Subway on a roll

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					Subway on a roll
How a re-positioned and re-branded existing
product for sandwich chain Subway led to a fully
integrated brand revitalisation success story




Strategic excellence: brand development

By:
Gillian McGhee, Frame
Debbie Kiely, MediaCom Scotland

Word Count: 1997
Date: 30 January 2008
Précis - 50 words
This is the story of our transformation of an existing Subway product - the new
Sub of the Day® launched with a fully integrated marketing campaign.

The result? A re-positioned promotion delivered sales +9.8%. The North region
saw RoI Index of 137. Subway even went on to adopt our promotion globally.





Executive Summary - 200 words
Subway is the US sandwich chain selling Subs (submarine shaped bread rolls).
We begin in January 2006. In a hugely competitive market, research showed
Subway was misunderstood and intimidating for non-users. Marketing was
needed to build the brand and business by introducing new customers.

Brand tracking indicated just 22% of UK adults aged 15-50 were
spontaneously aware of Subway. And only 13% had ever visited.1 We identified
two key barriers to success:

• The brand was dogged by American heritage

• The existing £1.99 ‘Daily Special’ designed to encourage trial and build
  frequency was languishing

This is a story about an existing promotional offer being transformed into
a successful brand building promotion with fully integrated marketing. The
result? 9.8% increased national sales and brand awareness up 17%. the
campaign delivered a return of investment index of 137 in the North
region. Purchase intention increased by 10%.

Subway was fighting strong against the likes of McDonald’s and Burger King
– both established brands with deeper pockets.

Such was the success, Subway’s founder Fred Deluca declared our promotional
strategy to be the new global Subway standard.




1. Source: BMRB Omnibus Benchmark Tracking Survey, Jan 2006




3
Subway launches as a serious UK contender
Subway is the US sandwich chain selling Subs (submarine shaped bread rolls).
We begin in January 2006. In a hugely competitive market, research showed
Subway was misunderstood and intimidating for non-users. Marketing was
needed to build the brand and business by introducing new customers.

Brand tracking indicated just 22% of UK adults aged 15-50 were
spontaneously aware of Subway. And only 13% had ever visited.2 We identified
two key barriers to success:

• The brand was dogged by American heritage

• The existing £1.99 ‘Daily Special’ designed to encourage trial and build
  frequency was languishing

This is a story about an existing promotional offer being transformed into
a successful brand building promotion with fully integrated marketing. The
result? national sales +9.8% and brand awareness +17% (propelled from
22% to 39%). Proven to be linked to the promotional advertising activity by
econometric modelling.

Subway was fighting strong against the likes of McDonald’s and Burger King
– both established brands with deeper pockets.




2. Source: BMRB Omnibus Benchmark Tracking Survey, Jan 2006





Fresh UK goals
Business and marketing objectives for 2006 were ambitious:

1. Add 9% to the business (like for like sales)

2. Establish Subway as brand owners of ‘Subs’ (like McDonald’s Big Mac and
   KFC’s Bucket, we needed a product that was ours)

3. Grow brand awareness and intention to visit by 10%



Market Dynamics
The sandwich market was worth £3.6billion and the Quick Service Restaurant
(QSR) category a further £2.8billion.3 Subway had an opportunity to capture
more of both markets.




3. Source: Mintel 2005





Customer research demonstrated Subway was ideally positioned to meet both
sandwich and QSR category needs:




Figure 1: Source: Juice Qualitative Research, June 2005




Subway meets a fairly wide
variety of needs
In 2005, the QSR category spent over £76million,
with McDonald’s, BK and KFC accounting for
92% of all expenditure. Traditional fast-food was
in decline. Supported by heavy weight media
the big three had moved into the sandwich (Sub)
sector with the creation of “healthy” alternatives
to burgers. Although with much smaller budgets,
Subway had the right product to compete here
and we needed to make people aware.


                        Figure 2: McDonald’s launch the deli sandwich, KFC
                                      have Subs, BK bring in the baguette.





Knowing sandwiches were the second biggest menu option for QSR customers
(Figure 3), we intended to divert share from the traditional players.




