Stuart Frankel's story about how he transformed Subway from two small stores in Miami to 32,000 outlets worldwide is very interesting and based upon the famous $5 foot long. This could very well be the idea for a chain restaurant in a long time. The $5 foot long has been around for several years now and it doesn't seem to be any need to change anything because it still appeals to consumers based on the statistics. Just from the $5 foot long alone Subway rakes in $3.8 billion in sales every year. Frankel thought this was just going to be a short term gimmick until lines were continuously out the door and turned into a national phenomenon. American's seem to just like the whole number 5 for a 12 inch sub. The idea was based upon a healthy alternatives for other fast food chains and you could eat one half of the sub and save the other for later or share with someone else which is something you cannot do with other popular items like the Big Mac. What surprised me the most was that Frankel's profit margins never declines. You would think that with all the production and food cost that are necessary to produce a mass amount of sandwich's that some profits would be lost at first, but that never happened because of the high demand right from the start. He never lost any money on a $5 dollar foot long. Everything seemed to fall right into place with how Subway's business was run as far as marketing and the company as a whole. It started up when the need for a fast healthier alternative was rising and a Subway customer Jared lost 250 pound by eating Subways subs everyday and he eventually became the face of the franchise. People saw how much weight he lost and jumped on the bandwagon. The catchy $5 dollar foot long song also made it popular because it stuck into people's head and often times the people in the commercials were athletes making people think that they got into shape by eating there favorite sandwich. Some people think that Subway is "riding the pony" on the $5 foot long to long, but why would they change something that has about $4 billion in sales every year? What other ideas do you think subway could come up with that would be successful?
Monday, April 4, 2011
Subways $5 Footlong
Stuart Frankel's story about how he transformed Subway from two small stores in Miami to 32,000 outlets worldwide is very interesting and based upon the famous $5 foot long. This could very well be the idea for a chain restaurant in a long time. The $5 foot long has been around for several years now and it doesn't seem to be any need to change anything because it still appeals to consumers based on the statistics. Just from the $5 foot long alone Subway rakes in $3.8 billion in sales every year. Frankel thought this was just going to be a short term gimmick until lines were continuously out the door and turned into a national phenomenon. American's seem to just like the whole number 5 for a 12 inch sub. The idea was based upon a healthy alternatives for other fast food chains and you could eat one half of the sub and save the other for later or share with someone else which is something you cannot do with other popular items like the Big Mac. What surprised me the most was that Frankel's profit margins never declines. You would think that with all the production and food cost that are necessary to produce a mass amount of sandwich's that some profits would be lost at first, but that never happened because of the high demand right from the start. He never lost any money on a $5 dollar foot long. Everything seemed to fall right into place with how Subway's business was run as far as marketing and the company as a whole. It started up when the need for a fast healthier alternative was rising and a Subway customer Jared lost 250 pound by eating Subways subs everyday and he eventually became the face of the franchise. People saw how much weight he lost and jumped on the bandwagon. The catchy $5 dollar foot long song also made it popular because it stuck into people's head and often times the people in the commercials were athletes making people think that they got into shape by eating there favorite sandwich. Some people think that Subway is "riding the pony" on the $5 foot long to long, but why would they change something that has about $4 billion in sales every year? What other ideas do you think subway could come up with that would be successful?
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