Disclaimer: I’m not unbiased. Outback is the Homa family restaurant of choice for fancy family meals.
Ken’s Take: It’s always risky to move away from your traditional value proposition. Outback is known for a quantity not quality. Reducing the quantity – even with a commensurate cut in prices – could alienate core customers (like me).
Note that customers get lured in by the lower prices, but end up spending about the same amount as before. Another marketing triumph, right ?
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Business Week, The Leaner Baby Boomer Economy, July 23, 2009
[Hit by the recession], Outback Steakhouse … reduced menu prices and offered smaller cuts of beef at Outback to maintain margins … and has gone on an ad blitz pushing the more modest portions for $9.99. This is obviously a tricky balancing act at Outback, where a big slab of meat was the chain’s main attraction.
The good news, says Chief Branding Officer Jody Bilney, is that people who order the less expensive entrées typically end up buying dessert or more alcohol, so the average ticket is still about $19 per person.
Full article – includes vignettes on BMW, Starwood Hotels and others:
http://www.businessweek.com/magazine/content/09_31/b4141026524433.htm
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The Homa Files 
July 30, 2009 at 10:48 pm |
I’m certain these changes were tested by the Outback management team at a few restaurants around the country to assess the impact on customer sat, sales and sales mix before rolling it out to all restaurants.
Starbucks is incredibly savvy about test driving new store concepts and food items. For example, in Seattle, Starbucks shut down and reopened an existing store to test new concepts including the addition of beer and wine. Check out these pictures – this is a cool prototype store of what we can expect in the future:
http://www.psfk.com/2009/07/inside-starbucks-new-stealth-store-15th-avenue-e-coffee-and-tea.html
Next time I’m in Seattle, I plan to check out this store.
Also, there is a great story about the birth of the Frapacino in former Starbucks President Howard Behar’s book “It’s Not About the Coffee”