    Figure 3: Sales Incidence in QSR Outlets. Source: The NPD Group (confidential)




7
Who were we targeting?
Extensive segmentation research identified a core target market that we
christened Demanding Young People Who Know Their Own Minds. This
equated to 19% of the total population who fit the following description:



    18-39s, working or studying who Do Not frequent Subway
    currently and who agree with five of the following statements;

    • I ’m not easily swayed by others’ views

    • People have to take me as they find me

    • I like to pursue a life of challenge, novelty and change

    • I like to try out new food products

    • It’s important to learn new things throughout life

    • I enjoy life and don’t worry about the future too much

    • It is important to be well-informed about things




Subway offers this audience a fresh alternative to the trash culture they reject,
not just in food, in all aspects of their lives. They don’t and won’t compromise
their values or individuality.




8
Figure 4 shows the values we believed matched our core customers to the
Subway UK brand values.




Figure 4: Shared Values




Brand development work led to a customer pen portrait (figure 5) used to
shape our approach to both creative and media to attract UK customers to the
Subway brand.




    Representative of our target, he’s of the “work hard, play harder,
    splurge/purge, live in the moment, it’s all about me” mentality.
    He’s a multi tasking multi platform customer, living a diverse life,
    comfortable with, indeed a demander of, new technology, who
    expects and actively seeks out the best that life has to offer. He’s the
    ultimate Customer in Control. Anything not relevant to him and his
    lifestyle, will be filtered out and ignored.


Figure 5: Consumer Pen Portrait




9
KEY CUSTOMER INSIGHT - 1
Subway’s American fast-food cues didn’t
resonate with UK customers
Now knowing our UK customers, it was immediately clear our brand had to
move on from its American fast-food roots to succeed here.

The food industry was undergoing a period of climactic change. 7 out of 10
customers were confused as to what constituted a healthy diet.4

Superfoods. Organic. Genetically modified. Low-carb. Low-fat. Low-salt. No
wonder they were baffled.

Even with no burgers or fries, Subway was positioned as part of the USA ‘fast-
food’ market.

Overtly American fast-food cues did not sit comfortably. The 2004 release of
Morgan Spurlock’s SuperSize Me only served to reinforce already negative
perceptions.




4. Source: Mintel 2005




10
 KEY CUSTOMER INSIGHT - 2
 Customers were confused about Subway’s
 product and customised ordering process
 Pre-launch research showed new customers found the menu complicated and
 the order process intimidating. However, established users understood the
 proposition and welcomed the variety available (Figure 6).


                                                                            “I was tempted.
     “you’re in charge of what you                                           I looked in the
      eat. you can make it as healthy                                        window but
      or unhealthy as you like”                                              decided it was
                                                                             too confusing”



                                           “It can feel
                                            bewildering…
                                            intimidating
                                            almost”

 Figure 6: Customer Quotes. Source: Subway UK Qualitative Research conducted by Juice, 2005




 Research into eating habits on the move revealed our
 target were promiscuous lunchers. Spoiled for choice,
 expectations were high and loyalty low. Our customers
 knew what they wanted, when they wanted it and perhaps
 most importantly, how they wanted it.




11
Herein lay the opportunity for Subway: your Sub is made right in front of you
to your exact specification.

Our brief was to develop the Subway brand to appeal to UK customers. Insight
led us to decide a further requirement:

• new customers confused by this exact specification needed a ‘point and
  order’ option



Brand Differentiation
Our solution? Launch the brand with Sub Of The DaY®.

A different Sub every day of the week for only £1.99. The same offer in
structure and product to the ‘Daily Special’ but re-branded and re-launched to
stimulate trial. This would help embed the word ‘Sub’ in everyday vernacular,
strengthening Subway’s ownership of Subs.

Overall objectives:

• Deliver brand personality to create customer connection

• Create an easy entry value platform to stimulate trial

We had to change perceptions of customised ordering from intimidating to
a competitive advantage. The introduction of a simple ‘point to order‘ menu
option would overcome non-users’ fears, giving confidence to try Subway.




1
Creative development
The US ‘Daily Special’ used a colour palette that didn’t seem part of the
Subway brand.
                         Figure 7: The Original Global Promotion




The new look and language formed the beginnings of our brand
personality. We set out to own Subs.




                                                                   Figure 8: New SUB OF THE DAy®
                                                                   brand identity, using core colour
                                                                   and elements from the Subway logo;
                                                                   e.g. the arrow.




In January 2006 we didn’t have budgets for new creative, we adapted the US
‘Wallet’ TV advert. Such was the success, by May 2006 we could create our
own UK specific advertising.


