Chipotle Mexican Grill, often simply called “Chipotle”, is an American fast-casual restaurant chain that serves a simple menu of Mexican-inspired food. The name “Chipotle” came from smoked hot chilli pepper, Chipotle, used in traditional Mexican cooking. It is also used in several other items offered by the brand such as tacos, burrito bowls, salads, and other side dishes.
The case study is about the marketing strategies of Chipotle including its target market, marketing mix, digital marketing, and various unique marketing strategies. So without any further ado, let’s begin by understanding about Chipotle.
Chipotle or ‘Chipotbae’ as mentioned by its fans, is run by Steve Ells – a classically trained chef of San Francisco. Whilst he had problems with funding in the beginning, in 1993, he was able to set up a simple Burrito store in Colorado, near the University of Denver.
After that, Chipotle never looked back. It serves a whopping 1 million customers a day as it now has more than 2000 stores at different locations. The brand has always been popular amongst the Millenials and has won their abundant loyalty over any other food chain.
People even think it’s cool to love Chipotle, to tweet about this brand, to advertise Chipotle on their clothing, and to make an effort of waiting in a queue for it which matters the most.
It invests maximum budget on marketing and advertising to create and spread brand awareness across its target market. Let us get to know the basics of the target market specifically suitable for Chipotle.
Target Market of Chipotle
Chipotle’s ideal target market is college students and younger millennial professionals aged 18 – 30. It targets customers who belong to urban areas who want quick food but not fast food.
In today’s society, there is a trend of eating healthy and nutritious and millennials like to keep up with the trend. During work crunch, a healthy alternative to cooking would be a fast-casual restaurant Chipotle against Wendy’s and McDonald’s due to their recent publicly exposed health risks.
Chipotle can gain customers with their philosophy of “Food with Integrity” because this age group generally has a disposable income and are educated about well-balanced diets who like to stay in a routine.
Hence choosing Chipotle every time they have a time crisis for cooking or eating food. It can attract an enormous following of loyal customers who are often in the need of a quick bite to eat with friends. Fresh food and a fresh atmosphere can draw the attention of the target customers.
The brand has successfully interpreted its target audience, let us see how Chipotle organized its 4Ps of the marketing mix.
Marketing Mix of Chipotle
Marketing Mix can be defined as the set of tools related to marketing that the firm uses to pursue its marketing objectives in the target market. Chipotle also used the 4Ps of the marketing mix in a very unique way. So, let’s take a closer look.
Product Strategy of Chipotle
Chipotle is best known for its signature burrito, always served hot. It offers GMO-Free, Cage-Free poultry, grass-fed beef, and locally farm-grown vegetables and toppings. The toppings include salsa, sour cream, corn, lettuce, guacamole or cheese.
Customers love the fact that they are getting fresh and healthy ingredients in their burritos. Natural ingredients make the food even better. These two, very appealing factors are inculcated to make the customer base come back to the store and thus also making them loyal in the process.
Customers can also make a burrito bowl, crispy tacos, or soft tacos. To assure the quality of the food, the customized product goes through an assembly line in front of the customer giving them the option of choosing side chips and salsa or chips and guacamole.
Finally, the customer has a choice of a variety of beverages including their signature Patron margaritas, Corona Beer, bottled drinks, and soft drinks.
Price Strategy of Chipotle
Chipotle uses a value pricing strategy. Its prices are just about the same as compared to other fast-casual places. Its food is usually in demand as compared to others but has always maintained a constant rate.
The quality of the food ingredients and where these ingredients come from are also a factor in determining the pricing of its foods.
Chipotle has recently raised the prices of its foods. The cost of its products can range anywhere from $6.50 for the chicken to $7.20 for steak or barbacoa. Guacamole costs an extra $2.00 the rest of the options for filling is free.
Options for sides have homemade chips for $1.30 with the addition of salsa for $.70 or guacamole for $1.95. Beverage prices can range from $1.65 for a small soft drink to $7.15 for their signature Patron margarita.
It offers a healthy meal ranging from $8.00 to $12.00 depending on one’s specific preferences.
Place & Distribution Strategy of Chipotle
The place of the selling of their customizable food offerings is through two main channels i.e. in the main stores and through their application via phone orders or even faxing them but they are to be collected from the restaurant.
Chipotle is spread across 1,700 locations in the U.S, Canada, and Europe. Many of these locations are near college campuses, urban centres, basically where the working-class lives.
Catering service is also offered by them where they will come and set up a “make your own burrito” station at any location and can handle anywhere from 15 to 200 people. It makes itself much more available and appealing to customers allowing them to get the product from other locations besides just at their retail stores.
Promotion Strategy of Chipotle
Variety of Promotions is done by the company by giving out free or discounted food to its customers during a specific period of the year.
