Why Chipotle brand will Rebound Quickly

Chipotle has been through no picnic recently, with two multi-state E-coli outbreaks, a separate norovirus issue, and widespread negative food safety publicity.   However, barring any other major food safety issue, Chipotle will recover quickly and thrive, for five major reasons.

  1. Consumers LOVE, not like, the brand – Chipotle has extremely high levels of brand awareness and brand esteem, well beyond their peers, which yields very high levels of brand equity, from which a setback can borrow.  Brand equity is like a bank account: continued positive experiences build brand equity; issues will erode.  Consumers have a very strong personal affinity, love and respect for the brand; it’s well beyond a fast-food choice they visit.  In fact, Chipotle scores 83 (out of 100) on the American Consumer Satisfaction Index (ACSI), nearly at the top of all fast food brands, which average 77, well beyond Wendy’s (73) and McDonald’s (67).
  2. Chipotle has been transparent in its communication and rigorously improved product safety – Once the second E coli incident occurred, Chipotle’s leadership has aggressively communicated taking responsibility for the problem, sought best-in-class system-wide food safety counsel and implementation, and has invested in redundant measures to ensure food safety.   In their most recent quarterly report, Steve Ells, founder, chairman and co-CEO of Chipotle said “We are pleased to have this behind us and can place our full energies to implementing our enhanced food safety plan that will establish Chipotle as an industry leader in food safety. Image result for chipotle loveWe are extremely focused on executing this program, which designs layers of redundancy and enhanced safety measures to reduce the food safety risk to a level as near to zero as is possible. By adding these programs to an already strong and proven food culture, we strongly believe that we can establish Chipotle as a leader in food safety just as we have become a leader in our quest for the very best ingredients we can find.”  This contrasts with several food companies who either hid or understated their food safety or recall issues and were quick to try to claim it was solved with a reactionary nominal manufacturing change.
  3. Favorable food safety and public relations are reassuring and reminding consumers to return – Yesterday, both the CDC (Center for Disease Control) and FDA (Food & Drug Administration) called Chipotle’s E. coli outbreaks over.  Chipotle will close its Image result for chipotle company wide meetingstores for several hours on February 8th to have a company-wide meeting reviewing new food safety measures.  Internal communication and execution of these improved processes are already in effect in their stores.  We also expect Chipotle to resume and increase its compelling advertising, in-store promotion, and couponing programs to welcome concerned consumers back to their stores and resume their unusually high frequency and loyalty of coming back to the stores.
  4. Chipotle will refine, but stay true to its compelling promise of Food With Integrity –2010_02_Chipotle
    Chipotle loyalists are drawn to their unique positioning as a higher quality fast food option, strong price/value, and great taste.  While their will be refinements in product sourcing and distribution, the product promise of Food With Integrity will remain intact, and strengthened. Consumers will continue to see the Chipotle brand as a superior fast food choice meriting their continued loyalty.
  5. Same-store-sales will rebound faster than industry averages – Since Chipotle has a stronger and more loyal customer base, traffic will improve more quickly than the industry’s typical 12-18 months to recover same-store-sales performance, as per Credit Suisse estimates. In addition, their marketing and promotional effectivenessChipotleand sophistication will also accelerate the pace of same-store-sales rebound.  We expect a recovery in 3-4 quarters, propelled by an even stronger in-store experience, product quality, favorable public relations, and consumer word-of-mouth.

Lessons learned:
1.  Give consumers a superior, differentiated product and a reason to love, not like, your brand.
2.  Beloved brands can, and do, recover from quality and public relations issues, if they are quick, contrite, and responsible.
3.  Be proactive and vigilant in your product quality processes, pre-prepare how you would mobilize to address a product quality issue.
4.  Incent post-crisis consumers to resume confidence in your brand and incent/reward them for their loyalty.

 

Can I patent my recipe? – Typically No!

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Beyond patents

Design Patents.

Annual Plan Checklist for a Killer 2016!

We hope your 2015 is exceeding expectations and you’ve created a strong plan for 2016 to grow faster.  As most of you are, or are approaching, completing your 2016 Plan, here’s a checklist to make sure you’re ready for a killer 2016!

