sale plan

2. GOALS BY PRODUCT LINE

3. GOALS BY TERRITORY, SALESPERSON & ACCOUNT

IV. EVALUATION PLAN                                                                                

A. PERFORMANCE METRICS

B. EVALUATION STANDARDS / PROCEDURES

C. RECOMMENDATIONS / NEXT STEPS

EXECUTIVE SUMMARY

One of the biggest problems facing people on a college campus is the lack of access to healthy, affordable food. Most fast food chains only offer unhealthy, greasy food that is simply not good for a person’s body. Subway restaurants have created a name for themselves by offering the health-conscious consumer a healthy alternative to fast food at an affordable price and in a short amount of time. People on a college campus, such as students and professors, are busy people with hectic schedules. They shouldn’t have to sacrifice a health for convenience. This is where Subway can implement this new brand extension of Subway Delivery on college campuses to infiltrate this need in the market. With Subway Delivery, students and professors who spend hours on campus can get a healthy and affordable meal delivered right to them. They will no longer have to choose between a meal that is good for them and a meal that is cheap and easy for them to get on the run. Subway Delivery offers them the best of both worlds.

This brand extension will begin in twelve colleges and universities with the New England area. As Connecticut is the home of the first Subway restaurant, this brand extension stays close to the roots of the company. One of Subway’s foundations of running their business is finding high traffic locations. College campuses are a perfect way to ensure business. College-aged people are known for wanting things quickly, as they are the generation of technology. Subway Delivery is the perfect way to help college students stay healthy on campus and have an easily accessible source of food.

SITUATION ANALYSIS

COMPANY BACKGROUND

In 1965, Fred DeLuca was determined on becoming a medical doctor. However, medical school is expensive and DeLuca needed money in order to complete his dreams. A family friend, Peter Buck, suggested the idea of opening a submarine sandwich shop. With a $1,000 loan from Buck, the duo opened “Pete’s Subway” and would later change the landscape of the fast food industry. In 1966 DeLuca and Buck incorporated a company called “Doctor’s Associates” which privately holds Subway to this day.

The first shop was opened in August of 1965 in Bridgeport, Connecticut. The business partners set a goal of having 32 stores opened in 10 years. Soon after opening, the duo “learned the basics of running a business, as well as the importance of serving a well-made, high quality product, providing excellent customer service, keeping operating costs low and finding great locations,” (Subway). These lessons built the foundation for Subway restaurants world-wide. Ten years after opening, the duo owned and operated 16 shops throughout Connecticut. They soon came to the realization that they would not hit their goal of 32 stores in the time frame they had determined. They then turned to franchising which launched the Subway brand into extraordinary growth that continues to this day with more than 44,000 locations in over 100 countries. The first store to open outside of the United States was located in Bahrain in 1984. By this time, all stores were owned by franchisees.

In 2002, Subway became the largest fast-food chain in the United States, (Lewis 2017). Subway does not typically fry their food or sandwiches which puts them a step ahead of their fast-food competitors in regards to healthy fast food. Subway sandwiches are known for being garnished with various fresh vegetables, cheeses, and meats. In 2015, DeLuca passed away, which passed the day-to-day operations and control to his sister, Suzanne Greco.

INDUSTRY OUTLOOK

The industry that Subway mainly fall into is the Fast Food Restaurant industry. “Globally, fast food generates revenue of over $570 billion,” (Sena). In the United States, the fast food revenue was $200 billion, up $6 billion from 1970. There has been a slump in growth for the last several years but this industry is expected to have an annual growth rate of 2.5% for the upcoming years. With over 200,000 fast food restaurants in the United States, an estimated 50 million Americans eat at one of them each day. These 200,000 restaurants employ over 4 million people and have added over 200,000 jobs since 2015.

Fast food restaurant consumers focus the most of taste, price, and quality- in that order, (Sena). Most fast food restaurants tend to focus mainly on affordability and speed in order to give customers food quickly and at low cost. Fast food makes up more than 50% of sales in the entire restaurant sector. In regards to Subway being a sandwich focused shop, sandwich shops make up about 12% of the market share. Subway itself accounts for 4.6% of the market share.

Generally, fast food restaurants are viewed as unhealthy. Due to this stigma, Unites States consumers are beginning to lean towards healthier options. The industry seems to be fighting this new dynamic successfully, but for Subway this new dynamic is a good thing because with them you can get a healthy sandwich or lunch option quickly and for an affordable price.

