A MEDIA PLAN WITH INTEGRITY: the plan that will revolUtionize chipotle
EMILY BARKER JORDAN FOX
TABLE OF CONTENTS EXECUTIVE SUMMARY SITUATION ANALYSIS
1
Marketing Objectives Market Analysis Competition Brand History Target Audience Geography Purchase Cycle and Timing Media Mix
3 5 6 7 7 7 9 10
CREATIVE BRIEF
13
OBJECTIVES, STATEGIES, AND RATIONALES Target Audience A Day in the Life Media Mix PNM Grid Trends Reach and Frequency Budget Media Flight Plan Sales Geography Schedule and Timing Sales Promotions
14 16 17 18 24 26 28 32 35 36
WORKS CITED
Works Referenced
APPENDIX I
Primary Research
APPENDIX II:
Media Flight Plan
APPENDIX III:
Target Research: Simmons
APPENDIX IV:
Media Usage Research: Simmons
APPENDIX V:
Secondary Sources
EXECUTIVE SUMMARY THE PROBLEM:
Chipotle is a respected fast casual chain that continues to grow rapidly. However, it’s media spending is only a fraction of that of the category leaders, and it is still a small player in terms of market share.
THE SOLUTION:
A defensive plan with a much larger budget will allow Chipotle to compete more evenly within the market, while still allocating money efficiently, as it is easier to increase usership than to convert new users.
TARGET AUDIENCE:
The primary target is 18-34 year old Caucasian adults, a broad target that is representative of Chipotle’s wide appeal. The secondary target is more specifically defined as Asian adults aged 18-34 that live in the Pacific region.
MEDIA:
Nationally, the campaign will feature cable television, radio, magazine, and internet. Spot markets will focus on spot network television, radio, transit advertising and event promotions. The majority of the budget will be spent in cable television and national radio.
REACH AND FREQUENCY:
The campaign will contain a minimum reach and frequency of 70.4 and 3 nationally. Maximum reach and frequency will peak during our launch month and two promotional months (February, March, and August), where the national reach and frequency will be 84.2 and 4.3.
1
BUDGET AND GEOGRAPHY:
The total amount spent for both national and spot media will be $19,984,800. It will be broken up based on an 80/20 budget split for national and spot media. The ten spot markets chosen represent 18.2% of the national population, and were chosen based on high consumption of Chipotle and a high concentration of the target demographics in each market.
SCHEDULE:
The campaign will launch in February, in order for the product to be present in consumer’s minds leading into the spring, when consumption increases. This will be a continuous national campaign with a pulsing spot presence. Spot media will run every other month beginning in June, after the initial two-month national and spot launch.
PROMOTIONS:
Two promotions will take place during the course of the campaign. Chipotle will be a premier sponsor of South by Southwest, a leading music, film, and interactive conference and festival held in Austin in March. Chipotle’s customized sponsorship will include their logo throughout the event, a Chipotle food truck selling food to concert-goers, and Chipotle sampling at select exclusive parties. Chipotle will also sponsor a burrito eating contest on college campuses. To celebrate back to school the contests will take place at the end of August on campuses in each of the spot cities.
2
SITUATION ANALYSIS MARKETING OBJECTIVES:
PRODUCT:
Chipotle is a Mexican-inspired fast-casual restaurant. Its focused menu has limited options, with an emphasis on burritos and tacos. The burritos are completely customizable however, through an assembly line style of preparation. Customers can choose from four different varieties of meat and salsas, two types of rice and beans, cheese, sour cream, and guacamole. Burritos are also available in bowl or salad form. While burritos are the focus, quesadillas and chips are available as sides. There is a kid’s menu, which features the same options, but in smaller portions. Some locations also offer beer and wine or breakfast, like chorizo, potatoes, and pozole soup. The majority of Chipotle’s menu is gluten-free, while vegetarian and vegan choices are also available. What sets the Chipotle product apart is high-quality ingredients. The meat is carefully seasoned and marinated, the rice is infused with fresh cilantro, and sliced peppers and onions are sautéed in oregano. The guacamole and salsa are fresh made in stores. Even the little details are attended to every day: fresh cheese is grated and 100% cultured cream is whipped for sour cream. “Food with integrity” is Chipotle’s defining principle. This refers to the “commitment to finding the very best ingredients raised with respect for the animals, the environment and the farmers” (Chipotle Website). They believe in locally sourced ingredients and naturally raised meat. By engaging in sustainable farming practices, Chipotle is able to achieve high-quality food while also setting themselves apart from the competition.
PRICE:
Like the majority of fast-casual chains, Chipotle is inexpensive, with all menu items priced under $10. However, Chipotle is on the more expensive side of fast-casual, charging slightly more than competitors for similar items and up-charging add-ons like guacamole. Take the Chicken Burrito. Qdoba Grilled Chicken Burrito: $7.79 Chipotle Burrito with Chicken: $6.89 Moe’s Southwest Grill Chicken Burrito: $6.59 3
Au Bon Pain Mayan Chicken Bowl: $6.49 Subway Chipotle Chicken $3.89
PLACE:
The first Chipotle opened in Denver in 1993, and expanded to other states by 1999. Today Chipotle has 1,230 locations in 41 states and continues to expand. There is limited penetration in many states however, which is an opportunity for growth in the future.
