Red Lobster Case Study

2008 Words9 Pages
Presentation of the Facts Surrounding the Case Red Lobster is one of the largest full-service casual dining chains. It was built on the premise of bringing affordable Seafood to Mainstream America. It maintained success for many years with affordability being the focus of the brand. However, over the years, the chain began to struggle and needed an extensive update. The chain’s image had been transformed from an affordable casual-dining restaurant with great food to a chain that served cheap, frozen, mass produced seafood. In 2004, Kim Lopdrup took over as president and initiated an aggressive turnaround program. The management team wanted to revamp the value of Red Lobster beyond just being affordable. They wanted to make the freshness of their seafood the focus of their brand, while still remaining affordable. They did not want to increase prices. However, they cut back on extensive price promotions, which raised the question as to whether or not the chain could sustain their affordability position. To find this out, Lopdrup and the management team performed a segmentation study that showed that the vast majority of customers desired dining as a way to connect with family, friends, and clients, rather than by their love of portions of affordable seafood. This new segment of customers who desired dining as a means of connecting with other people was called experientials. With Lopdrup now know what the vast majority of these new consumers wanted, questioned if the “experientials” should now be their main customer target, and what changes could be made before the turnaround program took place. Identification of the Key Issues Red Lobster was founded in 1968 by Bill Darden. He saw an opportunity to bring affordable, quality seafood to a mainstream American consumer base. Darden had many years of restaurant experience under his belt as he had been a

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