How Customer Satisfaction Increases Sales

HOW
CUSTOMER
SATISFACTION
INCREASES SALES
SUBWAY
The document establishes the customer satisfaction of the people towards this famous food chain and
evaluate how this factor has helped in improving sales.

Customer Satisfaction Increases Sales Page 1

HOW CUSTOMER SATISFACTION INCREASES SALES
SUBWAY

CONTENTS PAGE NO.
1. Introduction
1.1 Background of the Research 4
1.2 Purpose of Research 4
1.3 Research Method 4
1.4 Limitation of the study 4
2. Theoretical Framework
2.1 What is customer satisfaction 5
2.2 Relation between customer satisfaction and sales. 6
2.3 Measurement of Satisfaction 7
2.4 Models of Customer Satisfaction 7
3. Subway Model
3.1 History of the company 9
3.2 Strategies of Subway 10
3.3 Key competencies 10
3.4 Franchise Model 11
4. Food Chain Industry Model 11
5. Data Analysis
5.1 Research Methodology, Sampling and Analysis.13
5.2 Comparison of customer satisfaction and sales of subway 20
6. Findings &Recommendations21
7. Conclusion 21

TABLE PAGE NO.
1. Number and percentage of gender and respondents 12
2. Number and percentage of age and respondents 13
3. Number and percentage of income per annum 14
4. Number and Percentage on response for Frequency of visits 15
5. Number and Percentage on response for Quality 16
6. Number and Percentage on response for Delivery 17
7. Number and Percentage on response for social status 18
8. Number and Percentage on response for Parking Facilities 18


Figures PAGE NO.
1. Number and percentage of gender and respondents 12
2. Number and percentage of age and respondents 13
3. Number and percentage of income per annum 14
4. Number and Percentage on response for Frequency of visits 15
5. Number and Percentage on response for Quality 16
6. Number and Percentage on response for Delivery 17
7. Number and Percentage on response for social status 18


Satisfied customer is the best source of advertisement
- G.S. Alag

CHAPTER: 1: INTRODUCTION: Subway, the second largest food chain has been running
successfully since its inception in 1965. It positions itself in the third place in the industry in terms of
market share after McDonalds and KFC. With more than 30,000 outlets the company has a strong
customer base operating in about 88 countries as on 2008. Customers throng the outlets for their famous
Subs and have attracted people towards them with their slogan EAT FRESH.

1.1 Background of the Research: There are many factors which either influence or decrease the sales of
the company. In a food industry like Subway, customers form the major stakeholders and their
satisfaction is directly proportional to its sales. This paper attempts to determine how far customer
satisfaction helps in improving sales, without affecting the other variables. In addition, the paper tries
to identify the factors that help in increasing the customer satisfaction. This was found using the
customer satisfaction survey conducted with those who visit the shop. It also takes into account the
previous survey that was taken under similar lines. The theory adopts statistical methods including
Carl-Pearson co-efficient to arrive at the relation between these variables and conclusion is drawn
based on the correlation coefficients.
1.2 Purpose of the Research: Customer satisfaction becomes crucial factor in the wake of growing cut
throat competition wherein there is a continuous revision of prices and promotional schemes
introduced by McDonalds, KFC, and Burger King Etc. it becomes imperative for the company to hold
its customers back and continue to march forward in improving their market share. Hence a dire need
and purpose is felt for this research and know the minds of the customers and fulfill their demand and
win over customer loyalty.
1.3 Research Method: the paper use both Quantitative and Qualitative data; the number of customers
walking into the shop, the average amount they spend, the age group of people visiting and frequency
of visits are measured quantitatively; the opinion of customers on the ambience, service received in
store, what factors they see to be changed as compared to the competitors are measured in qualitative
terms. Statistical methods are used to quantify the variables.
1.4 Limitation of Study: the main limitation of the study is related to the geography covered in the
research. It aims to study the relation between the variables through survey taken with people only in
UK. But this is not generic to the entire company as the opinions and the types of customer vary
between countries. The second limitation pertains to the time period in which the survey is taken.
There might be more people of different age groups visiting the stores during holidays and might lead
to different ideas. Also, the credibility of the data provided by the people participated in the survey
cannot be measured, in case of wrong judgments the analysis might lead to misleading facts.


