Building a Loyal Bond

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1 Tara Reed 12.19.2016 Chipotle & College Students A Loyal Bond

Transcript of Building a Loyal Bond

Page 1: Building a Loyal Bond

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Tara Reed12.19.2016

Chipotle & College StudentsA Loyal Bond

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Background

How can Chipotle improve or foster greater brand

loyalty among millennial college students?

Chipotle is a fast casual food chain founded in 1993. Their goal was to show that food served fast didn’t have to be a “fast-food” experience. Over the past 20 years they have exploded with success but now they are interested in learning how to become more appealing to millennial college students. The millennial generation can be a very complex group to understand, but with proper research and observational skills one can gain proper incites in to their world.

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Executive Summary What fast food/fast casual restaurant brands Millennial college students have a strong relationship with? Why?

What makes those brands unique and different?

Starbucks, Panera, Chick Fil-A, and Buffalo Wild Wings.They feel like they are apart of the brand community.

Offer a unique asset that they focus on to elaborate it based on needs of the customers.

What makes them talk about those brands?

They offer a unique and personalized experience.

How could we improve or foster greater brand loyalty across Millennial college students?

Expand their usage of local produce, create a more welcoming environment, offer more change and create rewards programs.

How could we encourage Millennial college students to talk about our brand?

Rewards programs, comforting environment, new menu items.

What improvements can Chipotle make to be more appealing to Millennial college students?

Create a rewards program and a more welcoming environment and continue to evolve that product or offer new choices for customers to choose from.

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Secondary Data ResearchCollected, analyzed, summarized, and synthesized secondary data obtained from 68 articles obtained from sources such as client's and competitors' owned and earned media, Advertising Age, Brand Channel, Fast Company, Motley Fool, Google Finance, Pew Research, Nielsen, Gallup, Boston Consulting Group, or The Harris Poll to (a) complete 360-degree assessment of a client's marketing environment and (b) discover initial insights for solving a client's problem

Experience SurveyCollect primary data from a millennial college student to gain deeper insights regarding the question, How can Chipotle improve or foster greater brand loyalty amount millennial college students?

ObservationsCollect primary data by observing the behaviors of 20 millennial college students in a Chipotle restaurant.

Research Methodology

Survey Based ResearchCollected categorical and metric data through online survey taken by 351 millennial college students. Separated data into two district groups (those addicted to Chipotle and those addicted to another brand) and analyzed data based on variables such as top/bottom two boxes, means, t-tests, and correlations, to answer the marketing problem.

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What fast food/fast casual restaurant brands do Millennial college students have a strong relationship with? Why?

Feel apart of a

community within the

brand

Personalized experience

that creates a stronger

connection to the brand.

Cater to specific needs

Rewards programs/

daily specials

Superior experience when they

interact with these

brands

Bottom Line: Millennial college students have a strong relationship with brands such as Chipotle, Starbucks, Chick-fil-a, Panera, and Buffalo Wild Wings. They enjoy these brands because of attributes such as rewards programs and the personalized and superior experiences they receive from these brands. Each of these brands caters to a specific need and makes the consumer feel as if they are apart of a community within the brand.

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What makes those brands unique and different?

Determined a unique asset they can use

as an advantage

Focus on serving a

good quality product that attract their

target market

Focus their product to

meet a specific need

Change product to

create diversity and more options

Bottom Line: These brands stand out as unique and different because they determine a specialized asset they can use as an advantage, they also focus on serving a good quality product. They design their product to meet a specific need in the market and they effectively monitor the product so they can improve and modify it to fit consumer needs.

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What makes them talk about those brands?

Offer unique and

personalized experience

Offering change and a

large selection of menu items

Welcoming environment

& rewards Bottom Line:

Millennial college students talk about these brands because they

are offered a unique and personalized experience in an

environment they feel they are being welcomed in. They also talk about these brands based on new

menu items that allow them to choose from many different

product options.

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How could we improve or foster greater brand loyalty across Millennial college students?

I love to feel valuable, they should

have a rewards/ loyalty program to

show me I am.

This long line is terrible. They need

to improve store layout to better the

flow of traffic/ make the wait more

comfortable.

