Celebrity Brand Endorsement Crisis at Subway
| Case Code: MKTG439 Case Length: 13 Pages Period: 2014-2019 Pub Date: 2022 Teaching Note: Available |
Price: Rs.300 Organization : Subway IP Inc. Industry : Food & Beverage Countries : United States Themes: Advertising & Promotion, Brand Strategy, Public Relations & Media, Ethics in Marketing |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Selecting the Endorsee
Subway’s brand endorsement was done by Fogle for 15 long years. Fogle’s success story started in 1998 when he was a college student in Indiana University, US. He was obese and weighed 425 pounds, which made it difficult for him to socialize and carry out his normal activities. To embark on a weight loss program, Fogle devised his own personal Subway diet and combined it with a walking regimen..
Endorsement Benefits both Subway and Fogle
Fogle’s brand endorsements increased sales for Subway by 18 percent in 2000 and by 16 percent in 2001. Fogle starred in more than 300 commercials and made numerous public appearances promoting Subway against fat filled fast foods like burgers. In 2013, he starred in a Super Bowl commercial to celebrate 15 years of his weight loss, along with celebrities like actor Brian Baumgartner, speed skater Apolo Ohno, and NASCAR driver Carl Edwards..
Responding and Managing Crisis Communication
The response of Subway to Fogle’s arrest was immediate; the raid at Fogle’ home by the FBI began on the morning of July 7, 2015.By noon, Subway issued a statement on Twitter which said, “We are shocked about the news and believe it is related to a former Jared Foundation employee. We are monitoring the situation closely..
Public Perception
The crisis evoked a mixed response from the public. While some opined that the incident would affect people’s perception of Subway, many were of the view that its sales would be affected. Don Sniegowski, Editor at Blue MauMau , a website for franchisees, was of the view that it was tough to foretell the effect of the Jared scandal on Subway’s business, but sales would be affected. He said, “You think of Subway, and you think of Jared chasing around little girls. It’s going to mitigate people’s decision to go there.” .
Brand Subway
According to analysts, the Fogle crisis had a big impact on the Subway brand in a world where information spread fast through social media, word-of-mouth, and news channels. When people saw the celebrity, they viewed the negative aspects of the celebrity and associated the brand with it. Fogle had been associated with Subway for a very long time and had become an integral part of the organization..
Public Relations Experts’ Opinions
On July 14, 2015, exactly a week after the Fogle crisis, famous Hollywood actors Brad Pitt and Angelina Jolie along with their kids visited the Subway store at Glendale, California, to buy sandwiches. The visit of the star couple to Subway just a week after the crisis showed that there was still support for the brand among the public..
The Way Forward
In June 2018, Subway hired Bain and Company , a management consulting firm, to restructure the business and infuse new ideas and strategies to boost sagging sales in the US. The move came as a result of low business, the death of one of its founder Fred in 2015..
Exhibits
Exhibit I: Number of Subway Stores Worldwide from 2011 to 2019
Exhibit II: Core Values of Subway
Exhibit III: Revenue of Subway Stores in US from FY 2013 to FY 2019.
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