CHAPTER: 2: THEORITICAL FRAMEWORK: the framework covers a wide range of topics
including the meaning and relation of customer satisfaction and sales, how satisfaction can exactly be
measured and the models of customer satisfaction.
2.1 Customer Satisfaction Meaning: in simple terms Customer satisfaction is a measure of the extent
to which the product or the service meets the expectations of the customer. It is defined as Customer
satisfaction is defined as the degree of satisfaction provided by the goods or services of a company.
This is usually gauged by the number of customers making repeat purchases. Customer satisfaction is
critical if a company is to register high sales profits. Having seen what the meaning is, it is important
to know what the key elements to Customer Satisfaction.
Key Elements to Customer Satisfaction: following the keys to successful customer satisfaction:
Meeting Commitments: this is the most important thing that any customer needs from a supplier.
With respect to the underlying company food has to meet the quality standards and service must
be up to the expectation of the people.
Internal Team and Relationships: there is a positive and direct relation between the customer
satisfaction and the employee satisfaction. Any company who are able to keep the employees
happy by giving better environment and pay including monetary and non-monetary benefits,
would be very successful in winning over customers. Because the commitments of the employees
are more, they would help the company to bring in more people with their high level of service
standards.
Knowledge: every time a person enters the restaurant he would expect the service person to
explain what each of the stuff is made of and also other information as would be required. If the
servicing person is unsure about the product it would build a negative image for the customer.
Trust and Integrity: building trust is also a key factor that would help in increasing the sales.
This can be brought by giving proper bills, key nutritional factors of its raw materials and also by
ensuring the freshness of the products used.
Responsiveness:developing a communication between the customers and the company is
important as regular feedbacks from them would help in improving the business strategies and
would be in line with the demands of the trends and people. Running a business is easy however to
be in the race on a continuous pace is difficult and would necessitate all these steps to be followed.
Passion and Energy: any employer must have the passion towards business and start loving the
product that he manufactures. There is a psychological feeling among consumers to attach a long
term relation with those who are in the business for a longer sustained period and those running
with a passion.
Living Up to expectations: this is the last but nevertheless the least point; in fact this is a crucial
point. Trends and mind set keeps changing among people so it is vital that business keep in pace
with this changes.
2.2. Relation between Customer Satisfaction and Sales: there are number of factors
that contribute to the satisfaction of the customer. With regards to subway or any other
eateries for that matter following are the characteristic features that comprise the overall
satisfaction of a consumer. They are variety, quality of the product, Delivery, pricing,
social, parking, and ambience.
Variety of the
Product

Diagram: 1 Customer Satisfaction Characters.
If all or most of these attributes are satisfied by the employer then it can be said that the
customer will become loyal to the product or the company and will maintain a long term relation with the
service. This will automatically help in increasing sales and also help in sustaining the market and
withstanding the competition. Relation between sales and satisfaction is not a new theory and is pretty old
where family owned business tend to use their conservative practices and socially responsible to attract
and retain customers. But with the wake of globalization and competition in every field of business only
customer satisfaction can give an edge or competitive advantage to a company and make them unique in
the industry.
2.3 Measurement of Satisfaction: this is the job of the marketers of a company and to
know how much consumers are satisfied about the product involves six steps and is
explained in the following paragraphs. However as this measure is subjective it is
difficult to know the exact requirements. This can be better known by experienced
professionals in the area.
Collection of feedback from individuals and evaluating them for
determining the overall satisfaction towards the product or the service.
Provide a survey form to be filled in by the customers. Many would not
be interested in doing this, as it is perceived as a time consuming job; it
has to be done by pleasing the customer by the service. Other ways in
which it can be done are through sending emails or through phone calls.
It can be made easy by framing the questions in an easier way and
through giving choices as open ended will not be liked by any person.
Choosing the right question is a key in the survey form as many times it
would be deceiving and would lead to misleading conclusions.
Quality
Delivery
methods
Pricing
Social
Parking Facilities
Ambience
Overall Customer
Satisfaction

