ChipotleIntegrated Brand Promotion

Stephanie Danielle Holder

ChipotleIntegrated Brand Promotion

Stephanie Danielle Holder

ChipotleIntegrated Brand Promotion

Stephanie Danielle Holder

ChipotleIntegrated Brand Promotion

Stephanie Danielle Holder

ChipotleIntegrated Brand Promotion

Stephanie Danielle Holder

ChipotleIntegrated Brand Promotion

Stephanie Danielle Holder

ChipotleIntegrated Brand Promotion

Stephanie Danielle Holder

ChipotleIntegrated Brand Promotion

Stephanie Danielle Holder

ChipotleIntegrated Brand Promotion

Stephanie Danielle Holder

ChipotleIntegrated Brand Promotion

Stephanie Danielle Holder

ChipotleIntegrated Brand Promotion

Stephanie Danielle Holder

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Introduction

Chipotle Mexican Grill, Inc. is a chain of restaurants in the United States, United

Kingdom, Canada, Germany and France that specializes in burritos and tacos. The name

Chipotle derives from the Nahuatl name for a smoked and dried jalapeno chili pepper,

called a chipotle. Steve Ells founded the company in 1993. The first Chipotle was opened

in Denver, Colorado as one of the first fast casual dining establishment chains. Ells and

his father projected that the store would need to sell 107 burritos a day to be profitable

and after one month the restaurant was selling over 1,000 burritos a day. In just seven

years the company had expanded from 16 restaurants in 1998 to over 500 in 2005. In

2009 Chipotle was ranked eighth on a list of fastest-growing restaurant chains and in

2010 was bumped all the way up to third. In 2011 Consumer Reports ranked Chipotle as

the best Mexican fast-food chain. Chipotle is a company-owned business and does not

allow franchising.

Step 1: Situation AnalysisIndustry Analysis

Chipotle is focused in the restaurant industry, the fast food industry, and the

Mexican restaurant industry. Trends within the restaurant industry for the year 2015 are:

locally sourced meats and seafood, locally grown produce, environmental sustainability,

healthy kids’ meals, natural ingredients/minimally processed food, food waste/reduction

management, gluten-free cuisine, nutrition and fruit/vegetable kids’ side items. The

restaurant industry is affected by local, regional and national economic conditions. Some

economic and business factors such as energy prices and interest rates, which are largely

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out of the industries control, may adversely affect the result of operations. The restaurant

industry has multiple impacts on the economy such as: the industries annual sales now

top $660 billion; each $1 spent in restaurants generates an extra $2 in sales for other

industries; the industries share of the food dollar is now 47 percent; the total economic

impact of the industry is estimated at $1.8 trillion; and the industries sales constitute 4

percent of the United States’ gross domestic product.

The fast food industry is composed of restaurants where customers pay for quick-

service food products before eating. Fast food companies are now franchised in over 100

countries and there are over 200,000 restaurant locations just in the United States. The

main economic drivers for this industry are consumer spending, healthy eating index,

agricultural price index and consumer confidence index. Revenue for the fast food

industry has an annualized rate of 8.6%, which has grown from $6 billion in 1970 to $160

billion in 2014. Some of the challenges in the fast food industry are the rising food costs,

economic recession and changing perceptions about health. To fight the negative views

of fast food health consequences, fast food restaurants have adopted healthier choices

over the years. Because of the rising food costs and the inability to force a price increase

on customers, since the industry is so competitive, profit margins are often south of 10%.

To expand, the fast food industry is focusing on expanding new product lines such as

coffee or fresh and organic products. As the industry continues to evolve and the

economy strengthens, profitability in the fast food industry will continue to grow.

The Mexican restaurant industry has quickly grown over the past five years. This

is because Mexican based food has rapidly entered the American diet in the past couple

of years. The immigrant population has also increased from 6.0% in 1980 to about 17.0%

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today and Tex-Mex popularity has grown within the U.S. as well, which is helping the

Mexican restaurant industry grow. Consumer spending has also helped the industry

because unemployment has declined and household income has increased so consumers

have been eating out at restaurants more. In 2010, consumer spending was anticipated to

rise 2.4% per year on average until 2015.

