May 10, 2011

[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

Yellow Submarine Gourmet Fast-food Restaurant Submitted by: BSBA Summer Class 2011 QUEIPO, Mark Daryl RAMIREZ, Jien Ceriz PELAEZ, Caroline LOYOLA, Aries BERTULDO, Daniel FERNANDEZ, Lawrence Time Context: Middle of March 2000 Point of View: Paulo M. Lao Central Problem: Sudden decrease in sales due to declined customer traffic during the last 3 days.

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

Statement of Objectives Must Objectives: Increase sales and customer traffic. Want Objectives: Sustain the companys market share.

Areas of Considerations Internal Environment Strengths:

Good Location Yellow Submarine is located at the Ortigas Center a business district where many large and small corporations are situated home to class A residential condominiums and subdivisions closest market is UA&P (University of Asia and the Pacific) which has a student population of 1,900 and still growing

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

Close Proximity to UA&P Approximately 150 meters from the backdoor entrance Provides students with a venue to kill-the-time from long and short breaks Accessible place to meet friends and have a quick meeting for school projects Provides a respite from the humid and hot weather Students would opt to have lunch nearby rather than pay for parking fees at the mall and other restaurants UA&P is a premier university that is why it has one of the highest tuition fees in country Students come from middle income to high income families with an average disposable allowance of around P100-P150/day.

Weaknesses:
Seasonal demand with Students as a primary target market (UA&P) Demand will fluctuate due to school season such as Opening classes Semestral-breaks Term paper seasons Midterms and Final Exams

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

Other school events

Opportunities:
Outperform competitors in the quick-service segment Outperform indirect competitors in the area because of tight margins natural to small volume. Match all business activities with real and distinct customer needs, constantly identify customer needs and align or adjust all Yellow Subs activities to ensure customer satisfaction.

Threats:
Nearest Popular Competition Establishments at Pearl 8101 Starbucks Coffee California Australian Deli Shop Sugarhouse Bottomless Grill Restaurants providing alternative food choices for Delivery Slice of Meat (Deli Sandwiches) Brothers Burger (Hamburgers)

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

Little Caesars (Pizza) Thai-in-a-Box (Thai Food) Sit-in Restaurants that capture a lot of customers during Lunch Time KSP Bar and Grill Entry of fast-food companies and similar product lines Threatens the hold of captured market segment Decrease their market share

Alternative Courses of Action ACA#1: Completely overhaul the marketing plan of Yellow Submarine and formulate major initiatives for growth and long term survival of the business including: o Introduction of new product lines o Market Penetration o Market Development Strategies

Advantages: Disadvantages:

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

ACA#2: Advantages Disadvantages Recommendation Adopt: ACA# 1

Detailed Action Plan

Activities

Person Responsible

Time Frame

Budget

MARKET STUDY Purchasing Decisions of Customers

Influenced by attitudes, beliefs and emotions derived from the service product. Students highly consider other students perception of them Where they eat for lunch Where they hang-out during lunch and breaks

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

What they have for lunch Where they ate and where they will eat will give them enhanced appearance They would want to eat where the cool people eat and where they could be associated with the crowd eating there. This segment also wants to appear with more money impressive lifestyle and a trendsetter. UA&P students as trendy young adults are curious of any openings and exciting happenings. Reasons for purchasing: Curiosity or Crowd Effect Filling a Need Affordability Enhanced appearance Genuine preferences for sandwiches, salads, pasta and soup Health Consciousness Healthier Food Alternative There is a growing trend for slimmer bodies and healthier diets. Students are being offered a healthy alternative to lunch and snack meals, without sacrificing the need for Good Music

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

Nice Ambiance Great Food Students will prefer having a full meal below P100 with the same delight and filling experience. Students belong to a larger group of friends Group sizes may range from 3 to 12 members Groups could easily occupy a table for 4 easily Once a group has developed a liking to the place they would consider it as a regular hang-out to meet and eat with friends, after carefully considering: Price Special Offers Food Quality Ambiance/ Store Dcor Convenience Customer Service Students could go there as much as 3 times a week or at least once every two weeks As surveyed, Wednesday is the day where there are long breaks. This day is reserved for UA&Ps organization meetings and activities.

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

Secondary Target Market for Sit-in Service: Product:

Target Market 1. Professionals Those working overtime Those who are looking for a quick snack Those who are looking for a convenient location

Professionals Sit-in Service or Take-outs

Those looking for a place to hang-out while waiting for traffic to pass Those looking for an accessible stop to buy food for dinner or take-out for family 2. Organizations Those looking for a place to meet with clients Regular meeting 3. Residents Those looking for an accessible place to eat 4. Faculty Members at UA&P

Secondary Target Market for Sit-in Service: Product:

Professionals Delivery Service

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

Target Market Secretaries: Those responsible for ordering food during meetings, events, functions, or large groups Busy Executives/ Professionals Those looking for quick lunch, snack and overtime food needs Professionals Those ordering for events, meetings, large groups, division/ departmental functions Nearby Residents Advantages of Market Segmentations Strategies include the following: Greater profitability in satisfying diverse demands of the market place Increase sales by addressing the needs of target customers and correspondingly allocate resources Help firms develop strategies for brands or product categories Assist marketers in developing strategies for brands or product categories Useful in providing guidelines for product positioning in tri-media ads and selecting media to reach target segments Focus on consumer needs to maintain competitive advantage

