Harmonix Case Industry Merchadising

Chapter 8 Case Assignment: 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 They’ve been replaced by scenes of steaming fresh fish,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 makeover the seafood chain after marketing

research revealed that the restaurant was considered outdated and unappealing to potential

customers. Red Lobster president Kim Ludrop 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...