SUBWAY MARKETING

Team members:
5. Trương Gia Huy (leader) s3438408
Đoàn Khánh Linh (member) s3426374
ANALYSIS
Cù Huy Thiện
Trần Hương Giang
(member)
(member)
s3445990
s3410289
Chương Quốc Đoan (member) s3425551
1.
2. Course: MKTG 2105 - Marketing Principles
3. Tutor: Ms Jis Kuruvilla
4. Time: Thursday 9h- 10h30 Group 1
Doctor’s Associates, Inc. (DAI) Subway Marketing Analysis

Table of Content
Executive Summary.................................................................................................................................. 3
1. Introduction......................................................................................................................................... 4
2. Situation Analysis........................................................................................................................... 4
1. About Subway.......................................................................................................................................... 4
2. Products Description............................................................................................................................ 4
3. Marketing Environment.......................................................................................................... 5
1. Micro environment......................................................................................................................... 5
1.1 Company.................................................................................................................................................... 5
1.2 Marketing Intermediaries.................................................................................................................. 5
1.3 Customers................................................................................................................................................. 5
1.4 Competitors.............................................................................................................................................. 6
a. Direct Competitors................................................................................................................................ 6
b. Substitutes Competitors.................................................................................................................................. 6
2. Macro environment............................................................................................................................ 6
2.1 Demographic Environment................................................................................................................ 6
2.2 Economic Environment....................................................................................................................... 7
2.3 Technological Environment............................................................................................................... 7
2.4 Political Environment........................................................................................................................... 7
2.5 Cultural Environment........................................................................................................................... 7
3. SWOT Analysis.................................................................................................................................. 8
4. STDP............................................................................................................................................................. 9
1. Segmentation........................................................................................................................................... 9
2. Targeting................................................................................................................................................. 10
3. Differentiation...................................................................................................................................... 10
4. Positioning............................................................................................................................................. 11
a. Positioning map................................................................................................................................................ 11
b. Value Proposition............................................................................................................................................ 12
c. Positioning Statement.................................................................................................................................... 13
5. Conclusion........................................................................................................................................... 13
Appendix A...................................................................................................................................................... 14
Appendix B...................................................................................................................................................... 15
Appendix C....................................................................................................................................................... 15
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Doctor’s Associates, Inc. (DAI) Subway Marketing Analysis

Reference.......................................................................................................................................................... 16

Executive Summary

The modern and busy life style in Viet Nam has led to a huge expansion in fast food industry.
According to data from Vinaresearch, up to 73% of the surveyed people consumed fast food in the
last 3 month with the frequently of 2-3 times a month. Seeing the high demand for fast food,
Subway has expanded its business in Viet Nam with 4 restaurants in Ho Chi Minh City. With its
slogan: “Eat Fresh”, Subway provides customers with fresh and healthy sandwich, which content
more fiber and less salt than other fast food products. The company offers fast walk-in serving to
minimize the space of the restaurant and customers waiting time. In term of business operation,
Subway has been influenced by both Micro and Macro factors, which can bring many attractive
business opportunities as well as complex and hard to solved problems. Since entered Viet Nam,
Subway has chosen to focus on individual customers like students and officers in large cities like
Ho Chi Minh City. Thanks to the strong image of healthy fast food, Subway can easily penetrate to
Viet Nam market thought franchisee system.

In the other side, relatively small restaurant chain, lack of advertisement, inflexible and narrow
menu has result in the low sales revenue and lack of customers’ awareness. The high pricing
strategy has lowered the competitiveness of Subway over its competitors like Banh Mi, KFC,
Lotteria.