PROMOTION:
Chipotle creates all ads in-house and practices a very grassroots style of advertising. It spends less than 1% of total revenue on advertising versus 4% or more by larger competitors. In fact, Chipotle spends less in a year than McDonald’s does in 48 hours. Chipotle focuses on billboard and radio advertising, in which it promotes fresh ingredients with a dash of irony. (Source: Burrito Buzz--and so few ads)
Chipotle has always been promotionally driven. During the Timothy McVeigh Oklahoma City Bombing Trial, Chipotle burritos were regularly provided. The practice of sampling has continued over the years. When Chipotle opened locations in New York City, 6,000 free burritos were given out. Each Halloween, Chipotle sponsors “boo-rito”, in which people who dress up in the year’s theme receive discounted burritos. In 2011, Chipotle released its first national commercial, an animated film entitled “Back From the Start”. The two minute spot focused on sustainability and features a Willie Nelson song. It was released on YouTube in August, and was first aired on television for the Grammys six months later. The interesting concept and high-profile media buy generated significant buzz. (Source:Chipotle Airs New Ad, Steals Grammy Spotlight)
Chipotle has also added event marketing and social to the mix. In 2011, it hosted Cultivate Chicago, their inaugural festival of food, music, and ideas. It generates original online content, especially videos and music and invites people to share. Chipotle also launched the Farm Team, which aggregates influencers most passionate about “Food With Integrity,” which is shared with their networks.
4
MARKET ANALYSIS: FAST CASUAL RESTAURANTS
(Source: Mintel “Fast Casual Restaurants – US- October 2011”)
The fast casual restaurant market is fairly new within the dining out-of-home category. As a whole, the category grossed about $24 million in 2011, a thirty-five percent increase in sales from 2006. Young consumers within the category are very influential in its overall popularity. Over sixty percent of both the 18-24 and 25-34 year old markets dine within the fast casual restaurant category. Demographics that are the highest for eating at fast casual restaurants include 18-24 year olds, affluent household, and Asians. It is projected to continue growing significantly within the next few years.
Within the fast casual market there are three main segments: bakery, traditional, and ethnic. Ethnic is by far the category leader with a 37.8% sales increase in 2010 alone. Stores in this segment include Chipotle, Qdoba, and Pei Wei diner, ranging from Mexican to Asian cuisine. One of the unifying product claims throughout all three segments is that products are made using fresh ingredients. These establishments usually have “signature” items as well, often containing “fat-free” or “gluten-free” ingredients. Qualities that consumers find the most important within fast casual establishments are taste and quality of food. Over fifty percent of consumers claim that they also want what they are purchasing to be of value for what they are spending. Freshness is another attribute that consumers look for in a fast casual restaurant. 5
COMPETITION
Fast casual is a unique market within the dining out-of-home category. It is unique because it has many indirect competitors ranging from family or formal restaurants to fast food establishments. We have chosen to define direct competitors as those only within the fast casual segment with similar sandwich-like offerings, specifically Subway, Quizno’s, CiCi’s, Cosi, Au Bon Pain, and Qdoba. Competitors ranged in size, with major international chains like Subway and other smaller brands like Qdoba. Each has a unique niche in the market based on price and healthy offerings.
PERCEPTUAL MAP expensive
Cosi Au Bon Pain Chipotle Qdoba
unhealthy
healthy
Quizno’s
Subway
CiCi’s
inexpensive
6
BRAND HISTORY:
Steve Ells had a vision: to offer high-quality food, affordable prices, and fast service. It was with this vision that he opened the first Chipotle in Dever in 1993. He started off small in an 880 square foot location, but business took off. In 1999, Chipotle expanded to other states and went national by 2006. Today it has revenues of $2.27 billion and continues to grow, both domestically and internationally. Chipotle’s mantra of “food with integrity” guides everything it does, and has allowed it to become a leader in sustainable farming practices and quality ingredients.
TARGET AUDIENCE:
Primary Target •Gender: Men and Women •Age: 18-34 year olds •Race: Caucasian •Marital Status: Never Married •Spike in usage among college students Secondary Target •Gender: Men and Women •Age: 18-34 year olds •Race: Asian •Location: Pacific region (Source: Simmons Population Survey, 2009)
GEOGRAPHY:
Chipotle is an international brand, sold in forty-one states throughout America. Currently the brand has the most growth potential in the Pacific, Southeast, and East Central regions with a spike in usage in Texas. Even though the Southwest was not found within the top three regions Texas is an outlier due to its cultural cuisine preferences toward spicy, Mexican influenced foods, and previous successful Chipotle promotions. Although sales are strong across the country, these four regions are above average in Chipotle consumption, have the greatest number of Chipotle stores, and contain the largest populations of the target demographic. Due to these factors, the campaign will feature an 80/20 combination of both national and spot advertising. 7
* Additional regional EV% Analysis may be found in Appendix V.