I wish they would expand

menu items and

incorporate change

I enjoy having a place to

socialize with my friends

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How could we encourage millennial college students to talk about our brand?

On my way there now!

No way!! Lets meet for lunch!

Chipotle just started a loyalty program!!

They also have free WiFi so we can work on our project!!

And a more comfortable environment for us to work in!

Look what they just added to the menu!

Bottom Line:Millennial college students like to feel like they are appreciated. They also like to receive rewards and benefits for their actions so Chipotle should create a rewards program to thank their

customers and offer them benefits for choosing their brand. Millennial college students also like to have a comfortable place to do their homework and hang out with friends. Chipotle should create an environment that will give them a space to do this. They should also add free WiFi because they always need to be connected.

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What improvements can Chipotle make to be more appealing to Millennial college students?

Bottom Line:Chipotle can improve their brand by enhancing the environment to make it more welcoming and

comforting. They can add attributes like free WiFi and comfortable booths so students can work on homework and socialize. They can also offer a program that rewards its frequent customers for their business. Lastly since millennial college students like choices and many options to choose from, Chipotle could continuously add new menu items to keep their customers excited and coming back.

WiFi

Welcoming environment

Promotions/Reward Program

A place to socialize/

do homework

New menu items

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Appendix

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Table 1a: Internal SWOT Analysis ……………………….……………………………………………….………………….. p. 12Table 1b: External SWOT Analysis …….……………………………………………………………………………….……. p.13Table 2: SWOT Summary ……….……………………………….………………………..…………………………………….. p.14Table 3: Segment Profile of Prime Target Market …………………………….……………..…………………….... p.15Table 4: Experience Survey ……..………………………………………………………………………………………………. p.16Figure 1: Research Experience Survey .…………….……………………………………………………………………… p.17Figure 2: Meet a Stranger Adventure ……………………………………………………………………………………... p.18Table 5: Observations ……………………………………………………………………………………………………………… p.19Figure 3: Research Observations ….…………………………………………………………………………………………. p.20Figure 4: Observations ………………………………………..………………………………………………………………..... p.21Figure 5: Descriptive Analysis Sample ……………..……………………………………………………………….…..... p.22Figure 6: Should Chipotle offer a continuous rewards program? .……………….……………………….….. p.23Figure 7: Should Chipotle create a more welcoming/inviting environment? …………………………... p.24Figure 8: Millennial college student’s current feelings about Chipotle ….……………………….……….. p.25Figure 9: Why are Millennial college students loyal to certain brands? …………………………………... p.26Figure 10: How likely are millennial college students to visit Chipotle more frequently if they

offer a continuous rewards program? …………………………………………………………………… p.27Figure 11: How likely are millennial college students to visit Chipotle more frequently if they

have a more welcoming environment? …………………………………………………………………. p.28Authors Page ………………………………………………………………………………………………………………………….. p.29References ………………………………………………………………………………………………………………………...…… p.30

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STRENGTHS WEAKNESSES

COMPANY • Well-known • Expanding amount of stores23

• 1,970 stores in U.S. 10 in Canada 7 in England, 4 in France, one in Germany23

• Small stores, only seats 60 on average23

• Sales fell after E-Coli breakout• Income, ROI slowed from 2013 to 2014 compared to 2012 to 201323

• Not open late

BRAND • Unique logo22

• Unique packaging• Take-out focused24

• Cultivating a better world• Poem’s on bags/papers

• E-Coli breakout• Brand representation• Weak community for outreach

PRODUCT • GMO free22

• Made fresh everyday24

• Excellent taste• Food prepared in front of you• Recyclable material used for napkins, bags, etc.

• Food safety• Limited menu23

• Only one type of cheese• Limited versions of burritos

CHANNELS • Consistent interior layout8

• Phone app8

• Viewable kitchen

• Lack of efficiency• No drive-thru23

• Slow service

PROMOTION • Interactive game• Student discount• Gift cards that don’t expire24

• Instagram shows food and products• High follower count on social media, follows little• Halloween promotion18

• Non-traditional advertising• No permanent reward program• Limited promotions

PRICE • Large portions for amount charged22

• Free to add select items24

• Cheap chips• Price stable

• Expensive alcohol• Different meat options cost different amounts• Expensive Guacamole

BOTTOM LINES Chipotle is a well-known expanding brand that is striving to make their food fresh and GMO free, while providing large portions for the price you pay.

