The Red Crab Group:Developing Multi-Brand

Restaurant Concepts

AGE Group:

MBAH Medical Entrepreneur

Red Crab Group

• Raymond Magdaluyo

Established 14 restaurants under his Red Crab Group

“We started as a crab and seafood restaurant, but eventually, we want to be known as a house of brands—a house of world class restaurant concepts.”

Objective or Hypothesis Setting

• Red Crab and Seafood Restaurant’s market position in each branches they opened.

• The owner is confused if his restaurant is “Filipino or seafood restaurant”

• The mindset of the owner is only to “simple and served only good food”

• Identifying target market affects their financial concerns

• Red Crab: Don’t know how to position

them.They only served “good food” Selling point were “simple”.

Which is “Kapangpangan, Filipino food.”

Confused on his product and faced an identity crisis. “Filipino or a seafood restaurant”

Objective or Hypothesis Setting

Red Crab Seafood and Steaks: The Beginning

• Red Crab and Seafood Restaurant (Clark)

Established by Raymond’s mother in 1998 in Mimosa Leisure Estate.

She was offered a commercial spaces, they decided to set-up their own.

Preparation of Menu c/o of her mother, while Raymond focused on Marketing.

Red Crab Seafood and Steaks: The Beginning

• Home style “Kapampangan food” to complement the crabs.

• Price: high end since they were catering casino players and golfers.

• Image: “It looked like a Spanish restaurant”. Mother’s painting displayed in the restaurant. You would know it was owned by 50 plus-old woman.

Red Crab Malate

• 1999 Raymond and his mother open a new branch in Malate, Manila when Manoloto family asked them to take over the place.

• Without “Market research” the Red Crab Seafood and Steaks opened in Malate in October 1999.

Red Crab Malate

• By April, sales declined significantly (30% sales decrease). Raymond pointed it to the environmental changed and the district loses out to other developing areas like Rockwell and BGC.

Additional New Branches

• 2001: 2 more Red Crab Seafood and Steak stores opened.

a. Tomas Morato: March (still no market research)

b. Alabang: November Decided to start studying the market Discovered: Clients are not the OLD ones. Clients

came from 26-35 age bracket.

Decided to REPOSITION the restaurant

Repositioning of Red Crab

• From Filipino branding to a SEAFOOD RESTARUANT.

• Menu: from straightforward crabs and grilled food to new recipes that embodied a more INTERNATIONAL FLAVOR or CUISINE with the help of his sister (CCA Chef).

• Retained the dishes that OLD CLIENTS enjoy as “Old Time Favorites”

After the repositioning..

• In 2002, Raymond already operated three successful restaurant in Manila. The opening of Tomas Moratobranch generated a lot of attention. “the favorite hang-out of celebrities”

A Seafood Place with a Twist

• With Raymond want to open more stores.. He cited the new location…The Greenbelt 3

• According to him, during that time all best restaurant were relocating to Greenbelt 3.

• Because of its HIGH traffic and it LURED in good paying customers.

• Invited by the Ayala Management to submit proposal. Wanting to have a crab ans seafood place

A Seafood Place with a Twist

• Ayala’s condition: “propose a new concept and a consequently, a new name”.

• He came out with “Seafood Club”.

• A casual seafood dining segment in Manila.(Red Lobster Group and the Lerdy’s group of Seafood Resto in US)

• The Seafood Club hs a happy atmosphere. It’s a noisy place, fun , enjoy music and be merry while you’re cracking the crabs.

Seafood Club VS Red Crab

• Food almost similar

• Both offers eat-all-you-can and buffet services

• Both have a “come back home” cuisine and ambiance

• Seafood Club offers bountiful crabs in a festive atmosphere.

• Bigger floor space of 300 sq. meter

The Enchantment

• In 2004, Raymond was already operating 5 restaurants.

• With the merging market elevated seafood dining, another accidental project Raymond opened….

• Rockwell Mall offered him a space in the 3rd level. But he decline it because people would be lazy to go all the way to the 3rd floor. So, he requested the mall to allocate a space for him in the ground floor.

The Enchantment

• The Rockwell Management agreed to one condition:

– Put up another new restaurant concept.

• He thought of the market he haven’t touch… He taught of something “oriental-inspired”

• Crustasia was born..

