Red Lobster originally was founded in 1968 and gained tremendous popularity back then by offering fresh seafood for everybody. A recent market research study has revealed rather unexpected results that 25% of Red Lobster’s customers are “experientials,” people looking for pleasure, good service and high-quality food. 48 Vitosha Boulevard, ground floor, 1000, Sofia, Bulgaria Bulgarian reg. Red Lobster never thought that “experientials” were their customers and they were not marketing for them. But in 2010, even in a recession, the fortunes of the chain are improving. Why? 81% While this segment is different from the other five found in the market research study, the large majority of strategies being used by Red Lobster could continue as is. Experientials Indulgents 1.05 Red Lobster should add better and higher priced wine selection to cater to the Experientials. An Equity Valuation and Analysis of Kroger Co. A recently commissioned market research study has revealed, unexpectedly, that 25% of Red Lobster's customers are "experientials," people coming for a "good evening out" rather than Red Lobster's traditional core customer who came because of a craving for seafood. Academia.edu is a platform for academics to share research papers. “Experientials” alone and continue with similar strategy with little adjustments. The restaurant must stick with its emphasis on ‘Fresh seafood’. In 2008, Copernicus Company conduct a study to uncover some psychographic segments, and summarized Red Lobster’s customers into 5 categories: Experientials, Indulgents, Traditionalists, Eclectics and Frugals. The current positioning around attributes such as “freshness” and “approachability” is the right, positioning but it must also have emphasis on “affordability” since majority (Traditionalists and Frugals. $28.20 0.0225 Published Beta: Red lobster had an immense success and their goal was always to sustain the companies historical affordability positioning. Describes ultimate career opportunities that are so craveable and fun they can only be found at Red Lobster. -0.6997 Should Lopdrup make Experientials the target segment and modify Red Lobster’s positioning accordingly. Targeting Experientials and positioning Red Lobster as a high end product would result in the change or loss in revenue of other segments. Focusing on the experientials as the new Red Lobster target customer is the best action to respond to the segmentation study. Red Lobster needed to change how they are perceived by the public. Find out what we mean when we say our seafood has standards. 2-Year The ratings of Red Lobster’s guest experience had leveled off throughout the recent years and the percentage of “excellent” ratings had not increase and were stuck at 64%, while the other restaurant owned by the same company was higher at 68%. fresh catch news. This would be a benefit in regards to less promotional expenses and higher margins. Nevertheless the lack of change could also result in a continued downward trend in the restaurants overall performance. chances that the Experientials might increase to the percentage required to make this strategy profitable. Share: Opens in a new Window Opens in a new Window. A new look, a new menu, improved service and better communication to let people see Red Lobster in a fresh, new way. With respect to Red Lobsters positioning they may need to adjust this in order to accommodate the experientials needs for high service, upscale atmosphere, diverse menus, and culinary expertise. Time to get Cracking!" Retrieved from https://phdessay.com/red-lobster-case/. Red Lobster Case. This question concerning the positioning also brings up another question, whether the drastic positioning change undertaken would allow the company to keep the restaurant name as Red Lobster. In a survey made in 2004, customers believed that Red Lobster was under a category of low-end seafood restaurants that served mass-produced frozen seafood, much of it fried. If so, how should he change its marketing mix (4P)? A recently commissioned market research study has revealed, unexpectedly, that 25% of Red Lobster's customers are "experientials," people coming for a "good evening out" rather than Red Lobster's traditional core customer who came because of a craving for seafood. 2003 The scale of modifying can be described by the answer of questions at the end of the case. The appearance of the restaurant and pictures of fried food in the menus were causing customers to question the quality of the food. Re-positioning around freshness •Hired Salli Setti to oversee the implementation of parameters for chefs •New cooking staff was hired and cooking platform was changed Moving away from fried items and introducing new ways of cooking sea foodIntroduced “Today’s Fresh Fish Menu” 3. With respect to Red Lobster’s positioning was it beneficial for them to keep the “fresh and approachable seafood” position and if it was decided to not be the right move what would the right position be for the restaurant? *Refer Exhibit for the above numbers and further calculations. accounting for 46%). Also this group tends to order more items and are less price sensitive compared to the other groups of indulgent, frugal, and traditionalist. Red Lobster was founded in 1968 in Lake Land Florida. can use them for free to gain inspiration and new creative ideas for their writing assignments. The fact that experientials accounted for nearly one-fourth of the total customer base was a surprise for Red Lobster’s management and since currently the organization only semi-concentrated on the traditionalist, frugal, and indulgent. Red Lobster Instagram page. Percent Institutional Scholars Focusing on the experientials as the new Red Lobster target customer is the best action to respond to the segmentation study. Case Study Red Lobster. Red Lobster should continue its going strategy together by attracting experiential segment group. Find out what we mean when we say our seafood has standards. As per the above analysis, it seems that targeting Experientials can be a very risky step. Red Lobster found the need to evolve in response to factors like changing economic conditions, consumer trends and factors that affected cost and supply of certain sea foods. If so, how should he change its marketing mix (4P)? ” Some other issues were that Red Lobster many competitors, also value focus chains such as Chili’s, Applebee’s and Olive Garden. MANAGEMENT 410 - Should Red Lobster target the Experientials segment . Red Lobster Twitter page. As one of the best customers for a casual dining chain, this group can give more profitability if become the biggest proportion in percentage of customers. This makes it hard to specialize and meet the needs of every type of customer. If so, how should he change its marketing mix? But in 2010, even in a