Chipotle lacks efficiency due to small stores and no drive thru while struggling to provide consistent food safety

Table 1a. Internal SWOT Analysis What are the strengths and weaknesses that Chipotle has?

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Table 1b. External SWOT Analysis What are the opportunities and threats Chipotle has?

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Opportunities ThreatsSuppliers • Local produce23

• Products with less preservatives• Increase Pizerria Locale23

• The failure of a small business/local products• Higher food costs23

• Other similar Mexican cuisine (Fiesta, El Pollo Loco, Del Taco

Channels • Emergence in to malls21

• Small stores in rural areas• Pop up stores in tested locations23

• More outlets

• Limited rent space• Interest of potential franchisee• Fire department regulations

Target Customers • College students• Single people• Middle class families• Health conscious people

• Change in diet• Loss in trust• Long commuters

Competition • International market• Buying out small similar restaurants• Stock price is higher than similar restaurants23

• Other Mexican quick food options• Cheaper cuisine • Local restaurants

Society & Culture • Interest in Mexican cuisine • Emergence of bowls (low-carb diets)• Popularity of authentic food• People leaning toward no additives

• Home cooked meals• Not wanting to stand in line (time)• Constant change in trends/new trends

Economy • Cheaper Mexican option• Fuel points for gift cards• Stock market performing well

• Recession• Job loss• Stock market performing poorly

Political & Legal • Tax breaks• Government benefits• Competitors not following safety regulations

• Increase in minimum wage• Being sued• Illegal immigration

Technology, Communication & Transportation

• Word of mouth• Drone delivery • UberEats

• Competitor getting delivery• Cell phone towers go down• Hacking of technology/credit card information stolen

Natural Environment • Going green (more options to recycle)• Beneficial Weather• Increase of farms

• Food disease• Drought/natural disaster• Low interest in farming

Bottom Lines There are opportunities to expand their usage of local produce with less preservatives while targeting college students who enjoy a cheaper

Mexican food option.

Chipotle faces threats of small businesses failing, a change in diet, food diseases, people cooking at home, a recession and an increase in

minimum wage.

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STRENGTHSChipotle is a well-known expanding brand that is striving to make their food fresh and

GMO free, while providing large portions for the price you pay.

WEAKNESSES

Chipotle lacks efficiency due to small stores and no drive thru while struggling to provide consistent food safety. They also don’t provide a very welcoming store front for

customers to enjoy.

OPPORTUNITIES

There are opportunities to expand their usage of local produce with less preservatives while targeting college students who enjoy a cheaper Mexican food option. There are also opportunities for Chipotle to offer exciting promotions and new menu options.

THREATS

Small businesses failing, a change in diet, food diseases, people cooking at home, superior experiences at competing companies, a recession and an increase in minimum

wage all impose a threat of people purchasing their product.

MAJOR FINDING

Chipotle is an expanding company that provides large portions of fresh, non-GMO food, but lacks efficiency because of their small stores. Although the brand and food are well-

known, constant change of diet from society, people cooking at home, and diseases from food makes it difficult to retain the existing customers and attract new customers.

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Table 2. SWOT Summary

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Demographics Name College Students

Age 18-26

Gender 44% female, 56% male

Family Status 90% single 9% married

Children 93% without children

Job 74% part-time job, 16% full time jobs

Education Working on a college degree

Income 72% makes less than $20K a year

Location 86% metropolitan, 13% non-metropolitan, 1% not known 1

Ethnicity 57% White, 21% Hispanic, 13% Black, 6% Asian, 3% Other 1

Religion 76% pretty certain belief in God, 8% not too certain belief in God, 16% don’t believe/don’t know 4 , 71% important, 14% not too important, 16% not important/don’t know 4

Psychographics Interest Friends and family, playing sports and games watching movies, and listening to music, media usage and online access , craft food/drinks

Values Honesty, family and friendship, loyalty, kindness, choices, multiple options to choose from, health and wellness

