Chipotle Media Plan

EMILY BARKERJORDAN FOX

A MEDIA PLAN WITH INTEGRITY:the plan that will revolUtionize chipotle

TABLE OF CONTENTS

EXECUTIVE SUMMARY

SITUATION ANALYSIS Marketing Objectives Market Analysis Competition Brand History Target Audience Geography Purchase Cycle and Timing Media Mix

CREATIVE BRIEF

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

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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: Chipotleisarespectedfastcasualchainthatcontinuestogrowrapidly.However,it’smedia 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 withinthemarket,whilestillallocatingmoneyefficiently,asitiseasiertoincreaseusershipthan to convert new users.

TARGET AUDIENCE: The primary target is 18-34 year old Caucasian adults, a broad target that is represen-tativeofChipotle’swideappeal.ThesecondarytargetismorespecificallydefinedasAsianadultsaged18-34thatliveinthePacificregion.

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 promo-tions. 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 nation-ally. 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.

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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’smindsleadingintothespring,whenconsumptionincreases.Thiswillbeacontinuous 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 premiersponsorofSouthbySouthwest,aleadingmusic,film,andinteractiveconferenceandfestivalheldinAustininMarch.Chipotle’scustomizedsponsorshipwillincludetheirlogo 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.

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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.

Whileburritosarethefocus,quesadillasandchipsareavailableassides.Thereisakid’smenu, which features the same options, but in smaller portions. Some locations also offer beerandwineorbreakfast,likechorizo,potatoes,andpozolesoup.ThemajorityofChipotle’smenu 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.

“Foodwithintegrity”isChipotle’sdefiningprinciple.Thisreferstothe“commitmenttofindingtheverybestingredientsraisedwithrespectfortheanimals,theenvironmentandthefarmers” (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 Au Bon Pain Mayan Chicken Bowl: $6.49 Chipotle Burrito with Chicken: $6.89 Subway Chipotle Chicken $3.89Moe’sSouthwestGrillChickenBurrito:$6.59

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PLACE: ThefirstChipotleopenedinDenverin1993,andexpandedtootherstatesby1999.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. Infact,ChipotlespendslessinayearthanMcDonald’sdoesin48hours.Chipotlefocusesonbillboard 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 dressupintheyear’sthemereceivediscountedburritos.

In2011,Chipotlereleaseditsfirstnationalcommercial,ananimatedfilmentitled“Back From the Start”. The two minute spot focused on sustainability and features a Willie Nelsonsong.ItwasreleasedonYouTubeinAugust,andwasfirstairedontelevisionfortheGrammyssixmonthslater.Theinterestingconceptandhigh-profilemediabuygeneratedsignificantbuzz. (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 launchedtheFarmTeam,whichaggregatesinfluencersmostpassionateabout“FoodWithIntegrity,” which is shared with their networks.

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MARKET ANALYSIS: FAST CASUAL RESTAURANTS The fast casual restaurant market is fairly new within the dining out-of-home category. Asawhole,thecategorygrossedabout$24millionin2011,athirty-fivepercentincreaseinsalesfrom2006.Youngconsumerswithinthecategoryareveryinfluentialinitsoverallpopularity.Oversixtypercentofboththe18-24and25-34yearoldmarketsdinewithinthefast casual restaurant category. Demographics that are the highest for eating at fast casual restaurantsinclude18-24yearolds,affluenthousehold,andAsians.Itisprojectedtocontinuegrowingsignificantlywithinthenextfewyears.

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.

Qualitiesthatconsumersfindthemostimportantwithinfastcasualestablishmentsaretasteandqualityoffood.Overfiftypercentofconsumersclaimthattheyalsowantwhattheyarepurchasing to be of value for what they are spending. Freshness is another attribute that consumers look for in a fast casual restaurant.

