Brand Equity - “Chipotle”

About Chipotle:

Chipotle is a Mexican fast-food chain in America, which specializes in tacos and burritos. It was
founded in 1993 by Steve Ellis, has grown to over 2600 stores worldwide and serves over 1
million customers daily. Chipotle marketed themselves as “Food with Integrity” and was
committed to offering fresh meals with ethically sourced materials. They also emphasized on
sanity, interior design, service, and atmosphere.

With Chipotle chain’s popular approach to fresh preparation and assembly line service, it has
been recognized as one of the finest “fast-casual” dining experiences. The target audience of
Chipotle are the millennials some of whom are the most loyal followers of the brand, earning its
nickname ‘Chipotbae’. The following is almost cult-like that even if one thinks that Chipotle’s
burritos are overrated, they would not dare say that in front of their peers.

Chipotle has managed to create a peculiar brand personality, largely with the help of social
media, which renders it a witty (sometimes raunchy) millennial voice who is up to date on all
cultural trends. Instead of forcing a sale on their customers, they make them want to grab
Chipotle’s burrito bowl with the clever use of reference language and lingos with which
millennials highly resonate.

Chipotle faced a series of food safety incidents in 2015 due to which the brand’s businesses
suffered majorly. In spite of the incidents, the loyal fans of Chipotle could not stay away and
supported the brand through thick and thin. This shows a highly strong bond between the brand
and its customers.

Positioning:

When Chipotle entered this market, Taco Bell was a much bigger and older player in the fast
food Mexican cuisine category, with a well-established global presence. Taco Bell had
positioned themselves as an affordable and taste focused player. So, Chipotle tried to position
themselves on quality and health to differentiate from Taco Bell and other fast food players, and
have been quite successful in creating their own niche due to their sustained focus

“Food with integrity” is the main slogan which Chipotle uses to create their identity. Even though
they had faced few issues like presence of airborne bacteria in their food, they have by large
consistently undertaken various initiatives over the years to do justice to this slogan.

They use the tagline, “Real is better. Better for You, Better for People, Better for our Planet” to
showcase their commitment to a healthier offering and better service to their customers, as well
as focusing on sustainability of this planet even if it takes additional efforts. This went hand in
hand with historically unhealthy and obese American customers increasingly turning to healthier
and organic offerings when they dine out and also increasing awareness of people towards
sustainability efforts
They highly emphasize on using organic ingredients and try to differentiate their firm from other
fast food joints by advertising their offerings to their health conscious customers as nutritious
food which can be relished without compromising their taste buds, prepared only from a list of
53 natural ingredients, which can be checked by any customer from their website. They are also
one of the very few fast food players to completely shun artificial flavors, colours and
preservatives.

They also showcase their commitment to always give their customers freshly prepared food by
eliminating microwaves, freezers and can openers from their restaurants. They commit to goals
on local and organic produce, by maintaining a strict quality control on their procurement
shunning meat from poultry with added hormones. They also show themselves as a
sustainability focused company with initiatives such as diverting 50% of their waste from landfills
and by recycling their used plastic gloves into waste bags.

Advertising Strategy:

Chipotle chose to focus on non-traditional avenues of marketing, choosing to spread the word
through “cause marketing” where they promote messages of sustainability and responsible
agricultural practices as opposed to directly promoting their products. With an advertising
budget as small as 2% of their revenue, Chipotle has historically been known for creative ways
of marketing their brand.

While they’re print and traditional medium advertisements were notably quirky, Chipotle
focussed on making the most of social media marketing and using video content. Some of their
most unorthodox tactics include:

1. A haiku contest on Twitter and Facebook expressing one’s love for the burrito

2. A satirical web series that exposed big agriculture

3. A 2-minute ad titled “Back to the Start” that became so popular it was screened at the
Grammys

4. Free burritos for life for pro-athletes who love Chipotle

5. A series of free local music festivals called “Cultivate” across the country

6. A column in the Huffington Post about ethically sourced food

Their strategy is to embrace the trends of social media and approach every traditional method in
the book a little differently. For example, while most brands might offer free merchandise to
celebrities in order to endorse them, Chipotle chose to send a free-burritos-for-life card to any
pro-athlete that expressed a liking for Chipotle without any formal guarantee of endorsement in
return.

Chipotle has kept its brand relatable to its target customers by adapting to the current trends
without deviating from their commitment to deliver fresh, healthy, ethically sourced and yet
delicious meals to their customers.
Measuring Brand Equity:

Keller’s Brand Equity Model:

Kelly’s Brand Equity Model states that in order to build a strong brand, you must shape how
customers think and feel about your product. You have to build the right type of experiences
around your brand so that customers have specific, positive thoughts, feelings, beliefs, opinions,
and perceptions about it.

Identity: This step which is at the base of the pyramid talks all about Brand Awareness. The
basic question here is “Who are you to your target consumers?” Chipotle has a major target
audience who are millennials, specifically the people who are young professionals in the age
range of 25-35. The millennials are the driving force towards Chipotle’s growth since millennials
tend to be more health-conscious. With the added focus on real ingredients which is inherent in
the brand, Chipotle is able to target millennials successfully based on their personality and
characteristics. Although Chipotle positioned itself as a healthy alternative to fast food which
worked for them in their favor for a long time, the E. coli outbreak incident tarnished the image
of Chipotle, and its Food quality and trustworthiness rating declined.