SPOT MARKETS:
Austin, TX Charlotte, NC Chicago, IL Cleveland, OH Columbus, OH
Los Angeles, CA San Francisco, CA Seattle, WA Washington, D.C. Virginia Beach, VA
Ten spot markets were chosen from these three regions and Texas. These were determined based on above average Chipotle consumption, number of households that visit Chipotle (out of all restaurant visits), and areas where there were previously successful Chipotle promotions. Within these ten markets we will be running a pulsing spot campaign to supplement the ongoing national coverage. This spot campaign will include outdoor, television, and radio advertising as well as event marketing promotions. 8
TIMING AND PURCHASE CYCLE:
“Historically, our average daily restaurant sales and profits are lower in the first and fourth quarters due, in part, to the holiday season and because fewer people eat out during periods of inclement weather (the winter months) than during periods of mild or warm weather (the spring, summer and fall months).” – Chipotle’s 2011 Annual Report Company Background Since Chipotle was founded, in 1993, revenue has increased exponentially each year. From 2010 to 2011, total revenue grew over four hundred million dollars. Even as profit and national purchasing are increasing dramatically, there are still considerable seasonality and consumer purchasing variables that need to be accounted for. Seasonal Purchase Cycle •Chipotle sales are strongest during the second and third quarters •Sales are lowest during the first and fourth quarters due to decreased fast-food consumption during the holiday and winter season •Overall consumption peaks in the summer Timing Decisions Fast-casual consumers are more likely to eat out of home late in the week and on the weekends. Individuals chose to dine out more during the end of the week as they have more leisure time and use fast-casual dining as a social experience or get-together location (Richards-Person). As Chipotle offers a menu consisting of only lunch or dinner options, purchasing is limited to the afternoon and evening. Timing will be very important for this brand, particularly within our television and radio mediums. Advertisements will run during lunch and dinner times, after 11 A.M. until 10 P.M. These mediums will also be used more heavily on the weekends when it is known that consumers are more likely to eat out of the home (Richards-Person).
9
MEDIA MIX:
The media types within this campaign were specifically chosen based on the unique media habits of our primary and secondary demographics. Based on the quintiles below, as well as PMN grids, and other Simmons research, we believe that both of our targets will be most receptive to a mix of radio, television, magazine, internet, and outdoor advertising. Primary Target Media Media Type Radio (All day) Television (Early & Late Fringe) Cable Television Magazine Internet Outdoor
Quintile I 93 107 88 83 100 105
Quintile II 104 99 103 110 111 104
Secondary Target Media Media Type Radio (All day) Television (Early & Late Fringe) Cable Television Magazine Internet Outdoor
Quintile I 95 65 64 110 202 99
Quintile II 65 86 63 73 129 106
(Source: Simmons Population Survey 2009)
Although secondary target quintile indexes may not be skewed as favorably to the mediums that we picked as the primary demographic, we believe this is due to the small sample of Asians who participated in the survey. Obviously, even within this small Asian sample mediums such as internet, outdoor, and magazine are proven to be heavily utilized. Yet, we feel television especially would have a higher index if there were more Asian participants.
SHARE OF VOICE
Further examining share of voice of media within the fast casual segment aided us in choosing effective media types and allocating our budget where our message can best resonate with our target.
10
Quiznos 3237.9
TOTAL
Moe's
889.8
Subway
28127.9
Chipotle
808.8
Qdoba
2065.2
5763.1
NETWORK TV
34.7
CABLE TV
3180.9 195
SYNDICATION
592.9 223.5
SPOT TV MAGAZINES SUNDAY MAGS DOLS NATL NEWSP (000) NEWSPAPER (000)
2088.3 906.5
312.7
4477.6 20
860.9
365.4
0.4
57.3
NETWORK RADIO (000)
603.6
6647
NAT SPOT RADIO (000)
1307.5
1787.2
356.1
1577
2716.8
452.4
118.2
US INTDISPLAY (000)
18.8
(Source: Kantar Media Fast Food Competitive Spend)
Chipotle Media Mix Media Type Network TV Cable TV Syndication Spot TV Magazines Sunday Magazines Natl Newspaper Newspaper Net Radio Natl Spot Radio US Int-Display TOTAL
11
Cost (000)
Percent of Mix
0.4
.05
356.1 452.4 808.8
44.0 55.9 100 (Source: Kantar Media Fast Food Competitive Spend)
Share of Voice Media Type Network TV Cable TV Syndication Spot TV Magazines Sunday Magazines Natl Newspaper Newspaper Net Radio Natl Spot Radio US IntDisplay TOTAL
Quiznos
Moe’s 3.9 66.6 25.1
Subway 20.5 11.3 0.7 7.4 3.2
Chipotle
Qdoba
15.1
15.9 26.6 18.7 40.4
100
2.2
1.3 23.6 6.4
0.05
2.8
44.0
76.4
2.1
9.7
55.9
5.7
100
100
100
100 (Source: Kantar Media Fast Food Competitive Spend)
In order to be heard over the clutter within this market we have created a campaign that consolidates the budget into five impactful media types. Allocation within these mediums will be done consciously, with the strong presence of our competition in mind. We will avoid newspaper altogether in order to more wisely place our money and differentiate from competitors, and will focus more heavily in cable television, spot television, and magazine in order to strengthen our brand within these mediums.
12
CREATIVE BRIEF BACKGROUND
Chipotle is a growing fast-casual chain that offers quality Mexican-style food.
WHAT ARE WE TRYING TO ACHIEVE?
A denfesive campaign to increase usership universally, but particularly where Chipotle is already strong. Increasing usage by heavy users is more attainable than converting completely new ones.
WHO ARE WE TALKING TO?
