Strategic Marketing Tim Horton in Canada - Essay Sample for Free

1) An example of successful product innovation by Tim Hortons which put the firm into direct competition with McDonald\’s is its introduction of the following to its menu:

a) Chili
b) Chicken sandwich wrap
c) Breakfast sandwich
d) Yoghurt and berries

2) To effectively compete with rivals such as McDonald\’s, Tim Hortons relies on the following strategies:

a) Market penetration
b) Contests such as \”Roll Up the Rim\”
c) Product innovation
d) Market development
e) All of the above

Market penetration is a strategy that a company uses when it attempts to build market share by selling existing products to existing customers. Firms can attempt to extend their penetration of markets by encouraging increased use of the product. The strategy of product development concentrates on the introduction of new products into existing markets. In contrast, market development focuses on finding new markets for existing products, occasionally by geographic expansion, but often by targeting new segments of consumers. Tim Hortons is a quick-service Canadian coffee chain, founded in Ontario in 1964 by Canadian hockey player, Tim Horton. Recognized initially for its coffee and donuts, the restaurant currently offers a greater variety of food and beverages, including a breakfast menu, sandwiches, soups, wraps, and baked goods. In 2017, Tim Hortons’ revenue totaled $4.1 billion Canadian dollars, making it the second largest coffee chain in the world. Furthermore, Tim Hortons was positioned at number five on a list of Canada’s most valuable brands in 2014. The full-service restaurant presently has 3,800 Canadian restaurant locations, and approximately 4,700 locations worldwide. McDonald\’s is a global restaurant chain with over 30,000 locations in 115 countries.

In 2017, McDonald\’s had revenue of $29.5 billion. However, as strong as the firms are, they are still susceptible to competition. Tim Hortons and McDonald’s both utilize market penetration as their primary intensive strategy for growth by modifying products, improving product quality, increasing market share, gaining customers from competitors, dominating growth markets, increasing existing customer usage, and converting non-users into users. For example, Tim Hortons and McDonald’s upsurge regularity of purchase through advertising campaigns that provide persuasive messages to customers, resulting in frequent restaurant visits. The chains increase average purchase amount per transaction through value meals and utilize promotional tactics to gain competitors’ customers and attract individuals who do not typically consume fast food. When Tim Hortons implements its Roll Up the Rim to Win promotion each year, its intention is to further increase market share. Additionally, Tim Hortons integrates a market penetration strategy by ensuring its friendly, enthusiastic, and productive employees request consumers to purchase more from their wide array of goods at each visit. The quick-service chains also implement price reductions and expanded distribution to effortlessly penetrate markets. McDonald’s and Tim Hortons offer promotions where consumers can purchase a beverage of any size for $1. As a result, these restaurants become a location of preference for beverage buyers. Low costs empower firms to reach additional customers in markets where operations exist, growing overall market shares rapidly.

Furthermore, Tim Hortons and McDonald’s have mutually adopted a product development strategy through continuous improvements in existing products, innovation, and development of new goods to sell to existing customers. These new products are adaptations of existing items, or completely new products. McDonald’s frequently develops new menu items over time, such as innovative McCafé beverages and burgers, and Tim Hortons recently introduced new healthy menu options, such as chili, paninis, yoghurt and berries, and low-fat baked potato wedges, which cater to the demands of health-conscious psychographics. Although McDonald’s sells French Fries, Tim Hortons’ baked potato wedges contain lower fat content, fewer calories, and the same great taste as regular French Fries. Tim Hortons has also launched a breakfast sandwich, developed to rival with McDonald’s well-known Egg McMuffin. The full-service chains ensure to keep their competitors in mind and introduce innovative products to contend with them. When a firm creates new products, it captures new consumers. Product development is a vital business development tactic that Tim Hortons and McDonald’s must adopt to remain competitive. Lastly, Tim Hortons and McDonald’s have both implemented a market development strategy by attracting new customers for their existing products through targeting the customers of competitors, non-buying consumers in currently targeted segments, new customers in new segments, and through geographic expansion.

