Panera Bread Marketing Mix Proposal

Signature Frozen Yogurt Table of Contents Executive Summary For the past 28 years we have been committed to offering a wide variety of healthy entree options at the highest quality for a reasonable price, however, we have never offered a selection of healthy option desserts and therefore have decided to launch a new product, the Signature Frozen Yogurt. This product is a secret blend of all-natural ingredients. One of the most important ingredients is real nonfat milk, which has been certified by the National Yogurt Association to carry the Live and Active Cultures. Regardless of the flavor, our crispy and tangy yogurt is designed to awaken the senses and blend perfectly with each of our freshly cut fruit toppings. It is low in fat, contains no cholesterol, no preservatives, is fortified with calcium, and is made of the highest ingredients. The competitive advantage of this product is the place the product will be sold, at our already established cafes. The cafe already draws in customers and now to complete their meal, instead of having to travel elsewhere for a healthy option desert, they have it already where they are eating, which means no extra traveling costs, or planning is required. The convenience factor is now added which is a very important in the American lifestyle today. Unlike the fast food competitors, our new dessert will keep us at the top of the fast-casual, bakery-cafe industry by continuing to provide for the millions of Americans who are looking to eat healthy. While competitors are struggling to keep up with today’s prominent healthy-eating trend, we remain a valuable asset to the cause. We will use mass marketing techniques in order to target our chosen market for the newly created Signature Frozen Yogurt . The initial market will consist of New York and California, two places which have seen a growing trend in the market for frozen dessert. The population will consist of individuals roughly between 19-35 years of age, both male and female individuals that come from the upper middle class, are health-oriented, and currently frequent Panera Bread, but rarely eat dessert because of the poor healthy choices currently offered, and is currently measured at approximately 7, 927, 516 individuals. We will use price skimming for our pricing strategy. In the past we have not needed to cut the prices of our food as a way to bring in customers. Our company is known to have great quality, and you may have to pay a little extra for it. Since we are an already well-established bakery chain, we have the ability to have the product enter the market with the price skimming strategy. We feel like this strategy best fits our company image as a whole, and will fit in with the prices of our other products. For the communications strategy, our media mix will be fairly standard for a new product being introduced at the national level. We will use mass media exposure. We will use TV, Magazines, Internet, and Outdoors. With TV we will have a wide reach, and will be able to target our demographic specifically through certain TV shows and time slots. We have written, shot and edited our own TV spot for the new product. We have used our original slogan â€Å"A loaf of bread in every arm†¦Signature Frozen Yogurt in every hand†, as well as a summertime theme associated with our frozen yogurt. We will also use magazines, the Internet with our website, Facebook, Twitter, sales promotions including coupons and samples. We pride ourselves in making our bread, salads, sandwiches, and all desserts fresh daily. The actual ingredients used to make these delicious entrees, however, are provided by our own distribution center. We use a vertical marketing channel in which the members act as a unified system in all three stages- manufacturing, wholesaler, and retailer, and each level has an increase of formalization and control. Our goal in introducing the Signature Frozen Yogurt into the described market is to increase our current market share for healthy option dessert and create top of mind awareness of our brand. The goal is to have customers name Panera Bread as their number one option when asked about their preferences of frozen yogurt. Along with the introduction of the Frozen Yogurt into the New York and California store locations will be an initial investment of $685,816, which consists of all the machinery, installation and training costs for all 154 cafes located in the mentioned states. The forecasted return on investment is predicted to be 0. 16, and to break even we would have to obtain sales of 152,765 units at an averaged out price of $4. 9, which takes in account all variations for the different prices for different size containers. Based on our established customer list, we expect that 40% of all the people in the states of California and New York will be our customers and that 30% of these customers will be likely to purchase dessert and one of their store visits throughout the year, which we have calculated to be roughly 12-20 times for each individual. In the first year of im plementation, from April 2010 to December 2010, we expect to have sell approximately 14,408 units and double sales volume by year end 2011. We expect that this project will increase Earnings Before Tax and Interest (EBIT) by approximately $30,593 and increase Net Income by approximately $18, 968. Business Mission and Vision Our mission statement is â€Å"A loaf of bread in every arm and frozen yogurt in each hand. † Our commitment is to actively contribute to the community today through donation of our daily extras to the local community in need, one loaf at a time, feeding the community and wasting not a crumb. We not only have a commitment to giving back to the community but consistently holding the highest standards of quality for every customer regardless of which Panera you dine at. Finally, we also commit to providing a sound environment with integrity present for our employees. Goals and Objectives By entering the frozen dessert market, we will further increase our distinctive qualities because no other competitor in the restaurant industry has a similar frozen yogurt product. The Signature Frozen Yogurt will take on the familiar qualities of all other products by use of the â€Å"Signature† title. This consistence will remind consumers that all our â€Å"Signature† products are similar in an important aspect: quality. Also, our company is creating more value for the new product itself by displaying the ingredients and nutrition facts to prove to consumers that the dessert is a truly healthy one. Finally, our decision to enter this new market gives consumers a much more accessible product. Currently, there are only a few big-name frozen dessert foodservice venues that offer a frozen yogurt product, including TCBY and Baskin Robbins. Our company recognizes the great