Introducing Panera Bread in Europe (Portugal) – Page 1

Introduction to Panera Bread Company

Through the company’s mission statement, “A loaf of bread in every arm”, the Panera Bread Company has made notable efforts in accomplishing its goal of making the awesome bread largely available to many customers across the Northern American frontier. The Panera Bread Company, with the headquarters in Saint Louis, USA, has a relatively wide consumer base characterized by its extensive network of bakery-cafes across the entire Northern American religion. Specifically, Panera Bread operates under many company-owned and franchised bakery-cafes. To be exact, all the bakery-cafes operating under the Panera Bread by the end of March 2013 were 1673, all in the 44 states in USA as well as Ontario in Canada (Panera Bread, 2013). The Panera Bread has a renowned reputation for its specialty in breads. This is because of the art and craft applied by the company in the process of making the bread. According to Panera Bread, great bread results to great meals. With, all the success of market expansion enjoyed by Panera Bread in the North American region, there is a higher possibility that expansion of its operations across other countries could also be successful. Specifically, some European countries such as Spain, Belgium and Portugal are good examples of where Panera Bread could expand its operations in the quest of tapping the European market as well. Specifically, Portugal could be a very good choice.

Marketing Objectives

Every operating business has four main functional areas. In these four vital aspects, lies marketing. The Panera Bread Company has a very definite marketing objective for all its products. Basically, marketing objectives includes the steadfast processes involved in identifying, predicting and effectively satisfying the customer needs in the most profitable way possible (Riley, 2012). The Panera Bread Company has very straight forward marketing objectives. It yearns to not only maintain but also increase its market share in the bread production sector in the North American frontier and beyond. More so, the Panera Bread employs a lot of innovative changes in terms of new products. Unlike during its commencement, at the present, the company enjoys a very wide variety of breads specifically baked to suit different consumers across its current customer bases. As an indication that Panera bread has successfully met its marketing objectives, it enjoys huge indices in terms of customer loyalty. According to the Wall Street Journal, the Panera Bread enjoys tremendous benefits as far as customer loyalty is concerned and is ranked among the top five companies in America that enjoy high customer loyalties (Panera Bread, 2013).

Target Markets

Essentially, target marketing refers to the breaking of a market into a series of segments and concentrating on suitable marketing efforts relevant to each different segment. Target marketing is a very key aspect leading to the successful business performance for Panera Bread. Due to the fact that different residents of different states across the USA have different orientations, culturally and financially, Panera Bread indulges in strategic target marketing. Throughout its 1673 bakery-cafes across the 44 USA states and Ontario in Canada, Panera Bread bakes different breads to suit the different tastes and preferences in each deffernet segment. As a result of effective market segmentation, Panera Bread is able to capture most customers in each region due to the fact that it easily meets their specific requirements.

Brand Positioning

The concept of brand positioning refers to the efforts of any company to provide its customers with strong reasons to choose its products over those of its competitors. In short, brand positioning activities includes everything done by a business firm to enhance its uniqueness from competitors in the same industry. Through brand positioning, Panera Bread has efficiently portrayed to its customers its intentions to meet their satisfaction. To start with, Panera Bread has a distinctive mission statement which also doubles as motto towards strengthening its brand positioning strategies, “A loaf of bread in every arm”. The brand positioning strategy for Panera Bread includes four strategic steps (Heckler Associates, 2011).

The first was upgrading a local chain for national performance. In 1992, Panera Bread was small chain with just 20 bakery-cafes operating as St. Louis Bread Company. To gather national prominence, the name was changed to Panera Bread consequently increasing its competitive potential. Then, there was the incorporation of artful transitions with reference to building a new and fresh identity as Panera Bread. Most notably, the company started with a memorable opening promotion within its most differential centers. This included franchising with other leading chain restaurants like the McDonalds. The third step strategy was keeping up with the market trends. This includes creating modern customer relation services such as incorporating different varieties of seating and table settings as well as including additional customer attraction amenities like the Wi-Fi. Lastly, the Panera Bread Company has implemented notable changes innovation wise resulting to expansion in available products. More so, there are substantial advertising efforts that help in brand positioning as far as development in product experience and sales volumes are concerned.