Crustasia

• Focuses on the liberating, enchanting, fulfilling and transformative experience.

• More women servers than men.• Tagline: “let the enchantment

begin”• Food: Crabs and Seafood but with

blends of best Thai, Vietnamese and Chinese influences.

• Crustasia won number of prestigious awards: Best Asian Restaurant

Crustasia

• Intensive product development and Market Research help CRUSTASIA secure customer appreciation.

– Food consultant prepared 300 plus recipes in 15 food tasting sessions with 20 different set of recipes.

– Out of 300 dishes, he got 100.

The House of Brands

• In 2005, Red Crab Group operated 13 restaurants. (Red Crab, Seafood Club and Crustasia)

• Introduced: Blackbeard’s Seafood Island.

• A fun-filled crab abs seafood island restaurant with an animated pirate/island setting.

• Primary Target Segment: Family and special gatherings

• Also targets: after-work, group of friends or barkada crowd.

Creating own Market (Market Research)

• He then define in finer details the element of his market segment.

Three (3) levels

1. Micro market or where are going to operate.

2. Food type or what we are going to serve

3. Motivational group or what influences them to go to the restaurant

Market Research Result

• Holding family gathering, special gathering, business related events, regular lunch, romantic dates were the top 5 reasons why people eat in his restaurant

• With this he determined his marketing position.

• Raymond developed “one product, multi-concept format for all his restaurants under Red Crab Group”

Brand Positioning

• Raymond stressed the importance of a “SOLID STORYLINE”. People will respond for a clear storyline.

• He targeted the “Special Gatherings”

• Slogan: from “You love the crab, you’re cracking the moment!” to “You’re cracking the crab, you love the moment”

• RED Crab Seafood and Steaks.. Crab the Moment!”

Price Positioning• Pricing strategy for each concepts

vary.a. Ambiance

b. Location

c. Service level

• For high-end (Crustasia/Seafood Club): Average of Php 800 to Php1000

• Informal Meal (Red Crab/Blackbeard): Average of Php 320 to 350 for full course meal.

Distributing and Promoting the Brand

• Red Crab chain of restaurants sustain the popularity by mixture of advertising and effective public relations (PR) activities.

• Got unsolicited PR releases through talk shows featuring the restaurants.

• Part of reinvestment goes to PR (Boy Abunda’soutfit)

• Give crabs to celebrities if they mentioned the restaurants.

The Evolution

• From 1998 to 2005: Red Crab Group together with non-family partners opened anew restaurant called “Heaven N’ Eggs” in Tomas Morato.

• First time he established a non-seafood place.

• Offered all day breakfast: beef tapa, omelets, hotdogs in large servings.

• It was a success so they opened a few more branches in Metro Manila

Problem Analysis

• Problem: Old style , owned by 50 year old woman Red Crab MalateProblem: No market research. Competition from other commercial areas like The Fort and Rockwell

• Red Crab Tomas MoratoProblem: No market researchRed Crab AlabangProblem: No market research. Age group who frequented the restaurant 26-35 year old age bracketDespite initial success owner had an identity crisis

Solution

• New recipes with international appeal

• Downplay “filipino” branding instead international seafood restaurant

• Focused on crabs and seafood

• Original recipes non seafood renamed :old time favorites”

Seafood Club • Problem: Had to think of a new

concept based on mall requirements for him to enter an Ayala Mall...Seafood place with a twist...

• Advantage of Ayala Mall- high end paying customers, high foot traffic

• Inspired by an America Movie “My Best Friends Wedding”- festive, colorful, happy, singing people, big red bibs with large wooden mallets

• Casual festive seafood place to celebrate

Crustacia

• Identified the primary target market

• Located at an upscale mall. People had higher buying capacity

• Storyline or tagline behind the restaurant (Vietnamese fishing village, Oriental looking pretty female servers, detailed attention to customers like serving hot tea upon entering the place etc.)

Crustacia

• Less of a crab restaurant Why he made it in Rockwell?

• Intensive product development and detailed market research= great menu

• Output= 300 menus , food tasters/food tasting sessions, customer feed back rate from 1-10

• 100 chosen menus made it

Crustacia

• Identify the market

• Single product, multi concept approach e.g. all seafood places but different themes/ storylines