Company Case 2 – Panera Bread
Analyzing case study six on page 298 in Marketing Management Knowledge and Skills by J. Paul Peter and Jim Donnelly, we find Panera Bread Company, a signature bakery-café entity. With an attractive menu and a significant dining ambience, Panera Bread was recognized as the nationwide leader in the specialty bread market scoring the highest level of customer loyalty in 2003 among the quick-casual dining restaurants. Founded by Louis Kane and Ron Shaich who spent considerable years studying the market’s fast food chains, they found that many fast food chain customers would be attracted to a higher quality quick dining experience. As the restaurant business is very labor intensive, extremely competitive, and risky, Panera Bread had to set itself apart from its rivals. Pricing, food and service qualities, dining ambience and atmosphere, as well as providing convenient locations for its customers are the focal considerations for competitive advantage. Additionally a new restaurant coming into the market could very easily fail due to lack of enthusiasm for the menu or dining experience, untrusting food quality, poor service, bad location or improper pricing. Panera Bread beat the odds. After revamping their stores in the mid 90’s, it was clear that the company had related with its consumers and by 2006 with over 850 company-owned and some franchised stores, Panera Bread bakery-café sales totaled $1.2 billion.
Rather than focusing on price alone, Panera Bread’s marketing strategy was two-fold; focusing their efforts and attention on price and on the basis of providing an entire dining experience. The majority of its cafes if not all used real china and stainless steel silverware, had outdoor seating, and free public wireless internet. The company’s distinctive menu, signature interior design, inviting atmosphere, high-tech operating systems, and strategic market locations we key elements to its success.
Panera Bread’s target market was urban workers and suburban dwellers looking for a quick serve meal and a comfortable place to dine in. Prior to selecting a location, its marketing team would study the surrounding trade area, demographics, and competition. Once the study was complete, the marketing team would utilize its proprietary software to analyze the information with the use of predictive modeling then decide whether to build or not.
Panera Bread tried to grow sales at its existing locations through menu diversity, product merchandising, daily promotions, and advertising at local community events. Panera Bread’s vision was designed to make its evening menu more appealing for consumers to stop in and dine by offering soups, salads, sandwiches, café beverages, breads and desserts, management believed the plan would sprout growth within the suburban markets. Product development was