Market Segment Possibilities

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

Upper Class Market Class A & B: UA&P Students Convenience Markets Ortigas Professionals Secretaries Yuppies Professionals Residents Nearby condominiums, townhouses Status seeking individuals Ambiance, Store dcor Fun-seeking individuals Music personnel Budget conscious individuals Value meals Discounts Health conscious individuals Hoagies sandwich lovers

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

Salad lovers Pasta lovers Hang-out Seekers Coffee lovers Comfortable seats Weight-watchers market Bottomless drinks market Coffee and Iced tea Quick-service preference Sit-in Take-out Delivery Services Customer Oriented Qualified Staff Trendy Individuals Those who wants to try something new Quality-seeking consumers

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

Yellow Submarines Product Positioning

Yellow Submarine builds a product position that emphasizes Yellow Subs overall freshness in bread, vegetables and meat. Its secondary position emphasizes on its affordability vis--vis its competitors. This strategy enables Yellow submarine to establish a niche in the quick-service segment and out-perform indirect competitors in the area because of tight margins natural to small volume. It couldnt complete prices of the highly capitalized competitors . Yellow submarine depends on established and well known suppliers to back-up its claim. French Baker, one of the leading bakery companies supplies Yellow Submarines bread. Its location is nearby and can deliver fresh made bread with a lead time of one day only The meat is supplied by Blue Bacon, an upscale restaurant and meat shop in the Quezon City area. Orders can be picked up time, ensuring the freshness of the meals. In order to out-perform up anytime, ensuring the freshness of the meals.

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

In order to outperform competitors in the quick-service segment and other indirect customers at 8137 plaza, Yellow Submarine continuously has to work on the following competitive edge: 1. Operational Efficiency: This term describes a firm who attempts to utilize all process to provide their customers with dependable products at a competitive price. Yellow Submarine concentrated on the following factors: A. Matching all business activities with real and distinct customer needs, constantly identify customer needs and align or adjust all Yellow Subs activities to ensure customer satisfaction. B. Reducing or eliminating entirely the activities which currently expend time and resources which do not correspond to customer needs. Investment in Operational Efficiency Equipment or Automated-Systems for inventory or billing was pursued likewise standardization of procedures and food preparation. C. Developing job descriptions providing for cross-functional responsibilities which require everyone to be responsible for customer service. Each team member therefore works with each other to identify ways to simplify processes and lower costs. D. Develop a screening process for suppliers and other vendors that ensure cost efficiency and timely transfer of products or services. Yellow Submarine responded rapidly to changes in market demand by adjusting products/ services to meet such demand, providing customers with product or services at a competitive price. 2. Customer service: Yellow Submarine developed competitive strategies involving a commitment to match product/ services to meet individual customer needs.

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

Yellow Sub rarely competes in price. For Yellow Sub to sustain competitive advantage it strongly considered the following factors: A. Flexibility in the delivery of products and services to customers in the area of sit-in, take-out and delivery service. B. Proper training of personnel through relationship selling programs, building long term win-win relationships with customers. C. Infrastructure, providing a customer service information system capable of collecting and analyzing customer data to educate both management and employees in making customer s service decisions. Yellow Submarine made sure that product or services are tailored to the individual needs of customers, providing customized services and providing relevant information and service to each group of customers 3. Product Leadership: Yellow Submarine is one of the first Hoagies/ Submarine Restaurant in the country, offering a variety of thirteen types of sub, responding to customers specific demands for an affordable, health alternative fast food product and a cozy customer-oriented restaurant to go with it. Yellow Submarine ensures a top-of-the-mind awareness as a hoagie sandwich leader, providing customers with enhanced benefits through product improvements that correspond with customers product needs, being proactive to avoid being reactive to the marketplace. Yellow Submarine ensures a high-quality service effectively implementing the following initiatives: Reliability -strictly observing operating hours

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

-making available menu items at all times upon customers request -on time delivery of sales orders -consistent food taste Responsiveness -transactions with customers always done with a smile -personnel are willing and happy to serve customers Competence -timely and perfectly preparing food orders just as the customers want them to be -asking customers certain ingredients to be placed in the sandwich Access -having a telephone, fax machine, web-site and e-mail addresses in order to be reachable by the customers/ suppliers at all times Credibility -being open and honest to inquiries of customers regarding its ingredients, food, products and sources of raw materials Security -freshness o f food all the time, serving the freshest bread, vegetables and ingredients in its food -customer information for Yellow Subs exclusive use only Understanding

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

-understanding customer needs, wants and changing preferences -flexibility in implementing changes on food items, developing new food items, ambiance and music etc Tangibles -conducting regular preventive maintenance on its equipment for reliability during operating hours so as not to be inconvenient to its customers

