SM 346 Final Project! Analysis of andRecommendations for Tim Hortons"
Introduction to Tim Hortons• Founded in 1964 as a “coffee and donuts” shop• Dedicated to satisfying the changing tastes of consumers through product innovation• #1 seller remains their “legendary” coffee• 95% franchise owned in Canada, similar strategy in U.S. • Merged with Wendy’s International, Inc. in 1995 in order to place greater focus on United States expansion
Identiﬁcation of the ProblemWhile Tim Hortons does a great job of attracting thesegment of consumers that are “on the run,” theydisregard several other segments of coffee drinkerswho need a comfortable space to spend time and “calltheir own” when buying and consuming coffee. After our analysis, we have proposed a plan that will leave Tim Hortons better positioned to gain customers seeking a comfortable place to call their own, while maintaining their established customer base of ‘on-the-run’ consumers.
Strengths• Largest quick service restaurant chain in Canada • 3,200 locations in Canada • 600 in the United States• Iconic in Canadian culture • 40% of all fast-food revenues • 80% of the baked goods market • 66% of the coffee market• Demonstrates corporate social responsibility through various programs
Weaknesses• No brand recognition in the United States • Small presence in the U.S. with just 606 units • Locations are not as proﬁtable as Canadian counterparts• Competition in the U.S. is ﬁerce • All-American brands like Starbucks and Dunkin Donuts have many more locations per capita
Opportunities• International expansion • In 2011, Tim Hortons expanded internationally to the Gulf Cooperation Council • 5 restaurants opened in the United Arab Emirates• Canadian expansion• Product line expansion
Threats • Competitors are continuously moving into Tim Hortons’ territory • Global economic recession can result in increased costs for labor, production, and resources • Threat of market saturation
Overall Strategy & Objectives• Based on the mission statement below, Tim Hortons’ strategy focuses on two main objec;ves • Deliver quality products and services • Be the industry leader in all that they do • They deliver on this mission through their CSR ini;a;ves and dedica;on to quality product sourcing “Our guiding mission is to deliver superior quality products and services for our guests and communities through leadership, innovation and partnerships. Our vision is to be the quality leader in everything we do.”
Segmentation Methods GEOGRAPHIC DEMOGRAPHIC PSYCHOGRAPHIC Heavily Canadian. In the Gender and age ranges Fast-‐paced lifestyle, “on-‐states, localized in near-‐ generally similar; decrease the-‐run” consump;on north ci;es such as in consump;on by seniors. style. May appreciate Wealthy more likely to Detroit and Buﬀalo; CSR and environmental frequent Starbucks than TH scaIered elsewhere. or DD. ac;ons. GEODEMOGRAPHIC BENEFIT BEHAVIORAL Suburban and “small-‐ Those who seek Loyal and frequent urban” subsectors. Lack convenience and consumer base of “on-‐ of penetra;on in economy receive both the-‐go” coﬀee drinkers. aﬄuent and from Tim Hortons. Tim Hortons fans are sophis;cated areas. avid – LOVE Tim Hortons.
Evaluating Segment Attractiveness Current Strategy" Proposed Strategy" Identiﬁable? Identiﬁable?Convenience and economic-driven consumers Maintain convenience-driven base while extendinglooking for a quality product in a QSR setting reach to those looking for a comfortable place. Substantial? Substantial?Large proven customer base in Canada; working to Coffee market in the U.S. is huge: 64% of surveyedbuild similar base in U.S. Americans consumed coffee in past 30 days. Reachable? Reachable?Current marketing strategy includes all traditional Similar marketing strategy with an emphasis onforms of media (TV, Radio, Print, Outdoor) as well as digital and social as well as event-based marketing. social platforms (Facebook, Twitter, YouTube) Responsive? Responsive?Current customer base accepts Tim Hortons’ value Based on our survey data, consumers are receptiveproposition, reacts positively to offerings with high to our proposed ideas. levels of customer loyalty Proﬁtable? Proﬁtable?In Canada, yes: 66% of Canadian coffee market; Similar options proﬁtable; these consumers are80% baked goods, 40% QSR. Need to build in U.S. some of most engaged.