13
Our creative vehicle contrasted things you don’t want to witness with things
you do – such as watching your sandwiches being freshly made – presented
with a distinctively British tone of voice.

We used a TV mix of 30” brand adverts and 10” promotional SUB OF THE
DAy® ads with a full in-store campaign – leveraging brand appeal whilst
promoting the core accessibility of SUB OF THE DAy®. [see appendix one]

This new brand creative was carried through TV and radio to the full marketing
mix, used as efficiently as possible to maximise stand out with much lower
budgets than the competition.

In-store the new design better explained the Sub each day, using fresh new
photography.




Figure 9: Menu panels




1
Outdoor was too expensive, so we used store windows and sandwich boards to
get the message out on 600 high streets.




Store poster             Street posters




Window posters




1
Figure 10: Street Leafleting

                               Direct mail was out too. Instead, we
                               produced promotional flyers and staff
                               training packs, utilising staff from every
                               store to get the message on the street in
                               the hands of new customers.

                               Staff wore promotional T-shirts for the
                               first time, communicating via the very
                               person who took customers’ orders.




                               Figure 11: Staff T-shirts




1
Effective and efficient use of media
resources
We needed to be seen and create cut through.

Television was the natural communications channel. We adopted a non-
traditional retail strategy investing the bulk of budget into Sunday-Thursday
airtime.

The rationale was two fold:

1. Avoid the weekend clutter inherent in the category

2. Drive weekday lunchtime footfall

We identified the freshest channels and programmes that would position us
in the environments that reflected our customer’s mindset. Only programmes
that had an affinity with our “Demanding young People” were targeted:




         Figure 12: Matching customer programme affinity to media selection



A similar strategy for radio was also deployed.




17
To optimise investment across the year, we chose four key windows to promote
our message and utilised the full marketing mix:




Figure 13: Creative plan



The campaign was designed to kick-start the year by promoting the strong
value message through SUB OF THE DAy®. January was the ideal month to
launch – airtime is relatively cheap, viewing is high and our competitors were
traditionally, less active at that time of year. We couldn’t afford to dominate
the airwaves on a continuous basis so had to be smart with our budget and
identify clear windows of opportunity.




18
Results
The campaign was an immediate success. Same store sales during the initial
January 2006 rose by a phenomenal 17.% with a corresponding increase in
traffic of 1% (figure 14).

The fact that an existing offer which wasn’t delivering could be re-branded
and re-launched to generate these results proved it’s not just what you offer
customers but how you offer it to them.




                                                                          16% increase in store traffic and
                                                                          corresponding 17% sales growth
                                                                          indicates the pulling power of the
                                                                          price point in driving traffic but
                                                                          without eroding the value of the
                                                                          average transaction.




Figure 14: National AUV (Sales) and Traffic (Footfall) increases over the January 2006 campaign [Source: Subway]




19
This uplift in sales and traffic was not a short-term response. Both continued
to grow across the full calendar year, consistently out performing 2005
(Figures 15 & 16).




Figure 15: Traffic by Month, 2006 vs 2005. Subway UK. Source: Subway




Figure 16: Sales by Month, 2006 vs 2005. Subway UK. Source: Subway




     = advertising activity




0
Across the year, Subway achieved like for like sales growth of +9.8% and
footfall growth of +9.1% without eroding average spend. In comparison, like
for like sales at rival Gregg’s (including Bakers Oven) for the same period were
only +3.3%.5

Each campaign was tracked to ascertain its impact not only on sales and
footfall but also on brand awareness, advertising awareness and future
purchase intention. Throughout 2006, all metrics showed extremely positive
growth.




5. Source: Gregg’s Plc Annual Report 2006




1
Spontaneous brand awareness – over time
By the year end, spontaneous brand awareness almost doubled, reaching an
all time high of 39%– a 17% increase over delivering on our expectations
(Figure 17).




Figure 17: Spontaneous brand awareness. [Source BMRB Omnibus]
(Base: adults aged 15-50. Jan 06 = 1158 Mar 06 = 1078, Oct 06 = 1119, Jan 07 = 1124)





Spontaneous brand awareness –
vs competition
In addition, Subway (39%) had overtaken KfC (3%), even though we had
been significantly out-spent by them for years and were a comparative new
comer. Not surprisingly, after only one year we hadn’t quite caught up on
McDonald’s but our gain on BK was extremely promising.