Traits Outgoing, hardworking, creative, caring

Behavioral Stores Kroger, Target, Nordstrom, Kohls, and Apple

Brands Nike, Apple, Chipotle, Adidas, Under Armor, Patagonia

Music Country, Beatles, One Direction

TV/Movies Dark Knight, Star Wars, Harry Potter; Office, Greys Anatomy, Game of Thrones, Friends

Places Florida and beaches

Celebrities LeBron, Tom Hanks, and Will Ferrell

Online Facebook, Instagram, Netflix, Amazon, Gaming, constant need for online connection

Bottom line Millennial college students are mostly single and working part time jobs while working to earn a degree. They have lower incomes and the majority of them live In metropolitan areas. They are interested in social activates and media usage. They have a strong sense of brand loyalty and tend to favor higher end brands.

Table 3. Segment Profile of Prime Target Market

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Table 4. Experience Survey

Research Question Bottom Line

How often do you visit and purchase Chipotle? 1 to 2 times per month

What are your favorite and least favorite aspects about coming to chipotle?

My favorite part about coming to chipotle is the variety of ingredients you have to choose from in order to create different combinations and I dislike how long the line is and how loud it always seems to be.

What expectations do you have when you eat Chipotle and do you leave fully satisfied after your experience, why or why not? I expect to receive fresh ingredients and to leave full. I am usually always satisfied except for

the times when my chips seem stale and a few times I went my chicken was burnt.

Is there anything Chipotle doesn't do that you think they should that could make them a better brand?

They need a rewards program. This would encourage customers to visit more often because their visits would be rewarded. As a customer I am most loyal to the brands that I feel I am receiving a great benefit from.

If you could make one improvement to Chipotle that would make you a more loyal customer what would it be and why?

I would improve their store layout. It is very loud and hard to hear in there and there is always a huge line. The limited seating makes me feel like I am not welcome to stay and eat my meal.

Major Finding: To improve greater brand loyalty across millennial college students Chipotle should focus on improving the layout of their stores to better the flow of traffic and make the wait shorter and more comfortable. They should also create a rewards program that will reward customers for their business and encourage them to keep coming back.

Methodology: Conducted and experience survey with Beth to better understand how Chipotle can improve greater brand loyalty across Millennial college students from 1:00 pm to 1:20pm on Friday, November 11th.

How could we improve or foster greater brand loyalty across Millennial college students?

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1. 1 to 2 times per month2. I love the variety of ingredients to choose

from, I dislike how long the line is and how loud it always seems to be.

3. Fresh ingredients and to leave full. I am usually always satisfied.

4. They need a rewards program. 5. I would improve their store layout.

1. How often do you visit and purchase Chipotle?2. What are your favorite and least favorite aspects

about coming to chipotle?3. What expectations do you have when you eat

Chipotle and do you leave fully satisfied after your experience, why or why not?

4. Is there anything Chipotle doesn't do that you think they should that could make them a better brand?

5. If you could make one improvement to Chipotle that would make you a more loyal customer what would it be and why?

Figure 1. Research Experience SurveyHow could we improve or foster greater brand loyalty across Millennial college students?

Bottom line: To improve greater brand loyalty across millennial college students Chipotle should focus on improving the layout of their stores to create a morecomforting and welcoming environment. They should also create a program that will reward customers for their business and encourage them to keep coming back.

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One day Tara was given a task by her professor to dive into the minds of a millennial college student in order to develop a deeper understanding of how Chipotle can create greater brand loyalty. Her professor sent her out with a very clear mission and a complementary card that allowed her to get two free Chipotle meals, one to share with a stranger. So she set out on a bright Friday afternoon to meet a stranger and dig deeper into their brain. As she was walking in to her local Chipotle she met Chelsey who was on her lunch brake from classes. Chelsey was in a rush but she was willing to speak with Tara because she had so much to say about Chipotle. They ordered their meals to go but sat down for a quick Q & A. They talked about what makes them a satisfied customer, their expectations of the brand and what they could do to make improvements. Chelsey was a very loyal customer of Chipotle but she recognized areas that needed improvement. At the end of the interview they thanked each other and both went away feeling satisfied.

This meet a stranger assignment made me very nervous to put myself out there, but it turned into a fulfilling experience. I was able to take away a deeper understanding to my initial questions and fill in any information gaps. I also made someone's day by providing them with a free lunch.