Fast casual restaurants, “known to have a consistent, simple look, feel and even music in each location. Customers typically order and pay at a counter or window, and then take food out or grab a tray to sit and eat. Meals are short, there is no table service and condiments are usually centrally located rather than table top,” (Sena), are beginning to take market share from fast food restaurants. This is directly related to concerns about healthy options. This option is fast and in expensive, but not as fast and inexpensive as fast food. This is where Subway has the advantage.

COMPETITIVE ANALYSIS   

Subway’s primary two competitors are McDonald’s Corporation, with 15.2% market share, and Yum! Brands Incorporated, with 8.4% market share. Yum! Brands include KFC, Pizza Hut, and Taco Bell. Subway itself holds 4.6% market share and is among these other two entities that hold are the top three players in the fast food industry.

McDonald’s is the world’s biggest fast food operator started in San Bernardino, California in 1948. During the 1980s, McDonald’s growth slowed as other fast food entities began to increase. They currently employ more than 420,000 employees and earned $24.6 billion globally in 2016. Their menu consists mostly of burgers, fries, desserts, and beverages, but has recently introduced some healthier options such as salads to cater to the more health-conscious consumer. This directly effects Subway. Subway is known for being the healthy fast food option. Similar to Subway, McDonald’s business model is also primarily focused on franchising. “McDonald’s US revenue is expected to decrease at an annualized rate of 1.5% to $8.2 billion,” (IBIS World). This could give Subway an opportunity to develop this brand extension and infiltrate the market to increase market share.

Yum! Brands Incorporated includes three different fast food restaurants and also operates Long John Silver’s seafood restaurant and A&W Restaurants. Yum! Brands employees about 523,000 people and earned $13.1 billion world wide. The company is located in over 130 countries globally. Their strategy is much like Subway’s in which they open locations in high-traffic areas. Over the next five years Yum! Brands is expected to decline at a rate of 0.5% annually to $2.6 billion.

SALES PLAN

TEAM MANAGEMENT

TEAM STRUCTURE & ORGANIZATIONAL CHART

The subway corporation will implement the generalist sales force organization. Through this implementation, we will have two sales representatives to cover our entire northeast region. One rep will cover northern New England and the other will cover Southern New England. The reason in doing so is to go after the universities in the Northeast area and access the situations at each university. We will also have a district manager to oversee the sales representatives. Their job will be to check in on our Northeast representatives and make sure that the sales numbers are being met and if they can develop good rapport amongst the universities which is the target market for this plan. We will target universities in Connecticut, Rhode Island, New Hampshire, Vermont, and Massachusetts. We will also have a Store Manager and associates for an in store location for each campus. Our goal is to create service for anyone on campus. The manager will oversee the stores functionality and the associates will maintain it.

“Generalist salespeople typically have geographically small states territories and minimal travel time and spend a high percentage of their time face to face with customers. (Cron 156).

“Sales people also have a greater opportunity to gain in depth knowledge of the local culture, economic and competitive conditions.” (Cron.156). This structure will allow us to focus on our goal of opening a local subway that delivers on campuses in each of those states. Our focus is going to be solely on opening these stores and breaking new ground on our product service to our target market of customers.

TERRITORY DESIGN, ROLES, AND RESPONSIBILITIES

We chose our territory design to be northern New England and Southern New England and also balanced out the accounts delegated to each position. Subway is on the list as one of the fastest growing chains in America and with that, the opportunity of subway delivery has shown itself to be present. By choosing certain universities based on enrollment, diversity, and geographical location Subway will be able to implement this new subway delivery service amongst these campuses. Certain universities already have agreements with other food chains so those were left out. Through a recent survey we have found that both students and teachers who are on campus for extended periods of time would be open to the idea and accessibility that they could have food such as a subway sandwich delivered to them. We find that the biggest obstacle for this market is time and with delivery as an option subway can offer convenience and efficiency. We balanced the workload amongst our two sales reps with incentives to earn more through commission. We then decided that we want to open a small subway at each university so that we could make the sandwiches and deliver them as quickly as possible. These store will be maintained by our store managers and associates per location.