Selecting Target MarketOur proposed strategy shift will maintain the mass-marketing approach that TimHortons currently employs • TV • Radio • Print • Outdoor (billboards, etc.) • Social: Facebook, Twitter, YouTube However, we will focus heavily on digital and event-based marketing, which will become clear later in our presentation.
Developing a Positioning Strategy High Quality • Lab • Dunkin • Starbucks Donuts • Tim Hortons • Rendezvous • Bert’s On-the-run Leisure • Espresso Royale • Biggby • 7-11 Low QualityTarget Market: Beneﬁts Offered: Price:Convenience & price- Low price, quick service, Inexpensive (comparableminded consumers good quality to competitors)
Marketing Mix Product Price Value Crea)on Value Capture Promo@on Place Value Value Delivery Communica)on
Product• Wide variety of goods • Coffee, specialty beverages like espresso and iced coffee, baked goods, and breakfast and lunch options• “On-the-go” options• Don’t offer many things you have to sit down to eat
Price • Coffee is priced around $1.20 • Less expensive than other coffee shops• More focused on offering convenient items with less variety• Tim Hortons is about value and convenience Place• Tim Hortons is primarily consumed in Canada • Majority of outlets are located in Ontario• Their restaurant are the main way they get their products to the consumer and generate proﬁts • Some items can be bought online
Promotion• TimmyMe • Allows user to ﬁnd the 10 closest store locations, get directions to the nearest location, check the balances of a gift card, and get nutritional information on all their products• Facebook and Twitter• Roll Up the Rim to Win • Customer rolls up the rim on their coffee with chance of winning anything from free coffee or doughnuts to a brand new car • Held annually since 1986
Recommendations HANGOUT Ω Quick Caffeinators What business are coffee shops really in?" The simple answer might be “selling coffee” PLug-INs Comfort Creatures But every brand has an emotion behind it, else it’s just a product. " For many coffee shops, that emotion tends to be" A la central perk “Apart from their home and ofﬁce, Hip-sperts people tend to seek out a place they can call their own”
Our recommendationsreﬂect the knowledge thatthere are several consumersegments who want theircoffee shop to be a place toplug in and do work, relaxwith a good book, or meetup with friends.Our research reinforced this by reﬂecting the perceptions of TimHortons and Dunkin Donuts as less inviting, with few having ever satdown in either establishment. Our primary recommendation is to create “Hortons Hangout” in all locations, incorporating HANGOUT event-marketing as part of the launch.
These sit-down consumers are often the most engaged withthe brand, frequenting their choice of coffee shop severaltimes a week for extended periods of time, and oftenpurchasing multiple drinks and snack items during their stay.
Coinciding with the launch of “Hortons Hangouts” we will create pop-up hangout events in cities, on campuses, at bus shelters, etc. Two great examples from Absolut and Caribou Coffee
Adding Value to TimmyMeCompetitors’ apps incorporate payment systems andcustomer loyalty programs, where perks are receivedafter a given number of purchases, on birthdays, etc. The new and improved TimmyMe will incorporate thesefunctions with the added beneﬁt of WiFi enhancementsand the best new function…
Is This Seat Open?Have you ever planned to go to Starbucks or even the UgLi to study, only to be denied an outlet or a seat altogether? Each Hortons Hangout will be equipped with the technology for access on TimmyMe Before accessing the WiFi – which Tim Hortons has alreadyimplemented in all locations – users will be obligated to disclose whether they are seated in the Hangout and using an outlet TimmyMe will know the logistics of each location and be able to inform users whether there are seats or outlets open
Each of these marketing innovations HANGOUT will drive value to Tim Hortons" allowing them to access the consumer base of coffee drinkers who need a comfortable place, while maintainingtheir established “on-the-go” customers
That concludes our presentation Would you be more likely to frequent TimHortons if these options were available? That concludes our presentation Are there any questions?