Company Analysis

Chipotle’s mission is to provide food with integrity. Food with integrity is the

company’s commitment to finding the very best ingredients raised with respect for the

animals, the environment, and the farmers. Chipotle seeks better food from using

ingredients that are not only fresh but that are sustainably grown and raised responsibly

where possible.

Chipotle is very ambitious and is looking to expand all the time. The company has

more than 900 stores in the United States as well as stores in other countries such as the

United Kingdom, Canada, Germany and France. They are currently considering opening

more locations in London, Paris and Munich. However the spokesperson for Chipotle,

Chris Arnold, said, “It has never been our intention to just stamp a bunch of restaurants

around the community around the world.” Arnold says, “Our vision as a company is to

change the way people think about and eat fast food. That’s something that the traditional

fast-food guys aren’t doing. We think there’s certainly room for us to build that niche in

other countries as well as the U.S. and there’s a business opportunity for us to continue to

grow.”

The founder of Chipotle, Steve Ells, says, “Chipotle succeeds not because of the

burritos. It works because of our system.” Chipotle’s sales trends have grown 27.8% over

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Market Mix

Product-Provides food that is more in-line with full-service restaurants -With the speed and

convenience of fast food by using high-quality

raw ingredients, classic cooking methods, and ultimately providing food with integrity.

Price-Ranges from $6.25

to $6.95-Affordable price for healthy and organic

food

Promotion-Word of mouth-Press releases-Social media

Distribution-Restaurants in the

U.S. and other countries-Catering

the past five years going from 1.84 billion in 2010 to 4.11 billion in 2014. The chain’s

revenue has surged at an annual rate of 20.4% over the past five years. Results for the

first quarter of 2015 compared to the first quarter of 2014 are as follows: revenue

increased 20.4% to $1.09 billion; comparable restaurant sales increased by 10.4%; the

restaurant level operating margin was 27.5% which is an increase of 160 basis points; net

income was $122.6 million which is an increase of 47.6%; diluted earnings per share was

$3.88 which is an increase of 47.0%; and 49 new restaurants were opened. Management

also expects the following for 2015: 190-205 new restaurant openings, low-to-mid single

digit comparable restaurant sales increases, and an effective full year tax rate of

approximately 38.7%. Chipotle’s market share has consistently gone up in the past five

years. On May 3, 2010 market share was at 128.83 and today it is now at 621.34.

Company Marketing Mix

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Brand Evaluation

Chipotle has built an excellent company and a loyal fan base. They have

identified themselves as different than the competition by offering food with integrity.

Unlike other restaurants in this industry, Chipotle is dedicated to providing food with the

best ingredients while also honoring the animals, the farmers, and the environment with

respect.

SWOT Analysis for Chipotle

Strengths-Healthy and nutritious food-Natural ingredients-Environmentally friendly-No franchising-Word of mouth promotion-Organic ingredients in cooking-Positive brand image-Customer loyalty-Many locations

Weaknesses-High priced menu items because of natural and organic ingredients

-Limited menu

Opportunity-Addition of new items to menu-Expansion to other regions and countries-Growing trend of health consciousness among consumers

Threat-Intense competition from other similar companies-Volatility in price of raw materials-Economic instability

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Step 2: Analyze The CompetitionSWOT Analysis for Qdoba

Strengths-Widespread presence-Breakfast-24 hour locations on weekends-Quality ingredients-Open kitchen to showcase handcrafted preparation-Diverse offerings for all age groups-Biggest franchise player in its category-Online ordering-Catering services

Weaknesses-Franchise format makes it hard to offer local customized menu options and services-Restricted to U.S. with limited international exposure-Nothing offered for health conscious customers-No expansion into newer regions and territories

