Agency: Wieden & Kennedy London
By Gemma Charles, marketingmagazine.co.uk, Friday, 27 January 2012 12:30PM
It was last March that the news broke that Subway had toppled McDonald's to become the biggest restaurant chain in the world by number of outlets.
The story - that Subway had 33,749 stores to McDonald's 32,737 - was lapped up by the media, eager to recount how the sandwich chain had overtaken the burger behemoth. While Subway's sales still lag behind McDonald's, the achievement nevertheless holds enormous significance for the business, which was launched by teenage entrepreneur Fred DeLuca in Connecticut, US, in 1965, as a way for him to fund his studies at medical school. Subway, which is privately owned, still retains a link to its origins; the holding company is called Doctor's Associates.
The figures emerged just a week before Manaaz Akhtar joined Subway from rival Burger King as UK head of marketing.
'It was a really good way to enter a new role,' she says. 'I felt positive and proud to see that I was joining a business that's growing, particularly in these difficult economic times.'
Subway made its UK debut in Brighton in 1996, and now the UK and Ireland area is its biggest European market.
A pre-recession plan to reach '2010 stores by 2010' made for a snappy sound bite but died a death once the financial crisis of 2008 took its toll.
Expansion was continued, however, albeit at a slower pace than first envisaged, and three years ago Subway eclipsed McDonald's in terms of stores in the UK and Ireland. Today, it remains ahead by about 200, with a portfolio of 1526 outlets.
In the past year, Subway has made public its plan to grow through non-traditional development, within sites such as cinemas, hotels, convenience stores and railway stations. Indeed, the flexibility of its store format and the minimal space required to open a branch have already enabled them to spring up in bizarre places, from a Baptist Church in the US to a riverboat in Germany. In the UK, it has 150 such stores, with plans to treble that number.
In the long term, the company claims that the sky is the limit. Akhtar's boss, area development manager Trevor Haynes, who runs the UK business, has predicted the chain could double in size over the next 20 to 30 years. It seems an achievable ambition, entailing the chain opening up to 70 stores a year.
Last year in an interview with a national newspaper, Haynes illustrated his belief in the potential for further growth by pointing out that the UK has one store for every 45,000 people. In Canada, the equivalent figure is one for every 12,000.
Akhtar, though, shies away from describing Subway's strategy as an 'aggressive' growth plan, insisting that it is not purely a numbers game.
'Our ambition is to grow and look for quality stores and locations. It's not all about rapid expansion,' she contends.
The size of Subway's ever-growing store network is not, however, reflected in its ranks of marketers; Akhtar oversees a team of only five. While she may not have access to the people resources that go with holding an equivalent role at a brand such as McDonald's, this has in no way blunted her ambition to shake up Subway's marketing this year.
Akhtar's plan is to expand the customer base by shifting the activity to a focus on the platforms of health and value, no mean feat for a brand associated with calorific products such as its Italian BMT (Biggest, Meatiest, Tastiest) and Meatball Marinara.
'In the past, Subway has focused on the young male office worker and student consumer groups. But what we are looking to do with our new marketing programmes is to broaden the target and become more inclusive,' she says.
'We've been very much in the planning stages for the past six months, doing really "deep dive" analysis of the data. Now we have these two clear platforms for growth,' she adds.
A key strand of Subway's marketing activity around the health agenda is the sponsorship of the latest series of weight- loss reality TV show The Biggest Loser (see box, page 31). It also plans to run a series of educational ads in women's magazines for the first time to highlight that there is more to the brand than foot-long subs filled with meat and cheese. These will break in April.
In another development that may appeal to consumers still struggling to keep their diet-related resolutions, from next month, Subway's menu boards will carry calorie information in line with its Department of Health 'responsibility deal' pledge.
Akhtar denies there is a danger that all this talk of health could alienate the brand's traditional customer base. 'Of course we've got more indulgent products and there are customers who love that, and we have no plans to remove them from the menu, but I guess, in the past, we have heavily communicated those types of products while not communicating the other great stuff we do.'
Work on the value side of the offering is already under way. In October, Akhtar oversaw the roll-out of the '£3 lunch', which allows consumers to have one of nine six-inch subs and a medium drink.
She declines to provide sales figures but says the promotion has generated double-digit growth in some parts of the country.
