Comprehensive Marketing Analysis of Subway: Strategies and Environment

This report provides a detailed marketing analysis of Subway, a leading fast-food chain. It begins by exploring Subway's market orientation, contrasting product and marketing orientations, and highlighting Subway's adoption of a customer-centric approach. The report then examines the external environmental factors influencing Subway's operations, including political and social considerations. It delves into Subway's marketing strategies, focusing on segmentation, particularly the effectiveness of demographic segmentation, and analyzes the marketing mix, including product offerings, pricing strategies, and distribution channels. Furthermore, the report assesses Subway's promotional mix, evaluating a recent video campaign in terms of its core objective, target audience, and alignment with the AIDA marketing theory. The analysis concludes with an evaluation of the campaign's effectiveness and overall marketing approach.

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Table of Contents
Table of Contents.............................................................................................................................1
Introduction......................................................................................................................................2
Concepts of market orientation for Subway....................................................................................3
Product orientation.......................................................................................................................3
Marketing orientation..................................................................................................................4
Market orientation for Subway........................................................................................................4
Determination of the marketing environment..................................................................................5
Determination of the marketing strategies.......................................................................................6
Effective segmentation strategy for Subway...................................................................................6
Marketing mix strategy for Subway................................................................................................7
Product.........................................................................................................................................7
Price.............................................................................................................................................7
Place.............................................................................................................................................8
Evaluation of the promotional mix..................................................................................................8
Promotional mix element for Subway.............................................................................................9
Promotional channels of Subway....................................................................................................9
Key message of the video campaign.............................................................................................10
Target audience of the video campaign.........................................................................................10
AIDA marketing theory.................................................................................................................10
Evaluating the effectiveness of the video campaign......................................................................11
Conclusion.....................................................................................................................................11
Reference.......................................................................................................................................12

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Introduction
In the current global scenario of fast food industry, Subway is one of the leading fast food
chains in the world. Currently, they are having more than 45000 stores in more than 100
counties. Thus, Subway is having huge and vast market penetration around the world. It is also
being reported that Subway is the largest brand of restaurant in the world. Though in the current
time there are numbers of competitors are present in the market for Subway, they are having
their own competitive advantages over the others (Subway.com 2018). One of the major
competitive advantages for Subway over their competitors is their product offerings. This is due
to the reason that Subway mainly caters with different types of sandwiches, which they market as
healthier option over the offerings of their competitors.
Subway enjoys the market leadership status over their competitors by offerings healthier
products such as salads and sandwiches over the fried items of their major competitors.
However, the product offerings of Subway are different and diverse in different regions around
the world in accordance to the local taste and preference pattern (Lesser et al. 2013). This report
will discuss about the marketing approach of Subway along with discussing the marketing
orientation of them. In addition, this report will also discuss about the environmental factors of
Subway along with their level of influence. The marketing strategies of Subway including the
marketing mix of them will also be discussed and evaluated in this report. In this report, one of
the recent advertisements of Subway will be critically analyzed and different elements of the
promotional video will be identified. The core objective, target audience and competitor analysis
of the promotional video will also be discussed in this report.

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Concepts of market orientation for Subway
Product orientation
One of the earliest marketing concepts being followed by the business organizations is
product orientation. According to this concept, organizations produce maximum number of same
type of products and it was assumed that if the products are durable then it will get sold in the
market (Bacile, Ye and Swilley 2014). One of the major advantages of this concept is that,
organizations can gain economies of scale from having the maximum level of production. This is
due to the reason that the more will be the rate of production of similar type of products, the less
will be the average cost of production. However, on the other hand, the major disadvantage of
this concept is not meeting the expectation and requirement of the market. This is due to the
reason that there is higher probability of getting the requirement of the customers wrong and thus
the more will be the rate of production of the similar types of products, the more will be the risk
for loss.
In addition, in the current time, product orientation concept is more irrelevant due to the
reason that customers are more diversified than ever before and their requirements and
preference patterns are also different. Thus if the product orientation concept is initiated then the
organizations will not be able to cater to different sets of expectations of the customers. Rather
they will have to depend on single product variant. It is also to be noted that majority of the
business organizations are having multiple and diverse product portfolio in the market, in
competing with them, product orientation will not be effective enough. In addition, product
concept is also not applicable for those sectors where scenario is rapidly and frequently
changing.

