Posted: 13 Feb 2012
Date Written: February 4, 2011
Red Lobster, a 40-year-old chain of seafood restaurants, has just completed some market research revealing an opportunity to shift their target customer segment. The chain is in the final stages of a 10-year plan of rejuvenation under CEO Kim Lopdrup. When he took over as CEO in 2004 the chain was closing restaurants and suffering declining same store sales and declining customer satisfaction. But in 2010, even in a recession, the fortunes of the chain are improving. A recently commissioned market research study has revealed, unexpectedly, that 25% of Red Lobster's customers are "experientials," people coming for a "good evening out" rather than Red Lobster's traditional core customer who came because of a craving for seafood. Should this news cause Lopdrup to do anything differently?
Learning Objective: The case was written with three purposes in mind (i) to permit a discussion about segmenting customers (ii) as a general case about the marketing of restaurants and (ii) about the potential of seafood as a source of protein especially in light of the growth of aquaculture as a source.
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