Marketing Analysis

Chipotle vs. Moe’s Marketing Analysis Ashley Abbott and Lee Templeton

Introduction

When it comes to fast Mexican inspired dining, most Americans have a preference between Moe’s Southwest Grill and Chipotle Mexican Grill. The debate over which restaurant is superior typically stems from the differing tastes of food and menu options that the two restaurants offer. However, the differences of Chipotle and Moe’s consist of more than just the presence of queso or cilantro-lime rice.

When both restaurants are examined from a service design perspective, the superior restaurant is undoubtedly Chipotle because of their commitment to serving a quality product, providing a positive customer experience, and dedication to cleanliness. Moe’s poor quality of food, unqualified employees, and cheaper atmosphere contribute to its second place ranking behind Chipotle. The companies are compared on the basis of the three parts of the service design model: interaction, environment, and outcome in order to properly assess their overall quality.

Background of Moe’s Southwest Grill

Moe’s Southwest Grill was started back in 2000 in Atlanta, Georgia. They are a quick-service restaurant serving “TexMex” or South Western food. Their mission statement is to “provide a one-of-akind experience that energizes everyone with an enthusiastic welcome, exceptional service, awesome food, killer tunes and an unforgettable time.” The vision of the company is to “the deliver the best customizable Southwestern food and an irreverent brand culture to communities around the world, making Moe’s Southwest Grill the choice restaurant for guests, franchisees and associates.” Moe’s is corporately operated and is owned by FOCUS Brand Inc., which is under the management of Roark Capital Group. Since joining with FOCUS Brand Inc. in 2013, the company has increased from 500 restaurant locations to 550 restaurant locations.

As a company, Moe’s places a significant emphasis on creating a certain atmosphere and experience for customers. Whenever customers walk in the doors of Moe’s, they are greeted with an enthusiastic employee yelling “Welcome to Moe’s!” The corporation of Moe’s stands behind this trademark quote because they believes it embodies the welcoming environment they are trying to create.

There are 20 different items on the menu, named after pop-culture inspired references. The menu provides a lot of variety and lots of options for vegetarians, gluten-free customers, and low-calorie eaters. Moe’s aims to be transparent with what ingredients are in their food and where it is coming from. Recently, the

have started a commitment to providing more organic food items with reduced amounts of hormones and MSG’s.

Interaction

Chipotle opened its first restaurant in 1993 in Denver, Colorado by current CEO Steve Ells. It began with the simple mission of proving that “food served fast didn’t have to be a ‘fast-food’ experience.” Ells had no intentions of forming a chain but rather wanted to build a place where people could eat “delicious food made of the finest ingredients quickly and affordably.” From the beginning, the main focus of Chipotle was the quality of the “Southwestern” food they served. Chipotle coined the phrase “Food With Integrity” to market their philosophy of using the freshest ingredients. The restaurant revolutionized the industry of quick-service restaurants because of its unique cooking techniques, use of high-quality raw ingredients, simplistic interior design, and an ordering process that mimicked that of a factory assembly line.

The popularity of Chipotle has caused the company to grow rapidly across the country and there are currently 1,600 restaurant locations. Despite its rapid growth, Chipotle as a corporation remains determined to stay dedicated to hiring qualified employees that share the same vision for high-quality food as they do. The strict hiring requirements help ensure that every Chipotle restaurant location cultivates a unique and genuine environment.

Interaction

When walking into Moe’s, the first interaction customers have with employees is the “Welcome to Moe's!” catch phrase yelled immediately upon entrance. As a result of the assembly-line nature of the restaurant, employees have a significant amount of interaction time with customers. Several employees are stationed throughout the assembly process so the customer will on average interact with four employees. Because of the increased communication between employees and customers, it should important to hire competent and qualified employees to maintain a positive restaurant experience for customers. The official Moe’s corporate website describes potential Moe’s employees to have a “super fun, energetic personality, high standard for excellence, [and a] desire to give back.” The work atmosphere they emphasize is one where employees can “be themselves, achieve their goals and

experience success according to their own unique definition.” The application is provided on the website and consists of only standard legal and logistics forms for the applicant to fill out. There is no written answer portion or anywhere for the applicant to describe their personality or goals. Several review sites like Yelp, Glassdoor, and Indeed list Moe’s to have a noticeably high turnover rate of employees. The corporate website lists a 21- day training period for new employees and the only concrete personal requirement for front-line employees is that they are at least 16 years old. With such minimal training and hiring requirements, it is understandable why some employees would not be intrinsically motivated to work well and treat employees with quality service.

