MKT220 CH 09 Red Lobster: Market Research Reveals What’s Fresh Today Remember the Red Lobster commercials featuring lots of fried shrimp bouncing around and lobster claws dripping with butter? They’ve been replaced by scenes of steaming fresh fish, rice, and vegetables. The old slogan, “For the Seafood Lover in You” has also been canned. Now Red Lobster wants you to “Come See What’s Fresh Today.” The restaurants themselves will soon look different, too, with a more streamlined, contemporary décor that downplays the traditional nautical themes. These changes and more are part of an effort to make over the seafood chain after marketing research revealed that the restaurant was considered outdated and unappealing to potential customers. Red Lobster president Kim Lodrup says that in the first stage of the makeover, the chain improved operations so that customers wouldn’t have to wait so long for the food to reach their table. The second phase focused on improving the restaurant’s image and shifting the focus from low prices to freshness. The third and final challenge will be to increase sales. Lodrup says, “We are positioning Red Lobster to be the best seafood restaurant on the planet.” Lodrup was originally hired as a marketing specialist to revive the sagging brand’s image in 2003 when sales were falling and customer satisfaction was at an all-time low. He immediately put the kibosh on promotions like the All-You-Can-Eat Crab Legs Specials that had lost money for the company in the past and emphasized Red Lobster’s seafood expertise instead. After sales increased in 2004, he was promoted to president, but he still relies on marketing research to keep his finger on the pulse of customer preferences. “We find out what they want from idealized dining service and research how to deliver value to guests,” Lodrup says. To do that, Red Lobster follows changing consumer habits and pays attention to which dishes patrons prefer. They use phone and Internet surveys to learn about guest attitudes toward the food they’ve tried and try to determine how well they might respond to new menu items or concept changes before instituting them. The guest-relations department “catalogs the nature of guest contact so we can see if there are changes in trends,” Lodrup explains. “Emerging concerns or requests from consumers get captured weekly and recorded for our executives.” More in-depth research measures attitudes and trends that could affect the brand in the future. Before a promotion is launched, featured menu items are chosen through extensive consumer testing. Beginning with a large number of possible dishes, they narrow it down to the one that testers deem most appealing. After studies indicated that freshness is the single biggest criteria consumers use to judge a seafood restaurant, the chain knew it was vital to get word out that fresh fish is delivered to Red Lobster restaurants six days a week. Interviews with former customers revealed that many still beli ...

1. MKT220
CH 09
Red Lobster: Market Research Reveals What’s Fresh Today
Remember the Red Lobster commercials featuring lots of fried
shrimp bouncing around and lobster claws dripping with butter?
They’ve been replaced by scenes of steaming fresh fish, rice,
and vegetables. The old slogan, “For the Seafood Lover in You”
has also been canned. Now Red Lobster wants you to “Come
See What’s Fresh Today.” The restaurants themselves will soon
look different, too, with a more streamlined, contemporary
décor that downplays the traditional nautical themes.
These changes and more are part of an effort to make over the
seafood chain after marketing research revealed that the
restaurant was considered outdated and unappealing to potential
customers. Red Lobster president Kim Lodrup says that in the
first stage of the makeover, the chain improved operations so
that customers wouldn’t have to wait so long for the food to
reach their table. The second phase focused on improving the
restaurant’s image and shifting the focus from low prices to
freshness. The third and final challenge will be to increase
sales. Lodrup says, “We are positioning Red Lobster to be the
best seafood restaurant on the planet.”
Lodrup was originally hired as a marketing specialist to revive
the sagging brand’s image in 2003 when sales were falling and
customer satisfaction was at an all-time low. He immediately
put the kibosh on promotions like the All-You-Can-Eat Crab
Legs Specials that had lost money for the company in the past
and emphasized Red Lobster’s seafood expertise instead. After
sales increased in 2004, he was promoted to president, but he
still relies on marketing research to keep his finger on the pulse
of customer preferences.
“We find out what they want from idealized dining service and
research how to deliver value to guests,” Lodrup says. To do
that, Red Lobster follows changing consumer habits and pays

