Chipotle Mexican Grill

3846 words 16 pages
Chipotle Mexican Grill

1 a) Do you think CMG ought to consider an advertising campaign? Why or why not? If so, what should be the focus of the ads? Celebrity endorsements, the humane treatment of animals in its beef, etc…?
CMG should consider an advertising campaign in order to increase awareness about the Mexican food industry and about the CMG chain. There is a relatively small market for authentic Mexican food in the United States and CMG can increase this market by having a good marketing campaign. CMG also competes with other food chains which offer healthier ingredients in their menus such as Qdoba, Panera Bread and Moe’s Southwest Grill. So in order to increase visibility over their competitors an ad campaign is advisable.
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The advantages to franchising their business include that it provides a cost effective way for CMG to accelerate expansion. The capital for expansion will come from franchisees as opposed to loans. Any risks of expansion are spread among the franchisee operations therefore CMG does not take the risk alone.
It may allow some relationships to be formed between suppliers and store managers that allow cheaper contracts for the whole franchise network. It gives an advantage to the smaller or newer franchisee and also makes CMG more competitive as a brand.
If the franchisee operation does not do well and it goes under, CMG would still receive money from sales and still has the rights. The only disadvantage is that they would lose the customer base in that area.
c) Some of CMG’s high ingredient costs can be attributed to its commitment to “food with integrity.” What do you think of Mr. Ells’s commitment to pressure suppliers to raise animals more naturally and humanely to produce ingredients in a way that is more environmentally sustainable? Is this goal sustainable in light of their difficulty in obtaining this type of meat?
Pressuring suppliers to raise animals more naturally is a good idea for CMG to pursue because it is something that sets CMG apart from other fast casual dining operations in the industry. CMG stores claim to have 12.4% increases in sales in 2007 from just repeat customers alone.
In January 2008 46% of

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