The Salmonella outbreak that occurred at the beginning of July, 2015 injured the excellent reputation Chipotle has been building over the years. It dented Chipotle’s image of a provider of high-quality goods and repulsed loyal customers. Consequently, Chipotle experienced a significant drop in profits and is currently struggling to break even in some of its stores. The incident perfectly demonstrates how a company’s image and reputation can influence its profitability. Chipotle is considering the various tactics appropriate to build back a favorable reputation. It may opt to reposition the brand to a new customer group; reposition the brand in the minds of current customer group; engage in multi-segment product positioning to target the existing and new markets; or stay with the present positioning. Analysis indicates that since Chipotle already has an identified and established existing market, the best recourse would be to retain the current brand positioning and focus on ways to strengthen the association between the brand and the target market.
Retaining Current Brand Positioning
Chipotle has an excellent branding strategy. It has a clear target market that is largely comprised of the millennials with an expansive disposal income. The millennials are the apt market because their values and attitudes are in accordance with Chipotle’s brand promise to deliver high quality healthy products that are ethically sourced and processed (Fromm & Garton, 2013). It is, therefore, not prudent to shift the target market to a different prospective consumer base. Furthermore, it is only the relationship between the brand and the existing market that has been strained; hence, there is no need to reposition the same product to another market. Considering the 4Ps of marketing: price, product, promotion, and place, the best alternative intervention would be to retain the current brand positioning while working to mend the unfavorable reputation through the product promotion (Kotler, Hessekiel, &am; Lee, 2012). Chipotle should demonstrate to the market that it can be still associated with the positive attributes the customers trusted before the Salmonella outbreak caused the image crisis.
Partnering with Gyms
Chipotle should, especially, consider partnering gyms as part of its product promotion interventions to change the current unfavorable perception. Gyms are fitness centers which are frequently visited by people conscious about their health and fitness levels. Their ideals of healthy living resonate with those advanced by Chipotle. Crucially, gyms promote the use of organic means to attain a healthy lifestyle, which is reminiscent of Chipotle’s mission (Stock & Wong, 2015). Since the ideals of gym-goers and Chipotle’s target market are identical, Chipotle should take an advantage of the opportunity to partner gyms and fitness centers. It can facilitate their renovation as a part of the corporate social responsibility and manage to advertise or even stock their products in gym.
Chipotle may also use gym to conduct educational programs on leading healthy lifestyles to incentivise the consumption of Chipotle products. Chipotle has been on the forefront of promoting the consumption of healthy food products (Postrel, 2015). Its mission statement revolves around the ‘Food with Integrity’ concept which ascertains Chipotle’s commitment to the sourcing of the best organic ingredients (Chipotle, 2016). The ingredients, Chipotle (2016) insists, must be produced justly with regards to the animals, farmers, and the environment. The organic sourcing of products is, thus, Chipotle’s unique selling proposition. It enabled Chipotle to hold a vast market share from Taco Bell and other competitors. It can be used, for instance, to demonstrate to gym-goers and the rest of target market that Chipotle is committed towards healthy living and that the Salmonella crisis was an exception rather than the norm. The effort to change the perception will create an incentive for thhe gym-goers and other fitness gurus to favor Chipotle’s ‘Club fitness’ image and enhance its positive reputation once again. The favorable change in perception will, hopefully, propel the rest of target market and increase its sales once again.
Crucially, though, Chipotle should augment the rate of positive change in perception by complementing gym partnerships with popular media adverts. The partnership will be more effective in influencing perception if the positive stories are broadcasted to the masses. Relying only on the “from mouth to mouth” effect will, eventually, achieve the turn-around in reputation but at a much slower pace (Kotler, Hessekiel, & Lee, 2012). Chipotle should increase its advertising budget to conduct extensive marketing campaigns that portray Chipotle in a favorable light. Ordinarily, Chipotle does not do much advertising. In the year 2011-2012, for instance, it allocated a mere U.S. $30 million as the advertising expense, a figure prevailed by McDonald’s with U.S. $650 over the same period (Fromm & Garton, 2013). Intensifying the marketing campaigns will espouse the brand’s current meanings and values and prompt their purchases.
In conclusion, it is evident that the Salmonella incident that occurred in 2015 gravely injured Chipotle’s reputation decreasing its sales. There are several strategies the firm can use to redeem the dire situation. The most effective tactic would be to retain the existent positioning while strengthening the association between the product and the target market. The major intervention would be to partner gyms and fitness centers to promote Chipotle brand’s image. These facilities were chosen because the users are health-conscious and attach importance to great nutrition, exhibiting similar ideals to those of Chipotle. The firm should also intensify its advertising activities. Successful implementation of the strategy should prompt a transformation in perception consequently stimulating sales and profitability.