How would you describe Subway’s core proposition in India?
Our core differentiation is customisation. Customisation is basically, ‘Make it your way’. Whenever you come to us there is a standard menu for you to choose from but you can make your own sandwich as well. You decide which bread you want, how you want it, which sauces, cheese or olives and many other options. It is completely your own sandwich.
How different is Subway's core proposition from the US, Subway’s origin market, if at all? Fine-tuning products to suit local demands and needs is a common practice.
Our brand journey started in India in 2001.
We’re not something like a McDonald’s or a pizza place which is ever so identifiable among the general masses. We had our very local customer base in the initial stages that were aware. But now, what has happened since 2001 is that we have 535 restaurants and we’ve expanded to almost 70-plus cities (as of 21 October 2015). Customers have adapted and the young generation is very open to trying new food formats. Subway allows them to do that. That’s been our key strength. Having said that, we’re catering to the local market’s requirement. If you go to a Subway restaurant now, you’ll see that 50 pc of our menu is a vegetarian menu.
Keeping this in mind, what kind of need do you observe with respect to vegetarian-only outlets/Jain sub-outlets in India?
We haven’t dwelled on making specific Jain or halal restaurants as of now. We have four vegetarian only restaurants in the country.
A FICCI - Grant Thornton report 2015 pegs the Quick Service Restaurants (QSRs) market to be around Rs 92,000 crore in India and expected to grow annually by 16 pc. It also mentions that QSRs of Indian origin are growing at a relatively faster pace. What does this mean for Subway?
The pie is only becoming larger for all the players. It is just a matter of who are consistent and people who are offering value proposition to customers and are able to sustain the value and price in terms of the product. Indian market is seeing an emergence of domestic brands. But most of the domestic brands are struggling to adapt to the quick-service model. Having a very strong logistics is required to offer a consistent product.
Are there gaps that homegrown brands are filling better?
We see in our studies that customers find Subway and some of the other key players in the QSR category, as being able to offer products consistently over the years. Yes, there has been an exponential growth in the number of food start-ups but the trend shows that all the brands are driving home value. Now, some of them are trying to drive value through a very low entry price point and very tactical promotions. But what is going to survive in the long run is consistency, offering a value product which does not need to necessarily be at a low entry price. The customer is willing to pay, it is just about what they want to pay for. They want to pay for a good product and good value.
How feasible is it operating in a market such as India which has its share of F&B restrictions?
The challenges in F&B will always be there and they are mandatory. We all have to go through it. Quality and safety in the F&B category are paramount. While the laws are dictating things to be done, we as a brand inherit very stringent guidelines to reinforce the emphasis on food safety.
You have to respect the law of the land. The core fundamental of our brand is that when we enter a country we have to be very sensitive to the requirements, in terms of the taste profile and also the sensitivities involved.
Subway has a strong presence on Facebook. But it doesn’t have an account for the Indian market on Twitter? Why is this the case?
A large number of brands are investing huge amounts in digital media. The spends seem to have gone up almost by 50 per cent. So there is a continuous need to gain the attention of our young, evolving customers. Television is becoming a secondary medium. Yes, we don’t have a Twitter account as of now but we will be investing in having it for India very soon. Our Facebook page is very robust. The fans there have been acquired over a period of time and they’ve been acquired on our own strength. Of late, all our campaigns have a very sound digital theme attached to it. Our strength on digital media has gone up. We do realise that this is what marketing and communication is going to be all about going forward. You’ll see more of our presence online going forward.
How would you describe Subway’s communication strategy?
We want to be out there to be able to increase top-of-mind awareness. We do realise other QSRs are putting in huge monies behind their advertising budgets. If we look at the total share of voice, Subway’s is relatively less. But what we are doing is, we are being very strategic. Television is still very important and at the same time we’re trying to evolve around digital. Also, our regional marketing is very strong.
A number of Subway’s TVCs are based on the price-led or offer-led proposition. Is this indicative that Subway’s price point is still something that has to win the Indian market over completely?
While we are trying to increase awareness about the product, it is equally important for them to be aware of the starting price points. We don’t want to be advertising some fantastically low prices, and when the customer comes in, what he actually finds is almost a pitiable quantity for the low price. The ‘Sub of the Day’ campaign we just ran had a story to it and the story was just not about the price but about a very basic human emotion. Of course it has to end with a price point because at the end of the day it is a promo commercial and not a brand commercial.
What do the numbers look like currently for the brand in terms of take-away versus dine-in sales?
We do not have online sales currently. That is a plan which has been activated but it is something which will take a year or so to formalise.
We do not have centralised delivery system. So we cannot put a number since some restaurants are just delivery-focused restaurants instead of dine-ins. Just as an indicator, 15 per cent is from delivery. This is not something that we can qualify given that we do not have a centralised delivery system.
Subway India's homepage has a good amount of screen space dedicated towards inviting people to partner them through franchises and/or career. What is that a reflection of when all other QSRs have their website homepages (first, second scrolls etc) flooded with nothing but their products and links to order online? How much of your marketing communications is directed at franchisees and how much is towards end-consumers?
This is an effort to evolve the brand a little more. When people go to the website they just do not want to look at the promotions. Being a franchise business there is an automatic inquisitiveness among the people to know about the company.
One hundred per cent of marketing budget is directed towards the consumers.
Given that we’re a franchise business, we have development agents in each territory. The responsibility and task of getting in franchise enquiries lies with the development agents. So, we as Subway marketing we do not play a role in directly reaching franchisees.
With aggregator sites coming in, how does that affect QSRs in terms of attracting customers?
More and more restaurants are looking at aggregators like Zomato and FoodPanda to just increase their share of business. But as of now, Subway has not signed in with aggregators. It is but well within the rights of the individual franchises to get into a commercial agreement with the aggregators.
Has the approach to position itself as ‘healthy’ worked for Subway in India? Can you explain this, and throw some light on consumer insights in this regard?
When a consumer looks at Subway, they understand us as a healthy brand. This is from the consumer’s mindset. We have low fat offerings but it is not something that we’re going out and claiming in our advertisements. Our consumers feel that we’re a healthier alternative to other QSRs.
You also handle Sri Lanka. How different is the consumer market there, from India?
Sri Lanka is very much like the Indian market and we expect to grow there. Just as we’ve developed far more than we were since we opened in India. Sri Lanka is a very aspirational market.
(This article first appeared in the 13 November 2015 issue of Campaign India)