Opportunity-Low cal/healthy options introduced-Expansion into newer regions and territories-More marketing and branding activities to boost brand image

Threat-Increasing focus of customers towards healthy food options-Prices of food materials and labor costs rising-Economic recession causing less customers to eat out-Intense competition-Higher costs of operation

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SWOT Analysis for Moe’s

Step 3: Consumer SegmentChipotle’s main target market for the “Food with Integrity” advertisement is 18-

34 year olds. However, for this campaign’s target market segment consumers are going to

be broken up into four different groups: children, teens, adults and seniors. Chipotle

already has a broad and loyal customer base but there is still room for improvement, such

as to win over the consumers who like Chipotle’s competitors’ food more. Although

Chipotle does not currently do any television advertisements I believe that by putting

advertisements on television it would increase their customer base.

Strengths-Catering-Online ordering-Nutritional information on website-Healthy options-Convenience-Competitive pricing-Quickness of food preparation

Weaknesses-Confusing menu items and ordering process-Low brand awareness-Low awareness of healthy choices-Stores limited to 20 states

Opportunity-Southwest and Tex-Mex food are growing in popularity-More health-conscious consumers-Fast casual dining segment is growing in popularity-Room to expand

Threat-Tough competition in industry-Need more awareness for healthy food options

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To reach the children consumer group (ages 3-12), I propose that Chipotle

advertise on children’s television channels such as Disney Channel, Disney Junior,

Nickelodeon, and Nick Jr.

To reach the teen consumer group (ages 13-18), I propose that Chipotle advertise

on television channels such as ABC Family, MTV, and CMT. I also propose for the

company to advertise in magazines like Seventeen, Teen Vogue, ESPN, Sports

Illustrated, and Teen Ink.

To reach the adult consumer group (ages 19-50), I propose that Chipotle advertise

on television channels including ABC, HGTV, Food Network and the Travel Channel. I

also propose that they advertise online because the primary means to reach this group

would be through Internet traffic.

Lastly, to reach the senior consumer group (ages 51-75) I would propose

advertising mainly in the newspaper USA Today and on news television channels.

Males and females are both target audiences for this campaign. The campaign will

be global seeing as how Chipotle is located in the U.S. as well as other countries. There

will also be a social media campaign put into place. The campaign will run for three

months starting on May 1st and ending on July 31st.

Step 4: Brand Positioning StrategyThis campaigns positioning strategy will be to position the brand as the category

leader. Chipotle is number one in the quick-service restaurant industry. This positioning

strategy will work for all the mentioned age groups because Chipotle is unique, healthy

and consumed by all age groups. The children and teens will be targeted because they

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will tell their parents they want Chipotle. The adults will be targeted because adults with

children will see the healthiness of the product and want to take their children to

Chipotle. Adults without children and seniors will want to choose Chipotle because of the

health benefits as well.

By targeting the children and teens at a young age, they will grow up with

Chipotle so when they are adults and have children or want to take care of their health

they will continue to want to consume Chipotle and then they will pass it down to their

children as well. The cycle will go on and on, producing more consumers for Chipotle,

which is the overall goal.

Step 5: Budget

Television

$181,665,700Twitter

Trending Topic

$400,000

Newspaper

$4,140,000

Magazine

$21,775

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Television

The average price to place a 30-second advertisement in a primetime weeknight

television show is $112,100. In the above consumer segment I listed eleven television

networks that Chipotle will be advertising on during the three-month campaign. There

will be one advertisement per day placed on each network, each day of the week. These

advertisements will run every week during the three-month campaign. That makes 147

advertisements on eleven different networks at $112,100, which totals to $181,265,700.

However we also have to add in the cost to produce the 30-second advertisement. In

2008, national commercials produced by an advertising agency averaged out to $342,000.