Figure 18: Spontaneous brand awareness. [Source BMRB Omnibus]
(Base: adults aged 15-50. Jan 06 = 1158 Mar 06 = 1078, Oct 06 = 1119, Jan 07 = 1124)




3
Aided advertising awareness
Advertising awareness increased by % to 54%, overtaking KFC and
number two BK (Figure 19).




Figure 19: Aided advertising awareness. [Source BMRB Omnibus]
(Base: adults aged 15-50. Jan 06 = 1158 Mar 06 = 1078, Oct 06 = 1119, Jan 07 = 1124)





Future Purchase Intention
After each wave of advertising future purchase intention increased, by a
total of 10% over the year. We even over-took Burger King by 9% (Figure 20).




 Figure 20: Future Purchase Intention. [Source BMRB Omnibus]
 (Base: adults aged 15-50. Jan 06 = 1158 Mar 06 = 1078, Oct 06 = 1119, Jan 07 = 1124)





SUB OF THE DAY® recognition
Recognition of ‘SUB OF THE DAy®’ was %. Over half the population knew of
it (and were frequently buying).6




The category number
one follows suit
A worry, but also a huge indication
of the successful innovation of SUB
OF THE DAy® - six months into our
campaign McDonald’s re-branded their
Deli Sandwich as ‘£1.99 Deli of the
Day’, using a new fresher look and feel
also similar to Subway.


6. Source: BMRB Omnibus                   Figure 21: McDonald’s Deli of the Day. Source: Xtreme





Global Subway accolade

                    “The success has been nothing short of remarkable.
                     Given the legacy of the previous Daily Special, no
                     one could have forecast the impact the integrated
                     SUB OF THE DAy® promotion would have. It’s
                     made everyone here and in the US sit up and take
                     notice.” Deirdre Anderson, UK National Board Chair




Subway UK had the third highest average weekly sales of over 85 countries in
the Subway chain.

The UK had the highest unaided brand awareness and second highest
profitability than any other Subway market in the world.7

The success of SUB OF THE DAy® was, in fact, so remarkable, founder Fred
DeLuca announced it would become the global Subway standard to replace
the ‘Daily Special’.




7. Source: Subway




7
Beyond reasonable doubt – Econometric
modelling
To ensure we were providing a positive return on investment and not negatively
impacting on the bottom line, we undertook econometric modelling in two of
the bigger macro regions – Carlton and the North which together account for
some 40% of total Subway sales.




Figure 22: Campaign Sales Uplift. Source: MediaCom




Figure 22: Campaign Return on Investment. Source: MediaCom



The figures illustrate the positive return on investment achieved for all TV
campaigns conducted in 2006 - an ongoing indication that we ‘re on the right
track to continue delivering profitable growth.

Given how the rest of the country went on to behave in terms of sales, traffic and
tracking, we can confidently extrapolate this return across the whole country.


8
Discounting other possible effects
Was it the store environment?
No. The store environments hadn’t changed.

Was it the counter staff?
No. Mystery shopper results didn’t significantly change.

Was it the price offer?
No. The ‘Daily Special’ was already £1.99.

Did the product improve or the menu change?
No. Subway ingredients weren’t changed. The same Subs were offered on the
same days of the week as the ‘Daily Special’.

Was the increase due to more store openings?
No. All results given are based on same store data as 2005.

Was the impact short term?
No. The promotion rolled out nationally and continues to be successful in
2008. SUB OF THE DAy® currently accounts for an average 20% of sales.

Was it the website?
No, this didn’t change.

Was it due to increased share of voice?
No, Subway is considerably outspent.




9
Conclusion
Subway is franchisee owned - there are no publicly announced profit or
investor results. Our evidence the new brand campaign was effective?

• The pre-existence of the ‘Daily Special’

• Sales +9.8%

• Brand awareness +17%

• Purchase intention +10%

• Regional econometrics – positive sales uplift and return on
  investment growth (proving it was the promotional campaign)

• The scale of results compared to competitors with much larger budgets

• The global Subway adoption of our strategy

We believe the brand success was down to the successful re-positioning
and UK re-branding of the ‘Daily Special’ and the full integration of the new
campaign. a campaign that went on to deliver unprecedented national
results, over-delivering on all of Subway’s objectives.




