Advertising, Publicity, and Sales Promotion
In the summer of 1965, 17-year-old Fred DeLuca was trying to figure out how to pay for college. A family friend suggested that Fred open a sandwich shop—and then the friend invested $1,000 to help get it started. Within a month, they opened their first sandwich shop. From that humble start grew the Subway franchise chain with more than 33,000 outlets in 91 countries. Targeted advertising, timely publicity, and sales promotion have been important to Subway’s growth. For more than 10 years, memorable Subway ads featured Jared Fogle, a college student who was overweight but lost 245 pounds by only eating Subway’s low-fat sandwiches like the “Veggie Delite.” Jared says it was a fluke that he ended up in Subway’s ads. After all, he was recruited to do the ads because of good publicity that Subway got after national media picked up a story that Jared’s friend wrote about him in a college newspaper. Subway’s strategy at that time focused on its line of seven different sandwiches with under 6 grams of fat. The objective was to set Subway fare apart from other fast food, position it to appeal to health-conscious eaters, and spark new sales growth. Jared already knew he liked Subway sandwiches, but the “7 under 6” promotion inspired him to incorporate them into his diet. As soon as Jared’s ads began to run, word of his inspiring story spread and consumer awareness of Subway and its healthy fare increased. It’s always hard to isolate the exact impact of ads on sales, but sales grew more than 18 percent that year. The ads also attracted attention from potential franchisees. Many of them followed up by requesting the franchise brochure, which explains how Subway’s strategy works and why Subway is a profitable small business opportunity. For instance, it describes how franchisees elect a group to help advertising managers at Subway headquarters with advertising and media buying decisions—so that Subway outlets get the most return from their advertising dollars. Franchisees can develop their own promotions, too. A south Florida franchisee wanted to boost weekend sales at his two stores, so he offered footlong subs for $5 on Saturdays and Sundays. Business boomed—there were lines out the door. The down economy had made customers particularly price sensitive, so the bargain had wide appeal. And the promotion was profitable because the increased volume of sandwiches made up for the lower margin on each footlong. Word got out and soon other franchisees were selling $5 footlongs. Then the franchisees advertising group voted to take it nationwide for four weeks, later extending it indefinitely. Soon it was hard to find someone that didn’t recognize the five finger signs and catchy (and annoying) jingle from the campaign developed by MMB ad agency. It even got mentions on “The Tonight Show.” Subway tries to balance its menu and promotion to appeal to three segments: customers interested in low fat, those most
concerned about taste, as well as those seeking a good value. The “Eat fresh” theme and copy thrust of some of Subway’s ads appeal to the first two target markets, while in-store signage promotes its “value meals” and $5 footlongs. Subway reinforces its healthy positioning with health-conscious spokespeople. For example, on Twitter @SubwayFreshBuzz customers can find Olympic swimmer Michael Phelps, Olympic gymnast Nastia Liukin, and others promoting Subway’s fresh, healthy fare and the value of the $5 footlong subs. For those most concerned about taste, Subway counters high-end fare from Panera Bread and Quiznos Subs with its “Subway Selects” line of sandwiches. Subway recognizes that it needs to vary its creative approaches to get its message out to different target markets. For example, young men age 18 to 34 are heavy purchasers of fast food and they appreciate bargains. Many guys in this group are also big on video games. So Subway placed ads promoting its $2.49...
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