A recent article in the WSJ, Slicing the Bread But Not the Prices, discussed the Panera Bread company.

The title line read, “While rival restaurants offer discounts, Panera focuses on employed eaters willing to spend.”

Wow! What a focused target market statement. And – the secret to why Panera is growing in stores opened over a year, where Cosi, a competitor that most casual observers put in the same category, reported a loss of $969,000 for its second quarter and a 14% decline in revenue.

Note: I have eaten at both places, and have generally had a good experience with Panera and Cosi – so these are business model observations and not a critique of the food.

Panera knows who its market is. It’s created a wi-fi experience, offered fresher ingredients, and has not cut prices on the menu, and has held firm on offering a good value meal to those employed eaters willing to spend. Its created a magnet effect in attracting a market that wants what it has to offer. And so Panera picked up a higher percentage of a smaller market segment – however in so doing has managed its growth and managed to grow.

There’s a lesson in this: Really Really Know Your Market!

Don’t assume that it’s the same target market that you started off with 2-3 yrs ago when you had your perfect business or product marketing plan – when you thought you knew where your sweet spot was. Take a look at who is really buying your product or service. Many companies have found that there might be other markets that they didn’t initially consider or were unknown.

Take the example of the newspaper with the largest circulation numbers – USA Today. They started with self-service kiosks, and quickly became a hotel staple, followed by national papers like the WSJ or NYT. USA Today initiated a new niche in their market, which was hotels wanting to offer an amenity to patrons at a low cost, versus travelers picking up the paper on their own. Nowadays, we take this for granted – just about every major hotel chain slips a USA Today under your hotel room door so you can have the convenience of a national paper delivered to your room – but at the time, this was new and an example of a breakthrough value proposition.

What are some examples you can think of in which companies started off with an initial offering and then tightened their focus, tightened their lens of who they would sell to?

Are you still broad-based – or have you focused like a laser beam on those markets, those customers who view your pricing and your value proposition as being unique, distinct, and highly desirable to them, and “doubled down” on that?