Marketing Analysis: Chipotle

Jon Ajila, Bryce Avila, John Barrasso, Stephen Dierks

Introduction

• Chipotle Mexican Grill

• Traded on the NYSE (579.55 closing as of 11/30/15: Yahoo Finance)

• 1993: Denver, Colorado

• “Fast-casual” dining

• “Food with integrity”

Introduction

• Revenues - $4.1 Billion (2014 financial report)

-Billion dollar increase from previous year

• Production capabilities - 1783 total restaurants

-Not a franchise

Environmental Scan• Recovery from 2008 recession

• Fast food industry is extremely competitive

• Employee benefits for starting positions

• Set career paths

Environmental Scan

• Uses local farmers instead of industrial

agriculture

• Strict farming conditions must be met

-Shortage of carnitas

• No artificial flavors, fillers, or genetically

modified organisms (GMOs)

Environmental Scan

• Society wants quality food in a short amount of time

• Desire for healthier food options

-Nationwide obesity is at an all time high

-Better option than competitors

Comparative Analysis: Qdoba• Mexican fast casual restaurant

• Began as Zuma Fresh Mexican Grill in 1995 and became Qdoba in 1999

• Owned by Jack in the Box Inc.

• Over 600 Locations

• Franchise

Comparative Analysis: QdobaStrengths:

-Widespread presence-Convenience-Customizable meal-Strong customer relationships due to rewards program-Breakfast and Kids Menu

Weaknesses:

-“Franchise” limits differentiation amongst restaurants from location to location-Must fit one mold-Limited advertising

Opportunities:

-Offer more healthy meal options-Increase advertising-Expand to new markets

Threats:

-Rising food and labor costs-Direct competition from competitors

Comparative Analysis: Moe’s Southwest Grill• Mexican fast casual restaurant

• Began in December 2000

• Owned by Focus Brands

• Over 600 locations

• Franchise

Comparative Analysis: Moe’s Southwest GrillStrengths:

-Widespread presence-Convenience-Customizable meal-Strong customer relationships due to strong social media presence

Weaknesses:

-”Franchise” limits differentiation amongst restaurants from location to location-Must fit one mold

Opportunities:

-Offer more healthy meal options-Expand into new markets

Threats:

-Rising food and labor costs-Direct competition

Customer Profile: Geographic • Over 1,700 locations domestically and internationally

• Densely populated in the southwest and northeast

Customer Profile: Demographics• Economically comfortable consumers

• Young, technologically savvy consumers -Smartphone App and online ordering

-Generation Gap

• Highly profitable

Customer Profile: Psychographics• Vegetarians

-Only 3.2 percent of American adults

• Environmental Protection -Form relationships with farmers who do not use antibiotics or synthetic fertilizers for

livestock and crops, respectively

-“Farm to table” initiative reduces transportation emissions

http://chipotlecultivate.com

Customer Profile: BehavioralHealth conscious individuals who seek nutritional benefits

Use of non-genetically modified organisms in food

Nutrition calculator

NUTRITION CALCULATORSELECT A MEAL TO BEGIN YOUR CALCULATION

Chipotle SWOT AnalysisStrengths:

-”Food with Integrity”-Widespread presence-Convenience-Customizable meal

Weaknesses:

-Higher prices than competitors-Less menu items than competitors-Limited advertising

Opportunities:

-Expand into new markets-Add new menu items-Increase advertising

Threats:

-Direct competition-Rising food and labor costs

Marketing Mix: Product• Chipotle Mexican Grill

• “Fast-casual” Mexican cuisine

• “Food with integrity”

• Simple menu offering

• Risk of imitation by competitors

Marketing Mix: Price• Price at market compared to direct competitors

-Have greater total revenues year over year compared to competitors (CSI Market)

• No value menu compared to indirect competitors-McDonald’s Dollar Menu

• Different cost associated with choice of meat and premium toppings

• Prices vary by state

Marketing Mix: Place• Denver, Colorado

• Over 1,700 locations domestically

• Over 17 locations internationally

• Small and large cities alike

Marketing Mix: Promotion• Non-traditional marketing strategy to attract millennials

-Online marketing through social media and web-advertising

• Generation gap because of lack of traditional print or television promotion

Future Developments: ProductNew Products:

-Sofritas

-Chorizo

●Sofritas○ Shredded tofu infused with Chipotle inspired

ingredients

●Chorizo○ Mexican Style sausage made from ground

pork and chicken

Price Considerations• Increase in overall market price

• Chipotle is forced to react to change in price

• Trends suggest there will be continued price increases

• Chipotle has increased beef prices 4-6% in August alone

Places

• Currently 1,783 locations nationwide

• Expecting to have opened more than 200

new stores by end of 2015

• More than 17 international locations

including 7 in London and another in

Frankfurt, Germany

Promotional Strategies Current Strategy:

-Little to no advertising

-Focus on “Food with Integrity”

-Rely heavily on word of mouth

New Strategies:-Focus on promotional offers

-No need for mass advertising due to popularity

-Multi-platform advertising

-Social Media

Thank You!

Works Cited● "Chipotle." Chipotle. Chipotle Mexican Grill, Inc., 2015. Web. 30 Nov. 2015.

● "Chipotle Mexican Grill, Inc." Yahoo! Finance. Yahoo!, 30 Nov. 2015. Web. 30 Nov. 2015

● "Chipotle Mexican Grill Inc's." Chipotle Mexican Grill, Inc Competition Comparisons to Its Competitors, Market Share and Competitiveness by Segment. CSIMarket Company, 30 Nov. 2015. Web. 30 Nov. 2015.

● "The Scarecrow." YouTube. YouTube, 11 Sept. 2013. Web. 30 Nov. 2015.