Its importance to Subway's fortunes should not be underestimated. Akhtar goes so far as to suggest that the business 'wouldn't be faring well at all' had it not been for the £3 deal. 'It's great in terms of responding to consumer need but it's great that we are seeing some strong numbers coming through,' she adds.
Akhtar, who controls a media budget of about £8m, eschewed TV to promote the £3 lunch, preferring a mix of outdoor, radio and digital instead. While a wholesale move away from TV is not on the cards, she says: 'I've been really looking at the budget and the way it's been spent and I do want to put more focus on different types of media.'
Most marketers these days rave about experimenting with social media, but the medium Akhtar highlights is outdoor. 'We want to drive that impulse eat,' she explains. 'When people are thinking about food and are hungry, a poster is there, making us top-of-mind.'
As Subway is a completely franchised business, core to its communications plan is the need to reach its retailers, as well as consumers. Part of Akhtar's job involves selling her marketing plans to franchisees, of which there are about 800.
Quarterly national franchisee board meetings are attended by her team and agencies, including McCann Erickson, which holds Subway's above-the-line account, and WCRS, which oversees social media for the chain. The national board members feed information down to regional boards, which communicate with the individual franchisees.
Akhtar says the process is vital to making sure her work cuts through. 'There's no point us spending money on these programmes and campaigns if it hasn't been communicated clearly to the store manager. It could all fall down at that point,' she adds.
Subway puts 4.5% of sales revenue into a central marketing pot, so franchisees have a keen interest in how their hard-earned takings are being spent. They are renowned for being a demanding bunch, but Akhtar appears unfazed by the added layer of scrutiny.
'My role is to make sure we give out the facts and data. Everyone will have an opinion on how something looks but I always try to draw that back and say "leave it with us, we are accountable and responsible for it, we will make sure it looks good and works".'
While the formal channels are in place, when critical marketing activity arises, a more hands-on approach is adopted. For the launch of the £3 lunch, for example, the marketing function created a video and made direct calls to franchisees.
Although the UK marketing team operates independently of the US, Akhtar has made use of the body of knowledge across the pond - Subway has pushed the health angle in the US for many years. The sharing of good practice is not a one-way street, however. Subway bosses around the world are eager to hear more about the Subcard loyalty scheme, which launched in the UK 18 months ago and already has 5m users.
Akhtar describes it as a 'great asset' and says it has wider strategic importance to the business as 'one-to-one' marketing has been earmarked as a growth area by those at the top of the global operations.
'Subcard allows us to look at the consumer profiles and see what they are buying. We've got so much data, which can help us become more relevant and more engaging. (Subcard holders) love Subway, so starting to tap into what they like and getting that relationship strong is so important.'
While Subway's expansion plan and overtaking of McDonald's took the headlines in 2011, under the stewardship of Akhtar, this could be the year that its marketing output makes the move to centre-stage.
1526 stores in the UK
3000 extra jobs to be created by 2016 due to expansion
2m Number of subs sold every week
- Marketing assistant, Total (1999-2002)
- Assistant brand manager, rising to senior brand manager, Pizza Hut (2002-2005)
- Product marketing manager, rising to senior marketing manager, Burger King (2005-2010)
- UK head of marketing, Subway (2011 to present)
Grew up: Watford.'It's a good base for commuting to London and all around the country.'
Hobbies: Loves to travel. 'The last place I went to was New Zealand last year,' says Akhtar.
She is also running the London Marathon this year on behalf of Subway's charity partner, Heart Research UK.
Favourite brand: Virgin Atlantic. 'It has kept the brand current and sexy in advertising while continuing to deliver high-class service'.
- Marketing a health message without alienating Subway's core male consumers
- Working with franchisees feeling the pinch due to rising commodity costs and a weak high-street
- Ensuring Subway's marketing stands out against rivals with bigger budgets, such as McDonald's
For the second year running, Subway is sponsoring ITV1's reality weight-loss show The Biggest Loser.
The deal is aimed at promoting the chain's health credentials and showcases its nine low-fat subs and salads through a series of idents.
The US version of The Biggest Loser is also sponsored by Subway, but due to more liberal product placement laws, contestants eat Subway products as part of their calorie-controlled diets.
To further support the association, Subway will be promoting the sponsorship through Subcard communications, Facebook, Twitter, PR and its website.
This article was first published on marketingmagazine.co.uk
Agency: Wieden & Kennedy London