Meaning: The second base of the pyramid emphasizes Brand Meaning which basically
answers the question of “What are you?” The goal is to identify what your brand means and
stands for and communicate the same. The 2 main heads under brand meaning are
performance and imagery. Performance identifies how well your product meets your consumer’s
needs referring to reliability, effectiveness, empathy, and price. When Chipotle started out in
1993 the idea was to represent the fact that food that is served fast need not necessarily be fast
food. The brand is recognized for its quickness and efficiency. The brand imagery of Chipotle
reflects social responsibility which is due to Chipotle’s focus on improving the environment and
assisting in charitable foundations. The brand’s focus has majorly been to provide healthy
quality food which is accessible to all which has added to its imagery as well.

Response: The Brand Response stage focuses on asking “What does the customer think and
feel about you?” The 2 categories under it are judgement and feelings. In order to judge a
brand, customers take into account quality, credibility, consideration and superiority. Chipotle
was perceived to be a quality brand but its image got tainted with the E. Coli breakout. Although
the brand is still perceived to have good quality in terms of healthiness and freshness, but the
quality care has faced a bad reputation and hence Chipotle needs to work upon building its
credibility. The customers are willing to pay a little on the higher side as they consider Chipotle
to be high quality. Because of Chipotle’s transparency about how their food is prepared,
customers find the brand superior to its competitors. Tapping on the notion that one needs to
have some degree of self-respect to be health conscious even when it costs more than other
fast food joints, Chipotle has successfully been able to focus on self-respect feeling under brand
response.
Relationships: The final step of pyramid highlights Brand Resonance which asks the question
“what kind of a bond will consumers have with you?” It consists of behavioral loyalty, attitudinal
attachment, sense of community and active engagement. Chipotle has a high loyalty given the
fact that health conscious millennials who are into fitness or a healthy lifestyle overall and also
resonate with the brand visit Chipotle on a consistent basis. Attitudinal attachment and sense of
community do not have a scope to be built in the case of Chipotle since the product offerings
are food related and not any premium service. With the social media presence of Chipotle, there
is active engagement of customers with the brand but it has a scope to improve further.

Aaker Brand Equity Model:

Brand Awareness: To measure Brand Awareness, we look at recognition and recall, to

determine the customer perception about our brand. In the case of Chipotle, we can figure out if
packaging and aesthetics of the brand would induce recognition in the minds of consumers, and
if the core elements of the brand like logo, taglines and symbols provide recall value to the
brand. Chipotle, which has its Aztec roots has produced brand awareness among customers.
The logo also indicates spice - which is indicative of Mexican food in general, also provides
recall value for customers. Adding to taste, their organic sourcing of raw materials provides
authenticity to the brand, also creating a differential recognition among customers.

Brand Loyalty: Loyalty measures the culmination of trust and connection that customers
associate with the brand. Chipotle after the crisis, their brand loyalty was put to test, as
customers felt betrayed, and there was a loss in customers. To preserve the existing
connection, and to rebuild trust, Chipotle gave away 3 million burritos away for free to win
customers back. It also leveraged its personal relations with customers in its core value and by
being transparent and striving to improve their image with their loyal followers.

Brand Associations: We talk about what aspects of Chipotle are associated by the customers
with the brand, and how this could be used to measure uniqueness and favorability of the brand.
For Chipotle, big burritos, fresh, organic ingredients and casual dining are some of the terms
associated with it. The dining experience in its outlets was also a point of association for
customers as getting to smell and see the food being prepared aided in customers’ appetite and
thereby building the brand association.

Brand Asset Valuator Model:

Differentiation: The comparison with competition and how consumers perceive your brand
compared to the other brand is a great indicator of how the brand is performing in the market.
With its high-quality Mexican food, organically sourced raw materials and casual dining
experience, Chipotle has made its uniqueness visible and quantifiable by the consumers and
provides it with a strong Brand Asset value.

Relevance: How a customer perceives the product and why they would choose to buy it is one
of the key measures of brand equity, and there is a direct correlation between the brand
relevance and market penetration. With its fast food offerings, customers requesting for newer
places to be opened for their love of burritos and its health-conscious idea of food, it provides
customers with a unique value proposition and would be a good indicator of its brand asset.

Esteem: Esteem is the perceived quality and customer perceptions about growing popularity of
a brand. The brand equity here is measured using the perception of two factors: quality and
popularity. With its Food with Integrity, customers feel safe about the food as it is cooked in front
of them and provides them with a sense of security. This aspect, along with people’s fascination
with Burritos, is popular fast food with also some organic features.

Knowledge: Knowledge measures the extent of the customer’s awareness of the brand and
understanding of its identity. Knowledge implies that customers are aware of what the brand
offers and understand what it stands for. With its core values of organic sourcing and food with
integrity, the customers understand what Chipotle means to them and are happy with the
offerings and taste and personal relations.