Sterling-Rice Group Situational Segmentation A New Product Developer’s Dream

Page 1 Today’s Discussion  Innovation Perspective  Situational Segmentation  Noodles & Company Case Study  Questions and Answers

Page 2 Innovation Perspective  The key to successful innovation goes beyond demographics Demographic Male, 32, White Collar Create a restaurant concept?!

Page 3 Innovation Perspective  The key to successful innovation goes beyond general behavior Demographic Male, 32, White Collar Behavior Eats out frequently at fast food, fast casual and casual restaurants Create a restaurant concept?!

Page 4 Innovation Perspective  Truly understanding your consumers world and the situations they often find themselves in is key to innovation Demographic Male, 32, White Collar Behavior Eats out frequently at fast food, fast casual, casual restaurants Situation Morning on the way to work No time to sit down Needs energy Create a restaurant concept?!

Page 5 Situational Segmentation  Situational segmentation explores the consumers “many worlds” Facts Day of week/Time of day Where I’m coming/going Who I am with Moods Before During After Competitive Set Direct competitors Indirect competitors Needs/Expectations Antes (have to have) Drive (differentiators)

Noodles & Company Case Study

Page 7 Background & Objectives  Background  Noodles & Company sales have yet to recover from the “carb-scare” of the early twenty first century  Men in general have never been big “Noodles fans”, but are needed more than ever to build sales  Objectives  Understand men’s barriers to entry for the Noodles concept  Recommend menu item changes to address/overcome these barriers

Page 8 Executive Speculation FoodOther “Fix the food and we’ll be okay”“Lower prices” “Give them something to hold”“Add TVs, bars, and wood” “They need to feel satisfied” “It’s all about portion size” “Actually grill the meat!’ “Meat and potatoes”  Noodles & Company executives, relying on years of experience and men stereotypes, felt that men like their restaurants/food “manly”

Page 9 SRG Perspective  Understand what men really want to eat (experience) at Noodles & Company lies within understanding situations where Noodles can “win”  Chicago and Denver  Males, with/without kids  Higher education  Mid to upper income  Quick casual customers  Light Noodles & Company customers  Eating out situations  Brand set and choices  Emotions  Requirements  Noodles & Company barriers  Noodles & Company opportunities Six SessionsDiscussion

Page 10 Eating Out Situations Out and About Everyday Family Dinner Kicking Off the Night Lunch with Coworkers Solo Parent Date Night Eating Solo Client Lunch

Page 11 Two Key Situations  Which situation to you think Noodles & Company is best suited for? “It’s her ‘out and about,’ not mine.” “How many nights do we really have together? So I do what she wants!” “We’re usually rushed, so it’s easier if there is no arguing.” “I want something that is kid-pacifying.” Out and About Solo Parent

Page 12 Noodles & Company Friendly Situations  Some situations are more Noodles & Company “friendly” than others  Which situations are most critical, and in the end, how do we become more “man-relevant” in these situations? Out and About Everyday Family Dinner Solo Parent Eating Solo Date Night Client Lunch Kicking Off the Night Lunch with Coworkers LessMore Frequency

Page 13 Out and About BEFORE Anxious/Rushed DURING Good AFTER Satisfied Relaxed Happy You and your significant other are out running errands and want to stop to get a quick lunch or dinner together

Page 14 Out and About ExpectationsNoodles “Grade” Full, but not bloated + Light, energizing food Healthy food + Healthy halo Good, quick service + Assuming no lines Quiet +/- Perhaps too quiet? Can socialize + Food delivered to table Clean and vibrant + Feminine “okay”’ Serves alcohol +/- Minimal awareness  Noodles & Company is well-positioned for today’s “out and about” couple  Quick, healthy food that energizes you for the balance of the day is a Noodles & Company strength to be leveraged Neighborhood Places Brands Noodles & Company Delivery

Page 15 Solo Parent Only one parent with kids (either single parent or dad’s night out) BEFORE Overwhelmed DURING Overwhelmed AFTER Overwhelmed

Page 16 Solo Parent  Noodles & Company adds to the stress level and overwhelmed feeling that men experience in this situation  Can Noodles & Company become more of a kids’ place and stay true to the brand? ExpectationsNoodles “Grade” Treat for kids - Kids don’t drive a N&C visit Plenty of kids options - 2–3 (hard to find) entrées do not deliver variety Kids can be kids - Magnifying glass effect Kids can keep themselves busy - No play lands or coloring books! Quick + Not a problem at dinner time Predictable - Lack of familiarity among this target Brands Noodles & Company Delivery

Page 17 Noodles & Company Challenge  Can you create a Noodles & Company experience that fully meets the needs of the Out & About and the Solo Parent Occasion Food Service Atmosphere Treat for spouse/dateTreat for kids Healthy optionsPlenty of kids options Quick QuietKids can be kids Serves alcoholServes shakes

Page 18 Questions and Answer  Was it all about “meat and potatoes” after all?  Is it really possible to deliver an “Out and About”, “Solo Parent” place?  If you were Noodles & Company which situation would you focus on?  Are there other categories where situational segmentation works?  What categories and why?

Thank You!