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Essay: Panera Bread marketing analysis (SWOT, marketing mix, Ansoff’s matrix)

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  • Subject area(s): Marketing essays
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  • Published: 23 September 2022*
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  • Words: 1,480 (approx)
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  • Tags: SWOT analysis examples

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Introduction

Panera Bread is a healthy bakery and cafe that thrives off of its sales of sandwiches, salads, and soups, but Panera is attempting to expand its menu diversity with fast breakfast and hearty dinner options and diversify its customer base through digital sales. The chain is proud of its upfront nutritional information and ingredients without artificial preservatives, flavors, or sweeteners because Panera values simplicity, quality, and freshness. There are over 2,000 cafes open in the United States and Canada.

The purpose of the internal assessment on Panera Bread is to determine the ways in which Panera can improve its marketing approach to increase the number of consumers who eat at its restaurants. An evaluation of Panera Bread’s marketing mix and innovations will be discussed using a SWOT analysis, the Ansoff’s Matrix, and an evaluation of its marketing mix. Secondary sources will be used to identify the evolution of Panera Bread’s recent developments such as In-Store Kiosks, mobile ordering, rapid pick-ups, and delivery options. Panera’s new breakfast and dinner offerings have the potential to increase its target market, increasing sales through product differentiation.

Main Findings

The following supporting documents will be used to evaluate Panera Bread:

  • Outside Source – How Panera Personalized their Guest Experience with In-Store Kiosks and Mobile Ordering
  • CNBC.com – Panera Bread Enters the Breakfast Wars with New Strategy
  • Forbes – Panera Is Finally Going After The Dinner Crowd With A New Menu

Outside Source is an app development team, so it is a trusted source in the discussion of digital sales. “How Panera Personalized Their Guest Experience with In-Store Kiosks and Mobile Ordering” discusses the ways in which the digital transformation of Panera Bread is boosting its personalization among customers. Studies show that 73 percent of customers believe technology enhances their dining experience. Panera’s technological enhancements, including a mobile app, “order-ahead website portal,” Rapid Pick-up digital order display, and In-Store Kiosks, allow customers to have access to all ingredients and to customize any item. Blaine Hurst, Panera’s CEO, explains that 3.1 million of Panera’s orders are digital per week, which is 30 percent of its total sales.

Amelia Lucas of “Panera Bread Enters the Breakfast Wars with New Strategy” analyzes the effectiveness of launching new breakfast items, such as breakfast wraps, light and dark roast coffee with in-store ground coffee beans, and cold brews. Panera is attempting to compete with on-the-go breakfast powerhouses like McDonald’s and Dunkin’ Donuts by offering quality and time-sensitive items. She writes for CNBC.com, which is a reputable source with relatively little bias. Panera Tap is a new strategy involving Panera’s mobile app with the purpose of allowing customers to save past orders for the convenience of later ordering, and near field communication smart posters will be used in the future for placing orders for self-serve coffee.

Alicia Kelso is a Senior Contributor at Forbes.com who focuses on the restaurant industry. “Panera Is Finally Going After the Dinner Crowd With a New Menu” highlights that Panera has created a 10-item menu specifically for dinner, which is only available after 4:30 pm. Panera has always offered dinner, but it has just recently made a separate dinner menu in line with its earlier decision to make a separate breakfast menu. The prices are to remain similar to its lunch items because it is keeping the same base of flavors for its ingredients. Panera hopes this menu will increase customers and profitability.

Analysis

SWOT Analysis of Panera Bread

Strengths

  • Digital enhancements allow Panera to use the data gathered about customer preferences to make corrections and keep consumers happy.
  • Uber Eats, DoorDash, and Grubhub allow third-party deliveries.
  • Check-out Kiosks allow lines to be cut in half since customers can order at the kiosks or the counter.
  • A seasonal menu rotates throughout the year.
  • With 30% of Panera’s sales being made up of digital orders, Panera is able to reach a larger audience with e-commerce.
  • Panera Bread can use insights from JAB Holding, the owner of Panera and numerous coffee chains, to build a foundation for its own relaunched coffee platform.
  • Panera is the tenth largest chain by sales in the United States.

Weaknesses

  • The suppliers that Panera can buy ingredients from is limited because of its requirements for no antibiotics, preservatives, or flavorings, which can lead to higher expenses.
  • More diversity in its menu items could lead to diseconomies of scale if more ingredients are needed to be bought for only a few menu items.

