Subway is entering the highly competitive fast food breakfast market. The overall market sales for breakfast was approximately $25.3 billion in 2009 and in 2004, the fast-food portion outpaced non-fast food breakfast sales. In 2009, fast-food breakfast sales represented 55 percent of the total market, however, the breakfast market suffered a 2.8 percent drop from 2008 to 2009. (1) Despite recent decline, market research firm Mintel, expects a 2.1 percent increase in for the coming year. (2) The major players in the fast-food breakfast industry are McDonalds, Dunkin’ Donuts, Starbucks, Burger King, and Hardees. Taco Bell, Wendy’s, and Quiznos, have all introduced breakfast products within the last two years. (2)
In a survey conducted by Mintel to determine what factors contribute any importance to their purchasing habits, freshness of food was 90 percent, convenient location was 86 percent, speed of service was 79 percent, menu variety was 78 percent, and low prices was 77 percent. (2) With the exception of menu variety, all of these drivers are in accordance with Subway’s current product selection and service style. Problem:
Subway is entering a highly competitive market that does not directly coincide with their current brand image. They must identify what aspects of the market to target and how to position themselves to appeal to those consumers.
A good solution is one that does not pose any major risk to Subway’s existing brand or market share. It is more important that the solution offers a low cost and low risk way for Subway to slightly increase its sales. Alternative solutions:
Subway could decide not to enter the fast-food breakfast market and maintain their current position. This is the safest alternative in the short run because it does not require and large investments. Subway could use the money they save to increase marketing of current products, or bring on a new product that does not deviate from the original brand. However, given the low...
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