-exponential-growth/ [Accessed 18 May 2010]. McCarty, M. (2006) Fast Food Market Forecast - The Subway Example of Strategic Product Positioning. [Online] Available from: http://ezinearticles.com/?Fast-Food-Market-Forecast---The-Subway-Example-of-Strategic-Product-Positioning&id=735770 [Accessed 18 May 2010]. McDonald, J. W. (1998) Subway Sandwich Shops. [Online] Available from: http://www.brainmass.com/homework-help/business/marketing/93143 [Accessed 18 May 2010]. Subway. (2010) Frequently Asked Questions. [Online] Available from: http://www.subway.com/subwayroot/AboutSubway/subwayFaqs.aspx [Accessed 18 May 2010]. Subway. (2006) Student and Educator Resource Guide. [Online] Available from: http://www.subway.com/studentguide/s_e_welcome.htm [Accessed 18 May 2010]. Torres, L. S. (2003) Do the Math: Subway is the No. 1 franchise in Entrepreneurs Franchise 500 … for the 11th time. That translates to more than 17,000 locations in 75 countries. Are you impressed yet? We are …. [Online] Available from: http://findarticles.com/p/articles/mi_m0DTI/is_1_31/ai_n13255247/ [Accessed 18 May 2010]. Yelp, (2008) Subway of East Setauket. [Online] Available from: http://www.yelp.com/biz/subway-of-east-setauket-east-setauket [Accessed 18 May 2010]. Read More