Ensuring Proper Function

Our sales rep from both northern and southern New England will be visiting these universities on a consistent basis to ensure that all the needs are being met and all the questions are being answered. This allows the potential business of a subway and subway delivery to have an opportunity to grow based off of the specific information gathered from its geographical location. The goal is to have constant communication with the clientele to find out what is essentially best in specific food service scenarios per university. to ensure things function properly, having a campus store will allow the quality of subway to be maintained.

CLIENT/ ACCOUNT MANAGEMENT

On campuses there is a common trend when it comes to food. Often college food is deemed as mediocre or not up to the standard that it should be. Even more so, the implementation of vending machines has put forth unhealthy alternatives. A student or professor that might be in class from 9am until 5pm and only has a few minutes in between classes doesn’t like these options. By allowing subway go we could potentially save those students and teachers time and delivering them a healthy worthy snack or potential lunch and dinner. We asked if a subway sandwich was a healthy alternative to chips or candy from vending machines and the answers we received pointed towards yes. From this data we can use it to determine the demand of a potential subway delivery system. “Only 35% of college students are satisfied with their school’s dining program” (Cron Decarlo).

We have set up two accounts that are separated by geographical location. This divide of universities allows Subway to efficiently meet the needs of each university. This also saves on travel to allow the reps and district manager more efficiency with their own travel and saves money as a company expense. The Southern New England rep will receive the A accounts. These accounts are considered to be in the southern New England region and have a slightly larger amount of those enrolled. Due to slightly larger enrollment that means more opportunity but also more obstacles so the southern New England reo will start off with a higher salary than the northern New England rep. The northern New England rep will receive the B accounts. The responsibilities will remain the same and will have to meet their quota annually.

Each sales rep will make 5 to 10 calls a day to universities. They will be required to travel to these universities when needed and will also have to balance the workday amongst administrative tasks as well as sales meetings, manager meetings, and sales calls. The overall goal of the position is to garner more revenue for universities and subway itself.

Also for our store manager per location, they will be required for the upkeep of on campus stores. They will manage payroll and scheduling on a daily basis. They will communicate with higher ups through email and ensure the procedures to maintain the store are being followed. These managers will oversee a few associates that will do their jobs to keep subways food of quality and efficiency.

For the associates, they will be divided into two roles. One will be an in store associate that will make the sandwiches and prep the food. They will be responsible for cashing out customers and cleanliness of the store. They will also dispose of any waste at the end of the way properly. The second role is the delivery driver. The delivery driver will be primarily focused on getting the food to the customer as fast as possible. But the delivery driver will also have to know how to do the in store associates job to be a backup in case of higher conversion in store. They will be responsible to do almost the same work that the in store associate does especially with cleaning and restocking. The delivery driver will be eligible for tips at customer’s request.

COMPENSATION PLAN

Subway’s delivery system will offer a similar compensation plan to the one they already have in effect. At Subway restaurants today, part-time employees make minimum wage, which varies among states, while managers of stores tend to earn $3-4 more an hour. Subway’s part-time employees earn about $20,000 dollars a year, while managers will earn upwards of $86,000 per year. With this salary in mind, Subway’s delivery system will not change much because the only thing that changes is that some employees will have to make deliveries.

Considering these shops will be located around or on college campuses, sales should be fairly good. Subway delivery managers and employees will be offered bonuses if their location meets or exceeds quota. This will encourage the manager and employees to continue doing a good job in their positions and therefore increase the revenue for the company.

Through Subways compensation plan, each employee will get an hourly wage based on the numbers discussed above, and will be paid on a bi weekly basis. In addition, part-time employees who make the deliveries will be able to collect gratuities from customers.

Along with annual salaries, Subway also offers generous benefits and incentives for full time employees. Full-time employees and managers will receive medical, dental and vision insurance, life insurance, a 401 K retirement plan, and paid vacation for both them and their family. In addition, managers will have the opportunity in receiving incentives such as phone and computer upgrades.  

TRAINGING AND MOTIVATION

Although Subway delivery is fairly similar to the normal Subway shops, there are a lot of things both experienced Subway employees and new employees need to learn. Starting with experienced employees, they will have to go through the training of delivery and working on a college campus. Working on a college campus will probably involve later nights considering the demand for sandwiches will be greater than at a normal location. Therefore, employees must ensure that they can work later shifts. In addition, they also have to be trained on delivering the Subway sandwiches. This will include taking orders on the phone, and knowing the campus that they are working in.

