Sample Business Studies Case Study on Red Lobster


Marketing is important for all firms as it determines every organization’s success or failure. In my perspective, without effective marketing practices, it becomes challenging for a firm to distribute its products to the large consumer market, thus paralyzing its operation. I opine that lack of sales translates to losses; thus, a firm cannot sustain its operations when it does not profit from its operations. As such, marketing is a critical aspect of a firm’s operations because it determines whether a company can gain profitability or make losses from the sales of its products. I firmly believe that Red Lobster is one of the companies that have undergone a series of transformations related to improving its marketing practices. The corporation primarily deals in foodstuffs, and it is based in the United States. The firm has been in operation for over 40 years, and its operations have been in the form of casual full-service dining chain stores. I contend that one of the company’s objectives is to increase the sales of its products and increase its profit margins. Therefore, the firm has made significant changes to its marketing strategies involving segmentation, consumer change, competitive responses, prioritization of limited resources, and marketing mix concepts, including price, product, promotion, and place.

Question 1

Principle #1: All Customers Differ


Market segmentation is one of the important concepts that Red Lobster has incorporated in its marketing strategy to promote itself. Some of the factors considered in market segmentation include demographic, geographical, psychographic, and behavioral aspects. In demographic segmentation, I opine that consumers are grouped according to various features, such as income, age, gender, occupation, race, and others. In my perspective, geographical segmentation groups consumers based on features, such as area of residence and climate. I believe that in psychographic segmentation, consumers are often grouped based on their personal traits, values, opinions, and interests. In my opinion, behavioral segmentation sorts customers by behaviors and decision-making patterns, such as purchase, lifestyle, consumption, and usage. I opine that Red Lobster has incorporated three marketing segmentation strategies, including demographic, behavioral, and geographical segmentation to group its customers based on various features. However, the firm has not incorporated the psychographic segmentation strategy in its marketing operations, thus it has missed focusing on specific needs that consumers may desire to have.

In my perspective, Red Lobster’s practices segmentation. Foremost, it practices demographic segmentation, even though it caters to individuals of all ages and both genders. I contend that the firm focuses on middle and upper-class individuals considering that prices on its menu are not low. Furthermore, the firm targets Caucasians who form the largest part of its consumer market. I opine that another feature that the firm uses to sort its customers based on demographics is education: the majority of its customers tend to be more educated. When it comes to geographic segmentation, Red Lobster is a restaurant that is based on urban areas. Therefore, it targets customers who reside in urban regions, specifically metropolitan areas. Most of the target market, which is the middle and upper-class individuals, resides in the urban areas. In my opinion, the firm has effectively incorporated demographic and geographic segmentation strategies into its marketing operations, and that has enabled the organization’s management to understand how the restaurant can increase its sales and profit margins.

Another market segmentation strategy that Red Lobster has integrated into its market segmentation process is behavioral. I believe that the firm targets its consumers based on their traits and decision-making patterns, including lifestyle and usage. The firm encompasses consumer loyalty in this type of segmentation, and it targets individuals who cannot be persuaded by other firms to associate with their products. Moreover, the corporation’s strong reputation and effective customer service play an important role in maintaining consumers’ loyalty. I also believe that the firm targets customers’ loyalty and middle and upper-class individuals with a classy lifestyle and often wants to associate with a well-known restaurant. In my perspective, behavioral segmentation has enabled the firm’s management to understand the consumers’ beliefs and perceptions about the brand.

Psychographic segmentation is one of the market segmentation strategies that I believe the firm has not integrated into its operations. Lack of research on this segmentation strategy means that the firm is unaware of what consumer values it needs to target. For instance, the firm is not decided on targeting consumers who like good meals or those who associate themselves with brands that have a strong public image. Therefore, in my perspective, for the firm to attract more customers and increase its sales and profit margins, it should come up with a strategy to sort customers based on their values and preferences. I opine that focusing on what the consumers need will help to enhance their loyalty on the firm.