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Marketing orientation
The last concept is the marketing orientation. According to this concept, products are
being marketed and sold in accordance to the taste and preference of the customers. According to
this concept, it is important to measure the change in the customer preferences and offering the
products accordingly (Urde, Baumgarth and Merrilees 2013). This is the most common type of
market orientation being followed by the organizations. One of the major advantages of this
concept is the effective fulfilment of the need and requirement of the target customers. On the
other hand, the major disadvantage of this concept is the involvement of the higher cost
(Homburg, Jozic and Kuehnl 2017). This is due to the reason that changing the production trend
according to the market requirement frequently will cost more for the organizations.
However, in the current time, majority of the contemporary business organizations are
following this concept. This is the major reason behind the growth of trend of market research.
This is being done in order to determine the requirement and trend of the target market and offer
products accordingly. However, it should also be noted that there are huge cost involved with the
market research program and this lead to the increase in the production cost for the final
products.
Market orientation for Subway
Among all the orientation concepts being discussed, Subway follows the marketing
orientation. This is due to the reason that the offerings of Subway evolved in all these years
based on the requirement of the target customers (Macial, da Rocha and da Silva 2013). In
addition, they also offer different variants of their products in meeting the different tastes of the
customers. Thus, initiation of the marketing orientation concept by Subway helps them to meet

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and fulfill the requirements of the customers effectively. Initiation of the marketing orientation
by Subway also helps them to offer different products and variants in different regions around
the world according to the local taste and preferences.
One of the major instances of marketing orientation for Subway is changing the trend of
the product offerings. This is due to the fact that Subway first started their business by offering
submarine sandwiches. However, in the following years, they have introduced different variants
such as tacos and salads in accordance to the change in the customer taste and preferences. This
is one of the prime examples of determining the requirement and expectation of the customers
and offering products accordingly (Min and Min 2013). Another instance of marketing
orientation of Subway is offerings products in different flavors and ingredients in different
regions around the world. This also portrays that Subway effectively determines the social factor
of the target market and offer the products accordingly.
Determination of the marketing environment
There are number of environmental factors that are having influence on the business
operation of Subway (Latif, Islam and Noor 2014). One of the major political factors being faced
by Subway is the difference in political scenario in different countries. This is due to the reason
that different countries are having different political standards and processes and thus it is
difficult for Subway to maintain their universal business policies and strategies in all their target
countries (Lawton, McGuire and Rajwani 2013). This is also creating barriers in driving their
global business operation. Another major environmental factor for Subway is the social factor.
This is due to the reason that taste and preference pattern of the customers are different regions.
For instance, customers from the western countries will be more preferable for beef items, while

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on the other hand there are certain countries in the Asian region where beef items will not be
preferred by the customers. Thus, offering of beef products in these countries will affect the
consumer buying behavior.
Determination of the marketing strategies
Psychographic and behavioral segmentation are two major customers segmenting tools
used by the business organizations. Psychographic segmentation refers to the lifestyle of the
customers along with their social personalities (Park and Jang 2014). With the help of the
psychographic segmentation, business organizations target the customers by their way of
lifestyle and what type of customers will be the target customers for them. In case of Subway,
psychographic segmentation refers to the type of profession from where the major customers are
coming for them.
On the other hand, behavioral segmentation refers to the personal behavioral elements
and preference pattern of the customers. This refers to the purchasing pattern and usage pattern
of the customers. In addition, frequency of the purchase and expected loyalty from the customers
are also being treated in behavioral segmentation (Ziafat and Shakeri 2014). In case of Subway,
the purchasing trend of the customers and how loyal they are towards the brand determine the
behavioral segments for Subway. Thus, the basic difference between the behavioral and
psychographic segmentation is internal and external attributes of the customers.
Effective segmentation strategy for Subway
It is suggested that demographic segmentation process will be the most valuable and
effective for Subway in segmenting and targeting their customers. This is due to the reason that

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with the help of the demographic segmentation strategy, Subway will be able to target larger
section of the customers more effectively (Shukla, Banerjee and Adidam 2013). This is due to
the reason that behavioral and psychographic segmentation will more narrow down the target
customers, while the demographic segmentation will help Subway to divide the target customers
based on age and income. This will enable Subway to offer their products in accordance to the
preference of the age groups and can price the products in accordance to the income level of the
customers.
Thus, with the help of the demographic segmentation, Subway will be able to target the
wider and vast range of the customers. This will also help them to market their global products
without having the need to change the products according to the diverse attributes of the
customers. This can be concluded that demographic segmentation will be the most valuable
segmentation strategy for Subway.
Marketing mix strategy for Subway
Product
Subway is having different and diverse range in their product portfolio. This ranges from
wraps, salads and tacos to sandwiches. Moreover, the products offered by Subway are different
from their close competitors in terms of the ingredients (Harrington, Ottenbacher and Fauser
2017). This is due to the reason that Subway extensively uses fresh vegetables for their offerings
and is being targeted as healthier option compared to their competitors. Products of Subway are
available in both vegetarian and non-vegetarian forms. Thus, having diverse product portfolio
helps Subway to cater to diverse range of customers.
Price

