Quizno's Sandwich Company
Quizno's is the second leading sub shop company today; Subway is the first leading shop. Quizno's does have other competitors such as Blimpie's and Jerry's Subs; however, Subway is Quizno's primary competitor. The Subway website reads, "Subway is the world's largest submarine sandwich chain with more than 30,000 restaurants in 87 countries." (Subway History 2009). Rebecca Steinfort, the Chief Marketing Officer for Quizno's said, "Our main competition is Subway, which is an 800-pound gorilla" (York 2009). Subway began back in the 1960's, according to the Subway official site page. The site reads that, Subway was started in New York by Fred DeLuca and Dr. Peter Buck; Subway has been in business for over forty-three years (Subway, 2009).
Size and Trend of Industry
According to the National Restaurant Association, the quick-service restaurant industry is very profitable; the profit revenues represent 47.5% (or $511 billion) of the food dollar. The quick service industry in the U.S. receives profits of up to 120 billion. The convenience of quick-service has proven to be a substantial success for this industry. According to the United States Department of Agriculture, between 2000 and 2010, the consumption and spending on fast food is expected to increase six percent mainly because of the new-age families that spend more time engaging in activities outside of the home. According to an affiliate of the Dun & Bradstreet Company, Hoover Incorporated, many households favor convenience over cooking, which prompts quick-service restaurants to place their franchises in more unorthodox locations such as inside airports or gas stations. According to Hoover's Inc., fast-food chains in the U.S. are looking to accommodate the increase in consumer spending by targeting international markets, particularly in China (Advertising Age 2009).
The company seeks to be the number one sub shop choice. In its attempt Quizno's has made tremendous progress through its interesting, yet questionable advertising techniques. In Quizno's advertising techniques, they have created ads that are targeted primarily to men and women between the ages of 18-34 years of age. According to an article from the Mcclean Marketing Group titled "Quiznos sponge monkeys revisited - Buzz isn't enough," the restaurants' target audience is 18-34 year olds and its spots are created with this audience in mind. In the past, Quizno's had used a commercial ad, created by the Martin Agency, which used a sponge monkey as the spokes person. When the ad was created, the idea was to create an eye catching and interesting commercial that would stand out from its competitors. In a Washington Post News Week article, the sponge monkey in the commercial is described as, "A small, furry creature, wearing a bowler hat, levitates as he sings an ode to Quizno's subs" (Stevenson 2005). Other past marketing techniques used by Quizno's included the Quiz Kidz program, "in which a special menu was developed for the little ones and initially launched with a "kids-eat-free" promotion." This Business Network article also mentions the purpose of the Quiz Kidz program, which was to attract parents who would, instead of a sub, enjoy a salad or pasta. Overall, the sponge monkey commercial was a success in grabbing the attention of viewers; however, it had drawn in a vast number of complaints from customers who felt the commercial was unpleasant and tasteless. On the other hand, the Quiz Kidz program was a success due to its family oriented approach. According to this Business Net article, the Quiz Kids program increased "evening and weekend business, it nearly tripled sales." These are the major past marketing activities that have been presented by Quizno's. (Edwards 2009 p. 2).
The current marketing activities that Quizno's is currently using include delivery and catering services; Quizno's has also altered its menu to surpass Subway's five dollar foot-long deal. In doing so, Quizno's is currently offering the four dollar Torpedo sub which claims to be a better tasting sub for a lower price. In the attempt to promote the lower priced sub, Quizno's has taken the sexually suggestive approach in its current commercial ads. Advertising for the Torpedo sub was created by the advertising agency Nitro. The commercial ad is focused on the Torpedo sub; however, in the commercial an actor and a voice over is used; the actor and the voice over both say sexually suggestive phrases such as, "Put it in me," and "Say it Sexy." This commercial has also drawn up much attention for Quizno's however it has stirred up many complaints as well. (Ehrke 2009)
In addition to the captivating commercials and lower priced subs, Quizno's has developed and implemented the "Million Sub Giveaway." In this tactic, Quizno's is offering free subs to customers who agree to share personal information; mainly their email addresses. According to an "Advertising Age" article titled, "Quizno's throws Subway curve with Sexy 4-dollar foot-long," "Quizno's offered a "Million Sub Giveaway," "which is an online effort that e-mailed a coupon to the first million customers to give their names and e-mail addresses." These marketing activities are fairly new to the public, and are continuing to be promoted on national and international levels (York 2009 p. 7).
