assignment relationship marketing

8/19/2019 Assignment Relationship Marketing

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ASSIGNMENT RELATIONSHIP MARKETING JANUARY 2016

BACHELOR OF BUSINESS ADMINISTRATION WITH HONOURS

SEMESTER JANUARY 2016

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RELATIONSHIP MARKETING

MATRICULATION NO : 7101614!0"1001

IDENTITY CARD NO# : 71016$14$!0"1

TELEPHONE NO# : 01$6641264

E$MAIL : %&'%()*%%+,-%.//#/'

LEARNING CENTRE : SHAH ALAM

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TABLE OF CONTENTS PAGE

Introduction of eBay.com 3-8

The key elements of a business model 9-14

Reference of the key elements of a

Business model 15

nalysis of the eBay.com based on the

!ey elements of a business model

1. "alue #ro$osition 1%-19

&. Re'enue (odel &)-&3

3. *om$etiti'e +n'ironment &3-&,

4. *om$etiti'e d'antae &8-&9

Recommendation

1. tratey 1 &9-3)

&. tratey & 31-3&

3. tratey 3 33-34

ummary 35

References 3%

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INTRODUCTION OF SUBWAY

i) Company Backgron!

Subway chain is a fast food chain that comes at third position globally which comes after

McDonald’s and KFC. This company came out to be established in 1!" and the originator

of the Subway food restaurant was Fred De #uca$ and he was so thoughtful to start is

restaurant business when he was only 1% years old. First and foremost store was established

in &ridgeport$ Connecticut. The founder of Subway almost immediately cultured the

fundamentals of management in a business$ in addition$ the significance of allocation as a

well'made$ high eminence item for consumption$ on condition of the outstanding customer

ser(ice and )eeping operating costs low simultaneously by disco(ering immense position.

Such )ind of in(enti(eness sustained in ser(ing the groundwor) for prosperous S*&+,-

restaurants internationally. There are in ecess of /!$0! Subway restaurants nearly 122

countries globally and also it can be said as the world’s greatest intensifying authori3ation

succession. This area monopoly se4uence has occupied more than 1/$0/5 inhabitants

6Subway 52117. Subway offers many different )inds of fresh marine sandwiches also )nown

as subs to their customers. 8(erything 9 decided by the consumers s which )ind of a product

they want to ha(e in the ser(ices The companies moti(e is to pro(ide the fresh products$

slogan of company$ 8at Fresh which says$ Subway chain uses only a moment ago ba)ed

bread and fresh constituents. Since a (ery long time the Subway tried to ma)e e(ery efforts in

the mar)ets to set up again. The Subway chain has also a lot of ri(als in e(ery countries

mar)et. ,s soon as the Subway chain was withdrawing their restaurants from the Danish

mar)et$ Sunset &oule(ard immediately raised / of their branches 6Subway Denmar)7.This

description will pro(ide the se4uence about the Subway succession$ its consumers and

Subway as a authori3ation representation. The competition between Subway and its three

biggest competitors McDonald s$ &urger King and Sunset &oule(ard$ are also integrated.‟

"i#ion$

“Be the #1 Quick Service Restaurant (QSR) franchise in the world, while delivering fresh,

delicious sandwiches and an exceptional experience (Source! Retailindustr"a$outco%,

1&')

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%i##ion$

elight ever" custo%er so the" want to tell their friends * with great value through fresh,

delicious, %ade+to+order sandwiches, and an exceptional experience (Source!

Retailindustr"a$outco%, 1&')

Logo$

Starting in :anuary 5225$ Subway started using a modified (ersion of the logo. &y early 522/$ all

branches had the new loo). 9n this logo$ the o(al behind the word mar) was remo(ed. The slogan

used with this logo was ;8at Fresh.;. ,s of 521!$ this logo is still used as a secondary logo.

