Management

 

 

 

 

 

 

 

 

 

 

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Noodles restaurant Pastas-R-Us seeks to understand the operational data from its 74 outlets which will inform the formulation of new marketing and expansion strategies that can improve its performance. Its current marketing strategy which involves issuing regular customers with loyalty cards is also under review for potential improvement or discontinuation. With different indicators to examine using descriptive statistical analysis, this report highlights the most important expansion strategy to guide the restaurant in its efforts to improve performance and increase profits.

 

Section 1 – Scope and descriptive statistics

• Objective

This report has the objective o helping the restaurant’s administration decide if they can improve the current expansion criteria. This involves determining if their Loyalty Card is having a positive impact and if it needs any alterations/ improvement. The report therefore provides a descriptive statistical analysis of the firm’s operational data to answer the management’s queries.

 

• Condition of current database and the variables to be analyzed

The current database consists of the following variables;

Annual sales per square feet (Sales/SqFt), Average spending per person (Sales/Person), Median age of residents within a 3 mile radius (MedAge), Median household income within a 3 mile radius (MedIncome), Percentage of Loyalty Card sales on Net Sales (LoyaltyCard%), Percentage of residents with a bachelor’s degree within a 3 mile radius (BachDeg%), Percentage sales growth compared to last year (SalesGrowth%),  and Restaurant size in square feet (SqFt),

 

• Descriptive statistics findings

	SqFt	Sales/Person	LoyaltyCard%	SalesGrowth%	BachDeg%	MedIncome	MedAge	Sales/SqFt	Annual sales
Mean	2580.47297	7.04405405	2.02648649	7.41405405	26.3108108	62807.7027	35.2013514	420.305405	1059381.31
Median	2500	7	2.075	7.03	26.5	62757	35	396.01	1035749.21
Mode	2500	7.03	2.04	4.05	29	#N/A	34.8	#N/A	#N/A
Standard Deviation	374.919031	0.2972611	0.55237081	6.62473032	7.00474531	17904.273	3.65455217	137.239523	280423.448
Skewness	0.52717084	0.9036315	-0.7568911	0.49374747	0.1405442	0.29783801	-0.1669958	1.23589655	0.36141333
Range	2548	1.43	3.09	37.12	26	81424	18.8	808.56	1246632
Minimum	1251	6.54	0.29	-8.31	14	32929	24.7	178.56	499968
Maximum	3799	7.97	3.38	28.81	40	114353	43.5	987.12	1746600
Sum	190955	521.26	149.96	548.64	1947	4647770	2604.9	31102.6	78394217.3

 

Section 2 – Analysis

• Scatter plots and relevant regression equations

For the comparison “BachDeg%” against “Sales/SqFt” the regression equation is;

y = 6.6996x + 244.03 with R² = 0.1169

The relationship is positive and increasing. The  R² value of 0.116 or 11.6% indicates that location in a neighborhood with more bachelor’s degree holders is likeliy to increase sales per square feet.

For the comparison “MedIncome” against “Sales/SqFt” the regression equation is;

y = -0.0002x + 431.11 with R² = 0.0005

There is no relationship. The  R² value of 0.0005 or 0.05% indicates that income in a neighborhood hardly predicts sales per square feet.

For the comparison “MedAge” against “Sales/SqFt” the regression equation is;

y = -2.2452x + 499.34 with R² = 0.0036

There is decreasing and negative. The  R² value of 0.0036 or 0.36% indicates that age in a neighborhood is a poor predictor of sales per square feet.

For the comparison “LoyaltyCard (%)” against “SalesGrowth (%)” the regression equation is;

y = -3.5596x + 14.628 with R² = 0.0881

There is decreasing and negative. The R² value of 0.0881 or 8.81% indicates that the loyalty card is a negative predictor of sales per square feet.

 

 

Section 3: Recommendations and implementation

Expansion criteria; 

• Effective expansion criteria

Opening branches in locations where there are more bachelor’s degree holders is the most effective expansion criteria i.e. there is a positive correlation between knowledge against sales (Vidyakala, Nithykala & Rani, 2018).

• Expansion criterion to be changed or eliminated

Locating outlets in higher median income neighborhoods can be eliminated because there’s no significant positive relationship between this and sales.

 

Loyalty card

• Relationship between the Loyalty Card and sales growth

There is a significant relationship between the Loyalty Card and sales growth and it is negative, not positive. Hence the more clients use the card, the less sales the restaurant experiences. The more clients use loyalty points and cards, the less money the pay the establishment which leads to lower net sales (Pimpão et al, 2016).

• Recommend on this marketing strategy?

Yes, because marketing startegies should not lead to depressed sales. It would be better to alter the method and adapt a strategy that does not adversely affect sales.

• Marketing positioning for a specific demographic

Marketing positioning targeting bachelor’s degree holders such as introducing organic or healthy meals for them is likely to be more effective in improving sales.  This accommodates a useful demographic already responding to the company and ensures sales are not depressed in any way.

• Information to track and evaluate recommendations effectiveness.