recession, the fortunes of the chain are improving. After doing this investigation, Red Lobster realized that many changes needed to be made. -0.6964 Share: Opens in a new Window Opens in a new Window. Opens in a new window. ticket: $12.45) but because sea food is so expensive they are positioned 3.17 Cost of Capital Est. ” Some other issues were that Red Lobster many competitors, also value focus chains such as Chili’s, Applebee’s and Olive Garden. Red Lobster is also faced with the choice to open new locations in relation to the clienteles they plan to focus on, and whether or not to remodel the current restaurants around this concentration. After two years he had opened four other locations. (2017, Mar 17). Show Us How You Rock The Lobster. By expanding this segment, profitability would increase. Adding non-seafood items and some quick eating options like fresh fish burgers, ready to eat desserts, traditional American favorites will help in meeting expectations of other target, segments. ” Some other issues were that Red Lobster many competitors, also value focus chains such as Chili’s, Applebee’s and Olive Garden. fresh catch news. 2004 We don’t bring the product to the consumer; we bring consumers to the product.. ISSN 1392-2785 ENGINEERING ECONOMICS. Lopdrup was facing a balance between building stronger connection with Experientials and losing part of Indulgent and Frugals. Question: Should Lopdrup make Experientials the target segment and modify Red Lobster’s positioning accordingly. http://moneycentral.msn.com We use cookies to give you the best experience possible. This presented the problem that Red Lobsters current layout was narrow focused in comparison to many of the other restaurants it competes with. Red Lobster Serving fresh seafood at affordable prices throughout the U.S. and international markets, Red Lobster is the world’s largest restaurant company of its kind. Since then aquaculture has led to dramatic declines in the cost of seafood, and allowed many new competitors to enter the industry thus increasing competition. 13.90% This would be much less of a cost burden when compared to changing the focus towards experientials and would have a lower risk of loosing their current loyal customers. A recently commissioned market research study has revealed, unexpectedly, that 25% of Red Lobster's customers are "experientials," people coming for a "good evening out" rather than Red Lobster's traditional core customer who came because of a craving for seafood. Course: International Marketing Date: 29. Red Lobster originally was founded in 1968 and gained tremendous popularity back then by offering fresh seafood for everybody. 2002 Lobstertunities. Red lobster could also have the alternative to continue down the same path oriented towards the traditionalist, frugal, and indulgent but update their positioning in regards to their stance in product, price, promotion, and positioning. Red Lobster Hospitality LLC is an American casual dining restaurant chain headquartered in Orlando, Florida.The company has operations across most of the United States, as well as in China, Ecuador, Guam, Hong Kong, Japan, Malaysia, Mexico, Philippines, Puerto Rico, Qatar, and the United Arab Emirates; as of June 23, 2020, the company had 719 locations worldwide. Get deals on all of your Red Lobster favorites, including: Light lunch entrees like Shrimp Tacos, the Wood-Grilled Southwest Chicken Sandwich, Soup and Salad combos, and more Dinner entrees like Wood-Grilled Lobster, the Broiled Seafood Trip, the Admiral’s Feast, and more The next option in regards to promotion is if it was beneficial to continue their traditional frequent price promotions? 3.18 -1.21% Red Lobster - Free download as Word Doc (.doc / .docx), PDF File (.pdf), Text File (.txt) or read online for free. Even with the cost declines, seafood was still much more expensive than other proteins, which caused Red Lobster’s menu to more expensive than other value restaurant chains like Chili’s, Applebee’s, and Olive Garden. For franchise restaurants as enormous as Red Lobster, it must not go superior and modify its consumer base to experientials since of possible marketplace chances and its particular functioning types. Problem Analysis Before 2004, Red Lobster lost focus on their specific target market. Academia.edu is a platform for academics to share research papers. Red Lobster Careers "It's your career. Lobstertunities for Management Positions. Which is very different from Red Lobster’s traditional core customer who just wanted big portion sizes of decent seafood and does not worry about nutrition or upscale atmosphere. Book Value Per Share: However, there is no, past trend or any correlation data to assume what percentage changes might actually happen. After conducting massive amounts of market research it was revealed to Red Lobster the different psychographics regarding the patrons who often utilized their restaurants. Four scenarios are considered to, analyzethe percentage increase in the Experientials to compensate for the loss in other segments due to. In this case, the revenue lost from the remaining segments is. Find out what we mean when we say our seafood has standards. Shares Outstanding: lost and all other segments would stay put. The chain is in the final stages of They had many issues that could be easily solved and that could help them in their image to the customers. A recently commissioned market research study has revealed, unexpectedly, that 25% of Red Lobster's customers are "experientials," people coming for a "good evening out" rather than Red Lobster's traditional core customer who came because of a craving for seafood. Red lobster should move away from being an “over-indulgent”, lower quality restaurant and move to attract the “Experiential” market with a sophisticated, upscale atmosphere. Academia.edu is a platform for academics to share research papers. Prior to Kim Lopdrup taking over as president of Red Lobster in 2004, their target customers were known “experientials.” Experientials are people who love generous portions of affordable seafood, but use the meal occasion as more of an opportunity to connect with family, friends, colleagues, or clients. Sales in many of the stores had slowly increased but this was mostly due to the aggressive promotions executed in the recent years, but the numbers were nowhere near where the management team wanted them to be. Course Hero is not sponsored or endorsed by any college or university. -0.0078 Restaurants were not physically adapted for “experientials. 4. But in 2010, even in a recession, the fortunes of the chain are improving. Kd(BT): 7-Year Red Lobster never thought that “experientials” were their customers and they were not marketing for them. -0.6974 Financial. 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