Final Report Marketing

Submitted To: Professor Rajeev SachdevWednesday, April 9, 2008

Marketing II

Tim Osborne

TABLE OF CONTENTS

1. Executive Summary and Introduction

2. Company Analysis

3. Situation Analysis

4. Customer Analysis

5. Competitive Analysis and Climate

6. Analysis of the Problem Faced By The Organization

7. Marketing Strategy Analysis

8. Alternative Marketing Strategies

9. Recommendations

10. Justification and Implementation

11. Methodology and Data Analysis

12. Conclusions

13. Appendices

14. Works Cited

*To indicate the Marketing Theories they are highlighted yellow throughout the report.*

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1. EXECUTIVE SUMMARY AND INTRODUCTION

Executive Summary

Tim Hortons is a large company that focuses on top quality, always fresh

products, value and great service. It has become the largest quick service restaurant chain

in Canada specializing in always fresh coffee, baked goods and home style lunches (Tim

Hortons: About Us). Originally Tim Hortons offered only coffee and donuts to its

customers but has greatly expanded today to offer a full lunch menu as well along with

many more baked goods. The biggest attraction to Tim Hortons is still their always fresh

coffee, it is also offered in a take-home tin so customers can enjoy the great taste of Tim

Hortons’ coffee at home. Our team has explored the company’s information resources to

learn about what Tim Horton’s needs to do in order to successfully expand into the

United States. This was achieved through a number of group meetings, emails and

discussions about the different ways of expanding successfully into the foreign market. A

review of the company’s history and timeline lead us to a greater understanding of how

the company really works, and how committed they are to improving their image in the

consumers eye. We also conducted a SWOT analysis to determine the strengths and

weaknesses of Tim Hortons and their major competitors: Dunkin’ Donuts and Starbucks.

To deal with the challenges brought about by these competing firms Tim Horton’s will

have to make the necessary changes that will ultimately make them a strong competitor in

the United States. These changes include adding new items to the menu that will appeal

to the American customer; they can also have an endorsement deal with American sports

players to gain a bigger target market. Another thing Tim Hortons can do to gain more

American customers is to continue their joint venture with the American company

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Wendy’s into the United States because it has proven to be successful in Canada. Lastly

Tim Hortons can use a product and promotion strategy to determine which products they

currently have or which ones they have that need to be modified or invented to create a

menu that will appeal to the American consumer. Our team concludes the report with a

brief analysis of the problems and the recommended solutions to further improve the

company’s place in the American industry.

Introduction

Company Goals

Tim Hortons guiding mission is to deliver superior quality products and services

for our customers and communities through leadership, innovation and partnerships.

Their vision is to be the quality leader in everything they do (Tim Hortons: About Us).

Tim Hortons plans to make a bigger push into the American market in 2008. For 2008

Tim Hortons expects operating income to grow 10%, which repeats the 2007 target

(Reuters). Tim Hortons wants to create more awareness for their company in the United

States and compete more aggressively with their competitors.

Team Goals

As a team, we are concerned with gathering general company information

including future goals for Tim Hortons, and current operating strategies so we can

understand how the company operates and how they serve their customers. In the

beginning we planned to survey people to find out their thoughts on different aspects of

Tim Hortons but we realized that this would not let us return the results we wanted

because we were not able to survey the American consumers. Therefore we had to rely on

secondary resources to guide our report. Using the information we have collected from

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the company and our proposed conclusion, we can determine a recommendation for the

company that describes how Tim Hortons can improve or maintain their effectiveness

into the United States.

Methodology & Analysis of Steps

Our team’s research methodology was almost primarily based on the company

Web Site. Finding old articles and using the company website provided us with a lot

useful information. Our steps in finalizing an informational report included a number of

team meetings, emails, and organizational divisions of work.

2. COMPANY ANALYSIS

Our group has chosen Tim Hortons as our company to produce a marketing plan

to expand operations into the United States. Tim Hortons is a coffee and donut chain that

was founded in 1964 in Hamilton, Ontario (Tim Hortons: About Us). The founder Tim

Horton was a Hockey player for the Toronto Maple Leafs. To prepare for his retirement

from hockey he decided to open a coffee and donut business to support him. Only

offering two basic types of donuts and coffee it has expanded its menu to include a vast

assortment of beverages, donuts, sandwiches, bagels, soups and much more. Tim

Horton’s even has their own brand name coffee that is available for consumers to take

home. Tim Horton’s has surpassed MacDonald’s as Canada’s largest food service

operator with nearly twice as many Canadian outlets as McDonald's (Harris). “Today

there are more than 2,750 stores across Canada, and over 350 locations in the United

States with over 95% of the stores in Canada owned by franchisees” (Tim Hortons:

About Us). Tim Hortons’ mission statement is “Our guiding mission is to deliver superior

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quality products and services for our customers and communities through leadership,

innovation and partnerships. Our vision is to be the quality leader in everything we do”

(Tim Hortons: FAQ).

Four P-Analysis

Product – From only offering two products back in 1964 to offering over 100 items on

their menu and in stores today Tim Hortons products have become well received by

Canadians and Americans by offering a vast assortment of products (Tim Hortons: In Our

Store). Their products have come a long way not only offering a big menu but Tim

Hortons’ even sells their products in Canadian and American retail stores. Tim Hortons

continues to look at new possibilities for their menu as Canadian and Americans tastes

change. Tim Hortons also offers some healthy choices on their menu such as sandwiches

and subs to appeal to the health wise consumer.

Pricing – Tim Hortons keeps their prices inline with the current competition and takes

into account the geographical area they are in. They try to remain competitive by

providing good quality at a fair price.

