Chipotle's Differentiation Strategy Essay

A differentiation strategy is “an integrated set of actions taken to produce goods or services (at an acceptable cost) that customers perceive as being different in ways that are important to them” (Hitt, Ireland, & Hoskisson, 2015). Chipotle’s “food with integrity” mission has been a recurring theme since Chipotle’s inception in the 90s. Chipotle focuses on tastier food that is not only made from fresh ingredients, but ingredients that are sustainably grown and locally sourced. Chipotle’s customers are more willing to pay higher prices for their products because they are receiving superior value for how ingredients are grown and raised, and the service they receive at Chipotle restaurants. Because of Chipotle’s mission to be sustainable, their customers are very loyal to the company. This brand loyalty allows Chipotle to charge their customers higher prices compared to their competitors. Chipotle can continue to create value-creating strategies by investing in marketing and advertising strategies. Chipotle has created innovative marketing strategies in the past such as their beverage cups being printed with thought provoking stories. Additionally, Chipotle puts ads in magazines. Chipotle’s current advertising strategy is focused on word-of-mouth publicity, which is why they have only advertised a commercial once on television, which was
Taco Bell, for example, uses a cost leadership approach where customers are attracted to low, affordable prices. The fast-food industry as a whole targets a broad range of consumers, the majority of which are young adults age 18-29. Millennials represent a key segment for quick service and fast casual restaurants because 57% of this age group say they eat fast food at least weekly, the most often out of all consumer groups (Dugan, 2013).
International