Word of mouth is what Chipotle relies on and expects the same satisfied customers to come back to them. It offers discounts and gives out coupons on Facebook and Twitter. It annually has a Boorito event where it gives discounted burritos.
The brand uses only 2% of its revenue on advertising, many of its awareness comes from word of mouth after previous customers have tried their restaurant. They have very few commercials, and rarely use billboards unless in the opening of a new location.
It also relies on social media, to create a buzz when it comes to its food items. It also offers direct customer service like mentioning a customer who may have been unsatisfied with their experience.
After organizing the suitable marketing tools for the brand, they work extensively on their digital presence as the customers are mostly online. So let us now see Chipotle’s marketing strategy.
Marketing Strategy of Chipotle
Chipotle focuses on non-traditional advertising and majorly relies upon the “word of mouth” marketing strategy. This is working very well for the brand as in 2014, Chipotle’s store sales were up by 13.4% and eventually their revenue by 24.4%, that is $904,200,000 of money from the burrito.
So let’s go through its strategic marketing moves in the coming sections.
Digital Marketing Strategy of Chipotle
Digital presence is how the brand appears online. Chipotle, took care of what their customers find when they search “Chipotle” on the internet via websites, social media handles, and their online reviews. Let us get to know more about how popular they are on the internet.
Chipotle has a consistent presence across Facebook, Twitter, YouTube, Pinterest, Linked In, and Instagram. It has 1.1M followers on Instagram, 3.3M on Facebook, 1M followers on Twitter, 1 Lakh on LinkedIn, and Pinterest with 11k followers and 7.8M monthly views. Their content is standard across all platforms to target the same customer for brand recall.
An interesting strategy is the timing they post evenly on all days of the week. Usually, they post at mealtimes to attract a hungry customer.
Being Active on Social Media Channels
Millennials were the target market for the brand and they are found mostly online so they were targeted through social media platforms.
Consistently they posted across Facebook, Twitter, Instagram, Youtube, Pinterest, and LinkedIn. Content is written in the latest lingo form appearing natural and clever to seem like they are your best friend.
Its statistics show that they respond to 83% of Facebook posts and 90% on Twitter. It tries to engage with them personally and in genuine conversations.
Chipotle became the first major restaurant to market itself on Tiktok. Very creatively they came up with the #ChipotleLidFlip video challenge which encourages followers to try to flip their lids over their Chipotle bowls. This attracted 276 million views on over 110,000 video submissions only within the first week.
Ace in Content Marketing
Chipotle follows unique content marketing. Like their “Cultivating Thought Campaign” was about putting something worth reading on their cups and food bags. They collaborated with popular authors to execute this campaign. This idea was very simple and it showed that the company understands the power of storytelling.
The company also focuses on creating exciting content through the use of music and animation graphics. It produced a mobile game for iOS users called “The Scarecrow” and an original show series titled “Farmed and Dangerous.” This gained attention from the public on YouTube with millions of views.
All of their content is related to its core value of “Food with Integrity”. This helps its customers stay intact about how responsible the brand is and where their food comes from.
Hosting Festivals and Events
The Cultivate Festival is a series of festivals across America that includes celebrity chef demonstrations and experiences to inform the attendees about organic food resources.
The media coverage around the events has promoted strong brand perception for those 3,00,000 attendees across Chicago, Denver, and San Francisco and even the non-attendees.
Competition Attracts Customers
Chipotle has always been creative and does out-of-the-box things so they came up with a pretty smart way to get people to express their deep love for burritos by running a contest on Twitter and Facebook. They asked people to post Haiku to win prizes and the top 20 poems will win a dinner for two.
Free Food & CSR
Chipotle uses a different strategy from its competitors. Instead of sending them to celebrities and influencers to boost the image, it banks on professional athletes.
Whenever a professional athlete expresses joy for their product, they are sent a card which entitles them to a free burrito a day for the rest of their life. Hence, everyone believes the professional athlete’s choice that their product is good, as there is no advertising or monetary exchange involved.
Chipotle gave away 100,000 free burritos to healthcare workers, in honour of National Burrito Day on April 2. By doing this they expressed their gratitude to brave individuals fighting the frontlines amidst the COVID-19 outbreak.
These unique marketing strategies were a successful one for the brand which has helped the company grow exceptionally. Let us now conclude this case study on Chipotle in the coming section.
In this case study, we got to know about the marketing strategies of Chipotle which could be by using the correct mode to connect with their target audience. The brand content should contain topics that are relatable and exciting to get a good engagement rate.
Its social media accounts have attracted a lot of customers. Content that is personalized and consistent goes a long way in building customer trust. It posts content during mealtime which is a good idea as it attracts hungry customers.
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