Red Lobster is a privately owned dining restaurant. It was founded on 22nd March back in 1968. Bill Darden and Charley Woodsby are the founders of Red Lobster. The head quarter of the restaurant is situated in Orland, Florida, United States. Apart from the United States, the restaurant is also in various countries like Canada, Mexico, Japan, Malaysia, UAE, Brazil, and New Zealand and so on. The CEO of the restaurant is Kim Lopdrup. He has worked in the chain restaurant for the past 25 years. Red Lobster restaurant is mainly famous for the sea food they serve, however, the menu is quite diverse. The restaurant serves something for everyone like, chicken, pastas and steaks and so on. The restaurant was famous for making things approachable and easy. That all changed mid-2000s, when people started to think that the restaurant is out of date from today’s customers. The restaurant has seen great growth over the course of time, but they have to step up their game in terms of marketing mix and strategy. However, the company with over 40 years of experience of being a seafood restaurant has taken a new turn with current CEO Kim. They are trying to renew their strategies and grab newer opportunities to make a mark in the current market. This paper will discuss the current positioning and standing of the Red Lobster restaurant along with the marketing strategies and possible recommendations.
Discussion
Red Lobster already has a good foundation that can work as an advantage as they claim their place in the market again. It is one of the largest seafood restaurant chain in the world. If that was not enough, they are already growing in the market by expanding in various countries. The company has a market share of a whopping 50% in the full service seafood restaurant segment. One of the best facts is that Red Lobster is the 5th largest casual restaurant for dining in America with an annual sale of 2.5 billion US dollars, with an average unit volume of 3.5 million US dollars (Beaudin, et al., 1-4). Regardless, Red Lobster will face quite the struggle in trying to make it back in the market.
The company will be working hard on its marketing strategies and overall quality of their restaurant and food to win over all the sea food lovers out there. They will be working on not just the quality of the food but also the presentation of the food, business strategies and a polite staff. One of the most difficult things that the company will have to tackle is their famous affordable price point. The company has to find the perfect balance amid;
Serving people quality and fresh food
Hiring a friendly staff
Getting fresh produce
Keeping things clean and hygienic
Managing their PR
Becoming more contemporary
The list might not seem very big or daunting, but it can be tough to achieve on a set price tag. The idea is to not forget the original essence of the company, which started back in the 1960s. The main goal of the restaurant is to provide people with good quality and fresh sea food but at affordable charges. Keeping in mind the current market and the charges of quality sea food, finding a balance to break even can be difficult. However, there are many innovative ways that the company can use to achieve that.
It is evident that the restaurant has been lacking when it comes to attracting customers. However, with the help of the new CEO, Red lobster is trying to get back on track again. The company has invested in widespread market research that has helped in making new discoveries. There is an obvious issue that the company has been facing when it comes to the restaurants image and reputation. Lately, the restaurant was being linked with the controversy of using unhealthy frozen food. Most customers complain that the restaurant does not provide them with fresh food. Other than that, the recession has also taken a toll on the customer count. The CEO Kim has taken a very different approach to make things work for Red Lobster again. He is more focused on rejuvenating and following a differentiation strategy (Beaudin, et al., 1-4). Kim does not want to go the road of competing in an already robust market, instead he wants to gain an edge by improving the company overall.
The main plan that Kim has is to go for higher quality. Kim’s core plot is to give people a high-quality dining experience at reasonable costs. In fact, it is a great strategy, the restaurant needs to come out of the shell of bad quality that is putting it behind in the market. One of the best ways to do that would be a new look and a more unique menu that will help attract the customer. It is obvious that the human eye is attracted to anything that is esthetically pleasing and good quality is a bonus for the long-term goal. A new look will also help make the change obvious to the people. A novel appearance means a fresh start, people would definitely want to look into Red Lobster after seeing a makeover. Another thing that the company needs to focus on is the embracing of the 21st century technology, media and communication (Setta). Investment in partnering up with various social media platforms like Facebook, Twitter, YouTube and Instagram will help the company get on track with the contemporary world.
Being part of social media in conjunction with the strategy of providing people with good and high quality food is going to help the company make a mark in the market. Additionally, Red Lobster also needs to work on hiring skillful chefs and grill masters. Recruiting good cooks is one of the most important steps in their journey to success. The company also needs to make sure that the staff that they are hiring have the knack and prowess to attract new customers and retain the ones who are already present. A polite and friendly staff is a must in order to make the restaurant function better. If the staff is arrogant and rude, people will not like to come to the restaurant regardless of how good the food is (Setta). Procuring fishermen who provide fresh sea food is also an essential step as if it will help remove the stigma that the restaurant does not provide fresh food. They should also mention this bit when advertising their restaurant on social media.
