Marketing strategy for Quiznos in the fast-casual segment

Marketing

Quiznos Subs Marketing Plan

Quiznos is a fast food restaurants specializing in sandwiches. Quiznos operates in a highly competitive market and needs to market effectively to increase sales and market share. The following analysis will describe a marketing strategy for Quiznos. This will begin by looking at the current situation and trends. This will be followed by looking at the key issues for Quiznos, including strengths, weaknesses, threats, and opportunities. Based on this analysis, a marketing strategy with the objective of increasing the dinner market is recommended. The final sections will describe how this will be achieved by describing the marketing strategy, actions to be taken, and control.

Current Situation and Trends

Market Situation

The U.S. fast food market is around $150 billion annually (Euromonitor, 2005).

The U.S. fast food market is expected to increase by about 1.7% from 2004 to 2008, to reach $153 billion in 2008 (Euromonitor, 2005).

This slight increase in the market shows that the fast food market is mature, with little opportunity for overall growth.

Burger operations account for around half of all sales in the fast food market.

Burger sales have started to decline.

The fast food market is fragmented, with the top five companies making up around a third of the market.

The top five companies in the market are Wendy's, McDonalds, Yum! Brands (owners of KFC, Pizza Hut, and Taco Bell), Burger King, and Doctor's Associates Inc. (owners of Subway).

There is a rise in the popularity of healthy fast food alternatives.

The consumer interest in healthy fast food options has caused all of the major fast food organizations to introduce healthy menu items.

The major fast food organizations have also launched marketing campaigns to promote their healthy menu items

Research suggests that the growth in the fast food market will be in the fast-casual area. This refers to consumers who want "fresh food served quickly in a distinctive, casual environment" (McPherson, Mitchell, and Mitten 2003). This market is predicted to be worth $35 billion annually by 2010 (McPherson, Mitchell, and Mitten 2003).

Research suggests that there is a gap in the market, with many of the major fast food organizations unable to provide or be perceived as providing fresh food. The organizations that are perceived as providing fresh food are the non-fast food restaurants, with these restaurants not being able to provide quick service. This leaves a gap in the market for a fast food outlet that combines the benefits of fresh food with the benefits of quick service.

Research suggests that the dinner market is the most promising, with this the most popular meal and the one that consumers are willing to pay the most for (McPherson, Mitchell, and Mitten 2003).

B. Competitive Situation

Competition will continue to be strong in the fast food market because of the number of organizations operating in the market.

The major organizations will also continue to market and advertise heavily, as is characteristic of the industry.

The fast food organizations will become more direct competitors of Quiznos because of the healthy menu items introduced and because of the marketing of fast food as healthy.

Previously, Subway was the major direct competitor for Quiznos because they sell a similar product that offers the same consumer benefits. This has changes with McDonalds now also offering freshly made sandwiches as standard menu items.

C. Macroenvironment Situation

Changes in regards to health and dieting have already impacted the market, with a new demand for healthier menu options. This trend will continue as consumers continue to demand healthier fast food items.

In regards to health and dieting, there is a current focus on low G.I. foods and the health benefits of these items. It is expected that this interest will continue.

In regards to health and dieting, there has been a consumer shift in recent years with consumers becoming more concerned with preservatives and additives, and with consumers preferring organic fruit and vegetables. It is expected that this trend will continue with consumers becoming more educated about health, nutrition, and food. It is expected that this will result in consumers who demand more from fast food outlets.

There is a growing concern about obesity in children. This could lead to parents choosing a healthier fast food outlet, instead of McDonalds or Burger King. There is potential for Quiznos to take advantage of this possible trend.

There has been a social trend in recent decades with more women entering the workforce and more families with both parents working. This trend has created a greater demand for fast food since parents do not have as much time to prepare food. Along with the increasing demand for healthier food options, this creates an opportunity for Quiznos to take advantage of the increasing market.

There has been a social trend with people having children later in life. This creates an expanded market of people in their 20's and 30's who are single and without children. This market of individuals cooks less and so have a greater demand for fast food and restaurant meals. There is an opportunity for Quiznos to take advantage of this market.

III. Key Issues

C. Strengths

Quiznos's products have the adaptability to be easily changed to suit different markets and different times without significant costs. For example, products could be introduced to suit children and families or to suit the dinner market. This involves changing what is on each sandwich, but does not mean making any significant changes to the actual restaurants or the food delivery processes. This makes it easy for Quiznos to adapt to consumer needs.

Quiznos's freshly made sandwiches can be easily altered to suit the customer's specific dietary needs, whether it be low G.I., low salt, low fat, or no added preservatives.

Quiznos's products are freshly made, which is something that consumers are seeking.

Quiznos's image as a slightly upscale fast food restaurant matches well with the current potential market of buyers seeking a better fast food product.

Quiznos's products are healthy and not as associated with fast food as hamburgers, pizza, and fried chicken. This gives Quiznos a strength over the competition, since people do not associate the negative perceptions of fast food to Quiznos's products.

D. Weaknesses

Quiznos's stores are franchise owned. This makes it difficult to guarantee that products can be made based on specific health demands such as low salt or low G.I.

Quiznos's stores being franchise owned also makes it difficult to control the atmosphere and setting in each individual restaurant. This could have a negative impact on Quiznos being seen as a quality fast food restaurant.