According to Yelp, the main customer complaints about the Moe’s restaurant in Midtown Atlanta, Georgia involved their interactions with the employees. The top complaints consisted of comments about the lack of positive communication between the employees and customers while they were making their food or checking them out at the register. The restaurant, which serves as a base analysis of most in the area, received a total of 3/5 stars.

The service profit chain model links internal service quality to employee satisfaction which links to employee retention and productivity. One of the ways of assessing internal service quality for a specific restaurant is to explore complaints employees have about working conditions. The negative working conditions listed by employees of Moe’s are compared in the chart below to the negative working conditions of employees at Chipotle (according to Glassdoor).

Moe’s Employee Complaints

Chipotle Employee Complaints

Low wages, standard food service hours

Not paid enough for amount of work expected

Lack of communication skills between

Very fast paced environment

everyone Usually had to work most nights and weekends

Values can sometimes feel like they are getting in the way of productivity

Shifts can be busy, and one employee can have

Only receive one free meal per shift

many tasks Not enough employees to complete tasks

Management chooses favorites

In the service profit chain model, the employee satisfaction, retention, and productivity directly affects the external service value, which includes links from customer satisfaction to customer loyalty and revenue growth. The complaints between Moe’s customers and Chipotle customers are compared side by

side, and in reference to the employee complaints to demonstrate that happier employees lead to happier customers.

Moe’s Customer Complaints

Chipotle Customer Complaints

Employees were too slow

Too expensive for the amount of food

Employees treated customers rudely

Waited in line too long

Facilities were not clean enough

Kitchen was too slow cooking ingredients

Quality of food prepared was poor

The restaurant seemed over crowded

Was not greeted upon arrival

Charged extra for certain items (guacamole)

In comparison to Moe’s Southwest Grill, Chipotle has a similar assembly-line process for customers to order their food. Each customer will interact with an average of four employees during each visit to the restaurant. The importance of hiring well-prepared employees is crucial to the happiness of customers, management, and other front line employees. Chipotle strives to employee individuals who believe in the mission of the company to provide “food with integrity” and be successful in life to achieve their goals. The application form to apply to Chipotle is not specifically listed on the website for the general public because the hiring process consists of a lengthy, personal based questionnaire along with an in-person interview process. Some of the key words listed on the Chipotle website for future employees are “conscientious, presentable, ambitious, honest, and infectiously enthusiastic.” According to the Chipotle corporate website, the company is unlike other fast food companies because of the fact that nearly all of the leaders have worked their way up from base-line employees to receive management positions. The marketing concepts of role ambiguity and employee identification explain how Chipotle employees prove to be happier and more productive overall. Because of the in-depth application and interview process, employees are only selected if they identify with the values of the company. An employee will be more intrinsically motivated to work harder and more efficiently if they believe in the core values of the work they are doing. In addition, an employee who has worked their way up through the company to a leadership position will not struggle with role ambiguity because of their deeper understanding of the company.

Comparing the internal and external service qualities of Chipotle and Moe’s demonstrates that Chipotle is the superior company based on the more positive experiences of their employees and the customers that visit their restaurants.

Environment Similar to the fun and up-beat personality that Moe’s strives to hire in their staff members, the company aims to provide a laid-back and creative atmosphere. According to a detailed market analysis on the Moe’s franchise by The Man Eater Newspaper, Moe’s statement vibrant colors of dark red and yellow were specifically picked to give the brand a lively trademark image. Artistic images of “oldies” rock musicians hang on the walls of every restaurant and music from the 60s, 70s, and 80s plays throughout the restaurant. The large menu wall is clearly displayed in large fonts and colors next to the beginning of the order assembly line. The names on the menu coincide with the eccentric atmosphere of the website, consisting of titles like “The Homewrecker”, “Joey Bag of Donuts”, and “Moo Moo Mr. Cow.” A survey we conducted of 10 Auburn students about their preferences between Chipotle and Moe’s included questions on the overall atmosphere, cleanliness, and personality between the two companies.

Question

Moe’s

Chipotle

Better quality of food?

0/10

10/10

Cleaner facilities?

1/10

9/10

Better employee interactions?

3/10

7/10

Less expensive to eat at?

10/10

0/10

Better marketing strategy?

3/10

7/10

Which do you feel more loyal

10/10

10/10

1/10

9/10

to?