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(Source: Mintel “Fast Casual Restaurants – US- October 2011”)

COMPETITIONFast 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.Wehavechosentodefinedirectcompetitorsasthoseonlywithinthefastcasualsegmentwithsimilarsandwich-likeofferings,specificallySubway,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

inexpensive

expensive

healthyunhealthy

Quizno’s

CiCi’sSubway

Qdoba

Chipotle

Cosi

Au Bon Pain

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BRAND HISTORY: Steve Ells had a vision: to offer high-quality food, affordable prices, and fast service. It waswiththisvisionthatheopenedthefirstChipotleinDeverin1993.Hestartedoffsmallinan 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’smantraof“foodwithintegrity”guideseverythingitdoes,andhasallowedittobecome 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:Pacificregion (Source: Simmons Population Survey, 2009)

GEOGRAPHY: Chipotle is an international brand, sold in forty-one states throughout America. CurrentlythebrandhasthemostgrowthpotentialinthePacific,Southeast,andEastCentral 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 preferencestowardspicy,Mexicaninfluencedfoods,andprevioussuccessfulChipotlepromotions. 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.

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SPOT MARKETS: Austin, TX Charlotte, NC Chicago, IL Cleveland, OH Columbus, OH

Los Angeles, CASan Francisco, CASeattle, WAWashington, 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.

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* Additional regional EV% Analysis may be found in Appendix V.

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’s2011AnnualReport

Company BackgroundSince Chipotle was founded, in 1993, revenue has increased exponentially each year. From 2010to2011,totalrevenuegrewoverfourhundredmilliondollars.Evenasprofitandnational 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•Salesarelowestduringthefirstandfourthquartersduetodecreasedfast-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).

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MEDIA MIX:Themediatypeswithinthiscampaignwerespecificallychosenbasedontheuniquemediahabits 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.

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Primary Target Media Media Type Quintile I Quintile II Radio (All day) 93 104 Television (Early & Late Fringe) 107 99 Cable Television 88 103 Magazine 83 110 Internet 100 111 Outdoor 105 104

Secondary Target Media Media Type Quintile I Quintile II Radio (All day) 95 65 Television (Early & Late Fringe) 65 86 Cable Television 64 63 Magazine 110 73 Internet 202 129 Outdoor 99 106

(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 VOICEFurther 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.

Quiznos Moe's Subway Chipotle Qdoba TOTAL 3237.9 889.8 28127.9 808.8 2065.2

NETWORK TV 5763.1

CABLE TV

34.7 3180.9 SYNDICATION

195 SPOT TV

592.9 2088.3 312.7

MAGAZINES 223.5 906.5 SUNDAY

MAGS DOLS NATL NEWSP

(000) 4477.6 NEWSPAPER

(000) 860.9 20 365.4 0.4 57.3

NETWORK RADIO (000) 603.6 6647

NAT SPOT RADIO (000)

1307.5 1787.2 356.1 1577

US INT-DISPLAY

(000)

18.8 2716.8 452.4 118.2

Chipotle Media Mix

Media Type Cost (000) Percent of Mix

Network TV Cable TV Syndication Spot TV Magazines Sunday Magazines

Natl Newspaper Newspaper 0.4 .05 Net Radio Natl Spot Radio 356.1 44.0 US Int-Display 452.4 55.9 TOTAL 808.8 100

(Source: Kantar Media Fast Food Competitive Spend)

(Source: Kantar Media Fast Food Competitive Spend) 11

(Source: Kantar Media Fast Food Competitive Spend)

Media Type Quiznos Moe’s Subway Chipotle Qdoba Network TV 20.5 Cable TV 3.9 11.3 Syndication 0.7 Spot TV 66.6 7.4 15.1 Magazines 25.1 3.2 Sunday Magazines

Natl Newspaper

15.9

Newspaper 26.6 2.2 1.3 0.05 2.8 Net Radio 18.7 23.6 Natl Spot Radio

40.4 6.4 44.0 76.4

US Int-Display

2.1 9.7 55.9 5.7

TOTAL 100 100 100 100 100

Share of Voice

In order to be heard over the clutter within this market we have created a campaign that consolidatesthebudgetintofiveimpactfulmediatypes.Allocationwithinthesemediumswill 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.

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BACKGROUNDChipotle 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 alsotargetingAsiansaged18to34inthePacificRegion.