Long-Term Promotion Program

Trial-to-Loyalty Program Trial Stage: Utilizing the primary reinforce of a free sample of the product A sample of Yellow Subs delicious sandwiches were given during the grand opening day to the invited target market. Included in the package is a loyalty stamp card which entitles the holder to a free 6 inch sub sandwich upon completion of the 6 stamp boxes (subject to a specified period) and a 10% discount on drinks during their next purchase upon completing the customer survey questionnaire. In doing this, trial is encouraged with no commitment from the consumer. Repeat purchase is encouraged; however, there is a large inducement so the consumer does not have to fully commit to purchase but is essentially subsidized by Yellow Submarine. Brand Conscious Stage: Utilizing the second reinforce by issuing the stamp loyalty card, thereby

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

promoting the continuity of purchase through a future reward system. The consumer is being asked to purchase 6 more six inch sandwiches (to fill 6 stamp boxes) during the next two weeks (or the specified period stated) at full price prior to receiving a reinforce in the form of a free sub sandwich. During this sequence, the consumer has actually purchased the product at full price for its inherent value with the promise of a future reward.

Program Plans
#1 Program Theme Have one on us is a trial-to loyalty promotion program for the first 100 customer from 11am to 2pm. Sales Objective: Develop sandwich sales of 100,000 over a two-month period. Have an average of 650 sandwich orders a month or 1,300 over the two-month period. Promotion Objective: Sampling the product during the grand opening to invited target markets; providing stamp loyalty cards to potential customers whenever a free sandwich sample is given. Returned Customer Survey Questionnaire is given a 10% discount on drinks during the same day. Description: Loyalty Stamp Card has 6 to 8 empty slots for stamp marks. Upon completion of the six

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boxes, the holder can avail of a free sub sandwich with a minimum order of a soft drink or bottomless iced tea. This was to launch together with the restaurants grand opening. The Loyalty Stamp Card has a specified affectivity date of no later than two weeks from day of acquisition. The expiry date is adjusted daily. There is a control number to whom it was issued and when it was issued, for the monitoring and control purposes. The duration of the promo lasted for the two months (October and November) but was extended because it was proven to be unsuccessful. Support: Streamers, flyers, email text newspaper, inserts, direct marketing.

Rationale: This promotion built trials and exposure for the Yellow Submarine sandwiches. Serving and cold sandwich show customer the variety of food products offered Ability to communicate direct to target market (health conscious, sandwich lovers, UA&P students, professionals, etc) Another purpose of the grand opening was to collect pictures of various customers and displayed them on the restaurants wall for a month or so. By doing this, customers were endorsing the Yellow Submarine and directly spoke to future first-time customers. October was chosen as the grand opening because this was the time when UA&P students came back from their semestral break. The six stamp loyalty card encouraged immediate purchase after trial. The 10% discount on drinks was strong inducement and along with the free

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

sandwich, lowered the risk of trying an unknown product. #2 Direct Mail Promotions to Secretaries Mailing of brochures, letters, and other materials that describe a product and ask the consumer to order it. Program Theme: Sales Objective: Sales of P120, 000 over a two month period. Promotion Stategies: Collect a customer database of secretaries, executive assistants, administrative assistants and other employees responsible for ordering food for Large executive meetings Functions Events Lunch and snack appointments Group breakfast, lunch or dinner Regular lunch take-out and overtime snacks. The manager issues a personal complementary meal every time a maximum delivery order of P500 is made.

Description of Direct Mail

May 10, 2011

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Promotional Activity for Delivery Services

The complementary meal must be availed in the period specified together with a large drink or bottomless iced tea. This complementary meal must comes with a 6 sub sandwich and potato chips on the side. This may vary accordingly and salad meal may be chosen upon the discretion of the manager in case the previous complementary free meal has already been given. Each complimentary meal note shall be recorded on a logbook and will have a corresponding control number for verification and monitoring purposes. In case a second large order is placed by the same person within a specified period and the complementary meal has not yet expired, the manager may extend for another 3 days the complementary meal. This notification will be made in a personal note duly signed by the manager. The manager may reinforce its customer relationship by personally calling the customer and informing her of a complimentary meal or an extension and an invitation to visit the restaurant. As variation of addition to the promo, the delivery can include a customer survey form which will include a Return to Yellow Sub promo. This will merit the customer a complementary soup or meal given by the manager personally. It will also have a specified period of validity to hasten the repeat purchase or return visit.

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]

In availing the complimentary meal, only one person, whose name appears on the managers note can rightfully avail of the free meal. It cannot be transferable. This rule is for the purpose of meeting personally the customer and establishing loyalty. Should a repeat large order be absent for a month or beyond, the manager can send a reinforcing letter as a sign of remembering and giving value to the customer. Support: In-store signage, posters and display, direct mail and flyers Rationale: The promotion builds trial and exposure for Yellow Submarine as an alternative to other fast food joints. This promotion helped Yellow Sub establish a market niche in delivery services for office functions, events, group meetings, group breakfast, lunch, snack and dinner take out needs. October and November were chosen as the time to launch the promotion because it gave time to build a customer database. By this time, Yellow Sub would have already started its first month of operation and have built the initial awareness of its products and restaurant.

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[STRATEGIC MARKETING MANAGEMENT: CASE STUDY]