Caucasian adults between the ages of 18 and 34. They are likely to be unmarried. We are also targeting Asians aged 18 to 34 in the Pacific Region.
WHAT MEDIUM ARE WE USING?
In order to best reach the target, we will use a combination of media: TV, radio, outdoor, magazines, and online.
WHAT ARE WE COMMUNICATING?
“Food with integrity” is about more than just food. It’s about better ingredients and more sustainable practices to cultivate them. It’s what sets Chipotle apart.
13
OBJECTIVES, STRATEGIES & RATIONALES target aUdience OBJECTIVE
Aim Chipotle advertising at Caucasian adults aged 18-34 and Asian Pacific adults aged 18-34 to raise restaurant sales. Primary Target Audience •Gender: Men and Women •Age: 18-34 year olds •Race: Caucasian •Marital Status: Never Married •Spike in usage among college students
Secondary Target Audience •Gender: Men and Women •Age: 18-34 year olds •Race: Asian •Location: Pacific region
Primary vs. Secondary Psychographics Primary Target Health conscious Live a busy, on-the-go lifestyle Prefer not to cook at home Fast food helps them stay within budget Likely to try a new nutritional product
Secondary Target Value food with integrity Prefer foods without artificial additives Look for fresh ingredients in their meals Consider themselves to be very healthy Want to know about the ingredients within their food (Source: Simmons Population Survey, 2009 Base: 18-34)
STRATEGY
The primary target of Caucasian adults aged 18-34 is a wide target demographic that is respresentative of Chipotle’s wide-range appeal. Since there are no significant spikes in usage among gender or income, we chose to leave it as a broad target. The secondary target however was a more concentrated group of the Asian population within this age range. Chipotle’s offering appeals to both demographics, but for different psychographic reasons, which allows Chipotle to capitalize on a larger audience. 14
RATIONALE
The primary target audience is health conscious, but more importantly is very busy. They live a hectic life, and fast food often fits in best when they are on-the-go. The younger half of the target, individuals ages 18 to 24, prefer not to have to worry about cooking at home. Fast food is also a popular choice with the entire demographic because it helps them stay within their budget. Chipotle offers the fast service at a resonable price that the target desires, but also food that is high quality and healthier than other options. These young consumers are more likely to try a new nutritional food product than any other age group (index 132). This will be a key part of Chipotle’s positioning with the target, along with “food with integrity,” since the target is not overly concerned with eating healthy foods or foods that are free of artificial additives. Chipotle’s messaging must cater to the primary target’s wants while still staying true to its guiding mantra. The secondary target chooses to eat at Chipotle for different reasons. They prefer to purchase and eat foods without artificial additives (index 142), which is the premise of Chipotle’s company mission. Also, it is very important to them that they know about the ingredients within their food before they buy it (index 133). Overall, they consider their diets to be very healthy (index 121), and eat Chipotle because it is a fast-casual restaurant that values fresh, healthy ingredients. (Source: Simmons Population Survey 2009)
15
A DAY IN THE LIFE
casey qUesadilla is a senior Journalism major at Northwestern University in
Chicago, Illinois. She is currently applying to jobs during her final spring semester at school. On top of applying for jobs, Casey still has all of her schoolwork, her work-study job, and has to make time to meet-up with all of her friends before the semester is over. In short, Casey has a very hectic schedule and seems to have less and less leisure time. On this particular morning, Casey wakes up around 8:30AM for her morning class. After showering she sits down at her desk with her cereal and starts checking her normal websites. Usually these consist of Facebook, her email, and some school websites. Then it’s off to class. Casey squeezes in a workout at the university fitness center and catches up on an episode of Teen Mom when she is on the elliptical. From there she goes to work at one of the campus cafeterias. While at work Casey takes the liberty to change the radio station so she can get some satisfaction out of her three-hour shift. As the Top-40 radio station plays in the background Casey hears a fun advertisement for a Mexican fast-causal restaurant and decides that sounds like a good choice for a late lunch. A much more appealing choice than cafeteria food. After work Casey calls her friend Ben to see if he wants to go to get lunch and catch up at the restaurant she heard about on the radio. He accepts, and they spend the next hour talking about mutual friends, school, and the fast-approaching real world. Casey leaves glad that she was able to make time to meet-up with Ben, especially since she is usually so busy. And she got a chance to relax and have a great, affordable meal that she did not have to make. Before Casey’s night class she goes home and watches the new episode of Hart of Dixie on CWTV.com, while also getting some homework done. She doesn’t always have the time to sit down and watch television shows when they first air so this is the perfect opportunity for her. Before she knows it she is back on campus and in class again. But she sighs a sigh of relief because tonight is Thursday, and she will be going out with all of her friends.
16
OBJECTIVES, STRATEGIES & media mix RATIONALES PNM GRIDS
The master PMN Grid was created from eleven weekday and weekend grids completed by members of our primary and secondary target demographics. As the media within the campaign be will identical targeting both demographics this master grid is indicative of the media usage habits of both the primary and secondary targets. By utilizing the PMN grids the trends listed below were found and taken into consideration when creating the media mix. • Television: This is a popular medium that is watched most during the day on weekends, and in the evening and late at night on weekdays. • Radio: The targets utilize radio heavily throughout the day, especially on weekends. • Magazines: These are more common media types with females that were sampled for the grids. Not the heaviest usage, but it is a common media type to be used on the weekend. • Online: This was the heaviest media type for our targets, just above television. Facebook was a very common internet site that was frequented throughout the day. *See Appendix I for all eleven PMN Grids.
