Tuesday, April 17, 2007

Should advertising or food do the talking for a restaurant?

More on the fast food industry from this post.

While all fast food retailers keep increasing the amount they spend on advertising, the Chipotle Mexican Grill has kept its advertising spend at less than 1% of its annual revenue, most of which it allocates to billboards and radio advertisements. In comparison, Taco Bell and McDonald's spend around 4% of their revenues on advertising. Here's how they succeed.
"When Chipotle came to midtown Manhattan last July, it gave burritos away to 6,000 people, some of whom stood in line for two hours. The stunt cost $35,000, figures James W. Adams, Chipotle's marketing director. In return, the company landed 6,000 new spokespeople. 'You could spend that same amount on an ad in The New York Times and you wouldn't have that many people talking about you,' Adams points out."

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