2016 Annual Plan Checklist

1. Develop a Written, Market Based Growth Plan Carefully

  • Analyze and segment your customer and consumer base, prioritize by growth potential
  • Understand what your customers’ unmet needs and why they will choose your superior product or service
  • Build a strategy that leverages your business model: market opportunities, your core competencies and where you are most profitable

2. Widely Communicate Your Growth Strategy

  • Summarize your 3-5 Key Growth Strategies, based on factual analysis (e.g. channels, products/services)
  • Growth Priorities should be quantified and clearly communicated throughout your company and key constituents (e.g. suppliers) so everyone understands them and is aligned
  • Innovation should be among your top priorities; have clear parameters (fertile areas in which to innovate) to provide direction

3. Have, or Get, the Right Accountable Team

  • Have accountable talent who can lead and drive respective pieces of the growth strategy
  • Have strong and clear inter-department communication and processes
  • Have the right talent who can produce; commit to coach up, outsource for, or dismiss those who can’t

4. Execute with Cross-Functional Precision

  • Have clear leadership, accountability and measurement of top initiatives
  • Maintain ongoing cross-functional leadership and communication to keep key initiatives on track
  • Track key programs quantitatively and refine them based on in-market learnings

5. Deploy Effective and Efficient Marketing

  • Marketing should identify and drive consumer and marketing growth opportunities
  • Marketing should develop and lead a clear marketing strategy that directly ties to growth strategy Your brand positioning(s) should be clear, consistently communicated.
  • Your marketing communication and R&D efforts should consistently strengthen your superiority
  • All major programs should be on strategy, measurable, optimized across multiple media, and provide measurable return-on-investment

6. Drive Productivity… Everywhere

  • Set ambitious, achievable productivity goals (cost reduction/efficiency). $1 in productivity > $10 in new sales
  • Challenge each function to develop specific, measurable, cash-saving (not conceptual) programs; drive wide participation
  • Celebrate, publicize, and reward best programs. This creates a ripple effect for more productivity

Avoid Botching Exposure: No, we still don’t know BDO

BDO, a global accounting, business and financial consultancy, is wasting millions of dollars on its current advertising campaign, “People who know, know BDO.” In their advertising, they could tell you who they are, but they don’t. They could tell you what problems they solve for you, but they don’t.    They could tell their target audience when to contact them and why, but, alas, they don’t.  It’s painful to see such a great introductory opportunity go to waste.

Rather, they do tell you that the people who already are aware of them and know what they do (presumably anyone but the audience) are knowledgeable.     So they are talking only to people who already understand and use their services.     This is a great example of everything you don’t want to do in your advertising.

Sadly, they repeat the strategic vagueness on their website as well (At least the campaign is consistent).BDO

To avoid this, take these simple steps:

1.   Clarify your brand proposition – Who are you, what problem(s) do you solve, who is your target audience, and why are you superior and unique.
2.   Determine your advertising goal – Are you trying to attract new users?  (like BDO is attempting, but failing to do)  Convince current customers to buy/select/consume your brand more frequently?   Are you trying to improve your brand image?    If you are not clear about the purpose of your advertising (or any marketing investment), you can count on meandering advertising, unless your marketing partners are clairvoyant.
3.   Assess your advertising from the consumer’s perspective – What do they know about you now?  What do you want them to know about you after they have been exposed to your message?    Make sure you are giving them a persuasive message, in their language, based on what you know from your consumer research.     Again, BDO makes a common error of crafting advertising based on their internally focused, prideful self-assessment.     It’s a missed opportunity to tell potential customers of who they are, why they’re a superior service, and how they will solve the customer’s problems.
4.  Pre-test your advertising – There are several great advertising effectiveness evaluation methods, including MSW ARS and IPSOS ASI, that will give you unbiased, quantitative and credible feedback on if your advertising campaign is persuasive and has achieved your marketing goals.    These are small investments that can be done while the campaign is in the idea phase, prior to wasting money on producing or airing ads that do little to grow your business, or even may do harm.

4 Ways to Raise Pricing and Delight Customers

Most companies loathe or mismanage the harsh reality that pricing increases are often necessary to offset inflation, even with the most diligent cost control.     Often, this is a painful across the board price percentage increase on all units, on largely unchanged products and services.     Here are five great ways to drive price increases that consumers will willingly accept, and, even enhance loyalty to your company.tide_pods
1.   Innovate to improve the customer’s user experienceTide Pods is a brilliant innovation that makes washing clothes more convenient, portable, and less messy.    The idea is grounded in solving problems and consumer irritants in the category    Tide virtually reinvented laundry detergent from the customer’s perspective of easily, and properly doing a load of laundry.    Pricing impact:   +10-15% increase per load, plus a more space efficient configuration, which reduces distribution expenses.