17
OBJECTIVES, STRATEGIES & RATIONALES media mix OBJECTIVE
The campaign will consist of a variety of media types. National media will include cable, radio, magazines, and internet, while spot media will include television, radio, and outdoor. Spot market promotions will be in addition to these media types and will be featured within the ten designated markets.
STRATEGY
Cable (Daytime, Early Fringe, and Late Fringe): Purchasing 15-25 spots nationally per daypart. Daytime being the heaviest of the dayparts, which is continuous throughout the campaign. Early Fringe will also be continuous, but on a lighter schedule, and Late Fringe will only be used during the three promotional months (February, March, and August). Increasing awareness and frequency within the target demographics is the main goal of cable. National Radio (Daytime and Evening Drive): Ranging from 15-30 spots in each daypart per month, both are continuous throughout the campaign. Magazines: Purchasing 2-3 half page, 4-color ads in women’s magazines per month to promote reach and frequency on a national level. Internet (Search and Target Sites): Purchasing between 10-15 GRP’s of both types of internet media will allow the brand to maintain a firm online presence. *Additional Web purchasing rationale may be found in Appendix IV. Spot Television (Early Fringe): Purchasing around 15 spots every other month until the last month (October) where it will finish strong with 25 spots in order to increase reach and frequency in spot markets. Spot Radio (Daytime): Ranging from 15-20 spots per month, spot radio will connect with the targets during key impulse purchasing times. Outdoor: A pulsing outdoor 25-show will be used throughout the ten spot markets. Utilizing transit outdoor versus billboards will increase frequency through the types of ads that targets recognize the most. 20
RATIONALE
Cable Television Both the primary and secondary targets have high media usage within cable. Cable is a great way to target these consumers through niche channels that they are watching the most at different points during the day, since the PMN grids revealed this is when our targets are watching television. Primary and secondary demographics are both above average in claiming that if they could not have cable they would not watch television (primary index 119; secondary index 130). With such a wide range of targeted consumers cable is a good way to appeal to their direct media preferences. Channels they are watching include: Cable Channels Comedy Central E! Fuse MTV TBS VH1
Primary Target Index Secondary Target Index 146 173 144 163 170 232 262 191 129 157 216 167
(Source: Simmons Population Survey, 2009)
* All secondary target index data has asterisks because of the small sample of Asians age 18-34 that participated in the research, but we feel that it is representative of this segment as a whole.
Magazines For this medium the target is our female portion of the demographic. Through Simmons research and PMN data, it has shown that within the target age range women are much heavier magazine readers than men. Women also admit to enjoying reading advertisements in magazines (index 116), much more so than men do (index 83). Even the secondary target admits that magazines are their primary source of entertainment (index 154). Other mediums will be more geared towards men in order to balance out the campaign. Publications that the targets are reading: Publication Allure Cosmopolitan Entertainment Weekly InStyle Parents Seventeen
21
Primary Target Index 190 208 185 158 212 244
Secondary Target Index 143 168 115 121 143 168
Circulation 1,108,834 3,032,000 1,796,560 1,700,000 2,215,645 2,000,000
(Source: Simmons Population Survey, 2009)
Titles range so that all ages within this female demographic are included in readership. For example, publications such as InStyle and Entertainment Weekly skew towards the older end of the demographic, women ages 25-34. Therefore, they are balanced by titles such as Seventeen, whose readership falls primarily into the younger end of the demographic, women 18-24. Publications such as Cosmopolitan are popular throughout the entire demographic. Internet Online is the medium of choice for our young target demographics. It is admittedly most of the primary and secondary targets’ primary source of entertainment (primary index 172, secondary index 197). This medium also provides the option of customizing the campaign to various types of websites, which will target the specific segments of the demographic. For instance, UFC.com and ESPN.com would be targeting the male segment, whereas CWTV.com and EA.com would be targeting the younger segment, adults ages 18-24. Selecting a complimentary group of sites will then properly reach the target, within their main media source. Website CWTV.com EA.com ESPN.com Facebook.com Fandango.com UFC.com Youtube.com
Primary/Secondary Target Index 258 214 151 191 189 253 177
(Source: Simmons Population Survey, 2009) *Additional Web purchasing rationale may be found in Appendix IV.
