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Vol 106 / Issue 8

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MONEY How Subway wooed Japan WhEN it cOMEs tO glObal ExpaNsiON, flExibilitY is kEY. A Tokyo SubwAy reSTAurAnT feATureS An indoor leTTuce gArden. By Schuyler Velasco / Staf writer Tokyo Japanese people produce less saliva than many Americans – and for Subway, the fast-food chain, that strange yet pertinent scientific fact made all the difference. The chain's hard, crusty sandwich bread, produced overseas, was difficult for its Japanese clientele to chew and digest. So in 2011, Subway Japan started producing its own bread domestically, altering the recipe to make it softer and lighter than the bread used by Subway in other countries. Changing the bread was one of several tweaks the American-based chain has had to make over the past two decades to become a major player in the Japanese fast-food market. As many other fast-food chains including McDonald's and KFC have learned, succeeding overseas means adjusting to the cultural and gastronomical leanings of other countries and junking whatever doesn't work, even if it's key to the brand back home. Aside from the name, and the fact that they both sell sandwiches, Subway in Japan and Subway in the United States barely resemble each other. "Subway first came to Japan about 20 years ago, and quickly expanded to 150 stores," says Masako Iwasaki, a spokeswoman for Subway Japan. "It did well initially, but the number of stores quickly dropped to 90" after the novelty wore off. In an effort to turn things around, management took a three-pronged approach. On the economic end, it trimmed down the square footage of stores and set up more locations in food courts to mitigate the high cost of land in Japan. To improve efficiency (and kyodo/Ap cope with the tighter quarters), it scaled quite so worried about scaring away back on the amount of sandwich cus- clients. Fujifilm, for example, has found tomization typically found in American success selling over-the-counter mediSubway locations. cations and cosmetics after the fortunes Second, management introduced a of its film-camera business went south. Japanese-only menu, cutting down on As a result, constant product tweakthe number of sandwiches featuring ing is par for the course. McDonald's deli meat. "The kind of hams used in Japan, for example, recently dealt with Subway, customers didn't think it was its own version of the Subway bread special because they had them in the issue, reformulating one of its popular fridge," Ms. Iwasaki says. Japan-friendly chicken sandwiches. "With the Chicken sandwiches were introduced, including Filet-O, our female customers were tellChicken Teriyaki and Shrimp Avocado ing us that the crust [on the chicken] (now one of Subway Japan's most popu- was too heavy, so we made it lighter," lar sandwiches). says Kenji Kaniya, a Third, the chain got rid Even Subway's spokesmaninfor McDonof the "Eat Fresh" slogan, ald's Japan Tokyo. 'Eat Fresh' which translated poorly to Vegetables have become Japanese. "When we interso central to Subway's slogan was viewed the successful 90 and marketing in jettisoned. The imagethat many locations stores that survived and Japan were making profit, they one here, loosely there feature miniature said customers come begreenhouses in the dintranslated, is cause they think they can is 'Veggie Subway.' ing areas where lettuce is get ample veggies," comgrown, some of which pared with other fast-food used in-house. A veggie options, Iwasaki says. "So we went with focus may not work in most developed that." A new slogan, loosely translated nations, Iwasaki says, but it fills an un"Veggie Subway," was launched in 2008. tapped need in the relatively young JapThe rebranding has worked wonders: anese fast-food market, which is largely Subway Japan has doubled the number dominated by noodle shops and chains of its locations over the past 2-1/2 years such as KFC and McDonald's. Subway's to around 460 locations nationwide. clientele skews between 80 and 90 perIn most cases, undergoing such a cent female, and the majority of those major marketing shift for an established are urbanites between ages 20 and 40. brand can be risky and potentially disas"A lot of people come here to maintrous. For example, JCPenney under- tain their weight. A female office worker went a major rebranding effort to lure might think, 'I ate too much last night; I younger customers, only to alienate its will go to Subway for lunch,' " Iwasaki loyal base and send company finances says. into free fall. A focus on weight loss is one thing But Japanese consumers are widely Subway Japan does have in common considered among the most brand-loyal with its US counterpart, though a Japain the world, allowing entrenched com- nese "Jared, the Subway Guy," has yet to panies to try new things without being emerge. r thE christiaN sciENcE MONitOr WEEklY | January 13, 2014 43

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