Place – From opening their first location back in 1964 Tim Hortons has rapidly expanded

to having more than 2,750 stores across Canada, and over 350 locations in the United

States. (Tim Hortons: About Us). Today there is even a location in Kandahar,

Afghanistan to provide the troops with the coffee they know and love. Tim Hortons also

has several stores in Ireland’s Tesco supermarkets (Breen). Tim Hortons not only has

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their regular locations with drive through but also has many satellite locations in

shopping malls, highway outlets, universities and hospitals (Tim Hortons: About Us).

Most of the locations are concentrated in Ontario and British Columbia see Appendix A

for a map of all Tim Hortons stores across North America.

Promotion – Tim Hortons mainly promotes themselves through the media. Tim Hortons

advertises on television, radio, magazines and outdoor methods including; billboards and

transit shelters. Tim Hortons may also utilize newspaper advertising. (Tim Hortons:

FAQ). Tim Hortons also promotes their products and chain through a large marketing

campaign called “Roll up the Rim to Win” this is where customers can win various prizes

by looking under the rim of coffee cups. Tim Hortons often runs this campaign from

early February to May every year in the height of the NHL’s playoff season so that their

ads can reach the most people possible. Tim Hortons also promotes themselves through

local communities by funding timbits hockey and sponsoring various other teams.

3. SITUATION ANALYSIS

SWOT Analysis

Strengths

Tim Hortons’ has many strengths; in Canada one is their brand name in Canada.

Tim Horton’s is synonymous with Dunkin’ Donuts in the United States in popularity and

customer loyalty. For someone walking down the street it is not uncommon in Canada

that a stranger may pull to the side of the road in their vehicle asking where the nearest

Tim Hortons is. However the name Tim Hortons have very little impact as a brand to

consumers. So Tim Hortons will depend on product quality as a strength in the US. Their

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biggest strength in the United States is their actual product and services their offer. Tim

Hortons formulates their own coffee and is able to sell it to their customers. Having a

good quality product will satisfy more customers, which will also sway customers to

come back for more. Another strength that Tim Hortons has is its corporate responsibility

through their charity organization “Tim Hortons’ Foundation”. This foundation is able to

contribute money, volunteers, camps, and such to children who are unable to experience

the many pleasures of life as compared to an average child. The Tim Hortons Foundation

also seeks to help disabled children and children under foster care.

Weaknesses

The biggest weakness for Tim Hortons expanding to the United States is that they

have not created awareness of the American market. There are currently 350 stores south

of the border and that number has such declined or slowed down expansion. Another

problem is that Americans prefer black coffee, and most customers are satisfied with

Dunkin’ Donuts coffee. This has caused problems for Tim Hortons as it has been

unsuccessful with marketing to get customers to switch over. Dunkin’ Donuts offers a

wide variety of donuts and coffee that Americans are very pleased with. Tim Hortons

offers more types of coffee and a wider variety of food choices and yet Tim Hortons is

unable to reach American customers enough to bring them to try a coffee or donut.

Opportunities

Tim Hortons has filled Canada with its stores and really can not expand much

except into newer communities as cities and towns grow. With Tim Hortons entering the

US market, it has a strong competition against the ever popular Dunkin’ Donuts. If Tim

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Hortons can come up with a better marketing strategy that will focus on what the

customers like from Dunkin’ Donuts that Tim Hortons also offers only better, then maybe

Tim Hortons will have a fighting chance at expanding across the United States and

maybe overtaking Dunkin’ Donuts.

Threats

Current threats for Tim Hortons include competition. For instance Dunkin’

Donuts and sandwich shops like Subway or Mr. Sub. Dunkin Donuts’ is a threat because

of their strong brand image that they have in the United States. Many customers are

aware of what products and services they offer. The issue with sandwich shops being a

threat is only against Tim Hortons’ sandwiches that they offer. The problem is that Tim

Hortons’ sandwiches are $5-$6 for a portion half the size of a subway sub that costs $6-

$9. So the threat here is that customers may see that Tim Hortons’ sandwiches are

expensive and it is cheaper for them to go to one of these big chain sandwich retailers.

The hope is that Tim Hortons will realize this and lower the price to keep these

customers, as well as to not be overtaken in its fight to offer more. If Tim Hortons was to

be overtaken then they would not be able to offer these sandwiches and therefore would

be one less type of item to offer to its value customers.

Internal Environment Analysis

As stated in the SWOT analysis, Tim Hortons’ strengths in America are its

products mainly coffee, and its foundation. Tim Hortons’ weaknesses are its stagnated

ability to expand in the United States market. The close competitors only offer or

specialize in some of the areas that Tim Horton’s does. For instance, Starbucks, a

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premium coffee retailer compete against Tim Horton’s specialty coffees like the iced

cappuccino but the competition with Starbucks ends there.

With Tim Hortons having a major issue with overcoming the competition against

Dunkin’ Donuts, it will take the right marketing strategy to overcome this feat. Tim

Hortons needs to focus on what really attracts customers to Dunkin’ Donuts and what

they want. Then they need to focus their marketing strategy on those needs with

comparison to Dunkin’ Donuts. If Tim Hortons can attract customers from Dunkin’

Donuts as well as other customers, there will be much more room for expansion in the

United States market.

External Environment Analysis

Tim Hortons has its opportunity knocking at the door inside the United States and

as stated above, a new marketing strategy is needed to target customer wants and

differences in wants compared to Canadian customers. Maybe even a few menu changes

or change the focus of products in advertising to products that appeal to Americans.

When expanding into the states Tim Hortons has developed competitors that they

will have to compete against. These competitors will have advantages over Tim Hortons.

Some advantages are experience with the target market and awareness of their brand.