Spot Television Spots will run during Early Fringe in all ten spot markets, and therefore networks will vary based on what is most popular for our demographic in each market. For instance, the target consumer is most likely to watch local news on CWTV (primary index 156; secondary index 164). Overall, this day part is at an ideal time for consumers who are considering what they will be eating for dinner within our spot markets. Outdoor Using outdoor advertising has been a staple in the past for Chipotle and has been successful. This campaign will be more focused on transit advertising though, as opposed to the traditional billboards. The target demographics are more receptive to transit advertising, such as bus, bus shelter, taxi, and subway advertisements, than to regular billboards. Utilizing transit advertising will increase overall reach and frequency within the ten spot markets as well. 22
Transit Type Billboard Bus Bus Shelter Subway Taxi
Primary Target Index 108 121 126 131 122
Secondary Target Index 106 128 118 145 146
(Source: Simmons Population Survey, 2009)
Radio (National and Spot) This is a medium that has proven effective for Chipotle in the past because of the prevalence of consumers that utilize it. Radio is also a medium that will help make or break an impulse purchase, as consumers are in the car throughout the day or even listening at work or home. Research has indicated that adults within the target demographic are above average in claiming to always listen to the radio when in the car (index 111). Although, as different age groups listen to different types of radio it is vital to segment the formats in order to cater to all members of the target demographics. Formats that the demographics are listening to are: Formats Adult Contemporary Contemporary Hit Radio Country Hot AC News/Information/Talk All Sports
AQH Share Adults 18-24 6.2% 14.8% 14.5% 4.9% 2.8% 1.4%
AQH Share Adults 24-35 7.5% 9.9% 12.4% 5.4% 6.1% 3.7%
Source: Arbitron “Radio Today 2010 – How America Listens to Radio” – Monday-Sunday 6AM-Midnight AQH Share)
Sports radio would specifically be utilized to target our male demographic heavily, in order to balance out the campaign.
23
OBJECTIVES, STRATEGIES & RATIONALES reach & freqUency OBJECTIVE
The campaign will consist of a variety of media types. National media will include cable, radio, magazines, and internet, while spot media will include television, radio, and outdoor. Spot market promotions will be in addition to these media types and will be featured within ten designated markets.
STRATEGY
Reach and Frequency Goals Pulsing Schedule with Continuous Internet Buys Month
February March April May June July August September October
National Reach Goal
85 85 70 70 80 70 85 70 80
National Frequency Goal
4.5 4 3 3 3.5 3 4.5 3 4
MFP Expected Reach
83.9 82.3 70.7 70.4 77.2 71.5 84.2 71.3 81.2
MFP Expected Frequency
4.3 3.8 3 3 3.3 2.9 4.2 2.6 3.6
Reach and Frequency Decision Model Optimize Reach Product introduction In growth phase of cycle Expanding into new markets Launching major sales promotions Seasonal peak for sales Among upper half of category
Optimize Frequency Product information Less established brand Lower brand awareness Lower market share Strong intense competition Pulsing schedule Creative on par for brands in category Advertising message more complex
24
Ostrow Model: Chipotle Market Factors Dominant brand in market High brand loyalty Long purchase cycle Less frequent usage
Message Factors Simple copy High copy uniqueness Continuing campaign Product-focused message Single message New messages Large advertising units Media Factors Low clutter Compatible editorial setting High audience attentiveness Continuous scheduling Few media vehicles High repeat exposure media Total Estimated Frequency
RATIONALE
-.2
-.1
+.1
+.2
-.2 -.2 -.2
-.1 -.1 -.1
+.1 +.1 +.1 +.1
+.2 +.2 +.2 +.2
+.1
+.2
Smaller, less know brand Low brand loyalty Short purchase cycle Frequency usage Need to beat competition Target old people or children
-.2 -.2 -.2
-.1 -.1 -.1
+.1 +.1 +.1
+.2 +.2 +.2
-.2
-.1
+.1
+.2
-.2 -.2 -.2
-.1 -.1 -.1
+.1 +.1 +.1
+.2 +.2 +.2
Difficult message Older messages Small advertising units
High clutter Incompatible editorial setting Low audience attentiveness Pulse or flight schedule More media vehicles Low repeat exposure media
-.2
-.1
+.1
+.2
-.2
-.1
+.1
+.2
-.2
-.1
+.1
+.2
-.2 -.2
-.1 -.1
+.1 +.1
+.2 +.2
-.2
-.1
+.1
+.2
Complex copy Low copy uniqueness New campaign Image-focused message
0 3.0
The Ostrow model customizes Chipotle’s unique factors to determine a guideline frequency figure. All of the factors ended up evening out, leaving us with the base of 3. We used 3 as a minimum frequency goal. 25
OBJECTIVES, STRATEGIES & RATIONALES bUdget OBJECTIVE
80% on national media and 20% on spot media in 10 markets for a total budget $19,984,800, including all event marketing promotions and contingency funds.
STRATEGY National Media Cable Daytime Early Fringe Late Fringe Radio Daytime Evening Drive Magazines Internet Search Targeted Sites Contingency National Total
Amount ($) 6,035,500 2,381,200 2,914,700 739,600 3,566,700 1,797,300 1,769,400 2,975,200 2,550,000 900,000 1,650,000 200,000 15,127,400
Spot Media Television Early Fringe Radio Daytime Outdoor Contingency Spot Total
Amount ($) 874,800
Promotion SXSW Burrito Eating Contest Promotion Total
Amount ($) 175,000 400,000
Gross Total
National (%) 39.9 15.7 19.3 4.9 23.6 11.9 11.7 19.7 16.9 5.9 10.9 1.3 100.0
22.5
Cumulative (%) 4.6
692,100
17.8
3.6
2,315,500 200,000 3,882,400
59.6 5.5 100.0
12.2 1.1 20.4
575,000
Spot (%)
Cumulative (%) 31.7 12.5 15.3 3.9 18.8 9.5 9.3 15.7 13.4 4.7 8.7 1.1 79.6
Cumulative (%)
.9 2.0 2.9
19,984,800
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RATIONALE
Allocating the majority of the budget to a national campaign will allow Chipotle to have the highest exposure to national customers. Since Chipotle has locations in 41 states, a nationally focused campaign allows the chosen defensive strategy to be effective without ignoring the rest of the locations. The 20% designated for spot markets directly correlates to the percentage of the United States population that the selected markets comprise. The designated markets align well with the target demographics, as they have high concentrations of 18-34 year olds, both White and Asian. They also have high numbers of Chipotle locations and high indices of Chipotle users, which works with the defensive strategy. Two promotional events will take place during the scope of the campaign. They cost only a fraction of our budget ($575,000 for both), but will generate large returns, due to their alignment with the target demographic, the spot markets, and the overall Chipotle brand.