Since that was seven years ago we will approximate that the price is somewhere around

$400,000. So the final budget for the television segment would be approximately

$181,665,700. Chipotle does not currently advertise on television so below is an example

of what the 30-second advertisement could look like.

Magazines

On average, to advertise in a magazine with a horizontal half of a page four-color

advertisement three times would be $2,205. As listed in the consumer segment above, I

provided five magazines that Chipotle will be advertising in during the three-month

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campaign. It also costs anywhere from $1,500 to $20,000 to design the magazine

advertisement. We will average this out to $10,750. So the total for the magazine

advertisement would be approximately $21,775. Below is an example of a horizontal half

of a page four-color advertisement in a magazine.

Newspaper

As listed before, Chipotle will be advertising in USA Today. This newspaper has

an average circulation of 1.8 million. The average cost to place an advertisement in a

newspaper is $100,000. We will use the same advertisement we used for the magazine ad

so we will not have to pay to design another advertisement. So to place a fourth of a page

advertisement, 0.25, each day for 92 days in USA Today for the three-month campaign it

would cost $4,140,000. Below is an example of a fourth of a page advertisement for a

newspaper.

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Twitter Trending Topic

Twitter trending topics are used to generate conversation about your company,

product or service. In 2013, the average cost of a Twitter promoted trending topic was

$120,000. However most are also supported by a promoted tweet purchase, which

averages to around $80,000. There will be two Twitter trending topics over the course of

the campaign. So in total the Twitter promoted trending topic will be $400,000. Below is

a picture of examples of Twitter promoted trending topics.

Billboard

The production costs for making a billboard advertisement are fairly minimal.

Printing the advertisement on vinyl for a bulletin board, which is the largest size billboard

and range from 10’ high x 30’ long to 14’ high x 48’ long (about 700 square feet of

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material), will cost around $500. The production cost would be the area of the billboard

in square feet multiplied by $0.80. So the production cost for the billboard would be

around $560. The design cost would range from $500 to $1,000. So to average that out

we will say it will cost around $750 to design the billboard. City and interstate billboards

range from $900 to $2,500 per month depending on what city you are advertising in. We

will average this out to $1,700. So with printing the advertisement on vinyl at $500, the

production cost at $560, the design cost at $750, and the price per month at $1,700 it will

cost approximately $6,910 for a bulletin billboard for this three-month campaign. Below

is an example of a billboard advertisement.

Social Media

Social media will be used as a free tactic. Promotions will be posted on the

Chipotle Facebook, Twitter and Instagram. Social media is free so the budget will be $0.

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Step 6: Communication objectives &

advertising messageCommunication Objectives

Maintain Brand Awareness: Chipotle is a very large company that many people

know about. Maintaining brand awareness throughout this campaign will be crucial to

making sure Chipotle stays at the front of our consumers’ minds.

Change Consumer’s Beliefs or Attitudes: We need to let consumers know that

they deserve better than a fast food hamburger that was taken out of the freezer and

thrown onto the grill. They deserve fresh and healthy ingredients that are good for them.

Therefore our consumers need to be able to differentiate Chipotle from a fast food

restaurant. By doing this Chipotle will gain more consumers because patrons will realize

that Chipotle’s food is healthy and nutritious and is worth the price.

Encourage brand switching: By convincing consumers and patrons that Chipotle

has the freshest food in their industry, more people will want to be dedicated to our brand

rather than the competitors. We will use our key mission, food with integrity, to let them

know that we are here to provide healthy and affordable meal options for them that make

them feel good about themselves and what they are eating. Then they won’t want to go

anywhere else.

Advertising Messages

Maintain Brand Awareness: Advertising will create a 75% brand awareness of

Chipotle Mexican Grill, Inc. among consumers within three-months.

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Change Consumer’s Beliefs or Attitudes: Advertising about Chipotle’s healthy

choices will change consumer’s beliefs or attitudes about the industry by 50% within

three-months.

Encourage brand switching: Brand switching to Chipotle Mexican Grill, Inc. will

increase by 50% within three-months.