2. attention to which dishes patrons prefer. They use phone and
Internet surveys to learn about guest attitudes toward the food
they’ve tried and try to determine how well they might respond
to new menu items or concept changes before instituting them.
The guest-relations department “catalogs the nature of guest
contact so we can see if there are changes in trends,” Lodrup
explains. “Emerging concerns or requests from consumers get
captured weekly and recorded for our executives.”
More in-depth research measures attitudes and trends that could
affect the brand in the future. Before a promotion is launched,
featured menu items are chosen through extensive consumer
testing. Beginning with a large number of possible dishes, they
narrow it down to the one that testers deem most appealing.
After studies indicated that freshness is the single biggest
criteria consumers use to judge a seafood restaurant, the chain
knew it was vital to get word out that fresh fish is delivered to
Red Lobster restaurants six days a week. Interviews with former
customers revealed that many still believed that Red Lobster’s
fish was frozen despite the company’s extensive global
connections and rapid seafood delivery system.
“It’s really important to signal to people food is freshly
prepared,” says marketing V.P. Salli Setta, who created the
Culinary Institute of Tuscany for Olive Garden before being
hired by Red Lobster. The company is considering a similar
seafood-related school in Maine to add authenticity to Red
Lobster’s menu. In the meantime, Setta hired a new team of
executive chefs to create updated recipes with the herbs that
customers said had fresher connotations than the traditional
lemon and butter sauces.
They also introduced a separate Fresh Fish Menu that is updated
twice a day at the restaurants. Even though fresh fin fish had
been on the regular menu for years, it had never really been
promoted. Research showed that this could make the restaurant
more appealing to their lapsed customers, who tend to be
affluent, educated, and over 50. Households with an annual
income of more than $70,000 account for half of all food eaten

3. in restaurants and have been shown to be most interested in
seafood dining. Reeling these customers back in has become a
top priority in the chain’s turnaround.
So far the makeover is working. Red Lobster has been reporting
same-store sales increases since 2004. Improvements in
operations and other cost controls led to the highest operating
margin in Red Lobster history and, Lodrup reports, “Every
measure of guest satisfaction is at a record level.” However, it
continues to be a challenge for the chain to change old
perceptions of itself. As one surveyed customer put it, “My wife
swears by the fish. She just can’t get her friends to try it.”
1. Why do you think Red Lobster relies so much on Internet
surveys to track customer opinions, preferences, and criticisms?
What are the advantages of online questionnaires versus
traditional surveys conducted over the phone or through the
mail?
2. Go to www.redlobster.com and click around. How well do
you think the site appeals to the educated, affluent, and over-50
crowd that the chain wants to reel in? What are the primary
messages that it communicates about the restaurant, and how
effective are they? How does the site attempt to capture
information about its customers?
3. Red Lobster’s closest competitor in the seafood-dining
business is Joe's Crab Shack. Check out their Web site at
www.joescrabshack.com and compare it to Red Lobster’s. How
does their marketing approach differ? Do you think they’re
appealing to the same types of customers? How does the Web
site try to get information from its customers?
4. Suppose Red Lobster was wondering how well its new
interior design was being received by customers at a
redecorated restaurant in Columbus, Ohio, and hired you to
create a questionnaire. Write one of each: an open-ended
question, a closed-ended question (either dichotomous or
multiple choice), and a scaled-response question.
2

4. On all questions you must explain or show the math behind your
answers.
DUE: 5/7/2015 @ 9:00AM
4. Which of the seven QC tools would be most useful in
addressing each of the following situations? Explain your
reasoning. (You may decide more than one tool is useful.)
a. A copy machine suffers frequent paper jams and users are
often confused as to how to fix the problem.
b. The publication team for an engineering department wants to
improve the accuracy of its user documentation but is unsure of
why documents are not error-free.
c. A bank needs to determine how many teller positions, drive-
through stations, and ATM machines it needs for a new branch
bank in a certain busy location. Its information includes the
average numbers and types of customers served by other similar
facilities, as well as demographic information to suggest the
level of customer traffic in the new facility.
d. A contracting agency wants to investigate why they had so
many changes in their contracts. They believe that the number
of changes may be related to the dollar value of the original
contract of the days between the request for proposal and the
contract award.
e. A travel agency is interested in gaining a better
understanding of how call volume varies by time of year in
order to adjust staffing schedules.
5. Develop a "personal quality checklist" on which you tally
non-conformances in your personal life (such as being late for
work school, not completing homework on time, not getting
enough exercise, and so on.) What type of chart would you use
to monitor your performance and why?
6. Computer upgrades have a nominal time of 30 minutes. Five

