Marketing Campaign Case Studies

Tuesday, June 24, 2008


Darden Restaurants, the largest casual-dining restaurant group in the world, operated three distinct restaurant concepts: the Olive Garden, Bahama Breeze, and Red Lobster. With about 700 locations, Red Lobster was the nation’s leading full-service seafood restaurant chain, offering fresh seafood at moderate prices. Red Lobster had a disappointing year in 1997, with same-store sales falling 3.9 percent on average unit sales of $2.6 million. Hoping to increase sales and revitalize the Red Lobster brand, Darden Restaurants released its ‘‘Life on Land Is Dry’’ campaign. Created by the ad agency Euro RSCG Tatham, the $80 million radio and television campaign began in October 1997 and portrayed the seafood restaurant as an escape from life’s dry daily routine. To reinforce the slogan, Euro RSCG Tatham created spots that contrasted images of dry, barren landscapes with images of couples and families frolicking at the seashore. The new campaign—which began with television spots during programs like the Major League Baseball playoffs and prime-time programs Friends and 3rd Rock from the Sun—carried the theme ‘‘Life on Land Is Dry.’’ The commercials, together with ancillary marketing changes like new menus and the addition of an elevated bar to some restaurants, were designed to create a more energetic personality for the Red Lobster chain. The campaign ended in mid-2000.
‘‘Life on Land Is Dry’’ marked a strategy shift for Red Lobster. The campaign promoted Red Lobster as a fun-loving restaurant instead of promoting the chain’s prices, selection, or food quality. The strategy proved to be effective. During the campaign’s second year Red Lobster reported double-digit gains in same-store sales for the first time in nearly a decade.

Red Lobster was a pioneer in television advertising among casual-dining chains, putting commercials on the public airwaves long before similar chains such as Chili’s, Bennigan’s, and T.G.I. Friday’s joined the fray. For many years Red Lobster advertisements employed the tagline ‘‘Red Lobster for the Seafood Lover in You,’’ developed by its longtime partner Grey Advertising, one of the world’s largest ad agencies with billings of more than $5 billion. Grey Advertising’s other accounts included Cover Girl makeup, Pantene shampoo, and Kool-Aid fruit drink.
Over time, however, casual-dining competition grew keener, with a host of clever ads vying for the attention of consumers. As Red Lobster’s sales began to decline in the mid-1990s, Grey Advertising tried to come up with a new approach that would differentiate the seafood chain from its rivals. In 1997 the agency created a campaign for Red Lobster that provided more emphasis on fresh seafood. The slogan was ‘‘Prepared so fresh you can taste it.’’ This campaign reflected Red Lobster’s desire to expand its audience not only to those looking for lobster and shrimp but also to people who enjoyed fresh fish. It did not, however, resonate with consumers. ‘‘That wasn’t the personality we were looking for,’’ Red Lobster spokesman Andrew Dun said. ‘‘In today’s restaurant world, having a fresh product isn’t enough to be differentiated.’’ In the first quarter of 1997 Red Lobster sales of $475.3 million were about 1 percent below the same period a year earlier. Same-store sales, a measure that excluded new and closed outlets, were down 3.6 percent. The chain worked feverishly to combat the sales slump by introducing a new menu, lowering prices, and sinking more money into employee training to ensure that servers and managers understood the new menu. None of this seemed to work, however, and in the summer of 1997 Darden Restaurants announced it would review its Red Lobster advertising and consider switching agencies. Prominent ad agencies were asked to submit proposals as part of the review process. Adweek, an industry trade publication, reported that campaigns Darden rejected early on included one by Saatchi & Saatchi that said, ‘‘Life is a beach. And we’ve got the food.’’ The company also passed on a J. Walter Thompson proposal with the theme ‘‘Inside every Red Lobster there is a great little seafood place.’’ After extensive review, incumbent Grey Advertising, New York–based Deutsch, and Euro RSCG Tatham, a Chicago ad agency with a strong consumer-products resume, emerged as finalists for the $90 million account. A test of the three agencies’ ad strategies determined the winner.
In September Darden selected Euro RSCG Tatham to develop the new Red Lobster campaign. At the time Euro RSCG Tatham was the world’s eighth-largest advertising agency, with billings of $7 billion. It had no significant restaurant accounts, although it was working with consumer-product and food companies promoting brands such as Sara Lee, Head & Shoulders, and Old Spice. Euro RSCG Tatham began work immediately on the estimated $80 million campaign. Its contract for the Red Lobster account was structured with an incentive. The more Red Lobster improved, the greater the revenue for the ad agency. Grey Advertising continued to handle Darden’s Olive Garden business.
Tatham officials soon began dropping hints in the trade press about the direction of the new Red Lobster campaign. The agency said that it would continue advertising Red Lobster on television but that it would also look at more targeted advertising, such as direct mail and the Internet. New advertisements would include an emphasis on atmosphere as well as on food. ‘‘Red Lobster has more to sell than food on the plate,’’ a Tatham official declared. ‘‘They have a place, an attitude, a feeling . . . all of which we will portray in the advertising.’’ Tatham’s new ads, featuring the tagline ‘‘Life on Land Is Dry,’’ debuted on October 6, 1997.

