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MKT460: Red Lobster 
Case Analysis 
MacKenzie Walters, 
Yanxuan Li, 
Jeff Malnor, 
Nicholas Stachurski, 
Lydia Zhang, 
Shu...
Agenda 
 Analyze and record the current situation 
 Analyze and record problems and core elements 
 Identify marketing ...
Macro Environment 
Industry Situation 
Organization SWOT 
Marketing 
Strategy
Macro Environment 
 The growth rate of restaurants declined in 2007, and in 
2008 sales were down on average by four perc...
Industry Situation 
Potential 
Entrance: 
Low 
Premium-casual 
dining 
Buyers 
Power: 
High 
Substitutes: 
High 
Suppliers...
Organization SWOT 
Strength: 
First-mover 
advantage with 
Red Lobster’s 
domination in the 
market 
Weakness: 
Mass-produ...
The Marketing Strategy 
 Pre-2004: 
Provide extensive price promotions to its customers 
 Post-2004: 
Provide fresh and ...
Problem Analysis 
 Before 2004, Red Lobster lost focus on their specific target 
market. 
 If Red Lobster gains 2,000 ne...
Marketing Problem Facing 
Management 
 Problem: Unable to re-position Red Lobster as a company 
1. Causes: 
a. Loss of fo...
Marketing Problem Facing 
Management 
 Problem: Excessive use of promotional menu items 
1. Causes 
a. To originally attr...
Alternative Strategies 
 “Experiential” Innovative Menu 
1. Provide new dishes monthly and seasonally 
2. Lower risk opti...
“Experiential” Innovative Menu 
 Implementation: Create seasonal menus 
 Integration of chef and marketing team 
1. Deve...
“Experiential” Innovative Menu 
 Outcome 
1. Understanding consumer preferences by region 
2. Potential increase in the s...
Unexpected Market Changes 
 Competitor changes 
1. Continue to provide extraordinary service and innovative 
items 
 Eco...
Interactive: Question 1 
 How has Red Lobster’s positioning changed over time? 
Write out a positioning statement (Hint: ...
Interactive: Question 2 
 What were the most effective elements in Lopdrup’s 
repositioning plan (initiated in 2004)?
Interactive: Question 3 
 Compute restaurant profitability under the following 
scenario: The mix of patrons shifts with ...
Interactive: Question 4 
 Should Lopdrup make Experientials the target segment and 
modify Red Lobster’s positioning acco...
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Red lobster powerpoint!

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Red lobster powerpoint!

  1. 1. MKT460: Red Lobster Case Analysis MacKenzie Walters, Yanxuan Li, Jeff Malnor, Nicholas Stachurski, Lydia Zhang, Shuang Chen
  2. 2. Agenda  Analyze and record the current situation  Analyze and record problems and core elements  Identify marketing problems facing management  Recommendation and Contingency Plan
  3. 3. Macro Environment Industry Situation Organization SWOT Marketing Strategy
  4. 4. Macro Environment  The growth rate of restaurants declined in 2007, and in 2008 sales were down on average by four percent.  The recession of 2008-2009 threatened Red Lobster’s business because restaurant sales declined significantly.  The cultural trend for Red Lobster was the atmosphere of casual to special occasions dining.
  5. 5. Industry Situation Potential Entrance: Low Premium-casual dining Buyers Power: High Substitutes: High Suppliers Power: Low
  6. 6. Organization SWOT Strength: First-mover advantage with Red Lobster’s domination in the market Weakness: Mass-produced and frozen food and loss of focus in its target segment Opportunity: Re-position the brand and set up consistent pricing Threat: Other Premium casual restaurant take the market share away
  7. 7. The Marketing Strategy  Pre-2004: Provide extensive price promotions to its customers  Post-2004: Provide fresh and premium product with clear branding image
  8. 8. Problem Analysis  Before 2004, Red Lobster lost focus on their specific target market.  If Red Lobster gains 2,000 new experiential customers, losing 2,000 indulgent customers and frugal customers… 1. Number of customer changed * Annual average spend per customer= Additional Revenue 2. Alcohol Margin * Extra Revenue on Alcohol + Food Margin * Extra Revenue on Food = Additional Profit 3. $102,222,92 Additional Profit
  9. 9. Marketing Problem Facing Management  Problem: Unable to re-position Red Lobster as a company 1. Causes: a. Loss of focus on target market b. Perceived as low quality c. Unclear value proposition 2. Symptoms a. Loss in seafood industry market share b. Loss of customers
  10. 10. Marketing Problem Facing Management  Problem: Excessive use of promotional menu items 1. Causes a. To originally attract customers with low price b. To convey affordable position to other chains 2. Symptoms: a. Perception of low quality b. Customer loss c. Negative attitudes toward company as a whole
  11. 11. Alternative Strategies  “Experiential” Innovative Menu 1. Provide new dishes monthly and seasonally 2. Lower risk option 3. Intrigues experiential customer base  Improve Restaurant Atmosphere 1. Hiring and training of personable employees 2. Clean and modern feel  Create New Managerial System 1. Demonstration by culinary expert 2. Manager involvement with customer 3. Limitation: High expense
  12. 12. “Experiential” Innovative Menu  Implementation: Create seasonal menus  Integration of chef and marketing team 1. Develop new menu items 2. Advertise new direction 3. Visually attractive menu  Distributed to all locations varying by geography by January of 2015
  13. 13. “Experiential” Innovative Menu  Outcome 1. Understanding consumer preferences by region 2. Potential increase in the seafood market share 3. Measure success by tracking sales after implementation  Response if strategy does not work 1. Utilize the information gathered on customer preferences toward a new strategy 2. Low risk
  14. 14. Unexpected Market Changes  Competitor changes 1. Continue to provide extraordinary service and innovative items  Economy downfall 1. use the same managerial team to focus on low cost options for the innovative menu
  15. 15. Interactive: Question 1  How has Red Lobster’s positioning changed over time? Write out a positioning statement (Hint: For (target segment), Red Lobster is (single most important claim) among all (competitive frame) because (single most important support)) for (a) pre-2004, and (b) post-2004. Do the current ads reflect the repositioning that Lopdrup and his team envisioned when their efforts began in 2004?
  16. 16. Interactive: Question 2  What were the most effective elements in Lopdrup’s repositioning plan (initiated in 2004)?
  17. 17. Interactive: Question 3  Compute restaurant profitability under the following scenario: The mix of patrons shifts with the restaurant gaining 2000 new unique Experiential customers, but losing 1000 Indulgent customers and 1000 Frugal customers.
  18. 18. Interactive: Question 4  Should Lopdrup make Experientials the target segment and modify Red Lobster’s positioning accordingly? If so, how should he change its marketing mix (i.e., the 4 Ps)?

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