Retail Dude

Certainly, sir, and how would you like your sandwich?

At SUBWAY sandwich shops around the world, the ’submarine’ style sandwiches come hot or cold, and with an almost infinite combination of breads, fillings and sauces. The first choice: do you want your sandwich to be ‘6-inch’ or ‘footlong’. Then there are 5 types of bread, 11 toppings, and 9 dressings and sauces to choose from - making for an almost endless combination of possibilities. These choices involve consumers in the brand, allowing them to ‘make it their own’ and giving them a reason to keep coming back. There are more than two million different sandwich combinations available on the SUBWAY menu.

The SUBWAY restaurant chain was founded in 1965 by Fred DeLuca, a 17-year-old college freshman, and family friend Dr. Peter Buck. The first restaurant opened in Bridgeport, Connecticut, USA on August 28 and was called Pete’s Super Submarines. Now, there are nearly 30021 Restaurants In 88 Countries, and the company estimates that about 1,900 SUBWAY sandwiches are served every minute around the world. It’s the biggest fast-food chain in the USA, and the company aims to overtake McDonald’s globally by 2009. The number goes on increasing each day. This is one of a kind of its business, since all its outlets are franchisees. They believe that it’s the country that wants good and healthy food that brings them to it and not their operations. SUBWAY chain is a privately held company and is not traded on any stock exchange.

McCarthy, Mambro Bertino Advertising (MMB), located in Boston, Massachusetts, is the SUBWAY^® chain’s creative agency. They very widely use the acronym BMT® which stands for Biggest, Meatiest, and Tastiest. In the early days of SUBWAY^® restaurants, it was a promotion that was based on the Brooklyn Manhattan Transit system in New York City that went along with the subway theme.

And in a deliberate strategy targeting rivals such as McDonald’s and Burger King, SUBWAY have positioned themselves as the healthy choice: offering sandwiches with ‘6 grams of fat or less’ as well as salads and other low-fat options. There is one amazing story of a person called Jared Fogle who lost 245 lbs. by eating nothing but SUBWAY sandwiches for almost a year in a diet program of his own design that included lots of walking and, yes, he is real. Jared came to our attention after Men’s Health magazine ran an article that featured his amazing weight-loss success story. Appearing in a series of SUBWAY TV commercials beginning in January 2000, Jared has since inspired many others to follow his lead. These days, he keeps busy by traveling throughout the United States and Canada, making public appearance and doing thousands of interviews for television, radio, newspapers and magazines. All their menu cards and delivery have the nutrient content of the diet. A wholesome list is also available about nutrition and contents in its website.

They also care about the localized market where they go into, such as they replaced beef with chicken when they launched in India and similarly pork with beef when in Pakistan, so as not to hurt sentiments of its residents.

The questions that comes to my mind is that  “Can we offer customers more choice, and so make the brand more appealing, while staying true to our focused and distinctive brand offer? “

Who remembers that Porsche has a category of SUV’s?  Usually companies and organizations spread out while trying to do so and in the process dilute its own image even if it is the “MENU”. This is what SUBWAY has done so exceptionally.  

BRAVO!

Sudip

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We all agree that supply chain is a backbone of retail business, but if retail is all about customers centricity and for the past 10 years it strived hard to change its product centric strategy to customer centric strategy and developed a face, a face that cares about customers, for whom customer is a king, then it definitely need its behind the scene player i.e. their supply chain to be customer centric. That strategic shift has weathered recent economic uncertainty, and we have seen it grow in both scope and complexity as retailers look to tackle localization and customer service that increasingly crosses channels. But this strategic shift from supply chain 1.0 to supply chain 2.0 have lots many hurdles in  its path, and one of is as usual the evergreen challenge that is getting the forecast to match demand. Apart from that due to globalization the supply chain is extended and require more resource to operate effectively, moreover the virtual stores also depend on the supply chain for their proper operations, these increases the pressure on precision in planning and execution of supply chain. The other challenges that are there on the way to shift are localization of assortment, SKU proliferation, and even customer demands for more supply chain precision – are putting new and different pressures on supply chain.

Now if we talk about solutions or about what will be new in the supply chain 2.0 than I will like to say that “the visibility” is what is a one word answer from many problems that supply chain faces today. With the help of latest technologies like RFID, intranet and real time information movement/Electronic Data Interchange (EDI), data synchronization and defined Universal Product Code (UPC), evolved and more enhanced and powerful Transport management systems (TMS) & Warehouse management systems (WMS) and other optimizer packages, the face of supply chain will definitely changed. But along with these technology enables the supply chain require to work out of their silos in collaboration with retailers.