Clearly understand the expectations of a person while meeting them in
person: this is done sometimes when face reactions can provide good
lead or act as a response. At this juncture, the analyst should be clear on
what the person expects from the company.
Through these methods of surveys and discussions one can arrive at the
level of satisfaction that the consumer has on the product. In other words,
the company can understand the aspects in which they are lagging behind
or going wrong in fulfilling the expectations.
Lastly, the company should see the level of satisfaction the consumer has
towards the competitors product and the parameters on which they have
achieved and why they have not. This is a method of self-introspection
comparing themselves with that of its peers based on the feedback from
the consumers.
These are the various steps through which the level of satisfaction can be measured and once
this is done, steps can be taken to see how it can be improved or sustained over time.
2.4 Models of Customer Satisfaction: the concept has gained so much importance that
there are many theories and models that are related. The two broad classifications of
models are Micro models and Macro models.
MACRO MODELS: Macro models include value, quality, complaining behavior,
and loyalty. These are defined as macro models because these include policy level
changes and these would have an implication on the customer satisfaction. The
traditional macro model was conceived as a perceived performance and comparison
would result in the perceived discomfort which gives out the satisfaction and the
outcome would result in the loyalty, spreading word of mouth etc. this can be seen in
the following diagram.

Dig

Diagram: 2: Macro Model of Customer Satisfaction.
Source: Woodruff & Gardial (1996)
Perceived
Performance
Comparison
Standards
Perceived
Disconfirmation
Satisfaction Outcomes
Loyalty &
purchase
Intent to
Purchase
Word of
Mouth

In the above diagram it can be deduced that the perceived disconfirmation is the result of perceived
performance of the product or the service and the comparison standards where by people compare the
services and product offered in relation to that of its competitors. Here the former is the experience that
one gets from the usage of the product and the other through the act of its competitions which they come
to know by word of mouth or by reading in the media. Perceived disconfirmation is the stage at which the
marketer or the company would come to know the level of satisfaction that the customer has attained
from the use of the product. If this number is positive would imply that he is highly satisfied with the
service and any negative number would reveal a negative satisfaction i.e. the competitor is more efficient
in servicing the customer and if it is zero there are probable chances that it might fall back on the either
side.
This model has its own drawbacks like it ignores the Value concept which gave way for the evolution
of another theory which includes the value chain where in a customer values the product attributes,
feeling for attributes, use consequences etc. to arrive at a satisfaction index. Further in 1991, more
sophisticated modesl were introduced which includes service with the value chain. It includes technical
service, expected service will give the resultant perceived service and that becomes the indicator for the
level of satisfaction of the consumers.
MICRO MODELS: these include the resultant feedback which result from the survey distributed and
analyze the personal attributes or characters of the people which decides the satisfaction level. As it
analyzes the individual behavior it is categorized as micro model. There are various theories in the Micro
model as described in the subsequent paragraphs:
A. Expectation Disconfirmation Model: this is considered to be the most dominant model among the
available ones. This model measures the level of satisfaction as the difference between the pre
consumption expectation and the post consumption expectation. The resultant number would be
the level of satisfaction or dissatisfaction towards the product.
B. Perceived Performance Model: this is similar to the previous one, difference lies only in the less
emphasis placed by the model on pre consumption experience. This model advocates that post
experience can vary or get discounted after the consumption of product or service and would not
reveal the correct picture of the exact position.
C. Norms Model: this model also states the experience as the important factor in calculating the
satisfaction level but the difference is this model explains what should be the level at the end of
consumption. This is not a predictive model after consumption instead it forecasts the level of
expectation that the person is set to achieve. But this is highly subjective as most of the times it
the choose might not reach the level it forecasted but real picture would be something else.
D. Attribution Models: this model uses three concepts viz. causality, stability and controllability.
These attributes can be either external or internal depends upon the product or service that the
company deals with.
These are the various models to measure the level of satisfaction however choosing a model depends on
the sole discretion of the company or the analyst.
CHAPTER: 3: SUBWAY MODEL
2.1 History of Subway: Subway, an American food chain started in 1965, it was first
started in Connecticut where Fred DeLuca started with a borrowed fund of $1000. It

