Red Lobster

New Product Development

Fall 2015

Red Lobster (Harvard Business Case)

MGMT522 New Product Development Christian Lehr

Addressed questions:

1. How to ensure sustained grow?

2. Should “Experientials” now be the primary target customer?

3. How much positioning change is possible while keeping the name Red Lobster?

4. What changes should be made in the offering before remodeling all the restaurants?

5. Is “approachable, fresh seafood” still the right positioning?

6. Continue with traditional price promotions?

7. Do the current ads fit to the positioning?

8. Is raising the prices an option?

9. Should they add a better wine selection to cater to experimental?

10. Should they broadening the menu?

11. Could locations vary its ambience by time of day?

12. How urgently should the remaining restaurants be remodeled?

Objective: The main objective is to ensure sustainable growth for Red Lobster.

Recommendation: Kim Lopdrup should not just focus on either the former target group of “Indulgents, Traditionalist and Frugals” or the growing portion of “experiential” customers, but spotlight the historical approach of providing top quality and fresh seafood at an affordable price to a currently increasing range of different customers and occasions. Hence the target group should include all customers who crave for great seafood.

Pros: By going with the above mentioned strategy, the broader base of guests is likely to result in a higher degree of capacity utilization of the restaurants, which will increase the revenues. Furthermore, attracting additional “experiential” customers will probably help to increase the portion of the alcohol sales which are the lowest within the group of the “Big 7” and hence will increase the revenues as well. In addition, having low and higher priced meals does not only serve demands of different customer segments but also gives the opportunity to fit to...