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? “Foodwithintegrity”isaboutmorethanjustfood.It’saboutbetteringredientsandmoresustainablepracticestocultivatethem.It’swhatsetsChipotleapart.

CREATIVE BRIEF

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OBJECTIVES, STRATEGIES & RATIONALEStarget aUdience

Primary Target Audience •Gender: Men and Women •Age: 18-34 year olds •Race: Caucasian •Marital Status: Never Married •Spike in usage among college students

Primary Target Secondary Target Health conscious Value food with integrity Live a busy, on-the-go lifestyle Prefer foods without artificial

additives Prefer not to cook at home Look for fresh ingredients in their

meals Fast food helps them stay within budget

Consider themselves to be very healthy

Likely to try a new nutritional product Want to know about the ingredients within their food

Primary vs. Secondary Psychographics

Secondary Target Audience •Gender: Men and Women •Age: 18-34 year olds •Race: Asian •Location:Pacificregion

STRATEGYThe primary target of Caucasian adults aged 18-34 is a wide target demographic that is respresentativeofChipotle’swide-rangeappeal.Sincetherearenosignificantspikesinusage 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’sofferingappealstobothdemographics,butfordifferentpsychographicreasons,which allows Chipotle to capitalize on a larger audience.

OBJECTIVEAimChipotleadvertisingatCaucasianadultsaged18-34andAsianPacificadultsaged 18-34 to raise restaurant sales.

(Source: Simmons Population Survey, 2009 Base: 18-34)

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RATIONALEThe primary target audience is health conscious, but more importantly is very busy. They liveahecticlife,andfastfoodoftenfitsinbestwhentheyareon-the-go.Theyoungerhalf 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(index132).ThiswillbeakeypartofChipotle’spositioningwiththetarget,alongwith “food with integrity,” since the target is not overly concerned with eating healthy foods orfoodsthatarefreeofartificialadditives.Chipotle’smessagingmustcatertotheprimarytarget’swantswhilestillstayingtruetoitsguidingmantra.

The secondary target chooses to eat at Chipotle for different reasons. They prefer to purchaseandeatfoodswithoutartificialadditives(index142),whichisthepremiseofChipotle’scompanymission.Also,itisveryimportanttothemthattheyknowabouttheingredients 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)

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A DAY IN THE LIFE

casey qUesadilla is a senior Journalism major at Northwestern University in Chicago,Illinois.Sheiscurrentlyapplyingtojobsduringherfinalspringsemesteratschool.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.UsuallytheseconsistofFacebook,heremail,andsomeschoolwebsites.Thenit’soff to class.

Caseysqueezesinaworkoutattheuniversityfitnesscenterandcatchesuponanepisode 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.

BeforeCasey’snightclassshegoeshomeandwatchesthenewepisodeofHartofDixieonCWTV.com,whilealsogettingsomehomeworkdone.Shedoesn’talwayshavethetimetositdownandwatchtelevisionshowswhentheyfirstairsothisistheperfectopportunity 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.

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OBJECTIVES, STRATEGIES & RATIONALES media mix

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.

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OBJECTIVES, STRATEGIES & RATIONALES

OBJECTIVES, STRATEGIES & RATIONALESmedia mix

OBJECTIVEThe 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.

STRATEGYCable (Daytime, Early Fringe, and Late Fringe): Purchasing15-25spotsnationallyperdaypart. 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):Rangingfrom15-30spotsineachdaypartper month, both are continuous throughout the campaign.

Magazines:Purchasing2-3halfpage,4-coloradsinwomen’smagazinespermonthtopromote reach and frequency on a national level.

Internet (Search and Target Sites):Purchasingbetween10-15GRP’sofbothtypesofinternetmediawillallowthebrandtomaintainafirmonlinepresence. *Additional Web purchasing rationale may be found in Appendix IV.

Spot Television (Early Fringe): Purchasingaround15spotseveryothermonthuntilthelastmonth(October)whereitwillfinishstrongwith25spotsinordertoincreasereachandfrequency in spot markets. Spot Radio (Daytime):Rangingfrom15-20spotspermonth,spotradiowillconnectwiththetargets during key impulse purchasing times.