2.  Resize to meet changing consumer preferences –   As consumers are trying to reduce their consumption of soft drinks and/or improve their portion control, Coke has come to their rescue with their new, appealing 7 1/2 ounce cans, ostensibly for consumers to choose versus 12 ounce cans.   150114_EM_PayMoreLessSoda And consumers are delighted; sales volume is up 9% according to the Wall Street Journal, while paying nearly double – yes double – the price per ounce for these cute cans.     Yes, this is an exaggerated, albeit successful example, but the bigger point is that Coke is re-evaluating serving sizes from a consumer perspective and looking at pricing on a price per ounce vs. price per unit basis.
3.   Innovate for new usage occasions –  Similarly, Crystal Light did this brilliantly by adding smaller On-The-Go packages, specifically designed to enhance the staple 8 oz.Crystal Light brand water bottle, again at a +100% price premium versus their traditional make a gallon at home package.    Lest you forget to buy these in the supermarket, they are brilliantly merchandised in convenience stores and gyms, right at your (now enhanced) water bottle point of purchase.

4.  Adjust product mix and package sizes –  Cereal and snack companies master the ability to change their product size mix and selectively reduce the amount of product in certain packages.     This can often mask direct comparisons versus the previous product line up and  pricing.    Further, you can strategically promote your more profitable package sizes more frequently, again, driving an effective price increase that is often invisible, and/or preferred by the consumer.

Lessons Learned:
1.   Think of pricing in broader terms than price per unit.     Price per ounce, price per pound, price per consumer usage occasion give you far more latitude for consumer-accepted price increases.
2.   Solve consumers’ most nagging problems in a product improvement or innovation and they’ll pay for that privilege.   Increasing convenience or reducing waste are among two widespread benefits that consumers will pay for.
3.   Build an expectation of gross margin enhancement into your innovation program and project selection criteria.

5 Hottest Food Trends at Expo West |

We were delighted to appear in The Ohio State University’s Food Innovation Center Blog:

Expo West

Natural Products Expo West 2014 was an incredible show of natural, organic, and healthy food and beverage manufacturing, ingredients, and in many ways – the future of the food industry, given that healthier food has moved from trend to societal shift. The natural, organic and healthy products food industry is growing nearly three times higher than the food industry average, per Penton. I had the privilege of attending with 67,000 of my closest friends and 2,600 exhibitors. Expo West was an enlightening window to emerging food industry trends.

 1. Gluten-free continues to explode, up 20% versus last year, driven by perceived health benefits and better diagnosing of celiac disease. New brands, new food categories, and Gluten-freeimproved organoleptics were virtually everywhere. Per NPD, 30% of consumers want to reduce the amount of gluten they are eating, and gluten-free foods’ household penetration has leaped to 11%, more than doubling since 2010, per Nielsen. The tidal wave is projected to continue as the foodservice sector (restaurants and institutions) catches up with consumer demand at retail. Even Pillsbury has jumped into the space with gluten-free dough (et tu, Doughboy?) as has Columbus’ Donato’s with its gluten-free Donato’s and Sonoma Flatbreads brands. Gluten-free is projected to grow by 22% annually through 2016, per Mintel.

2.  Non-GMO (genetically modified organisms) verified food offerings have tripled since last year, in response to growing consumer demand, as well as organic manufacturers’  non-gmo efforts. Regardless of where you stand on the contentious GMO discussion, consumers are responding. 93% of Americans said that foods that have been genetically modified or engineered should be identified, per a recent New York Times poll and non-GMO has recently surpassed ‘organic’ among consumers’ desired food claims. Whole Foods’ requirement of GMO labeling on all products in U.S. and Canada by 2018, will also drive non-GMO consumer awareness. Promising, except only 11% of consumers say they are willing to pay more.

Non-GMO food and beverages are projected to grow at a 13% compound annual growth rate for the next few years and account for 30% of retail sales by 2017, even without mandatory labeling, per Packaged Facts. General Mills, Smart Balance, Ben and Jerry’s, Chipotle, and Kashi have all taken proactive stances on GMOs by either eliminating them or pushing for increased labeling. To help manufacturers and consumers with product and ingredient sourcing, the verification body, the Non-GMO Project has established a centralized database. Buckeye brag: Marzetti launched Mamma Bella GMO free garlic breads, led by Fisher alum Adam Koenigsberg.

