RETAIL MIX

Pricing Strategies Retail Mix: SubwaYAssignment: "Retail Mix of your franchisee store with an emphasis on pricing. Also chart the retail mix strategy of the store 5 years from now"

Presented by: Group 2retail Market strategy

The retail mix is a set of decisions retailers make to satisfy customer needs and influence their purchase decisions.Elements in the retail mix includes:the types of merchandise and services offeredmerchandise pricingadvertising and promotional programsstore designmerchandise displayassistance to customers provided by salespeopleconvenience of the stores locationRetail Mix

Subway: An Introduction

Subway (stylized as SUBWAY) is an American fast food restaurant franchise that primarily sells submarine sandwiches (subs) and salads, started in 1965 in the US.Qwned and operated by Doctor's AssociatesMore than 43,000 stores in 110 countriesCompetitors include McDonalds, KFC, Dunkin DonutsSlogan: Eat FreshEntered India in 2002: First restaurant opened in Mumbai, followed by Bangalore, Chennai, Hyderabad492 stores in India as of 20144 only-vegetarian stores in India, introduced sub offerings that match local tasteRetail Mix: Subway

Since the operation of a subway restaurant needs less space (as compared to say McDonalds), it can be opened even in at a petrol pump or a car dealership.Since Subway offers higher customization in terms of the final product (as compared to KFC or McD), it leverages this advantage to the young clientele who like to have a different flavour every time.Forecasting: By taking past 3 years data and comparing it with past 3 weeks data. Orders are given for 7 days worth of materials needed and an additional 3 days as bufferSourcing & Vendor Relations: Vegetable vendors are whole-sellers, for other materials different vendors in different parts of India, all purchasing is done centrallyAssortment:: Veg/ Non-veg subs, salads, cookies, beverages, toasties,Presentation: Two bays: one non-veg and the other veg with billing counter in the center.. The layout allows a sequential flow from ordering, making of the sub to billingAtmospherics: Color: green and brown- healthy/hygienic food. Lighting: White light which is uniform throughout the store. Music: No particular genre which is played.Value Pricing: price points start from Rs. 100 for subsBundling pricing: combo with beverage/ cookieInternal: company policies such as performance linked pay, activities and internal branding such as employee of the monthExternal: Advertising (TV, magazines, hoardings, pamphlets, ads on cabs, e-mails) Sales promotion, Social media engagementInteractive: Customization of subs, online ordering, home deliveryOthers: 4 only -veg storesValue Pricing:Subway tries to create value products by service in terms of quality, ambience, variety, and convenience. By introducing the concept of sub of the day the company tries to satisfy the needs of its present customers by creating a sense of curiosity amongst in the sense they would want to know what sandwich is the sub of the day.Bundling Strategies:Subway offers combo offers of a sandwich, potato chips/cookie and a drink at only Rs. 45 extra for a medium size meal and Rs. 50 for a large size meal.Promotional Pricing:To increase its current consumers base and also to attract new customers, Subway goes for promotional pricing quite often. Subway has come up with new campaign where with any 6 inch sub and a medium beverage the company is offering another 6 inch sub for free. In September 2011, Subway had introduced a buy one get one free offer on Mondays. Subway Pricing Strategies

Subway Financial Strategies (India)

Financial ObjectivesHigher Number of bills Higher Billing AmountTargetsPricingRoyaltyMonthly, weekly & daily targets are allottedIn terms of Sales and COGS (Max 35% of sales)Varies across cities, purely as a function of logisticsAvg. monthly prices are paid to vendors for veg8% of revenues is paid as royalty fee4.5% is allocated to marketing fundsFRANCHISING: Opening a new Subway restaurant needs less expenditure as compared to its competitors. This advantage can be leveraged in maintaining its competitive advantage in pricing.RETAIL MIX strategy going forward

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