According to Advertising Age, in 2008 Quizno's spent $90 million on advertising via the Nitro Group, with the total profit/revenue at an estimated $1.9 billion. In contrast Quizno's competitor spent over 300 million dollars on ads (York, 2009 p. 10).
Franchising a Quizno's. According to the Quizno's internet homepage, in order to franchise a Quizno's certain criteria must be met. To buy a Quizno's franchise, you need a credit score and a net worth of $125,000. As a part of your net worth, you need $70,000 in liquid assets like cash or stocks which you can use to invest in tour restaurant franchise opportunities. Net worth is defined as your total assets; so that's cash, stocks, homes, cars, recreational vehicles, businesses, as so on, less your total debt (Quizno's Homepage 2009).
Referring back to the Quizno's homepage, "You can have between three and six employees working at one time. You might have 15 total employees on your payroll if you use part-time employees to work on different shifts." Also, the number of hours spent depends on the owner's preferences, such as operating the franchise independently, or hiring a manager to oversee the stores day-to-day affairs (Quizno's Homepage 2009).
Quizno's has many good qualities as a company, three of its current strengths are the four dollar Toasty Torpedo, the commercials are very memorable, and Quizno's delivers. The Quizno's four dollar Toasty Torpedo is cheaper than the Subway Five Dollar Footlong. In today's economy everyone is looking for a cheaper lunch and the Toasty Torpedo is the better buy. The Quizno's commercials over the last few years have been very memorable; they contained a memorable message and recently came out with a commercial that is getting a lot of attention. Another strength of Quizno's is its delivery service, Subway and other fast food restaurants have not yet begun delivering, so Quizno's is pioneering the fast food delivery. Another strength that benefits Quizno's is its delivery service. Currently, participating franchises offer the services during typical lunch hours. Unlike Subway, Quizno's delivers personal and catered orders to customers, with a base fee and delivery charge. Choosing the option of group ordering, and the time you would like the order delivered, are also offered. These benefit Quizno's because they have more franchises that provide the delivery service. Also, this helps the company because of the effect the economy has had on fuel prices. Rebecca Steinfort, Quizno's senior vice-president of delivery and catering, explains: "We've seen a great response even though we have not been advertising.
The Quizno's four dollar Toasty Torpedo is also cheaper than the Subway Five Dollar Footlong. For 4 dollars, customers can buy a toasty torpedo sandwich before tax. In comparison, Subway's five dollar footlong costs $5 before tax (Green Eggs Marketing, 2008, para.1-2). Quizno's benefits because the low price of the sandwich can encourage customers to add on to their meals by adding a bag of chips or a soda. Those side items are low priced, and the total cost of the meal will not exceed $6 (Toasty Torpedo, 2008, para.2).
A weakness that Quizno's has right now is that although it has a delivery service it is very poorly advertised. The only way to discover Quizno's delivery service is to visit the website; on the site there is very little information about the service. Customers should be made aware of the delivery opportunities. Another major weakness that Quizno's has is its prices. According to President of Quizno's Subs Greg Macdonald, "Consumers love the sandwiches but found them too expensive" (Marketing Magazine p.3).
The next weakness that Quizno's holds is their advertising approaches. For instance, previous commercial ads seemed a bit tasteless and un-appetizing. One commercial that involved a sponge monkey was raved as disgusting and unnecessary. According to an article from the Commercial Archives titled, "Quiznos Dusts off Baby Bob," Quizno's commercials have had negative ratings and perceptions, despite the ads' popularity. It is reported in the article that, "the ads give the idea that rats are in Quizno's subs," (Adland p 1). Another perception of a Quizno's ads was," Baby Bob just isn't very funny or interesting or anything" (Adland 1). These two commercials involved the shouting sponge monkeys, and the talking baby. As for the most recent commercial advertisement, there is a huge weakness in this add. The commercial focuses on the new four dollar torpedo sub. While the commercial does focus heavily on the sandwich, its sexual suggestions are even heavier. To compete with Subway's five dollar foot long, Quizno's has created the four dollar Toasty Torpedo.
