Darden Restaurants serve more than 400 million meals every year in more than 1,800 restaurants across the United States. Bringing in over $7 billion of revenue per year, Darden Restaurants strategically target different consumer demographics based on several segmentation variables to achieve the high level of market share they take pride in. For those reasons and more, the multi-brand restaurant operator CEO, Clarence Otis, claims that his company’s successes are never due to luck, or chance but strategy and marketing intelligence instead.
Marketing Segmentation is the concept of dividing and subdividing a market along mutual characteristics. This marketing strategy is employed across Darden’s portfolio of restaurants but is seen more clearly with the case of Darden’s top three restaurant chains; LongHorn Steakhouse, Olive Garden, and Red Lobster. The first and most common type of segmentation is done by focusing marketing energy on a specific demographic. Age and Generational Marketing clearly stands out with Darden’s top three chains as they seem to have successfully captured the Generation X demographic.
Generation X includes individuals born between 1965 and 1976 who in other words currently make up the typical “parent” bracket of our society. This is a highly successful advantage for Darden as parents tend to have more occasions for ‘sit-down’ dinners than any other age group. Primarily, parents like to take their families out for a meal every once in a while and once a family considers potential family restaurants, Olive Garden, LongHorn or Red Lobster automatically come to mind due to their perception as family-friendly, cultural, and arguably fancy.
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Furthermore, when parents want to go on date-nights or couple-night-outs with friends, Darden’s three chains equally come to mind as couple-friendly and therefore somewhat romantic. Another demographic variable that Darden focuses on is social class, but not income levels. Darden’s top three chains maintain a reputation for being fancy but yet affordable. Some might argue how fancy these chains truly are, but looking at a typical US demographic through a macro lens, the typical Darden consumers tend to be higher-middle class.
The economic environment of the past few years has tightened consumer dining-out budgets but demand for the three Darden chains has been more or less maintained at a desirable point with the help of promotions, coupons, special meals, etc. As far as race/ethnicity is concerned, Darden targets the European-American, Pseudo-Italian, and generally culturally-aware demographics by offering an authentic Italian cuisine, a fresh variety of grilled and fried seafood, and finally steaks that fire up one’s southern taste buds. Darden’s use of segmentation marketing does not simply end at demographics however.
Psychographic or lifestyle segmentation goes along way with Darden’s chains as each one caters for a typical consumer taste/behavior. The most prominent lifestyle targeted by Darden efforts is the “healthy/nutritiously-aware” consumer that would only consider Darden’s restaurants for the well-known healthy use of olive oil at the Olive Garden, the taste of wood-grilled seafood at the Red Lobster or other cuisines under Darden’s Specialty Group, like Seasons 52 for example. Darden’s portfolio expands into other restaurants much like Seasons 52 which is known to offer dishes less than 475 calories.
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As the case indicates, the Red Lobster brand was recently reinvented as the wood-grilling style cooking was introduced with an aim to offer a healthier alternative alongside fried seafood. Darden’s effort to build upon the Red Lobster’s “stealth health” initiative was proven to be successful as the chain was recently dubbed “best sit-down chain in America” by Men’s Health magazine. Another point can be made regarding lifestyle segmentation is mild efforts to attract animal-friendly consumers. This bracket of consumers includes but is not limited to vegetarianism and animal-friendliness.
This was seen in the addition of vegetarian-friendly meals to Darden menus and more mildly in the removal of all taxidermy heads that might scare off customers and their replacement with cowboy figures. The most valuable lesson Darden teaches us, as well as what differentiates Darden from its competitors, is the independence on chance and dependence on marketing intelligence. It goes without saying that Darden’s efforts and extensive investment in market research have helped Darden in becoming the world’s largest full-service restaurant company as well as a famous fortune 500 company.
