RED LOBSTER CASE

1. Psychographic is one of the important base of market segmentation in which consumer buying behavior, their personalities and life style are judged and on that base marketers divide the market. In the case of psychological profiling clustering system, market is divided into segments base on customers psychology i.e personalities, life style. After division, profiles of the customers are created then these profiles are used to break down locations into particular clusters. These clusters are helpful to identify a segment based on purchasing power of customers on their personalities, life style and other psychological factors. Software based modules, like MapInfo used by Red Lobster, have features including geographic information systems (GIS) that analyze trade areas and population density and clusters the customers on the basis of their psychological profiles. Profiling clustering can be used in hotel industry for choosing a specific location as it can identify specific life style, attitudes of the people living in an area. Like if mobility of people is considered as a factor in an area then psychological profiles of people residing and moving around can be a good reason for breaking location in specific clusters and then target those segments. Clustering system can also be used for other decisions like advertising, new offerings and sales promotions. 2. Service firms like restaurants, retail stores and colleges are revenue focused and site locations are based on customer and labor force population, competition, and storefront appeal to increase profitability etc. Site location differences for restaurant, retail store and post graduate college are given below: Restaurants Labor & material supply

Supply of material and labor is an important factor for choosing location in case of restaurant. Locations which have easy access of material like food ingredients and sufficient amount of labor force in lower cost are attractive factors. Role of population

Population density in an area as well as their purchasing power can also provide another base for selection of specific location. Usually income, buying behavior, family size, and life style are considered. Infrastructure

Sufficient area for a restaurant with the good layout and infrastructure opportunity are also deciding factors. Retail Stores Retail stores consider the most of the factors like restaurant because both are service oriented firms. Infrastructure Retail stores typically need larger space than that of restaurants. Bigger parking lot and good looking store front are considered for retail store location. Customers and supplier accessibility Proximity to customer and supplier are one of the critical factors for retail stores. Moreover population density and market size also play important role. Competition Increased numbers of competitor firms in an area also help retail stores to raise their sales.

Post Graduate College: Infrastructure Accessibility Labor supply

3. Red lobster targets the customers which live in suburban area with family income of $40,000 - $100,000. One of their targeted segment mentioned shows that most are married with teens. They have graduate and professional school education with 56% dual earners living in commuting distance of central cities. So on the basis of these characteristics, three classes in which ninety two percent Red Lobster returants fall into are: Exurban/Small Second Tier Suburban First tier suburban

Reason for descending order is that Red Lobster restaurants are mostly concentrated near to rural areas or small towns. Red Lobster defines its trade areas based on market size and population density. One simple reason for choosing locations near rural areas and towns is that they prefer to open their sea food based restaurant near natural sea found locations. They also target families and residential areas in rural areas so sales are based on pass through traffic and the amount of residential, work or shopping activity around that area. Exurban is closer to rural area with second tier and first tier suburban areas also fall into the category.

5. Three most important techniques for choosing the location of CNG station are: 1. Factor rating method 2. Forecasting (qualitative) 3. Statistical and regression techniques