Marketing and Communication
Table of Contents
PART 1: MARKETING PLAN.. 2
1.0 Executive Summary. 2
2.0 Introduction. 3
3.0 Company Overview.. 3
4.0 Situation Analysis. 3
4.1 External Analysis. 3
4.2 Internal Analysis. 5
4.3 SWOT Analysis. 6
5.0 Objectives. 8
6.0 Strategy. 8
7.0 Segmentation, targeting, and positioning (STP) 10
8.0 Tactics / Action. 10
9.0 Budget 11
- Control 11
- Conclusion. 11
Part 2 – Communication Plan. 12
Purpose of the communication plan. 12
Promotional mix. 12
Target audience. 13
Communication Message. 13
Chipotle is launching its new store, and with that, they are planning to create awareness among the community about its burrito product in the market. The products offered by Chipotle provide 65000 different fresh ingredients, and that too at a value-packed cost. The restaurant is popular for its customization and organic ingredient usage. Chipotle is the first chain that had set up its fast-casual dining market. The company targets a particular segment within the market of the middle class by applying high-quality ingredients in increasing both urban and suburban regions. While most of the fast food chains depend on advertisements, the fundamental marketing objective of the company is to spend around 15% of their profit on both traditional and non-traditional ads, for the purpose of saturating the market and owning a huge share in fast-food, fast-casual dining as well as fresh Mex market.
In 2010, Chipotle understood that reputation of the company is at high risk. To fulfilling the growth target, they require to connect with previous customers and attract new ones. They also expect to rebuild the faith of consumers, that why they come up with their campaign of “food with integrity” (Chipotle Mexican Grill, Inc 2016).
The strategy of Chipotle was to promote farm to the consumer supply chain. They also work towards changing consumer thinking, and therefore, their campaign emphasizes over connecting with the emotions of consumers and making them understand how Chipotle sources sustainable items (Baylis 2012). In doing so, the company took the help of social media and consumer websites.
Chipotle was started in the year 1993 and came into public in the year 2006. In just five years, the company has become an exploding chain. Chipotle is trying to experiment through its new restaurant, which is known as South East Asia House which provides Asian cuisine (Chipotle Mexican Grill, Inc 2016). Currently, the company is looking towards expansion in Europe and had even opened its first-ever restaurant in the UK, and store in France (Buss 2013). The target market segment of Chipotle is both suburban and urban areas, having a population. Currently, Chipotle is in its growth phase, with less to no debt, high revenue, and strong financial backing. The company also plans to expand its business in the US and various other countries like Germany, the UK, and France (Buss 2013).
Macro- PESTLE Analysis
Political Factor- it’s not a relevant factor for chipotle. They depend completely on organic items; therefore, if the FDA permit to have excessive regulations for the fast food sector, then products of chipotle wouldn’t get changed.
Economic Factor– the full economic growth of the US has provided customers with different eateries. That’s why the statistic is high in the case of restaurants, and it also provides a way for a particular fast-casual sector segment to expand its niche (Bruner, Eades, Harris and Higgins 1998).
Social factors- the social trends related to healthy eating are not diminishing. Adults are looking forward to creating a small influence on eating habits, to have a positive effect on both well-being and physical figures.
Technological factors– the comfort related to fast casual has got quite comfortable, due to online food ordering, as through this, customers can quickly pick up and have their food on time.
Environmental factors– Due to the fundamental concern related to pollution and global warming, the world is emphasizing more towards the nearby environment (Corey 2011). More emphasis is also placed on corporates, which is drawing more customers to come close to labels, and restaurant backgrounds, before taking food from there.
Legal factors- specific legal restrictions and FDA might cause a problem for the company and might even create hurdle in the availability of products (Corey 2011).
Micro- Michael Porter five forces
Rivals- the chipotle rival group includes Taco Bell, and its strength is its breakfast selection, sale, and Cantina menu. Another rival is Moe’s Mexican Grill, which has restaurants in 500 locations in around 37 states. It offers the best catering as well as a customized selection of menus.
New Entrants- the hurdles coming to enter the market are less, as the rivals existing among the top competitors is fierce, and it’s challenging for players in attaining more market share (Fromm and Garton 2013). Those existing within an industry are expanding, that’s why it’s difficult for new entrants to enter the market.
Substitutes- Chipotle substitutes include fast service, such as McDonald, Wendy’s as well as Burger King. Another substitute is home eating, which includes cooking at home, as it’s the cheapest option.