To promote this sandwich, Quizno's has developed a commercial that has been called inappropriate, offensive, and tasteless. There is a talking oven that is having a conversation with a chef. The oven is repeating comments such as "Put it In Me." According to the website onemillionmoms.com, an article titled, "Quizno's is more than 'Toasty'; they are in HOT WATER," reports various mothers who are against the new commercial advertising approach because of its potential affect on television viewers. The article quotes one mother as saying, "I find the homosexual innuendo tasteless, and it only serves to lessen the character of your company. Young children may not see the implication, but teens and adults certainly do"
As for the actual Toasty Torpedo sandwich, the sandwich has been reported as gross, disappointing, and even bland. According to an article titled, "Quiznos' $4 Torpedo vs. Subway's $5 foot long," from the "Orange County News Source," consumers have said "I couldn't believe how bland the sandwich tasted, and how dry the bread was. I was really disappointed" (Luda 2009). The Toasty Torpedo is all reported as looking like a completely different sandwich compared to the one shown on television. It is said that the sandwich does not even look close to what has been shown in the Toasty Torpedo commercial (Orange County News Source p 3). Quizno's has been reported as having another weakness, Quizno's has a malfunctioning issue with the Million Sub Giveaway special. In this, consumers were given the opportunity to share their names and email addresses in exchange for coupons at Quizno's restaurants. Though the giveaway was successful at collecting consumer data, it had a few malfunctions. In the giveaway it was reported that consumers never received their coupons, others could not print the coupons out, some Quizno's franchises even turned the coupons away (Advertising Age 2p).
One big opportunity for Quizno's is to undertake international expansion. Quizno's currently has over 500 restaurants in over 21 countries. If Quizno's opened more restaurants in other countries the company could continue to expand more and reach a larger group of customers.
Currently, Quizno's largest threat is Subway. Subway has launched the five dollar foot long deal on every one of its sandwiches; in contrast, Quizno's only offers its four dollar sub deal on select subs, which are the Toasty Torpedo subs. In addition to the sandwich deals provided by subway, they have also launched a side kick deal. In this, when a consumer buys a five dollar sandwich from subway, they are able to choose from a variety of side orders for only a dollar. The side orders include cookies; apples, and a 20 ounce beverage.
Another big threat to Quizno's right now is the commercials that they are running to promote the Toasty Torpedo. Although it is a memorable commercial, it may cause some problems. The Toasty Torpedo commercial uses many sexual innuendos and potential homosexual suggestions which could potentially cause different groups of customers to develop a negative attitude towards Quizno's. On other hand its competitor Subway, has developed multiple commercial ads that have a catchy jingle that promotes its five dollar foot long subs. This jingle has been reported to be a huge success and has captured the attention of millions.
According to an article from the Review Atlas titled, "Get Tuned up for the Return of Advertising Jingles," "Subway's "Five Dollar Foot-Long" commercial contains three key ingredients of a successful jingle. It's catchy, it's concise and it tells consumers something about the company you want them to know." (Review Atlas p, 20). The threats that Subway presents to Quizno's are immense and appear to be unbeatable. Therefore, it is essential for Quizno's to continue to compete in the race as a leading sandwich provider
Using primarily a focus group to gain an in-depth look at Quizno's, there was a vast amount of information. In addition to a focus group, the observation method was used to substantiate the findings that would come from the focus group. On a Wednesday, at approximately 12:40pm, The Quizno's restaurant was packed with costumers. There were consumers in every seat, and there was a line that stretched to the back of the restaurant. In this observation, the consumers who were seated were all eating in groups. Most of the consumers were dressed in collared shirts and neatly pressed dress pants. It appeared that everyone was on a lunch break. All of the customers purchased a sub that was toasted, and oozing with cheese. However, there was one female customer who was eating a salad, and appeared to be quite pleased. All of the consumers had a fountain beverage along with a bag of potato chips. As for the environment in the restaurant, it was somewhat noisy and crowded. In addition, the weather outside was unpleasant because of the rainfall. However, this did not stop the consumers from ordering a Quizno's meal. Each consumer patiently waited for their meals, however, they did not appear pleased with the service. It seemed as if the workers were moving too slow, according to the consumer's facial expressions. Also during the observation, the demographics of the consumers were obvious, including, gender, race, and age. During the lunch hour, there were more men than woman throughout the entire restaurant, and it was documented that approximately 95 percent of the consumers were Caucasian. The other 5 percent were of other races that ranged from African American, Asian, and Hispanic. The general age range was 25-45.
Though the observation method was used, the primary research method was the focus group. The focus group consisted of eight individuals; 5 of them were actually eating and enjoying a Quizno's meal, and 2 two were in the restaurant with a friend who was waiting in line for a Quizno's sub. The consumers all agreed to participate in the focus group; they all were delighted to do so. The age range of the focus group was 19 to 45. The focus group members were Caucasian-Americans. The majority of the focus group members were white collar workers who had decided to eat at Quizno's for their lunch breaks. The other half was Towson University students. The members were asked over 30 questions, including demographics, favorite Quizno's commercials, favorite Quizno's items, and least favorites items. The questions were designed to understand the underlying feelings that consumers had towards the suggestive messages displayed in Quizno's advertisements. However, in regards to asking questions relevant to said advertisements, there was a variety of answers.
