Fast Food Market Forecast – The Subway Example of Strategic Product Positioning
- November 15, 2016
- Posted by: marlenedubois
- Category: CPR Training
The United States fast food market has seen a healthy rise in growth within the last three years which forecasts can be sustained. The fast food market will be forecast to maintain its current growth expectations, with an anticipated Compound Annual Growth Rate (CAGR) of 2.3% for the all 5-year period 2005-2010. This kind of will be required to drive the market to a value of $57.6 billion by the end of 2010. Drivers of growth include increasing numbers of Americans inside the workplace, which reduces the amount of time spent on preparing meals at home. In 2010, the United States fast food market will be forecast to have a value of $57.6 billion, an increase of 12.1% since 2005.
In 2010, the United States fast food market will be forecast to have a volume of 37 billion transactions (Figure 1). This kind of represents an increase of 5.3% since 2005. The CAGR of the market volume inside the period 2005-2010 will be predicted to be 1%.
Success factors for fast food franchisees will include products along with marketing targeted to healthier menu selections, brand consistency, low start-up costs, franchisee support, along with consumer convenience. Subway ® represents a poignant example of a fast food franchisee ready for success inside the future fast food market. Their strategies transcend the fast food market along with apply to many various other markets along with products.
Subway sandwich shops are well positioned to leverage their strengths along with address reasonable threats, weaknesses, along with opportunities. The table below highlights these Strengths, Weaknesses, Opportunities, along with Threats.
- Size along with number stores along with channels
- Menu reflects demand for fresh, healthy along with fast.
- Use of non-traditional channels.
- Partnering with the American Heart Association.
- Worldwide brand recognition.
- Customizable menu offerings.
- Low franchisee start up costs.
- Franchisee training will be structured, brief along with designed to assure rapid start-up along with success.
- Décor will be outdated.
- Some franchisees are unhappy.
- Service delivery will be inconsistent via store to store.
- Employee turnover will be high.
- No control over franchise saturation in given market areas.
- Continue to Grow Global Business.
- Update décor to encourage more dine-in business.
- Improve Customer Service design.
- Continue to expand channel opportunities to include event wagons.
- Improve franchisee relations.
- Experiment with drive-through business.
- Expand packaged dessert offerings.
- Continue to revise along with refresh menu offerings.
- Develop more partnerships with movie producers along with toy manufacturers to promote completely new movie releases through children’s menu packaging along with co-branding opportunities.
- Franchisee unrest or litigation.
- Food contamination (spinach).
- Interest Costs.
- Economic downturn.
- Law Suits.
Subway will be not without competitive pressures. Chief competitors include Yum! Brands, McDonalds, Wendy’s, along with Jack inside the Box. Yum! Brands are the globe’s largest, with 33,000 restaurants in over 100 countries. Four of the company’s highly recognizable brands, KFC, Pizza Hut, Long John Silver’s along with Taco Bell, are global leaders of the Mexican, chicken, pizza, quick-service seafood categories. Yum! includes a workforce of 272,000 employees along with will be headquartered in Louisville, Kentucky.
McDonald’s Corporation (McDonald’s) will be the globe’s largest foodservice retailing chain with 31,000 fast-food restaurants in 119 countries. The company also operates restaurants under the brand names ‘The Boston Market’ along with ‘Chipotle Mexican Grill’. McDonalds operates largely inside the US along with the UK along with will be headquartered in Oak Brook, Illinois employing 447,000 people.
Wendy’s International (Wendy’s) operates three chains of fast food restaurants: Wendy’s (the third largest burger chain inside the globe), Tim Horton’s, along with Baja Fresh. Wendy’s operates over 9700 restaurants in 20 countries, has been included in Fortune magazine’s list of top 500 US companies, will be headquartered in Dublin, Ohio, along with employs about 57,000 people.
Jack inside the Box owns, operates, along with franchises Jack inside the Box quick-service hamburger restaurants along with Qdoba Mexican Grill fast-casual restaurants along with will be headquartered in San Diego, California.
The increase in sales of the sandwiches has been a result of decreases in consumer interest in hamburgers along with fries along with increases in demand for healthier options. Sales of sandwiches are growing 15 percent annually, outpacing the 3 percent sales growth rate for burgers along with steaks.
Current Marketing Program
A completely new breed of restaurant will be producing big gains against the market-saturated hamburger establishments. Termed “fast-casual,” these restaurants are dominated by Mexican chains, along with sandwich restaurants offering fresh-baked breads along with specialty sandwiches.
Responding to evolving consumer expectations for health, fresh, custom-made sandwiches; Subway’s marketing program addresses these expectations through numerous approaches. The most notable were the television commercials featuring Jared. These commercials emphasize the healthy aspects of a Subway sandwich by highlighting the 245 pounds Jared lost by eating a Subway sandwich diet. Subway also markets through a national sponsorship in events such as American Heart Association Heart Walks along with local events such as triathlons, along with children’s sports teams.
The Subway example represents marketing along with product strategies of which are classic examples of focusing on market demand, consumer trends, product leveraging, along with innovation. The marketing strategies of creating clear brand recognition, brand along with product association, along with market demands, have strategically positioned Subway to advance market share into the near future. These marketing strategies are also repeatable fundamental marketing strategies transcending the fast food market. Does your marketing strategy bind brand recognition to products of which support your market’s future direction?