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Red Lobster company Report

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Updated: Jul 6th, 2020

Executive Summary

This is a case study report regarding Red Lobster, which is a company that deals in food products. The paper looks into the marketing functions of the company. It analyses the development of marketing strategies implemented by the company in the decade starting 2000.

The assesses the market positioning activities that the company has been doing and the effect that it has had on the growth in customers and the company image as viewed by the customers. The market positioning changes have taken place under different marketing leadership plans.

Therefore, these plans are discussed in the paper and a view given on whether they have been efficient or not. Lastly, the paper assesses the benefits of focusing on experiential and why this is important for Red Lobster.

Introduction

Marketing is important for business firms. Most business firms that have attained quick development and expansion have had good marketing practices. Without proper marketing management, it becomes challenging to sell the products of a company which means that the company operations will be paralysed.

Lack of sales means no income for the company and thus the company cannot sustain operations when there are no finances to do so. Therefore, marketing lies at the centre of the company operations (Groucutt, Forsyth and Leadley, 2004). Red Lobster is one of the companies that have undergone a lot of transformations all in the name of improving marketing. Red lobster is a United States based company that deals in foodstuff.

The company has been in operation for over 40 years. It operates in the form of casual full-service dining chain stores. Therefore, this paper discuses various changes in the company, which have aimed at improving the company’s services and attracting more customers (Lamb, 2012).

Change of Positioning

Since its establishment, the company’s main goal has been the provision of affordable seafood to the Americans. However, in the recent times, the company has changed the management. The new management has been developing on its value position and incorporating freshness in its mission. Fairness has thus been incorporated into the position of the company.

Affordability only did not auger well with the customers of the company as they associated the position with low quality. The new position, which includes freshness, is being implemented without adjustment in prices as this could affect the customers.

There has been an increase in price promotions. The new management has been working on winning a significant number of customers by way of diversifying the service to customers in a remodelling exercise (Bell and Riis, 2010).

The growth of the Red Lobster restaurants up to when a change in the leadership of the company occurred can be attributed to sales promotions. It can be noted that, in 2004, Lopdrup took over as the president of the company. During this time, there was a lot of competition in the sea food sector with many competitive players like Olive Garden, Applebee’s and Chili’s emerging.

The other restaurants had lower prices of their food as compared to Red Lobster as the company only served seafood which was still expensive then. The other restaurants served other proteins on top of the seafood. Therefore, the available option for the company was diversifying its menu.

A consumer survey was commissioned by Lopdrup aimed at getting the real insights of consumers on the food offered by the restaurant. Also, there were changes according to the needs of customers. Therefore, the position needed to be changed so as to accommodate the changes suggested in the report

. According to customers, the seafood market had two categories of food one of them being top quality seafood which was fresh and which utilized culinary expertize in its preparation. On the other hand, there are the low end places which serve massive food, frozen and fried seafood made up the second category. Many customers put the company in the second category.

Thus, Lopdrup developed its plan to be implemented in 3 episodes. The first phase focussed on the improvement of operations. Most of the repositioning activities lied in phase two of the plan. This phase was to run until the year 2009. It involved major changes in the menu that would take place gradually.

The third phase involved the remodelling of the restaurants which was central in changing the perceptions that customers had about the restaurants (Lamb, Hair and McDaniel, 2012).

The first phase was implemented using the simplified approach which Lopdrup referred to as “simple, great operating discipline”. It involved the simplification of operations to ensure that everything in the restaurants went on well.

Under this approach, the costs are brought down while encouraging high quality for customers. The activities under these strategies include simplification of menus, recipes and promotions. Notably, there was the elimination of deep discounting (Fla, 2007).

Under the reposition approach, the management hired Salli Setta a marketing specialist. A new culinary team was hired under Setta. The chefs are given parameters in the new product development system that was put up by Setta. The chefs work within certain parameters and are responsible for creativity within the parameters under which they work.

The marketing team developed a new menu in the restaurants that emphasize freshness. Therefore, new changes were introduced into the operations of the restaurants that saw the developments of the new dishes. There was also the development of fresh fish menu, and it featured different types of fish entrees and which changes according to the fish catch each day.