Within the focus group, the majority of them replied "I just fast forward past the commercials on my TIVO, (An interactive television application), so I have never even seen a Quizno's commercial." Others expressed which commercials stood out to them the most, and which commercials were ineffective and offensive. The replies ranged from "the commercials were funny;" to "the Quizno's commercials are gross;" to "I've never seen any of their commercials to be honest," to "the commercials made me hungry for subway." One focus group member even replied, "Quizno's is the McDonald's of subs, it's sickening, they both are horrible!" Each question was directed to each member and each member gave an equal response. From this focus group, the underlying feelings, opinions, and emotions about Quizno's were discovered, as well as their feelings about Subway. Consumers expressed personal preferences in regards to Quizno's commercial advertising, and provided suggestions on how to improve it. The ultimate findings from this focus group was the low effectiveness of Quizno's advertising approaches; primarily its television commercials.
The reason for using the focus group was to gain in-depth and personal information from actual Quizno's costumers. Another reason for using this approach was to gain actual responses to recognize the short comings of the Toasty Torpedo television commercial, and other advertising approaches. This approach was also effective because it allowed personal interactions with costumers; the focus group also allowed consumers to feel comfortable and willing to open up. A survey was not used in the research because it would not exhibit the truthful feelings that consumers had toward Quizno's. In a focus group, a firsthand response would be given truthfully and openly.
A personal interview was not used in this research because there are so many differing opinions in regards to Quizno's and its commercial ads. A focus group would display the varying opinions on a more detail and emotional level. Ultimately, the interview would limit the results to one perspective, compared to a focus group. Also, the results from a personal interview would be biased and lack a multi-dimensional response. The focus group has positively affected the Marketing campaign, primarily by providing insight of why Quizno's past commercials were ineffective. The results from the focus group will demonstrate the specific elements that can assist in the effort to gain more customers, while regaining lost customers through enhanced advertising strategies.
The primary target audience that is best for Quizno's to appeal to is the middle class white collar segment. The middle class is in fact the largest class in the United States, according to the Pew Research Center. The middle class is largely comprised of married individuals with children, college students, and college grads. The Pew Research Center reports that 68 percent of middle class members are homeowners. It is also reported that a large amount of middle class member eat out several times a week; this audience is describe as healthy individuals as well. Moreover, the middle class is described on a geographic level as well. In this report, most middle class individuals reside in suburban and rural areas. Approximately 54 percent of middle class members reside in suburban areas, compared to the 40 percent that live in urban areas. According to the Social Analysis and Reference Groups, the middle class tends to value education, news, homeownership, and stability (Social Analysis p. 13). According to Dr. L Robert Khols, the director of International Programs at San Francisco State University, the middle class American also values equality, wealth, newness, innovations, success, and time. (Kohls, p.3-10). The middle class target audience has a variety of demographics, geographic, and behavioristic elements; however, the more affluent segments of the middle class are crucial to finding the perfect target market for Quizno's.
The 18-24 year-olds represent 26.1 million of the United States population, with the highest numbers of this demographic living in the Northeast. Whites still have the highest population of citizens at 62 percent. Hispanics are second at 16 percent, Blacks are third at 13 percent, and Asians are last at 5 percent. Less than 3 percent of this age group lives at home with their parents either in school full time or not in school at all. In the U.S. 62 percent of this population have a high school diploma with some college education, while 16 percent have no high school diploma or degree. Fifty-five percent are working middle to low-income full-time jobs, with personal earnings amounting to 60,000 dollars. A little over half of the individuals in this age group have never been married, and currently have no children. According to the Journal of Advertising Research, "this generation of citizens are idealistic, socially conscious, individualistic, anti-corporate, speak their minds and dress as they please." (Kapner, 1997). It is because of these reason that this particular segment is difficult to advertise to. They do not succumb to the usual advertising methods that have proven to be successful for other age groups (Wolburg, 2001). Those in this age group that are college students are also important because of the impact they have in the market. In numbers they can influence others because of how quickly they adopt new products, and how quickly they develop brand loyalties that will last long into adulthood (2001).
