Presented By: Geeta Sakhuja, Moon Guo, Maninder Mangat and Zaman Ahmed

About Mr. Sub

• Established in 1990 by Jack Levinson and Earl Linzon.

• First opened in Toronto and has now developed into a chain of 335 submarine sandwich shops in Canada.

• Mr. Sub’s menu includes a wide choice of subs such as the Panini grilles subs, wraps, salads and soups.

• They also offer catering services for school and office parties along with delivery and take-out options.

Target Country Assessment

Demographic characteristics

• The official language is Mandarin. • 45% of Chinese report the ability to speak English.• In 2012, Unemployment Rate averaged 4.15 %

Macro-economic factors

• China is an export oriented market economy. • China's gross domestic product growth increased in the past 10 years • China’s labor force in 2012 was 795.5 million

Mr. Sub’s Competition

SWOT ANALYSIS

 

Strengths:

• Well diversified menu list• Strong administration ties• Potential to grow among the

competition in the new market• Great business experience

Weaknesses:

• Not widely known• Only Canada wide recognition• Not enough marketing promotion• No visible CSR practices

Opportunities:

• Placing products in grocery stores• Mr. Sub can gain more consumers using

the adaptation approach • Positive feedback from Chinese

consumers for fast food

Threats:

• Faces tough competition from global competitors such as:

• Burger King, Subway and McDonald’s• Competition in Chinese market: • Yonghe King and Sun Ya Da Bao

Marketing Objectives

• Mr. Sub should gain 10% of market share by the end of first fiscal year.

• Enter the market with competitive pricing

• Opening outlets in most populated provinces.

• Target 72.1% population of male and female of age group 14-40.

Market Entry Strategy

• Existing Franchising model

• Franchising has become a popular method of investment in China

• As urban and rural disposable income rises, market potential also continues to rise rapidly.

• The new regulations indicate that cross-border franchise operations are possible.

• The new regulation also cancels previous additional filing requirements

• Does not require the franchisor to be located in China.

Target Consumer

• Location: Urban area

• Ages: 14~40.

• Educated, professional, middle class & high disposable income.

• Lifestyle: Active, Environmentally aware and have high level of health concern.

Marketing Mix - PRODUCT

Product line offering: • Localize and diversify its menu to better fit the Chinese

customers

Packaging:• Mr. Sub’s original red packaging theme• Comparatively smaller package sizes • Recyclable and environment friendly

Branding Strategy:• Healthy eating and balanced lifestyle• Shopping Bags and some products;• Fresh and healthy• Tasty good.

MARKETING MIX - PRODUCT

Services rendered:• Outstanding customer service • Knowledgeable employees • Mr. Sub will also cater school programs and parties

Store layout:• Consistent with the layout that is displayed in

Canada

Price

• Competitive Pricing: • High food quality standard • Set the price a bit lower.

• Wholesale Pricing Program• Focuses on partnering with gyms, schools and companies that offer

healthy food choice.

• Factors/Impacts on Pricing Strategy: • Currency Fluctuations• Inflation• Government Controls• Subsidies and • Competitive Pricing

Place

• Mr. Sub would set up franchises at some of the busiest and crowded areas of China where people are always on the go.

• There are three location strategies an international restaurant franchisor can adopt when entering the Shanghai market:

• (1) Locating in the Downtown Area • (2) Locating in the Special Economic Zones, and • (3) Locating near an upscale residential area.

Promotion

Some of the advertising methods we wish to follow for Mr. Sub would include the following:

1. Creating a new video advertisement to be published in China

• Theme: “SUMMER SUB”

• Media used: Commercial published on the local TV channels, radio stations and on YouTube

• Frequency: Advertise twice every week and keep customers regularly updated with Facebook updates, and tweets.

• Timing: Mid-July to August end.

Fall Promotion

2. Discount Special – MR. SUB sandwich with 2 cokes at 10% Off.

• Theme: “MR. SUB FALL SPECIAL – 10% OFF”

• Media used: For discount promotions publish flyers in frequently read newspapers and magazines.

• Frequency: Advertise for every weekend until the winter approaches.

• Timing: Mid-September to December end.

Financial Analysis

Mr Sub. Profit & Loss Statement.

2013 2014

Sales 200,000 300,000

Cost of Goods sold 100,000 120,000

Gross Profit 100,000 180,000

     

Total Expenses 75,000 85,000

Net Income Before Depreciation 25,000 95,000

Deprecation (9,500) (10,500)

Net Income Before Taxes 15,500 84,500

Income Taxes 2,290 2,519

Total Income 13,210 81,981

Decision

Based on our intensive research we believe that Mr. Sub should

move further with its expansion to China.