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Introduction - PB Company background

- Interaction with audiences (What do you know about PB etc)

1. Analyse Domestic Competitive Position of Paris Baguette in France

- Porter 5 forces
o Supplier power: very low
 Vertical supply chain: PB acquired the wheat supplier (Mildawon)
o Threat of new entrants
 Barriers to entry: moderate capital requirements to keep the product fresh
 High brand loyalty: >700,000 customers
o Buyer power
 Number of customers: daily 12 million  large
 Size of each customer order: small  lower price sensitivity
o Threat of substitute
 Relative price performance of substitute
 More affordable than restaurants
 Healthier and better quality than fast-food
 Perceived level of product differentiation:
 Artisan bread, fillings, outdoor café style and indoor seating
o Rivalry among existing competitors
 Number & Diversity of competitors
 30 chained bakeries (e.g., Marie Blachère: 670 stores; Ange: 207 stores)
 1200 of 33000 independent bakeries: committed to make products on site
(Boulangerie)
 Diversity: sustainable wheat, gluten free, organic flour
- Despite its initial rapid success stagnation and need for expansion
o Challenges:
 Intense competition in French market
 High consumer expectation: pastries as their national pride
o Slow growth in France: 5 stores vs 150 stores in the US vs 7 new stores in SE Asia in
November 2023
o Annual sales growth of 36%  successful brand recognition and differentiation

Place
 UK - Target Inner London boroughs with greater concentration of high-income earners. “The ONS
show that people on average people in Inner London boroughs earn nearly £10,000 more than
people from outside.”
o Drawn from PB existing locations in UK
o (Kensington) Kensington High Street
 One of the wealthiest London boroughs - median:£39,566, mean:£73,917
 Most popular shopping street in Kensington, with a mix of premium brands from
bakeries to fashion
o (Wandsworth) Battersea Power Station
 Median:£37,981, mean:£58,778
 “Battersea Power Station has emerged as one of London’s leading food and drink
destinations and this will only become stronger with the great mix of cafés, bars and
restaurants opening inside the Power Station, creating thousands of new jobs for the
immediate and wider local communities,” said Sam Cotton, Head of Leasing at
Battersea Power Station Development Company
 Provides office-space for high-end companies in close proximity to the shopping mall
 UK - Sophisticated interior design and atmosphere
  Italy - Target wealthier regions and cities
o Lombardy (12 provinces, northern italy) – Milan - Porta Nuova District

 Capital of the Lombardy region, Milano is globally recognized as a center of fashion,

design and finance. The city is home to iconic monuments such as the Milano
Cathedral (Duomo) and the Scala Theater. Milano is also an important artistic and
cultural center, with renowned museums such as the Pinacoteca di Brera and the
National Museum of Science and Technology. Its lively neighborhoods, luxury
boutiques, fine restaurants and international events, such as Fashion Week, help
make Milano one of the hottest destinations in Europe.
 [Link]

o Arezzo
 The city abounds in monuments but tourism is mostly muted in this underrated city.
Today, it’s one of Tuscany’s wealthiest cities, as witnessed by the proliferation of
jewellers, goldsmiths and antique shops. The lopsided main square is a magnet for
celebrations and strolls, as is the neighbouring Corso Italia. Culturally, the city
belongs to Piero della Francecsa, the artist who has most left his mark on Arezzo.
Medieval monuments cluster together in the northern part of Arezzo, including the
Duomo, sheltered by the encircling walls of the 16th-century Fortezza, now a park
with fine views.
 Corso Italia is the main thoroughfare through Arezzo. It runs downhill towards the
train station. This busy pedestrian street is lined with shops, cafes, and during the
antique fair, many stalls selling antiques and artwork.
 Italy - Interior design
Breakfast at the ‘bar’ is usually a ‘social moment’ more than a need. I mean we normally have breakfast at
home at then we have ‘cappuccino and cornetto’ with colleagues, friends or if couldn’t have it at home.
We stand because bar are usually crowed and we need to consume it quickly in order to allow other clients
to place their orders. While leaving abroad I got really frustrated because it took forever to get a coffee.
Then people either sit down or walked away with their coffees. In Italy we need to have it right there
within max 2 minutes, otherwise we never go back to that bar. We enjoy the taste of coffee afterward (our
coffees flavour are intense and strong, you can appreciate long after drinking it). In the weekends or if
we’re not in a rush, we might sit (usually outside) and enjoy it with the good weather!

 Providing online delivery options

Promotion

 Sponsorship: sports AC Milan (learn from Paris Saint-Germain), fashion show (refreshment for
guests/ staffs, Miniature bites: Serving small bites and appetizers can be a great way to keep guests
mingling and engaged with the fashion show. Try serving mini quiches, bite-sized bruschetta, or
skewered caprese salad.
 Elegant hors d'oeuvres: Offer more substantial bites with an elegant touch. Examples include
smoked salmon crostini, lobster bisque shots, or a fancy cheese platter with artisan bread and
crackers)
 Dolce World Expo

 Loyalty program:

 Socially relevant initiatives it can implement for local issues of the UK or Italy? (Italy youth
unemployment)
o Take reference from “cake academy of love” for disadvantaged youth in China
  Italy pastry/bread competition
 What is the best time to reach your target audience?
 What marketing channels are most effective for your target audience?
 What marketing messages would most resonate with your target audience?
 What advertising approaches are most persuasive to your target audience?