Quiznos does not have the menu variety that providers such as McDonalds has. This could make it difficult to attract families.

Quiznos does not have the size or budget of the major competitors such as McDonalds and Subway. This could make it difficult to manage a successful campaign, especially if other competitors take action to reduce the impact of Quiznos's marketing efforts.

Quiznos and Subway share many similarities, especially in regards to how consumers perceive them. This makes it possible that any action Quiznos takes to enhance sandwich sales could also help their direct competitor.

IV. Objectives

The objective of the marketing strategy will be to increase the dinner market for Quiznos restaurants. This objective is based on the observations that sandwiches are typically associated with lunch. This decision has been made based on the research showing that the dinner market is the growing market and the one where consumers are willing to pay more. It is also suggested that consumers want something better for dinner than for lunch and will be willing to pay for quality. If Quiznos can change people's perceptions by emphasizing that Quiznos is a good place for dinner it can substantially increase its sales.

This decision has also been made based on the observation that Quiznos's products and image matches well with what consumers want for dinner, including that they are seeking a healthy alternative.

Finally, it has been noted that there is a growing market of families and single people looking for a healthy dinner option. Quiznos's products and images puts it in a good position to take advantage of this growing market.

The overall objective will be to increase Quiznos's dinner sales. To achieve this, the marketing strategy will be designed to change consumer's perceptions so that they consider Quiznos as a good alternative for dinner.

V. Marketing Strategy

A. Product

The product will be adapted to suit the dinner market.

Family meal deals will be introduced to attract families and help position the products as being suitable for families and children.

Mini subs will be introduced to suit children.

A larger range of hot subs will be introduced to suit the dinner market.

New menu items will be added specifically for the dinner market. These products will be heartier meals that associate more with a major meal than with a lunch meal.

B. Promotion

Promotion will focus on advertising the specific new products that have been introduced. It is suggested that it is the products available that determines how the restaurant is perceived, with changes in the products available capable of changing how people view the restaurant.

It is suggested that simply showing people that a family dinner pack is available will be enough to communicate that Quiznos is a suitable place for families to have dinner. The same applies to advertising mini subs for kids; with it suggested that the fact that this product is available will be enough to communicate that Quiznos is a suitable place for children.

Dinner will also be specifically promoted by advertising the new dinner sandwiches available. It is suggested that appealing dinner sandwiches available after 5 pm will be able to attract people to Quiznos for dinner. This takes into account that people largely make a dinner choice based on hunger. This means that a dinner sub-that appeals to a person's hunger will attract them to the restaurant. This will then have a flow-on effect as people begin to associate Quiznos with dinner.

C. Place

The changes will take place in all Quiznos restaurants, but will be staggered so that initial marketing efforts and product changes can be trialed, tested, and improved, before making nation-wide changes.

The promotion will involve in-store promotions to take advantage of current Quiznos customers, especially lunch customers. In visiting restaurants for lunch, customers will see posters and advertisements for dinner subs available after 5 pm, with this encouraging people to return for dinner. It is expected that this method of in-store advertising will be especially effective because people will be hungry at the time they view the advertised products, with this making them seem more appealing.

Quiznos's new menu will also be promoted by sending brochures via the mail, with the brochures containing vouchers for the new products. This will attract people to the store, while also communicating that Quiznos is suitable for kids, families, and for dinner.

D. Price

Family packs will be priced at $17 for two regular subs, two mini subs, and a family-sized drink. A family-sized salad or soup will be able to be added for an additional $3. This keeps the price under $20, which makes Quiznos affordable for families.

Dinner subs will be priced between $6 and $8. This is significantly higher than regular subs. This price has been specifically chosen to be higher because it will help to differentiate dinner subs from regular subs and to highlight that they are heartier and more filling. A bowl of soup will be able to be added for an extra $1. This makes it easy for people to associate eating at Quiznos as having a meal, rather than having a snack. This also makes the overall price reasonable for consumers, but while the dinner sub-can still be perceived as being significantly better than lunch subs.

VI. Action Plans

The first action to be taken involves creating the new products for the dinner menu. This will be completed by focusing on creating products that will appeal to dinner consumers and will be perceived as being specifically suited to dinner.

This process will be completed by the research department, with specific new products developed. The marketing department will then complete research to determine people's perceptions of the products. The products that are appealing and that are associated with dinner will be selected.

Once the new menu items have been selected, the new menu can be created. This will involve adding the new products and the new family packs.

The next stage involves introducing the changes at selected restaurants. This will begin with the new menu and the in-store promotions introduced.

The brochures will then be created and distributed. The response rate of brochures will act as a measure of consumer interest and effectiveness of the advertising program.

The final step will involve making any adjustments or improvements and then introducing the changes nationwide.

VII. Controls

The marketing strategy will be controlled by introducing the changes in a few select restaurants initially and then monitoring the results. This will include measuring customer response rate, customer satisfaction, and customer return rate. The selected restaurants will also be monitored to determine if dinner sales are increasing.

The other major consideration is whether the strategy is changing customer perceptions of Quiznos. This can be determined by conducting a survey about customer perceptions and comparing consumers in the targeted location with consumers in other areas.