Consumers of fresh Mexican food tend to be relatively young, urban or suburban, and they tend to be slightly more affluent than consumers of mainstream Mexican (i.e. Taco Bell). As such, Chipotle customers place more value on the quality of their food and are willing to pay more for freshly-prepared foods. For Chipotle, the objective is to have consumers perceive Chipotle as higher quality than its fresh competitors, so emphasis is placed on ethical meats, dairy without growth hormones, and on superior food quality as a distinguishing characteristic.

Right now, Chipotle is expanding by adding new stores in previously untapped areas. All of the firms against which it competes directly are relatively small by QSR standards, so there is something of a race to establish market dominance. The brand, however, is critical to establishing such dominance. Building new stores is a slow, expensive process and while it should remain a...
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