busienss analysis

The marketing mix for the Subway comprises of the product, price, promotion and distribution strategies of the Subway.

Product:

The product offered by Subway to the customers is the Subway sandwiches along with side options of cookies and beverages including aerated drinks and coffee. The five levels of the product in the product strategy are core product, generic product, expected product, augmented product and potential product. In case of Subway, sandwiches are the core product which has the purpose of satisfying the hunger of the individual (Armstrong et al., 2009). It serves as a meal for the people and the core intention of the Subway sandwiches is to satiate hunger. The second level of product is the generic product which comprises of the qualities which the product possesses. Subway sandwiches have the quality of satisfying the hunger in a healthy and non-fussy manner. The sandwiches can be eaten while travelling unlike fine dining or a full meal; however, one sandwich is sufficient to make a person feel full.

The third level of product is expected product which provides the aspects that a customer expects from the product upon purchasing. Subway’s expected is a healthy, delicious and fresh sandwich that provides the benefits of a healthy meal to the individual. Augmented product is the fourth level of a product and it includes the additional factors that differentiate the product from competitors. Subway sandwiches are offered in several options of meat, vegetables and spices and the customers could choose from large menu, prepared in front of customers in a hygienic manner.

Potential product is the fifth level and it comprises of the changes which the product may undergo to enhance the product attributes. Subway sandwiches could include more meats such as kosher and halal and falafel patties to appeal to the ethnic groups. Further changes in the menu could be done to ensure that the popular breads within ethnic groups are also offered to customers as the sandwich base.

Price:

The prices of the Subway’s products are comparatively more than the competitors. The company uses the value-based pricing strategy to differentiate its offering from the competitors. Subway has a unique theme of providing healthy yet fulfilling meals to customers which are hygienic, fresh and prepared in front of them, giving them full control of their meals. The hygiene standards at Subway are exemplary and all these factors make customers attack higher value to Subway meals. This enables company to use good-value pricing wherein high quality of goods and services are provided for reasonable prices.

Subway also uses Everyday Low Pricing (ELP) as it offers Sub of the Day for the low prices (Kotler & Keller, 2011). Every day of the week a specific sub is offered for lower prices, which allows customers to have the same product and service at a lower price. The pricing objectives for the location with the diverse menu are;

· Increasing the market share of Subway as a result of increasing appeal to the ethnic groups

· Building the relationship with new and existing customers through diverse menu which understands and meets their requirements in a better manner.

· Attract the ethnic groups to try Subway

Promotion:

For promoting the diverse menu, Subway would use integrated marketing communication to generate interest and awareness of their new menu. The new menu would be launched at one location initially and the promotional campaign would include advertising, sales promotions and public relations. As the menu will be launched, outdoor advertising using print media, billboards, wallscapes and GPS-enabled advertisements would be used (Kotler & Keller, 2011). As an introductory offer, for the first week of menu launch, the new subs would be offered for a price of $4 per piece. Some local charity events would also be sponsored such as fitness race wherein the ethnic groups would be the target population and free subs would be provided to the participants in the event.

The promotional campaign would be run for three months and the total promotional budget is $73,000. The detailed budget is;

Distribution:

Subway uses the direct distribution strategy as the subs are prepared in front of the customers and served to the customers. The company uses exclusive distribution as Subway sandwiches are available at Subway outlets only. The new menu will initially be launched at one location only and the direct, exclusive distribution strategy would be used.

Marketing Controls

In order to assess the success of the new menu and the marketing plan, marketing controls would be practiced. The first marketing assessment would be performance after six months of the marketing plan implementation. The measures which would be used to assess the success of the marketing plan are;

· Profitability of the new menu: Weekly sales of the location would be assessed to identify the sales percentage of the new menu items. The monitoring would be done for six months.

· Return on Marketing Investment: The marketing budget of $73,000, which is the net costs of the investment in marketing plan, would be taken a denominator and the net returns from marketing investment becomes the numerator. The net returns from marketing investment would be calculated from the revenue of sales of the new menu items for a period of six months.

· Increase in Customers: The number of customers in the present month would be compared with the number of customers in the previous months adjusted for seasonality.

References

Gary Armstrong, Michael Harker, Philip Kotler & Ross Brennan. (2009). Marketing: An Introduction. Financial Times Prentice Hall.

Kotler, P. & K. L. Keller. (2011). Marketing Management (14th ed.). New York: Prentice Hall.