Establishing differentiation, reducing prices, increasing advertising efforts, and offering coupons has enabled both McDonald’s and Tim Hortons to attract the customers of competitors, non-users, and new customers in new segments. Customers are demanding healthy choices, wider variety, and greater technological advancements, such as online ordering and free Wi-Fi. In response, the full-service restaurants have both implemented healthy menu options, mobile ordering, and remodeled locations with new looks, providing a casual, convenient, comfortable atmosphere. Tim Hortons currently operates 3,800 Canadian restaurant locations and approximately 4,700 worldwide. In contrast, McDonald’s has over 30,000 locations in 115 countries. Establishing new locations in new markets, such as McDonald’s restaurants in African or Middle Eastern countries and Tim Hortons restaurants outside of North America where the company currently has no operations, will enable the firms to increase overall market share, dominate new markets, and build their global presence and brand name. Tim Hortons stands as Canada’s out-of-home coffee industry leader, possessing 70% of the Canadian market. The chain works jointly with countless suppliers of raw materials, predominantly providers of coffee. Moreover, Tim Hortons has effectively adopted vertical integration, having the ability to monitor and control its business operations and supply chain from production to distribution to closing of sales.

A majority of locations are extremely fruitful, earning an average annual profit of CAD$260,000. Though this sets the business apart from its competitors, Tim Hortons faces difficulties. As a result, its main competitor, McDonald’s, has gained an edge in the market. McDonald’s has a competitive advantage as their brand name, core procedures, and international presence trump Tim Hortons. For example, in 2013, McDonald’s earned revenue totaling $28.2 billion, which is nine times that of Tim Hortons. Furthermore, McDonald\’s possessed $102 billion in market capitalization, approximately fourteen times that of Tim Hortons. Although Tim Hortons provides customers with excellent promotions, McDonald’s has a competitive advantage through the firm’s use of online marketing media, and promotional efforts carried out on social media channels with massive audiences and exposure.

Tim Hortons can utilize emergent channels, such as social media outlets, in order to provide superior customer service and increase brand reach. Exposure will expand the firm’s markets. Tim Hortons has also been drastically slower to remodel their restaurants. McDonald’s has currently renovated approximately 70% of its 1,400 Canadian locations, whereas Tim Hortons has only modernized a mere 20% of its 3,300 locations in Canada. As a result, customers are more likely to visit McDonald’s restaurants with the fresher ambience they prefer, offering flat-screen televisions, self-service ordering stations, long tables, and comfortable armchairs. Additionally, another difficulty Tim Hortons faces is their lack of selection of meal foods. For example, you often find families and groups of friends enjoying lunch or dinner at McDonald’s from their large selection of popular fast food meal items, such as their famous Big Mac, McChicken, Sweet Chili Signature McWrap with Grilled Chicken, and French Fries. On the other hand, Tim Hortons offers limited options of this sort of food.

Instead, the eatery specializes in baked goods and beverages, where individuals and friends often gather for snacks and refreshments. Thus, the company should concentrate on introducing more lunch and dinner options. Through decreasing operating expenses, Tim Hortons has not experienced surges in efficiency. On the other hand, McDonald’s has experienced significant improvements in operational productivity and net profit margin. As a result, this has immensely aided the business in prospering and increased their competitiveness. As the market continues to expand, Tim Hortons must find methods to increase their organizational productivity to take advantage of development opportunities, protect against competitors, and the threat of new entrants. Enhancing production and distribution methods will enable Tim Hortons to reduce the cost of goods, offering competitive pricing to consumers. The increasing importance of corporate social responsibility to consumers is an opportunity to implement environmentally-friendly practices, such as advancements in distribution procedures and efforts to reduce waste.

The business must also grow their promotional sales efforts, offer discounts and coupons, monitor the promotional tactics of competitors, and expand their advertising budget to draw customers from competitors, increase their overall market share, and sustain during adverse economic conditions. For example, Tim Hortons can become familiar with offers held by McDonald’s, such as free coffee days, and mimic their international business strategies. It is essential for the organization to determine strategies to favorably contend outside of its home country, Canada, before expanding globally. With increasing shifts towards a healthy lifestyle, it is also crucial that Tim Hortons creates new menu items to attract customers of diverse psychographics. The organization’s warm, transparent atmosphere, friendly, determined, positive employees, product selection, and continuous participation and support in Canadian communities have greatly aided the firm in flourishing. To remain competitive, Tim Hortons must continuously analyze innovations, pricing strategies, promotional tactics, and production procedures of competition, while also leveraging web analytics to make data-driven decisions and adjust its marketing tactics to better meet the needs of its customers. The business can then implement strategic marketing that will diminish potential dangers and difficulties.

What kinds of benefits does competition bring to a society?

