how customer satisfaction increases sales(1)

HOW CUSTOMER SATISFACTION INCREASES SALESSUBWAY

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

Customer Satisfaction Increases Sales Page 1

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.

Customer Satisfaction Increases Sales Page 5Variety 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.Clearly understand the expectations of a person while meeting them in person: this is done sometimes when face reactions can provide good


Quality

Delivery methods

Pricing

Social

Parking Facilities

Ambience

Overall Customer Satisfaction

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)

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


Perceived Performance

Comparison Standards

Perceived Disconfirmation

Satisfaction Outcomes

Loyalty & purchase

Intent to Purchase

Word of Mouth

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 – MODEL2.1 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 Pete’s 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;

“We’re trying to avoid what I’d call health extremism: The whole notion that you have to be much prescribed down to the lowest level of calories isn’t really helpful to most of the population. So we’re showing things like the turkey BLT, which has 9 grams of fat. It’s flavorful, and you’re not in deprivation mode [when you order it], and that’s a much more livable way of eating. It’s not some sort of extreme exclusion of all the foods you like to the extent that you think you’re depriving yourself of all the food you like. You just can’t 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 company’s 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 industry’s 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 Industry: 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.

Industry – 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 Bach’s Alpha Test”.it uses a five pointer scale to measure the satisfaction level covering various aspects like their experience, opinions as compared to the peer’s 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


Number of Respondents in the Restaurant

MaleFemale

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.

20-25

26-3031-35

36-40

Number of Respondents

20-2526-3031-3536-40

Figure: 4: Age group of People.


Age GroupNumber 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.


OptionsNumber 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

Less than

£10,000

£10,000-20,000

£21,000-30,000

£31,000-40,000

More than £40,000

Number of respondents

Less than £10,000£10,000-20,000£21,000-30,000£31,000-40,000More than £40,000

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.



Percentage

Less than Once a month

9 18

Once a month 15 302-4 times a month

20 40

4 times a month

4 8

More than 4 times a month

2 4

Total 50 100

9

1520

42


Less than Once a monthOnce a month2-4 times a month4 times a monthMore than 4 times a month

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



Percentage

Very Dissatisfied

0 0

Dissatisfied 2 4Neutral 9 18Satisfied 17 34Very Satisfied 22 44Total 50 100

2

9

17

22


Very DissatisfiedDissatisfiedNeutralSatisfiedVery Satisfied

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.


Percentage

Never 13 26Sometimes 27 54Often 9 18Always 1 2Total 50 100

Table: 6: Survey on Dine in and Take away


13

27

91


NeverSometimesOftenAlways

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 company’s 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.

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.



Percentage

Poor 0 0Average 7 14Good 40 80Excellent 3 6Total 50 100

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.

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.



Percentage

Yes 30 60No 20 40Total 50 100

http://www.instituteofcustomerservice.com/files/ICS_UK_Exec_Summary-FINAL.pdf

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

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how customer satisfaction increases sales(1)

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percentage of age

satisfied customer

customer loyalty

percentage of gender

percentage of income

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