DARDEN RESTAURANTS CHANGES TACTICS TO APPEAL TO CONSUMERS' CHANGING TASTES
Darden Restaurants, owner of chains such as Olive Garden and Red Lobster, is experiencing the consequences of marketing complacency. It is a well-known fact that large companies have difficulty changing the way they do business, especially if it has proved successful over long periods of time. Darden Restaurants' focus has traditionally been on quality dining. However, with changing market trends, this focus has led to a fall in sales. Consumers are now more concerned about cost, and Darden Restaurants is changing its marketing strategies to address these trends with smaller dishes, bigger appetizers (that could serve as meals), and a new marketing campaign that focuses on value. It is also introducing more nonseafood dishes on the Red Mobster menu to attract different types of customers. However, it must be careful of the effects of psychological pricing on its current customer base. Some customers may see the discount in price as a reflection of lower-quality foods.
The restaurant chains are also moving into vacant strip mall locations to expand and make themselves available to different types of customers. Retailers are welcoming their new neighbors because they can sell some of their parking spaces, and they hope the new restaurants will attract more business for their stores. This strategy will cut long-term costs for the restaurants because some of these existing spaces are large enough to place two restaurants near each other, which enables one truck delivery to service two locations at the same time.
Discussion Questions:
1. Why is it easy for companies to become complacent regarding changing market trends?
2. Do you think that Darden Restaurants' price discounts are a good move for the firm?
3. Name some of the advantages of locating restaurants in strip malls. Can you think of any disadvantages?