Red Lobster Case

Topics: Darden Restaurants, Restaurant, Seafood Pages: 4 (1559 words) Published: November 29, 2012
Bill Daren, restaurant entrepreneur opened his first restaurant at age 18. After opening a few other restaurants, his passion for seafood drove him to open a restaurant with top quality seafood called Red Lobster. Red Lobster was founded in 1968 in Lake Land Florida. One month after its opening Red Lobster, Daren had to expand the restaurant due to its high demand. After two years he had opened four other locations. In 1970 the chain was sold to General Mills, Daren was still the president. By 1975, apart from having a new president, Red Lobster was the first casual dining chain to achieve national scale, to advertise on network television and to have a national seafood distribution system, which was an important competitive asset. In 1982 general Mills Restaurants, Inc used Red Lobster operation platform to create Olive Garden. This corporation also opened other chains such as Longhorn Steakhouse and Capital Grille. Red lobster had an immense success and their goal was always to sustain the companies historical affordability positioning. Red Lobster stated having some problems; this restaurant had always been top quality seafood with a really affordable price. Some customers were not attracted by the generous portions of affordable food as imagined but instead they were attracted to the desire to use a meal occasion as an opportunity to connect with family and friends. Red Lobster never thought that “experientials” were their customers and they were not marketing for them. Restaurants were not physically adapted for “experientials.” Some other issues were that Red Lobster many competitors, also value focus chains such as Chili’s, Applebee’s and Olive Garden. This chains also had seafood in their menus and their menus were much cheaper that one in Red Lobster. In a survey made in 2004, customers believed that Red Lobster was under a category of low-end seafood restaurants that served mass-produced frozen seafood, much of it fried. Red Lobster never thought that...
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