Opportunities

  • A developing food trend is more people are health-conscious and want to know where their food comes from.
  • The overall industry sales for restaurants is 3.6% higher than the previous year, reaching $863 billion.
  • The International Food Information Council and the American Heart Association explain that 95% of Americans have the financial capacity to spend money on healthier food options, but 28% say they are not easy to find.

Threats

  • Panera is entering the highly saturated dinner market, which could lead to the ten dinner-only menu items becoming an expense.
  • McDonald’s, Wendy’s, and Starbucks are already leaders in the breakfast industry, so Panera Bread will need to compete with powerhouse brands.

The SWOT analysis shows that Panera Bread’s strengths and opportunities outweigh the potential weaknesses and threats because Hurst explains that convenience and quality are hard to come by in the restaurant chain, so Panera is exploiting an area of the saturated industry that has been relatively untouched. It is likely that digital sales and menu diversity will continue to keep Panera as a leading competitor.

Evaluation of Marketing Mix

Price

  • Soups/macs: $6.49 – $9.89
  • Salads: $7.49 – $11.49
  • Sandwiches: $7.69 – $10.99
  • Grain bowls: $9.59 – $10.29

The pricing strategy is competitive pricing because Panera is charging what its biggest competitors are charging.

Product

  • Breakfast: egg sandwiches, egg wraps, oatmeal, and bakery assortments
  • Lunch: soups, mac & cheese, salads, and sandwiches
  • Beverages: smoothies, teas, and coffee
  • The new dinner menu includes a “teriyaki chicken and broccoli bowl, a pesto chicken bowl, a steak and blue cheese artisan flatbread, . . . , and a toasted Tuscan grilled chicken sandwich.”

Place

  • Panera Bread uses zero intermediaries for in-store customers because products are sold directly to customers.
  • Third party delivery utilizes one intermediary because the delivery services transport the items to customers.

Promotion

  • Above-the-line: TV commercials, magazines, and the Internet
  • Facebook, Twitter, and Instagram
  • Panera relies heavily on word-of-mouth which is why it values in-store experience.
  • Sales promotion: MyPaneraReward program

Panera is primarily focusing on its products by implementing new dinner and breakfast items. Product strategies are to expand existing products to new market segments through technological enhancements and to offer new products to existing customers. Prices are remaining consistent for the new items, and delivery channels are expanding how far Panera is able to reach customers.

Ansoff’s Matrix

(Product: x-axis, Market: y-axis)

Existing / New

Existing

Market Penetration:

Through In-store Kiosks, new delivery options, mobile app updates, and Panera Tap, existing customers have a faster connection to all of the Panera menu items that they could want. For this reason, digital sales are targeted at loyal customers because they eat at the chain most often.

Product Development:

As new dinner and breakfast items are being released, in-store customers are being introduced to the Panera Bread experience. Customers who enjoy lunchtime meals now have the option to come back for breakfast and dinner, increasing its profits with successful items.

New

Market Development:

Panera is marketing its most popular items in grocery stores. It is expanding its target market to those who eat out to also those who prefer to eat in, with Panera at Home.

The recent partnership with delivery apps allows new customers to have easier access to the chain.

Diversification:

While Panera Bread remains in the food industry, with the addition of its 10 dinner menu-only items, it is diversifying from merely the bakery-cafe industry to the dinner industry. The new products are bringing in a new customer, who wants heartier, more caloric dinner items.

Conclusion

Panera Bread can increase its target market and profitability through innovations and changes to its marketing mix because the chain is looking to diversify into the dinner and breakfast industries through changes to its menu and innovations such as In-Store Kiosks, a mobile app, online delivery, and Panera Tap. Panera Bread’s future is bright because Panera is targeting the growing industry of customers who want health-focused, quality, and convenient products. Through dinner-only menu items and its partnership with mobile delivery services, Panera is seeking to target customers who are not loyal to the brand yet. With the proper promotion of Panera’s changes to its products and its technological enhancements, Panera will be able to penetrate the restaurant industry, increasing its profitability and target market.

Limitations of research include the dinner-only menu items are a recently developed initiative, so there is little data to go on about its successes or failures. Also, any sources provided by Panera Bread have bias towards the discussion.

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