Figure 2: Meet a Stranger Adventure

Take away: To improve brand loyalty among millennial college students Chipotle should create a rewards program that rewards its customers for their business as well as

improve store layout to create a more comforting environment and help the flow of traffic.

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Table 5. ObservationsTable 2. How do millennial college students behave during their visit to Chipotle?

Unit Female White Relaxed Laptop Phone Patience Healthier

Choice*

School Work Socializing Satisfied

1 1 1 0 0 1 1 1 1 1 1

2 1 1 1 0 1 1 1 1 1 1

3 0 0 1 0 1 0 0 0 1 1

4 1 1 0 0 0 1 1 0 1 1

5 1 1 0 0 1 1 1 0 1 1

6 1 1 1 0 1 0 0 0 0 1

7 0 1 1 0 0 0 0 0 1 1

8 0 1 1 0 0 0 0 0 1 1

9 1 1 1 0 1 0 0 0 1 1

10 1 1 1 0 1 0 1 0 1 1

11 0 1 0 0 1 1 1 0 1 1

12 0 1 1 0 1 0 1 0 0 1

13 0 1 1 0 0 0 1 0 0 1

14 0 1 1 0 1 1 0 0 1 0

15 1 1 1 0 0 0 0 0 1 1

16 1 1 1 0 1 1 1 0 0 1

17 0 1 0 0 1 0 1 0 1 1

18 1 1 1 0 1 1 0 0 1 1

19 0 1 1 0 1 1 0 1 0 1

20 0 1 1 0 1 1 0 0 0 1

Male 10 90% 80% 0% 70% 40% 40% 10% 60% 90%

Female 10 100% 70% 0% 80% 60% 60% 20% 80% 100%

Total 20 95% 75% 0% 75% 50% 50% 15% 70% 95%

Bottom line: The majority of them looked relaxed (75%) but they only stayed a short period of time with brief moments of socialization in between bites. A large majority of them were also on their phones (75%) but none of them were using any other type of technology. Only half of them chose healthier meal options, 60% of them being female. Almost everyone left looking satisfied (95%) minus one male who mentioned they didn’t fill his burrito enough.

*Healthier Choices refers to a meal without chips and guac, soft drinks or the tortilla.

Methodology: Data was obtained through direct, disguised and structured human observations of millennial college students (50% Male, 50% Female) at a Chipotle restaurant between 7:00 pm and 8:30 pm on Tuesday, November 22, 2016.

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Bottom line: The majority of them looked relaxed (75%) but they only stayed a short period of time with brief moments of socialization in between bites. A large majority of them were also on their phones (75%) but none of them were using any other type of technology. Only half of them chose healthier meal options, 60% of them being female. Almost everyone left looking satisfied (95%) minus one male who mentioned they didn’t fill his burrito enough.

Figure 3.Research Observations

*Healthier Choices refers to a meal without chips and guac, soft drinks or a tortilla.

70%

0%

80%

60% 60%

20%

80%

100%

80%

0%

70%

40% 40%

10%

60%

90%

0%

25%

50%

75%

100%

125%

Female Male

Methodology: Data was obtained through direct, disguised and structured human observations of millennial college students (50% Male, 50% Female) at a Chipotle restaurant between 7:00 pm and 8:30 pm on Tuesday, November 22, 2016.

Figure 1: How do millennial college students behave during their visit to Chipotle?

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Figure 4. Observations

Bottom line:Millennial college students

seemed to be satisfied when they left Chipotle.

During their stay mostly all of them used their phones

(75%) and the ones who socialized (70%) only did

so briefly in between bites of food.

60% of females choose a heathier option

They all ate quickly and socialized minimally.

75% were on their phone but 0% had any other form of

technology

Only 15% worked on schoolwork

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Figure 5. Descriptive Analysis of Sample

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Dose a comforting environment increase your loyalty/ talk ability

for a brand?

Do continuous rewards programs increase your loyalty/ talk ability

for a brand?6.36 5.37

4.915.61

There is a moderately strong correlation between wanting a continuous rewards program and those who are addicted to other brands(r=.677) and a strong correlation between wanting a comforting environment and those addicted to other brands (r=.773).