The slogan


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ii) T'( %(aning o C#*om(r Loya&*y

&urger King wants to create and retain a loyal customer who engages in continued profitable

business with them. Customer #oyalty is the measure of success of the supplier in retaining a

long term relationship with the customer. Thus c#*om(r &oya&*y i# +'(n a #pp&i(r r(c(i,(#

*'( &*ima*( r(+ar! o 'i# (or*# in in*(rac*ing +i*' i*# c#*om(r. Customer loyalty tends the

customer to (oluntarily choose a particular product against another for his need. The loyalty may

be product specific or it may be company specific. +hen a loyal customer has repetiti(e

re4uirement of the same product$ such customers may be described as being > -ran! &oya&’. ?n

the other hand he may also re4uire different products of the same manufacturer. That is to say he

ma)es significant purchases direct from the same supplier and that counts as the company

specific loyalty.

#oyalty also means that customer is stic)ing to the supplier on certain grounds though he may be

ha(ing other options also. 9t may be possible that the supplier may not ha(e the best product or

the customer may be ha(ing some problems with the supplier in respect of his supply of the

product but the customer li)es to ignore other options and prefers to continue with the same

supplier as the customer thin)s the supplier pro(ides him more (alue and benefit than others.

Such loyal customers tend to spend more money buy more$ buy longer and tell more people

about the product or supplier. This type of long'term customer loyalty can only be created by

ma)ing the customers feel that they are number one priority with the supplier.

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iii) T'( Princip&(# o C#*om(r Loya&*y

Customer loyalty creates money. 9n the game of customer loyalty$ when one business gains a

loyal customer it is at no epense to the other company. @emember$ the only time we can ma)e

profit is when the customers return to buy again for second$ third$ fourth time. 9f a customer is

always buying from different businesses$ there is no loyalty. Ao one is benefiting from repeat

buying by ma)ing a profit from the customer. The customer is fore(er a new customer as he

changes from one business to another. The customer doesn’t e(en win$ because he is not getting

enough satisfaction out of any transaction or relationship to come bac) to buy from that business

again.

Bowe(er$ when a company learns to gi(e a customer what he wants the customer becomes loyal.

Be buys on a repeat basis and creates profit where no profit eisted before. This profit is not at

the epense of the competition it comes from the sa(ings and other benefit deri(ed from selling

to a loyal customer'e(eryone wins. The competition is no longer losing money on the unfaithful

customer. The business’s that has the customer’s loyalty is now ma)ing a profit$ which did not

eist before. The customer is pleased enough with the transaction$ relationship$ products$ or

ser(ices to become a loyal customer. The fi(e principles that create customer loyalty are

• Eeople do business with people

The acronym K U H L 6pronounced


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• Galue and assurance

The customers always decide what is of (alue to them. Galue is determined by the

customers’ specific tastes$ preferences$ wants and needs. Galue should not be

confused with price. Erice is only one component of (alue. Eeople base their

purchasing decisions on their specific situation and desires.

Bow a customer percei(es the (alue of your product or ser(ice can be described

as your (alue proposition. Galue proposition encompasses the true usefulness or

specific benefits the product or ser(ice pro(ides.

• 8ffecti(e communication

Communication is the largest single factor determining what )inds of

relationships you ma)e with others and what happens to you in the world you li(e

in. Communication is effecti(e when it is two'way. Spea)ing$ listening and

learning are the basis for effecti(e communication.

The message you gi(e to your customers and how you deli(er that message is

central in the process of creating customer loyalty. -ou communicate by what you

say$ how you say it$ and how you loo).

• Focus

Focus is the obHect of your current attention. Focus affects customer loyalty in

three ways

Bow you thin) about yourself and your business. +hen you ma)e the fi(e

principles that create customer loyalty a part of your deepest thoughts$ you

are instructing your subconscious mind to use its infinite powers to ser(e

your purpose.

Bow you thin) about your customers. De(eloping your ability to focus onrelationships instead of Hust ma)ing a sale is critical in creating customer

loyalty.

Bow your customers thin) about you.