Ultimately the customer will be satisfied with the combined efforts of both the retailers and their supply chain.

In last what I think I forgot to mention one big block in the path of supply chain 2.0 to be implemented in India is the infrastructure, so along with visibility the Indian supply chain requires good support from the infrastructure of the country.

-Prateek Katiyar

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Last weekend as all of us know, we had a good break from work (15th, 16th & 17th of August), so, I planned to visit Chennai to meet some of my friends. During my visit I came across a Retail Store named Rathna Store in Chennai. This store actually does away with all the principles and approaches of modern and organized retailing (like Visual Merchandising, Store Layouts, Space Planning & Allocation etc.) but still is able to pull large chunk of customers to their store on regular basis. I was wandering how it is possible.

Yesterday while writing my post on Customer Centricity’s & 7P’s Model, Rathna Store again struck my mind. After analyzing the model of Rathna Store, I came to a conclusion that it is not necessary to focus on all the 7 P’s, rather a Retailer need to identify the P’s which can be a Key Success Factors (KSF) for them and concentrate and capitalize on them. If we see the model of Rathna Stores, we can identify following,

Product: Yes, Rathna Store recognizes it as one of its KSF and they have large variety of products in each category.

Price: Yes, it is also a KSF for them, they compete with other based on prices. It is one of the major reasons for their huge footfall.

Place: They don’t pay much attention to place. Products are arranged haphazardly in store with no space planning and allocations. But location of store is decent.

Promotion: I am not having much idea on their promotions but there were no in-store promotions other than Gold Prices.

People: This is again not a KSF for them. People there lacked customer service. But were efficient in their work as in billing, inventory etc.

Process: Yes, I think it was again a KSF for them; the billing process was very smooth. In each floor whenever u select a merchandise, u can give it to the staff their and he will give u a receipt. At the end of your shopping you just need to go to the cash counter, pay all the receipts and collect your merchandise and move.  Moreover their supply chain is also very efficient. There were no stock outs.

Physical Evidence: It was not again a KSF for them. There was no Visual Merchandising and other efforts to improve in-store experience for customers.

Technology: I was not able to find use of any technology other than Close Circuit Cameras.

So, in spite of considering only 3P’s (Product, Price & Process) out of seven, and with minimal use of technology, Rathna Store is able to generate immense sales revenue.

Conclusion: “To be Customer Centric, a retailer need to identify his KSF based on customer needs and target market. He should then concentrate on those KSF in order to grab Customer Attention and achieve higher Sales. Concentrating on too many variables may dilute the essence of the Model. However all the 7 P’s are equally important but their relevance may differ from format to format.”

- Rajeev Damani

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Customer Centricity:

As Prateek posted..  “The Power in Hands of Customer”, the term ‘Customer Centricity’ again hit my mind after a long time (it use to hit more frequently during MBA classes ) And so I started thinking how can we be customer centric?? Especially in industry like us it actually holds a value. As we are moving from product-based competition to service-based, entire focus of our processes is toward customers. Customer is King, God, Lord etc. etc. or else customer is everything.

As I kept thinking for long , suddenly first class of service marketing flashed in my mind, where Dr. Kartik Dave (our Service Marketing Faculty) amazed us  by disclosing that there are actually 7P’s in case of Marketing of Services i.e. Product, Price, Place, Promotion (the traditional 4) and People, Process & Physical Evidence (the new 3) (guys trust me you should never miss your MBA classes ). It then took no time for me to realize that Customer Centricity is nothing but aligning these 7P’s with customers need (implied & latent). And technology is the facilitator and enabler in the process . So, very quickly I came up with following diagram:

I guess once we look at this diagram, everything is clear. Still I will like to give some insight,

Product: Customer centric merchandise planning.

Price: Pricing based on customers pocket size and affordability.

Place: Place which is convenient for customer to locate and relate. (Product affinity, aisle affinity, place affinity)

Promotions: Promote what customer need to know. Promote to right customers.

People: Instill the objective of customer service among your people. Hire right people for right position.

Process: Make all the process efficient and flaw less. Be it Billing, Returns, Circulation, Supply Chain etc. etc.

Physical Evidence: Give your customer what you promise to them. Clean Stores, Easy Navigation (no butt-brush), Good Lighting, etc etc.

Technology: Technology is the enabler as well as facilitator of the process. That is why we have applications for merchandise planning, space optimization, pricing, HR management, etc. Using technology makes the process more efficient and objective. Moreover, for global retailers, where they have bulk of work in all these areas, it makes sense to use these applications to pace up as well as make things smooth.

-  Rajeev Damani

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