3. Proteins, Popcorn, Chia and Kale were prevalent in multiple categories. New protein-rich or enhanced products targeted to consumers who are reducing or eliminating red Popcorn Indiana brand(or all) meat from their diets included yogurts (whey and soy proteins), snack bars (almond and pea protein isolate), and pancakes (oats, quinoa, and whey). Popcorn, with its better-for-you consumer perception, was featured by over 25 companies in every mainstream and exotic flavor. Most intriguing were Popcorn Indiana’s fit brand, positioned as a low-calorie option, and chip’ins, a popcorn-based extruded snack chip. Chia continues to be a hot omega-3 rich and filling superfood in many bars, yogurts, drinks, as well as seeds alone. And kale, which has grown four-fold since 2008, is the hot supergreen in raw snacks, chips, sauces, dressings, and disturbingly: macaroons.

4. More Funding, Investments and Acquisitions – The health and wellness segment’s rapid growth is attracting interest and investment from multiple sources. Major food Food_Acquisitionscompanies are penetrating the segment via acquisition and joint ventures, such as Coca-Cola (Zico and Honest Tea). Heinz (Hain Celestial), and Campbell Soup (Plum Organics), and the sector has become a darling of private equity leaders such as Sherbrooke Capital (Angie’s Popcorn) and Alliance Consumer Growth (EVOL brand). There is also an explosion of funding available for smaller companies through food incubators and crowd-funding platforms, with over 25 new food and agriculture funding sources launched last year. This foretells both continued growth among increasingly well-capitalized companies, as well as improved product quality and rate of innovation.

5.  Local Participation –  Ohio was well represented by many of our friends at 19 companies. In addition to the aforementioned Marzetti and Donato’s, Almondina, Avitae, Bunker Ohio StateHill Cheese (Heini’s), Eurochoc Americas Corp., Fit Organic, Fremont Authentic Brands, Garden of Flavor, Gaslamp Popcorn (Rudolph Foods), Graeter’s, Herbal Science, Jeni’s Splendid Ice Creams, 1-2-3 Gluten Free, R.A.W. Real and Wonderful, Swurves (Mike-Sells), Trophy Nut, Unistraw, and Wyandot Snacks exhibited, all of whom we expect are gearing up for the surge in new business… and hiring talented Buckeyes.”

Meet the Expert

Tammy Katz is an Adjunct Professor of Brand Management at the Fisher College of Business, The Ohio State University, and Chief Executive Officer of Katz Marketing Solutions, a marketing and brand management consulting firm. She is particularly interested in brand management, marketing strategy, commercialization, corporate outreach, and consumer-driven innovation.

What Keeps Marketers Up at Night?

Key Issues for Marketers are driving growth, ROI and digital capabilities, per MarketingProfs #marketing #brands

What Keeps Marketers Up at Night?

                   by Ayaz Nanji  |

September 26,  2013

Not surprisingly, the foremost worry for marketers is reaching customers,  with 82% saying it is a major concern, according to a recent survey by Adobe.

The next most common worries are understanding whether campaigns are working  (79% of survey respondents) and proving campaign effectiveness (77%).

Demonstrating return on investment for marketing spend is the fourth biggest  concern (75% of respondents), followed by using digital tools effectively  (70%).

Below, additional key findings from the report, Digital Distress: What Keeps Marketers Up at Night?, which  was based on data from an online survey of 1,000 US marketers (263 digital  marketers and 754 generalists).

   

Digital Demands

  • Only 48% of the digital marketers surveyed feel highly proficient in digital  marketing.
  • Generalists are even less confident, with just 37% saying that they feel  highly proficient.
  • Overall, only one in three marketers think their companies are highly  proficient in digital marketing, and only two out of five marketers think their  colleagues and peers are highly proficient.
  • In particular, marketers feel ill equipped to tackle the digital challenges  of e-commerce, personalization, and measurement.

Marketing Proficiency and Change

  • In general, marketers have low confidence in their organization’s marketing  performance. Only 40% think their company’s marketing is effective.
  • Just 44% say their marketing departments have a great deal of influence over  their organization’s overall business strategy.
  • 76% of marketers think marketing has changed more in the past two years than  the past 50.
  • Marketers are mixed on what areas to focus on in the future—with social  media, personalization, digital advertising, and cross-channel marketing all  seen as rising in importance over the next three years.

ROI

  • 83% of respondents said proving return on investment on marketing spends is  important.
  • 79% say it will be even more important to prove ROI in the next 12  months.