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i,) T'( S-+ay0# Pro!c*

Subway offers customers a wide selection of sandwiches also called


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,) T'( S-+ay0# C#*om(r Proi&(

Subway’s customer profile based on the following

1. Segmentation

Subway segmented its mar)et based on the following methods

a eographic

The geographic segmentation is based on the segmentation of mar)et through

countries$ locations$ towns J cities. Subway segmented their mar)et based on

the test of different geographic location. They are considered C?E 6Country

optional program7$ S?E 6Store optional Erogram7 and M?E 6mar)et optional

program7. For eample$ they offer mostly halal menu in Middle 8ast

countries$ mostly (egetable without beef in 9ndia$ li)ewise$ more sauce for

,merican.

$ e%ographic - socio+cultural

The demographic segmentation is something related to the age group$ gender$

life cycle and income. ,nd according to subway it maHority of customer are

concentrated on the age group in between 1% to / years mostly the people are

either studying or wor)ing. +e can obser(e the change in the products which

are consumed by different age groups. So it is a strategy that in(ol(es the

promotion of the item which meets the re4uirements of different age groups.

c .s"chological or ps"chographic

Subway core customer between the age of 1! to / are found to be more

health conscious. Therefore$ by pro(iding healthy and fresh food$ subway

segmented the customer based on the trends or psychological.

&esides by offering the reasonable priced food with fast ser(ices$ subway

wants to suits the poc)ets of the many college going adults as the concept is

something related to the (alue for money.

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d. &eha(ioral or attitudinal

&y pro(iding catering ser(ices to its customer$ Subway is segmenting the

mar)et based on the beha(ioral of its customers. Subway )new that with

hectic and busy lifestyle$ catering of fresh$ healthy and fast food is re4uired in

e(eryday life

Subway also ma)e special promotion during occasions li)e Christmas and

new year by offering gift card$ etc. on the purchase of its food. This shows

that they segments he customer based on the occasion under beha(ioral of its

customer.

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T/E BENEFIT OF DEALING WIT/ LOYAL CUSTO%ER

Customer loyalty can be seen as the main )ey element of customer relationship

management and illustrates the loyalty which is built between the customer$ organi3ation$

persons$ products or brands. Customer loyalty is the )ey determinant of an organi3ation’s

success.

#oyal customers are those that come bac) to purchase from the same business again.

Aot only can they help increase the profits$ they also often generate positi(e word of mouth$

which can be an effecti(e mar)eting tool.

The main benefit of dealing with loyal customer can include

increased sales

increased profits

increased word of mouth and referral business

reduced costs in attracting new customers

building good relationships with your customers.

,t the point when an organi3ation reliably con(eys predominant esteem and wins customers

affection$ mar)et share and income increases$ and the epense of procuring and ser(ing

customers reduces. Through customer loyalty$ Subway will get the benefit as belows

1. /c0uiring a new custo%er will costs %ore than %aintaining an existing one

Ma)ing contact with a customer and attaining the first deals fre4uently fetches so much

that the net profit for the transaction is insignificant or e(en negati(e. ,t the same time as

the relationship )eeps epanding$ prompting more business$ the customer gets beneficial

to the (ender. The longer the relationship$ lower the amorti3ed cost of ac4uisition. +hen

setting up a new ban) account$ epenses incurred during credit searches and promotional

epenses to sell the ser(ice to a new customer can add up to fi(e times the cost of efforts

that might ha(e enabled the firm to retain a customer.

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12 Loyal customers have a tendency to be less arrangement inclined

#oyal customers ha(e a tendency to be less deal prone than non'loyal customers of an

organi3ation. The customers who are in successful long'term relationships with ban)s$

the demand for ser(ices from ban)s from loyal customers were less price sensiti(e when

compared with the demand with non'loyal customers.

32 Loyal customers are likely to give free word-of-mouth advertising

Customer loyalty is consistent with a positi(e demeanor towards the ser(ice pro(ider

endorsing positi(e word'of'mouth. The customers who builds relationships with their

sales associates tends to spread an etensi(e positi(e word'of'mouth.

42 Loyal customers have a greater tendency of purchasing products with a little effort of

marketing

The longer a customer stays with an organi3ation there is a high probability that they will

place their business share with that organi3ation$ e(en to an etent of single sourcing.