potential in this growing market, in great thanks to society’s healthy eating trends. The frozen yogurt market is being revitalized now that consumers have realized that with healthy eating comes a great need to satisfy the sweet-tooth cravings, and that is where our Signature Frozen Yogurt comes into play. Our company is introducing a product that satisfies two consumer needs: a truly healthy, low-fat, low-calorie dessert, and a reinvented, flavorful product that used to have an image of plain and boring. So long as Panera Bread keeps these important attributes of our new product in mind, we are sure to be a unique success. The goal for our entire company is to become a leading national brand in the restaurant industry, as well as a leader in the frozen dessert market. The new market expansion will initially include New York and California, and eventually all 50 states, including the western states which we do not have a very strong presence in and can use popularity of the frozen yogurt as an advantage for entry. The global expansion, to be started approximately a year after the successful frozen yogurt introduction in the United States market is also a future goal for the company. In addition, we hope to maintain strong relationships with our franchises to continue working together in efforts to satisfy changing consumer needs. For different regions, our franchises will lend their customer feedback to our company to inform us of new possible flavors and toppings for the Signature Frozen Yogurt that can be introduced in those particular regions. Our goal in introducing the Signature Frozen Yogurt into the described market is to increase our current market share for healthy option dessert and create top of mind awareness of our brand. The goal is to have customers name Panera Bread as their number one option when asked about their preferences of frozen yogurt. We are also looking to increase consumption of desserts at our locations, considering that we acknowledge that the current desserts offered do not accurately fit in the healthy option category. The frozen yogurt will be low fat and encompass fresh fruit among other indulgent toppings that are guaranteed to satisfy every palate. Customers want healthier dessert options that they can trust to be of the highest quality, thus they will have no trouble purchasing our Signature Frozen Yogurt. Our current customers, especially, will perceive the new product as valuable enough to buy because of the firm’s commitment towards providing excellent customer service and a quality experience for any meal served, no matter if it is eaten in the restaurant or taken to go. For new and old customers alike, this product will be received well because few other restaurants in our industry offer a healthy dessert option that can prove its caloric or sugar levels. As to price and value capture, we have been able to build our name and image over the past few decades, all the while having prices set above those of fast food competitors. We have also been able to continuously increase profits because of the perceived value that we offer in making specialty products, as well as hand-made and made-to-order meals, the moment a customer walks in to the establishment. This value-based pricing strategy has worked in our favor as customers feel they are getting a higher quality meal at a slightly higher cost. In addition, we are also looking to increase EBIT constantly through the next three years. The capital investment required will be approximately $686, 916 for the initial cost of the machines to be installed at each of the 86 cafes located in California and the 68 cafes located in New York, their installation cost and training procedures. This will increase cost of goods sold, labor, and other general operating costs by fifteen percent. The projected ROI will be 0. 16 SWOT ANALYSIS COMPETITIVE ANALYSIS We compete in the firm-intensive restaurant industry within multiple markets, including fast food, casual dining, specialty dining, and bakery-cafe. We even compete on a time basis, in other words, breakfast, lunch, PM â€Å"chill out†, lunch at night, and take-home. Competitors include both national chain restaurants, as well as independent local firms. Our recent, most threatening competition comes from restaurant chains that have begun to align their menus with society’s increasing trend for healthy eating. Some of the â€Å"big-name† competitors include McDonald’s, Starbucks, Subway, and Chipotle Mexican Grille, among others. Even with their menu changes, however, we have been successful in maintaining and promoting an image of healthy eating on a higher scale of quality. This particular reputation has helped acknowledge our firm as a leader in the restaurant industry. McDonald’s is one of our largest competitors in the fast food industry. With almost 32,000 establishments operating globally, McDonald’s switch to a new focus on healthier eating habits has helped its company strengthen its position among health-conscious consumers. The chain has introduced menu items that serve as alternatives for their popular, but unhealthy, longstanding products. For instance, McDonald’s offers wraps in place of white bread, grilled chicken instead of fried, and apple slices in place of French fries. Wendy’s and Burger King, as well as many other fast food chains, followed suit after McDonald’s menu changes, further increasing our competition. We are not too concerned about the fast food industry’s push towards healthy food, however, because McDonald’s has been intensely focused on expansion into global markets. Therefore, their attention to the healthy consumer market is nowhere near as intense as it could be. Also, each of these fast food firms are known to be â€Å"hamburger-based,† giving us the competitive edge of offering made-to-order, specialty items of a much healthier caliber. We have not been impacted significantly enough by the fast food giant’s healthy initiatives to feel it necessary to react with our own menu or company changes. Within the fast-casual dining market, Chipotle Mexican Grill, a company of over 800 establishments nationwide, has become a one of our direct competitor, as the company offers some healthier eating selections, quick service, and a casual environment. The main distinction between these two restaurants is their very different menu styles. Chipotle offers Mexican style food, including burritos, tacos, and enchiladas. While Chipotle is now recognized for its healthy veggie options from local supplies and fresh grilled chicken salads as a replacement for the high-calorie burritos, we have the obvious advantage of a menu that is appealing to multiple target markets, rather than just the one market for Mexican-style food lovers that Chipotle caters to. Subway, of the Doctor’s Associates Incorporation, is yet another restaurant competing in