was named as Petes Super Submarines; the name after the person from the money
was borrowed. Within one year, they saw a huge growth and demand in their
business that necessitated hiring of franchise to take it to various places. The name
was further changed to subway. In 1984, the company had its presence in many
countries, but it was lagging behind McDonalds and KFC. The main reason for this
because of the number of stores that it had, so in 2004 it decided to increase the
stores and it entered an agreement with Wal-Mart stores and opened in their complex
and by this there was a series of shops opened and it outdid the number as compared
to its rivals in the industry. Until the end of 2006, the company had been selling only
sandwiches, muffins as breakfast, but it made pizzas available in its US stores but did
not carry on well. It also included coffee in its breakfast menu. Right in 2009, it won
the best nutrition award in the US as mostly they use fresh vegetables and fresh meat
in all their products.
2.2 Strategies of Subway: Following are the principles of subway:
High Quality Products
Excellent customer service
Low operation costs and;
Establishing in great locations easily accessible at convenient places.
Following are the strategies adopted by the company through which they attained this
position;
Marketing Strategies: the most vital marketing phrase that the food chain uses is EAT
FRESH. In a recent interview to a leading journal on the marketing strategy an official reported;
Were trying to avoid what Id call health extremism: The whole notion
that you have to be much prescribed down to the lowest level of calories
isnt really helpful to most of the population. So were showing things
like the turkey BLT, which has 9 grams of fat. Its flavorful, and youre
not in deprivation mode [when you order it], and thats a much more
livable way of eating. Its not some sort of extreme exclusion of all the
foods you like to the extent that you think youre depriving yourself of
all the food you like. You just cant sustain that."
Subway is placed in a delicate position in between the healthiest category and a fast food
chain; while the former projects an image of completely health conscious and the latter would prove it to
be an oily junk food place. Both of these would not be liked or attracted by the people, so it has found a
niche for itself and started a hard campaign and now over 35 years today it completely dominates the
market and with a total of 36,000+ stores it takes on the YUM brand which combines KFC, Pizza Hut,
Taco bell which owns a total of 37,000+ stores in total worldwide. Despite providing a normal ambience
and not too cheap it gains a customer solely depending on the quality of food it provides!
Its global marketing strategy is also strong taking into account the local and regional factors into
consideration. It does not change the menu entirely to different nations, it keeps the base menu the same
and change only some ingredients local to that market to enable easy marketability of goods.

PRICING STRATEGIES: this is the critical part of any product or service that would have a direct
impact on the consumer. Subway uses Upscale pricing which means their prices are slightly higher than
the local market price but it justifies such price rise by their higher quality and increased customer
service. They follow differential pricing system across its locations, but it has a concept of Value pricing,
which means they create a value for their product for the price paid.
3.3Key Competencies: Following are the key competencies of the food chain.
Distribution: the process by which the supply chain is maintained is efficient and
it is evident from the fact that it has its presence in almost every country.
Human Resources: it provides best training and remuneration for its employees
and do all possible ways to keep them happy.
Management Information System: this refers to the transparency with which the
company works.
Marketing: its marketing strategy is said to be the best in the industry.
Management: the team on the top is very efficient to analyze strategies often and
change according to the changing times.
Manufacturing: the company has a vast manufacturing set up where it produces
the bread that it needs and purchase vegetables and meat from its own sources to
ensure quality standards.
Research and development: subway employs modern technology in its processes
to maintain automation as well as standard as it carries the brand image of the
store to the rest of the world.
3.4 Franchise Model: the main model through which Subway connects to the world is through
Franchising. Franchise means the company or any government agency giving permission to an individual
or a group to perform business on their behalf using their name but is accountable for the sales figures,
however the former would not involve in the day to day activities of the franchised company. In other
terms the person to whom the business is given would act as an agent to the companys products. In olden
days when the company was started many people did not know and when they are asked if they are aware
they would ask if it is an underpass; it was then the company opted for the franchise model through which
they entered international market. Now when a person is asked for subway he would reply I just ate there.
This is the success they have achieved through expanding their network through franchise. Now the
company has more than 2 lakh employees and this is a remarkable number and this also helps in
spreading word of mouth. It is a remarkable achievement for a company to have so many outlets under
single brand name and with so many employees it is no wonder the company is the largest growing food
chain under one brand!
CHAPTER: 4: INDUSTRY ANALYSIS: Fast Food industry is one of the fastest growing industries
ever and the demand for the industry would be never ending. Particularly the products sold in this
industry are of utmost interest among people of all ages in the developed countries. However with the
growing awareness for health and with the recession period even companies in this industry is feeling the
trouble and they had to come up with new innovations and varieties at a reduced price as consumer
spending is drastically down in the wake of the economic recession. The industrys growth is amazing
from just $6 billion in 1960 when it was started to a whopping $160 million in 2013, and an annualized