New employees however will have to go through a more rigorous training. Subway already offers training that they call “Subway University”, which is a mandatory 20 classes that are online that each Subway employee has to take and get a passing grade on. In addition to these classes, Subway will also train employees on the spot.

Training for both experienced and new employees for Subway Delivery will address the following areas:

· Subway history and brand

· Product knowledge

· Rules and regulations

· Campus knowledge

· Delivery methods

The first part of the Subway Delivery training will be that employees have a working knowledge of Subway’s history and brand. Subway’s mission statement is "delight every customer so they want to tell their friends — with great value through fresh, delicious, made-to-order sandwiches and an exceptional experience." Trainees will both have to learn Subway’s mission, along with having this mindset while working. They will have to adapt this mission for when they are working in the store, and delivery sandwiches to people.

The next part of training will be product knowledge. Employees will have to have a working knowledge of the various vegetables, meat, breads, pastries, soup, salads, pizzas, chips and drinks that are offered at the Subway store. In addition, they will have to know how to prepare each item on the menu. A big part of product knowledge is to know how to also properly take care of the food and how to keep it fresh. Because quality is so important at Subway, it is important that employees continue to uphold their mission through the new delivery system.   

In addition to product knowledge, it is important to go through the rules and regulations of Subway during the training. Based on Subway’s training manual, rules and regulations that employees must learn include, cleanliness, dress code, punctuality, following “Sub-way” which is a technique of putting together a sandwich, customer service, respect for other employees, handling of cash, and following the given schedule. All employees and managers of Subway Delivery will have to learn and act upon these rules along with the ones made for the new delivery system. Employees must have a driver's license and be sure that they keep the food fresh and is delivered promptly.  

The fourth part of training will be learning the steps of understanding the campus that employees will be working on. It is important that managers properly inform their employees about the campus they are working so they are familiar with the area they will be delivering too.

The last step in the training process will be delivery methods. Because this is a brand new area of business for Subway, it is crucial that both employees and upper management know what they are doing. The first area of delivery is taking the orders, so there will be training in place for phone orders that will be placed for delivery. This will include what types of questions to ask customers while they are ordering such as the food they want, where their location is, and their phone number.

When it comes to actually driving, employees will also have to go through training. They will first have to go through a ride-along where new employees will go with an experienced delivery person to watch the process of food delivery. Next, they will have supervised deliveries where an experienced delivery person will go with them the first time to ensure they are doing the right thing.

SALES FORECAST

OVERALL MARKET POTENTIAL & ASSESSMENT

The overall market potential and assessment for Subway Delivery is to be recognized by top universities. The first quarter that Subway Delivery is developed will be very important for the marketing and advertising of them. Subway is already known all around the country, but their delivery systems are not. The goal is to ensure that these delivery systems are successful in order to gain revenue and continue to make business with other universities.

The first few locations will be vital in the success of Subway Delivery. Both Subway itself and the Universities will have to see a revenue and benefits from these locations. In other words, the Subway locations have to get a steady business and the Universities see a return on their investment. According to businessinsider.com, it costs roughly between $115,000-$260,000 to open a new Subway shop. Considering thee shops will be located on campus and rely heavily on delivery, the shops themselves will be rather small, therefore the cost to open will probably be more towards the $115,000 end. In addition, each Subway makes about $8,000 a week amounting to $400,000 a year. With each franchise earning roughly 20% of total sales, each Subway earns an annual profit of $80,000. With these numbers it will only take Subway Delivery locations two years to make up the money from opening and starting to earn big profits.

In addition, Subway will have to pay each campus that they are located on 20% of their revenue. This will amount to at least $16,000 that universities receive just for having Subway Delivery on campus. This will ultimately become an asset for universities by not only making their students happy but receiving money off of it.

GOALS BY PRODUCT LINE

The area we are focusing on is the the New England area. Here, there are six major “A” accounts, and six major “B” accounts that we will be focusing on as potential buyers. The goal is to have a minimum of three universities per each account. Getting business from these accounts are crucial for the success of Subway delivery and its advertising. Because Subway is already a well-known brand, the goals stated are higher than normal. However, based on Subway’s brand quality we believe that these quotas will be met.

