Why is Panera selling coffee subscriptions for $9 a month?

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This short article in Fast Company (February 27, 2020) describes a new business model being used by Panera, “Panera debuts $9/month unlimited coffee and tea subscription.” While short, the article offers an interesting example that can be applied across many topics:

  • Customer lifetime value and customer equity (Chapter 2) — Panera found that subscription customers visited the stores 3 times as often and purchased 70% more add-on items.
  • Subscription pricing model (Chapter 17) — Our new edition of Essentials of Marketing delves a bit more deeply into subscription pricing as many products now utilize the business model.
  • Marketing research (Chapter 7) — the article describes some of the findings from a test market Panera used before launching the new subscription pricing model.

What’s Now? Chapter 7 – Google Uses A/B Testing to Compare Ad Length

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One example of the experimental method discussed in chapter 7 is an A/B test. You can read about a real-life example of this in “Google Tested 3 Versions of This Honey Maid Ad to See Which Worked Best Online” (Adweek, April 13, 2016). Google compared :15, :30, and 2:17 versions of an ad for Honey Maid.

After reading the article, figure out how the ad follows each stage of the book’s “five-step scientific approach to the marketing research process” (see Exhibit 7-3). Provide answers to these questions: 1) What is the problem? 2) What are some examples of a situation analysis that Google might conduct (go beyond the article)? 3) How do they get problem specific data? 4) Interpret the data? Do you feel it has validity? Why? And 5) How do you solve the problem?

Orlando Magic Use Analytics to Increase Revenue and Profits

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Marketing analytics is one of the hottest topics facing today’s marketing manager. For a contemporary example, you might show this video to your class. The video is a bit heavy handed in its promotion of SAS (hey they created the video)  but it does show students how a sports team can utilize analytics. The best examples are around pricing tickets. Many of my students like sports, so it might help them pay more attention to this short (2:19) video.

 

See video below.

Can software detect emotions? How can marketers use this? Should they?

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Screen Shot 2015-02-06 at 3.02.36 PMPowerful computers now allow software to read people’s emotions. Some of this new software and various applications are described in this article and the video below “The Technology that Unmasks Your Hidden Emotions” (Wall Street Journal, January 28, 2015, non-subscribers may need to click here).

This article and/or video might be used to spark your students’ creativity and problem-solving. The article describes a technology, but only a few applications. You could have your students read the article (or you could show the video in class) and then ask your students to design a market research study that uses the technology. Alternatively, you might ask students how a retailer like Best Buy or a specialty store like say Victoria’s Secret. The software also raises privacy concerns that you might choose to discuss. We have also posted this at Learn the 4 Ps.