growth rate of 8.6%. Termed as Quick Service Restaurants, there are about 2, 00,000 outlets in the United
States alone. This is a pretty huge number and how much the industry is ready to fulfill the demand and
how conscious they are about the health aspects is a question to be answered. On the consumer
perspective it is easier to have fast food as the time consumed is relatively less and cost spent is lesser
than that of a normal restaurant. The main reason for this is many fast food counters does not have a dine
in place for lack of space and many a time only preheating is required, this cost is saved for the
manufacturer and is not passed on to the consumer. Also, consumers are happy as it is a chain and similar
menu is available across all locations and they know what to eat.
Drawbacks of the I ndustry: Despite this success, there has been something going wrong in the industry
that makes many companies suffer loss and shut down their operations. The main reason is the growing
awareness for health and this raised questions on the qualities of the product delivered. The fat content
involved is very high that it kept raising the body mass index that contributed to the increased number of
obesities. Because of this reason people tried to refrain from these eateries.
Secondly, the increased food prices, the cost of manufacturing is high but this cannot be passed on to the
consumer because of huge competition. Many small players were not able to sustain this and either closed
down their operations or gave into big players.
However the industry enjoys the advantage of recession proof, there was a decrease in the consumer
spending index but people preferred to spend little money on cheap foods instead of visiting traditional
restaurants.
Last but not the least, there is a problem of saturation which induces a slump in the market. When there is
a stall of a brand is almost every town; for example McDonalds, subway or KFC has at least one outlet at
every town that people often get bored of eating the same stuff every time.
I ndustry Road Ahead: Having said the difficulties faced by the industry it is imperative to focus on
what the companies are doing to mitigate this risk.
First, the industry can still thrive among people because there are lots who want quick meals at a low cost,
and food chains are fighting hard to provide items in a more healthier way and also getting conscious on
the raw materials they use like going organic or building their own farm to produce. Also, these eateries
try and provide varieties for people for choose and these are low calorie products.
These chains are also trying to innovate and try their hands on new product lines like McDonalds started
to give coffee with the meals, by this means not only they are diversifying their business but also provide
stiff competition to those specializing in that area like Starbucks. When there are many players competing
in the industry it would pave way for better innovation both of products and technology.
Lastly, companies try hard to confront market saturation mainly in the United States, by creating variety
options for people and this job is given to the franchises. This will be a win-win situation as both the
company would grow and franchisee would be more interested in creating new things to be a forerunner
and resulting consumers would be kept happy and their satisfaction is upheld.
Not only this, even the traditional restaurants are attracted towards this model of eating fast and they also
hire franchise in some areas and test how their foods can be offered in a way similar to that of fast food

chains. All these are welcome signs and it would pave way for lots of new innovations. Changes and
competition is always a welcome sign in any industry as long as it is healthy and contributes to the well-
being of the society.

CHAPTER: 5: Data Analysis:
5.1 Research Methodology: the research has been conducted using survey
forms/Questionnaires containing 8 questions among 50 people between the age group of
20-40. The questionnaire was tested and it attained a reliability index of 0.91 using Corn
Bachs Alpha Test.it uses a five pointer scale to measure the satisfaction level covering
various aspects like their experience, opinions as compared to the peers dine place etc.
first part of the questionnaire contains the demographic details like the place of residence,
their contact either the email address or the phone number and the store location where
they prefer to dine.
The variables taken for study as previously mentioned are, the variety offered, quality of
the product, Delivery, pricing, social, parking, and ambience. Hence the research includes
the analysis of each of these variables and is included in the survey as well.
Following tables/graphs represent the responses to each of the questions.

SECTION: AQuestion: 1: Gender: this would be the major factor in knowing the sector
of people who are satisfied and who are not. Most of the respondents were female among
the survey taken among 50 people in the store.

Options Number of Respondents in
the Restaurant
Percentage
Male 20 40%
Female 30 60%
Total 50 100%
Table: 1 Gender of People in Survey

Figure: 3 Number of people in the restaurant.
Question: 2: Age of the respondents: the people who participated in survey was in the age
group of 20-40 and most of them comprised in the group of 30-35 and second top was from 25-30. This
implies that the people who visit the store would expect more of variety, rather than anything else.

Table: 2: Age group of Respondents.