In order to increase business efficiency in Viet Nam, Subway should:

- Expand the selling channel by open more restaurant
- More focus on advertising through mass media and social network channel to reach young
customers
- Widen customer segment and increase competitiveness by offer cheap and low price
products/ combos
- Keeping Western flavor to reinforce its differences with domestic fast food.
In the next 12 month, Subway aim to:
- Raise more awareness from Vietnamese customers
- Increase the revenue and market share in fast food market
- Open new restaurant to wider its coverage
- Reach to more customer segment
- Introduce new western flavor like Avocado, Shrimp, turkey…
- Introduce cheaper products/ combos to increase competitiveness
- Run workshop about eating healthy and conserve the environment

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 Doctor’s Associates, Inc. (DAI) Subway Marketing Analysis

1. Introduction
Busy lifestyles together with the penetration of Western culture have changed how people enjoy their meal.
Cheap, convenient and time saving fast foods of the West have become familiar with people around the world.
This has encouraged more people to consume fast food as their daily diet. However, the rapid increase in
obesity and the raising concern about animal right have resulted in more people saying no to fast food. Taking
advantage of this situation, Subway has introduced a new trend: healthy and good nutrition fast food. Since
the establishment in 1965, Subway has provided customer with fiber rich and less salt sandwich products.
Controlling over 25.1% shares of value in the US, Subway is the second fast food branch with the revenue of
US$11,400 million in 2011 (qsrmagazine 2012, Euromonitor 2011). In addition, Subway has the largest
franchise system with over 2500 outlets around the world (qsrmagazine 2012). Recently, Subway has joined
the lucrative fast food market of Vietnam with 4 restaurants in Ho Chi Minh City.

Since entering into the Vietnam market in 2011, Subway has encountered many obstacles. The company has
to make a lot of effort to get the products to customer since it was new to Vietnamese people. Also, changing
the eating habit of Vietnamese people and coping with the government policy were other challenges for
Subway in order to success in this new market.

To understand more about this situation, this marketing plan will create an insightful look of Subway in
Vietnam market. This included the analysis of the environmental factors that may affect Subway sales, the
examination of product’s strengths, weaknesses, threats and opportunities. Moreover, this plan will provide
some possible recommendations as well as plausible solutions in order to increase business performance of
Subway.

2. Situation Analysis
1. About Subway

Subway is one of the biggest and strongest fast food brands in the world today. Fred DeLuca and Peter Buck
founded subway in 28th August 1965 in the United State with the initial capital just only $1,000
(Subway,2013). Based on the original shape of the bread as a submarine, the company was called “Submarine
bread store” before being changed into Subway in 1968 (Highnames, 2013). After periods of continuous
innovations, Subway had developed until 1988; this company had 1,800 stores in all United States as well as
many stores outside the country (Subway 2013).

Subway spread worldwide in the form of franchise which was the key factor leading to its international
success (appendix about the fastest growing franchise in the world). In fact, until now, there are
approximately 40,000 Subway stores in 102 countries all over the globe. The first Subway store is brought to
Ho Chi Minh City by the franchisee IFB Holdings Ltd at the end of 2010 (Sylvain Ha). Since then, Subway
has opened four stores in Ho Chi Minh City including the newest one which was just opened in June 2013 at
RMIT international university campus.

2. Products Description

It has been nearly three years since Subway appeared in Ho Chi Minh City (Thanhniennews, 2013). When
entering Vietnamese market, Subway keeps following the franchise agreements, therefore, almost the unique
characteristics of Subway bread are remained the same. Following the
“Eat Fresh” famous slogan, Subway provides customers the fresh menu
with daily produced ingredients. Submarine sandwich, which is usually
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 Doctor’s Associates, Inc. (DAI) Subway Marketing Analysis

called subs, is still the Subway’s core product along with salads and other baked cookies and doughnuts.
Besides the worldwide signature subs such as Italian B.M.T, Roasted Chicken, Subway Club…, Subway
provides more options for Ho Chi Minh citizens such as Slide Chicken and so on. The unique ordering
method of Subway is kept unchanged. Customers can design their own subs by choosing size of bread and the
inside ingredients such as meat, sauce, vegetable. Unlike other fast food, Subway bread is not greasy and does
not contain calories those that can be harmful for health. Therefore, Subway bread is considered as healthy in
some extent.

3. Marketing Environment
1. Micro environment

Image credit: Kotler et al, 2009

1.1 Company

Through more than 45 years working in fast-food industry, Subway has been successfully created a strong
image about a fast delivery service and healthy food. In August 2010, Subway started to enter Vietnam
market, as Fred DeLuca believed that Vietnam could be a potential market. Furthermore, with a good
reputation, which has been created for many years, Subway can reduce the cost of branding but still attract
customers.
As highly committing to the satisfaction of customers about their foods and services, Subway does its best in
each process from developing the product in R&D department to the selling their subs sandwich in store for
customers. For instance, R&D are testing a recipe of gluten-free bread in Dallas market and planning to
spread that innovation to all Subway restaurants in the world. Moreover, before entering Ho Chi Minh City,
Subway R&D researched carefully about Vietnamese taste in order to adjust the menu, which is most
suitable for Vietnamese people. These developments show Subway’s eager attempt to provide customers the
best quality food.