Other external factors that Tim Hortons has to recognize are that the American market

will be different than the Canadian market. A few differences that will affect the

company would be political and regulatory issues, America has different business rules

and regulations companies have to oblige to. Marketing law also differ between the

countries. Economic issues also need to be taken into consideration; the currency is

different between the two companies.

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4. CUSTOMERS ANALYSIS

Tim Hortons has many customers throughout Canada and the United States that

come to the local neighborhood coffee shop. Tim Hortons is a cultural fix for Canadians

as it is intergraded into Canadian society (Fischer). Tim Hortons’ customers range from

people of all races, genders and ages as they all come together under their roof to enjoy

Tim Hortons goods. Tim Hortons target market is the working class and more towards

the blue collar workers. Their main focus is on the morning rush as Canadians often need

their morning fix of coffee. Their focus in recent years has also shifted to the lunch hour

as they are offering more lunch menu choices. Their target market also includes business

or social functions as they offer catering to local businesses and customers. Overall Tim

Hortons’ market is vast as their market is unlimited throughout Canada and the United

States. Tim Hortons already has a 70% market share of the Canadian coffee and

doughnut industry (Crane 397). Tim Hortons’ possible market share can even grow as

they invade their competitor’s territory as they continue to open more locations in the

United States.

5. COMPETITIVE ANALYSIS AND CLIMATE

Entering into a developed market can be tough for any company, but when it

comes to Tim Hortons in the United States, there are many obstacles to overcome. There

are three large coffee shops in the United States. They are Krispy Kreme, Starbucks and

Dunkin Donuts. Starbucks is thought of as a more upscale coffee shop, with the large

selection of specialty coffees. Krispy Kreme is on the opposite end of the scale of coffee

shops because they are having difficulties competing against the others in the market.

They decided to expand into the Canadian market with the opening of 18 stores (CBC).

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After only four years, Krispy Kreme closed 12 of their 18 stores due to the hard times,

while filing for bankruptcy protection and trying to salvage their last six stores (CBC).

Tim Horton’s main competitor south of the border is Dunkin’ Donuts.

Dunkin’ Donuts is a successful franchise in the United States, just as much as Tim

Hortons is here in Canada. Dunkin Donuts is seen as their main competitor in the United

States, because they are both targeted to the “blue-collar” class (Boyle). Both companies

main focus is also coffee and donuts (Boyle). Tim Hortons offers a large variety of soups

and sandwiches, whereas Dunkin Donuts have only recently introduced three types of

sandwiches (Boyle). Dunkin Donuts’ weak spot in their business model is that 2/3 of

their sales are acquired before lunchtime (Boyle). Tim Hortons has taken advantage of

that weakness so far, generating 16% of their sales from their soup and sandwich menu in

their American stores (Boyle). Their lunch menu is a major benefit to them because the

more options that are offered to customers, the greater chance that the company will

attract more people into the stores and make more money. Another difference between

the two companies is that Tim Hortons has a dine-in atmosphere; they encourage the

customers to stay and eat (Boyle). Tim Hortons can use this as an advantage to those

customers who are looking for places to stay and eat rather than the “grab-and-go”

atmosphere that Dunkin Donuts offers (Boyle). To some people, the ones that are always

in a rush to get to their destination this is acceptable, but for others the feeling of the store

generally is what will bring them back, aside from the products that are being served.

Dunkin Donuts is very aware of how successful Tim Hortons is in Canada, because

Dunkin Donuts have tried to expand to Canada and have struggled because Tim Hortons

is such a strong competitor (Boyle).

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Since New England is considered Dunkin Donuts “territory” Tim Hortons has

introduced some stores in that area to increase competition (Whitman). Although Dunkin

Donuts has around 2,100 stores in that region Tim Hortons only has 42 stores, customers

in that area have 2 Dunkin’ Donuts that are closer to their houses than one Tim Horton’s

(Whitman). Krispy Kreme has already attempted to enter this market but failed and it

looks as if Tim Hortons is on the same path, as they have recorded an annual $4.8 million

loss in that area. In Tim Hortons’ other areas including Ohio, New York, Maine and other

states bordering Canada they have all been very successful (Whitman). For Tim Hortons

their biggest obstacle against their competitor Dunkin Donut is brand recognition

(Whitman).

Tim Hortons also has indirect competitors to keep in mind. Some consumers

rather have coffee at home in the morning, rather than going out and buying one. Their

indirect competitors would include Maxwell House, Folgers etc. These brands can be

found in grocery stores.

In Canada, the usual location for a Tim Hortons store is a stand alone building

with a drive thru. In order to expand further into the American market and gain brand

recognition, they are trying something new by putting 15 kiosks in Shell gas stations

(Whitman). Available at these locations are the standard pots of coffee, as well as

cappuccinos, lattes with fresh doughnuts and baked goods (Whitman). According to the

chief executive of the company that owns the gas stations; coffee sales have doubled

within the last year when Tim Hortons’ products have been available (Whitman). This is

definitely a start for the long uphill battle that Tim Hortons faces when trying to compete

with the American chains. Simple ideas, like selling coffee at local gas stations, are a

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great way to get noticed and introduce people to your brand without spending a lot of

money constructing stand alone buildings.

6. ANALYSIS OF THE PROBLEM FACED BY THE ORGANIZATION

Tim Hortons has been very successful in regards to its marketing strategy in

North America. Using advertisements on TV, radios, billboards, and bus shelters, Tim

Hortons has opened more than 2,750 stores across Canada, and over 350 locations in the

United States (Tim Hortons: About Us). However, the company is experiencing some

problems expanding further south; they do not have customers that are aware of their

brand. Tim Hortons is an international firm because it markets its products in the United

States the same way it does in Canada; the company is applying the product extension

strategy, where they sell practically the same product in the United States as they do in

Canada. However, this only works best when the consumer target market for the product

is alike across countries and cultures. This is not the case with Tim Hortons, and as a

result, the company might not be able to attract enough customers to its current stores in

the United States to enable them to open more stores. For instance, American citizens

prefer to have their coffee black instead of the famous “double, double” preferred by

Canadians.