Red Lobster was a leading player in the market category known as casual dining, whose appeal was primarily to aging baby boomers. This was the group that came of age simultaneously with fast food. As they aged, analysts said, these customers would want full-service, sit-down dining. Although more receptive to ethnic influences on the menus, they still wanted familiar food at moderate prices. ‘‘The major challenge [in appealing to this market] would be the economy,’’ said Ron Paul, president of the restaurant-industry consulting firm Technomic. ‘‘Casual dining is doing very, very well now because consumers are willing to spend the dollars it takes.’’ But when the economy took a downturn, he noted, consumers traded down to fast food.

The 1990s were a golden age for casual dining establishments. The restaurants’ themes, or concepts, varied, but their menus did not stray far from mainstream tastes. Some companies stuck with one specialty, such as Uno Restaurant Corp. and its famous deep-dish pizza of Chicago. Many chains, however, developed several concepts. Darden Restaurants, for example, was able to establish the two dominant chains in casual dining—the Red Lobster seafood concept and the Olive Garden, which had an Italian theme.
With its focus on seafood, Red Lobster was in the enviable position of having no serious national competitors. Its closest rival, Landry’s Seafood Restaurants, operated about 120 seafood restaurants in 26 states. The nation’s number two operator of casual-dining seafood restaurants, Landry’s operated four chains: Landry’s Seafood Houses, the Crab House, Joe’s Crab Shack, and Willie G’s Oyster Bar. By contrast, steak chains such as Outback Steakhouse and Lone Star Steakhouse & Saloon were in a crowded field and struggled to trumpet points of differentiation.