Outdoor: Apulsingoutdoor25-showwillbeusedthroughoutthetenspotmarkets.Utilizingtransit outdoor versus billboards will increase frequency through the types of ads that targets recognize the most.

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RATIONALECable TelevisionBoth 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. Prima-ry 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 Primary Target Index Secondary Target Index

Comedy Central 146 173 E! 144 163 Fuse 170 232 MTV 262 191 TBS 129 157 VH1 216 167

* 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.

MagazinesFor this medium the target is our female portion of the demographic. Through Simmons re-search 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 mag-azines (index 116), much more so than men do (index 83). Even the secondary target admits thatmagazinesaretheirprimarysourceofentertainment(index154).Othermediumswillbemore geared towards men in order to balance out the campaign. Publications that the targets are reading:

(Source: Simmons Population Survey, 2009)


Publication Primary Target Index

Secondary Target Index

Circulation

Allure 190 143 1,108,834 Cosmopolitan 208 168 3,032,000 Entertainment Weekly 185 115 1,796,560 InStyle 158 121 1,700,000 Parents 212 143 2,215,645 Seventeen 244 168 2,000,000

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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,womenages25-34.Therefore,theyarebalancedbytitlessuchasSeventeen,whosereadership 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 theprimaryandsecondarytargets’primarysourceofentertainment(primaryindex172,secondaryindex 197). This medium also provides the option of customizing the campaign to various types ofwebsites,whichwilltargetthespecificsegmentsofthedemographic.Forinstance,UFC.comand 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 Primary/Secondary Target Index CWTV.com 258 EA.com 214 ESPN.com 151 Facebook.com 191 Fandango.com 189 UFC.com 253 Youtube.com 177


*Additional Web purchasing rationale may be found in Appendix IV.

Spot TelevisionSpots 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 consumerismostlikelytowatchlocalnewsonCWTV(primaryindex156;secondaryindex164). 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.

OutdoorUsing 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.

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Transit Type Primary Target Index Secondary Target Index Billboard 108 106 Bus 121 128 Bus Shelter 126 118 Subway 131 145 Taxi 122 146


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 AQH Share - Adults 18-24

AQH Share - Adults 24-35

Adult Contemporary 6.2% 7.5% Contemporary Hit Radio 14.8% 9.9% Country 14.5% 12.4% Hot AC 4.9% 5.4% News/Information/Talk 2.8% 6.1% All Sports 1.4% 3.7%

Source: Arbitron “Radio Today 2010 – How America Listens to Radio” – Monday-Sunday 6AM-Midnight AQH Share)

Sportsradiowouldspecificallybeutilizedtotargetourmaledemographicheavily,inordertobalance out the campaign.

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OBJECTIVES, STRATEGIES & RATIONALESreach & freqUency

Month National Reach Goal

National Frequency Goal

MFP Expected Reach

MFP Expected Frequency

February 85 4.5 83.9 4.3 March 85 4 82.3 3.8 April 70 3 70.7 3 May 70 3 70.4 3 June 80 3.5 77.2 3.3 July 70 3 71.5 2.9 August 85 4.5 84.2 4.2 September 70 3 71.3 2.6 October 80 4 81.2 3.6

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.

STRATEGYReach and Frequency GoalsPulsing Schedule with Continuous Internet Buys

Reach and Frequency Decision Model

Optimize Reach Optimize Frequency Product introduction Product information In growth phase of cycle Less established brand Expanding into new markets Lower brand awareness Launching major sales promotions Lower market share Seasonal peak for sales Strong intense competition Among upper half of category Pulsing schedule Creative on par for brands in category Advertising message more complex