1.2 Marketing Intermediaries

According to Fred Deluca, at first, Subway planned to import some ingredients (FBNC 2011). However, in
long run, they need to use the available resources in Vietnam in order to reduce the production cost as well as
generate more profit.

1.3 Customers

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 Doctor’s Associates, Inc. (DAI) Subway Marketing Analysis

In Vietnam, Subway is focusing on selling for individual as its eager target is satisfying every customer. Since
Subway is still new and accounts for a small proportion of the total market share, its main customer is
individual and do not have special services such as birthday party or events.

1.4 Competitors
a. Direct Competitors

Vietnamese bread, which is called “Banh Mi” is not so far different from Subway subs. “Banh Mi” is a
Vietnamese traditional street food which is one of the most delicious street foods in the world according to
National Geographic. It has ham, eggs, pepper, pickle, roasted pork, varied kinds of sauces and many other
different ingredients depending on different areas. Regarding Vietnamese people perspective, “Banh Mi” is a
cheap, street food and regular food; they can find it anywhere at any time on the streets or in bread stores such
as Duc Phat, Kinh Do or even in many fancy restaurants. Vietnamese people eat “Banh Mi” for breakfast,
lunch and even dinner, as it is convenient and affordable. To some extent, Subway products also have some
similarities to “Banh Mi” as these subs are mainly combinations of meat (pork, beef or chicken), vegetables
(pickle, pepper, spinach) and sauces.

Therefore, Vietnamese people can easily accept Subway. However, one big disadvantage of Subway is its
much higher price compared to Vietnamese general food price. A sub in Subway is sold from about
45,000VND to 95,000VND; this is quite expensive for a regular food while the most expensive “banh mi” can
be around 30,000VND and usually under 20,000VND. For example, in Duc Phat or Kinh Do, their “banh mi”
is sold for 15,000VND and in Highlands coffee, one combo, before 9 am, including one “banh mi” and one
coffee is 49,000VND. At first, customers can go to Subway to try new foods and new style of serving but
with this much higher price, they might not consider Subway as a daily meal.

b. Substitutes Competitors

 FC, LOTTERIA, Jollibee and Burger King: except Burger King,

other three brands have penetrated Vietnam market for around 20
years so their market shares are bigger than Subway’s. Selling
different kinds of products helps them target different market
segments and satisfy customers’ needs. However, Vietnamese
people might be too familiar with these foods so they are excited to
try new fast food, which are subs from Subway. This can be a big
advantage for Subway.
 Pizza Hut and Domino Pizza: these two brands just entered
Vietnam market a few years ago and they initially introduced
“Pizza” to Vietnam market. This new fast food can easily get attention from customers. In present, they do not sell
only pizza but also many kinds of foods to compete with other fast food brands. Pizza Hut has some combos with
only 49,000VND with one small size pizza, one drink and one other dish. These combos are suitable for a meal as
the price is acceptable for middle class and above. Therefore, Pizza Hut can have a fixed amount of loyal
customers.

2. Macro environment
2.1 Demographic Environment

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 Doctor’s Associates, Inc. (DAI) Subway Marketing Analysis

With a median age of 28.7, Vietnam is considered as young country by The World Factbook (2013). The
bigger size of younger population provided a huge advantage for the growth of fast food in this market since
this group of target audience has a receptive mind, besides, they can easily adapt to new trend of fast and
processed food. Additionally, young adults are more likely to have high disposable income to satisfy their
personal interests such as trying new food.
Furthermore, Ho Chi Minh City, as the heart of Vietnamese economy, is well-known for its dynamic and busy
lifestyle. As time becomes an increasingly valuable resource with citizens here, the demand of fast meal also
becomes bigger in Ho Chi Minh City than in any other regions in Vietnam.