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Figure 6. Should Chipotle offer a continuous rewards program?

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Will a continuous rewards program increase loyalty and talk ability among millennial college students?

6.36

5.17

0

1

2

3

4

5

6

7

Addicted Chiptole Addicted Other

Mean Scores (n.s.)

84%

1%

54%

13%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Want Continuous rewards No Continuous Rewards

Top two vs Bottom two boxes

Addicted Chipotle

Addicted Other

Bottom Line:Although the data is not significant, on average, more millennial college students who are addicted to Chipotle want a continuous rewards program (6.36) than those who are addicted to another brand (5.17). But those who are addicted to Chipotle (84%) and those who are addicted to other brands (54%) would like to see Chipotle put into place a continuous rewards program.

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Figure 7. Should Chipotle create a more welcoming/Inviting environment?

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47%

14%

59%

4%

0%

10%

20%

30%

40%

50%

60%

70%

Want a Comfortable/ Inviting enviornment No Comfortable/Inviteing enviornment

Top two vs Bottom tow boxes

Addicted Chipotle Addicted Other5.61

4.91

4.40

4.60

4.80

5.00

5.20

5.40

5.60

5.80

Addicted Chipotle Addicted Other

Mean Scores (n.s.)

Will a more comforting and inviting environment increase loyalty and talk ability among millennial college student?

Bottom Line:Although the data is not significant, on average, more millennial college students who are addicted to Chipotle want a comforting/inviting environment (5.61) than those who are addicted to another brand (4.91). But those who are addicted to Chipotle (59%) and those who are addicted to other brands (47%) expresses they would like a more comfortable environment.

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Figure 8. Millennial college student’s current feelings about Chipotle

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Millennial college students addicted to Chipotle

Millennial college students addicted to another brand

Bottom Line:Those who are addicted to Chipotle and those who are addicted to other brands both seem to have very similar experiences with Chipotle. They all mentioned words like “love”, “like”, “great”, “fast”, and “quality” when describing their experience with Chipotle.

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Figure 9. Why are millennial college students loyal to certain brands?

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Millennial college students addicted to Chipotle

Millennial college students addicted to another brand

Bottom Line:Those who are addicted to Chipotle and those who are addicted to other brands both seem to have very similar reasons behind what makes them loyal to a brand. They all mentioned words like “good”, “like”, “great”, “fast”, “always”, “service” and “quality” when describing what makes them loyal to a brand.

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Figure 10. How likely are millennial college students to visit Chipotle more frequently if they offer a continuous rewards program.

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Metric Analysis

Addicted Chipotle mean 6.36

Addicted Other mean 5.17

T-Test 0.00

Correlation Addicted Chipotle 0.342

Correlation Addicted Other 0.677

6.36

5.17

0

1

2

3

4

5

6

7

Addicted Chipotle Mean Addicted Other Mean

Mean Scores (n.s.)

Bottom Line:Millennial college students who are addicted to Chipotle are more likely to visit more frequently if they offer a continuous

rewards program than those who are addicted to another brand, although the data is insignificant.

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Figure 11. How likely are millennial college students to visit Chipotle more frequently if they have a more welcoming environment?

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5.61

4.31

0

1

2

3

4

5

6

Addicted Chipotle Mean Addiceted Other Mean

Mean Scores (n.s.)

Metric Analysis

Addicted Chipotle Mean 5.61

Addiceted Other Mean 4.31

T-Test 0

Correlation Addicted Chipotle 0.757

Correlation Addicted Other 0.773

Bottom Line:Millennial college students who are addicted to Chipotle are more likely to visit more frequently if there is a more

welcoming environment than those who are addicted to another brand, although the data is insignificant.

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Authors Page

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I am a senior marketing major with a specialization in market research. I created this project in the Fall 2016 semester at NKU for a consumer incites course. This project required me to solve marketing problems through the marketing research process. I was able to analyze the internal and external environment for the client, by using secondary data sources. I then filled in any information gaps by conducting experience and observational research. Lastly I used a survey based method to collect data from a larger segment sample and used charts and graphs to present the data in an organized and meaningful manner. I was able to collect the information that allowed me to gain an accurate amount of incites to create problem solving recommendations for the client.

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