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Subway maintains premium pricing over their competitors. This is mainly due to the fact
that they offer more value in terms of quality and quantity compared to their competitors. In
addition, initiation of the premium pricing strategy helps Subway to have more favorable brand
value in the market with having the impression that Subway offers more quality food compared
to other players in the market (Keller 2017). Initiation of the premium pricing also helps Subway
to have higher profitability ratio.
Place
Subway is having more than 45000 stores in more than 100 countries. Thus, they are
having higher rate of market penetration. In addition, Subway maintains intensive distribution
strategy that refers to the fact that products are only available from the exclusive franchises of
them. On the other hand, online food delivery service is also being offered by Subway that helps
them to cater to larger section of the customers also that are beyond the range of their physical
stores (Verhoef, Kannan and Inman 2015). It is also being seen that majority of the physical
stores of Subway are located in metropolitan and tier I cities. This is due to the reason that
customers in the metropolitan cities are more attracted towards the fast food and they are more
health conscious. Thus, it is easier for Subway to market their products in the tier I cities. For
instance, more than half of the physical stores for Subway are located in the United States. This
denotes that developed markets are the major target segments for Subway.
Evaluation of the promotional mix
The major role of promotional mix is to initiate different promotional channels to target
and reach out to maximum number of customers. With the help of the promotional mix, business
organizations select a set of promotional mediums or elements in order to communicate their

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offerings to the target customers and in order to reach out to maximum number of the customers
(Nour and Almahirah 2014). Without the having the effective implementation of the promotional
mix elements, the other factors in the marketing mix will not get communicated to the target
customers.
Promotional mix element for Subway
In the given video, subway follows the advertising element of the promotional mix. This
is due to the reason that in the video the key attributes of their products are being conveyed
rather being personalized for individual customers or promoting a particular product. One of the
major advantages of this element is targeting and reaching out to maximum number of customers
at a time. This is due to the reason that the video of the advertisement will reached to maximum
number of customers in generalized manner and thus the impact will be more wide and vast
(Malik et al. 2013). In addition, it is less expensive compared to other elements of the
promotional mix for Subway. However, on the other hand, the major disadvantage that is being
faced by Subway is not having specific fulfillment of the expectation of a particular target
segment. This is due to the reason that the advertisement is more general and universal in nature
and it is not possible to meet all the diverse expectations of all target segments with generalized
approach.
Promotional channels of Subway
There are number of promotional channels being used by Subway in enhancing their
market share. One of the major channels is the television commercials that help them to reach
out to maximum households. In addition, social media marketing is also being extensively used
by Subway in order to have two ways communication with their target customers (Ashley and

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Tuten 2015). This also helps them to identify the reviews of the customers regarding their
products. Promotional campaigns are also being initiated by Subway by offering discounts and
festive offers to the customers.
Key message of the video campaign
The key message that is being conveyed through the video campaign is promoting their
service of creating the sandwiches by the customers according to their taste and preference rather
than buying the final product. This service is distinctive due to the reason that it enables the
customers to have customized products and this is not being offered by any of the major
competitors for Subway.
Target audience of the video campaign
The target audience of the campaign is mainly the millennial population. Majority of the
younger population is having the preferences for living independently and thus the customization
option of Subway is being conveyed with the celebration of independence by the younger
generation. It is conveyed in the campaign that younger generation prefers to live at their own
choice and thus they should create their desire rather than just buying.
AIDA marketing theory
According to the AIDA theory, the first element is the attention. The given video
campaign has used eye catching colors and activities mainly preferred by the young generation.
This will help to effectively relate to the lifestyle of the target customers, which will further
create the attention of them. Furthermore, the different attributes of the product of Subway is
also shown in the video such as hot and spicy flavors. This will create the interest of the target

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customers towards the product. Desire of the customers is being aroused through the
communication of the self creation services of sandwiches. Customers will feel the desire to feel
the need of owning the product. Purchase can be done through both online and offline stores of
Subway.
Evaluating the effectiveness of the video campaign
It is recommended that The Body Shop should use social media in order to gain the
feedback regarding the video campaign. This is due to the reason that putting the video in the
social media will help The Body Shop to initiate two ways communication process with the
customers.
Conclusion
Thus, it can be concluded that Subway is having effective marketing strategy. In this
report it is concluded that the distinctive marketing activities of Subway helps them to compete
in the market with their major competitors. This report also concludes that the advertisement
initiated by them is mainly targeted towards the younger generation. In addition, this report also
identified that the core objective of this video campaign is to communicate their self service
offerings to the customers.

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