- We were looking through the Wall Street Journal the other day and came across an interesting article about Subway’s $5 Footlong by Suzanne Vranica.1 month ago
The article is titled: “ The Secret of Selling the $5 Footlong”
The article quotes Tony Pace, Subway’s Chief Marketing Officer talking about the unpredictability of Social Media and why good old fashion broadcast TV spots still work.
Mr. Pace commented on the competitive landscape in the fast-food business, the rise of social media and the challenges facing chief marketing officers today. Here is a brief synopsis of that conversation:
Mr. Pace emphasizes being nimble and keeping ahead of the competition. Not an easy task in the fast-food business, which for the most part, has massive ad budgets, involved in price wars and copycat marketing.
On top of those challenges, Mr. Pace has to juggle the many marketing channels that have emerged in recent years, from Facebook to Pinterest. Crafting campaigns that suit the vagaries of tablets and smartphones.
Staying ahead, he says, is "all about testing and learning."
We liked Mr. Pace’s take on Subway being a retail business, always trying to drive daily business but also build a brand for the long term. It's the classic balancing act. They can drive sales, but can only take profits to the bank, so obviously they have to make sure to be driving sales in a profitable manner.
When Subway launched $5 Footlongs, a number of colleagues with experience in the category told him it would never work, because the price was too high. Obviously, they were wrong, because there have been billions sold. This was supposed to be a 4 week promotional experiment.
According to Mr. Pace the biggest stumbling block that chief marketing officers today face, are that there are many different streams of Data and information, and this has to be broken down into simple actions that make sense for the business and the brand. Narrowing it down to what the real economic situation is. Discretionary spending is affected by the trickle down effect in the economy. Things like gasoline price fluctuations as well as home heating costs greatly affects how much discretionary spending there is by consumers.
He asserts that Chief Marketing Officers today need to be in the test and learn mode. It is too late after waiting for a general consensus to emerge as to what is working and what isn’t. Being flexible and learning as it happens keeps a chief marketing officer sharp. And marketing is not viewed with the respect it deserves. Good long-term marketing takes a lot of skill and knowledge, and it takes appropriate risk-taking.
We like his take on this subject and would like to see more CMO’s step up to the plate and give their own take on what is working and what is not these days.
Reference: WSJ http://online.wsj.com/news/articles/SB10001424052702304558804579376781915327524
The secret of selling the $5 Footlong: Subway's CMO on social media—and why TV still works.
Subway's chief marketing officer, Tony Pace, discusses the unpredictability of social media, and why TV still works as a marketing tool.