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Red Lobster Case Solution & Answer

Three phase Plan

Firstly, Lopdrup initiated a three phase plan in order to eliminate the identified issues in the business. One phase emphasized on bringing operational efficiencies into the restaurants by cutting costs, and providing value to customers. Menus, recipes, and promotions were simplified, discounts were stopped on all menus, and planned to offer discounts seasonally. Finally, attention to appearance of the restaurants was given to improve the restaurants from all dimensions.

Secondly, re-positioning around the freshness phase initiative emphasized positioning that it tells the customers that the food is fresh. Since, freshness in the minds of customers means never frozen, and they know not about the process, and they have vague understanding of freshness. In order to address this issues, management understated that all fried items in the menu list, changed cooking platform, hired grill masters, revised menus, and place the name of chef on menu list, and offered customizable order.

Thirdly, remodeling of the restaurants initiative emphasized on remodeling of the restaurants to create comfortable seaside atmosphere to allow customers to sense the foods of Red Lobster as fresh and top quality. This initiative changes theperception of Red Lobster as a casual dining restaurant.

Question No. 02: Make a recommendation to Lopdrup on targeting and positioning Red Lobster in 2010. Please ensure that you provide a rational for your recommendation.

Targeting

Red Lobster lacked in proper targeting the market because, it has been giving discounts on the menus regularly that showed the company has no strategy regarding targeting the market. On the other hand, the competition into the market has increased because the customer traffic in the restaurants was declining. Customers were perceiving Red Lobster as less fresh and more frozen, this became a major problem for the restaurants. However, after implementation of the three phase plan, things seem to be quite better than before. But, target market for the Red Lobster was not defined, and it is important to consider that Red Lobster has both high end and low end consumers.

High end consumers require fresh seafood, and low end consumers don’t care about the freshness, but they prefer frozen seafood and non-seafood items. So, the vision of the Red Lobster is to provide high end customers on competitive prices with freshness. Therefore, the target market are the upper class customers, who prefer quality and freshness and are not much price sensitive.

The customers of Red Lobster have different perceptions, but each of them falls under the vision, and mission of the restaurant. Thus, targeting them would be vital because they are customers of the Red Lobster, and their loyalty cannot be broken until and unless Red Lobster fails in meeting with the expectations of the target market.

It can be determined that targeting the seafood industry is very complicated because, the seafood industry is much expensive than other protein foods. Customers of the seafood industry are supposed to be affluent, quality and freshness sensitive. Price should not be an issue for them, so restaurants in this industry cannot compete on the prices. Thus, the competition in this industry is based on quality, freshness, and customer services………………..

 

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