5. sets of samples of six observations each have been taken, and
the results are listed below. Using the factors in Appendix B,
page 417, determine upper and lower control limits for mean
and range charts, and decide if the process is in control.
Samples
1
2
3
4
5
20.5
19.3
19.1
18.7
20.2
21.4
18.9
19.5
19.6
19.6
19.8
21.6
20.6
19.8
20.4
20.4
18.6
20.3
19.4
20.8
19.4

6. 19.9
20.6
21.2
18.9
20.9
19.5
21.1
20.1
21.0
Appendix B:
7. A medical facility does MRIs for sports injuries.
Occasionally, a test yields inconclusive results and must be
repeated. Using the sample data below and a sample size of
100, determine the upper and lower control limits. Is the
process in control? Show work.
Samples
1
2
3
4
5
6
7
8
9
10
11
12
Number of retests
5
2
6
0

7. 1
11
7
4
3
1
4
6
8. An emergency room at a hospital wanted to understand and
better control the waiting time for patients. To do this they
constructed ͞x and R-charts by sampling the waiting times of the
first five patients admitted to the ER at the beginning of each
shift (7 a.m., 3 p.m., and 11 p.m.). What do you think of this
approach? Will it provide the information the hospital
administrators seek? How might the sampling process be
improved, and what would you recommend? Show work
11. A small consulting group of a computer systems department
has seven projects to complete. How should the projects be
scheduled? The time in days and project deadlines are provided
below. Determine the average processing time and average
tardiness for each sequencing approach: First come, first served
(FCFS), shortest processing time (SPT), and earliest due date
(EDD). You may wish to use the spreadsheet in FCFS SPT
EDD file. Show work
Project
Time
Deadline
A
8
17
B
4

8. 25
C
12
60
D
7
51
E
10
31
F
15
29
G
18
46
H
16
39
12. A process to make XYZ Company products requires that the
product goes through two work centers. The production planner
is working to schedule several jobs through the two work
centers to have the shortest total throughput time. Job times are
in minutes. You may wish to use spreadsheet in Johnsons Rule
file.
Given the information below. Show work
a. Develop the job sequence that minimizes the idle time in the
two work centers.
b. Prepare a chart of activities and determine each one's idle
time.
Job
A
B
C

9. D
E
F
Center 1
20
7
14
6
14
12
Center 2
13
10
5
11
9
8
Lesson 4 Activities: Provide a minimum of one page, double
spaced solution to both activities.
1. Quality Dimensions
This activity will require students to review one or more
sources to determine several dimensions of quality (two are
included in the lesson materials). Then, using these
dimensions, compare two products or services along the
dimensions. The products should be reasonably comparable in
price. So if you are comparing automobiles, try to compare
models that may be trying to reach the same set of customers.
For example, Toyota Camry and Honda Accord or Toyota
Highlander and Chevrolet Traverse, might be more appropriate
than a Nissan Altima and a Bentley. Service quality may also
be selected and would involve comparing two service offerings.
There is a web site listed below for service quality.
David Garvin's article "Competing on the Eight Dimensions of
Quality" in November 1987 issue of Harvard Business Review.

10. Chris Akins. "8 Dimensions of Quality" at
http://lssacademy.com/2008/05/28/8-dimensions-of-quality/
A quick look at the definitions of eight dimensions of quality:
http://inasia.biz/tutorials/quality_dimensions.pdf
A service quality dimension list SERVQUAL may be reviewed
at these web sites:
http://en.wikipedia.org/wiki/SERVQUAL
http://www.12manage.com/methods_zeithaml_servqual.html
2. Gantt Chart. A Gantt chart is a relative simple and effective
tool for scheduling and managing projects. It offers an
opportunity for a quick visual review of the production plan or
project. For this assignment select a "project" from the list and
develop a Gantt chart for completing the plan or project.
Remember the plan should include both the tasks and the times.
Your chart should have at least ten tasks.
1. Graduation from your undergraduate (or graduate) program.
Do not select this option if you are graduating this Fall 2014 or
Spring 2015. Be sure you include classes and administrative
items that you must complete (example, applying for
graduation, graduation checks, getting ready for the graduation
ceremony, etc.).
2. Building your dream home or some similar project. Do not
be overly concerned with every minute detail, but include major
components of the project.
3. Taking a one-month, cross-country vacation to various
Historic and National Parks in the United States.
4. Others may be approved by the instructor.