In addition, quality and consumer satisfaction will be a goal for Subway Delivery. Because quality and keeping food fresh is part of Subway’s mission, it is crucial that the delivery system lives up to it. Therefore, Subway will implement customer satisfaction surveys after each delivery to ensure that the consumers are both happy with their experience and quality of food. Also, because this is such a new area for the company, representatives from actual Subway locations will make monthly visits to the Subway Delivery locations to ensure that it is being run properly, and will also join on delivery rides to see if the sandwiches are kept fresh. By making these goals it will ensure the success of Subway Delivery.

GOALS BY TERRITORY, SALESPERSON, AND ACCOUNT

The New England area of sales representatives will get a minimum of six university accounts. As stated before, there are six major A accounts and six major B accounts in the New England area. They are then split into Northern New England and Southern New England territories. The Northern New England accounts are typically the larger, more well known universities. Therefore, the sales representatives have to work hard to earn their trust and gain their business in order for success.

The first stage in the sales process that Subway will have to follow is creating strong relationships with potential universities that are interested in having a Subway on campus. This first step is vital to making sales and will predict the future. Although Subway has a strong brand recognition, these representatives still have to work hard to create strong relationships with executives at potential universities.

The second stage in the sales process is beginning the process of establishing contracts/ rules/ regulations. By making rules and regulations with the universities, it sets boundaries on what Subway can and cannot do as a college “hot spot” for food. Subway is going to be on a college campus, so there could be some things that a normal operating Subway can do that the college one cannot.

The last stage is closing the sale with the university. This includes picking a day to start construction, and agreeing on an opening date to start normal functioning.

EVALUATION PLAN

PERFORMANCE METRICS

The Subway deliveries will be measured separately by every individual store on every individual campus. By doing this, we can see which universities are making the most sales and generating the most revenue, and which universities are making the least. We can also gather useful information by doing this because we can see which campuses are adding to Subway’s success. The results of this could depend on location, diversity, taste pallet, or even just the university in general. Our goal is to reach all twelve universities in a year. We understand that this is a new idea for Subway and to the students, and we want to see how they would react. Most universities students live on campus and are unable to have a car. We believe that the Subway delivery system will fulfill the students needs and wants. It is vital that we have representatives from different Subway locations make monthly visits to the Subway’s on these college campuses. This is crucial because we must make sure these restaurants are up to par, just like a normal Subway. We believe that hanging flyers around campus is a good idea to spread the world and let the students know about this new feature that Subway has to offer. Another idea is to use Subway’s social media platforms to voice their new delivery option. For example, Subway could post on a social media account that they are new to delivery. If it is your first time using the delivery system, use the code “FirstTimer10” to receive 10% off your first purchase. By doing this, it will attract students due to curiosity and it gives them a chance to save money on a purchase.

EVALUATION STANDARDS/PROCEDURES

Subway’s initial delivery system will start off in the New England area at twelve different universities. Subway’s official headquarters is located in Milford, Connecticut. We believe that offering the Subway delivery option to colleges specifically in the New England area will only benefit Subway’s revenue. Starting off with twelve colleges doesn’t seem like a lot, but it all depends on how quickly Subway can seal the deal with these universities. The success from the twelve original universities will depend on opening more delivery sights in other locations. Starting off with big, well known universities is a better way to go for Subway delivery because they have a better chance at targeting more students and a better chance to earn more revenue from the university itself. The placement of the Subway’s on the campuses will also bring success or failure to Subway. The key to success for Subway is to have the stores in an easy access area. Subway will gain revenue from the deliveries if it is quick and easy for the delivery people. Also, by having the Subway in a general area on the campus, they can operate too as an average Subway. This will allow Subway to generate extra revenue by having students come inside and purchase items from their menu, rather than just the deliveries.

RECOMMENDATIONS/ NEXT STEPS

Within the first year, we are hoping to open all of the Subway’s at all twelve of the universities. If we are able to open them and operate, we will generate the revenue within the first semester at each university and take it from there. If this is a success, we hope to expand to other universities in New England. Looking a bit farther into the future, if the Subway delivery system is a success, we would hope to expand outside of the New England area and offer this branch to other regions.

Works Cited

Cron, William L., et al. Dalrymple's Sales Management. John Wiley Et Sons, 2015.

“District Manager - Subway Restaurants.” CareerPlug, 5 Jan. 2018, subwaycatering.careerplug.com/jobs/118655/apps/new.