Suppliers- Chipotle suppliers are quite less, and they even have very less qualified farmers that make use of main ingredients. The company applies personnel industry monitor related to trade issues, overseas demand, rate exchange, industry news, weather, global events, and crises, which could affect the price of the ingredient (Grant 2010).
Buyers– Consumers are highly interested in what is supplied in the market. The emphasis is placed more on healthy and local food. As per the survey of 2014, it is noted that 64% of consumers are interested in local food, 54% were interested in visiting restaurants, and 72% like to have healthy food (Grant 2010).
Value Chain Analysis
Supply chain management- Strong long-term relations were built by Chipotle through its industrial suppliers. It depends completely on its industrial suppliers for its supplies and ingredients.
Operations– the company emphasize more on human skills as compared to timers, rules, and robots. They had built strict regulations within the supply chain in the context of its requirements and specifications.
Distribution- Chipotle operates around 23 distribution centers for the supply of their ingredients, and they even supply the same in other restaurants. These centers are being exploited in various regions independently (Hatfield 2012).
Sales and marketing– the company, spend less on its marketing activities, as they focus on spending more on attaining high-quality ingredient. They don’t depend on TV ads.
Service- Chipotle had brought changes in the fast food centers of America. They product inexpensive and fast food, although the flavours and quality are never comprised, as compared to typical fast food (Jones 2014).
Product research and development– When Chipotle comes up with its campaign “Food with integrity,” it includes different ways to apply ingredients of organic growth. They even explore farming organizations that try to practice animal ethics and are concerned about the environment.
Human resource management– Chipotle hires apprentice, general, and kitchen managers, along with part-time and full-time crew members.
General administration– Chipotle hires real estate team managers that explore the potential areas for opening new restaurants. Most of the team is highly dedicated to projects about sales and target over return on investment (Jones 2014).
Innovative product– Chipotle holds around 65000 combinations, having the best quality ingredients. This company is easy, fast, and loves to make new ingredients.
Pricing- Chipotle provides the best quality ingredients and that too at the affordable cost of $6.
Holds strong influence– Chipotle is trying to change the way, in which people think about having fast food. Chipotle has provided its long-term commitment to providing food through sustainable sources (Koller, Goedhart and Wessels 2010).
High cost as compared to competitors- Chipotle provides better quality at a high cost.
Limited menu– the company offers 65000 different ingredients, but the menu of Chipotle includes only three options, such as burrito bowl, burrito, and tacos.
Geographical expansion– currently, Chipotle operates its restaurants in the US, holding the potential of expansion in 3000 locations. Recently, the company has entered France and UK.
Branding of products- various items, which are not related to Chipotle are also applying a similar name for their sauces like Subway, which has come with their Chipotle sauce (Kyle and Wong 2015).
Competition- Chipotle holds a lot of market space for increasing competition. As the company is new in the market of whole food; the fast food chain provides the best quality in the coming time.
The slowdown of the economy– Due to more cost of burrito items, Chipotle could explore in the economy (Lepore 2011).
Particular- Chipotle emphasize the application of a promotional team. The team, which includes public relations, direct marketing, advertising, personal selling, and sales promotion, persuasively interacts with customer value and works towards building a better customer relationship.
Measurable– Chipotle will try to move through its action plan in two years, along with the additional team to view the progress (Lepore 2011).
Achievable- the ads of the company will work along with the promotional team, for the purpose of creating short-term excitement and sales for the 1st quarter will increase awareness of Chipotle.
Realistic– Chipotle will try to set up long-term knowledge as well as refinement. The team of promotional marketing will apply the highest point for reiterating, where Chipotle will be positioned as a fast food company.
Time-bound– Chipotle will calculate the time for launching the awareness to the public. In the next years, the advertising of products will be increased with the marketing budget.
Product development strategy- Chipotle has offered both new innovative products to their customers. It always offers the right level of economic surplus to its clients. Chipotle also seeks innovation through one market and delivers innovation and new items to others.
Market development– the company has its store in South East Asia House. It’s also looking towards its expansion in Europe, and already opened its restaurant in the UK, and store in France, for pursuing the market segment on a geographical basis (Levine-Weinberg 2016). As the company is growing its new market; the strategy of market development holds more risk factors as compared to the market penetration strategy for Chipotle, but new market development has significantly proven the core competencies of Chipotle of its experience with the particular market segment.
Diversification- Diversification is not the best thought of organization, as it fails to afford in creating new items within new markets.
Market penetration– the company, penetrates the market through its different product range, like chicken items, hamburgers, cheeseburgers, soft drinks, desserts, milkshakes, breakfast products, and French fries (Lutz 2015). Currently, the company has also started offering fruits, salads, and wraps.
