A Recipe for Success from Traditional French Bakeries

Traditional bread bakeries are the toast of France due to some astute strategic-planning and a unique twist on a phrase often used in the real estate industry: location, location, location.

In a bite-sized article in Harvard Business Review, the authors describe the surprising results of a detailed (but presumably well-fed) analysis of 19-years’ worth of data on the strategic locations of bakeries in Lyon, France.  In the French boulangerie market, traditionalist and modernist bakers, who would typically never break bread together, often operate in very close proximity to one another.

Which seems counter-intuitive in a market that is anything but a cakewalk and in which pricing is competitive, ingredients are regulated, and any “cost-saving practices…are more or less invisible to consumers.”  It’s hard to make bread from selling bread.  But the strategy that traditionalist bakeries have cooked up to compete with the newer and more efficient modernists is precisely that of placing their businesses close to the modernists, allowing them to emphasize and underscore their traditional values.

In PriSim’s classes, we often discuss the classic Marketing Mix model composed of the 4 Ps (Price, Product, Place, and Promotion).  The Lyon boulangerie market is an example of just how important Place can be, particularly for a commoditized product.

In giving customers their daily bread, traditionalists have found they cannot live on bread alone without a strategic location to go along with it – grist for the mill if you’re “one of the many companies competing on the basis of traditions or values.”

Let’s hope that the dough from French bakeries’ sales continues to rise…

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