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Red Lobster Case Study

Lopdrup became president of Red Lobster in 2004 and worked to reposition it from a low-cost seafood chain to a higher-end restaurant emphasizing fresh seafood. His repositioning plan had three effective elements: improving cleanliness, friendliness and food quality; emphasizing freshness through wood-fired grilling and a fresh fish menu; and renovating stores to have an upscale, seaside atmosphere. A 2008 survey found that experiential customers, who enjoy both casual and upscale dining, accounted for a large portion of Red Lobster's customers. Targeting this segment by keeping current ads and food offerings but slightly raising prices and expanding the alcohol selection could further the success of

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2K views2 pages

Red Lobster Case Study

Lopdrup became president of Red Lobster in 2004 and worked to reposition it from a low-cost seafood chain to a higher-end restaurant emphasizing fresh seafood. His repositioning plan had three effective elements: improving cleanliness, friendliness and food quality; emphasizing freshness through wood-fired grilling and a fresh fish menu; and renovating stores to have an upscale, seaside atmosphere. A 2008 survey found that experiential customers, who enjoy both casual and upscale dining, accounted for a large portion of Red Lobster's customers. Targeting this segment by keeping current ads and food offerings but slightly raising prices and expanding the alcohol selection could further the success of

Uploaded by

Jonathan Saks
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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1. How has Red Lobster’s positioning changed over time?

Do the current ads reflect


the repositioning that Lopdrup and his team envisioned when their efforts began
in 2004?

• Originally, Red Lobster was positioned as an operationally efficient restaurant,


where it prided itself on fast service at a cheap price to appeal to the main-
stream customer. However, that lead to a feeling that the fish was not so fresh
or of high quality. Starting in 2004 after Lopdrup took over as president he
worked to reposition Red Lobster to invoke a feeling of freshness and top
quality. This repositioning is currently being reflected in Red Lobsters Ads.
Starting in 2008, Red Lobster ads showcased a new menu consisting of the
days fresh fish. Additionally, they featured direct references to their new
grilling methods and the freshness of their fish. However, they didn’t over em-
phasis it as they still wanted to be considered a restaurant that one can go to
for a casual meal, while also having a high end feeling. These ads were ulti-
mately a fantastic reflection of the repositioning envisioned in 2004 by Lop-
drup and his team.


2. What were the most effective elements in Lopdrup's repositioning plan (initiated
in 2004)?

• When Lopdrup became president of Red Lobster in 2004, he intended to re-


position red lobster in the mindset of customers from a low end restaurant
serving mass-produced, frozen seafood to a high end restaurant with top
quality, fresh seafood. Lopdrup's Lopdrup's repositioning plan included three
main elements to achieve this goal. The first effective element of Lopdrup’s
repositioning plan was getting back to the basics of running a restaurant
through Freshness, Cleanliness, Friendliness, and Fullness. The goal of this
was to lay the groundwork for the changes that would come in the future. Red
Lobster wanted to reposition itself as high end restaurant and to do that it had
to start at the bottom. It cleaned up all of its restaurants, retrained staff and
hired extra workers to help with reset and turn tables to allow for more cus-
tomers. The second effective element of Lopdrup’s repositioning plan was to
evoke freshness in the minds of customers. To do this, Lopdrup first needed
to determine what freshness meant to consumers. He found out that in the
minds of consumers, freshness meant that the food was presented as close
to natural as possible. To reposition, Lopdrup de-emphasized a lot of the
friend items from the menu as consumers didn’t view them as fresh. Addition-
ally, he added wood fire grills to make a separate menu with fresh fish to in-
crease the awareness that Red Lobster sells fresh fish. The third and final ef-
fective element used by Lopdrup was renovating the restaurants. The reno-
vated stores were designed to extended the goals of the first and second ef-
fective elements. It extended the first by creating a more upscale vibe while
still keeping a casual feel that would be appropriate for all occasions. It ex-
tended the second effective element by creating a seaside atmosphere to in-
voke a sense of freshness and high quality.

3. Should Lopdrup make Experientials the target segment and modify Red Lob-
ster’s positioning accordingly? If so, how should he change its marketing mix
(i.e., the 4 Ps)?

After looking at the results of the “Purchase Behavior of Segments Identi-


fied” in a 2008 survey, Lopdrup should make Experiential’s the target segment.
Experiential’s surprisingly accounted for almost a quarter of Red Lobsters cus-
tomers. While Lupdrup didn’t know how many of those customers were new, it
Indicated that Red Lobsters repositioning had worked. Research showed that
Experientials enjoy both casual and high end restaurants and love fresh fish. For
Red Lobster to enhance the effects repositioning plan targeting Experientials is
the next step. By changing its target segment to Experientials, Lopdrup needs to
change the marking mix accordingly. When it comes to Promotion, Red Lobster
should keep its current ads in place. They showcase the fresh fish and nice at-
mosphere that Experientials like. When it comes to in store promotions, Red
Lobster can cut back a little as Experientials spend more than all of the other
customer segments so discounts don’t matter to them as much. When it comes
to Price, Red Lobster can slightly increase the prices of alcoholic beverages and
food as Experientials earn more than all of the other customer segmants. How-
ever, if Red Lobster reduces its in store promotions, it has to be careful when
they increase prices so prices don’t increase that much. For products, Red Lob-
ster should expand its alcoholic selection and include more high priced items.
12% of Experientials purchased alcohol according to the 2008 survey. However,
Red Lobster should keep its food Menu intact and stick to seafoods. Experien-
tials love seafood and are satisfied with Red Lobsters current offerings. Addition-
ally Red Lobsters repositioning called for the renovation of its stores to have a
more seaside feel which doesn’t match with having a grill and serving meat. Fi-
nally, when it comes to place, Red Lobster should keep upgrading its stores as
Experientials like the atmosphere of the new stores.

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