Tim Hortons is competing with various national, regional, and local companies in

Canada and the United States, major ones being Dunkin Donuts and Starbucks. The

company believes that since the marketing strategies they use in Canada attract millions

of customers, they are positive that the same marketing strategies will produce the same

results in the United States. They are, however, forgetting that Americans prefer their

own coffee and donut franchises. Dunkin’ Donuts, the most popular coffee and donut

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shop in the United States, is the major competitor of Tim Hortons, and the company has

to gain the trust of the American public in order to become as popular and successful as

Dunkin’ Donuts. Dunkin’ Donuts is an established business in the United States with

franchises in every single state. As Tim Hortons is starting up they only have 350 stores,

so it is harder for them to create awareness when it is hard to find a store in the United

States.

There may be some government regulations preventing Tim Hortons from using

the same advertising techniques in some states as it does in Canada, forcing the company

to change its marketing strategies to achieve customer preference. Expanding globally

might cause problems for Tim Hortons because they may have to change the products

that they sell because consumer’s preferences are different. This is a problem for them

because the products they offer now are what make them so popular and they do not want

to change that too much.

7. MARKETING STRATEGY ANALYSIS

The business world is becoming increasingly innovative and consequently,

organizations are becoming more and more multifaceted. The pricing strategy is a vital

aspect to the success of any organization and for that reason it requires a great deal of

attention. Any organization’s goals is to earn profit; upon glancing at the profit equation,

it becomes evident that price plays a big role in the performance of an organization.

Currently, Tim Hortons is the prominent retailer of coffee and donuts in Canada and

hold’s over 70% of the Canadian market share (Crane 397). Due to it’s dominance in

Canada it is less sensitive to a price change by its competitors despite the ongoing

success and growth north of the border. The increased level of competition which has

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more so the characteristics of a pure competition market, Tim Hortons price strategy must

change strategically in response to a major competitors price change. Tim Hortons aim

should be on setting a price which would enable competition, primarily with Dunkin’

Donuts. Price is a representative of value and therefore they should strive to appropriately

set prices which will appeal to the American consumer while maintaining a positive

image of quality. The biggest obstacles when entering a new market is to make your

brand known and a good way to get people to become familiar with Tim Hortons is by

offering discounts as an efficient way of easing people into the Tim Horton’s familiarity.

Perhaps the biggest marketing problem Tim Hortons faces in their United States

debut is to dispel the customer loyalty which is already present in other big brand coffee

and donut stores. A big part of its success in Canada can be attributed to the culture

influence it has built and how Canadians have become accustomed to the Tim Hortons

experience. When entering a new market, especially one as developed as the American

restaurant/fast-food industry, researching the present consumer needs and wants is

imperative to helping a company gain some of the customers by tending to unsatisfied

yearnings. It is important to note that outside of Buffalo and New York, where Tim

Horton played hockey, the name Horton is relatively unknown. In addition with the lack

of hockey enthusiasts in the United States, the brand value just does not have the

sentimental value as it does for the Canadian people. Tim Hortons set to differentiate

itself and its image from the present dominating competitors by focusing it’s advertising

on the freshness of its products. Also, they noticed that Dunkin’ Donuts was merely a

grab-and-go restaurant meanwhile Tim Hortons provides a more meaningful experience

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whereby people can go sit down and spend time thus creating a home away from home

type feel (Tim Hortons: Contact Us).

In Canada, Tim Hortons distribution strategy consisted of allocating its stores in

particular locations which were deprived of similar services. Meanwhile, in the United

States, there is already a strong existing presence of big brand name coffee and donut

stores as well as competitors to the wide variety of products sold by Tim Hortons. In an

attempt to enter the United States market with a bang, Tim Hortons opened multiple

stores including stores in New England, in which Dunkin’ Donuts is known to have a

very strong dominance (Tim Hortons: Media1). Alongside the expansion of regular stand

alone stores, for convenient access to consumers, they can also be located in shopping

malls, highway outlets, universities and hospitals which increase the convenient locations

as well as increases in visibility which ultimately leads to more awareness. The offering

of 24-hour drive-thru is a welcome addition for consumers on a time schedule and it fits

the current business model of Dunkin Donuts. Further more, strategic combo unit

locations with Wendy’s, which are already popular in the United States, can further the

convenience and further the awareness for the American consumer (Tim Hortons:

Contact US).

Tim Hortons aims at potential target markets by providing locations near

consumers; such as universities or shopping malls for added convenience. Nowadays it

seems like everyone is in a rush to get somewhere and for that reason Tim Hortons have

implemented a 24-hour drive-thru to accommodate that specific target market as well as

made an effort to provide healthier food in an attempt to be on par with the health

awareness trend whereby people are distancing themselves from unhealthy junk food and

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moving more towards more healthy food choices. Market segmentation is important

because it allows for better analysis of consumer needs by grouping similar needs and

wants under the same segmentation groups to identify the best course of action to

accommodate each segmentation group. Tim Hortons is expanding its target market by

constantly adding new foods to their menu ranging from the likes of soups to chili as to

draw more customers other than just from their coffee and donuts meanwhile their

competitors, for example Dunkin Donuts, is essentially only competing for the coffee and

donuts market. Tim Hortons servicing of different market segmentations means more

business throughout the day meanwhile the customary coffee and donut shops peak

during the morning hours and have few customers afterwards.