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OBJECTIVES, STRATEGIES & RATIONALES media flight plan
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OBJECTIVES, STRATEGIES & RATIONALES geography OBJECTIVE
Since Chipotle is a national chain, the media buys for Chipotle will also be national in scope, plus a spot heavy-up buy in 10 markets. Target market regions for Chipotle were developed using a variety of criteria, detailed below. Chosen spot markets cover 18.2% of US households.
STRATEGY
The campaign focuses on a defensive strategy, and increasing Chipotle usage in regions and markets where Chipotle is already strong. To choose the spot markets, we had a multi-step process to make sure all factors were accounted for we first focused on key regions. To determine the top regions, we used a combination of factors to calculate each estimated value percentage. These factors included the number of Chipotle locations, the presence of our target, and the total amount of money spent eating out of home.
Raw Number Caluclation Region Southeast Pacific East Central Middle Atlantic Southwest West Central New England Total
18-34 Population 1936092 15098914 10425402
# of stores Total spent eating OOH 236 72381125100 312 55958962600 263 42621590200
Total across
EV%
9024937
111
37971939100 37980964148 13.7
1936092 4706132
158 106
34638399100 34639383639 12.5 19325171300 19329877538 7.0
3132377
43
14470347000 14473479420 5.2
45308235
1229
2.77368E+11
72383061428 26.1 14473479420 20.2 72383061428 15.4
(Sources: Simply Maps, MRI Fast Food Geography Data)
2.77413E+11 100
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Based on this ranking system, the Southeast, Pacific, and East Central Regions were the strongest, but we needed a more accurate system to weighed each factor equally. To do this we determined the percentages instead of raw numbers and calculated the estimated value percentage. Percentage Caluclation Region Southeast Pacific East Central Middle Atlantic Southwest West Central New England Total
18-34 Population 4.2 33.3 23.0
# of stores
EV%
19.2 23.5 21.4
Total spent Total across eating OOH 26.1 49.6 20.1 78.9 15.4 59.8
19.9
9.0
13.7
42.6
14.2
2.1 10.3
12.9 8.6
12.5 7.0
27.5 26.0
9.1 8.7
6.9
3.5
5.2
15.6
5.2
100
100
100
16.5 26.3 15.4
(Sources: Simply Maps, MRI Fast Food Geography Data)
100 100
Based on the EV% calculations, Pacific, Southeast, and East Central were once again the top markets. They also had indices of 157, 142, and 120 in Simmons We focused on spot markets within these regions, specifically cities where Chipotle already performs well. Using our target as the base we ran the top 14 markets in Simmons against Chipotle visits and found that Chicago, Cleveland, Los Angeles, San Francisco, and Washington, DC had extremely high indices. All cities were also within our key regions. City Cleveland Chicago Los Angeles San Francisco Washington DC
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Index 575 212 874 187 628
% down 20.2 14.0 6.6 3.3 12.2
(Source: Simmons Population Survey, 2009)
The remaining five markets were chosen based on above average Chipotle consumption and number of households that visit Chipotle out of all restaurant visits. City Columbus Virginia Beach Austin Seattle Charlotte
# households that visited Chipotle in last 6 months 23, 129 11, 428 19,566 19, 566 20, 050
Chipotle % of all FF visits 7.74 7.97 7.81 7.81 7.94
(Source: MRI Fast Food Geography Data) *A full list of top cities Chipotle % of all FF visits is within Appendix V.
The chosen spot markets also worked favorably with our secondary demographic of Asians, having percentages that are higher or on par with the country as a whole (4.8%) City San Francisco Seattle Los Angeles Austin Virginia Beach Chicago Charlotte Columbus
% of Asians 33.3 13.8 11.3 6.3 6.1 5.5 5 4.1
(Source: 2010 Census)
RATIONALE
All spot cities work with the goals based on geography, demographics, and development of Chipotle. There is already an established userbase and plenty of locations, so ad dollars will not be wasted on people who do not already know the messaging, or in places where there are no stores.
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OBJECTIVES, STRATEGIES & RATIONALES schedUle & timing OBJECTIVE
Taking into consideration seasonality and consumer purchasing habits the campaign will most effectively allocate the budget during times of the day, week, and year consumers will be reseptive towards them. Media buys will be representative of these consumer habits, and will be chosen around them.
STRATEGY
The campaign will begin in February and will run through October, for a full nine-month campaign. February will be the ideal time to launch the campaign, getting the brand fresh in consumers’ brains leading into the spring. The heaviest media months will be the first two months (February and March), then also in August. During these months we will be focusing on our two promotional events, and therefore will increase our monthly goals and spending.