the mix of a healthy, fast food type of market. Subway has had a successful impact on health-conscious fast food consumers ever since â€Å"The Subway Guy,† also known as â€Å"Subway Jared† revealed to society that he lost a couple hundred pounds from simple exercising, and most importantly, from eating Subway subs every day. Subway’s profits surged after these commercials featuring Jared were released across the country. While Subway has a presence in our health-conscious target market, their primary competition is more likely to be Chipotle Mexican Grille, instead of Panera Bread. This is due to the fact that both restaurant chains have buffet-style ordering, where customers have complete and total control over their meal. Unlike these firms, we at Panera Bread are in favor of offering our customers a choice of unique, specialty menu items that have been pre-tested in multiple variations until the perfect combinations were found. We want our customers to enter or establishment and enjoy the meal itself and all of its uniqueness, rather han have to create their own. In the specialty cafe market, Starbucks, a company of over 16,000 global establishments, is our foremost competitor. This firm is renowned for its distinctive features, which are similar to our company. Starbucks has the uniqueness of an intimate, yet casual environment, as well as a vast array of specialty coffee products. The main diffe rence is that Starbucks focuses primarily on the beverage market, whereas Panera Bread’s focus is on our variety of food products and specialty breads. Starbucks is an important competitor to watch because much like our firm, their customers perceive the business to be of very high quality. Thus, Starbucks has a similar advantage in having the ability to retain a very loyal customer base. They also have an edge on Panera Bread in terms of their larger company size, for they have more market penetration and therefore a greater influence within the specialty cafe market. Finally, although Starbucks specializes in gourmet coffee beverages, they do have a pastry selection that is comparable to ours. Our firm believes that in the short-term future, Starbucks will not have a presence as strong as that of Panera Bread in the bakery market. In review of the frozen yogurt market, the number one competitor is actually the first ever national frozen yogurt restaurant chain. TCBY, also known as â€Å"The Country’s Best Yogurt,† has been the major source for frozen yogurt for many decades, and thus, their brand recognition is incredibly strong. This firm’s product has always been a favorite frozen dessert alternative for the health-conscious consumer. We believe our competitive advantage lies in the fact that in today’s society, consumers of all demographics are looking for everything they want and need at the reach of their fingertips. TCBY only offers frozen desserts, and while their innovative and specialized dessert options are noticeably unique, the firm simply does not have the vast variety of menu selections that we offer. Our company satisfies much more than just the sweet-tooth cravings of our customers, and this makes us even more distinct than TCBY and similar frozen yogurt competitors. The new Signature Frozen Yogurt is a type of healthy frozen dessert that is not found at our most comparable restaurant competitors. The closest comparison from the fast food industry would be McDonalds’ McFlurry and Wendys’ Frosty, two ice cream-based products that are not low-fat, low-calorie, nor nutritious. Previously mentioned competitors in the fast-casual restaurant industry, however, have no product like the Signature Frozen Yogurt. Our company also has very few competitors in the frozen yogurt market. TCBY is the leading brand for companies selling only frozen yogurt. Other competition in this market comes from small, localized firms that have entered the market within the past ten years, for example, Yogurbella and Red Kiwi in the Southern Florida region and Pinkberry in New York. Overall, the introduction of our Signature Frozen Yogurt is perfectly timed for our firm, as well as society’s growing trend of healthy eating. We have countless unique advantages over the competition. Our strong brand name is an immediate competitive edge because it is associated with our high quality products. The slightly higher prices are reflective of the quality product and overall experience that each consumer receives when he visits a Panera Bread location. This experience can in great part be attributed to the casual, inviting, and relaxing ambience of every establishment. Of course, our bakery expertise, healthy menu options, and artisan breads are a founding pierce of our company’s success. Therefore, our introduction of new products, including the Signature Frozen Yogurt, will have an easier time of gaining market acceptance, as well as our consumer’s confidence. Marketing Strategy Research The U. S. Market for Ice Cream and Frozen Desserts According to trend data, the sales of low fat or diet ice cream are increasing while the sale of regular is decreasing. This shows that the market for healthy frozen desserts is rapidly growing. In addition, consumers are looking for different flavors and type of frozen desserts that will give them a surprise factor. Frozen yogurt which was more popular in the 1980’s and 90’s is making a comeback in more cafe settings that resemble coffee shops. These cafes would offer healthy yogurt as well as premium healthy toppings for the yogurt. They cater to consumers that want the same atmosphere and effect as Starbucks The trend for ice cream in the food service industry is that consumers will pay a little more and wait a little longer for the upscale experience and the atmosphere. In the next three years, frozen yogurt is the one frozen dessert that will experience the highest growth in sales in the food service industry. Projected U. S. Foodservice Sales of Frozen Desserts (in millions) Along with the nformation gathered from secondary research, we also used primary research techniques including a survey (see appendix), of which the results were as follows: Do you like frozen yogurt? {draw:frame} Yes =44 Indifferent =8 No =0 How Often do you go to Panera Bread every three months? {draw:frame} Often (7+ Times) =4 Sometimes (3-6 times) =39 Rarely (0-2 times) =9 Do you think that Panera Bread’s current desserts are healthy opt ions? (Current dessert menu items include: cookies, brownies, pastries, scones, cinnamon rolls, muffins) {draw:frame} Yes =2 Somewhat =16 No =34 Would you be more willing to get dessert at Panera if there were healthier options? {draw:frame} Yes =32 Indifferent =22 No =4 Target Market Strategy Panera has found a home in the niche market of suburban regions, where consumers are looking for quick, convenient, and high quality menu options. We have designed our