Figure: 4: Age group of People.
Number of Respondents
in the Restaurant
Male
Female
20-25
26-30
31-35
36-40
Number of Respondents
20-25
26-30
31-35
36-40
Age Group
Number of
Respondents
Percentage
20-25 10 20
26-30 12 24
31-35 25 50
36-40 3 6
Total 50 100

Question: 3: Income per annum: This criterion would be the deciding factor for the pricing. There would
not be much spending if the annual income
of majority of people is low and if the price
charged for the product is high it
might not increase the customer base and
sales. In the survey the income group was
divided into 5 categories viz. less
than 10,000, 10,000-20,000;
20,000-30000; 30,000-40,000 and
more than 40,000. Majority of people
fell under the category of 20,000-30,000
and then between 30,000-40,000. This
means that the cost has to be more
competitive to attract even the younger
groups whose income would less than the
majority chosen.

Table: 3: Income group of Respondents.
Options
Number of
respondents
Percentage
Less than
10,000
9 18
10,000-
20,000
10 20
21,000-
30,000
18 36
31,000-
40,000
12 24
More than
40,000
1 2
Total 50 100

Figure: 5: Income group of people in the Restaurant.
SECTION: B: Question 1: How often Subway is preferred as a dining place: this is a critical factor to
know how much the store attracts people to dine in the restaurant, there was a four point option to the
respondents viz. less than once per month, once per month, two to four months, greater than four times a
month. Most of our respondents had been visiting the place for two to four times per month. This is a
good number however the second majority of people chose it as only once per month. This is because of
multiple reasons; first the restaurant must improve on the promotional schemes to attract people
frequently to the place and secondly people have lot of options these days and are exposed to information
overload, they prefer eating variety of foods like French Fries from McDonalds, burger craze of Burger
King, and also from Pizza hut. As all the competitive products are attractive and tasty it becomes a
challenge for the restaurant to be in race actively. Below table and figure represents the responses.

Table: 4: Frequency of Visits.
Less than
10,000
10,000-
20,000
21,000-
30,000
31,000-
40,000
More
than
40,00
0
Number of respondents
Less than 10,000
10,000-20,000
21,000-30,000
31,000-40,000
More than 40,000
Options
Number of
respondents
Percentage
Less than
Once a month
9 18
Once a month 15 30
2-4 times a
month
20 40
4 times a
month
4 8
More than 4
times a month
2 4
Total 50 100

Figure: 6: Frequency of visits.
Question: 2: Do you like the Existing Quality of the product or does it need change: the response to this
question help in inferring how far people like the quality and taste of the product delivered. It was a five
pointer scale viz. very dissatisfied, dissatisfied, Neutral, Satisfied, Very Satisfied. Most of the respondents
have opined that they are very satisfied with the quality and some have responded to satisfied
.

Table: 5: Response on Quality of the Products
9
15 20
4
2
Less than Once a
month
Once a month
2-4 times a month
4 times a month
Options
Number of
respondents
Percentage
Very
Dissatisfied
0 0
Dissatisfied 2 4
Neutral 9 18
Satisfied 17 34
Very Satisfied 22 44
Total 50 100

Figure: 7: Quality Satisfaction Level of respondents.
Question: 3: Do you prefer dining in Restaurant or Home Delivery: this parameter helps in analyzing the
consumer perception and preference for home delivery. If most of the respondents feel delivery is better;
the company has to innovate new methods of advertising and marketing and reposition themselves by
projecting they specialize in take away as well. This is measured by four pointer scale where in dine in is
given emphasis; includes Never, sometimes, often, always. For this, response was received where people
does not prefer delivery at home often; this might be for various reasons like people would like a change
of atmosphere so they want to go out and eat and secondly there is a general opinion that when food is
taken in the restaurant it is fresh and by the time it comes home it loses its freshness and flavor. Unless,
there is an emergency people do not prefer to bring food home. This is depicted in the table and graph.

Options
Number of
respondents
Percentage
Never 13 26
Sometimes 27 54
Often 9 18
Always 1 2
Total 50 100
Table: 6: Survey on Dine in and Take away
0
2
9
17
22
Very Dissatisfied
Dissatisfied
Neutral
Satisfied
Very Satisfied

Figure: 7: Respondents on Delivery.
Question: 4: Social Status: this refers to the social status that the company has among people. In other
words it is the brand name that goes along with the food chain; it measures how fond people are
associated with Subway. As soon as they hear the name how interested they are to eat, this is most
important to find as brand image is most important in a companys growth. Brand name itself plays a vital
role in increasing the customer base. People associate their status by the place they are dining; the
question gives four options viz. poor, average, good, and excellent. Respondents had a feeling that the
food chain gives good social status for them. Take away for the company from this is that it has to
improve its brand image through creating affluent products for those who can afford to. Only when the
high end people visit the store will they feel it is socially well off to dine in subway.

