Ch. 10 - Product Concepts

        In this chapter we review different concepts of a product, as well as Branding. Chipotle has a firm grasp on one of our most important brand makers: Millennials. Millennials believe in what Chipotle stands for: Community. And based on that insight, the brand has consistently created a way for its customers to explore their interest in “food with a conscience,” making what could be tedious and preachy into an ongoing dialogue and movement that is both socially conscious and good for the palette. Leveraging the Chipotle brand in these new concepts will play very well with Millennials who drive a disproportionate share of margin for the franchise and vote not just with their visits, but with their likes, follows, tweets and Instagrams. Starting with Millennials and cascading from these new concepts will accelerate their growth potential, quickly.

        

     Chipotle has also been very creative as far as packing their products. They in the beginning of last summer a new line of oddly literary packaging—bags and cups printed with new writing both from authors you might find in the New Yorker as well as comedians like Sarah Silverman.Instead of limiting the topics to food or sustainability, both themes the company has focused on in the past, and ultimately decided to let authors write about whatever they wanted.

     The project was the brainchild of author Jonathan Safran Foer, who happened to eat lunch in a Chipotle restaurant one day by himself, and started wishing he had something to read. He knew people at the company—who'd reached out after Foer wrote Eating Animals, a book about factory farming—and decided to suggest his idea: What if Chipotle’s packaging was more like a book or a magazine? If customers like the new packaging, the company plans to roll out another lineup of writing soon. The soda cup may be the next literary form.

Ch. 17 - Personal Selling and Sales Management

One of Chipotle Mexican Grill’s founding principles is to serve “food with integrity.” So it comes as no surprise that quality customer service is an important part of the company’s mission. With 1,300+ locations, Chipotle is one of the fastest-growing restaurant companies in the United States. That type of rapid growth can make consistently great customer interactions a challenge. Chipotle’s secret recipe: becoming a customer company.

Chipotle’s service team receives inquiries as diverse as suggestions for locations of new restaurants, feedback about service at a specific location, or detailed questions about food ingredients and preparation. The company tapped Salesforce when it needed a scalable solution to provide business insights, keep pace with its growth, and expand to address social media over time.

                                      

Using customer profiles, Chipotle maintains a record of all customer service inquires—from a variety of channels—for 360-degree customer views. “Although we have more than a thousand restaurants, we want each to be a part of the community it serves and every customer to know they’re important,” says Shannon Kyllo, Customer Service Manager. “Salesforce gives us a close understanding of our customers so we can better meet their needs and personalize their experiences in our restaurants.”

Integration with back office systems for reporting is also important. “In addition to engaging with customers, it’s critical that we can identify trends as they develop,” explains Kyllo. “For example, if we get a lot of positive feedback in one area, it may be due to an exemplary district manager. Or if we get several complaints about an ingredient, there may be an issue with the supplier that we need to investigate.”

        Consumers are increasingly taking to social networks to share their opinions about their dining experiences—both positive and negative. Chipotle has a new team that is entirely devoted to listening to conversations about its brand and building even closer connections to customers. “As social media becomes the primary platform for customers to share their experiences and feedback, we are constantly evolving our communication model so we can connect with our customers in the ways that are most relevant for them,” explains Eric Wilson, Director of Initiatives. “Our service model is built on creating relationships with our customers—that’s always our top priority.”

Ch. 16 - Advertising, Public Relations and Sales Promotion

   Chipotle believes on the type of grand experiment that makes most brand managers tremble: It's giving up on advertising. Having cycled through four ad agencies in five years, the restaurant chain focus now mostly on word-of-mouth promotions.

       Chipotle has been adopting this plan since 2010, and according to numbers it has been working out very well.  In fact, not advertising on TV is key to Chipotle's business model. The company spends almost nothing on advertising—just $6 million nationwide last year. (By comparison, Arby's, the smallest of the large fast-food chains, spends about $100 million and McDonald's, the biggest, spends more than $650 million.)

Chipotle has been reducing its above-the-line advertising costs in the last few years.The company did advertise on TV for the first time ever in 2011, buying a single ad during the Grammy Awards that ran only once, for instance. But In its annual report, Chipotle describes why it believes advertising is bad for its business:  "Our marketing has always been based on the belief that the best and  most recognizable brands aren’t built through advertising or promotional campaigns alone, but rather through all of the ways people experience the brand."

Sales at Chipotle went up 20 percent last few years, so this is a company that already has momentum. The fact that its ad dollars are less effective than they should be suggests it's worth cutting them back -- they're a drag on earnings and they're not contributing efficiently to the company's overall growth.

Ch. 14 - Marketing Channels and Retailing

I walked into Chipotle Mexican Grill restaurant on the corner of 8th ave. and 56th street and one thing immediately becomes clear: This doesn't look like all those other places.That look is no accident. The distinctive Chipotle design--a spare, industrial motif marked by concrete floors, exposed piping, natural colors and ample use of plywood and stainless steel reflects a company culture that champions the basics. And all of the 1500 locations have the same look. 

