Looking into how to restore Subway's brand perception by recommendations from a product, price and place perspective.
The first initiative that Subway should undertake should be to improve or change its perception regarding the freshness of its products and subsequent offerings. The negative image through the DNA test that raises questions on its protein and meat content should be addressed next. A customer obsessed company model is sustainable in the long term. Subway by tailoring its services now towards customer service rather than just focusing on product offerings could further its initiatives and regain lost market share lost to other not so established commercial chains.
One way to go about things would be to explicitly advocate for freshness by citing vendors and pickup markets. It could start by implementing an AI/ML model to gauge demand and introduce these forecasts into its supply model and daily operational model. This would cut unnecessary costs and free up funds to be invested in marketing campaigns and newsletter aimed at targeted customer segments.
One space it should lean back is the low diet meal. Clearly stating calories, protein richness and forming a menu set by acknowledged nutritionists would go a long way in bringing gym freaks, diet conscious users back to the platform. Another segment gaining major traction is the green consumers, a customer segment who advocate everything to be used should be bio-degradable and does not harm the environment in any way. This includes watching or looking out for wrapping paper that is environmentally friendly.
There are two main issues in the place market strategy. The first one namely the franchising model and the second the development agent issue.
The franchising model is as mentioned cannibalizing. Opening stores close to each other creates unnecessary competition and lowers brand perception of it being a menial store. The model of dividing the stores into regional areas with a third-party developmental agent would go a long way in better management of the stores and eradicate the internal factors tarnishing the brand name and the numerous cases coming out in widely circulated newspapers of its poor organizational structure.
A tradeoff here would be more costs in maintaining the new structure but as economies of scale improve, the cost would be offset by the benefits.
Maintaining and monitoring regional dashboards which monitor progress, efficiencies and address bottlenecks to further drill down which areas are under performing and which areas have scope of improvement and need further investments would go a long way in better sizing distribution. Partnering with local vendors for distribution might better assure people in certain areas in terms of credibility of the supplies and collaborations.
Another tradeoff here would be maintaining the same licensing fees model which has worked in the company’s favor given the rising industry trends and demands.
They need to widen their assortment and offer both $5 and $10 subs. This will retain both the $5 customers and also help it scale and earn from the $10 customers.
Alternatively, if the financial model does not seem feasible then it can try something like particular days such as weekend specials where it could offer this promotion. Beginning a loyalty program for the most active customers would go a long way in maintaining retention and driving monetization in the long term.
The price could also be specifically offered in areas depicting low engagement with the brand or high competition. It could act as a distinguishing agent. Offering promotions based on churn rate of user segments based on buying habits, trends, demographics or identifying any occurring patterns would go a long way in establishing legacy relationships.
It is also important to note that money might be spent out of pocket by Subway, but a more consistent revenue stream could be established by increasing active users and thus market share. If Subway aim to generate profits it once saw, it has to test the waters with these strategies and see what sticks. Otherwise, the competition is on the rise and will eventually a new Subway of the 21st century would emerge on its own.
I think Subway would have to change its model drastically and become more flexible going forward to resolve its issues pertaining to product, place, and price. The customer behavior is changing constantly and with it their requirements. It is really important to change with customer demands which Safeway currently is not equipped to handle.
A walk away from its current strategies would be difficult but would help the brand re-position itself for future challenges. The growing competition is a big concern as they have formed their offerings on Subway’s shortcomings. It would take something incredibly creative and innovative from Safeway to reach the height of past glory.
Looking and conducting customer interviews to understand user pain points and scale them back into the development process would be a good first step. It would also provide a good insight into what the customers are looking for in modern times and going forward.
Changing its perception would require time and patience. There has to be a priority set between short term and long-term goals.
Judging solely by the way, Subway is structured right now with the franchising model, which is only working its way downwards, especially after post-Covid times, Safeway does not look well positioned or organized to deal with its issues related to product, place and price. Neither are any big investments, assets and patents on the way as well.
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