establishments to allow for a relaxing, lounging environment, as well as just the opposite- a fast moving order line that will have a consumer and his packed to-go meal out the door in just a couple of minutes. We will use mass marketing techniques in order to target our chosen market for the newly created Signature Frozen Yogurt . The initial market will consist of New York and California, two places which have seen a growing trend in the market for frozen dessert. The population will consist of individuals roughly between 19-35 years of age, both male and female individuals that come from the upper middle class, are health-oriented, and currently frequent Panera Bread, but rarely eat dessert because of the poor healthy choices currently offered, and is currently measured at approximately 7, 927, 516 individuals. Ranked the number one option in the cafe/bakery market, we have the highest level of customer loyalty among quick/casual restaurants, according to the Wall Street Journal. We have also received several awards for excellence, and have been named the number one fast food chain for popular salad and healthy option facilities. The introduction of the Frozen Yogurt will The Signature Frozen Yogurt will strengthen our current competitive advantage over the cafe industry and add value to ourcurrent menu. The dessert will be freshly made at each location; it will not be an industrialized food product, thus always guaranteeing its freshness. Customers will be able to customize their choice; they will be able to choose the flavor of the yogurt and what toppings they’d like, therefore always allowing them to have their way. Positioning Statement For the health-conscious consumer, Panera Bread present the Signature Frozen Yogurt, an all-natural, low-fat, low-calorie dessert that will remind consumers why our copmany is such a trusted brand and is nationally recognized for our quality products. The nutritious, low-fat, low-calorie treat is yet another specialty product produced by a company who loves their bread, their employees, and their customers. Unlike the fast food competitors, our new dessert will keep us at the top of the fast-casual, bakery-cafe industry by continuing to provide for the millions of Americans who are looking to eat healthy. While competitors are struggling to keep up with today’s prominent healthy-eating trend, we remain a valuable asset to the cause. Marketing Mix Product The signature frozen yogurt is a convenience type of product. Since it is a dessert the consumer will not put much time in researching where to purchase the product. There are five product flavors: four that are classic flavors and on that is a seasonal flavor and will change every three months. The flavors are as follows: Macadamia Nut, Chai Tea, Dulce de Leche, and Orange Scone. The first seasonal flavored launched will be pineapple upside downflavor. The topping options will be as follows: fresh cut fruit bits (strawberry, pineapple, blueberry, blackberry, raspberry, and banana), pecans, walnuts, chocolate chips, coconut, heath bar crunch, cookie dough, and drizzles (caramel, chocolate, and peanut butter). The signature frozen brand features ingredients including real nonfat milk, so you get all of the benefits derived from dairy, at a fraction of the caloric intake. This differs from other frozen yogurts in the marketplace, which are created using predominantly water, milk and sugar. At Panera, the proof is in the taste. We strive to make each cup of yogurt from the highest quality of ingredients. You know you can tell the difference from the very first spoonful. Our frozen yogurt is a secret blend of all-natural ingredients. One of the most important ingredients is real nonfat milk, which has been certified by the National Yogurt Association to carry the Live & Active Cultures seal. Regardless of the flavor, our crisp and tangy yogurt is designed to awaken the senses and blend perfectly with each of our freshly cut fruit toppings. There are only 90 calories in each 8-ounce serving of Signature Frozen Yogurt. It is low in fat, contains no cholesterol, no preservatives, is fortified with calcium, and is made with the highest quality ingredients. Children, adults and the elderly can enjoy this great tasting healthy option dessert! The product itself is packaged from the distribution warehouse and brought directly to each Panera cafe. There is it dispensed into the frozen yogurt machines at each site. When served to the customer, the yogurt can be served in three different size cups, which will include small (8 ounces), medium (10 ounces), and large (12 ounces). This product is considered a brand extension. The Signature frozen yogurt is adding another product category, which is the category of frozen yogurt under the product line of dessert. Essentially it is adding product depth. We currently have several different product categories under this product line including pastries, cookies, brownies, coffee drinks, and smoothies. Currently, we have not encountered any special issues involved with this product. Since we are striving to provide a healthier item for our dessert menu in order to reach out to those who are conscious about their health, below is the label containing the nutrition facts for the Signature Frozen Yogurt, which will be readily available in all stores and in our company website in the occasion that the customer wishes to inquire about their intake of calories when consuming this item. Nutrition Facts Serving Size: 8 oz Est. Percent of Calories from: Place/ Distribution We pride ourselves in making our bread, salads, sandwiches, and all desserts fresh daily. The actual ingredients used to make these delicious entrees, however, are provided by our own distribution center. We use a vertical marketing channel in which the members act as a unified system in all three stages- manufacturing, wholesaler, and retailer- and each level has an increase of formalization and control. We use product pooling where there is one main distribution center within driving distance from a store. Each store is normally re-stocked twice a week and is delivered the ingredients from our privately owned trucks. Inventory can be delivered on an as needed business if demand is higher than expected. Once the product arrives in the store then the frozen yogurt will be placed in the dispensing machine and ready to be served to the customer. Price We will use price skimming for our pricing strategy. In the past we have not needed to cut the prices of our food as a way to bring in customers. Our company is known to have great quality, and you may have to pay a little extra for it. Since we are an already well-established bakery chain, we have the ability to have the product enter the market with the price skimming strategy. We feel like this strategy best fits our company image as a whole, and will fit in with the prices of our other products. The pricing is as follows, small for $3. 