2.2 Economic Environment

According to World Bank (2011), Vietnam economy has grown sharply since the open trade policy
passed. From 2008 to 2012, the average Vietnamese GDP per capita creased nearly 50%. Over the
years, consumer’s spending patterns have also changed. More income resulted in higher spending in
essential products such as foods and beverage (New Zealand Trade and Enterprise, 2011). Hence, as a
premium fast food brand, Subway Vietnam can gain an advantage of this situation.

2.3 Technological Environment

The high percentage of population using Internet and mobile phone has created a huge potential for mass
advertising of Subway. According to Internet World Stats (2012), there was a significant increase in the
number of Vietnamese Internet users, from about 22,8 million users in 2009 to nearly 31 million users in
2012. Subway can promote their brand through pop-up website or fan page.

Moreover, online payments in Vietnam are growing rapidly as the security of online transaction is
trusted more and more. This can create a new potential selling channel for Subway Vietnam aside from
selling at the restaurant.

2.4 Political Environment

Vietnam has built up Foreign investment law, Intellectual property law and Commercial law in 2005. That
helped to establish a legal provision for franchise operation as well as encourage more international brand
coming to Vietnam. In addition, Food safety law in Vietnam has been stricter in recent years (Tuoitrenews,
2013). This enforcement makes Subway pay more attention when choosing their supplier together with
maintaining the high quality of food safety. Furthermore, Vietnam has become the 150th member of WTO
since January 2007; hence the country is more open to foreign goods and services (WTO, 2012). This means
many strong competitors in fast food industry can quickly and easily enter the market to compete with
Subway.

2.5 Cultural Environment

Vietnamese consumes rice as their primary food, which is different with the Westerners where people
consume wheat and cereal as main food. This makes it harder for Subway to promote their bread products to
Vietnamese consumer. However, a significant proportion of Vietnamese people eat fast food not for their
hungry (Vinaresearch, 2012). Therefore, apart from eating for their main meal, people can choose Subway to
satisfy their appetite demands.