Table: 4: Social Status.

13
27
9
1
Never
Sometimes
Often
Always
Options
Number of
respondents
Percentage
Poor 0 0
Average 7 14
Good 40 80
Excellent 3 6
Total 50 100

Figure: 8: Social Status of Subway.
Question: 5: Parking Facilities: Not only the food and quality matters for increasing sales of the product,
other factors or facilities that are offered to the customers that would help in increasing the sales.
Sometimes when the additional facilities offered are more people forego going to the competitors place
and come here. Some of them include parking facilities; children play area where parents need not mind
taking care of kids while eating etc. when asked people whether the outlet gives sufficient parking facility
many felt yes, but those who said no are not far away so the company should make sufficient provisions
for this. But this is specific to the outlet in which the survey was taken, however it is better that the
company checks this in for other outlets so that they do not lose their sales on this front.

Table: 8: Parking Facilities.
Question: 6: Ambience: this is the statutory question included in all types of surveys, and this is done to
understand the perception of the audience on the company. Many people felt that the ambience is
reasonable, however it needs changes and it was generally felt that they need more convenient space to
comfortably sit and eat. Also the place is not good enough to hold a get together or party. So the company
needs to keep this demand of consumers in mind and make necessary arrangements for this.

0
7
40
3
Poor
Average
Good
Excellent
Options
Number of
respondents
Percentage
Yes 30 60
No 20 40
Total 50 100

ANALYSIS: going by the analysis based on the survey and previously done research, weightage was
given to each of these independent variables and it was found using convenience sampling that the variety
offered, quality and price is highly significant in determining the sales of the product.
5.2 Relation between Customer Satisfaction and Sales: Subway has won the award for Best Customer
Satisfaction in many countries in the year 2012, and the report published by UK Customer Satisfaction
Index reveals that food industry has gained the maximum number as compared to other sectors
(http://www.instituteofcustomerservice.com/files/ICS_UK_Exec_Summary-FINAL.pdf); and among that
subway tops the list. Hence with the above factors it can deduce that with these three independent
variables the dependent variable of Sale can be improved. In another survey done by National Customer
Satisfaction Index as on September 2013, Subway was ranking second in the list after Greggs with the
score of 79. There is only a marginal gap between the first two and this can be achieved by increasing one
or more of these independent variables.
CHAPTER: 6: FINDINGS & RECOMMENDATIONS:
Findings: from the above analysis of the company following are the findings revealed
Variety, Quality and Price are the three independent variables that decide the level of customer
satisfaction.
Customer satisfaction is directly related to the sales of Subway.
People would want more extended facility to enjoy the food
Store has to enhance its brand value to increase the social status of the richer cream of the society.
More facilities have to be provided like better parking place, etc.
Subway has to decrease its price to attract the youngsters and school goers.
Customers are happy with the current functioning of the restaurant.
Number of revisits is more than the first time visitors.
Recommendation: After careful analysis of the model there are some recommendations that was thought
would help in enhancing the growth of the company. These are summarized as below.
a) The franchise model is however successful for the company in expanding their network in over
100 countries, it is felt that growing number would make the control factor difficult and more so
would hamper the name of the store. This would prove very costly to the company; as it had
taken more than 4 decades to build the reputation, it would not take a months time to lose it.
Also, there would be word of mouth which will decrease the sales further. So better control
should be put in place to check the functioning of franchises.
b) As subway is a part of the market that is getting saturated, it becomes really difficult for the
company to distinguish itself. Hence, it has to start developing new products with varied offerings
to become unique.
c) The company has to set a Unique Selling Proposition with which it has to reach the consumers
and this they have to tag along with the advertising for creating a better image and make people
come and is not affected by saturation.
d) There has to be lot of promotional offerings for people who visit just to create a sense of
attraction and increase the number of walk INS to the restaurant.