99, medium for $4. 50, large for $4. 99. Each topping is an additional $. 99 cents. Both internal and external factors have been considered when setting the prices. First, we have chosen selective distribution when it comes to the place. We are a well-distributed chain, but not massively distributed across the country and not distributed at all outside the United States. Also, a survey was performed in a randomized sample of 50 individuals who were asked what their maximum willingness to pay would be for the Signature Frozen Yogurt. About 40% of the individuals surveyed said they would be willing to pay at most $5 for a 10 ounce serving of frozen yogurt, thus we priced the product accordingly. We also considered internal factors such as relative dessert prices currently sold at our locations. Some prices for comparison are as follows: chocolate chip cookie: $1. 99, orange scone: $2. 99, and chocolate brownie:$3. 50. In order for the product launch successfully the product must be priced according to the other products offered by Panera. The prices for the products are on the more expensive side but not overly expensive. The higher price of the good is a way to hold up the reputation we have built that we do not sacrifice quality for price. An external factor that has been considered is our current competition. The introduction of frozen yogurt will drive the company to compete with local frozen yogurt vendors, TCBY, and developing yogurt chains such as Yogurbella and Chicberry. Although our product is priced slightly higher than TCBY and about the same as Yogurbella and Chicberry, we wanted this product to be competitively priced but at the same time hold a standard of higher quality, therefore a little higher priced than TCBY. The frozen yogurt industry itself instigates monopolistic competition. There are several competitors and therefore competition is very tough. The key to survival in this market is differentiation. The product itself may not be that different than other local current local vendors beside certain flavors offered or the quality of the taste, but the key to successfully positioning the product in the chosen market is the place. The yogurt will be sold at a cafe that already draws customers in for lunch or dinner, and now to complete their meal, instead of having to travel elsewhere for a healthy option dessert, they have it already where they are eating, which means no extra traveling costs, or planning is required. The convenience factor is now added, which is a huge factor in the American lifestyle today. This will add the competitive advantage to purchasing frozen yogurt at one of our locations, and not elsewhere. The competitors, in response may respond by dropping their prices in hopes that lower prices will make up for the inconvenience factor of having to travel to get your dessert after dinner. Although the competition may be able to lower their price and still make a profit, this may not be enough to sway the competition. Promotion and Communications Advertising The advertising objectives of this new product are to inform consumers about the new frozen yogurt product line that we are beginning to sell. We will emphasize that this is a new product being offered at our locations. We will also emphasize the unique and fresh aspects of ourSignature Frozen Yogurt. Some aspects that make this product ‘unique and fresh’ are the healthy nature of the product, the high quality materials used to produce it, and the relatively expensive price. The message execution of the advertising will be a lifestyle choice; we want to introduce the idea of getting a healthy good tasting dessert at Panera Bread. Our media mix will be fairly standard for a new product being introduced at the national level. We will use mass media exposure. We will use TV, Magazines, Internet, and Outdoors. We will also place a picture of the Signature Frozen Yogurt in all company owned delivery trucks; since all food is delivered via them and it can reach a wide audience while driving. With TV we will have a wide reach, and will be able totarget our demographic specifically through certain TV shows and time slots. We have written, shot and edited our own TV spot for the new product. We have used our original slogan â€Å"A loaf of bread in every arm†¦Signature Frozen Yogurt in every hand†, as well as a summertime theme associated with our frozen yogurt. With the magazines,we can hone in our message to specific demographics that will be interested in our product. The subscribers will also most likely pass along our message to others, and we consider word of mouth to be a powerful, free, advertising tool that can certainly be used to our advantage. We will use our logo to create brand recognition among consumers, and we will use our slogan to create interest. The main message encoded to the consumer will emphasize how this product has a healthy advantage in comparison to other frozen yogurts, and it will emphasize the variety that our product has. With the Internet we can have a wide reach;we can link to detailed content, we can hone into our demographic and we can have interactive features. Through the internet will also use our slogan and logo to foster brand recognition and toemphasize the healthy advantage and the variety of the product. It will have similar encoding and message as our magazine ads. We will advertise our website through print ads and TV, but will also have links to our website from other company websites that appeal to our target audiences. Some types of sites we would like to buy ad space from are health websites, fitness websites, food and entertainment websites, and search engines. We already have a really well established and well formatted website. It is easy to use and readily accessible, meaning we would simply add to its current featuresto include information about Signature Frozen Yogurt. This information would include all sales promotion information as well as details about the product and where it can be found. Outdoors advertising is cheap;we can gain repeat exposure, and we can direct customers to a local store off of the road. The style of this advertising will be more along the lines of flashy and fancy, we want to emphasize the status and the quality of our company. Our timing will incorporate a flighting strategy; we want to initially attack our consumers with our message aggressively and consistently to build a base of consumers that know and understand our message and our new product. This will serve the purpose of informing the customer of our product. Once we feel that our product has become commonplace for our consumer we will convert to a less aggressive strategy, slowing down our advertising. We will increase our advertising once again once we have a new twist on the