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Doctor’s Associates, Inc. (DAI)
3. SWOT Analysis
Strength
 Subway is a
worldwide well-known
brand with a high reputation
(MailOnline, 2011). This
may help to gain
consumer’s initial
favoritism and willingness
to try Subway.
 The franchise form of
Subway helps it enter
Vietnamese market easily
(Brognaux and Pouchain
and Malhotra, 2011)
 Setting up in Ho Chi
Minh City in the form of
small store can reduce the
establishing cost and risk of
lost at the initial time.
 Subway allows
customers to design their
own sandwich step by step
with fresh ingredients that
helps Subway to
differentiate themselves.
Taste customization, which is
done carefully before actual
entering Vietnamese market
helps Subway satisfy more
local customers.
(Thegioimarketting, 2012 )
 Home delivery helps
Subway to reach more
customers when there are
only few stores in Ho Chi
Minh City.
 Take-away package is all
made from carton and paper
and are environment
friendly.
Weakness
 Subway
restaurants’ decoration
is too simple and not
attractive
(Strategicmanagementi
nsight, 2013)
 Small store restrict
the number of people
served at site.
 Only 4 outlets in
Ho Chi Minh City is
the huge advantage of
Subway to win the fast
food market.
 The price is much
higher than other
substitutes and
relatively high compare
to the average living
standard in Ho Chi
Minh City
(Nhuongquyenvietnam,
2013). Therefore, less
people can afford.
 Traditionally,
bread is considered as a
common fair price food
in Vietnam. With such
a premium price level
of bread, Subway is
facing difficulty in
reaching customers.
 Weak advertising
campaign makes
Subway to be new to
many Ho Chi Minh
City citizens.
 Only a part of
Subway menu offer
healthy food, others
still contain calories
and rich of salt.
(NaturallyIntense,
Subway Marketing Analysis
Opportunity Threat
 Fresh menu  In order to
offering compare to receive payback
greasy fast food which quickly, franchisee
already existed help sometimes distorts
Subway stay update the main menu to
with new trend of totally fix
healthy food. It also Vietnamese taste
helps Subway (Strategicmanageme
standout from the ntinsight, 2013). The
other fast food unique
restaurant. characteristics of
 Living standard Subway can be
and purchasing power destroyed.
of Ho Chi Minh  Subway has
citizens is increasing. fixed store locations,
That means the while “Banh mi”
number of people can (typical Vietnamese
afford Subway will bread) can be found
get increasing. anywhere with
 Vietnamese cheaper prices, that
people are now more can reduce Subway’s
familiar with fast segment.
food, therefore, more  Strong
opportunity for competitors in Ho
Subway to expand its Chi Minh City,
segment. which are Lotteria
 Ho Chi Minh city and KFC, sell their
is the most dynamic fast food at lower
city in Vietnam, more price.
modern compare to  In other
the traditional custom. countries, Subway
That also helps suffered from some
Subway increase the lawsuits about poor
number of customers. franchising
 There are lots of management
foreigners living and (Foxnews, 2013).
working in Ho Chi Their image when
Minh City. Those Subway came in
people could be Vietnam may be
Subway’s customers affected.
before and can  Vietnam has the
continuously be opening market
Subway’s customers policy which is the
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 Doctor’s Associates, Inc. (DAI)
2009)
4. STDP
1. Segmentation
DEMOGRAPHIC
TEENAGERS  Age: 15-23
 Gender: male and female
 Status: single
 Studying: high school,
college, university
 Family role:
 Living with family or
away from home but
still receiving financial
support
 Coming from middle
or upper class
 Income: the majority
amount of money comes
from parents, around 2-4
million per month
OFFICERS  Age 23-45
 Gender: both male and
female
 Either single or married
 Education: high school or
university
 Occupation: student,
white collar, freelancer…
 Income: relatively high,
around 10 millions per
month
 Social class: middle and
upper class
HOUSEWIVES  Age 30-55
 Married with children
 Gender: female
 Occupation: mostly stay
at home to take care of
family and kids.
 Income: Majority of their
income comes from the
husbands or interests from
money invested in bank,
approximately 10 millions
per month
Subway Marketing Analysis
in Ho Chi Minh City.
PSYCHOGRAPHIC
 Busy lifestyle
 Prefer convenient food such as
take away food and drink
 Modern, energetic, active and
sociable
 Love to eat out alone, with
family or friend.
 More up-to-dated with global
trend
 May not conscious with healthy
food and food safety
 Interested in international well-
known brand
 Using internet as their main tool
of communication
 Busy lifestyle
 Work at least 8 hours per day
 Modern, open-minded, active,
sociable, positive attitude
 Willing to spend more money
on foods
 Prefer take away foods
 Care about quality of food and
food safety
 Tech-savvy
 Spending most of their time to
do housework and take care of
kids
 Love to go shopping and try
new things such as food
 Be conscious about the price
but care more the quality
 Love discount, sale promotions
opportunity for more
strong competitors in
fast food industry to
come in the future.
BEHAVIORAL
 Occasion: 3 main daily
meals, going out with friends
 Benefit sought: looking
forward for a convenient,
quick meal as they have less
time
 User status: potential users,
regular users and first time
users
 Usage rate: light or medium,
around 1~3 times a week
 Occasions: 2 or more daily
meals
 Benefit sought: looking
forward a convenient, quick
meal as they don’t have
much time
 User status: potential users,
regular users
 Usage rate: light, medium
and heavy users, about 2~5
times a week
 Loyalty status: loyal
customers
 Occasion: special occasions
such as family outing,
weekend, birthday
 Benefit sought: looking for
new flavors, new tastes
 User status: non users and
first time users
 Usage rate: light, medium
users
 Loyalty status: Not loyal
because parents do not let
their kids eat out often, they
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 Doctor’s Associates, Inc. (DAI) Subway Marketing Analysis

 Social class: middle and think that home food is

upper class always the best which
contain high nutrition, best
quality and food safety
FOREIGNERS  Age 10-65  Miss hometown’s foods,  Benefit sought: looking for
 Gender: both male and western flavor Western flavor
female  Cannot eat Vietnamese foods  User status: first time users
 Visitors or employees in  Care much about quality and and regular users
HCMC food safety  Usage rate: medium, heavy
users (for those who stay in
Vietnam for a long time)
 Loyalty status: quite loyal