52 Customer loyalty and employee loyalty are positively correlated

+hen the customer retention rate is increasing then the employee retention rate will also

increase since the employees will feel that they are satisfied with their Hob2 #ong'term

customers are easier to ser(e since they )now the structure well and how to use it as well

as to wor) with loyal employees. The increasing rate in customer retention will leads to

the impro(ement of customer retention since long'term customer ser(ing employees will

highly eperience in creating (alue for their customers2

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62 ANALYSIS ON T/E LOYALTY LE"EL OF TARGET CUSTO%ER

Subway is to pro(ide fresh$ customi3ed sandwiches based on consumer’s needs and

re4uirements. The specific and uni4ue product offering of healthier diet and nutritious products

is an important aspect in the brand e4uity of Subway. For se(eral years Subway has ad(ertising

themsel(es based on eating healthier food and by aligning themsel(es with se(eral organi3ations

and associations promoting health consciousness Subway has also aligned themsel(es with

se(eral social e(ents and programs promoting health consciousness in the de(eloped countries.

Subway is an eample of de(eloping a focus on a specific segment of customers based on

demand factors$ a de(eloping trend and inno(ati(e products. The specific segment of customers

is those health'conscious customers and the de(eloping trend is the trend of healthier eating

along with fast food concept. The inno(ati(e products are the customi3ation off the menu and the

ability of Subway to pro(ide se(eral (arieties of food products.

+hen analy3ing the success

factors it can be seen that healthier menu options$ consistency of the food 4uality$ con(enience

pro(ided to the customers 6fast food7 and the lower capital costs re4uired for franchisees are the

important aspects of the mar)eting strategy of Subway. The uni4ue brand e4uity of lower le(els

of fat content in the foot products offered by Subway through the ad(ertising of the weight loss

of one of its customers has de(eloped high le(els of consumer attraction to the food products

offered by Subway.

Subway the de(eloping food products for different segments of the customers based on

demography$ geography$ and beha(ior and psychographic. The segmentations are based on age

where there are meals for )ids$ office goers and elderly. The food products are also customi3ed

based on income le(els and health consciousness. The customi3ation of the food products can be

seen based on the geographic and lifestyle conditions also. ,n eample is the halal sandwiches

offered in many of the geographies where the customers insist for only halal food.

Subway has ta)en a differentiation concept whereby the food products are differentiated from

that of the con(entional fast food restaurant chains. The pricing of the products are at the higher

end of the scale and intended to promote uni4ue (alue to the customers who are health'conscious

and loo)ing for 4uality ser(ice. The brand of Subway is positioned as the healthier option for fast

food customers and it can be seen that it is positioned between that of a 4uic) ser(ice restaurant

and a full'ser(ice restaurant.

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Subway has positioned its products based on the health and nutritional aspects which can be

said to be positioned at a different le(el to that of the competitors. Subway is able to offer

enhanced (alue proposition to the customers by pro(iding healthier and nutritional food along

with 4uality and similar to the food products offered by other fast food chain such as &urger

King$ Kentuc)y fried chic)en etc. Customers of these fast food restaurants are getting attracted

to Subway because of the uni4ue (alue proposition. Bence it may be said that the healthier food

option along with the ser(ice is the uni4ue (alue proposition for the customers. Moreo(er the

franchisees are trained to pro(ide ecellent customer ser(ice.

+hen analy3ing from the aspect of targeting of the customers it can be seen that Subway is

targeting the between age 1%'"2 years segment of the population who are health'conscious and

the increasing trend of eating healthy food is being utili3ed by Subway in its mar)eting and

promotional campaigns. 9t should also focus on the target groups such as teenagers and students

as these target groups spend lot of time on social networ)ing sites or other sites. So subway can

add banners on such networ)ing sites which are regularly (isited by the target groups so

concerned. The website of the Subway includes lot of information about the nutritional aspect of

the food products offered by the Subway.

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RECO%%ENDATIONS TO SUBWAY OF T/E CUSTO%ER LOYALTY LE"EL

9n today’s world one of the maHor problems is unbalanced growth in customer loyalty program.