The fish menu was put on a separate menu card which was given to every customer who entered the restaurant. The menu was used as lead for servers – restaurant servers greet customers by describing the available fresh fish menu. Also, the name of the chef on duty featured on the menu.

Upgrades were also made in the raw ingredients. Accompanying these activities were new television adverts that were developed to help in advertising the new menu. The advertisement covered the two menus – fresh fish menu and the wood fire grilling (Fla, 2007).

This can be termed as a comprehensive marketing strategy that aimed to attain a total change in the market positioning of the company. All aspects of change were featured in the set of marketing activities that were implemented under the supervision of Setta.

This is part of the changes that had been introduced in the year 2004; however, seta made these plans more comprehensive building from the simple steps and capturing all aspects of customer attraction and marketing. The quality of the food was improved through comprehensive training of the chefs and the serving staff. The quality of service was also upgraded by including an advertisement aspect in the serving of the menus.

The method of advertisement that was used as from 2008 borrowed from the “Ignite the Craving” advertisement campaign that was used from 2004 by Lopdrup. The campaign was very successful then. The same method is still being used; however, it focuses more on the new methods of grilling and on the major positioning factor which is “freshness” (Pride and Ferrell, 2011).

More diversity was employed in the position as focus on freshness alone would become boring to the customers. Promotional strategies were revitalised. The first promotional strategy is known as Lobsterfest. The other one is Endless Shrimp. They shifted the focus to choice and variety and not on what was available.

This signified a growth in the number of customers that was achieved using the positioning strategies mentioned earlier. Remodelling followed the positioning exercise which had helped the restaurants to gain more customers and a positive perception. The remodelling exercise was preceded by a research which guided the running of the exercise (Pride and Ferrell, 2011).

Focus on Experiential

Making the experiential the target segment of the Red Lobster Restaurants is a good marketing step. In fact, this is one of the targets of the recent internet advertising campaign that the company is using. The campaign is a behavioural in nature. This campaign will be run by two companies.

These companies include Revenue Science, which is a company that targets behaviour, and Internet Broadcasting, which is an online news source company. The restaurant will target its customer base which is inclusive of on-the-go customers as they leave work heading home by utilizing the traffic maps and other online tools (Pride and Ferrell, 2011).

Real Branding will help Red Lobster to pinpoint and target the viewers who visit their site, and whose consumption behaviour matches the consumer profile of Red Lobster. However, this is only after having assessed the behaviour of the customers. This will be achieved by assessing the behaviour of the customers. This strategy will help the company to reach a considerable number of consumers at the local level.

In this way, it is the best example of capturing consumers for the company by way of using consumer behaviour concept. There are many potential customers who transact their business online. Therefore, by engaging them online, the company will be able to know their tastes in consumption and try to align them with their menus.

If they go together, customers will be invited to the restaurants. Research has shown that most people who transact online like exploring to meet the qualities of experiential customers. Most of the menus offered by Red Lobster restaurants fit the experiential consumers (Satz, 2005).

Conclusion

The Red lobster is among the Companies that have operated in the restaurant of the Unite States for a long time. The company has gone through a transformational process that has helped to improve what the restaurant offers in the market and raises the customer base.

The plan that was devised by Lopdrup in 2004 has helped to position the company in the market. This has been through improvement of the quality of food and changing the perception of customers. The focus on the exponential consumers will be a positive move. However, other customers must continue to be given attention.

Reference List

Bell, DE and Riis, J 2010, . Harvard Business Review. Web.

Fla, O 2007, Freshness Hallmarks the New Red Lobster. Web.

Groucutt, J, Forsyth, P and Leadley, P 2004, Marketing: Essential principles, new realities, Kogan Page, London.

Lamb, CW 2012, Marketing, Nelson Education, Toronto.

Lamb, CW, Hair, JF and McDaniel, CD 2012, Essentials of marketing, South-Western Cengage Learning, Mason, Ohio.

Pride, WM & Ferrell, OC 2011, Marketing express, South-Western Cengage Learning, Mason, Ohio.

Satz, S 2005, Red Lobster’s Behavioural Campaign. Web.

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