“Problem Formulation”

Background Description
Chipotle is a Mexican chain restaurant committed to utilizing the best ingredients raised with respect for the animals, the environment, and the farmers. Although Chipotle was recently named consumers’ favorite Mexican chain, its revenue growth was projected to slow to 20 percent in 2012 and 15 percent this year, compared with 24 percent in 2011. Along with its decrease in revenue growth, Chipotle’s 2013 planned increase in store count has been reduced from 15 to 13 percent. Chipotle receives high marks in food quality and cleanliness, and their sustainable practices appeal to many consumers. After introducing organic uniforms for all staff members, Chipotle has decided to broaden its eco-friendly message by selling organic-cotton hoodies. In 2012, Chipotle began selling a consumer clothing line with U.S.-made hoodies, T-shirts and canvas totes on its website, providing a new opportunity for growth and a possible increase in revenues for the company.

Management Decision Problem
Will introducing an organic clothing line increase Chipotle’s revenues?

Marketing Research Problems
Research Problem #1: Determine Chipotle’s target market for the organic clothing line and assess if it differs from its usual target market.
To determine Chipotle’s target market, Chipotle should survey the consumers who visit Chipotle to see which of the consumers that already enjoy their food would enjoy the organic clothing. Then Chipotle should survey consumers who are known to buy organic foods and other items to see how many of them would be interested in buying clothing made by Chipotle. The variables would include the number of people who would be interested in buying these products vs. the people that would not be interested. Another variable to consider is how many of these consumers are already purchasing items at Chipotle and those who are not but are still interested in the organic clothing that they have to offer.

Research Problem #2: Assess the target market’s perception of Chipotle’s new clothing line to determine if it will be a profitable venture.
In 2011, the chain introduced new uniforms made of organic cotton for employees of its 1,400 restaurants. Chipotle now offers environmentally friendly clothing items to the public for purchase, including U.S.-made hoodies, T-shirts, canvas totes, and children’s shirts. Characteristics to be surveyed in order to assess the target market’s perception of Chipotle’s new clothing include customer satisfaction with current clothing items and the prices of the items, types of additional clothing items desired by consumers, and color choices for clothing items. Another characteristic to consider is availability of the clothing items. In order to reach more consumers in the target market, Chipotle is examining the possibility of selling its clothing items in retail stores. The chain could survey its target market to determine which retail stores they frequently shop for clothes. Chipotle