Step 7: Creative StrategyTo reach our communication objectives of maintaining brand awareness,

changing consumer’s beliefs or attitudes, and encouraging brand switching, Chipotle will

be using the following message strategies: promote brand recall and instill brand

preference.

Message Strategies

Promote Brand Recall: To promote brand recall and get consumers to think of

Chipotle before any other Mexican fast food and casual dining chain, Chipotle will be

using the slogan “Chipotle. It’s smokin’.” If successful, the slogan will be impossible to

forget and consumers will buy what they remember. Thus making everyone think of

Chipotle over other similar restaurants.

Instill Brand Preference: Chipotle will instill brand preference by using feel good

advertisements. These advertisements will talk about the healthy ingredients Chipotle

uses and how it’s good for you because we have food with integrity. This will make

consumers only want to eat at Chipotle rather than at our competitors because we provide

food that’s good and good for you.

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Copywriting

Headline: “What makes Cinco De Mayo even better?”

Sub head: “Celebrating with a Chipotle burrito.”

During the month of May, Chipotle will build the advertising message upon Cinco De

Mayo. This advertisement will be spread across all social media platforms, television

advertisements, magazine advertisements, newspaper advertisements and billboards. The

Twitter trending topic will be #ChipotleDoesCincoDeMayo.

Headline: “Celebrate your independence a new way.”

Subhead: “Choose food with integrity and try Chipotle today.”

For the month of July, Chipotle will focus in on the celebration of Independence Day.

Chipotle will run this advertisement across all social media platforms, television

advertisements, magazine advertisements, newspaper advertisements and billboards. The

Twitter trending topic will be #ChipotleIndependence.

Step 8: Media Objectives and StrategiesMedia Plan

To reach the target audience, advertising messages will be placed across all social

media platforms, television advertisements, magazine advertisements, newspaper

advertisements and billboards. We will use social media to focus in on the younger

consumer groups. Television advertisements will be used to draw in the children, teen

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and adult consumer groups. This will give us coverage, reach and repetition. It’s cost

effective and we have the ability to select our audience. Magazine advertisements will be

used to bring in the teen consumer group. The advantages of this are that we can select

our audience, we will have audience interest because they are reading the magazine and

we will also have creative opportunities. Newspaper advertisements will be targeted

towards the senior consumer group. This will attract the senior consumers because the

newspaper advertisements reach more than 50% of U.S. households, it provides

credibility for the company, and it is low cost. Billboards will be effective because they

will reach almost every person who is driving by which will give us reach and frequency.

Media Objectives

The target audiences we want to reach are broken into four different consumer

groups: children ages 3-12, teens ages 13-18, adults ages 19-50 and seniors ages 51-75.

These groups consist of all races, ethnicities, genders, socio economic statuses, and

religions.

Media Strategies

The advertisements will be scheduled continuously over the three-month period.

The media mix will be concentrated so that brand familiarity may be heightened and so

that we can dominate in one medium relative to the competition.

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Step 9: PromotionsTraditional Support Media

Bulletin billboard advertising will be used to attract the traveling consumers. It is

used to reinforce a message being delivered by another media vehicle. The billboards will

be strategically placed near a Chipotle so that when the consumers see the billboards they

will be near the restaurant while they are contemplating product selection. This will make

the billboards immediately relevant and will catch the consumers’ eye. This is an

excellent way to achieve wide and around-the-clock exposure of our message.

Point of Purchase Advertising

Window and door clings will be used for businesses that support Chipotle to hang

on their door or window.

Event Sponsorship

Chipotle Mexican Grill, Inc. will be sponsoring multiple 5K runs and Go Green

Initiatives. We support the 5K runs because we believe in living a healthy lifestyle. Just

like we provide healthy food, you have to provide healthy exercise to your body. We also

support Go Green initiatives because we believe in keeping the environment clean and

loving the Earth. Sponsoring these events will not only create news coverage for Chipotle

but also for amazing causes.