Tim Hortons is known for having brilliant promotions which have become so

prominent in Canada that they have made an impact on the culture. They were able to

reach the Canadian people in a sentimental way and therefore created a friendship with

their consumers. The “roll up the rim to win” promotion became an instant success in

Canada as it was very well communicated with the help of television advertisements,

billboards and radio. The simple phrase “roll up the rim to win” became a part of the

Canadian national identity and it was ultimately brilliant advertising because that is all

people were talking about. Now Tim Hortons is releasing the same “roll up the rim to

win” promotion in the United States in an attempt to create the same brand awareness and

build relationships with the American consumers (Tim Hortons: Roll Up the Rim).

Tim Hortons provides online information regarding their foods and beverages

menu as well as other nutritional facts and a nutritional calculator. They also have a store

locator which allows the user to locate the nearest Tim Hortons to them and also gives the

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phone number for added convenience. In addition to company information and

promotional deals, announcement and advertisements, their website also provides the

user with upcoming news as well as talks about the community of consumers. Their

website uses the versatility and efficiency of the internet to gather important data

regarding their consumers while also conveying important data to the consumer in a

pleasant and straightforward manner. The website is useful for marketing purposes as

well as it provides customer service in a fast and convenient manner (Tim Hortons:

Contact Us).

8. ALTERNATIVE MARKETING STRATEGIES

Introduction of a new product to the product mix:

The introduction of a new product is often a good way to penetrate a new market.

To create a niche product that appeals to a new group of target customers will enhance

Tim Hortons image and open a new field of customers to exploit. The product in question

will be Smoothies. This new consumer good will appeal to the health minded customer

and will add a cold beverage option to compliment the predominantly hot beverage menu.

Specifically Tim Horton’s will use a fresh fruit genre of smoothies. This will ensure the

highest quality of smoothies. The fruit should be used in its prime condition and yogurt

will also be a menu option to widen variety. Some fruit such as bananas and citrus fruits

can also be added among the typical berry fruits as they have virtually no seasonality.

Pricing will be particularly beneficial to this product as smoothies are often fairly

pricy and considered a classy product with regards to beverages. This will establish a

more prestigious image in the customers mind and will open Tim Hortons to a new

market of consumers. Benefits of this concept will more likely be in a group atmosphere

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where customers travel in a group to grab a “Tim’s”. Not every customer however will be

interested in coffee, and a fruit smoothie will be a healthy and enjoyable alternative

product choice.

Distribution will not be of much concern to this new product. Since Tim Hortons

already carries most of the fruit and yogurt in their Yogurt and Berries snacks, the only

fruit that will need to be purchased are those with good seasonality. Such fruits will be

bananas and citrus fruits and will be included for variety and taste, as well as long

product lifetime.

Promotion will not be out of the ordinary for the Tim Hortons new product. A

typical mix of television, radio, and billboard ads will promote the product the same way

Tim Hortons would promote any of their new products. In terms of additional equipment

that will need to be purchased, only a blender will be essential to this product.

In general the introduction of the fruit smoothie seems like a logical and

profitable next step to the Tim Hortons product mix. With most of the supplies already

available and in use at Tim Hortons the product will be easy to introduce as well as create

a classy cold alternative to the typical coffee shop. It is a niche market that is within grasp

and should be considered when entering the USA.

Endorsements

Endorsements are a nice addition to your marketing mix when trying to infiltrate

new markets (Frankowiak). The credibility of a “third” party is often beneficial and can

promote your product in the right situations. This has been a successful social trend used

by companies such as Nike and Gatorade. Since Tim Hortons was established by the

great hockey player, Tim Horton it is only right to choose a hockey player to endorse the

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product. Also since Tim Hortons is trying to penetrate the American market, particularly

the New York and northern states, an American hockey player should be chosen from

one of the near by teams. Although hockey is not such a big sport in the United States,

they could make endorsements seasonal. For instance they could have a hockey player for

the NHL season and a football player for when the NFL season starts. This will allow

them to continue to represent Tim Hortons as Canadian by implying a hockey player, but

also promote the American sports.

Product Life Cycle

A marketing strategy that Tim Hortons can use is the product life cycle. They can

use this on their main product the coffee and donut. The product life cycle will allow the

company to analyze the stages that a product goes through in the marketing place (Crane

317). There are four stages; introduction, growth, maturity and decline (Crane 317).

Right now Tim Hortons is in the introduction stage in the United States. The main

part of the stage is to promote awareness and recognize competitors. The product life

cycle will allow for Tim Hortons to suggest the company’s primary demand or selective

demand of a product it also introduces the product class of the product. The first stage

will allow for the company to use a skimming strategy to determine if the price of the

product is too high or to low based on the demand and market (Crane 317).

Cross-Cultural Analysis

When companies are looking to expand their services or products to a global

market some companies apply a cross-cultural analysis. This is studying similarities and

differences among consumers in two or more societies or nations (Crane 175). Tim

Hortons can apply the cross-cultural analysis between Canada and United States to help

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them become aware of American customs, values, cultural symbols and language that

differ from Canadian ones. It will also help them to find out any similarities in the

American market compared with their current strategy that they use for their Canadian

stores. In Canada the cultural symbol for sports is hockey, which differs from the

American’s sport of football. Hockey is well-known and liked in the States as well, but

the sport just is not as big south of the border. Another difference Tim Hortons has to

keep in mind is that Canada’s second language is French although they cannot market

like that in the States because their second language is Spanish. Tim Hortons can isolate

marketing strategies that are used in Canada that can help them gain awareness in their

American market and also determine differences in the two markets as well. This will

help them when implementing a marketing strategy for the United States.

Product and Promotion Strategies

A company’s goods can be sold globally in three different ways, in the same form

as the home market, adaptations to the products or a totally new product (Crane 186).