Points of Difference

A good strategy to succeed any marketing strategies for any business firm is to incorporate strong points of differences during the operation. In this case, points of difference refer to relatively distinct features of a company from all the rest of its competitors. For Panera bread, points of difference are evident both at product level and service level. To start with, the décor in the bakery-cafes of Panera Bread is way too attractive compared to other competitors such as the Starbucks. More so, Panera Bread is known for its breads and sandwiches, though it sells other products such as soups, coffee and syrups. However, other competitors are known for other products other than bread though they sell breads and sandwiches too. A good example is the Starbucks. It is known for coffee though it sells bread and sandwiches too. In terms of social corporate responsibility, Panera Bread also makes very distinctive efforts to ensure differentiation from fellow industry competitors. For instance, during the end of the 2011 financial year, Panera Bread announced that it had donated over 100 million worth of unsold bread and other baked goods to local hunger victims across its operation frontier (Panera Bread Co., 2012). This too, is a distinctive point of difference for Panera Bread.

Opportunities and Threats to Open in Portugal

To have a better understanding of the perfect market entry strategy for Panera Bread in Portugal, the most vital precepts to put into consideration are the opportunities and threats in the food industry in Portugal, with specific interest in both bread production and consumption. According to market research theories and maxims, the eventual success of any product consumption expansion relies much on how well the company understands various production and marketing factors affecting its operations in any new environments. With respect to this, understanding both the opportunities and the threats of that could face Panera Bread in its quest to open operations in Portugal is necessary. It enables the strategic decision team to understand what techniques to apply towards creating and developing a successful Portuguese market entry strategy. A critical SWOT analysis of the Portuguese bread industry reflects a number of opportunities and threats.

Opportunities

It is worth noting that for Panera Bread Company, starting operations in Portugal is a good idea considering the following opportunities.

A Dominant Bread Eating Culture

At the centre of any Portuguese person, is food. As a result Portugal’s diverse history in both discovery and trade, the country has had access to many exotic foods, bread being one of the necessary and most important foods. Wheat and corn breads, just like the ones baked in Panera Bread bakery-cafes, are very popular in Portugal. In fact, in Portugal, bread is served with almost all foods. Even all the popular soups in Portugal use bread as a key ingredient. Therefore, with reference to the fact that bread is a major food in Portugal, Panera Bread could confidently start its operations in Portugal without any fear of lack of customers.

Availability of Raw Materials

It is obvious that bread making requires a lot of ingredients. However, the major ingredients constitute of wheat and corn. Currently, in its operations in the North American market, Panera Bread Company enjoys the relatively cheap availability of these two chief raw materials, wheat and corn, from both the USA and Canada. In the same case, availability of both corn and wheat in Portugal for bread making is notably not a problem. According to statistics, Portugal enjoys approximately 35,000 square miles of productive land used to grow a lot of foods including all important ingredients in used in making different kind of breads such as wheat, corn, rice and potatoes (Elliott, 2012). More so, FAO includes Portugal as a member of the European wheat producing countries. To be specific, the Southern region of Portugal, Alentejo, is a very productive part, with reference to wheat farming, and would suitably act as Panera Bread’s source of cheap raw material.

Threats

However, countering the above opportunities of setting up production and marketing of its products in Portugal, the Panera Bread Company is definitely set to face threats. The dominant threats include the following.

New Production Procedures

Most definitely, the difference between North America and Europe exceeds the geographical aspect. There exist cultural differences as well as well. In respect to this, bread in America differs from bread in Portugal in various aspects. The sizes, shapes, flavors, packaging and supplementary ingredient mix are very different in both cultures. At the present, there are definite methods, techniques, tools, procedures and additional materials used by Panera Bread during its operations in North America. Logically, it is the combination of all that that leads to the success of this company in its current market. Unfortunately, venturing in the Portuguese market calls for almost entirely redefining its entire production procedures. This means a change in additional flavors, shapes, designs and outlook of the breads to suit the Portuguese market. Incorporating all those changes poses as a potential threat to Panera Bread Company since it will involve a lot of capital investments in terms of new chefs, machines and other necessary requirements without a guarantee of profitable outcomes.

Competition

Obviously, during the planning of international market entry strategies for any company, competition is always a potential threat to consider. As aforementioned, the Portuguese culture is incorporates bread as a daily dietary necessity. Consequently, there are several Portuguese companies that have taken this advantage and actively indulge in bread baking to supply the extensive bread demand within the Portuguese domestic economy. This means that it will not be an easy ride for Panera Bread to successfully set up its operations in this country. It will have to make very strong strategic plans to enthusiastically compete with the already established bread producing companies in Portugal. More importantly, the Portuguese companies Panera Bread is set to compete with have added advantage in terms of market knowledge and already established customer loyalty indices in Portugal. Most definitely, this is a quite a threat facing the establishment of Panera Bread Company in Portugal.

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