Which personality do you identify more with?

According to our survey, students consider Chipotle to have a more positive overall atmosphere than Chipotle. The image that Chipotle CEO Steve Ells had for Chipotle is that of a clean, modern, and efficient environment that stimulates creativity through design and architectural inspiration. According to The Daily Meal restaurant review website, Ells hired one of his old college friends, Bruce Gueswel, to

design the first location. Gueswel still serves as one of the head architects for the company and strives to design every restaurant with the same clean and precise décor. The color scheme for the company consists of neutral gray and wood colors, along with a signature deep red accent color. The simplified color combination mirrors the simplified menu that is posted at the top of the length of the ordering assembly line. The options for each menu item are mentioned in clean letters, and do not have creative titles like Moe’s provides on their menu. Because Chipotle is hiring employees that are more intrinsically motivated, the bathrooms and facilities in the restaurant tend to be cleaner than the facilities at Moe’s. The participants of the Auburn survey support this claim with a 90% approval rate of Chipotle having cleaner facilities. The low cleanliness perception that most people have about Moe’s can be partially attributed to the variety of menu items that need to be cooked on the grill. Pieces of food can drop from the grill or from the path employees take from the assembly station to the grilling machines. Additionally, 90% of participants said they identify more with the values and personality of Chipotle. Although Moe’s openly demonstrates their passion for a fun and welcoming environment, the “food with integrity” mission of Chipotle translates well to customers when it is combined with their modern and inventive restaurant atmosphere.

Outcome Approximately 100% of participants that answered survey questions about the Auburn Moe’s and Chipotle restaurants believed that the food quality at Chipotle is higher than the food quality of Moe’s.

Both restaurants have recently begun more public campaigns about their dedication to providing more natural ingredients. The entire mission of Chipotle is “Food With Integrity” and the company at its core strives to provide food that has been sustainably produced. According to Moe’s corporate website, the company is striving to “Feed the MoeMent” and provide the ingredients to all of their products. Moe’s claims to provide fresh ingredients at all of its restaurants as well as menu options for vegetarian and gluten-free eaters. Moe’s website has several sections dedicated to the fresh quality of their food, but it does not post the ingredients of their menu options. Food critic and health evaluating website FoodBabe.com revealed that Moe’s does not provide as many fresh products as they claim to provide.

Most of their products that they claim are “sustainable” and “organic” actually provide significant amounts of GMOs, MSGs, preservatives, hormones, and antibiotics in them. While the food at Chipotle contains some preservatives and GMOs, the corporation is striving to be open about their ingredients.

According to an article in the Huffington Post, Ells was quoted to say that the company is posting what products they serve contain GMOs. He says, “it will not be long before Chipotle is GMO-free.”

Suggestions Overall, Chipotle is the superior company when compared to Moe’s on a service quality standpoint. Moe’s main problem they could improve upon is their employee selection process. The more intrinsically motivated their employees are, the more positive the restaurant experience will be for customers. On a corporate level, Moe’s should strive to actually provide healthier substances on their menus since they have been campaigning for it in their “Feed the MoeMent” project. Chipotle as a company understands the service profit chain in reference to the fact that employee satisfaction will lead to customer satisfaction. Their encouragement of lower-level employees to work their way through the company up to management positions, provides an environment that is conducive to personal growth.

While their food is actually more natural and sustainable compared to Moe’s, Chipotle realizes that the quality of their food is still not where it needs to be. However, the main difference with Chipotle and Moe’s in that regard is that Chipotle has been open with the public about their flaws and with their intent to correct them. Moe’s and Chipotle are two similar companies but Chipotle has surpassed Moe’s in almost every area of the service design model.

References http://www.huffingtonpost.com/2013/07/12/steve-ells-chipotle-20thanniversary_n_3583927.html https://nickirvingpr.wordpress.com/2014/05/26/chipotle/ http://www.huffingtonpost.com/the-daily-meal/6-things-you-didnt-know-a_b_5232706.html http://www.thedailymeal.com/10-things-you-didn-t-know-about-chipotle-mexican-grillslideshow?utm_source=huffington %2Bpost&utm_medium=partner&utm_campaign=chipotle#13 http://chipotle.com/food-with-integrity http://www.glassdoor.com/Reviews/Moe-s-Southwest-Grill-Reviews-E15970.htm http://www.glassdoor.com/Reviews/Chipotle-Reviews-E15228.htm