The food business is a broad range of businesses. Food is a basic need of consumers like clothing, and shelter. For a company to enter into the food business it has to assess the various segments of this business. These ranges from production of food, processing, and marketing. The company prior to entering a market in this line of business should assess its capabilities and compare these to the kind of needs of the consumers – would the customer be a processor, or a consumer?Is the product that the company can offer a raw material, processed food, or to serve a group of consumers who would like to eat and yet also need some little pleasure and not merely to satisfy their hunger? In the consumer segments of the market the company can classify these into consumers who eat at home, consumers who eat in restaurants, or they merely eat out say for camping. If they eat in restaurants would they prefer to eat in fastfoods because their concern is merely to eat something they don’t eat at home, or do not want to spend so much time as eating? Or would they want to experience once in while in a sit down restaurant where they eat, enjoy the view, or talk to friends while eating, or merely while away the time? Panera has assessed its capabilities and strengths and in the process has embarked to enter the food market on a very narrow segment of the market in terms of the uniqueness of its product – to serve customers who are looking for the fresh smell of home baked food, feel the joy of tasting fresh bread, enjoy the ambience of the restaurant and the view, or also to be able to work on their laptops and connect to the internet on a wifi. It has further narrowed its market segment by selling at a price that is above the fastfood market and thereby identify itself as not being with the crowd or mass market, and yet offer prices that is much lower than in a sit down, exclusive type of restaurants, or clubs. It is this understanding the marketing concept of Panera as a restaurant that sells not only fresh bread but also provides an ambience of leisure eating that we can appreciate its strengths and competitiveness with other restaurants that offer similar or nearly similar type of product. Definitely it does not sell fast food where there is a queue, nor packaged food that is either eaten in the restaurant or as take-outs or “to go”. Basically, other than the fresh smell of bread it also sells “ambience” of pleasure. Strategy
We need to understandthe nature and uniqueness of the product and the kind of consumers it serves that we can appreciate more fully the beauty and effectiveness of its strategy. It is also by this uniqueness that we begin to appreciate the importance of personal service, effective training of its personnel in handling customers, and maintaining the quality of the bread its offers. The marketing concept of Panera is a differentiation of its product as a unique food and ambience, easily accessible, higher price to identify it as not being in the mass market. It is in a broad food basic commodity industry, and yet it is in narrow segment of that business as being not in mass fast food market, nor in an exclusive very expensive restaurant that is identify as being “Frenchy”, or a black tie restaurant. It is simply a close to home-baked freshly baked bread business, with some added products on the side lie sandwiches. I would describe its product as basically more of “ambience and home-baked food.” Lately, it advertises its product as organic to ride on the growing popularity of organic food and ecological concerns. The strategy of Panera to serve the market are of two types of restaurant outlets, namely: (1) restaurants that it owns, and (2) franchised restaurants. It is new in the latter outlets and it has to monitor their sales performance, quality of food served, and the support to provide the raw materials to ensure that only the ingredients are quality controlled by Panera. Franchises are...
References: Quick MBA Strategic Management,
Five Porter’s Generic Competitive Strategies, www.edu/road/parbotek/Trinidad/Chapter%205.ppt
The Five Generic Competitive Strategies: Which One to Employ,
McDonald’s Annual Report 2007,
Starbucks Coffee Company Annual Report 2008,
Please join StudyMode to read the full document