Tim Hortons can use this strategy to find out which items on their menu are popular in

Canada that might be popular in the United States and use the same product. They can

also find out which flavours American’s do prefer, and if they do not offer those products

if they can add those items to their menu. By having a product and promotion strategy

Tim Hortons can create a menu that is targeted mainly to their American market, and find

out which current menu items can be used in their American stores. Tim Hortons also has

seasonal flavours in their Canadian stores, and can also invent new ones for their

American Stores. They can use the same product, but of course market it differently to

better suit the global market. For example Tim Hortons uses Canadian sports to help

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promote their products by marketing during Hockey Night in Canada and the Brier Cup.

They can use the same approach but with a few adaptations using football or baseball to

help them market and create awareness of their product. Tim Hortons can take advantage

of American broadcast stations to promote to both Canadian and American consumers.

About 80% of Canadian has access to American major television networks, and

American companies can market to both Canadian and American consumers (Boucher).

Joint Venture

A joint venture can be a smart investment for any company as long as the two

companies are able to successfully work together. This has been the case for Tim Hortons

and Wendy’s in Canada. In December 1995 Wendy’s and Tim Horton’s merged to start

offering stores with half being a Wendy’s restaurant and half of it being Tim Hortons

(Wendy’s: About Us). Their shared mission is to deliver quality food, value and

unparalleled service to customers (Wendy’s: About Us). The joint venture has proved to

be beneficial for both companies which we believe this could also be a successful

marketing strategy to use in the United States. Because Wendy’s is such a popular fast

food spot in the United States we think that if Tim Hortons continues to be linked with it

then they will gain a new group of customers. The people who are going to eat at fast

food restaurants, such as Wendy’s, might appreciate that there is a coffee shop right next

door because a lot of people like to have a coffee or donut for dessert. This could be a

great way for Tim Hortons to expand even more into the United States; by partnering

with an already trusted American company.

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9. RECOMMENDATIONS

Upon reviewing the alternative marketing solutions, three have been chosen to

further promote and enhance the image of Tim Hortons in the United States. The three

that were decided upon were the joint venture with parent company Wendy’s, the

endorsement of Tim Hortons’ by American athletes and distribution of Tim Hortons

products to grocery and convenience stores. With these three strategies in place Tim

Hortons can increase the awareness of the company in the United States.

Since Tim Hortons already has joint locations with Wendy’s in Canada they can

create places similar to those in the United States. Tim Hortons can take the advantage of

the benefits of working with Wendy’s by teaming up with them in the United States.

Since Wendy’s is already a well-known and trusted franchise in the United States they

can help through their customers to promote Tim Hortons.

Using athletes to endorse the Tim Hortons’ brand name will also prove to be

beneficial well beyond its large cost. Tim Hortons uses popular sports, for example

hockey and curling to help promote their company in Canada. They can also do this in

the United States; they can use familiar American athletes in hockey and football to

promote to those consumers. Also with local talent promoting the brand name, it will

have a closer to home appeal and will stick in the minds of the consumer.

Lastly we want to focus on the product and promotion strategy for Tim Hortons

so that any products that are currently being sold in Canada can be extended to the

American stores. Also it will be helpful for Tim Hortons to adjust their product so that

they are more appropriate for the American customer’s preferences, for instance different

flavours that American’s might prefer that were unsuccessful in Canada. We also want to

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recognize any product inventions that can occur to increase the satisfaction in American

consumers. This might mean new donut flavours, or new baked goods, sandwiches or

soups.

10. JUSTIFICATIONS AND IMPLENTATION

Endorsements

Tim Hortons has sponsored Canadian sports to promote awareness of the brand in

Canada. In Canada Tim Hortons sponsors minor sports teams in local communities (Tim

Horton’s: Community and Goodwill). They have ads around the ice rinks of the Canadian

Hockey teams. Tim Hortons also has endorsement deals with Canadian NHL superstar

Sydney Crosby and Wayne Gretzky (Colello). They also have sponsored major sporting

events, for example the Briers cup a major Canadian curling event was sponsored in

2008. Through the sports events they can promote the brand and also Tim Hortons likes

to promote products as “monthly” features. The Tim Hortons in the United States can

also use sports to promote their brand and interest the consumers. Since hockey is the

known sport to Tim Hortons, they can promote their brand through American hockey

teams and athletes. Tim Horton was a former member of Buffalo Sabers and the history

of the owner may attract more customers in the Buffalo area (Maloney).

We have chosen a hockey player that is recognized in the states, and in the area

where most of the Tim Horton’s franchises are located. The player we chose would be

Rick DiPietro. Rick DiPietro is an American goalie that plays for the New York

Islanders. He is a fan favorite in that area and has been with the team since the 1999-2000

seasons. He has also just signed a long term contract and will not be leaving the city any

time soon. We also want to put ads in some NHL areas which Tim Hortons has done in

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Canada. They can put ads in the Buffalo Sables and Columbus Blue Jackets arenas, both

of these areas have a Tim Hortons close by. We also could plan an endorsement deal with

a football player, since that is a popular sport in the States. Since hockey and football are

both seasonal sports, we can cover more market share almost all year around through

these two sports.

Endorsements however are expensive especially when you want a very

recognizable athlete so you can gain a wide audience. We also have to keep in mind that

some athletes already have endorsement deals with competitors and so they may not be

available. When creating the television and radio ads there are marketing laws and

company ethics/morals to consider. For Canada there is the competition act that Tim

Hortons’ has to follow. There are also Federal Trade Commission laws that are similar to

the competition act for the United States. These laws help protect the consumers. We can

use extensive technology to gain information from American customers to see which

athletes and sports are popular in America. Also in certain areas, athletes can differ and

Tim Hortons can create ads with specific athletes that will be effective in certain areas.

