Following a food safety crisis, Chipotle Mexican Grill has spent the last year working hard to recover and rebuild its brand strength. After several customers became ill from eating its food in the last quarter of 2015, the company continues to try to regain its momentum by launching its biggest marketing campaign ever in April of this year. The new marketing campaign will bring new marketing tactics, while leaving others in the past.
Due to the slowed sales following the food safety concerns, Chipotle ramped up its marketing and promotional efforts in 2016 in hopes of making a recovery. Some of its marketing tactics from last year include free entrées and BOGO offers, the creation of its Chiptopia loyalty program (which was discontinued in September 2016, after only three months, according to this AdAge article), a short animated film, and a TV commercial shown in select markets. While sales at longstanding locations have improved since the incidents, they are not yet back to desired levels. In fact, same store-sales declined by 4.8% in the fourth quarter of 2016, according to another AdAge article.
Before the food safety incidents occurred, marketing was not a very large spend for Chipotle. Today, the company is prepared to launch its largest marketing campaign ever. The new marketing campaign will no longer utilize tactics such as sales promotions to get customers in its stores, but rather tactics that will rebuild the brand narrative it has worked so hard to create over the years. Furthermore, the company’s Chief Marketing and Development Officer Mark Crumpacker says Chipotle’s marketing priorities are “to attract new and lapsed customers, build brand affinity, promote its digital ordering and catering capabilities, and explore new menu items,” according to an AdAge article.
In order to support these priorities, Chipotle’s new marketing plan for 2017 will include several elements. The company plans on advertising more consistently, all year long. The marketing plan also includes the use of a scripted TV series for children and TV commercials to spread its brand message. Furthermore, Chipotle plans to increase the amount of fundraisers run in its stores, as this brings in “lapsed” customers that otherwise might not have visited. Chipotle’s Chief Financial Officer John Hartung says 20% of such customers tend to visit the store again in the month following the fundraiser, according to the AdAge article. Additionally, while Chipotle does not plan on making any significant changes to its menu, there has been mention of a new dessert addition.
According to the AdAge article, despite this new beefy marketing plan, Chipotle hopes to reduce its marketing spending from 4.7% of sales in the last quarter, to 3% of sales. While this goal represents a significant decrease in spending, it is still higher than the 2% to 2.5% of sales that it spent before the food safety incidents took place.
From a marketing management perspective, here are some questions to consider:
- How do you think Chipotle might launch its largest marketing campaign ever while reducing its marketing spending?
- Research another company that has emerged from a brand-damaging crisis. What types of marketing strategies did it use?
- Why do you think Chipotle might be cutting back on the use of promotional sales offers?