Another recommendation for Red Lobster would be to target the experiential segment in the market. This can be a risky move for the restaurant, but if done right it can be quite fruitful. The changes required to pull this strategy off will be expensive and widespread as well. There is a chance that the company will have to put aside the affordability strategy. This can also cause the company to lose its preexisting loyal customer base. There is no doubt in the fact that a sudden shift in the positioning can be difficult to manage. There is always a risk that the targeted customers might not get attracted. The best way to handle this is to go on experiential route slowly and gradually (Setta). By doing so, a new group of people can be targeted but at the same time the already existing customers will not feel alienated. This will be Red Lobster’s way of extending its horizons.
As mentioned above, affordable pricing is one of the most distinctive feature of the company, so they cannot let it go. However, the best of both worlds can be achieved if the company expands their menu. By expanding the menu, they can set different prices ranging from affordable to high priced dishes. This is one of the best strategies as people who would want to experiment can have an extravagant dish from the menu. On the other hand, the regular customers who just want an affordable, yet good dining experience can order the reasonable dishes from the menu.
However, both the expensive as well as the more reasonable dishes need to be high quality and fresh. Further, the menu that is more geared towards the experiential segment should be devised in a manner that they would be attracted towards the food that is being offered. Red Lobster can also work on making things more enticing by adding a limited addition dish in the menu. The best thing is, that will give the restaurant the opportunity to experiment while being safe. If a limited addition dish gets a good turnover it can be added in the menu permanently. The excellent supply and distribution system can be used to keep the prices of the food items more approachable and reasonable (Eldred). The extensive menu will work as a value proposition for the company and help the company with its innovation.
There is one thing that was really wrong with the positioning of Red Lobster. The customers liked the brand essence of affordability, but it was making the brand personality appear cheap. The affordability was positioning the brand for providing low quality products. That can all change if the company works on adding the element of freshness and quality in their new market mix. When they promote their product they have to make sure that they associate the pricing with convenience and ease of the pocket. The focus should be on the high quality of the product, so the customers stop associating the brand with words like cheap and low quality. This is the focal reason why targeting experiential is very important for the brand image.
As far as the brand narrative statement is concerned, now the company has been looking at the customers as the employees. The people who will be helping in the growth of the company. So, Kim the CEO of Red Lobster has planned to reposition the restaurant as a company that only focuses on providing its consumers with quality food. The first thing that they will be doing is changing the menu and remodeling the restaurants to change the perception of the restaurant in the eye of the consumers. It will be done with the help of a simple improvement of the operations.
The best change that the restaurant opted for was altering the menu and making it widespread by adding entrees as well in accordance with the fresh catch of the day. It is a simple tactic but mentioning “fresh catch” will help the customers see that the produce that is being used is high quality. New television and social media advertisement help the customers see and become more aware of the brand. The advertisement of Red Lobster mainly covers the fresh fish and grilling section.
When it comes to the cultural context of the brand, they have been very inclusive and diverse. They are working on extending the menu based on the market that they are working in. By doing so, the people of the country the restaurants have extended in are able to connect with the brand. The best thing is that there is a constant menu, however, they brand spices things up once a while by adding food items that are familiar to the natives (Eldred). This is one of the best strategies to grow in other countries. By doing so the market expands rapidly.
Conclusion
Red Lobster has a substantial stranding in the market of the United States. They have operated in the country for decades and gone through transformations over the course of time. The company has worked and is constantly occupied in improving their quality and service even more. By doing so they are inhabiting a well-deserved customer base to keep their standing in the vigorous market. The plan that was devised by Kim a long time ago has proven to have a cemented foundation as it is helping improve the image of the company by the day. With a few more adjustments, the restaurant can be directed towards becoming more successful. The main thing that the company has to work on is the improvement of food and changing the perception of the customers. Both of these factors go hand and hand, and need to be done simultaneously in order to make a significant change in their market position. Focusing on the exponential customers will prove to be a great strategy in making customers and further cementing its position in the market and even step into the fancy dining genre. Keeping this fact in mind, the other customers should not be ignored at any cost. As the customers who are looking for affordable seafood are the ones who make up the main customer base of the restaurant. Both the consumer base side by side will help Red Lobster in the long-run.
Work Cited
Beaudin, Laura, et al. "Mobile marketing: Don’t miss the moment." Bain & Company (2016): 1-4.
Setta, Salli. "Opening Keynote Address: Salli Setta, President, Red Lobster (CMP Credit: 1 CE)." (2017).
Eldred, Claire. "Encounters and Exchanges with Elsa Schiaparelli’s Lobster Dress: an Object Biography." Fashion and Contemporaneity. Brill Rodopi, 2019. 69-87.