2. Targeting

Among those segmentations mentioned above, Subway mainly targets in teenagers and foreigners. In
fact, Subway has the strategic locations in Ho Chi Minh City to focus on these two groups of customer.
One restaurant is in Pham Ngu Lao Street where there are a lot of foreigners. Another restaurant is in
RMIT campus that is an international environment with many students and foreign teachers. The reason
why Subway chooses to focus on these segments was they are the most potential groups who can afford
for Subway. Foreigners are more familiar with Subway in their home countries will probably be
customers of Subway in Vietnam. They already get used to paying around 5 dollars which is about a
hundred Vietnam dong for a subs, therefore, such premium price of Subway in Vietnam do not affect
their consumption much. Besides, RMIT is an international university that is known as one of the most
expensive university in Vietnam, thus, those students coming from middle and upper class are able to pay
for a relatively high price for a meal at Subway. Moreover, with such a premium price compared to
others fast food, Subway is choosing concentrated marketing strategy, which is focusing on a small group
of customer with high income. Therefore, it loses a significant amount of customers who are more prices
conscious such as officers (Tintuconline).

Image credit: Kotler et al, 2009

3. Differentiation

The superior competitive advantage of Subway is the bread customization. Customers have chance to
design their own meal step by step, from the ingredients of bread to different meat, sauces and so on. In
fact, there are very few fast food restaurants in Ho Chi Minh City that allow customers to change the
elements in their products. Therefore, that is the strongest point which helps Subway to satisfy customers

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Doctor’s Associates, Inc. (DAI) Subway Marketing Analysis

with different taste and interest. With the flexible menu, Subway does not bind itself to the traditional
passive ordering method. People can experience the new way of ordering food which brings them more
fun as well as more interaction.

Customer is choosing her favorite elements to put in the sub. Image: Google Search 2013

 Product differentiation: Subway brings the fresh air to the fast food trend in Ho Chi Minh City
with new form and new customer’s experience of their products. With the fresh and less greasy
menu compare to fried chicken or greasy burger, Subway offers Ho Chi Minh City citizens new
kind of fast food which is fast but not harmful for their health.
 People differentiation: Subway tries to provide well-trained staff who can present a
professional appearance with customers. Food customization requires lots of interactive
communication between staffs and customers, therefore, staff’s professional behavior and
attitude is very important to win customer’s satisfaction. Thus, all Subway staff needs to pass
the initial training sessions.
 Image differentiation: Subway Ho Chi Minh City inherits the strong reputation of the success
of Subway all over the globe. Therefore, its existence in Ho Chi Minh City would attract many
people, especially the youth.

4. Positioning

a. Positioning map

Product Price of the Quality Image

cheapest
combo/product
“Banh mi” Healthy
(Vietnamese 10,000VND Food safety is
street food) not guarantee

Healthy
SUBWAY 50,000VND Food safety is
®
guarantee
Not healthy
Burger King 49,000VND Food safety is
guarantee

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Doctor’s Associates, Inc. (DAI) Subway Marketing Analysis

Not healthy
49,000VND Food safety is
Pizza Hut guarantee

Not healthy
74,000VND Food safety is
KFC guarantee

(Source from Nhuongquyenvietnam.com, 2013)

Nutrition Safety

Price

Price

 Comparing to direct competitor “Banh Mi”, the price of Subway is

much higher. This makes it hard to compete with “Banh Mi” because these two
products serve the same need. Furthermore, while Subway is famous for its fast serving, “Banh Mi”
also does not take any time longer to prepare and enjoy.
 Comparing to substitute competitors, Subway does not sell the same products like fried chicken or
pizza so it is not so competitive. However, other fast- food brands also sell many other foods beside
the main product; therefore, they can target more type of customers and favor as the same time they
can satisfy different needs. Subway, at this time, has not expanded its menu yet.

b. Value Proposition

Value proposition of Subway is “more for more”. Compare to other brands, Subway are not very
familiar with Vietnamese people like KFC, Loterria, which have been in Vietnam for many years.
However, nowadays, people start to realize the deleterious effect of fast food, especially hamburger
and fried chicken. Though, modern people still do not have time to prepare a healthy meal by
themselves. Subway with its slogan “eat fresh” and fast serving time can compete with other brands.

