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*Subway Rolls Out First Major Online Push

Sandwich chain Subway has teamed up with online portal Yahoo Inc. and beverage marketer PepsiCo Inc. in a joint promotion that is its most ambitious Internet push yet to drive traffic to restaurants.

The promotion, which runs through the holidays, requires consumers to visit Subway restaurants in the United States and Canada and buy any Pepsi drink marked with a special code. Consumers can enter the code at www.gosubway.yahoo.com for discounts at Yahoo Shopping retail partner sites.

“The greatest challenge that we face is making sure that Subway is in the consideration set when people are deciding what they're going to eat for lunch or dinner, and that Subway is making the list of the potential candidates that they go to,” said Tricia Kingston, manager of strategic planning at Subway Franchisee Advertising Fund Trust, Milford, CT.

“It's getting our brand into their mind-set, top of mind or, at least, into their awareness of the options they have,” Kingston said. “So online gives us a new channel to get our brand into their mind-set.”

The largest submarine sandwich franchise worldwide, Subway has 12,264 restaurants in the United States and 1,422 in Canada. The 35-year-old chain sells sandwiches and drinks but now wants to boost sales of a steak-and-cheese sandwich with horseradish, four new sandwiches and gourmet breads — all introduced in August.

Partnering with Yahoo gives Subway access to the consumers it seeks under the guise of savings on meals and online purchases.

“We offer a brand equity that is strong, particularly against a younger audience that may be that target for Subway,” said Murray Gaylord, director of fusion marketing at Yahoo, Santa Clara, CA.

Designed to connect Yahoo's audience with offline brands, the fusion-marketing program partnered in August with PepsiCo, Purchase, NY, to debut PepsiStuff.com. This collaboration allows consumers to earn merchandise, discounts and online awards after buying 20-ounce and 1-liter Pepsi products.

In fact, the under-the-cap program has generated more than 3 million sign-ups on the site at www.pepsistuff.com.

The gosubway.yahoo.com push requires consumers to visit a Subway store, purchase a 32-ounce fountain beverage in a specially marked promotional cup and peel off the holiday savings sticker for the code.

Consumers can redeem the code at gosubway.yahoo.com through March 1 for discounts at select Yahoo Shopping partners.

So, for example, barnesandnoble.com offers $10 off a $30 DVD purchase and $10 off for first-time customers on books worth $40. Florist FTD.com, on the other hand, gives a $10 discount on any order. Samgoody.com gives $5 off orders of more than $30, macys.com gives $10 off purchases of more than $75, and thesportsauthority.com offers $10 off orders of more than $50.

Though terms of the deals were not disclosed, Yahoo gets extra traffic and a cut of transactions through its shopping partners, and Pepsi sells more beverages. Subway gets to push new products and attract additional customers. While online gift certificates are under consideration, the gosubway.yahoo.com push is the chain's current bet to lure new business via the Internet.

The promotion will be publicized throughout the Yahoo site, with ads targeting the demographic that Subway is looking to reach. Marketing plans also include e-mails and banner ads.

Offline, Subway is running a TV spot with a Yahoo tag in it. The chain has installed point-of-purchase materials in all of its restaurants across the United States and Canada, except for Quebec.

While the materials prominently feature Yahoo Shopping and show an image of a Pepsi bottle, they also tout Subway's fresh value meal — even though buying Pepsi is the only requirement. But Subway is willing to take its chances.

“It's rather unusual for someone to just walk in and get a soda,” Kingston said. “So, by getting them into our restaurants, we're that much more likely to sell them sandwich and chips, get a whole meal into their mind-set.”

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