NDLS Flashcards
Noodles & Company
Fast casual restaurant, founded in Boulder in 1995, about 450 restaurant locations in 30 states, went public in 2013
NDLS Target Market
Career-minded millennial parents (25-40 years old)
Milennial Attitudes
Work-life: would continue working even if won the lottery, juggling family and work demands is very stressful
Influences: children impact brands chosen, strive to achieve high social status
Meals: often eats meals on the run and regularly eats organic foods
Spending: would pay extra for a product that is consistent with image they want to convey, spender rather than a saver
Claritas PRIZM
a set of geo-demographic segments for the United States. PRIZM segments combine demographics, consumer behavior and geographic data for marketers. 68 segments
Regression analysis
regression analysis is used to understand the relationship between two or more variables
We use regression to:
- estimate/predict the values of a dependent variable (y)
- based on values of at least one independent variable (x)
Dependent variables (y)
also called outcome variables. this is what we are using our model to predict.
ex: home price
Independent variables (x)
also called explanatory variables or predictor variables. we use them to predict values of the dependent variables.
ex: number of bathrooms
Regression model
the mathematical relation between the explanatory (x) variables and outcome variable (y) in this form: y = b0+b1x1+b2x2+…+bpxp
Coefficients
each coefficient estimates the change in the estimate of y per unit increase in x when all predictors stay the same
Things to consider when keeping/dropping variables
- the significance of each individual coefficient
- redundancy: do you have two variables that represent the same underlying thing?
- logical relevance: do you have a strong logical reason to include a variable
Occam’s Razor
when two explanations are otherwise equivalent, you should prefer the simpler one
P-value
a p-value less than 0.05 is statistically significant, making it significant to the model
What is a Slidedoc?
slidedocs are visual documents developed in presentation software that are intended to be read and references NOT projected. for when you cannot be there to explain orally and for preservation of content
Slidedocs Fill the gap
they combine the strengths of writtens documents and visual presentations
Slidedocs Contain:
a visual report: fully comprehensive but not verbally presented, needs to be read. text-heavy with imagery; graphics on every slide and appropriate formatting.
STP
Segmentation: group customers based on similar needs, profile each segment
Targeting: assess attractiveness of each segment, select segments to target
Positioning: define value proposition for target segments, develop an action plan
Classic Segmentation Variables
demographic, geographic, psychographic, behavioristic
Benefits of franchising
allows NDLS to branch out and grow, limits NDLS risk (doesn’t have to use NDLS capital to grow or sign lease agreements), NDLS uses the assets of the franchisee to grow their brand equity and market share
Downside to franchising
NDLS loses some control and autonomy over operations and standards, NDLS needs to make sure the franchisee is complying with NDLS standards. If franchisee does not adhere to NDLS methods, NDLS faces real threats: loses consistency, threatens brand credibility, loss of customer trust, could cost NDLS legal fees if franchisee breaches contract
What does regression model explain?
R square: closer to 1
Adjusted R square: cannot be larger than R square but should be close
coefficients: pos/neg correlation, alternative scenarios
Gross Profit
Sales revenue - cannibalization = incremental sales revenue - COGS = gross profit
Restaurant Operating Expenses and Contribution
Gross profit - expenses - labor cost = restaurant contribution margin (RCM)
Calculating Income Tax & Operating Cash Flow
RCM - dep expenses - store contribution to profit subject to tax - income tax + dep expense = total operating cash flow
Restaurant Contribution Margin
new restaurant sales revenue - all associated expenses. represents incremental revenue generated at the new location after deducting costs, provides a hurdle for new site selection