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Doctor’s Associates, Inc. (DAI) Subway Marketing Analysis

People will come to Subway to have healthy diet as well as fast serving time. Compare to the direct

competitor, Subway can compete by its high quality food and western food style.

c. Positioning Statement

To teenagers and foreigners who want to satisfy their modern eating habit; Subway Vietnam is a brand of
fast food that offers their customers such a great meal which is worth the price with fresh ingredients.
Moreover, with excellent customization menu, Subway is confident in satisfying even the most fastidious
customer.

5. Conclusion
In general, Subway is working well in some areas and but they also have troubles in its business. The
company has gained good reputation for many years, which help it enters Vietnam market easier by
taking advantage of the original company’s reputation under franchise method. Subway locates in district
1 and RMIT University where its target market concentrated; at the same time, Subway develops home
delivery service. In addition, Subway offers customer a chance to customize their food. The company
also changes their menu to adapt Vietnamese taste. All of these factors help Subway to get more
awareness from the customer and build up their brand in Vietnam.

On the other hand, Subway in Vietnam has some problems. The company has so far opened only 4 stores
in Ho Chi Minh City, and most of them locate in district 1. This distribution practice prevents Subway
from spreading its image wider. In addition, price of the products is relatively high compare to
Vietnamese average income. That’s why it targets only a small portion of market segments. In other
word, Subway’s main disadvantage is price. One more disadvantage is lack of advertising activities.
Subway has not focused on promoting its branch in Vietnam.

In the next year, Subway needs to gain more awareness from local customers by focusing on advertising
and expanding its menu. The company should place more focus on promoting their products by using
mass media and the Internet as well as social networking. Moreover, in order to target more segments,
Subway can expand its menu by offer more combos and products with lower price than current ones.
Besides doing this, Subway should keep its Western style to differentiate from direct competitor. Subway
can add more Western trend flavor such as Avocado. By doing these, Subway aims to increase its
competitiveness and expand its restaurant chain. Furthermore, Subway needs to enforce its reputation in

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Doctor’s Associates, Inc. (DAI) Subway Marketing Analysis

local area. All these solutions will create high profitability rate and help it further develop in Vietnam
competitive fast food market.

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Doctor’s Associates, Inc. (DAI) Subway Marketing Analysis

Appendix

Appendix A

Number of franchise units of Subway

26,000
24,000
22,000
20,000
18,000
16,000
Franchise units

14,000 US
International
12,000
10,000
8,000
6,000
4,000
2,000
0
2009 2011 2013

Year

(Source: Entrepreneur, 2013)

According to the 34th Annual Franchise 500 rate of the website “Entrepreneur”, Subway is
placed at the second spot for top 10 franchises for 2013. It has the largest franchise system with
more than 31,000 units all over the world (2013). From 2009 to 2013, Subway has changed its
number of international franchise units from 6,484 units to 10,607 units (Increased by 4,123
units).

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Doctor’s Associates, Inc. (DAI) Subway Marketing Analysis

Appendix B

Subway Stores list in Ho Chi Minh City

 121 Ho Tung Mau, District 1, Ho Chi Minh City, Vietnam,

Phone number: 39 1441 18

 39 Le Duan Street, District 1/ Shop No. Unit 9 Kumho Asian

Plaza, Ho Chi Minh City
Phone number 8 3822 4249

 171 Pham Ngu Lao, District 1 Ho Chi Minh City

Phone number 8 3836 4497

 702 Nguyen Van Linh Blvd.

Dist.7, Tan Phong Ward, Bldg 2, Ho Chi Minh City

Appendix C

Comparison of price between Subway and other fastfood

brands
80,000
70,000 74,000 74,000
60,000
50,000 58,000
40,000 49,000 49,000 50,000
PRICE (VND)

30,000
20,000 32,000 Price of cheapest combo (VND)
10,000
0
C ria e ut za ng ay
KF tt e l l ib a H piz Ki w
o zz r b
Lo J
Pi o'
s
rg
e Su
in Bu
m
Do

BRANDS

Source: Nhuongquyenvietnam.com

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Doctor’s Associates, Inc. (DAI) Subway Marketing Analysis

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Doctor’s Associates, Inc. (DAI) Subway Marketing Analysis

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