Segmentation– Chipotle key targeted segment is people between the age group of 18-34, that will explore Chipotle philosophy of “Food with integrity.” People depict the key segment for its fast casual and quick service restaurants, as 57% of adults in the age group of 18-29 like to eat fast food every week (Meixell and Eisenbrey 2014).
Targeting- Chipotle tries to target two segments of customers: one who buy a meal for themselves and another who orders catering for others at a meeting or event. The restaurants of Chipotle are open from 11 AM till 10 PM and target customers, who like to dine for lunch, snack, and dinner (Nisen 2014). Chipotle also operate catering services in the US, which are the same as Qdoba, that target event planner and business, which need catering for 200 people.
Positioning- a burrito from Chipotle is positioned as the most valuable fresh ingredient, which creates a long-term commitment to provide the best quality food at a high cost.
Product- Chipotle always provide the freshest ingredients for healthy eaters and grubbers, who look for satisfaction for their money.
Place- while opening the new store at the new location, Chipotle wants to ensure that they can get more customers. Due to this, Chipotle is good in Norway. Oslo is a populated place and includes more urban dwellers, which are attracted by Chipotle.
Price- Chipotle take premium price, and is interested in increasing it for their small increments, whenever it’s required (Osterwalder and Pigneur 2010). Chipotle is expected to rise the cost through marginal cost pricing, as the result of its expansion.
Promotion- Chipotle will apply a promotional mix for the purpose of creating innovative ways of undertaking public awareness (Parrish 2007). Chipotle will also sponsor organic farms and advertise it, and even place the logo in places, where millions of people can view it.
In the first year, Chipotle expected to get around $799060 million by the average sale cost of $6 for each unit, and that too at a variable price of $3.10 for each unit. Chipotle gained profits after the increase in sales by 65744 units. In the 3rd year, by constant growth, Chipotle earnings will rise to 133110 units per sale (Reuters 2016).
What are your KPIs (key performance indicators)?
Controls will be measured through Ernst & Young LLP accountant. By two-way communication, the company will be in contact with customers and provide them satisfaction.
How will you monitor progress?
Through the rapid growth of Chipotle, it will maintain its cost within “A-class” restaurants, along with its best quality ingredients for providing healthy food. The marketing team will monitor monthly sales (Schultz 2012).
How will you recognize the successful achievement of objectives?
Presently, Chipotle is exploring the best-talented candidate that holds good local marketing knowledge, along with tactics (Smith 2007). The Marketing Strategist will support Chipotle in its international growth and emphasize short and long-term goals.
The “Food with integrity” campaign was successful, and it created awareness and connect Chipotle with consumers. Chipotle holds the potential to do well in sustainable food, but they require to examine their lack of transparency, not for their strategic advantage, but for providing credibility to the movement.
- Four reasons for the communication plan:
- Outline all the operational changes
- The organization is saturated, and change is required
- Communicate with staff about how the change will affect them
- Retain people in the loop
- Advertising- Reach the target market through online videos, billboards, social media, and commercials.
- Public relations- Encourage to have media coverage in newspapers. Grand opening on social media, interviews, pictures, and videos. Chipotle can also hire a brand ambassador for product promotion (Parrish 2007).
- Sales promotion- provide incentives by using online ordering and apps. Provide customers with a reason to apply delivery service over others, like incentives, discounts, and free, items. Provide offers like the first month of delivery is free.
- Direct Marketing- Email will be sent with direct links; short-term information on social media, websites, and phones. Increase the database with the contact information of the target market. Provide coupons through electronic sources; use handout flyers on the campus of the College.
- Personal selling- Inform existing customers about new products/services. Use flyers outside the stores by emphasizing customers and company relationships (Parrish 2007).
- Digital marketing- we will make use of websites for the promotion of the new product. Facebook, Twitter, Instagram, YouTube, and snap chat accounts will be used for product promotion.
The target market segment of Chipotle is both suburban and urban areas, which includes two types of customers, one who buys a meal for themselves and another who orders catering for others at meetings or event. The target segment will intend to focus on ordering online food, and will even take monthly coupons for dining in the restaurant.
Chipotle “Honest Ingredient”
- Create a blog for idea sharing as well as employee feedback
- Develop a short video every week for updating staff about progress and ensure bout safe delivery of food and changes taking place in the system
- Conduct surveys for development and the survey should be administered by staff, during the time of crisis, training as well as taking the confidence of management (Parrish 2007).
- Develop customer survey for making suggestions and inputs
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