Principle #2: All Costumers Change

Consumer Change

Another underlying challenge that all firms face while making short and long-term marketing decisions is that consumers change over time. In my perspective, events in people’s lives tend to change their existing routines, attitudes, and buying habits. While developing marketing strategies, managers must take into account the static variations in consumers’ needs, which are due to their inherent differences, and the dynamic differences that arise as the customers’ needs change over time to ensure their organizations are not affected by changes in consumers’ needs. I contend that many firms segment their customers based on their needs and preferences for a particular product, but even after being segmented, consumers’ needs continue to evolve at different rates and in different directions. In my opinion, addressing such challenges requires a firm to first understand what causes changes in consumers’ needs and preferences. Some of the factors that alter consumer dynamics include discrete life events, an individual’s typical life cycle, consumer learning effects, product lifecycle, and changes in the environment. Discrete life events, such as painful divorce, marriage, and graduation, lead to changes in consumers’ preferences. An example is when a consumer engages in a painful divorce; thus, he or she chooses to avoid a particular brand that was his or her spouse’s favorite to avoid the psychological distress associated with such reminders. I contend that changes in consumers’ needs and preferences related to typical life cycles are attached to psychological and sociological changes an individual experiences over time. I firmly believe that consumer learning effects may contribute to changes in consumers’ preferences when customers realize that other better products exist in the market and would like to eat.

In the case of Red Lobster, I contend that the firm has established strategies that effectively respond to such changes whenever they are experienced. In relation to discrete life events, the firm has come up with themes such as offering the Crab Lover’s Trio dish, to address consumers’ needs and preferences in such events.  I opine that the company’s customers tend to love various dishes whenever they visit the restaurant for special occasions. I believe that some of the most consumed dishes include endless shrimp, crab fest, lobster fest. Therefore, the firm has included different dishes within its restaurants to ensure that consumers are well catered for during events. I contend that the firm has also come up with strategies to address issues related to an individual life cycle, such as psychological and sociological changes, by providing a wide variety of dishes with different flavors. With regard to consumer learning effects, I strongly believe that the firm has incorporated a strategy whereby it prepares the best seafood and innovative dishes that its guests desire to eat. The corporation tends to prepare dishes that its competitors are unable to offer to the customers, to maintain its wide customer base. An example of an innovative dish in that regard is the Crab Lover’s Trio dish. Red Lobster prepares the Crab Lover’s Trio dish using three different types of crabs, which are made in different ways. The types of crabs included in that particular dish includes king crab, snow crab legs, and jumbo lump crab.

Principle #3: All Competitors React

Competitive Response

Competitive response is another aspect that I believe Red Lobster has incorporated into its marketing strategies, and it enables the entity to select target markets and positioning strategies based on their relative strengths and weaknesses compared to those of the competitors. The true effectiveness of those strategies is how competitors react to them. Although consumers play an important role in an organization’s success, it is also important for managers to consider how other firms react to the marketing strategies a firm has put in place through competition.

Strengths. In the case of Red Lobster, I opine that the firm has put in place strategies to maintain a competitive advantage over other seafood restaurants in the United States. In my perspective, the firm engages in the preparation of high quality and innovative seafood dishes that its competitors across the U.S, such as Landry’s Crab shack, Long John Silvers, and Captain D’s Seafood, do not offer in the marketplace, for instance, Crab Lover’s Trio. I believe that the company also offers customers the best services and food products to improve their experience, yet some seafood firms have not addressed this aspect.

Weaknesses. Although the firm has effectively addressed some aspects in response to competition from other firms, I opine that it has not resolved other issues. For example, the enterprise has not expanded its operations into various countries across the world. The limited geographic presence has limited the company’s ability to compete with the seafood restaurants that have expanded their operations into various countries. I firmly believe that other local seafood firms are trying to react to Red Lobster’s weaknesses by expanding their operations into various countries across the world to increase their sales and profit margins.