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bakery and Patisserie Arena. Bakery&Snacks.
[Link]
french-bakery-and-patisserie-sector

Krémer, P. (2022, August 11). France’s battle of the bread heats up between chains and artisanal bakeries.
Le [Link]. [Link]
bread-heats-up-between-chains-and-artisanal-bakeries_5993205_183.html

Lee, Y. (2023, February 23). [K-food] Paris baguette charms world’s taste buds with “glocalization.” The
Korea Herald. [Link]

Moss, L. (2022, August 20). Paris Baguette looks to spread its footprint nationally. CoStar.
[Link]

Paris Baguette franchise. Paris Baguette. (2024, February 22). [Link]

Paris Baguette franchise: Average sales ($2.53m) vs. cost ($652K-$1.75M). Franchise Chatter. (2023,
December 23). [Link]
fees-average-revenues-and-or-profits-2023-review/

Yang, J. (2023, December 12). Paris Baguette opens 7 new stores in SE Asia in one month. KED Global.
[Link]

NEW

European Commission. (2024, March 19). Integration of young people in the labour marke. National
Policies Platform. [Link]
of-young-people-in-the-labour-market

Maričić, D. (2021, April 21). What makes Italian Restaurant Design Unique?. Archi-living.
[Link]

Pekic, B. (2023, August 31). Italian food delivery sector worth €1.8BN, study finds. ESM Magazine.
[Link]
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Research and Markets. (2022, May 17). Italy Loyalty Programs Market Intelligence Report 2022-2026:
With customers’ changing tastes and preferences, Italian brands are designing loyalty programs to
drive customer engagement. GlobeNewswire News Room. [Link]
release/2022/05/17/2444728/28124/en/Italy-Loyalty-Programs-Market-Intelligence-Report-2022-
2026-With-Customers-Changing-Tastes-and-Preferences-Italian-Brands-are-Designing-Loyalty-
[Link]

Sigep 2025. Sigep The Dolce World Expo . (2024). [Link]

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[Link]

The competition. Panettoneworld. (2021). [Link]

lang=en

Yu, S., & Leahy, J. (2023, July 10). China’s youth left behind as Jobs Crisis mounts. Financial Times.
[Link]
Let’s go over a few key facts about Paris Baguette or PB before diving into our analysis. PB is a premium bakery
originated in South Korea. After rapid global expansion supported by a franchising model, it now has 4000 units and
a high revenue. In the case, we can see that to strive in different markets, PB uses the Glocalization strategy. For its
standardized measures, PB has central kitchens in different countries, such that the dough is made collectively and
delivered to each branch for baking. Also, knowledge retained at the headquarters after each business unit learns
about customer preference, so there is a globally informed menu apply to all markets. Meanwhile, PB is localized in a
way that it has different CEOs, some unique products and marketing initiatives in each market.

Moving on to place. We recommend PB adopt a localization strategy while preserving its French identity. In terms of
construction and design, the Italian market has its own needs. Due to high customer traffic in the morning or during
weekends, the shop has to be spacious. Also, Italian prefers standing at the bar to have their coffee, so PB should
have a longer counter or expresso bar. European cities like having their retail stores blend into the city's vibe, so in
Italy, PB can adopt decorations with marble and tiles. Meanwhile, PB should keep its brand colour and the French-
style staff uniform as they are central to its brand identity. So PB should adopt a localization strategy for the shop’s
exterior design while retraining its French identity for the interior design.

One of the current retail trends is delivery service. In Italy, Just Eat and Deliveroo each have a 40% market share, so
to target as many consumers at once, PB should partner with them. Offline sales channels could bridge the market
gap as some Italians prefer having breakfast at home or ordering delivery to share with friends. Besides, offline sales
have a high growth potential in Italy as only 70% of the population have ordered online despite high mobile phone
penetration, so the market is expected to grow 7% annually.

Based on PB’s positioning, we will target high-income earners. As for the location, leading food destinations, fashion
or finance districts, or nearby iconic monuments bring customers to the shop, so based on this idea, we suggest PB
first enter Arezzo and Milan. As mentioned by Sunny, Arezzo has an entry partner, Caffe Pascucci. Caffe Pascucci has
a strong presence in Arezzo, so PB can benefit from its supply chain and customer network and make itself known
among locals. Also, by supplying baked goods to Caffe Pascucci, PB can diversify the sales channel and maximise the
customer base. The second location will be Milan. Located in the Lombardy region, its GDP per capita is much higher
than the national average, so people can afford PB’s premium pricing.

Lastly, for promotion, PB should adopt a localization approach to better reach Italian customers. PB’s first goal
should be increasing its exposure to Italian by adjusting its existing marketing strategies to better fit the market.
Sponsorship can be considered. Similar to its partnership with PSG in France, PB can sponsor football and volleyball
leagues in Italy. Through giveaway events, it can test out new products and make people familiar with the brand. As
Italy is a leading fashion hub, PB can provide catering services at Fashion Shows to establish itself as a health-
conscious bakery. Next, socially relevant initiatives do not only fulfill corporate social responsibility but also increase
PB's exposure to public. Italy has the highest youth unemployment rate among G7 pus China, so PB can participate in
the government’s Youth Guarantee Program by offering apprenticeships to youth and help lower youth
unemployment.

After entering the market, the following goal will be increasing sales and customer loyalty to achieve sustainable
growth and market penetration. Annual exhibitions such as the Dolce World Expo allow PB can showcase its pastries
and baked goods while learning from others. Meanwhile, if PB wins the Panettone World Cup, the Italian Christmas
bread, the recognition from the authority will help PB establish its competitive advantage in Italian specialty pastry.
A loyalty point program is vital as well. In Italy, without a loyalty program, 72% of people switch food brands
frequently, so PB should develop a sticky loyalty program. through attractive and personalized rewards such as
birthday month discounts or birthday cakes. Meanwhile, PB can benefit from the customer data by modifying its
products.