The Stages of Changes
STAGE 2—IN PROGRESS
Port of Subs Seeks
Differentiation
WHO: Kristin Cronhardt,
vice president of marketing for Port of Subs.
WHAT: Port of Subs, a
30-plus-year-old sandwich chain based in Reno, Nevada, needed a point of
distinction in the highly competitive submarine sandwich segment.
GOAL: Reposition the brand
and prepare it for serious growth in the next several years.
WHEN: Already
underway and expected to be complete over next year to
year–and–a–half.
NUMBER OF UNITS: 147
COST: Between $30,000 and
$80,000, depending on the age of the store. Stores built under the 2000
model will only shoulder the cost of paint and graphic elements.
You know you’re in trouble when customers in new
markets aren’t sure whether you sell sandwiches or boats. That was
what Port of Subs was up against two years ago when Kristin Cronhardt
joined the chain as vice president of marketing. “Outside the Reno
and Las Vegas markets, people don’t necessarily know what our brand
is,” Cronhardt says. “They think it’s a boat shop and
other odd things.”
As a player in one of the most competitive segments in
quick-serve and with plans to double its size over the next two to three
years, Port of Subs knew it had to make it abundantly clear to consumers
what the brand stood for. To that end, Port of Subs conducted a two-day
brand-positioning workshop with key franchisees and corporate executives
last March.
Some key findings were unearthed
during the session. The brand’s distinct service kept coming up—i.e. the chain
slices its meats and cheeses fresh to order. “Even though our
customers are aware of it, they didn’t necessarily associate that as
our point of difference versus our competition,” Cronhardt says.
From that workshop, the company decided it was time to
update the somewhat sterile blue-and-white restaurant design that faced its
last change in 2000, by incorporating some tan color schemes. It hired
Seattle-based M3 Messenger Corp., which went to work discovering what customers
felt was important about the brand.
The firm learned customers
considered the color blue a keeper, so the Port of Subs maintained some blue
elements in its logo. A retro-looking chef character, known to company insiders
as The Dude, was introduced to emphasize that sandwich prep starts with fresh
slicing.
Port of Subs also changed the interior of its
restaurants from blue-and-white to a warmer earth-tone scheme. Vinyl chairs
were replaced with wooden ones. Graphic elements, including a shot of The
Dude, now decorate the walls. A branding wall outlining what makes a Port
of Subs sliced-to-order sandwich so good appeared. Rather than the old
backlit menuboards, new stores have menu panels. In addition, the new Port
of Subs feature televisions and free wireless internet access.
The company also went through
an agency review. Its new agency, Innerwest Advertising and Public Relations,
decided to further hone in on the slice-fresh angle, creating an ad campaign
that revolves around a new slice-fresh language. “Customers come into the store,
and they really have their own vernacular,” Cronhardt says. A
“quick-slice” translates into a to-go item, for example, while
the staff are called “master slicers.” The unique campaign
included radio, billboard, and television spots, depending on market
penetration in certain areas.
A corporate-owned prototype opened in Tempe, Arizona,
in May 2005. The chain is currently revamping several more of its corporate
shops.
“We made a commitment to franchisees that we
will go through and remodel our corporate stores first, sit back and take
two or three months to see what the results are and the response.
Obviously, if we don’t get the sales lift we expect, then it
doesn’t make sense to move forward,” Cronhardt says. “We
have a gut feeling, and looking at what we’ve seen and heard from
other concepts that are doing remodels, you automatically get a
bump.”
The first round of remodels is to be complete in
March. By June, Cronhardt says, the company should have enough information
in hand to move forward on franchise remodeling. She expects some franchisees
will be changing their stores by next summer.
As with other chains, there
are the early adopter franchisees eager for change and there are those more
reluctant to make any significant changes. “If it does what we think it will do, it’s
going to be an easy sales job for us because we’ll have actual
numbers,” Cronhardt says.
From Bread to Bricks
Arby’s turned its menu on its head with the
opening of the Arby’s Market Fresh fast-casual prototype in
Schaumburg, Illinois, September 12, 2005.
Five years ago, Arby’s rolled out Market Fresh
sandwiches, featuring fresh-sliced meats and cheeses and vegetable
toppings. The company has gradually expanded the line; today it offers
eight varieties of Market Fresh sandwiches, five wraps, and three salads.
Market Fresh products generate about 15 percent of Arby’s sales mix.
The menu at the Market Fresh
prototype takes that lineup as a jumping-off point, offering a range of on-the-go
options and choices with high-quality ingredients. Among them are an Angus
Beef &
Cheddar sandwich, tomato-basil soup, a Grilled Chicken Santa Fe salad, a
selection of side dishes, and dessert and kid’s menus.
Arby’s is betting that diverse menu will draw an
eclectic mix of diners, particularly those with limited time who,
nonetheless, demand fresh, healthy options. Marketing materials list the
median target age range as 18–40 and target demographics as young
professionals, shoppers, mothers and young families, and students. The
restaurant is open for breakfast, lunch, and dinner.
Retail design firm WD Partners
conceptualized the brand extension. Lee Peterson, executive director of design
and branding at the firm, says his team wanted to preserve the authenticity
of Arby’s
brand, but with a modern sensibility. “Arby’s has a youthful
energy and inventiveness—the big hat signs, the early ’60s
aesthetic,” he says. “We gave that a nod and wink, but this
[prototype] has more to do with the Market Fresh product and its
freshness.”
The time frame from concept to launch was only about
six months, Peterson says.
Arby’s and WD Partners built “freshness
cues” into the design of the prototype. The color palette centers on
warm shades of green, red, orange, and yellow. A floor-to-ceiling natural
stone wall recalls Arby’s early-’60s kitsch. Graphics and wall
hangings feature natural colors and textures, such as leaves, seagrass, and
brick. A wireless network, music, and televisions help create an inviting
atmosphere.
Entering the prototype, customers
first encounter a “Salad Tossery,” where custom salads are freshly
made. Customers may select salads, side dishes, and beverages from a grab-and-go
station or order a sandwich or custom salad at the register.
The Market Fresh prototype
was designed for nontraditional spaces—primarily inline spaces, but also end-caps.
“Research shows that not enough spaces [remain] that allow a
drive-thru,” says Jordan Krolick, chief development officer at
Arby’s. “For those markets that we could not play in any other
way, we think this is a great concept.”
WD Partners prepared three
Market Fresh “packages.” The first, like the Schaumburg building,
fits the classic 30-by-90 inline space, while the second and third packages
preserve the memorable iconic elements but fit in smaller spaces.
Arby’s launched this
test at a time of renewed vigor: Franchised store sales were up 4 percent
and company store sales up 1 percent in 2004. The company ranked 11th in
the 2005 QSR 50, based on estimated domestic systemwide sales of more than
$2.8 billion.
Krolick indicates Arby’s will treat the Market
Fresh prototype as an experiment in brand extension. “Is this going
to be the final version? I don’t know,” he says. “We will
be testing a number of the attributes.”
