Quiznos: What Not To Do If You Are a Challenger Brand
I’m going to stay mum about the recent creative execution by Quiznos to promote their $4 sub. I applaud them for continuing to push the creative envelope and take risks with their advertising. Every new campaign from Quiznos seems to generate conversations about the company. However, I can’t stay quiet about the $4 sub promotion to better compete with Subway’s $5 Foot Long promotion.
“The reality is that we are a challenger brand,” Chief Marketing Officer Rebecca Steinfort said in an interview. “Our main competition is Subway, which is an 800-pound gorilla. We may be 200 pounds, but they’re 800 (Adage: http://adage.com/article?article_id=135435.”
That is correct. Quiznos is a challenger brand, but you do not challenge the low-cost provider in the market by under-cutting their price. Especially when you are not positioned as a low-cost provider yourself, and there is another low-cost provider in that space (Blimpie). What will they do when Subway comes out with the $3 sub? Quiznos already lost 300 stores to lack of profitability last year and I don’t see how $4 subs is going to help this matter any. This latest effort just reinforces that Quiznos is a price alternative to Subway and not a quality alternative. They’ve officially entered a hyper-competitive price sensitive space they are not suited to compete in.
Their marketing has been ineffective over the last couple of years because the CMO, President, and Ad Agency have all been in a revolving door. There has been no consistency and they have lost their differentiating message of “toasty,” better quality, and taste. Furthermore, they have gone downmarket. They’ve turned into just another QSR instead of appealing to the fast- growing, Fast-Casual, up-market crowd that go to lunch at Panera Bread, Paradise Bakery, and Chipotle. They could have done price-oriented promotions during this recession as a way to retain business; they just didn’t need to stoop as low as they did.
The better alternative would have been to be more proactive in improving the consumer experience, making site improvements, and food quality improvements to differentiate Quiznos on the basis of quality. The consumer experience has greatly deteriorated at Quiznos over the last couple years. Other chains have seized the “quality positioning” from Quiznos through better food, experience, and service. Consumers don’t see the value in a Quiznos experience anymore and therefore Quiznos only alternative is to play the discount game, which is not a winning strategy.
I’d have to disagree. Their stores are very well kept, and offer a much better dining experience than Subways. I would bet that in a survey Quiznos is ranked as more upscale than their competitors. They lost their differentiators, of Mmmm Toasty, not because they are offering a $4 sub, but because Subway now has toasters.
March 23rd 2010, come back and check and see if Quiznos is doing better than they are today.
Their ads have been all over the place, and nearly offensive at times. It is too bad that their revolving agency door didn’t provide enough continuity so that the Million Sub giveaway actually gave away their new sandwiches.
Thanks Peter. Toasty was used as a quality/taste differentiator. Consumer equated toasty with “better quality and taste”. You are right, toasty became less of a differentiator when competitors added toasters, but Quiznos did build their units around their toaster oven. The root of the problem is they are walking away from “better quality” in my mind. They can’t be profitable making $4 subs, and still be known for “better quality.” The margins just are not there.
I agree with you, Brendan. I think that the competitor who has it right is Potbelly’s – They compete, in my mind, on a whole different playing field than Quizno’s and Subway, because they’ve developed A. an innovative brand experience, with engaged staff and unique stores, and B. a differentiated product (even though it’s still a toasted sub, they’re using different combos, different ingredients, etc.). I also think it’s interesting that they rarely, if ever, do any sort of price-based promotions. For them, it’s all about quality, consistency, and customer experience… and it works!
Brendan I think you nailed it with this post. Subway may be the 800lb Gorilla but it silly to have a 200lb monkey put on a gorilla suit to compete. They need to be who they are. Every sub sandwich is toasted at quiznos – subway it’s an option. while it would be easy to view that as a Quiznos weakness I actually think there would be many ways that to exploit that to enhance and strengthen the quiznos brand. I also agree with the decor. In the quiznos I have been in they seem to be the subway 1.0 version hard contrast colors and not a comfortable environment. Subway had yellow black and white – Quizonos has white black red and green. Unless they have a new interior design for newer stores – I can’t say it’s the most comfortable place either. As noted money is well spent in maintaining product and environment quality. Most importantly there’s nothing wrong with being #2 on the block – assuming you’re something different. Because if you’re trying to be the same as #1, you’ll eventually go unnoticed.
I should also add that in the photo that you’ve posted, I feel that Quiznos is playing fast and loose with the scale of the sandwiches – in reality, the Torpedos may be 13″ (or so), but they’re substantially skinnier than either Quiznos’ or Subway’s regular sandwiches. However, because there’s no point-of-reference in the ad, you’d never know it — but this sort of deception will lead to customer disappointment in the end.
Brendan, you’re right on target. I was a Subway franchisee for 12 years and we knew they would never be able to compete with us on price, speed of service or number of stores. What they did have going for themselves was a perception of higher quality. (Truth be told, my wife has always preferred their product.) They have definitely lost their way and now their franchisees’ tenuous hold on profitability will surely suffer. I think it’s telling that a friend who owns about 30 Subway stores in the Denver area is opening another in a defunct Quizno’s space.
Thanks Jim. I think the big loser in all of this is the Franchise Owners. Food costs are going up while their parent company is cutting prices and giving away subs for free at the owner’s expense.
What do you expect from a telecommunications person?
http://bloodyfranchise.wordpress.com/2009/03/29/quiznos-torpedoes-its-franchisees/