product or a new feature, such as a new season flavor, that needs to be expressed and told to the consumers. Public Relations Public Relations tools that will be used will be annual reports, electronic media, and media relations. Annual reports will be used to give financial performance information to investors and others about what is going on in the organization. This can provide us with projections for the new product, as well as give us results and an opportunity for analysis in accordance with Signature Frozen Yogurt. Media relations will be used to create news coverage and public awareness of the new product for our company; this will be done by news releases and event sponsorships. In addition, electronic Media will be used to inform, interact and generate a buzz about our new product; this will be done through web sites and email campaigns. Press Release Panera Bread Launches New â€Å"Healthy Option† Signature Frozen Yogurt in Select Markets NEW YORK— April 18, 2010—Panera Bread? officially announced the launch of a new product into select cafe’s in the beginning of May. The product will put a new spin on dessert options offered in their bakery. In the past, Panera? has been known to have indulgent pastries, brownies, and cookies high in calories, sugar, and fat. However, they have also been known to have several healthy options for lunch or dinner, including a wide selection of salads, sandwiches, and soups. So, why aren’t their healthy dessert options as well? This question was raised when the development of the signature frozen yogurt was originally brought up in corporate back in September of 2009. â€Å" We wanted to innovate our selection of dessert. We pride our company on being one of high quality and healthy options, but we weren’t following through with that in our dessert section of our menu,† comments Ronald Shaich,CEO. With the implementation of this new product into the product line we hope to keep our very health conscious customers around for dessert and not travel elsewhere to satisfy their sweet tooth,† says Ronald Shaich. The frozen yogurt is a secret blend of all-natural ingredients. Probably one of the most important ingredients is real nonfat milk, which has been certified by the National Yogurt Association to carry the Live & Active Cultures seal. Regardless the flavor, our crisp and tangy yogurt is designed to awaken the senses and blend perfectly with each of our freshly cut fruit toppings. There are only 100 calories in each 5-ounce serving of Signature Frozen Yogurt. It is low in fat, no cholesterol, low in calories, no preservatives, fortified with calcium, and made with the highest quality ingredients. Panera? plans to launch the product first regionally in the New York and California corporate stores. â€Å" We picked these locations first to test the success of this product because research shows that frozen yogurt is on a rise in these areas especially in cafe like settings,† explains Domenic Colasacc, Lead Independent Director. If the product reaches their goal of sales then it will be released nationwide in the corporate stores and eventually offered to the franchises. Press Contacts: Deidre Novotny [email  protected] com (727) 692-2194 Sales Promotion We are not known for using a variety of advertising on television, such is the case for competitor McDonalds. We choose not to spend large amounts of money on advertising because our loyal customer base is so strong and has so rapidly grown over the years that we feel our brand is well established without enormous advertising campaigns. Since we are introducing a new product that has never been on the menu before, we will strengthen the quantity of advertising so that consumers will be aware of its existence. As always, in-store marketing efforts will be effective for visiting consumers, and as always, their positive word-of-mouth is a great promotion tool. We will use sales promotion tools to create awareness and a buzz about our Signature FrozenYogurt. We will use coupons, samples, and deals. We will use the coupons to give the consumers a discount; this will stimulate demand, and also allowus to directly track sales. This would be active only during our initial campaign for the ad to spread awareness and create an incentive to purchase the newest addition to our menu. The initial coupons will consist of a half off for any Signature Frozen Yogurt. This will establish a customer base, word of mouth, and reduce the risk of our consumer in trying to product. We will use samples to encourage trial, andoffer direct involvement. This method of sales promotion will also create an opportunity to attract consumers, get them to try and enjoy the new product, and if they enjoy the production will create positive word of mouth. This will be standard for the first week after the launch of the product at all Panera Bread stores located in New York and California, and then will cease immediately. This will flood consumers who attend the store regularly with the product, hopefully creating word of mouth and another reason for them to keep coming back to Panera Bread. We will also create deals, for example, buy a sandwich and get a free signature frozen yogurt with your sandwich. This will encourage trial and reduce customer risk. A deal like this will only be implemented in the first two weeks after the launch of the product. Personal Selling There will not be any personal selling necessary for this product, but we will push at the registers for our special sales promotions and educate the customer on the qualities of the Signature Frozen Yogurt if needed, hoping that this will promote the trial and purchase of signature frozen yogurts. Direct and Online Marketing Most of our direct marketing will be done through the internet. Telephone, mail, infomercials, and catalogs as well as other non-internet based marketing did not seem like it would be appropriate or effective. Through internet based direct marketing we can use email to inform our target consumer of our new product. We can also use email to establish our promotional sweepstakes for Signature Frozen Yogurt. Budget Our current market consists of 7, 927, 516 individuals between the ages of 19-35 years of age currently residing in California and New York. Assuming that 25% of these individuals frequent Panera Bread and 30% purchase the Signature Frozen Yogurt , the introduction of this product in the market will affect sales in the following manner: * * 2010* * * * 2011* * * 2012* Return on Investment (ROI): $111,701/$685,916=0. 16 Payback Period (without taking in consideration variable present value): $685,916/111,701=6. 14 years Break Even Analysis: In order to break even, our company would have to sell 152,765 units of Signature Frozen Yogurt, averagely price at $4. 49 per unit. Communications Budget: Advertising will take 2. 