Could advertising for two markets create confusion among consumers? Or will it boost sales of submarine sandwiches?
This is the dilemma that Subway, the nation's second-largest fast food chain, faces with its new and opposing advertising campaigns.
While recent commercials geared to healthy eaters have boosted profits, the Milford, Conn.-based chain is now wondering if its hungry, fat-loving customers are getting left behind.
The challenges of targeting hearty eaters comes four years of success with a campaign for healthy customers. In 1997, Subway's sales leveled off after two years of steady growth. In hopes of pushing the chain out of this standstill, Subway founder and President Frederick DeLuca decided to differentiate his product from other fast food restaurants by highlighting a line of seven subs that have less than six grams of fat.
According to Forbes magazine ("Split Personality," Sept.3, 2001), these low-fat subs successfully attracted the health-conscious consumer and boosted Subway's sales by 5 percent to $3.5 billion in 1998.
As a result of this success, Subway decided to devote all its advertising muscle to the health-conscious consumer.
The company created a new campaign that used Jared Fogle, an actual college student, as a spokesperson. Jared went on a diet of six-inch turkey subs and foot-long veggie subs, and coupled with mile-long walks to his local Subway, he lost 245 pounds.
His diet became coined the "Subway Diet." The ad campaign featuring Jared brought immediate success to Subway. According to Forbes magazine, the chain's sales climbed 19 percent in 2000 -- way over the industry's average growth of 4.4 percent.
DeLuca worried, however, that there may be an untapped market of hungry youngsters who care less about healthy foods and more about taste. Recently, DeLuca designed a new line of sandwiches that are calorie laden and replaced the signature U-wedge bread with fully sliced loaves to make the sandwiches look more meaty. He also decided to create ads geared toward these bigger eaters while continuing the ad campaign directed at the health-conscious market.
The initial ads for these hearty subs used a pushy shadow puppet who urged people to go for Subway's more traditional sandwiches. In July, Subway introduced another campaign using Jim, who is a normal-sized, sarcastic version of Jared, to promote its new calorie laden subs. According to Forbes magazine, DeLuca plans to divide the $65 million national ad budget for the two campaigns.
The effects? This dual ad campaign may cause some confusion, especially among new consumers. However, it may also tap into that new market of hungry youngsters.
The overall effect of the dual ad campaign depends on whether the new customers gained (the heavier eaters) outweigh the customers lost in the confusion.
According to University Economics Professor Mary Lee Epps, the outlook for Subway doesn't looks promising.
"Subway has already captured most of health conscious consumers through its previous campaign," Epps said. "And this market of health-conscious consumers is already very saturated.
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