Product and Promotion Strategy

This strategy will help determine which products Tim Hortons can carry over

from their Canadian stores. This will be very useful for the new American franchises

because this will help establish what product customers prefer and the overall menu the

Tim Hortons stores will carry. Depending on the location in the United State the product

preferences probably will differ as well.

To start Tim Hortons should do some research on donut flavours, sandwiches and

baked goods that American customers like. They can look at their competitor Dunkin

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Donuts to see which donut flavours are their best sellers and even their coffee flavours.

They can do taste tests through sampling of their products and try to gain feedback from

the customers. Also having potential consumers try their products will allow for them to

gain awareness of the Tim Hortons brand and their products. The Canadian Store applies

a featured baked good for the month, usually a new product that actually gets tested to

see how well it does on the market. The American companies can do this too, it is a very

useful way to determine if the product is liked or not.

The second thing that Tim Hortons can do with their research is to alter some of

their product and promotion strategies to work for the American market. In Canada Tim

Hortons is mostly known for their double-double. If Tim Hortons can determine which

beverage American’s prefer they can market that product a lot more and make it the

specialty beverage like the double-double is in Canada. They can also alter their products

to combine with their marketing strategies. For instance for the Superbowl they could

have donuts that are decorated differently to look like a football or have soup and

sandwich combos called the “SuperDeal.” They can do the same for Hockey when it gets

close to playoffs and use the Stanley cup and the athletes that are used as endorsers. This

way they can create products/promotions that are slightly altered from the original

product to make unique goods and ideas that grab the customer’s attention.

The third option Tim Hortons has is to invent new products with the data they

have collected from surveys. Canada is known for their Canadian Maple syrup and Tim

Hortons used that to create the “Canadian Maple Donut.” The Canadian Tim Hortons

have many seasonal flavours for certain holidays. In America one of their biggest

holidays is Thanksgiving. They can create seasonal flavours for that time of year, for

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example Tim Hortons can invent pumpkin flavour donuts, and candy corn flavoured

cookies. They can invent products that will better suit the want of customer preferences.

The use of the company’s website to gather feedback from customers will be very

useful for the company. It will help manage the company and save paper. An incentive

that the company can use to get people to fill out the survey is have coupons or prizes.

Tim Hortons has done surveys in the past in Canada, between September 13th and

October 24th 2004 Tim Hortons had surveys available for customer and had “Free Coffee

for a Year” as a prize to those who participated (Tim Hortons: Media). Tim Hortons

should have consent forms and guidelines regarding their surveys. If personal information

is collected they should disclose what the information should be used for and the privacy

policy.

Joint Venture Tim Hortons can be found around Canada as an independent franchise or a joint

venture with its parent company Wendy’s. The joint ventures are usually placed in food

court areas to offer customers a variety of products and give the customers a choice in

what they want to eat. Wendy’s is an American owned company that was established in

Ohio (Wendy’s: About Us). It is a very established fast food chain in Canada and the

United States. It has a loyal customer base and is a well-trusted company. Tim Hortons

can use Wendy’s to its advantage to gain awareness for customers.

Tim Hortons should start joint venture locations with Wendy’s in the United

States. This will allow for the company to expand customer awareness through the

Wendy’s consumers. When Wendy’s customers go to a joint location, they will see the

Tim Hortons restaurant as well. This first step allows for customers to acknowledge the

company Tim Hortons. They may even see the Tim Hortons menu, and opt for something

28

a little healthier than the burger and French fries. This will allow them to at least try

something on the Tim Hortons menu, it even allows for the customers to just simply view

the menu to see what Tim Hortons has to offer. Allowing for potential customers to view

what products Tim Hortons offers will allow them to gain awareness of the company.

Customers will now know Tim Hortons sells coffee and donuts and associate it will that.

They can even create awareness by giving out coupons for a free donut or coffee when a

customer from Wendy’s purchases a meal. That way they the customer will try their

products and learn more about the menu.

There are laws that Tim Hortons will have to follow regarding establishing joint

ventures. Also marketing laws for the coupons that Tim Hortons plans to distribute

through Wendy’s. They should include an expiry date and terms of conditions of the

coupon. It is important that Tim Hortons includes this information because it will lower

any legal issues to the coupon and customers are aware of the terms of the coupon. Tim

Hortons can give away a coupon that says free donut or free coffee and see which

customers prefer the coffee or donuts at Tim Hortons. They can use that data and an

information data base to compute statistics to see which is more popular. Also the use of

technology to produce print ads inside Wendy’s to advertise the coupons, also use of

technology to create the coupons with SKUs that are compatible with Tim Hortons’ cash

registers to keep track of the coupons.

11. METHODOLOGY AND DATA ANALYSIS

When doing the research for our company, we had originally planned on

completing surveys and handing them out to students around campus. We discussed the

purpose of this and it was decided that this would not really help to analyze what needs to

29

be done in the American market so we did not carry out with the surveys. Due to the

geographical distance, we were not able to gain feedback first hand from American

consumers. Consequently, all of the research that was done was using secondary sources,

mainly websites and articles, to see a list of all secondary research go to our Works Cited

page. With our lack of first hand communication with the target market we were focusing

on, we were forced to rely heavily on outside material including surveys done by other

companies and reports written by outside sources. Because Tim Hortons only went public

last year it was difficult for us to gather information that is usually easily found on

financial statements. Therefore we could not find current strategies used by Tim Hortons

and were not able to access any feedback the company may have had from their

American customers.