‘‘We’re taking a brand that already has a lot of positive attributes and making it more casual, more energetic,’’ said Wyman Roberts, executive vice president of marketing for Red Lobster, upon announcing the chain’s new ad campaign. ‘‘Like all brands, we need to evolve into something appropriate for these times.’’
In Red Lobster’s judgment the times called for repositioning the restaurant as a welcome break from the otherwise dry world. The first two 30-second television spots, entitled ‘‘Escape’’ and ‘‘Pack Your Bags’’ and featuring the tagline ‘‘Life on Land Is Dry,’’ began airing in October 1997 during prime-time programs such as Monday Night Football, Friends, 3rd Rock from the Sun, Home Improvement, and the Major League Baseball playoffs. The new commercials set footage of Americans of all ages enjoying fun on the beach to upbeat original music. The beach images, shot on both U.S. coasts, in Cape Cod and Los Angeles, were designed to associate the fun and excitement of water experiences with the freshness of Red Lobster fish and seafood. ‘‘By tapping into people’s memories of great beach vacations and sunny days spent relaxing in backyard pools, we capture their passion for life by the water including their hunger for fresh fish and seafood,’’ said Gary Epstein, managing partner of Tatham.
Subsequent spots in the campaign used contrast to make the same point. Scenes of people doing everyday, mundane tasks on land, using shots of the Los Angeles freeway and the deserts of Lancaster, California, were juxtaposed against the ‘‘escape’’ implied in Red Lobster seafood. ‘‘Research showed that our customers long for experiences that take them away from the grind of their everyday routines,’’ Roberts observed. ‘‘With this understanding of our customers’ needs, we hope to get them excited about seafood and the entire experience of dining at Red Lobster restaurants. In fact, this ad campaign is the first chapter in the larger story of efforts to restructure and rejuvenate Red Lobster.’’
The ‘‘Life on Land’’ campaign also included a number of beach-themed commercials featuring musical accompaniment from big names such as Rod Stewart and LeAnn Rimes. One spot launching a promotion for snow crab legs featured three older women cavorting across the sand while Rod Stewart’s song ‘‘Hot Legs’’ that contains condolence phrases played in the background. The promotion offered one pound of crab legs for $9.99. Another spot employed country-and-western prodigy Rimes’s baleful rendition of ‘‘Blue’’ to promote a $14.99 Maine lobster dinner. ‘‘It’s the story of the end of the season and a woman reflecting on the great summer and the experiences she’s had at the seashore. Red Lobster is trying to do a good job of just tapping into that,’’ said Roberts.
To complement its brand-building efforts on network TV, Red Lobster also released a $12 million radio campaign focusing on promotional messages. Radio stations in 60 markets across the country aired 60-second spots supporting the ‘‘Life on Land Is Dry’’ theme. The initiative, which doubled Red Lobster’s annual radio spending without eating into TV buys, followed successful local tests that involved sponsorships of local disc jockeys.
In 1999 the campaign aired another beach-based commercial, titled ‘‘Wingtips,’’ which featured a woman walking barefoot across a pristine beach. The spot’s voice-over encouraged consumers to ‘‘Breathe. Smile. Eat. Make a mess. Make a memory.’’ The spot deviated from the campaign’s other commercials by ending with the tagline ‘‘Escape to Red Lobster.’’ The ‘‘Life on Land Is Dry’’ campaign ended in mid-2000.
In addition to the multimedia advertising push, Red Lobster also made a number of cosmetic changes designed to improve the restaurant experience for both its patrons and employees. Dress-code changes for staff allowed servers to wear shorts and colorful shirts with fish motifs instead of the traditional black pants, white shirts, and ties. The company also eliminated its long-standing ban on beards for male workers. The changes were designed to improve morale in this notoriously highturnover industry.
Significant additions were also made to the Red Lobster menu. More boldly flavored entrees like Louisiana Lacy’s Catfish and Hickory Planked Salmon were added, together with a new seafood pasta line backed by TV commercials. ‘‘In the past, I think we were guilty of creating a menu that leaned toward the middle of the road,’’ said Tim Rosendahl, the seafood chain’s vice president of food and beverage. ‘‘Now our seafood gumbo, for example, is much more authentic. It’s got a real kick.’’
Finally, Red Lobster announced a renewed effort to increase awareness of the restaurant’s alcoholic beverage offerings. Elevated bars, akin to the ones seen in Bennigan’s and T.G.I. Friday’s outlets, were installed in select Red Lobster restaurants, while a teal-colored corrugated roof was designed to provide a tavern-on-thebeach feel. With this push the chain hoped to tap a potential new profit engine, since its alcohol sales were only about half the industry average. In the past, Roberts explained, ‘‘We did not really push or even acknowledge in our restaurants that it’s OK to have a drink.’’
Red Lobster’s sales slump appeared to have bottomed out by the end of 1997. Sales of $417.8 million, with 49 fewer restaurants, were more than 4 percent below the prior year. Sales on a comparable store basis were down 0.2 percent. On the plus side, profit margins were substantially improved over 1996 because of lower cost of goods sold and reduced selling expenses. More importantly, the company was satisfied with the new course being charted by Euro RSCG Tatham. ‘‘Red Lobster has made great progress compared to one year ago and is in the midst of a refocusing on guest satisfaction similar to that successfully undertaken by [t]he Olive Garden,’’ said Joe R. Lee, Darden Restaurants chairman and CEO. ‘‘While we celebrate the improvements, we realize we must maintain our focus on great food and great service in order to provide an outstanding dining experience every time.’’
The company continued to make progress through 1998. After nearly a decade of stagnating or declining fortunes, the chain saw double-digit gains in same-store sales in the third quarter of that year. The 11.6 percent increase marked the biggest such gain in eight years. Analysts credited much of the sales success to the revamped ad campaign. ‘‘It’s a much classier campaign,’’ observed Stacy Jamar, a restaurant analyst for Salomon Smith Barney. ‘‘It’s a more appealing image than before.’’ ‘‘They [Euro RSCG Tatham] have really done a good job with established brands,’’ added Lehman Brothers analyst Mitchell Speiser. ‘‘It has taken a while to turn Red Lobster around because there was a negative perception that it was an old chain and not too relevant. They have done a great job of changing the perception and pruning the portfolio.’’

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