About the research: The report was based on data from an online survey of 1,000  US marketers (436 decision makers, 499 staff members; 263 digital marketers, and  754 marketing generalists). The survey was conducted between August 26 and  September 11, 2013.
Ayaz Nanji is a digital strategy and content consultant. He  is also a research writer for MarketingProfs. His experience includes  working as a strategist and producer of digital content for Google/YouTube, the  Travel Channel, and AOL.

Super Bowl XLVII Ad Winners and Atrocities

No spectacular ads last night (except for the Beyonce brand), but several excellent ads that were well worth the $4.0 million investment for the ad time, pre- and post-game public relations and social media legs.     Super Bowl advertising with strategically sound brand communications that focused on persuading consumers to buy and garner a return-on-investment, rather than sophomoric – or just lame – humor at the expense of a selling message.   Budweiser, Tide, Doritos, Skechers, and Milk Processors most of the car ads were particularly effective at keeping their products central to  the main message (vs. prop ‘afterthought’) and told engaging stories about the quest for the brand.

But some spectacularly cringe worthy ads too:   GoDaddy (disgusting, patronizing and unclear message) and Samsung (fatal flaw: inside jokes about how advertising is developed amuses no one except those who made the ads and unclear message).

Special kudos to Oreo’s brand team and brilliant agency, 360i,  for their nimble Oreo ‘You Can Still Dunk in the Dark’ mega tweet  (over 10,000 tweets) which was created on the spot during the power outage (and depleted chicken wings).    Another bravo to Beyonce’s breathtaking performance (done gratis, but 13 minutes is worth $104 million in advertising).

Here are the winners (and worst) from four marketing mavens – USAToday’s AdMeter (panel popularity), Mullen and Radian6’s Brand Bowl (twitter volume and sentiment),  us (effectiveness), and AceMetrix (Persuasion and Watchability)

USA Today – AdMeter                              

Best:
1.   Budweiser Clydesdale (horse and trainer reunited) 


2.   Tide (Miracle Stain)
3.   RAM (farmers)
4.   Doritos (fashionista Dad)
5.   NFL (Deion Sanders returns)

Worst:  GoDaddy – So awful it doesn’t deserve a link – get domains at 1and1, just in protest.

Mullen and Radian6’s BrandBowl

1.  Volkswagen (get happy office guy)  


2.  Bud Light (voodoo)
3.  Calvin Klein (guy in underwear)
4.  Audi (prom)
5.  Taco Bell (viva young)

Worst:  iRobot

Katz Marketing Solutions

1.  Tide (Miracle Stain) 


2.  Coca-Cola (security camera)
3.  MILK board (Rock running)
4.  Budweiser (horse and trainer reunited)
5.  Skechers (cheetah race)

Worst:  GoDaddy

AceMetrix

1.  Budweiser (horse and trainer reunited) 


2.  MILK board (Rock running)
3.  Coca-Cola (security camera)
4.  Jeep (home again)
5.  Doritos (goat 4 sale)

Worst:   Calvin Klein

AZO Advertising is Amiss: Talk to your Consumer

The AZO campaign features a fatal flaw that can kill the effectiveness of any advertising:  it’s not clear.   While AZO is advertising a compelling and effective urinary pain reliever, the commercial uses “company speak,” not consumer language.  

Throughout the spot, AZO is presented as a solution for UTI’s.  That’s great if you are a doctor or work for AZO and know what that is.   Sadly, however, most consumers don’t know that they mean ‘urinary tract infection.’

It’s a tragically common, and avoidable, mistake in marketing communication.   Companies get caught up in their own knowledge and internal language and forget who they are talking to.    Remember, when you do any marketing communication, you must talk to your consumer in THEIR language, not yours.

So, sadly, this commercial only reaches and persuades a fraction of their potential audience.    Make sure you keep it simple and avoid wasting money.  Keep it simple and talk directly to your consumer.

Lessons Learned:
1. Keep your target consumer at the forefront of all marketing communications. Talk to them in their language, not yours.
2. Before you produce anything, double-check that your communication is clear with unbiased consumers, or even internal employees  who are not involved in the marketing or technical development.   They are often too close to the process to stay unbiased.
3. Stay flexible.   If you happen to overlook an important, fixable issue like this, fix it!    In this case, the small cost of changing the words (with a new audio recording), would dramatically increase the effectiveness and sales impact of this advertising campaign.