INTRODUCTION

Red Lobster is known well for its casual dining chain restaurant that serves affordable and fresh seafood
to mainstream America. The founder of the restaurant in 1968, Mr. Bill Darden started Red Lobster from
its early focus on affordable and top quality seafood to become, more than 40 years later, one of the
Americas oldest and largest national full-service casual dining chains with 694 locations that spread
within US and the highest market share among casual dining seafood chains. In 1982, encouraged by
strong earnings from Red Lobster, an Italian-themed casual dining restaurant was launched Olive Garden.
By 1989, the restaurant had 145 locations.
Consumer survey was done by Kim Lopdrup to find out the qualities required when it comes to choosing
a restaurant. Kim Lopdrup, had been working in the chain restaurant business for 25 years, and he took
over as President in the year 2004. The survey revealed that the top three attributes when choosing a
seafood restaurant are freshness, quality, and taste of the seafood. A repositioning of the restaurant was
needed and it was done. The company had a total revenue of $7.1 billion by Fiscal 2010.

EXECUTIVE SUMMARY
In July 2008, Red Lobsters marketing team identified purchase behavior of its segments through market
research study. They divided the segments become 5 behaviors: experiential, indulgents, traditionalists,
eclectics, and frugals. From the results, they also found almost a quarter of their customers would be
described are experientials. The people in this group actually have very high culinary standards, and they
have really high expectations for service and atmosphere. But they still prioritize the relationship with
someone else who they care about. Experientials are the best customers for a casual dining chain and
were particularly profitable because they are more likely to order desserts and appetizers and wine, and
they are less price sensitive.

SITUATIONAL ANALYSIS
A) SWOT ANALYSIS
1. STRENGTH
First mover advantage with Red Lobsters domination in the market
2. WEAKNESS
Mass produced and frozen food and loss of focus in its target segment
3. OPPORTUNITY
Re-position the brand and set up consistent pricing
4. THREAT
Premium casual restaurants take the market share away
B) SEGMENTATIONAL STUDY
1. Psychographic segmentation
They have four big groups of customers: frugals, indulgents, experientials, and traditionalists. The
current strategy has brought many customers from these segments, then changing the focusing to
one segment is not necessary. The brand positioning, approachable and fresh seafood, is still the
right positioning for every segment. It also may be still accepted by customers in the experiential
group.
2. Geographic segmentation
Location of the restaurants, nearby the seaside may become a problem for the restaurants to
expand more. If they have decided to change to locations, it will indeed alter the main objective
of the restaurant opening in which to give a good environment beside the sea.

OBJECTIVES
1. To retain the tradiotionalist or to attract new experientials
2. To retain the present environment or to bring the restaurant to high class renewed environment

RECOMMENDATIONS
1. Product strategy
Beside retaining the fresh seafoods, they may add a better or special wine menu with many
varieties of wine selection. Similar to the fresh fish menu, the special wine menu could be
offered to customers to compliment the wine of the day. They can try new dishes with new
starters as well as desserts and different cocktails as the experientials characters are as per that.
And at a certain concern, the good foods even at its new menu, it may still attract other target
customers as well.
2. Place strategy
as per of my opinion, they can still retain their locations nearby seaside as it shows the restaurants
individuality. In terms of the renovation in order to follow the era, the can retain the outer look of
the restaurant in which the casuality is retain and from the inner part, they can add on more new
looked furniture. If considering the traditionalities, the restaurant management can expend the
restaurant and add on special executive rooms to bring a classy and higher class environment. By
doing this, both the experientails and traditionalist will not be looked down. The positioning as a
providing of excellent dining experience is necessary to build in every customers mind.
3. Promotion strategy
Promotions can be done thru advertising the restaurants in mass media, and social media. Besides
that, sponsoring for special events may support its image as an upscale restaurant.
4. Pricing strategy
They could reduce the price promotions for the traditionalists as the group should be price
sensitive. Based on the experientials character, Red Lobster may increase the price a little bit to
provide what customers want. Fresh and best quality seafood should be still provided in the
menu. They may need to add a better and higher priced wine and food selection. They could offer
the special wine menu to customers to compliment the wine of the day or slightly more expensive
dishes and desserts to attract more people from the experiential group.

ACTION PROGRAM

Currently, Red Lobsters marketing effort is focused in three phases: operational excellence,
repositioning around freshness, and remodeling the restaurant. They chose to continue changing

in positioning through three phases to build the brand image as top quality and fresh seafood. In
fact, the strategy had resulted the better condition for Red Lobster. Its internal research found
that its customer satisfaction was higher than industry average. They could increase its capacity
to accommodate 50% more customers. Additionally, staff morale was increasing and turnover
was decreasing. The strategy should be applied and tested for at least one year as to find the
weakness and ways to overcome the current appled strategy.

FINANCIAL FORECAST

CONTROLS
1. Frequent surveys should be carried out
2. New innovative menus should be promoted as to attract more customers
3. Continuous renovations and upgrading required.