1. Which of the promotional elements has the potential to yield the greatest influence over a potential customer's decision to purchase a burrito from Chipotle?

  2. In preparation for a new store opening within a neighborhood, if Chipotle were to offer free burritos to individuals who are influential within multiple large social groups or organizations within the related neighborhood with the objective of generating positive word-of-mouth, then what would be this  approach called?

Transcribed Image Text:

Chipotle banks on customers to spread the word, and customers like Parrott routinely oblige. This all-volunteer army has helped make Chipotle one of the hottest properties in the restaurant industry. For example, same-store sales have a more than 10-year history of double-digit increases. Consumers consistently rank the chain tops among all quick-serve Mexican places. Fittingly, Chipotle is also generating buzz for word-of-mouth marketing. These days the typical consumer is exposed to so many paid pitches that people tend to tune them out. People also dismiss almost anything that comes from big companies. But if people hear the same message from a friend or even a stranger, they'll probably believe it since the tipster has nothing to gain. Chipotle's marketing budget is minimal. Over the first 11 months of 2006, McDonald's spent $818.9 million on traditional media advertising in the United States, while Yum! Brand Inc.'s Taco Bell unit spent $252.4 million, according to Nielsen Monitor-Plus. Chipotle's outlay over the same span: $4.5 million. Ells, a white-tablecloth chef who trained at the Culinary Institute of America, thought customers should be swayed first and foremost by the food. So instead of telling people about Chipotle's burritos, he gave them away. The handouts are now part of Chipotle's strategy. When Chipotle came to midtown Manhattan, it gave burritos away to 6,000 people, some of whom stood in line for two hours. The stunt cost $35,000, in return, the company landed 6,000 new spokespeople. Chipotle banks on customers to spread the word, and customers like Parrott routinely oblige. This all-volunteer army has helped make Chipotle one of the hottest properties in the restaurant industry. For example, same-store sales have a more than 10-year history of double-digit increases. Consumers consistently rank the chain tops among all quick-serve Mexican places. Fittingly, Chipotle is also generating buzz for word-of-mouth marketing. These days the typical consumer is exposed to so many paid pitches that people tend to tune them out. People also dismiss almost anything that comes from big companies. But if people hear the same message from a friend or even a stranger, they'll probably believe it since the tipster has nothing to gain. Chipotle's marketing budget is minimal. Over the first 11 months of 2006, McDonald's spent $818.9 million on traditional media advertising in the United States, while Yum! Brand Inc.'s Taco Bell unit spent $252.4 million, according to Nielsen Monitor-Plus. Chipotle's outlay over the same span: $4.5 million. Ells, a white-tablecloth chef who trained at the Culinary Institute of America, thought customers should be swayed first and foremost by the food. So instead of telling people about Chipotle's burritos, he gave them away. The handouts are now part of Chipotle's strategy. When Chipotle came to midtown Manhattan, it gave burritos away to 6,000 people, some of whom stood in line for two hours. The stunt cost $35,000, in return, the company landed 6,000 new spokespeople.

Answer rating: 100% (QA)

WordofMouth Marketing Among the promotional elements wordofmouth marketing has the po... View the full answer