Creating Value or Distracting Consumers?

In early 2014, the US restaurant chain Chipotle Mexican Grill announced that it would stop using genetically modified ingredients (GMOs), the move applauded by many observers. However, critics of the fast-food chain cited a lack of evidence to support its anti-GMO stance. They suspected that Chipotles anti-GMO claim was simply a ploy to distract consumers from a larger issue: the companys risky sanitation practices. While Chipotles anti-GMO policies may have won some health-conscious customers, other customers were becoming sick after eating at some Chipotle locations, calling into question the firms food handling and safety practices. Steve Ells, the founder and co-CEO of Chipotle, said the GMO decision was another step toward the visions we have of changing the way people think about and eat fast food. Just because the food is served fast does not mean it has to be made with cheap raw ingredients, highly processed with preservatives and fillers and stabilizers and artificial colours and flavours. However, ridding Chipotles supply chain of genetically altered components proved difficult. The chain discovered GMOs in basic ingredients such as baking powder, cornstarch, canola and soy oils, corn meal and sugar. And many non-GMO ingredients were in short supply. For example, at one point, Chipotle found that it could not supply all its locations with enough non-GMO pork to make carnitas. Given the supply chain challenges, Chipotle decided to use non-GMO products in its food preparation but to continue to serve some soft drinks with sweeteners derived from genetically engineered corn.

Chipotle Mexican Grill will pay $6.5 million to settle a class-action suit falsely advertising that its food is free of genetically modified ingredients, according to documents filed this week in California federal court. The settlement, in which Chipotle admits no wrongdoing, ends three years of litigation against the 2,500-unit chain in 2019.

Case adapted from Kotler

Required: Critically discuss and explain the marketing process of creating value for customers and building customer relationships. Your marketing process response should be in view of settling of the class-action suit regarding GMO for Chipotle. Remember to discuss the building blocks of customer relationship for Chipotle.