12. CONLCUSION

Tim Hortons is the largest quick-time service restaurant chain in Canada. It stared

out as a small coffee and donut shop, and has rapidly expanded its menu to include a vast

assortment of beverages, donuts, sandwiches, bagels, soups and much more. Tim Hortons

has over 2,750 stores in Canada, and over 350 locations in the United States, beating

McDonalds as Canada’s largest food service operator. Tim Hortons has been

experiencing problems opening more stores in the United States because they have not

created enough awareness of their brand in the American market, and also because of

their major competitor, Dunkin’ Donuts. To attract customers from Dunkin’ Donuts as

well as other customers, Tim Hortons needs a strategy that will allow them to target

customer needs and wants that appeal to the American public.

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After considering all the problems and issues that Tim Hortons is experiencing,

our group recommended three effective marketing strategies that might enable Tim

Hortons to reach its goals of opening new locations in the United States, and remain

competitive with Dunkin’ Donuts. Since Tim Hortons has joint locations with Wendy’s

in Canada, similar joint ventures can be made in the United States. Wendy’s is already a

well-known franchise in the United States and they can help promote Tim Hortons

through their customers. Using famous athletes such as Rick DiPietro of the New York

Islanders to endorse Tim Hortons’ brand name will also be beneficial well beyond its

large costs. With local athletes promoting the company’s brand name, it will give

customers a closer to home feeling. It will benefit Tim Hortons if they adjust some of

their products to satisfy the American customers’ preferences. We also want to recognize

any product inventions that can occur to increase customer satisfaction in Americas. We

believe that if Tim Hortons is able to successfully implement these changes then they will

become a fierce competitor in the United States as well as Canada.

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13. APPENDICES

Appendix A

(FindByClick)

32

14. WORKS CITED

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Boyle, Matthew. “Dunkin’s Doppelganger?” Cable News Network. A Time Warner

Compay. 2006 September 6. Fortune. March 28 2008.

http://money.cnn.com/2006/09/05/news/companies/pluggedin_boyle.fortune/

index.htm

Breen, Dermot. “The Importance of the Consumer.” Tesco Ireland. 24 January 2008.

Tesco Ireland. 24 March 2008. http://www.tesco.ie/about/20060124_conference.html

CBC. “Krispy Kreme down to a half-dozen stores in Canada.” CBC News. 7 September

2005. CBCNews.ca. 28 March 2008.

http://www.cbc.ca/money/story/2005/09/07/krispykreme_20050907.html

Colello, T.J. “Sydney native to mange Tim Hortons hockey Development.”

Transcontinental Media Network. 31 July 2007. The Canadian Press. 5 April 2008.

http://www.capebretonpost.com/index.cfm?sid=49136&sc=146

Crane, Frederick G., Kerin, Roger A., Hartley, Steven W., Berkowitz, Eric N., Redelius,

William. Marketing: 6 th Canadian Edition. Toronto: McGraw-Hill Ryerson. 2006.

FindByClick. “Tim Hortons Stores by Province/Sate.” FinByClick Community. 2008.

Wikipedia. 31 March 2008.

http://upload.wikimedia.org/wikipedia/en/1/16/Tim_stores_wiki.png

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Fischer, Dough. “Investing in an icon: Why everyone wants a piece of Tim Hortons.”

Canwest Publishing Inc. 24 March 2006. Ottawa Citizen. 2 April 2008.

http://www.canada.com/ottawacitizen/news/story.html?id=f695c530-37cd-4b7f-988c-

d7c1ab7f964a&k=89369

Frankowiak, James R. "Your Third Party- an Endorsment You can use." Public Relations

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Harris, Rebecca. “Down-Home Smarts.” Rogers Media Inc. 7 February 2007. Marketing

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content=20050207_66405_66405

Maloney, Rick. “Success brews success for Tim Hortons Owners.” American City

Business Journals. 10 December 2004. 31 March 2008.

http://www.bizjournals.com/buffalo/stories/2004/12/13/story3.html

Reuters. “Tim Hortons plans bigger push into U.S.” Canwest Publishing Inc. 20 February

2008. Financial Post. 4 April 2008. http://www.financialpost.com/story.html?

id=321722

Tim Hortons: About Us. “The Story of Tim Hortons. The TDL Group Corp.

2008.Wedny’s International Inc. 24 March 2008.

http://www.timhortons.com/en/about/index.html

Tim Hortons: Community and Goodwill. “Local Programs.” The TDL Group Corp. 2008.

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http://www.timhortons.com/en/goodwill/local-programs.html

Tim Hortons: Contact Us. “Contact Us.” The TDL Group Corp. 2008. Wendy’s

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International Inc. 1 April 2008. http://www.timhortons.com/en/contact.html

Tim Hortons: FAQ. “Frequently Asked Questions.” The TDL Group Corp. 2008.

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Tim Hortons: In Our Store. “On Our Menu.” The TDL Group Corp. 2008. Wendy’s

International Inc. 31 March 2008. http://www.timhortons.com/en/menu/menu.html

Tim Hortons: Media1. “Tim Hortons Southern New England Store Conversions Near

Completion.” The TDL Group Corp. 2004 June 29. Wendy’s International Inc. 28

March 2008. http://www.timhortons.com/en/about/news_archive_2004e.html

Tim Hortons: Media2. “Congratulations to the winners of “Free Tim Hortons Coffee for a

year.”” The TDL Group Corp. January 2005. Wedny’s International Inc. 4 April

2008. http://www.timhortons.com/en/about/news_archive_2005a.html

Tim Hortons: Roll Up The Rim. “About RRRoll Up.” The TDL Group. 2008. Wendy’s

International Inc. 6 April 2008. http://www.rolluptherimtowin.com/en/about.php

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International Inc. 3 April 2008. http://www.wendys.ca/about_us/story.jsp

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