Panera Bread Case Study Essay

2296 Words Apr 25th, 2009 10 Pages
In 1993, AU Bon Pain Company purchased the Saint Louis Bread Company. In 1995, top management at Au Bon Pain instituted a comprehensive overhaul of the newly-acquired Saint Louis Bread locations. The overhaul included altering the menu and the dining atmosphere. The vision was to create a specialty cafe anchored by an authentic, fresh-dough artisan bakery and upscale quick-service menu selections. This acquisition proved successful for Au Bon Pain. Between 1993 and 1997, average unit volumes at the revamped locations increased by 75% and over 100 additional locations were opened. In 1997, the bakery-cafes were renamed Panera bread in markets outside of St Louis. The Panera business plan had worked well and management concluded it had broad …show more content…
Now customers could experience the high quality Panera products at the convience of their own location, whether it be in the workplace, schools, parties or gatherings held in the home. This opportunity would help increase breakfast, lunch and dinner sales, as well as grow customer awareness.

Early on Panera's marketing strategy was more of a passive approach. They relied heavily on customer loyalty and word of mouth to develop their brand awareness. In 2006, Panera stepped up its marketing strategy. One element aimed at raising the quality of awareness about Panera by hammering the theme "food you crave, food you can trust." With this theme they looked to market Panera as a neighborhood gathering place . Also, instead of the hard-sell, in-your-face approach, Panera aimed at a softer touch, allowing its new customers to "discover" Panera. Panera also looked to increase its evening sales by capturing its existing lunch customers.

Panera Bread's franchising strategy was to enter into franchise agreements that required the franchise developer to open a number of units, typically 15 bakery-cafes in six years. To protect the company and ensure success, applicants had to meet eight stringent criteria to gain consideration for a Panera Bread franchise. A franchise fee of $35,000 per location and continuing royalties of 4-5% on sales was typically included in the franchise agreement. Dough products had to be purchased from approved sources by Panera Bread. The

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