This paper eemplifies the en(ironment and the ways loyalty managers can meet this eacting

challenge. This can only achie(ed by ma)ing business plan and optimi3ed business process

design to compute those strategies which is maintained by highly technology persons. ?(erall

co(erage at each le(el is re4uired for business processes which are fully co(er up by business

strategies. Technology fully co(ers the needs of the business processes which are fully co(ers the

technology re4uirements.

A2 eople do business with other people

To stri(e for success$ Subway should be inertia to react regarding to its substandard

ser(ice 4uality. To increase customers’ satisfaction with Subway’s ser(ice$ recommend

that Subway to standardi3e the personnel training program$ in which eti4uette and

8nglish training will be deli(ered to staff of Subway. The eti4uette training is epected to

enhance staff ser(ice 4uality at a standardi3ing etent nationally so that Subway can

ensure the ser(ice 4uality of its franchisees. &esides$ 8nglish training is considered as a

(alue added item$ with which staff of Subway can pro(ide more customi3ed ser(ice to

target customers who are 8nglish spea)ing.

B2 !ifferentiation

The fast food chains such as Subway offering differentiated products can be de(eloped

based on a differentiated focus approach with a target group of higher class of the society$

upscale lifestyle and status of customers. *nli)e in the de(eloped countries$ the stores of Subway

in de(eloping nations ha(e to be in the upscale areas rather than distributed in different

geographies. The franchisees can be pro(ided to high'4uality indi(iduals and groups who ha(e

prior eperience in pro(iding and de(eloping such retail outlets. The stores ha(e to be located in

upscale shopping malls and business areas. The specific target segment of the population would

be families and indi(iduals in the upper social classes. &ased on the social and cultural

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parameters of the de(eloping nations$ inno(ati(e products ha(e to be de(eloped. &urgers and

sandwiches are not the common food consumed by the customers in the de(eloping nations.

Earticular stress and focus should be pro(ided on geographic locations where (egetarianism and

halal food concepts are pre(ailing. The burgers and sandwiches can be offered as differentiated

products for the customers who would li)e to ha(e some )ind of differentiation. ,long with

burgers and sandwiches$ Subway can also de(elop inno(ati(e products based on the social and

cultural aspects of the de(eloping nations. Subway should also set up deli(ery ser(ice$ which

KFC and McDonald’s ha(e already done it.

C2 "alue and assurance

Since the present pricing of Subway is affordable for the target customer$ and could

manage with a high profit margin for franchisers and the head company$ it wouldn’t alter the

price greatly. Bowe(er$ prices would be lower for downsi3ed sandwiches to pro(ide a large price

range and capture more customers.

D2 #ffective Communication

9f Subway want to see higher amount of re(enue from eisting customer and reduced customer

falloff$ focus on persuading consumers to become brand loyal. 9mplement the >Turnstyle

initiati(e program 6+9F97> Subway ha(e recommended an updated communications strategy that

will utili3e the trends$ Subway identified to further tailor and amplify the program.

*nderstanding the customer segments has allowed Subway to e(aluate the eisting

program and ma)e changes that will resonate with the targeted customers. Turnstyle’s platform

has pro(ed to be incredibly useful for attracting and retaining the customers$ particularly

millennials. Subway has also gained (ery deep insights about the customers. The eisting

customers who sign'in to the Turnstyle powered +i'Fi return 1.% more fre4uently than the rest

of customer base. ,s the program progressed$ Subway obser(ed an increase in (isit fre4uency

amongst opted'in customers suggesting that Subway were able to form a tighter bond with their

customer. 9t is a fully organic solution that addresses se(eral of the communications obHecti(es at

S*&+,- understanding more about what ma)es the customers uni4ue$ offering public facing

+i'Fi$ increasing customer loyalty and retaining customers.

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E2 $ocus

Subway must establishments use analytical software programs to trac) customer buying

acti(ity. Doing so enables Subway to ma)e personali3ed recommendations$ send targeted e'mail

and mail promotions$ and assess what products$ ser(ices and price point’s customers prefer.

Card'based loyalty programs also are used by some fast food chains to lure customers with

promises of bul) discounts or rewards for repeat purchases.

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assignment relationship marketing

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