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Ostrow Model: Chipotle

Market Factors Dominant brand in market -.2 -.1 +.1 +.2 Smaller, less know brand

High brand loyalty -.2 -.1 +.1 +.2 Low brand loyalty Long purchase cycle -.2 -.1 +.1 +.2 Short purchase cycle Less frequent usage -.2 -.1 +.1 +.2 Frequency usage +.1 +.2 Need to beat competition +.1 +.2 Target old people or

children Message Factors Simple copy -.2 -.1 +.1 +.2 Complex copy High copy uniqueness -.2 -.1 +.1 +.2 Low copy uniqueness Continuing campaign -.2 -.1 +.1 +.2 New campaign Product-focused message -.2 -.1 +.1 +.2 Image-focused message

Single message -.2 -.1 +.1 +.2 Difficult message New messages -.2 -.1 +.1 +.2 Older messages Large advertising units -.2 -.1 +.1 +.2 Small advertising units

Media Factors Low clutter -.2 -.1 +.1 +.2 High clutter Compatible editorial setting -.2 -.1 +.1 +.2 Incompatible editorial

setting High audience attentiveness -.2 -.1 +.1 +.2 Low audience

attentiveness Continuous scheduling -.2 -.1 +.1 +.2 Pulse or flight schedule Few media vehicles -.2 -.1 +.1 +.2 More media vehicles High repeat exposure media -.2 -.1 +.1 +.2 Low repeat exposure

media

Total 0 Estimated Frequency 3.0

RATIONALETheOstrowmodelcustomizesChipotle’suniquefactorstodetermineaguidelinefrequencyfigure.Allofthefactorsendedupeveningout,leavinguswiththebaseof3.Weused3asaminimum frequency goal.

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OBJECTIVES, STRATEGIES & RATIONALESbUdget

OBJECTIVE80% 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 Amount ($) National (%) Cumulative (%) Cable Daytime Early Fringe Late Fringe

6,035,500 2,381,200 2,914,700

739,600

39.9 15.7 19.3 4.9

31.7 12.5 15.3 3.9

Radio Daytime Evening Drive

3,566,700 1,797,300 1,769,400

23.6 11.9 11.7

18.8 9.5 9.3

Magazines 2,975,200 19.7 15.7 Internet Search Targeted Sites

2,550,000 900,000

1,650,000

16.9 5.9

10.9

13.4 4.7 8.7

Contingency 200,000 1.3 1.1 National Total 15,127,400 100.0 79.6

Spot Media Amount ($) Spot (%) Cumulative (%) Television Early Fringe

874,800 22.5 4.6

Radio Daytime

692,100 17.8 3.6

Outdoor 2,315,500 59.6 12.2 Contingency 200,000 5.5 1.1 Spot Total 3,882,400 100.0 20.4 Promotion Amount ($) Cumulative (%) SXSW 175,000 .9 Burrito Eating Contest

400,000 2.0

Promotion Total 575,000 2.9

Gross Total 19,984,800

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RATIONALEAllocating 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 afractionofourbudget($575,000forboth),butwillgeneratelargereturns,duetotheiralignment with the target demographic, the spot markets, and the overall Chipotle brand.

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OBJECTIVES, STRATEGIES & RATIONALESmedia flight plan

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OBJECTIVES, STRATEGIES & RATIONALESgeography

OBJECTIVESince 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.

STRATEGYThe 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 accountedforwefirstfocusedonkeyregions.Todeterminethetopregions,weusedacombination 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 18-34 Population

# of stores Total spent eating OOH

Total across EV%

Southeast 1936092 236 72381125100 72383061428 26.1 Pacific 15098914 312 55958962600 14473479420 20.2 East Central

10425402 263 42621590200 72383061428 15.4

Middle Atlantic

9024937

111 37971939100 37980964148 13.7

Southwest 1936092 158 34638399100 34639383639 12.5 West Central

4706132 106 19325171300 19329877538 7.0

New England

3132377 43 14470347000 14473479420 5.2

Total 45308235 1229 2.77368E+11 2.77413E+11 100

(Sources:Simply Maps,MRI Fast Food Geography Data)

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Basedonthisrankingsystem,theSoutheast,Pacific,andEastCentralRegionswerethestrongest, 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

(Sources:Simply Maps,MRI Fast Food Geography Data)

BasedontheEV%calculations,Pacific,Southeast,andEastCentralwereonceagainthetopmarkets.Theyalsohadindicesof157,142,and120inSimmonsWefocusedonspotmarketswithintheseregions,specificallycitieswhereChipotlealreadyperformswell.