6% of annual sales. Therefore, the advertising expense to implement the project will use approximately 40% of the overall communication budget and will be distributed as follows: Magazine/ Newspaper Expense: $1918 Internet/ Search Engine Expense: $1918 TV Commercials Expense: $5,753 Outdoor Commercial Expense: $1918 Total Communication Budget: $11,506 $1,106,295x. 026=$28,764 for the year of 2010 and a forecasted value of $1,194,799x. 026=$31065 for the year of 2011. Implementation Our company has great proficiency in developing, testing, and launching new products. This can be credited to our goal of continuously creating new products to satisfy changing consumer tastes, as well as to reposition ourselves, all the while getting our customers excited about new and improved products for their enjoyment. Our new or reinvented products are introduced on a periodic or seasonal basis, and we call them Celebrations. The most important part of our growth strategy is to carefully evaluate these product launches. For the Signature Frozen Yogurt, we spent our best efforts developing our marketing strategy based on what we believe and know about our consumers’ preferences and what they value. Our product has been chosen; our price has been decided; our places have been selected; and our promotions are ready to be released. The next step is to launch our new product. We will be sending out the press release for our latest Celebration, the Signature Frozen Yogurt, on April 18, 2010. On this date, we will begin executing our various promotional tools as previously discussed, including our product commercial, print ads, and online media outlets, such as Twitter and Facebook, among popular search engines. We will launch the Signature Frozen Yogurt on May 10, 2010. Using test marketing, our company will be launching the product in specified regions. We choose not to launch new products nationwide because it is a very costly decision that cannot guarantee exceptional returns. The regions chosen for this particular mini-launch are New York and California. Our company establishments, as well as franchise establishments, will be adding the Signature Frozen Yogurt to their menus for a specified time period. We have chosen these regions because they are welcoming in a newly revamped, ultra-healthy frozen yogurt market, currently consisting of smaller independent firms. This provides our company with a unique opportunity to take advantage of. Based on various results in a three-month period from the mini-launch, we will then decide whether or not to launch the product nationwide. Customer reactions from regional launches will verify if the marketing plan and strategy chosen for this product were the best choices. Consumers will be questioned and surveyed regarding the new product’s consistency and level of quality, in comparison to our current standards. If customers do not react well, the product will not be launched on May 10, 2010 as according to plan. Instead, the marketing team will revise the marketing mix and strategy, as well as refocus on determining exactly what consumer need they were trying to satisfy. Assuming the mini-product launch is a success, the company will introduce the product nationally. Launches will be put into effect on either a periodic or seasonal rotation, a choice made while keeping in mind the time frame at hand. Competitors, namely fast food firms such as McDonalds and Wendy’s, have recently begun to alter their menus in an attempt to fulfill consumer demand for healthier eating options, therefore, our Signature Frozen Yogurt comes at a possibly risky time, as competing firms are stepping up to participate in society’s healthy-eating trend. Fortunately, we have a sustainable competitive edge because of our long-standing image of a business serving nutritious, quality food, an image that no other firm has in the fast food segment of the restaurant industry. We also maintain our competitive advantages because of our position in a niche market known as â€Å"quick-casual† and â€Å"bakery cafe†. This niche protects our company from competitors; actions regarding menu changes, as well as new product developments, although the recent economic recession in the United States has severely impacted the restaurant industry, mainly because consumers immediately decrease their restaurant outings. For us, our loyal customers have helped the firm verify the strength of their brand and image, even in these tough economic times. We have chosen to not change or lower menu prices because of the recession, instead focusing on further improving the quality of what is offered. As a result of this initiative, it is harder for consumers to completely give up healthier quality food in this economy, especially when it is provided in such a convenient and quick manner. We employ a growth strategy by continuously reinventing the menu, completed through rotations of new and old products, followed by careful evaluation of their performance. Such products are introduced on a regular periodic basis, or on a seasonal basis. It is the hope of the company that the new Signature Frozen Yogurt will find a place on the menu indefinitely. As our brand is already well established, the company will work to increase popularity for the frozen yogurt product. This will be achieved through prominent in-store promotions and sample testing. Advertisements will range from television commercials, to print ads in magazines and newspapers to outdoor advertising. We strive to remain in the evoked mindsets of our loyal customers whenever they think about where they will go for a healthy, guilt-free dessert. No matter what product is introduced and how it performs, our main focus will continue to remain on our employees, channel members, society at large, and most of all, our customers. We strive to provide a fully satisfactory experience each and every time a customer enters a Panera Bread establishment. We offer more than just food; we seek to offer a valuable way to spend time, which is especially precious to each individual customer. Evaluation and Control Ourimplementation approach will have our company focusing on various results from the test marketing stage. For the launch of the Signature Frozen Yogurt, we have chosen to conduct the first performance evaluation after the product’s first three months on the regional menus. Customer reactions from these launches will help us verify whether or not the marketing strategy chosen for the Signature Frozen Yogurt were the best and most efficient choices. Consumers will be questioned and surveyed regarding the new product’s consistency and level of quality, in regards to other products and standards. We then combine these results and information with past sales of comparable products, as well as the projected expectations of the new product. The company then will decide if the product remains on the