Why Subway Is Not Popular in China

Topics: Marketing, Fast food, Fast Food Nation Pages: 9 (2140 words) Published: April 17, 2011
1. Introduction

2.1 Relevant background

Since the Subway restaurant chain started in 1965, it has opened more than 30,000 stores in 87 countries during the past 40 years. In Western countries, Subway is very popular and famous for its “stylish and nutritious” concept. More importantly, Subway brings the idea of health into the fast food industry. Because of the nutritious sandwiches and low fat ingredients, Subway receives considerable acclaim in Europe and America. Moreover, some professional magazines pay many honours to Subway, such as America's Top Global Franchise” in 2009 and “Annual Franchise 500® listing” for 16 of the past 22 years.(Subway Chain Fact, 2006)However, in Chinese market, the development of Subway has not gone well.

2.2 Rationale

The Subway restaurant chain entered into Chinese market more than 10 years ago. Although it has opened at least 100 stores in many cities in 2008, it is surprising to find that Subway is still not popular among the Chinese customers, even a number of people have never seen or heard about it. Subway as the largest submarine sandwich franchise in the world is always insisting on nutrition of fast food, which meets the need of customers who emphasize on the importance of heath and attach importance to saving time. It is a phenomenon deserving of investigating carefully why Subway is not very popular in China.

1.3 Brief Literature Review
Most individuals point out that China is a special and huge market. Meanwhile, they also agree that some marketing strategies should be changed when the global brands expand in china market. Ambler, Wizel and Xi (2009) advised that foreign companies need to adapt to “Chinese characteristics” or “the special situation in China” in order to reach Chinese consumers. Therefore, this literature review mainly focuses on the importance of product, price, promotion and advertisement in China.

According to a market survey conducted by Bennett (1998), compared with developed countries, China's consumption level is still behind the stage. Likewise, Doctoroff (2005) indicated that the price is an important factor in the China market. He pointed out that multinational companies often failed to recognize that a majority of the population is poor in China.

Advertising is very important for a company in a new market. Dommermuth (1989) pointed out that advertising is the most visible of the explicit elements of promotion. Moreover, when company used advertising properly, it could achieve the results they seek. Correspondingly, Bennett (1998) discovered that an effective advertisement will live up to three major objectives, increasing sales, obtaining new customers, altering consumer behavior. Ambler, Witzel and Xi (2009) are also fairly sure that advertising in china is strongly correlated with sales.

1.4 Purpose
The purpose of this study is to analyze some problems of Subway on the marketing mix which may affect the development in china. Meanwhile, it aims to bring up some practical measures to Subway in order to attract more customers in china.

2. Methodology
The purpose of this section is to present the method which is used in this report and justify the limitation of the methodology. This section will be divided into four parts, which are data collection method, structure and content, difficulties and limitations, and research procedures.

3.3 Data Collection Method

Proctor (2003) indicated that questionnaire is a good way to record respondents’ answer. In this research, questionnaire will be the method of data collection, which is easier to gain a large of information in a simple way. The questionnaire can be found in appendix. The questionnaire aims to find out the Subway’s problems on the marketing mix. Therefore, the questions of questionnaire will focus on the variety of food, price of Subway, promotion and advertisement of Subway.

3.4 Structure and Content
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