$3$ Managing Pricing Decisions at Subway

Read the overview below and complete the activities that follow

Fast$-$food chains all have an objective to drive traffic through attractive pricing. Subway fired the first salvo with its $$5$ foot$-$long sub,

which quickly became the yardstick for fast$-$food deals. Subway used the $$5$ promotion for a variety of subs and occasionally even

offered it on all of its subs. The chain has used penetration pricing in the past to get ahead of competitors such as Quiznos, Domino's

offered it on all

and Pizza Hut.

This activity is important because price is a critical component that plays into a customer's assessment of the value afforded by a firm

price

The goal of this activity is for you to demonstrate an understanding of the various elements of pricing decision by considering how

Value is a ratio of the

acquiring that bunde e endle of beneffits a customer receves from an offering compared to the costs incurred by the customer in

sffering over another However, tor most mostrchchasers the vast majority of costs sere assoccited with the purchase price.