Opportunities. In my perspective, Red Lobster has many opportunities to maintain competitive other the local seafood restaurants and the global seafood firms. For instance, I firmly believe that it can incorporate a marketing strategy to expand its operations and distribute its products all over the world to increase sales and increase its profit margins. I opine that the firm also has the opportunity to incorporate a marketing strategy that allows it to focus on the preparation of a wide range of innovative dishes that both local and foreign seafood restaurants do not offer to the consumers.

Threats. While the corporation has multiple strengths and opportunities, I firmly believe that it is facing some threats in the marketplace. Such threats include constant changes in consumers’ lifestyle and eating habits and scarcity of seafood due to changes in climate or as a result of various economic aspects. In my perspective, the mentioned threats could lead to the corporation losing customers and profits; thus Red Lobster has to establish effective strategies to address such threats.

Principle #4: All Resources Are Limited

Prioritization of Limited Resources

In my perspective, another challenge that managers face while making strategic marketing decisions limited resources. A firm’s marketing decisions require trade-offs across multiple objectives, so that scarce resources can meet different needs within the organization. I opine that a company has to allocate the scarce resources to all its production and marketing areas for it to maintain effective operations across all sectors. In the case of Red Lobster, its scarce resources are the finances, and that is due to its limited geographical presence. I contend that the corporation has to carefully allocate its scarce financial resources to all aspects of organizational marketing to increase sales of its products and increase its profit margins.

Question 2

Giving Recommendation through 4Ps

Marketing Mix Concepts

In my perspective, another aspect that Red Lobster has addressed in its marketing strategies are the four marketing mix concepts. These concepts include product, price, promotion, and place. I contend that the concept of the product refers to the unique combination of goods and services that a given firm offers to its customers. The concept includes both the tangible and intangible elements of the service a business is offering to consumers. In the case of Red Lobster, I strongly believe that the firm offers its customers fresh and healthy foodstuffs, and in different presentations. I contend that price is the value that a firm has placed on its products and services. Many people desire to enjoy high-quality services and products at a low cost. However, this is not the case in Red Lobster. I contend that the firm’s products are associated with high prices that only middle and upper-class individuals can purchase.

As mentioned, the firm in question also uses promotion, which in my perspective is a method a firm uses to communicate with the consumers, and place, where consumers can access a firm’s products and how they can be delivered to them, to market itself. In my opinion, one of the promotion strategies that Red Lobster uses to communicate with its consumers is advertisements. I contend that the firm uses various social media sites, including YouTube, to advertise its products. When it comes to place, the firm is situated near malls, living quarters, and transportation areas in the urban regions, where consumers can easily access its products. Recommendation

Regarding the four concepts of the marketing mix, I would recommend that the Red Lobster firm focuses on the price concept. The company should reduce the price of its products to ensure that even the low and those the middle class can also enjoy the delicious meals. Incorporating that approach will enable the firm to increase its sales and increase its profit margins. However, a reduction in the price of its products is likely to affect other areas such as production. Therefore, to mitigate the consequences of reducing prices, I would recommend that Red Lobster cuts production costs, for instance, by eliminating waste and unnecessary spending. The corporation could also explore increasing the use of social media and reduce traditional marketing to cut marketing costs. The firm can also lower its financial expenditures on insurance policies by acquiring insurance plans that are associated with low premiums.


Red Lobster is one of the seafood firms that have operated in the United States for several years. The company has incorporated effective marketing strategies, such as consumer segmentation, changes in consumers’ needs and preferences, competition, and allocation of the limited resources to various organizational marketing areas, which have propelled its development. The firm has also effectively addressed the four marketing mix concepts, including product, price, promotion, and place in its marketing strategies. However, I would recommend that Red Lobster changes its concept of price. The firm should set affordable prices to allow the low-class individuals to associate with such a brand. Focusing on the approach will help the firm to increase its sales and achieve high-profit margins.