team omega: tim hortons
Post on 21-Oct-2014
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University of Michigan Sport Management: Marketing CapstoneTRANSCRIPT
SM 346 Final Project�Analysis of and
Recommendations 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 Problem
While Tim Hortons does a great job of attracting the segment of consumers that are “on the run,” they disregard several other segments of coffee drinkers who need a comfortable space to spend time and “call their 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.
Current Situational Analysis
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
Segmentation, Targeting, & Positioning
Overall Strategy & Objectives
“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.”
• 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
Segmentation Methods
GEOGRAPHIC
Heavily Canadian. In the states, localized in near-‐
north ci;es such as Detroit and Buffalo; scaIered elsewhere.
DEMOGRAPHIC
Gender and age ranges generally similar; decrease in consump;on by seniors. Wealthy more likely to
frequent Starbucks than TH or DD.
PSYCHOGRAPHIC
Fast-‐paced lifestyle, “on-‐the-‐run” consump;on style. May appreciate CSR and environmental
ac;ons.
GEODEMOGRAPHIC
Suburban and “small-‐urban” subsectors. Lack
of penetra;on in affluent and
sophis;cated areas.
BENEFIT
Those who seek convenience and
economy receive both from Tim Hortons.
BEHAVIORAL
Loyal and frequent consumer base of “on-‐the-‐go” coffee drinkers. Tim Hortons fans are avid – LOVE Tim
Hortons.
Evaluating Segment Attractiveness Current Strategy"
Identifiable? Convenience and economic-driven consumers looking for a quality product in a QSR setting Substantial? Large proven customer base in Canada; working to build similar base in U.S. Reachable? Current marketing strategy includes all traditional forms of media (TV, Radio, Print, Outdoor) as well as social platforms (Facebook, Twitter, YouTube) Responsive? Current customer base accepts Tim Hortons’ value proposition, reacts positively to offerings with high levels of customer loyalty Profitable? In Canada, yes: 66% of Canadian coffee market; 80% baked goods, 40% QSR. Need to build in U.S.
Proposed Strategy"
Identifiable? Maintain convenience-driven base while extending reach to those looking for a comfortable place. Substantial? Coffee market in the U.S. is huge: 64% of surveyed Americans consumed coffee in past 30 days. Reachable? Similar marketing strategy with an emphasis on digital and social as well as event-based marketing.
Responsive? Based on our survey data, consumers are receptive to our proposed ideas. Profitable? Similar options profitable; these consumers are some of most engaged.
Selecting Target Market
Our proposed strategy shift will maintain the mass-marketing approach that Tim Hortons 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
Low Quality
High Quality
On-the-run Leisure
• 7-11
• Dunkin Donuts
• Tim Hortons
• Espresso Royale
• Bert’s
• Lab
• Biggby
• Starbucks
• Rendezvous
Target Market: Convenience & price-minded consumers
Benefits Offered: Low price, quick service, good quality
Price: Inexpensive (comparable to competitors)
Marketing Mix
Product Value Crea)on
Price Value Capture
Place Value Delivery
Promo@on Value
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
Ω
Recommendations
Quick Caffeinators
PLug-INs
Comfort Creatures
A la central perk
Hip-sperts
HANGOUT
What business are coffee shops really in?"The simple answer might be “selling coffee”
But every brand has an emotion behind it, else it’s just a product. "
For many coffee shops, that emotion tends to be" “Apart from their home and office,
people tend to seek out a place they can call their own”
Our recommendat ions reflect the knowledge that there are several consumer segments who want their coffee shop to be a place to plug in and do work, relax with a good book, or meet up with friends.
Our research reinforced this by reflecting the perceptions of Tim Hortons and Dunkin Donuts as less inviting, with few having ever sat down in either establishment.
Our primary recommendation is to create “Hortons Hangout” in all locations, incorporating
event-marketing as part of the launch. HANGOUT
These sit-down consumers are often the most engaged with the brand, frequenting their choice of coffee shop several times a week for extended periods of time, and often purchasing 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 TimmyMe Competitors’ apps incorporate payment systems and customer loyalty programs, where perks are received after a given number of purchases, on birthdays, etc.
The new and improved TimmyMe will incorporate these functions with the added benefit of WiFi enhancements and 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 already
implemented 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
will drive value to Tim Hortons�allowing them to access the consumer
base of coffee drinkers who need a comfortable place, while maintaining
their established “on-the-go” customers
HANGOUT
That concludes our presentation
That concludes our presentation
Would you be more likely to frequent Tim Hortons if these options were available?
Are there any questions?