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AMANDA GAETA TARGET MARKET ANALYSIS SEPTEMBER 9, 2010


Overview Product/Brand 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’s 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. Sustainability From the company’s beginnings, CEO Steve Ells has been committed to sustainability in his business. When first hearing this, most consumers would think of environmental aspects like organic farming, but Ells has taken his vision much further past environmental responsibility to apply sustainability to animals and the people whom the company works with. The most obvious way in which Chipotle practices this sustainability is through it attainment of the food it serves. Although not since the restaurant’s beginnings in 1993, Chipotle now continually works towards a higher standard of this sustainability. The first step on this path came in 1999 when Ells was educated about how pork Chipotle purchased was raised. Pigs would be fostered by factory farms surrounded by concrete and given antibiotics to prevent disease within their confinement with hundreds of other pigs in cramped conditions. It is said that the amount of antibiotics amounts to three times more than all of the antibiotics assigned to humans. Ells preferred to have his pork live a more enjoyable life and redirected funds in order to purchase naturally raised pigs. This “natural” way allows pigs to live in a positive environment without antibiotics or added hormones in their diet. They are allowed to live their lives as the pigs they were born to be and not contaminated with a high amount of antibiotics. Within two years, Steve Ells had Chipotle served 100% naturally raised pork. Similar conditions existed for chickens that were injected with growth hormones, but due to now existing law, 100% natural chicken is required in dining. Finally, Chipotle attempted to tackle their beef supplies, which proved to be more of a challenge. In 1999, when the idea of sustainability through food was pursued, the company could not find anyone who could meet the standards of a “naturally raised” cow. Currently, the company holds that 85% of their beef meets the standards of the other two meats offered. Therefore, Chipotle has not completely met their goals, but still dedicates itself to the goal of one day having a complete selection of naturally raised meats.

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Beyond their main focus in food, Chipotle applies their commitment to sustainability efforts to their suppliers and the environment. The company makes sure to work with companies that treat their workers fairly. In order to secure these ethics, Chipotle makes sure that policies against any exploitation are set in place .Otherwise, a large company like Chipotle cannot consistently buy from small farms, but they do a considerable amount of business with locally, owned family farms who meet their food standards. This is something else that the company boasts due to the fact that they cultivate personal relationships with their suppliers. Inside the company, workers are treated respectfully by offering opportunities to grow professionally through promotion and responsibility as well as personally through things like continued English lesson for those who are not completely comfortable with the language. Chipotle’s happy animals paired with their content suppliers and workers are complemented even further to their environmental efforts. Overall, 40% of the Chipotle’s beans are grown through organic practices. In addition, these beans along with corn, avocados, and other vegetables come from the local farms aforementioned. This strategy ties each of these sustainability efforts together as one positive influence on the company itself. Advertisement With all of the differentiation from customer to customer, Chipotle has one thing that ties everyone together - a meal that weighs around 1 ¼ pounds. This amount of food for the price ranging anywhere from $5.00 to $8.00 is a great value to their consumers. The common denominator is something that the company prides itself on and focuses on in most of its advertising campaigns in the past by implementing pictures of massive burritos on billboards with phrases like “burritos so big you wanna ride’em.” After a long time commitment to that angle of promotion, the company is venturing in another direction to market something else that they have always had - “Food with Integrity.” Due to these consistent efforts to sustainability, it is clearly at the core of Chipotle’s business. Instead of relying on a marketing ploy to advertise something that the company can create for its consumers like a burrito or a secret menu item, the company is going to market itself through its basics. There is nothing flashy about their ingredients. There is just the truth of quality behind what the company stands for versus what their fast food or fast casual food are supplying. Thus, the company has nothing to hide behind and wants to be straight forward with the consumer.

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In Chipotle’s print ad from this year the company focuses on its “Food with Integrity” in a creative manner. When initially seeing the advertisement, the viewer will most likely catch the message “chipotle tastes delicious” first due to the darker font. They have already absorbed the fact that the ad is in fact for Chipotle and can move on to process the lighter font that provides the true message. Even this is conveyed in an entertaining way that links the entire message together by referring back to the darker print. It addresses the way in which their meat is raised naturally with no hormones, while also speaking to consumers’ cynical attitude towards advertising by outright saying that they worked with an advertising agency to formulate the idea. This works especially in the current climate where consumers are more aware of the fact that they are consistently being marketed to. Finally, the “direct” message comes through the dark print, and the viewer has fully experienced the advertisement. Target Market Demographics The main target of Chipotle’s “Food with Integrity” advertisement is 18-34 year olds with at least a Bachelor’s degree. This group belongs to the upper middle class in the “mass affluent” segment in households with an average income of $75,000-$99,000 if only one person and $100,000-$149,000 if more than one adult lives in the household. Living in a household under these conditions allows the younger portion of this age segment to be a part of the upper middle class through their families. According to the U.S. Census information available in April 2007, the mass affluent market consisted of 13.3 million households. The same data states that out of the entire mass affluent market, 78.5% of the households were Non-Hispanic Whites and 32.7% of them have a college or graduate degree. These consumers put their education to use in the full time occupations that 75% of this mass affluent population hold. In addition, 67.8% of this group is married with 35% in a two person household assumed to be a couple and 42.9% in a three to four person household assumed to be a married couple with children. Thus, this generation crossing, well-educated segment makes up respectable portion of the market that Chipotle can aim to tackle through their “Food with Integrity” advertisement. Psychographics Social classes are not strictly defined by the amount of money that the household possesses, but also relies on the prestige held through occupation. With a degree through higher education, it is assumed that this market has honorable jobs to maintain their place within the upper middle class. This social class of people is known for prizing their uniqueness as individuals. This is complemented by the Simon Market Research Bureau’s National Consumer Survey from 2006 that the mass affluent market values “stand[ing] out in a crowd” and being an individual more than other consumers in the market. As aforementioned, Chipotle as a company boasts about the possibility of 65,000 ways in which to order food, making each person own their individual order exactly how they want it. Therefore, Chipotle aligns with this consumer bases’ general beliefs in this manner. It has been established that the target market is family based, with over 40% of household having children under 18. With this information, it is safe to conclude that adults will be buying for their family. The Simmons Market Research Bureau National Consumer Survey of 2006 characterizes women in the mass affluent adult category as “career oriented” but “centered on their home and family.” This matriarchal approach paired with the affluent female point of view