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.

Region 18-34 Population

# of stores Total spent eating OOH

Total across EV%

Southeast 4.2 19.2 26.1 49.6 16.5 Pacific 33.3 23.5 20.1 78.9 26.3 East Central

23.0 21.4

15.4 59.8 15.4

Middle Atlantic

19.9 9.0 13.7 42.6 14.2

Southwest 2.1 12.9 12.5 27.5 9.1 West Central

10.3

8.6 7.0 26.0

8.7

New England

6.9 3.5 5.2 15.6 5.2

Total 100 100 100 100 100


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City Index % down Cleveland 575 20.2 Chicago 212 14.0 Los Angeles 874 6.6 San Francisco 187 3.3 Washington DC 628 12.2

TheremainingfivemarketswerechosenbasedonaboveaverageChipotleconsumptionandnumber of households that visit Chipotle out of all restaurant visits.

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 % of Asians San Francisco 33.3 Seattle 13.8 Los Angeles 11.3 Austin 6.3 Virginia Beach 6.1 Chicago 5.5 Charlotte 5 Columbus 4.1

(Source: 2010 Census)

(Source: MRI Fast Food Geography Data)

*A full list of top cities Chipotle % of all FF visits is within Appendix V.

RATIONALEAll 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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City # households that visited Chipotle in last 6 months

Chipotle % of all FF visits

Columbus 23, 129 7.74 Virginia Beach 11, 428 7.97 Austin 19,566 7.81 Seattle 19, 566 7.81 Charlotte 20, 050 7.94

OBJECTIVES, STRATEGIES & RATIONALES schedUle & timing

OBJECTIVETaking 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.

STRATEGYThe 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’brainsleadingintothespring.Theheaviestmediamonthswillbethefirsttwomonths (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.

Inthefirsttwomonthsofthecampaignwebeginwithanaggressiveheavy-upspotandnational effort. Leading into the spring, when consumer spending at fast-casual restaurants increases,thecampaignwillbeintheforefrontofthetarget’sminds’.Alargeportionofthisinitialeffortwillalsogotowardsourfirstpromotionalevent,whichisasponsorshipatSouthby 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.

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OBJECTIVES, STRATEGIES & RATIONALESsales promotions

OBJECTIVEThe 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.

STRATEGYChipotlewillbedoingtwoevents:asponsorshipofthemusic,film,andinteractivefestivalSouth by Southwest and a burrito eating contest on college campuses.

RATIONALEBoth 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 toputin,andhavesignificantimpactandbuzz.BotheventsalsoalignwellwithChipotle’sbrand identity.

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promotion #1

South by Southwest Sponsorship

ChipotlewillbeasponsorofSouthbySouthwest,anannualmusic,film,andinteractiveconference and festival held in Austin in March. In 2011, the monthlong event hosted more than333,100people.Chipotle’scustomizedsponsorshipwillincludethelogothroughouttheevent, 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’ssocialmediapresence.

Estimated costs: Super sponsorship (the highest level of sponsorship offered): $170,000

*SponsorshipcanbecompletelycustomizedtothespecificChipotlepromotionsmentionedabove. 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 increasingChipotle’ssocialmediapresence.

TheburritoeatingcontestextendsChipotle’spastpromotionalstrategyinawaythatcaterstothetarget.Theoretically,upwardsof16,000peoplecouldparticipate,makingittheworld’sbiggestburritoeatingcontest.Collegecampusesaccountforaninfluentialportionofthelowerage range of the target demographic.

Estimated Costs:$400,000/10 markets=$40,000/per market

$40,000/$6.25(priceofoneburrito)=6,400burritospermarket

6,400/4(estimateofanaveragecontestant’sburritoconsumption)=1600participantspercampus

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Chipotle Media Plan

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