Creating Offerings & Using Channels to Create Value for Customers

Running head: Consumer Behavior, Market Segmentation & Positioning

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Running head: Consumer Behavior, Market Segmentation & Positioning

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Consumer Behavior, Market Segmentation & Positioning

Consumer decision-making process.

Chipotle focused on sustainability, great taste, great value, great nutrition, and support for

families because that is one of their main considerations in coming up with the product. Their

product strategy is unique compared to the other fast-food chain restaurants. It has an Integrity

program that aims to remove any genetically modified organism food from the menu.

The company has a cost-effective mechanism for advertising products. Clients finish and

customize the food orders from their mobile phones, making it possible for them to maximize

their time and prepare meals before the clients get to the restaurant. Their website has many

resources that attract the millennials that appeal. For instance, Chipotle describes the source and

process of food reception or preparation with all the ingredients. That enhances an understanding

of what is being consumed by the customers and the source or condition of the ingredients. They

blanch the onions, lemons, avocados, jalapenos, and limes in boiling water for five seconds to

eliminate any skin germs (Chipotle Mexican Grill, 2015). The company's website has a nutrition

calculator that promptly computes calories, the quantity of sugars, salt … for clients.

Furthermore, they considered most families' eating out habits as seeking convenience and

quality. Therefore, close analysis of the consumers and their decision shows that they recognized

the problem of wanting fast food, yet most were unhealthy and lacking freshness. To satisfy that

Running head: Consumer Behavior, Market Segmentation & Positioning

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demand Chipotle acquires ingredients from farm producers who have humane treatment towards

their animals. By attracting customers seeking fast food with fresh and healthy ingredients, this

very same customers started being advocates of what the company was offering. They helped the

company build authority by giving positive reviews and even becoming partners.

Market Segmentation.

Market segmentation serves significantly in the organization and clarifies the desires and

needs of particular people in a target market. Commercial enterprises utilize market

segmentation to enhance the assessment of markets and ensure a company realizes its goals.

According to Friedman (2011), market segmentation is where a market is separated into

primarily homogeneous groupings for the clients to comprehend their needs (Friedman, 2011).

That allows for understanding the target markets as particulars with mutual interests, priorities,

and needs that enhance the clients' understanding. For instance, once the focus is on a given

segment of people related to income, tastes, gender, or age, a potential business might have a

greater understanding of the products they need to focus on and make it affordable for the

clients.

The implementation of market segmentation demands that an organization ought, to

begin with, the identification of what features a target market is. There are various market

segment features, including behavioural, demographic, geographic, and psychographic aspects.

For instance, in the demographic segmentation, there is ethnicity, age, education, income, gender

and occupation whereas psychographic segmentation focuses on the values, opinions, interests,

attitudes, and activities of the customers (New Charter University, 2016). As soon as the greatest

aspect of the product which is segmentation is determined through the features of the target

Running head: Consumer Behavior, Market Segmentation & Positioning

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market promotion and sales process. It is quite costly to advertise products because that makes it

possible to reach the target markets.

Businesses integrate segmentation features that relate with their products thus establishing the

place, way, and advertisement. Companies which go for all the population and not particular

people hardly thrive.

In the fast-food business, there is a great dependence on the basic principles of

segmentation that build restaurants' success in easy access in the target market. For instance,

Chipotle Mexican Grill is a fast-food restaurant that meets the needs of particular generations

who are the "Millennials". In America, the Millennials add up to 25% of the United States

population and that 50% of such population are more than ready to buy from a firm which

supports a they believe in (Millennials, 2016). Based on another research by The Nielsen

Company (2016), about 66% Millennials ready to buy products from a firm that support positive

environmental and social and impacts.

Market segmentation for Chipotle in the US market is millennials or individuals born between

1976 and 2000, especially those with the average annual income of $ 54000. The 1600

restaurants increase convenience for all the customers by ensuring they acquire what they need

within their neighbourhood. The primary target market are the locals. Known for fresh and

healthy alternatives, Chipotle appeals to that target age group in the society. The consciousness

to human attracts commuting workers, tourists, and people attending commercial events. The

product is associated with a fast-casual tag that is the exponentially growing market segment on

the restaurant industry.

Running head: Consumer Behavior, Market Segmentation & Positioning

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Target Market & Strategy.

The retention of customers is easier than establishing new ones. Failure to define a market can

also be quite disastrous. Market segmentation allows an organization to classify the population

base on given features. That helps to establish the ideal clients and match the business plans and

advertisement to reach these potential clients and their needs. There is a need for an accessible,

durable, identifiable, unique, and substantial customer aspect to create a successful company

(NetMBA, 2010). Market segmentation could finally result in direct communication between the

target market and a company. For instance, the clients could give feedback that would permit the

organization to have a direct evaluation of how to meet the clients' needs and desires.

Organizations can consistently change to the best and offer needed services. Nonetheless, the

organizations that fail to determine their target market will have difficulty determining how they

might expand and have suitable services for their clients.

I think the urban savvy young and middle age shoppers are suitable in the fast-food market.

Given that many people hardly have time to cook in urban areas, they also consider healthy food

and find convenience in pre-cooked and ready to order foods. They often go out for lunch and

dinner with their friends, colleagues or family.

Positioning.

High Price

High Quality Low Quality

Low Price

Baja Fresh

Moe’s Mexican Grill

Taco Bell

Rubios

Qdoba

Chipotle

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For the perceptual map of Chipotle, I picked two criteria – food Price and Quality. Chipotle does

not have a monopoly and faces growing competition in the fast-casual Mexican food like Qdoba,

Moe's and Baja Fresh. Looking at the map Chipotle at the moment is well-positioned as it offers

food prices slightly lower than its direct competitor but of higher quality. To remain competitive,

Chipotle might need to reconsider its current structure. As of now, Chipotle owns all of its

restaurants, but franchising might be something to consider in the future.

References

Consumer Behavior: How people make buying decisions. (2015). Principles of Marketing.

University of Minnesota Libraries

https://open.lib.umn.edu/principlesmarketing/part/chapter-3-consumer-behavior-how-

people-make-buying-decisions/

Chipotle Mexican Grill. (2015). A Focus on Food Safety. Retrieved from

https://www.chipotle.com/foodsafety

Czaplewski, A., Olson, E., & McNulty, P., (2016). Going Green Puts Chipotle in the Black.

American Marketing Association. Retrieved from

https://www.ama.org/publications/MarketingNews/Pages/Going-Green--Puts-

Running head: Consumer Behavior, Market Segmentation & Positioning

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Chipotle- in-the-Black.aspx

Friedman, H., (2011). Market Segmentation and Targeting. Brooklyn College of the City

University of New York. Retrieved from

http://academic.brooklyn.cuny.edu/economic/friedman/mmmarketsegmentation.ht

m

Market segmenting, targeting, and positioning. (2015). Principles of Marketing. University of

Minnesota Libraries https://open.lib.umn.edu/principlesmarketing/part/chapter-5-market-

segmenting-targeting-and-positioning/

Millennial Marketing, (2016). Who Are Millennials? Retrieved from

http://www.millennialmarketing.com/who-are-millennials/

NetMBA. (2010). Market Segmentation. Retrieved from

http://www.netmba.com/marketing/market/segmentation/

Norman, D., (2016). Market Segmentation, Targeting and Positioning and the Product. New

Charter University. Retrieved from

https://new.edu/nodes/market-segmentation-targeting-and-positioning-and-the-product