Relationship management and marketing focuses on the development, maintenance, and strengthening of long-term, profitable relationships with customers, suppliers, employees, and other partners for shared benefit and value. Relationship management seeks to create strong connections with suppliers through supply chain management. On the other hand, relationship marketing concentrates on consumers and their long-term satisfaction. Providing customer support, rewards programs, and sending promotions attracts consumers, retains them, and creates brand loyalty.


1) Positive Customer Experience: Relationship marketing allows organizations to focus on individuals that fit their culture and goals, creating ease in segmenting markets and catering to buyer needs. Firms who incessantly analyze the needs of valued consumers and ensure that questions and concerns are addressed, build trust, customer satisfaction, strengthen relationships, and deliver a positive customer experience.
2) Customer Retention: Organizations seeking to build, maintain, and enhance long-term relationships with clients provide transparency, support, and encourage loyalty. As a result, firms attract more customers, and retain them for longer.
3) Customer Feedback: Customer feedback is another great advantage of relationship marketing. When businesses encourage open communication, consumers are motivated to provide opinions, concerns, complaints, questions, and compliments. By carefully listening, organizations can utilize this feedback to their advantage through making important improvements to products, services, and operations. This increases overall customer satisfaction.
4) Profitability: Through effective relationship marketing, companies will acquire a higher return on investment. It is considerably less costly to retain a customer than to attain a new one. Thus, providing incentives, exclusive discounts, coupons, and promotions to existing loyal customers will mutually benefit the business and consumers.
5) Customer Advocates & Word of Mouth Marketing: Individuals who have positive experiences with a firm almost always share their knowledge with friends and family, providing honest recommendations and reviews. Creating a positive customer experience leaves a lasting impression, producing countless business opportunities, great reviews, constructive recommendations, and allows businesses to build a base of loyal consumers to consult for future organizational decisions.

McDonald’s has undoubtedly integrated relationship management and marketing effectively into its business model. George Betts, CEO of McDonald’s Canada, places an enormous emphasis on the relationships his restaurant creates with its customers. Betts strives to provide a transparent, trusting, and friendly atmosphere for consumers. Answering questions, listening to valued feedback, comments, and concerns on Twitter and Facebook, gathering opinions regarding new menu offerings, and providing exclusive promotions and discount coupons to loyal customers enables McDonald’s to communicate gratitude, appreciation, and strengthen long-term relationships with visitors. For example, the McDonald’s McCafé Rewards allows individuals to collect the stickers off their hot beverages and redeem completed McCafé Rewards cards for their favourite hot beverage once seven stickers have been collected. Remodeling and diversification of its restaurants and continuous product innovations have attracted new customers and encouraged them to spend more. These tactics have helped McDonald’s to retain customers, create long-term customer satisfaction, and build loyalty.

Tim Hortons is a dominant chain in Canada that has also successfully implemented relationship management and marketing. The full-service business has reopened many of its restaurants with fresh looks, providing a convenient, warm, and casual location where individuals, friends, and families can comfortably eat and utilize free Wi-Fi. Tim Hortons also provides promotions to customers, such as its Roll up the Rim to Win contest, offering individuals an opportunity to win prizes, including free coffee, donuts, electronics, and a grand prize of a vehicle. Furthermore, Tim Hortons incessantly monitors the shifting trends in consumption. Individuals are desiring healthy options, more variety, and greater value. In response, Tim Hortons introduced muffins, croissants, cookies, healthy menu options, such as chili, sandwiches, and wraps, and new beverage options as well. Consumers who believe that a business is responsive to their needs are more likely to remain using the products and services of that company, creating brand loyalty.

Competition brings many benefits to society. It is a critical and leading source of performance, innovation, and economic growth. Moreover, competition ensures the greatest productivity from competitors, and creates new opportunities.

Consumers: Consumers benefit the most from competition in the market. They can select from a wide variety of high-quality products at affordable prices. Furthermore, individuals can choose which brands, products, and services fit their needs. Without competition, customers would have no choice but to trust the only option offered.

Businesses: Competition encourages companies to continuously innovate as new product developments are recurrently introduced into the market. Manufacturers are able to provide a greater variety of competitive products to their consumers, typically resulting in lower prices and higher output. Competition also provides increased knowledge about customer preferences. To differentiate themselves from rivals, businesses must be highly motivated, proactive, creative, positive, and focused.

Employees: Lack of competition makes the business less responsive to employees’ needs. Moreover, without rivalry, personnel can not take their skills to another business.

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