When Ells opened the first Chipotle 20 years ago in Denver, he was determined to make the 880-square-foot restaurant's design as transparent as its service. That he had raised just $85,000 to start his business surely contributed to the ultimate industrial look. They had to make use of some very basic materials but have those materials speak to this brand that was being created. 

At Chipotle customers order from a pared-down menu of tacos and burritos, then watch the kitchen staff prepare their meal from fresh, sustainably raised ingredients. Each ingredient is laid out in front of the costumer so you can choose the perfect combination to make the preferred meal. You can watch the process as the burrito, bowl, tacos, or salad is prepared exactly the way the costumer ask for and it is handed out almost instantly. They don't say on the menu board that they have fresh guacamole, as a customer, you can see it being made right in front of you.

At Chipotle you won't find signs telling you where to stand in line or pay for your meal, essential qualities in tight urban locations. Thoughtfully considered elements include a combination of stools for quick bites and tastefully lit banquettes that encourage lingering.

The sounds, the smells, and the sights of cooking can really help you work up an appetite. Unfortunately in a lot of restaurants the “cooking” they do is more like putting together a science experiment. To that end, each Chipotle is designed with a kitchen that’s open to the entire restaurant. Overall, Chipotle definitely offers a unique fast service dining experience. 

CH 6. - Consumer Decision Making

     Companies should not fool themselves into believing that everyone wants to hear a green marketing message. Chipotle fully understands that the three most important factors in the consumer decision-making process for its products are price, taste and location. If it doesn’t get these factors right, then nothing else will matter.   

     In general, studies have found that millennials ages 18 to 34 do have higher expectations for ethical behavior by the companies with which they do business and are more receptive to green marketing messages. However, even among millennials, about one-third of this segment reports that, there are too many causes and it’s overwhelming, and, words like “green,” “eco,” “natural” and “sustainable” are so overused that they are almost meaningless.

     According to The Intelligence Group’s “Cassandra Report,” which studies the habits of the millennial generation, more than 60% of millennials report that they want brands that follow ethical practices and align with social causes. However, only 9% often make an effort to buy green products, while 36% report that they rarely or never make an effort to buy green products, according to “An Examination of Marketing Techiniques That Influence Millennials’ Perceptions of Whether a Product is Environmentally Friendly,” published in the Journal of Strategic Marketing. Therefore, green marketing messaging should be targeted at a narrow segment of the population as a whole, and such messages appear to be better received by a subsegment of the millennial demographic overall. 

     Espey says that only an estimated 5% of Chipotle’s customers have any significant depth of knowledge about the company’s Food With Integrity efforts. While Chipotle is devising marketing efforts to improve those awareness levels, the company understands the constraints and is not deluded to think that it can change this dramatically. 

     However, it may be more likely that those customers who do learn about sustainability efforts will become brand evangelists with high word of mouth activity. Chipotle reaches out to these customers through extensive use of social media including Twitter, Facebook and YouTube to spread its green message. The company’s Facebook page has received more than 2 million ‘likes.’  

     Chipotle also has “student brand managers,” on-campus brand ambassadors who are dedicated to “changing the way people think about and eat fast food” through grassroots marketing efforts aided by a local Chipotle marketing rep. Seeking permission to have a deeper and more intimate conversation with these key customers has the potential to significantly increase overall awareness and importance of sustainable food production issues among Chipotle’s customers and, in turn, build a significant cult-like following among the company’s most loyalty customers.

Developing a Global Vision

   Global Marketing is defined as marketing that targets markets throughout the world. Many Firms have the long term goal of establishing international markets to futher expand the buinesses worldwide. With this mindset Global Vision comes into play.
   Companies such as Chipotle Mexican Grill, have been fortunate to be able to start of in one location and branch of to other locations and eventually expand into international markets. Chipotle restaurants are located in a variety of places around the world including the United States, United Kingdom and Canada.
   Culture is a very integral part of the business as the company prides itself on its natural ingredients, responsible farming, and recycling. Chipotle's bags and napkins are 100 % paper recycled.
   Global Vision means recognizing and reacting to international marketing opportunities, using effective global marketing startegies, and being aware of threats from foreign competitors in all markets.

The Marketing Environment

    Chipotle Mexican Grill is a unique eatery. In a world of fast food and a lack of true consideration of consumer health, the restaurant pursues a different direction. The company positions itself as fast-casual food. This new, up-and-coming breed of dining commits itself to the customer time constraints as well as a positive environment. Customers can obtain their food in a short period of time, but can enjoy the more sophisticated atmosphere of the restaurant if they choose to stay and eat at the restaurant itself. Every Chipotle Mexican Grill is decorated with metal and light wood although every restaurant is unique in its set up. With this color scheme, the restaurant conveys a modern attitude to its customers.

Beyond its elegance in comparison to most, if not all, fast food establishments, Chipotle offers a level of customization to its meals in a simple manner. Although their menu only technically consists of three options (burrito, tacos, burrito bowl), Chipotle offers consumers over 65,000 combinations.  This is accomplished through their cafeteria line of ingredients including various meats, salsas, and extras like cheese and corn. Thus, at Chipotle, everyone can get exactly what they want in the way that they want it all while remaining different and unique from their friends who accompany them.