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that 79.8% of their families eat meals together leads to the thought that these busy career driven women will not have time to cook and thus, 87.6% of the mass affluent market will go for fast food. On the other hand, they can afford the specialty healthy food from Chipotle. This same Simmons Research Survey concludes that 74.7% of these women try to eat healthier. While they are out they will be bringing back food for their families that will keep all of them healthy. Thus through Chipotle’s advertisement, and “Food with Integrity” promotion, they connect to major aspects of this target market’s lifestyle- remaining unique and remaining healthy. Consumer Constellation Sustainability and healthy food is not a specific staple of Chipotle, but it is a way of life. The target market of the “Food with Integrity” advertisement not only buys from sustainable restaurants like Chipotle, but keeps sustainable versions of food within their home. Since meat has been a large part of Chipotle’s efforts, it is only fair to look at the consumer market for sustainable meat products. These numbers are a product of a study about sustainability and consumers done by the Hartman Group in 2008 where participants were selected to represent the U.S. Census data of the time. According to this report, 18% of consumers purchased the sustainable version of white meat and 12% bought the sustainable version of red meat. In 2006, 18% of households were in affluent households. With economic decline and recession occurring through 2007-2008, it would be wise to consider a lower amount of affluent households at this time in 2008. This, in addition to considering the premium usually placed on sustainable items making them more likely to be purchased by the affluent market, would allow this target market to fit considerably well within the 12%-18% range provided by the original statistics. Usage benefits& behaviors The value of sustainability and maintaining individuality is something that is not only a value of the upper middle class, but also of Non-Hispanic Whites. By obtaining food from Chipotle, the consumer is doing both and remaining true to their values. When asked if they liked the trend toward healthier fast food 42% of 18=24 year olds agreed along with 49.9% of 25-34 year olds. When choosing to eat Chipotle, each of these large portions of the groups surveyed in the Simmons Survey of 2006 will align their values with their consumption. These consumers are also receiving a great value for the food that they receive from Chipotle, especially due to the fact that 38% of people representing the 2008 U.S. Census stated that they would pay 20% more for chicken while 32% said they would be willing to pay this premium for red meat. Seeing as Chipotle’s meals run between $5.00 and $8.00, this batch of consumers is saving. Chipotle’s commitment to the consumer through their strong and active dedication to sustainability within their business along with their witty advertisements that connect back to brand’s main focus allows consumers to become loyal to the brand. The restaurant continually delivers 1 ¼ pound meals for reasonable prices – especially for the target market. This consistently positive experience with the company leaves the consumer coming back for more. According to a study done by Matthew Raga and Marilyn Roberts, these consumers band together through their love of Chipotle and function in their own brand community due the sincerity of the brand and its sustainable initiatives. Through this way of business, Chipotle illustrates the power of corporate social responsibility within not only the food industry, but the business world.

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References Packaged Facts.  (2007).  The  Affluent  market  in  the  u.s..  Rockville,  Maryland:  Market  Research     Group.     Packaged  Facts.  (2009).  Consumers  and  sustainability:  food  and  beverage.  Rockville,     Maryland:  Market  Research  Group.     Packaged  Facts.  (2007).  On-­‐the-­‐go  eating  in  the  u.s.:  consumer,  foodservice,  retailing,  &  marketing     trends  .  Rockville,  Maryland:  Market  Research  Group     Ragas,  M.W.,  &  Roberts,  M.S.  (2009).  Communicating  corporate  social  responsibility  and  brand  sincerity:     a  case  study  of  chipotle  mexican  grill's  'food  with  integrity'  program  .  International  Journal  of   Strategic  Communication,  3(4),  264-­‐280.

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Target Market Analysis: Chipotle  

Perform secondary research on a specific piece of IMC Use secondary sources, bootstrapping evidence, and state all assumptions, describe th...

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