Red Lobster case analysis
Should Lopdrup make Experientials the target segment and modify Red Lobster’s positioning accordingly. If so, how should he change its marketing mix (4P)?
Red Lobster originally was founded in 1968 and gained tremendous popularity back then by offering fresh seafood for everybody. They made it easily accessible and approachable. However, over several extremely successful decades of rapid growth and many new restaurants, Red Lobster in 2004 was becoming out of date and out of touch with today’s customer. The company with more than 40-year experience in seafood restaurants, with its new leading CEO Kim Lopdrup now has invested in extensive market research. The results of the market research reveal a surprisingly exciting opportunity for the company to shift its target customer segment. The chain at the moment is taking its first steps of an elaborate 10-year rejuvenation plan under the lead of its CEO Kim Lopdrup. Back in 2004 when he took over as a CEO of Red Lobster, the company was closing down restaurants and going through a major decline in sales. Furthermore, customer satisfaction had dropped significantly as well by then. Though, in 2010, even in a period of recession, the sales results are slowly starting to improve. As a result, the whole chain itself is improving as well. 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. 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. Lopdrup is currently thinking of possible re-positioning to attract more “experientials”, thereby also changing the company’s target segment. But would this be a good step?
Back in 1968, the brand gained popularity by making fresh seafood that was not very accessible back then. However, times have changed now. Customers
Red Lobster originally was founded in 1968 and gained tremendous popularity back then by offering fresh seafood for everybody. They made it easily accessible and approachable. However, over several extremely successful decades of rapid growth and many new restaurants, Red Lobster in 2004 was becoming out of date and out of touch with today’s customer. The company with more than 40-year experience in seafood restaurants, with its new leading CEO Kim Lopdrup now has invested in extensive market research. The results of the market research reveal a surprisingly exciting opportunity for the company to shift its target customer segment. The chain at the moment is taking its first steps of an elaborate 10-year rejuvenation plan under the lead of its CEO Kim Lopdrup. Back in 2004 when he took over as a CEO of Red Lobster, the company was closing down restaurants and going through a major decline in sales. Furthermore, customer satisfaction had dropped significantly as well by then. Though, in 2010, even in a period of recession, the sales results are slowly starting to improve. As a result, the whole chain itself is improving as well. 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. 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. Lopdrup is currently thinking of possible re-positioning to attract more “experientials”, thereby also changing the company’s target segment. But would this be a good step?
Back in 1968, the brand gained popularity by making fresh seafood that was not very accessible back then. However, times have changed now. Customers