The information that should be collected to track and evaluate the effectiveness of the recommendations include level of education, interest in menu changes and willingness to spend on healthy meals.  A deeper analysis of the responses from bachelor’s degree holders will provide the information needed.

• Data collection approach

By sampling a portion of the clientele in the outlets, the restaurant can get a reasonably accurate idea of the thoughts the clientele has on proposed changes that can improve sales per square feet.

 

In conclusion, the descriptive statistical analysis coupled with the regression analysis has revealed that the most important expansion strategy is to open outlets in neighborhoods where more bachelor’s degree holders are present. The best marketing strategy involves formulating methods around this demographic which is the only one with a positive and significant relationship with company’s sales growth.

 

 

References

Pimpão, P., Correia, A., Duque, J., & Zorrinho, C. (2016). Diffusion Patterns in Loyalty Programs’. Tourism and Hospitality Management (Advances in Culture, Tourism and Hospitality Research, Volume 12). Emerald Group Publishing Limited, 115-126.

Vidyakala, K., Nithykala, K., & Rani, G. I. (2018). An Analysis of Impact of Demographic and Socio Economic Factors on Financial Knowledge. International Journal of Management, IT and Engineering, 8(11), 15-23.

 

 

 

Appendix

 

 

 

 

 

 

 

 

Top of Form

Purpose 

This assignment is intended to help you learn how to apply statistical methods when analyzing operational data, evaluating the performance of current marketing strategies, and recommending actionable business decisions. This is an opportunity to build critical-thinking and problem-solving skills within the context of data analysis and interpretation. You’ll gain a first-hand understanding of how data analytics supports decision-making and adds value to an organization.

 

Scenario: 

Pastas R Us, Inc. is a fast-casual restaurant chain specializing in noodle-based dishes, soups, and salads. Since its inception, the business development team has favored opening new restaurants in areas (within a 3-mile radius) that satisfy the following demographic conditions:

 

• Median age between 25 – 45 years old
• Household median income above national average
• At least 15% college educated adult population

 

Last year, the marketing department rolled out a Loyalty Card strategy to increase sales. Under this program, customers present their Loyalty Card when paying for their orders and receive some free food after making 10 purchases.

 

The company has collected data from its 74 restaurants to track important variables such as average sales per customer, year-on-year sales growth, sales per sq. ft., Loyalty Card usage as a percentage of sales, and others. A key metric of financial performance in the restaurant industry is annual sales per sq. ft. For example, if a 1200 sq. ft. restaurant recorded $2 million in sales last year, then it sold $1,667 per sq. ft.

 

Executive management wants to know whether the current expansion criteria can be improved. They want to evaluate the effectiveness of the Loyalty Card marketing strategy and identify feasible, actionable opportunities for improvement. As a member of the analytics department, you’ve been assigned the responsibility of conducting a thorough statistical analysis of the company’s available database to answer executive management’s questions.

 

Report:

Write a 750- to 900-word statistical report that includes the following sections:

• Section 1: Scope and descriptive statistics
• Section 2: Analysis
• Section 3: Recommendations and Implementation

 

Section 1 – Scope and descriptive statistics

• State the report’s objective.
• Discuss the nature of the current database. What variables were analyzed?
• Summarize your descriptive statistics findings from Excel. Use a table and insert appropriate graphs.

 

Section 2 – Analysis

• Using Excel, create scatter plots and display the regression equations for the following pairs of variables:
• “BachDeg%” versus “Sales/SqFt”
• “MedIncome” versus “Sales/SqFt”
• “MedAge” versus “Sales/SqFt”
• “LoyaltyCard(%)” versus “SalesGrowth(%)”
• In your report, include the scatter plots as an Appendix to the paper that follows the Reference page.
• Refer to each scatter plot and designate the type of relationship observed (increasing/positive, decreasing/negative, or no relationship) and determine what you can conclude from these relationships.

 

Section 3: Recommendations and implementation

• Based on your findings above, assess which expansion criteria seem to be more effective.Could any expansion criterion be changed or eliminated? If so, which one and why?
• Based on your findings above, does it appear as if the Loyalty Card is positively correlated with sales growth? Would you recommend changing this marketing strategy?
• Based on your previous findings, recommend marketing positioning that targets a specific demographic. (Hint: Are younger people patronizing the restaurants more than older people?)
• Indicate what information should be collected to track and evaluate the effectiveness of your recommendations. How can this data be collected? (Hint: Would you use survey/samples or census?)

 

Use the Excel spreadsheet to show your work.

 

Format your assignment consistent with APA format with at least one (1) scholarly, peer-reviewed reference and one reference from the assigned readings (textbook).

 

Please Include:

• An Introduction paragraph (Do Not Write the word Introduction to begin the body of the paper – Use the title of the paper instead). There should be a thesis statement in the introduction paragraph.
• At least three (3) Level One Headings
• Conclusion Heading.

 

Submit the Excel Spreadsheet and the Paper. You must submit the spreadsheet to show your work.

 

Resources

 

 

DAT 565 Signature Assignment Statistical Report Grading Guide2.doc

 

• Center for Writing Excellence
• Reference and Citation Generator
• Grammar and Writing Guides

 

 

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