Subway Restaurant

When developing and bringing a product to the marketplace, it is important to consider a variety of different factors to develop the strongest plan possible.  This is important because the plan is the foundation of any product launch.  As with many things in business, operational efficiency increases as a function of the business or product plan's quality (Temtime, 2008).  In this brief paper, a product analysis covering multiple areas on the subway restaurant is presented for review.

Company Background

The idea to build a restaurant in a subway is an excellent plan for several reasons.  Subways are often located in large cities, which allows for a large base of demand (Metropolitan Transportation Authority, n.d.).  In addition, subways are a primary form of transportation for many people; this allows for constant demand throughout the year and during all hours of the day (Metropolitan Transportation Authority, n.d.).  Also, subway food services are limited; placing a restaurant in a subway might require a higher amount of investment, but the market is relatively empty.  Clearly, there are several good reasons to pursue the launch of a subway restaurant.

Target Market, Target Segment, and Usage by Segment

There are several ideal conditions that will aid in selecting a target market.  First, the market is a city within the United States.  Second, the market is city with a subway.  Third, of those cities, the ideal choice is the one with the largest amount of subway users.  Based on all of these conditions, the ideal market is New York City, New York and, specifically, the Upper West Side or Upper East Side of Manhattan (American Public Transportation Association, 2010).

The primary market will be an individual using the subway system.  There are positive and negative aspects of this market.  First, as discussed above, the demand will be relatively constant because subway users often rely on the system throughout the year and during all times of the day (Metropolitan Transportation Authority, n.d.).  Second, the market cannot be expanded directly because only subway users can visit the restaurant.  This means that demand will be relatively fixed or grow on a constant curve based upon expected use of the subway system. 

The primary market segment is based upon those who use the subway, which are usually low-income and middle-income individuals and families (Blodget, 2006).  However, those who commute to Manhattan are often young adults, working individuals with reasonable disposable income, or tourists (Blodget, 2006; Metropolitan Transportation Authority, n.d.).  These individuals are always on the go and are focused on efficiency.  The restaurant's design should reflect these characteristics to attract more customers.

Target Market Demographics

The market segment does encompass individuals of all ages, however the ages are skewed towards younger individuals who live and work in Manhattan of New York City (U.S. Census Bureau, 2010).  This segment of society has disposable income and is accustomed to eating while on the go, as evidenced by the highest incomes and street vendors of any borough (U.S. Census Bureau, 2010).  This is not unusual because, generally speaking, those who are older tend to live in suburban areas and also tend to have access to a vehicle as their primary mode of transportation.

Another demographic benefit is that Manhattan attracts the most tourists of any New York City borough (NYC Go, n.d.).  There is a large cost barrier for tourists who elect to visit New York City and stay in Manhattan; hotels, transportation, etc., are all very expensive.  However, most tourists are willing to incur the expense because Manhattan is geographically and metaphorically the center of all the action; the most famous tourist attractions are in Manhattan and others are all a short trip via the subway.  Targeting tourists is an efficient way to attract customers with spending power.

Description of Products (Mix & Width) and Services

The subway restaurant will most closely resemble the model of an eat-in café.  This model is chosen for several reasons.  First, the target market, target segment, and target demographic have several similar characteristics.  Individuals are young, they are on the go, will likely be between their originating and final destination, and have a reasonable disposable income.  Second, the overhead cost of a café is less than that of a full-service, sit-down restaurant (Locke, 2008).  Third, an open-air subway café has the benefit of advertising directly to those who walk by. 

The products provided will follow some general conditions.  The food products must be able to be made quickly with limited services.  The location of the restaurant, in a subway, limits the ability to run a full service kitchen.  This means that food will need to be prepared in a microwave oven or electric grill.  Potential food items include soups, salads, warm sandwiches, gourmet burritos, yogurt parfaits, baked goods, full service coffee bar, etc.  In my opinion, the product lineup will have a high mix and a narrow width.  The mix is high because a variety of products will be offered.  The width is narrow because all of the products come from a narrow band of the food preparation spectrum.

The service provided will be semi-service.  This means that customers will line up to make their order and the food will be brought to their table.  When customers are finished with their meal, they will deposit their food trays at a collection point.  Those who are requesting take-out can pick up their food at a to-go station.  This model of service is beneficial because it is operationally efficient and cost efficient. 

Competition, Product Positioning, and Publicity

Competition in the food industry in New York City is very fierce.  However, a subway restaurant is a niche category that, in my experience, has not been filled yet.  The primary competition will come from small vendors who sell soda, magazines, and candy.  In everything that I have seen, experienced, and read, there is no direct competitor in the form of a subway restaurant (NYC Business Solutions, n.d.).  There are several reasons why this might be the case.  First, space within the subway system is limited.  Second, New York City likely has several regulations on the type of vendors that can operate within the subway system (NYC Business Solutions, n.d.).  It is expected that the subway restaurant product will not violate any of these regulations because the scope of the plan falls within the vendors that already operate in Manhattan subways.

Product positioning is a key component of the potential for success.  As discussed later in this paper, the key form of marketing and advertising is via direct contact with the restaurant while in the subway.  Good customer experiences will also propagate return customers and help to increase publicity of the subway café by word of mouth.  It is paramount that the restaurant be located in a station with many different subway lines.  This increases the amount of commuters who will encounter the subway restaurant; an ideal location is Manhattan's 42^nd street stop in Times Square (MTA Transit Authority, n.d.).  Lastly, the café décor will be modern and upscale in line with the atmosphere of Manhattan.

Market Financial Trends & Advertising Analysis

Placing a restaurant in a subway affects the potential types of advertising that can be utilized.  As a small business in an industry with relatively tight margins, it will be difficult to build a large advertising budget (Williams, n.d.).  In addition, as discussed previously, the restaurant's customers will be subway users.  Therefore, the primary mode of advertising will be direct contact with the restaurant.  The décor, food, and environment will all be attractive, similar to the atmosphere of Manhattan; this cost-effective yet upscale décor will aid in attracting customers and promoting sales.  Specifically, the restaurant will look clean and have attractive signage.  In addition, a limited amount of targeted advertising to subway users will also be appropriate.  An example of targeted advertising could include an advertisement in subway cars that stop at the restaurant's station.

New York City and the borough of Manhattan have encountered significant media coverage because of its attraction as a target to subversive groups (Hays & Neumeister, 2010).  September 11, 2001 is a day that will always be remembered to the citizens of New York and also the world (CNN, 2010).  Therefore, it is important to keep this significant event in mind while designing the subway restaurant plan.  In order to obtain the best possible outcome, the restaurant should take steps to support the city of New York and the US by painting a flag or hanging a flag at the subway restaurant.  This symbol has become ubiquitous in and around New York City and especially in Manhattan.

A good plan develops a solid foundation for success.  To that end, this plan has been designed to successfully introduce a subway restaurant in New York City.  The plan covers a variety of areas that have been thought out and designed carefully.  The restaurant will be modeled as a café, it will attract those who work in and visit Manhattan, it will offer quality products that are targeted to a younger population segment, and it will advertise and promote itself in a cost efficient manner.  It is expected that the subway restaurant will flourish because of the unique market niche.