This target market consists of middle class males who are between the ages of 25 and 39. The salaries of this market ranges from 35,000 to 50,000 dollars a year. They are fresh in their careers; mostly in good health and value time as they do money. Most of the individuals in this market area are in a managerial position (Lexis-Nexis, Valios). To further support this is an article from Restaurants and Institutions. The article reads, "Middle-class consumers are most likely to say that casual-dining restaurants are their primary dining-out choices." This market has also been reported to eat at restaurants that reflect their social status. The Restaurant and Institutions site article reads, "Middle-class consumers are more likely than lower-middle-class or upper-middle-class consumers to say that their restaurant choices reflect their social status." The article says that these middle class individuals have a range of household incomes starting at 35,000 dollars a year. To also illustrate this target markets value of time is the Restaurant and Institutions article, which reads that most individuals in this middle class market will more than likely not wait more than thirty minutes for a meal; nor will they wait that amount of time to be seated at any restaurant; "nearly one-third of these consumers purchase lunch on weekdays, the members of this demographic also feel time-pressed" (Hume, Restaurants and Institutions, 2008 p5). This target market appears to value time, work, money, and quick-meals. This group is a great market because of the large amount of members who dine out frequently during the week.
This suggested target market mostly comprises of males who are white collared workers between the ages of 41 and 65; they are mostly married with children and typically live in suburban areas, however work in urban areas. This segmented group is a good target market due to its growing numbers in corporate work fields. Therefore, since the amount of white collar workers has increased, so have the amounts of lunch breaks that can be catered to by Quizno's. According to a report from the United States General Accounting Office, the workforce is increasing with elderly workers. In this was reported a 19 percent increase in white collar workers who are between the ages of 55 and 77. These numbers were calculated for the year of 2008 (GAO projections 2008). The report also illustrates the median salaries of white collar workers who are between 55 and 74. More specifically, the report says that a large amount of white collar workers, between 55 and 64, are in executive or administrative positions, earning over 50,000 dollars a year. This is one target market that Quizno's should consider due to its growing size. Another report from the Pew Research Center illustrates, in a series of charts that the percentage of males, who are between the ages of 40 and 60, tend to be in professional or executive positions. The report describes most of these individuals as being married with an average of two children; about 45 percent of these individuals have a ranging salary of 50,000 to 100,000 (Pew Research Center, p.68. 2009). The reason this market may be a great choice is due to the available financial resources that these individuals hold. Another major reason for this target market choice is due to TIVO. From the results of the focus group that was conducted, the older members of the group admitted to fast forwarding through commercials. With the TIVO feature, commercial spots are being missed and un-heard by older middle class workers. In the focus group, most of the older members had never even seen a Quizno's commercial; yet, they are familiar with the restaurant but not its specials. The goal is to reach out to the more affluent middle class male workers because they are able to afford commercial filtered television; thus, decreasing the amount of commercial viewership. Therefore, it is necessary to heavily target this market in a new and innovative manner. To support this is Stephen Baker, from Business Week, who reports, "Approximately 6.5 million TiVo-like devices are currently in use in the U.S. And 70% of them are routinely used for commercial avoidance; the devices are threatening to bring the $60-billion-a-year TV advertising business to its knees" (Business Week, p 1). Therefore, the Elder market segment will be the main focus for the enhanced Quizno's marketing strategy.
Not only is advertising necessary for Quizno's, more attractive and tighter advertisements are needed. Subway is Quizno's leading competitor and is having much success. Subway has advertisements that range from jingles, to funny skits, to special meal deals. In contrast, Quizno's is the second leading sub dealer; therefore, it is necessary for Quizno's to keep up with Subway on a constant basis. It is important for Quizno's to target its consumers through a combination of advertising forms. These forms include image advertising, and national advertising,. With image advertising, Quizno's will have the opportunity to transform its image as the second leading sub provider. According to an article from the Microsoft Corporation titled "Advertising," image advertising gives a product a personality that is unique, appealing, and appropriate so that the consumer will want to choose it over similar products that might fulfill the same need" (Microsoft 2009 p. 9). National Advertising is absolutely necessary for Quizno's to continue with so that consumers are continuously reminded of Quizno's; thus, fervently competing with Subways advertising approaches. The significance of this national advertising approach involves informing the nation about Quizno's its image, and its products on a continuous basis. The purpose for this continued national advertising approach is to developing loyal consumers; thus, having them choose Quizno's over its competitors. According to the Microsoft Corporation article, "national advertising tries to build consumer loyalty to a product or service." (Microsoft 2009 p. 2). Gaining loyal customers is the objective in using the national advertising approach.
