Why would someone buy from Chipotle v. a quick-service restaurant like McDonald’s or Wendy’s?Explain

Marketing Case Study
Q1. Why would someone buy from Chipotle v. a quick-service restaurant like McDonald’s or Wendy’s?
Chipotle has combined various marketing strategies that have enabled to compete effectively against the big businesses in the fast food industry. The business has mainly applied differentiation, as a strategy that enables it to compete against such businesses. The information in the case study gives various reasons that would make someone buy from Chipotle instead of quick-service restaurants, for instance, McDonald’s and Wendy’s. To begin with, Chipotle has proved that food that it delivers through quick-service does not have to be fast-food. McDonald’s and Wendy’s are businesses that mainly deal in fast foods. The category of food faces major criticism due to health concerns. Buyers from restaurants would be looking for an outlet that would offer quick service of food, and such food does not have to be fast food. Chipotle differentiated the type of food it serves it customer with; right from the time it opened its first store in 1993.
Chipotle, in addition to its food differentiation strategy of not necessarily serving its customers with fast food for their services to be quick, offers its customers with a variety of foods. The business uses a high-end menu, which gives the customers the experience of choosing from a wide variety of dishes. At Chipotle, for example, a customer can experience a variety of Mexican dishes such as burritos, tacos, salads, and burrito bowls. The competing restaurants may not offer Mexican dishes in such varieties, giving Chipotle a competitive edge over them. Furthermore, the business has used the strategy of opening many restaurant outlets, a strategy that makes the restaurant easily reachable by its customers. The restaurant, by 2012, had a total of 1,410 outlets, which were spread all over USA. The restaurants are also located in other countries and cities. Five of its restaurants, for example, are in Canada, and five are in London.

Q2. Why would someone buy from Chipotle v. a casual dining restaurant like Kelsey’s or East Side Mario’s?
The reason someone would easily buy from Chipotle and not other casual-dining restaurants is that the business has modified its selling strategy to include casual dining services. What makes the business better at such services is its use of fast service strategy when giving its customers casual dining services. The business knows the changing market trends, and it diversifies by opening more restaurants, so that it can serve the newly emerging markets. Casual-dining is the latest serving strategy in the restaurant service, and Chipotle’s outlets have grown to 1600, to serve the new niche.
Chipotle, besides using fast service for its casual dining, also uses good interior design, high-quality raw ingredients, and classic cooking techniques. The strategies, which are only identifiable with the world of classic (fine) dining, make the business outstanding from the rest, and it highly attracts customers than its competitors.
Finally, as Chipotle ventures in the casual dining services, it concentrates in doing just a few things, but in a very attractive and different way. The restaurant uses its recipes and excellent cooking techniques sophisticate the taste of its foods. The business also uses an outstanding design of its restaurants. The design of its restaurants does not depend on the standardized elements.
Q3. How was Chipotle able to raise price without any commensurate decrease in demand?
Chipotle has successfully raised the price of its food yet the demand has increased. Traditionally, demand falls with increase in price. The business, however, has continued to differentiate its services from those of its competitors, something that enables it to continue attracting more customers even as it increases its prices. The reason Chipotle increased the prices of its foods was the rising cost of food (ingredients). Chipotle specializes in selling Mexican dishes. The specialization gives a strong brand. The business is reliable as it gives its customers a variety of the Mexican dishes. Good customer experience, which is a result of their ability to get various Mexican dishes at Chipotle, is a strong selling point for the business. In reliable businesses, customers continue demanding for more products even as their prices increase.
Good customer experience, from the perspective of excellent customer care and good interior design, are factors that have increased the demand for the business’ food. Chipotle, for example, realizes that it does not have to serve its customers with fast food if it has to give them quick services. The business cares about the health of its customers. The excellent and rare interior design is also a strong point of customer attraction. Besides, Chipotle gives its food a sophisticated taste using its recipes, a factor which makes its food’s taste different from its competitors. The customers like the sophisticated taste, and even if the business increases the prices of the food, the customers still demand them.
Chipotle is also sensitive to the newly emerging market segments in the restaurant business. As I demonstrated earlier, Chipotle has extended to the casual dining services. The business serves its customers with differentiated casual dining services. Chipotle mainly uses speed in its casual dining services, a strategy that is time-saving to the customers. The competitors, on the other hand, are not fast in their casual dining services.
The fact that Chipotle has many restaurants in different destinations has increased its accessibility. In certain circumstances, the ability of a customer to access a business easily determines the decision to buy from it. Most of the competitors do not have many restaurants. As Chipotle opens more restaurants in different countries, the implication is that more customers can reach the restaurants, a factor that increases the demand for its products.
Q4. Are you a buyer or a seller of the Chipotle stock as at July 2014? Why?
I am a buyer of Chipotle’s stock as at July 2014. The reason I am a buyer, and not a seller, is Chipotle’s continuing good performance in the stock market. The stock price remains high, above $660. The demand for its stock, despite the increase in the price of the stock, continues to grow. The main reason for the growth in the demand for the stock is Chipotle’s good market performance. The rise in demand for its services, the expansion to new markets, and the extension to new services (e.g. Casual dining), are indications that Chipotle is a good market performer.
The indication of good market performance is that the business’ performance in the stock market shall continue improving in the future. Under the circumstances of continued growth that Chipotle is currently experiencing, the meaning is that the share prices shall increase in the future. If I buy the shares of the business in July 2014, therefore, I am confident that I will realize good dividends from the profits the business shall make. I will also make good profits if I sell the shares in the future as their prices will increase.