Step 10: Evaluation

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The first step to evaluating this campaign would be to record the sales of all

Chipotle products on August 1, the day after the campaign ends. Then we will compare

them to the sales before the campaign started and see what the difference is. This will tell

us if our campaign was effective or not.

Another way to evaluate the campaign would be to do distribute surveys among

the consumer groups that were targeted within this campaign. This will tell us how the

targeted consumer groups were appealed to the campaign and it’s a great way to get

feedback from our customers.

A way to evaluate the social media aspect of the campaign is to compare each

separate social media account to its numbers before the campaign started and the

numbers after the campaign is over. So for Facebook we could see if we have more likes

than we did before the campaign started. For Twitter and Instagram we can evaluate if we

have more followers after the campaign is over than we did before the campaign started.

We could also track the number of shares, tags, mentions and comments we have

acquired since the campaign started compared to before.

These evaluation methods should give us a good idea at how well our campaign

was received by our targeted audiences once the campaign is over. It will also give us

feedback on what we need to do better on next time and how we can improve. Hopefully

once the campaign is over we will be able to say that we accomplished our goals.

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Sourceshttps://chipotle.com

http://www.restaurant.org/Downloads/PDFs/News-Research/WhatsHot2015-Results.pdf

http://www.wikinvest.com/stock/Bob_Evans_Farms_(BOBE)/Certain_Economic_Business_Factors_Specific_Restaurant_Industry_General

http://www.restaurant.org/Industry-Impact/Employing-America/Economic-Engine

http://clients1.ibisworld.com/reports/us/industry/ataglance.aspx?entid=4305

http://clients1.ibisworld.com/reports/us/industry/default.aspx?entid=1980

https://www.franchisehelp.com/industry-reports/fast-food-industry-report/

http://www.chipotle.com/en-US/fwi/fwi.aspx

http://www2.qsrmagazine.com/articles/features/138/global_growth-3.phtml

http://www.marketwatch.com/investing/stock/cmg/financials

http://ir.chipotle.com/phoenix.zhtml?c=194775&p=irol-newsArticle&ID=2038444

https://finance.yahoo.com/echarts?s=CMG+Interactive#%7B%22range%22%3A%225y%22%2C%22scale%22%3A%22linear%22%7D

http://www.tvb.org/research-r/4718/4709

http://www.quirks.com/advertise/print/adrates.aspx

http://fitsmallbusiness.com/newspaper-advertising-costs/

http://www.usatoday.com/story/money/business/2014/05/01/usa-today-daily-circulation/8573269/

http://digiday.com/publishers/what-online-ads-really-cost/

http://smallbusiness.chron.com/much-television-advertising-really-cost-58718.html

http://yourbusiness.azcentral.com/average-cost-national-advertising-campaigns-26091.html

http://www.webpagefx.com/blog/business-advice/the-cost-of-advertising-nationally-broken-down-by-medium/

http://fitsmallbusiness.com/how-much-does-billboard-advertising-cost/

http://askville.amazon.com/cost-rent-average-billboard-sign/AnswerViewer.do?requestId=12691479

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Example of television advertisement: http://www.adweek.com/adfreak/chipotle-really- goes-back-start-its-first-uk-ad-campaign-156481

Example of magazine advertisement: http://www.avenuelondon.co.uk/your-credit-union-branding (may not show actual picture but when I found it on Google images and clicked on the picture this is the website it took me to)

Example of newspaper advertisement: http://advertising.ourdogs.co.uk/newspaper.htm (may not show actual picture but when I found it on Google images and clicked on the picture this is the website it took me to)

Example of Twitter trending topic: http://digiday.com/publishers/what-online-ads-really-cost/

Example of billboard advertisement: http://agricultureproud.com/2012/02/16/back-to-the-start-chipotle-ad-draws-controversy/

PowerPoint’s provided on D2L

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