Subway Marketing Strategy

Topics: Subway, Fast food, Jared Fogle Pages: 11 (3414 words) Published: January 21, 2013
1)Industry analysis

a.Definition of the industry

The industry is the fast food industry (“la restauration rapide”). I would define this industry as a mean of eating food where the aim is to eat quickly and to have the possibility to take away. It is often affordable. The most served food is Burgers, sandwiches, fries, soft drink but also hot dog, pizza, taco or sushi.

The turnover of the market increased for 66% in 7 years and reach 32,7 billion euros in 2011. This turnover still has been affected by the crisis. Because the average amount of money spent in the stores decreased a little. And the Sandwiches segment has decreased in number of sandwich sold but has an increasing turnover. But actually, the sandwich market took advantage of the crisis and increases its market share. They represent 20% of the fast food market with 6,4 billion euros. Also, 40% of the turnover of the outdoor eating is made with fast food.

The fast food industry should keep increasing with the development of the street vending. It is a real success for brand like Juju’s (fruit juice and smoothies), we love boon (yogurt and ice cream), sushiju (a truck of sushi) or Alto café. « Mobile fast food store » are success because in the fast food industry 50% of the food bought are to take away.

b.Market trends in the last three years

Here are some of the trends of the fast food market in France.

First, it’s important that the consumer became very demanding. He wants to have choice and like to eat in restaurant where you don’t have only one product. The other demand is that the consumer want to eat everywhere (cinema, supermarket, gas station, train station, …) and at any time. For example restaurant that close at 2 pm loose a lot of client. Because the economic context is hard and the increasing environmental concern the consumers behavior changed. For example we are changing our eating habit so we can adapt to the new work schedule, the increasing time of transport, the shortening time of the break, the increasing nomadism, people eat outside and have less time. The Second main trend is that, fast food chain needs to be very clear in their positioning. They can’t be the best and the cheapest at the same time. French consumer won’t trust a cheap product; it’s not good quality for them. Customers are very demanding concerning the quality criteria. Fast food restaurant really tries to position themselves as good food and not junk food like many people use to think. Indeed, they try to offer healthier food with salad, fruit juice …

To sum up the main trend is: faster (simple and easy to eat), healthier, and cheaper.

A very interesting trend is that a lot of restaurant tend to “frenchenize” their offer, in other word their adapt their product to the market and it seems to work pretty well. For example McDonald’s had to create a French menu to succeed with macaron, creation of the McCafé, table services and baguette sandwiches. Mc Donald’s France is far from the original US model.

This lead me to another trend, as some might think the French consumer don’t become American. For example in the US, Americans eat food all day, but in France even when we go to fast food we eat at certain hours. Our consumption of food outside of the meal hours is 8% while it’s 28% in the US. And we send about 31 minutes to eat our meal while American only take 19 minutes. And to finish, about 2 third of the sandwich bought in France are the famous « Jambon/beurre » (ham & butter).

c.Economic structure (pure competition, oligopoly, monopoly)

The fast food industry has a monopolistic competition economic structure because there is other company that sells the same type of product but not identical and the entry in the market is relatively easy. You just have to build a fast food restaurant or a bakery. As we talk the competition is not only around the price even if it’s an important criteria for the consumer. In fact the different sellers...
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