30
Appendix One - SUB OF THE DAY® Creative

1 -20” TV advert – Wallet




31
2 –30” TV advert – First Date




3
3 –10” TV advert – Delicious




We open in customers being served in a Subway Store.          The Sub of the Day logo animates over a fly over of 6”
                                                              Subs.
Male VO: You can enjoy a delicious Sub of the Day at Subway
stores for just £1.99                                         Male VO: Freshly made, right in front of you, just the
                                                              way you want it.




We cut to the end frame.

Male VO: Subway Eat Fresh




33
4 – 30” TV advert – Shark




Open on a boat out at sea, We see a sign that reads “Carlos        Unperturbed, the boat guy bends the bars back into
and Pedro’s Shark Tours”.                                          shape. A little too easily.
Two guys seem to be running the boat. Neither of them appear
to be experts.                                                     MVO: There are some things you just don’t want to see

One of the boat guys is kitting a tourist out in his wetsuit and   …and some things you do.
scuba gear, as his girlfriend looks on. The other boat guy
winches the shark cage into view.

We see a look of concern on the tourist’s face. Then we cut to
the cage. It’s been battered out of shape, and there’s a gaping
hole in it.




Cut to a see a timelapse sequence of four different Subs           Cut back to the boat. The tourist is in the cage. We
rising and baking. We then see delicious close ups of a            holding onto the bars. suspended above the water.
Sub being cut open and prepared.                                   The bottom falls off the cage into the ocean, leaving
                                                                   the tourist hanging on inside. We cut to his horrified
MVO: Like the delicious Subs at Subway stores. You                 expression.
know they’re fresh ‘cause you see them made right in front
of you - on bread that’s baked fresh right through the day.        We cut to the logo and hear the voice over:

                                                                   SUPER: SUBWAY. EAT FRESH.




3
5 – 10” TV advert – Coke




Open on a close up of a Sub sitting on a napkin on the edge of      Cut to a tanned male hand plunging into a pile of ice to
a boat out at sea. It’s sunny. The Sub looks delicious.             retrieve one of the bottles of Coke Zero.

The camera pulls back a little so we can see a cooler box sitting
close to it. The lid is slightly open. We see it’s full of ice. A
number of 500ml bottles of Coke Zero are in the ice.




VO: Right now at Subway, get a delicious six inch Sub of
the Day – made fresh in front of you – and an ice-cold              Cut to a cold, wet, refreshing bottle of Coke Zero
Coke Zero for just £2.49.                                           placed next to the Sub.
                                                                    SUPER: Sub of the day + Coca-Cola Zero. £2.49




3
6 –30” Radio Advert – you Can




7 –30” Radio Advert – Rags to Riches




3
Title:    Slide show SOTD                                Clock no:      [Clock no.]

Job no:   101635


7 –30” Radio Advert – Slideshow

SFX:           A Mum is showin g slid es to h e r so n’s n ew girlf rie n d . Be tw e e n e v e r y
               line sp o k e n b y th e Mu m, we h ear th e click and whir r o f th e h o p p e r
               loadin g u p ano th e r slid e.

MUM:           T his is Nig el, in his first sch o ol unif o r m.

SON:           Mu m, I’m sur e Lin da d o e sn’t want t o se e all th ese …

MUM:           And t his is him o n h is lit tle t ricycle.

SON:           You mig h t p u t h e r o f f m e already … ? (He laughs, n e r v o usly)

GI RL:         O o h, cu t e ….

MUM:           And t his is him in t h e bath. Aw, lo o k.

GI RL:         Er …. O h

SFX:           Sh oc k e d silenc e

ANNCR:         T h e r e ar e so m e t hin gs y o u just d o n’ t want t o se e

               …and so m e t hin gs y o u d o. Lik e t h e d elicious Su bs at S UBWAY®
               st o r e s; you k n ow t h e y’r e f r e sh ‘cause y o u se e t h e m mad e rig h t in
               f r o n t o f y o u.

               And y o u can enjo y a dif f e r e n t r e g ular six inch Su b o f t h e Day –
               e v e r y day – f o r just £1.99.

GI RL:         So t hat o n e was tak e n …?

MUM:           Last Su m m e r in F rance.

GI RL:         R ig h t.




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