Concepts of market orientation for Subway

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.

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.

Marketing orientation

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.

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.

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 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.

Market orientation for Subway

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.

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 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.

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.

Determination of the marketing environment

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 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.

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

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.

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 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.

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.

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 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.

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.

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.

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 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.

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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