e) There has to be individual menu options for each category of people like kids, teenagers, working
professionals, and one for the affluent class and each of these can be priced differently so that it
does not face the problem of social class.
CHAPTER: 7: CONCLUSION:
Nothing can better fit a conclusion like doing a SWOT analysis of the company and help the company
leveraging on the strength and work on the weakness, explore and exploit the opportunities and take
steps to mitigate the threats.
SWOT Analysis Subway 2013:
STRENGTH:
Highest degree of customization among the players in the industry.
Largest food chain in terms of number of locations operating under the same brand name
Most efficient marketing and promotional strategies.
One that offers the maximum choice for the customers
Food offered is healthier than others.
The only chain that has partnerships with Britain and American Heart Associations
It allows franchise to own the restaurant
The only chain that has the low startup cost.
WEAKNESS:
Poor ambience as was felt by people in the research the outlook looks very cheap.
As there are many fast food chains, it is getting really hard to retain the employees and there
are frequent job hops. Employee turnover is a real problem for subway.
As it is franchise modeled, service differs from one outlet to the other and it is difficult for the
company to control that.
OPPORTUNITY:
As the demand for healthier food keeps increasing, subway can focus more on their tagline
Eat Fresh and reach more people.
Introduction of the concept of drive-in can be much useful and it can help in increasing sales.
Same is the case for home delivery. However, the response of the people given in the analysis
is specific to the store where research was undertaken. People in this fast world would be
happy to get meals at home; hence this service can be introduced and enhanced.
There is a ever changing demand for goods, as the trend, tastes keep changing and the
company can make its research team more efficient and get to know the changes in advance
and be a forerunner in introduction of new products and grabbing the market.
THREATS:
Threat of market saturation mainly in the developed countries.
There are lots of local fast food chains that understand the market and people more than the
branded ones and they form the potential threat to the company.
Currency fluctuations are a continuous threat and this can be mitigated by hedging.

There is many other food options in each country which would be preferred by the people
mainly outside the developed countries and targeting that would be a threat and challenge for
the company.
The law suits and complaints against the company would also be a threat as it would affect
the growth of sales. However this is common to all companies across various sector, this is
significant because of health issues and if it loses any case, it would spread wrong message to
the community.
In summary, Subway is undoubtedly a success story in majority of countries and this success can be
extended further in terms of increase in sales and profit and that is solely dependent on the level of
customer satisfaction that it maintains.

Appendix-1
Questionnaire for Customers
Section A: Socio and demographic information:
1) Gender:
Male Female
2) Age:
20-25 26-3031-35 36-40 More than 40
3) Income per annum:
Less than 10,000 10,000-20,000 21,000-30,000

31,000-40,000 More than 40,000
Section B: Customers Perception.
1) How frequently do you eat at Subway?
Less than once a month Once a Month 2-4 times a month
4 times a month More than 4 times
2) How do you rate the quality of the products in Subway?

Very dissatisfied Dissatisfied Neutral Satisfied Very satisfied
3) Do you Prefer dining in the restaurant or home delivery

Never Sometimes Often Always

4) How far does Subway brand image helps you in your social status

Poor Average Good Excellent.

5) Do you feel there is a need for change in Parking Facilities?
Yes No

References
1. Subway (2013). About us. Available at: http://www.subway.co.uk/aboutus/- access date-
20/03/14
2. Entrepreneur (2013) http://www.entrepreneur.com/franchises/subway/282839-0.html- access
date- 21/03/14
3. Subway (restaurants). http://en.wikipedia.org/wiki/Subway_(restaurant) access date- 21/03/14
4. DeLong, K. (2012).Subway is most popularhttp://fox6now.com/2012/10/04/zagat-2012-fast-
food-survey-subway-is-most-popular/
5. The Subway Effect. http://www.qsrmagazine.com/executive-insights/subway-effect?page=2-
access date date- 21/03/14
6. The National Customer Satisfaction Index.
http://www.businesswire.com/news/home/20130904005142/en/National-Customer-Satisfaction-
Index-UK-Results-Restaurants#.Uzn47SgQ_IU access date- 22/03/14

7. Industry Analysis 2014. https://www.franchisehelp.com/industry-reports/fast-food-industry-
report/- access date- 23/03/14
8. Nigel Hill, John Brierley, Rob MacDougall (1999). How to Measure Customer Satisfaction. 2nd
ed. England: Gower Publishing Limited. 4-11
9. Bob E. Hayes (2008). Measuring Customer Satisfaction and Loyalty. United States: Quality
Publishers. 20-40.
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United States: Paton Publishers. 40-60
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UK: PRC Pub. Limited. 40-60.
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50.
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R. Williams (2012). Sales Management: Analysis and Decision Making. New Jersey: M.E.Sharpe
Inc.. 264.
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