Darden Restaurants

1. Based on the articles, “Darden Restaurants” and “Why America is Addicted to Olive Garden,” the Darden Company has a market orientation and adheres to the marketing concept. According to MKTG “market orientation is a philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customer’s decision to purchase product.” The “marketing concept is the idea that the social and economic justification for an organization’s existence is the satisfaction of customer wants and needs while meeting organizational objective.”

Darden Restaurants focus on the customer’s expectations and building long-term relationships. David Pickens, the president of Olive Garden, begins staff meetings with his managers by reading and listening to letters from customers. Pickens is truly interested in the customers experience at Olive Garden. Managers read letters from customers who have had reunions, celebrations, proposals, or just dinner with a friend; these letters are shared with staff members as well. Pickens goal is for Olive Garden’s customers to be satisfied with their meal and be emotionally satisfied when leaving the restaurant. Employees are treated like family and are trained to treat customers as if they were family.

Darden turned to research in the 1990’s when Olive Garden’s menu had become “stale and sales were in decline.” The outcome of the research revealed customers want to enjoy a good meal and feel emotionally satisfied. Executives implemented the slogan, “When you’re here, you’re family.” A joint venture was pursued with Italians, Olive Garden’s Culinary Institute of Tuscany (CIT). Fourteen employees were sent to Italy to spend a week with “Sergio and Daniela Zingarelli, a husband and wife who operate a restaurant, winery, and inn.” The employees are exposed to the Italian experts to learn their process for creating an Italian feast. Some of the chefs work in local restaurants.

Thus, the employees return to America with many new ideas to incorporate into Olive Garden’s overall dining experience. In summary, Darden consistently updates their restaurants to reflect “society’s long-term interests.” Darden has a commitment to provide high-quality meals and prices customers are expected to pay. Customer satisfaction is of uppermost importance to Darden and a concentration on long-term relationships with customers is essential.

Further, Darden invests in their employees to make them feel as if they are part of the family. Employees are empowered to have good attitudes, show loyalty and are encouraged to help solve customer problems. Darden is always trying to improve the quality and the presentation of their meals. They share information and ideas with each other to learn and provide the highest quality of service possible to remain connected to their customers.

2. Clarence Otis, the CEO of Darden, would say one way his company delivers customer value is by being prepared to handle the “economic and demographic forces buffeting the industry.” Otis studies his customer’s needs and actually listens to what the customer has to say. Sharing ideas among the three major restaurants with top executives is extremely beneficial. Darden’s new headquarters will relocate to Orlando in October. Test kitchens from each restaurant will be in one location and the top chefs can compare and learn from each other further providing delicious meals prepared to perfection in a very family-oriented atmosphere. Further, “Darden’s success has been a combination of leading edge technology that helps make a notoriously unpredictable business more efficient.”

3. (A) Olive Garden – Darden appears to be pursuing a competitive advantage by providing a high-quality product, customer awareness nationwide, excellent advertising, and sustainable growth. Olive Garden also pursues a “product/service differentiation competitive advantage” with a unique product that is valued by consumers. (B) Red Lobster- Darden appears to be pursuing a competitive advantage by “pushing ahead with an ambitious plan to revitalize its second-biggest brand. A sustainable competitive advantage is apparent as well. Red Lobster is changing their menu to offer healthier meals, such as the wood-fired grilling. Darden has taken a step further with the supply-and-demand problem.

Darden started “removing endangered wild fish, such as Chilean sea bass and orange roughly from its menus.” Darden is using their clout to “promote fish farming and to set standards to minimize its environmental impact.” (C) LongHorn Steakhouse – Darden appears to be pursuing a competitive advantage by revamping the LongHorn restaurants. They have taken all “deer heads on the wall” and replaced them “with cowboy sculptures by Frederic Remington.” Darden is pursuing sustainability by re-organizing and following Red Lobster and Olive Garden’s success. (D) Bahama Breeze – Darden appears to be pursuing a competitive advantage and a “product/service differentiation competitive advantage” by offering a Caribbean type atmosphere.

The niche competitive advantage according to MKTG is “A market segment that has good growth potential but is not crucial to the success of major competitors is a good candidate for developing a niche strategy.” Darden is implementing the successful strategies from Red Lobster and Olive Garden to increase customer satisfaction who patronize Bahama Breeze. (E) Seasons 52 – Darden appears to be pursuing a competitive advantage and a product/service differentiation competitive advantage by offering “fresh grill and wine bar concept known for its healthful menu, which features fresh, seasonal foods 52 weeks a year.” Although Seasons 52 has demonstrated a niche strategy being confined to the Southeast, Darden is beginning to step outside this area and open more restaurants. (F) Capital Grille – Darden appears to be pursuing a competitive advantage and a product/service differentiation competitive advantage by offering “an upper-end steakhouse concept.” Given the economic environment the Capital Grille has had decreased sales, but is highly rated by Consumer Reports. Darden has high hopes for success and plans to open more units over the next year.

4. Darden’s 2007 acquisition of LongHorn Steakhouse most resembles product development. Darden surveyed thousands of consumers “about every menu item and every last detail about its restaurants.” They improved their menu and changed the décor of the restaurant. Darden plans to open “hundreds of new restaurants.”

5. Factors of the external environment have influenced Darden’s marketing mix decisions during the time Mr. Otis has been CEO of the company include the declining economy, the need to provide healthier menus, supply and demand issues just to name a few. According to MKTG “The term marketing mix refers to a unique blend of product, place (distribution), promotion and pricing strategies.” Economic Factors – The economy has affected pricing strategies. Darden has not lowered pricing based on the economy. Darden realizes customers may eat out less, but when they do eat out Darden’s strategy is to provide the customer with a satisfying dining experience. Social Factors – Consumers are demanding healthier meals and Darden is listening.

They have incorporated healthier menus offering a better variety. External Environment – Supply-and-demand is an environmental factor. Darden has implemented programs to save endangered fish and removed these from their menus. Further, Darden promotes fish farming to “minimize the environmental impact.” Demographic Factors – Darden has recently opened a new headquarters in Orlando to bring top executives together. Test kitchens have been implemented. Darden encourages sharing of ideas and studies the consumer needs and strategic placement of restaurants according to customer demand.

Technological Factors – Olive Garden’s menu had become stale and sales were down. Darden began to research and found that consumers missed having a connection when attending their restaurants. Thus, Tuscany “ideation trips” were developed. Top chefs were sent to Tuscany to learn from the best and bring their learned knowledge back to America. 6. I learned a lot from the articles. I did not even know the restaurants were owned by the same company. I was most impressed by Darden’s role in promoting fish farms, saving endangered fish, the meal pacing program, and Darden’s dedication and value to their customers.