RATIONALE
In order to utilize the budget in the most effective way a pulsing campaign will be implemented. This will consist of a continuous national campaign for all nine months, then running the spot campaign every other month beginning in February. This pulsing spot message will complement the national advertising in the regions determined to have the most potential for Chipotle trial and overall consumption. Pulsing will provide national reach for the product, which has stores across the country, yet will also increase frequency within the target demographics through spot advertising and promotion.
In the first two months of the campaign we begin with an aggressive heavy-up spot and national effort. Leading into the spring, when consumer spending at fast-casual restaurants increases, the campaign will be in the forefront of the target’s minds’. A large portion of this initial effort will also go towards our first promotional event, which is a sponsorship at South by Southwest. Throughout the rest of the campaign (excluding August), continuous national coverage will be necessary to keep the brand top-of-mind with consumers all over the country. Then again in August there will be a more aggressive campaign in order to advertise for our back to college promotion, which will take place in the beginning of September. 35
OBJECTIVES, STRATEGIES & RATIONALES sales promotions
OBJECTIVE
The goal of the promotions is to do an extension of the innovative, successful promotions that Chipotle has a long history of doing, but focus on the 18-34 year old demographic and the key spot cities.
STRATEGY
Chipotle will be doing two events: a sponsorship of the music, film, and interactive festival South by Southwest and a burrito eating contest on college campuses.
RATIONALE
Both promotions hit the target demographic, with South by Southwest more representative of the older group of the target and college students comprising of the lower portion. Both take place in the spot markets, with the burrito eating contest featured on campuses in each designated city and South by Southwest being held in Austin. They are relatively inexpensive to put in, and have significant impact and buzz. Both events also align well with Chipotle’s brand identity.
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promotion #1 South by Southwest Sponsorship Chipotle will be a sponsor of South by Southwest, an annual music, film, and interactive conference and festival held in Austin in March. In 2011, the monthlong event hosted more than 333,100 people. Chipotle’s customized sponsorship will include the logo throughout the event, a Chipotle food truck selling food to concert-goers, and Chipotle sampling to select exclusive parties. A South by Southwest sponsorship allows Chipotle to reach the target in an innovative way. Out of the 333,100 attendees, 77% are between 21-40 years old (source: SXSW 2012 advertising presentation). The customized sponsorship allows to Chipotle to create unique brand interaction. Since the festival is in Austin, burritos work well with the local tex-mex cuisine. Finally, South by Southwest has a heavy social media component, which would aid Chipotle’s social media presence. Estimated costs: Super sponsorship (the highest level of sponsorship offered): $170,000 *Sponsorship can be completely customized to the specific Chipotle promotions mentioned above. More details are located in Appendix VI.
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promotion #2 The World’s Biggest Burrito Eating Contest To celebrate back to school, Chipotle will sponsor interactive contests on college campuses in each of the 10 spot markets. On August 31, Chipotle will provide burritos and challenge contestants to eat as many as possible within a two-minute time frame. There will be extensive social media outreach, and members of the campus will be encouraged to share data. This features the product in a cool way, while simultaneously generating content and increasing Chipotle’s social media presence. The burrito eating contest extends Chipotle’s past promotional strategy in a way that caters to the target. Theoretically, upwards of 16,000 people could participate, making it the world’s biggest burrito eating contest. College campuses account for an influential portion of the lower age range of the target demographic.
Estimated Costs: $400,000/10 markets=$40,000/per market $40,000/$6.25 (price of one burrito)=6,400 burritos per market 6,400/4 (estimate of an average contestant’s burrito consumption)=1600 participants per campus
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WORKS CITED “2011 Rate Bases.” Seventeen. www.seventeenmediakit.com/r5/ Arbitron “Radio Today 2010 – How America Listens to Radio” – (Monday-Sunday 6AM-Midnight AQH Share) “Adult Demographic Profile.” Parents. www.meredith.com/mediakit/parents/print/audience.html. Burrito Buzz—And so few ads http://www.businessweek.com/magazine/content/07_11/b4025088.htm “Circulation Demographics.” Allure. www.condenast.com/brands/allure/media-kit/print Chipotle Website. http://www.chipotle.com/en-US/Default.aspx?type=default Chipotle 2011 Annual Report http://ir.chipotle.com/phoenix.zhtml?c=194775&p=irolreportsAnnual Chipotle Airs New Ad and Steals Grammy Spotlight http://www.foxnews.com/leisure/2012/02/13/chipotle-airs-new-ad-and-steals-grammys-spotlight/ “Cosmopolitan Media Kit.” Cosmopolitan. www.cosmomediakit.com “Fast Food Cometetive Spending.” Kantar Media Fast Food Competitive Spend “Entertainment Weekly Adult Demos.” Entertainment Weekly. www.EW.com “General Ad Rate.” InStyle. www.instyle.com/instyle/static/advertising/mediakit/instyle/generalad Mintel Fast Casual Reports: October 2011 http://academic.mintel.com/sinatra/oxygen_academic/search_results/show&/display/ id=543322 McNearney, Scott. “SXSW Conferences & Festivals.” Print. Richards-Person, Melissa. Phone conversation with Papa John’s Senior Director of Advertising and Promotions 39