I was wondering what is the rationale behind “Sub of the day” at Subway. Why can Subway afford to lower it’s price by 20-30% on a particular sandwich every day?

I think it is a smart business move mainly motivated by the following -

  1. It helps them manage their inventory better. They are adding an artificial bias to the market demand for a particular day. Since they already know what the demand is, they can choose to optimize their supply. I don’t know how many of you have experienced this but the sandwiches which are out of stock are not the ones listed in Sub of the day.

  2. It is trying to create an invisible habit amongst the users. I have often had a few colleagues who tell me that they won’t get lunch on Tuesdays because the “Sub of the day” that day is “Corn and Peas”.

It’s amazing how a small marketing concept, has such a huge effect.