menu or is taken off. There are two obvious situations that can result from a new product launch; to put it simply, consumers will either accept the product, or consumers will reject the product. If our customers do not react positively to the frozen yogurt, the product will not be launched nationally just yet. The product will be removed from all establishments it was featured in and then the company has two possible plans of action to choose from. One option in this scenario would involve having our marketing team immediately revise the marketing mix and strategy of the new product after it is pulled from the menu, as well as reassess exactly what unfulfilled consumer need they were trying to satisfy. After completing intensive revisions, a new marketing strategy is prepared and the product can be re-launched for the next round of Celebrations. A second option entails putting the product away for at least a three-month period before attempting to reconfigure a new marketing strategy. With this option, members of our marketing and development teams will have an extended period of time to let the failed product concept settle, so team members can recoup and come back to the drawing tables with a refreshed mind. From there, they will begin revising and making the necessary adjustments on the product’s original marketing strategy. A third option, the most drastic one, involves scrapping the new product completely. This occurs in rare situations when a new product fails miserably in the launch regions, to the point where the entire cumulative sales of an individual establishment are negatively affected from the single, new product. In the anticipated case that consumers accept and then demand our Signature Frozen Yogurt, we will launch the product nationwide, in all establishments, in all regions of the country. For the first year of the new product’s life, we will measure its performance every three months. In the product’s second year of life, we will scale back evaluations to every six months. If a new product, including the Signature Frozen Yogurt, has remained on the menu for a third year, performance evaluations will be conducted after 9 months, and this evaluation will be strictly compared against its’ past two years of performance. In evaluating the new Signature Frozen Yogurt product, Panera Bread’s marketing strategy, marketing mix, media mix, and implementation plans will be continuously reviewed and evaluated using a few different methods. Marketing metrics will be used to quantify the trends, dynamics, and characteristics of the frozen yogurt consumption. We will use sales and profits as a measurement tool by comparing our new product’s results to the financial performances of TCBY’s frozen yogurt. We have chosen TCBY as a benchmark company to compare our performance to because although it specializes in only the frozen dessert industry, it is a large, established brand that has been a leader in its industry for many years. We can also compare product performance to the frozen desserts of fast food firms, such as McDonald’s or Wendy’s, because although they are very different types of desserts, these chain restaurants have been competing in the same market for a long period of time. It will be important to factor in the differences of company size and market share of the industry when using these metric tools. The most important measurement tool for our new product will be customer satisfaction. It will be measured using in-store, online, and direct email surveys. This particular evaluation can become more in-depth if deemed necessary. After our managers gather these results, they will make necessary modifications based on why our goals for the new product were, or were not, achieved. Throughout the evaluation process, the current economy conditions will remain factor in actual performance of products. Finally, the managers at each individual location will conduct a portfolio analysis to ensure that if the new product is a success, a proper amount of resources will be allocated to that particular product. Product performances must be strictly controlled for multiple reasons. First, a failing product left on the menu for a time past the set period of three months may result in an unusually difficult task of turning around more than one financial quarter’s declining profits. Second, a failing product that is strongly disliked by consumers may hurt the company’s brand image, and negative word-of-mouth may be spread. Third, a failing product that is harshly criticized by the media will severely hurt the firm’s brand name, image, and reputation, and this would occur in a much more public fashion. Finally, for the opposite situation, an excessively successful product can result in the cannibalization of other products that we offer. In regards to the Signature Frozen Dessert, there is a possibility of the product casting other desserts on our menu into obscurity. By preparing for future possible scenarios before the implementation process begins, we minimize the chance of having to take future corrective actions, and thus, this is the importance of continuous product review, evaluation, and control. For evaluation of our new Signature Frozen Yogurt, the first product review will be conducted on August 10, 2010, three months after the launch date of May 10, 2010. We will gather the financial performance results per location, including sales, costs, and profits. We will then factor in the customer feedback. Managers and marketing team members will also be focusing on evaluations of the strengths, weaknesses, customer satisfaction and acceptance of our new product. After compiling this information, the company has multiple options as to which step to take next. We can launch the frozen yogurt nationally, make improvements on the product and re-launch it in the same or different regions, or we can take the product off the menu completely. We are confident that our upcoming launch of the Signature Frozen Yogurt will be an immediate success, solidifying our entry into the frozen dessert market. Works Cited â€Å"Datamonitor Industry Market Research: United States – Fast Food. † Business & Company Resource Center. DatamonitorMarket Definition, 15 Aug. 2007. Web. 25 Oct. 2009. http://iiiprxy. library. miami. edu:2309/servlet/BCRC? rsn=unknown&rcd=naics&locID=miami_richter&brv=722211&srchtp=ind&ids=restaurant&c=2&iType=naics&mode=i&ste=87&tbst=tsIS&cind=722211+-+Limited-Service+Restaurants&tab=2048&docNum=A169919235&bConts=2306. Jargon, Julie. â€Å"Wall Street Journal: Slicing the Bread but Not the Prices. † Panera. com. Panera Bread, 19 Aug. 2009. Web. 12 Oct. 2009. Minkin, Tracy, and Brittani Renaud. â€Å"America’ s Top 10 Healthiest Fast Food Restaurants. † Health. com. Health magazine, 15 July 2009. Web. 21 Oct. 2009. . â€Å"Panera Bread Co. (NMS: PNRA), Property . † Mergent Online.