Mini Marketing Case Study 2

docx

School

University of Guelph *

*We aren’t endorsed by this school

Course

1000

Subject

Marketing

Date

Apr 3, 2024

Type

docx

Pages

Uploaded by EarlCrownChimpanzee23

Q1. Perform a SWOT analysis for Starbucks and Tim Hortons. Based on your analysis, in which company would you invest? Justify your answer. Ans. Starbucks: Strengths: 1. Global Leader: Starbucks is a global leader in the coffee industry, with a vast network of over 24,000 stores in 75 countries, ensuring high brand visibility. 1 2. Diverse Product Range: Starbucks offers a wide variety of products, catering to different tastes and preferences, including innovative beverages, snacks, and pastries. 3. Digital Innovation: Starbucks has a strong focus on digital platforms, including mobile apps and loyalty programs, enhancing customer experience and convenience. 4. Brand Loyalty: Starbucks has a loyal customer base due to its consistent quality, customer service, and engaging marketing initiatives. Weaknesses: 1. Second Position in Canada: In Canada, Starbucks is second to Tim Hortons, facing stiff competition and capturing a smaller market share. 2. Perceived Expensiveness: Starbucks products are often considered expensive, deterring price- sensitive customers from frequent visits. Opportunities: 1. Diversification: Starbucks can expand its menu and introduce more food items to attract a broader customer base, especially those seeking healthier or diverse food options. 2. Digital Expansion: Further investment in digital technologies can enhance online ordering, personalized marketing, and customer engagement, especially post-pandemic. Threats: 1. Intense Competition: Starbucks faces strong competition from Tim Hortons, McDonald's, and local coffeehouses, requiring continuous innovation to stay ahead. 2. Changing Consumer Preferences: Health-conscious and environmentally aware consumers may shift preferences towards sustainable and healthier options, challenging Starbucks' offerings. 3. Economic Challenges: Economic downturns can lead to reduced consumer spending on premium coffee, impacting Starbucks' sales. Tim Hortons: Strengths:

1. Canadian Icon: Tim Hortons is a Canadian cultural icon, deeply ingrained in the nation's identity, enjoying widespread loyalty among Canadians. 2 2. Market Dominance: Tim Hortons holds the majority share of the Canadian coffee market, with 8 out of 10 cups of coffee sold in Canada coming from Tim Hortons. 3 3. Traditional Favorites: Tim Hortons offers classic Canadian breakfast items, including the famous "double-double" coffee and maple-glazed donuts, catering to local tastes. 4 4. Retail Expansion: Tim Hortons has expanded its presence into retail outlets, capitalizing on the demand for its products in grocery and drug stores. 5 Weaknesses: 1. Declining Reputation: Tim Hortons has experienced a decline in its corporate reputation, with falling same-store sales for consecutive quarters, attributed to increased competition and internal issues. 2. Dependency on Canadian Market: Tim Hortons' heavy reliance on the Canadian market makes it vulnerable to economic fluctuations and changing consumer behaviors within the country. Opportunities: 1. Menu Diversification: Tim Hortons can diversify its menu by incorporating healthier options and catering to changing dietary preferences, attracting a broader customer base. 2. Enhanced Customer Experience: Improving customer service, store ambiance, and digital ordering systems can enhance customer satisfaction and loyalty. Threats: 1. Competition: Intense competition from Starbucks, McDonald's, and local coffeehouses challenges Tim Hortons' market share and necessitates constant adaptation to consumer preferences. 2. Economic Factors: Economic downturns and reduced consumer spending can impact Tim Hortons' sales and profitability, especially if perceived as a luxury by budget-conscious consumers. 3. Changing Consumer Trends: Evolving consumer preferences for healthier, ethically sourced, and environmentally friendly products may require significant menu and operational changes for Tim Hortons to remain relevant. After performing the SWOT analysis, I would personally invest in Starbucks because of the following reasons: 1. Global Diversification: Starbucks' global presence reduces its dependency on any single market, providing a more diversified revenue stream and risk mitigation.

2. Digital Innovation: Starbucks' focus on digital innovation aligns with evolving consumer trends, offering convenience and personalized experiences, which can enhance customer loyalty and drive sales. 3. Brand Strength: Starbucks' strong brand recognition and diverse product range provide a foundation for continuous growth and adaptation to changing market dynamics. 4. Sustainability Initiatives: Starbucks' emphasis on sustainability aligns with growing consumer preferences for eco-friendly practices, potentially attracting a broader customer base. Before making any investment selections, it is crucial to undertake exhaustive due diligence, considering the company's financial stability, the caliber of its management, and the state of the market. Investment diversification across a variety of assets is another wise risk-spreading tactic. Q2. Which growth strategies have been pursued by Starbucks and Tim Hortons in the past? Which strategies do you believe will be most successful for the two firms in the future? Why? Ans. Past Growth Strategies: Starbucks: 1. Global Expansion: Starbucks has aggressively expanded globally, ensuring a presence in 75 countries, leveraging its brand recognition, and standardizing its offerings. 2. Diverse Product Range: Starbucks diversified its menu with a wide variety of beverages and food items, appealing to different customer preferences and expanding its customer base. 3. Digital Innovation: Starbucks invested significantly in digital technologies, including mobile apps and loyalty programs, enhancing customer engagement and convenience. Tim Hortons: 1. Canadian Market Dominance: Tim Hortons focused on dominating the Canadian market, becoming a cultural icon, and capturing 80% of the country's coffee market. 2. Traditional Favorites: Tim Hortons emphasized traditional Canadian items like the "double- double" coffee and maple-glazed donuts, catering to local tastes and preferences. 4 3. Retail Expansion: Tim Hortons expanded its presence into retail outlets, capitalizing on the demand for its products in grocery and drug stores. 5 Future Growth Strategies: Starbucks: 1. Innovative Menu Diversification: Starbucks should continue to diversify its menu, incorporating healthier options, plant-based alternatives, and unique regional offerings to cater to changing consumer preferences. 2. Sustainability Initiatives: Given the growing emphasis on sustainability, Starbucks should invest in eco-friendly practices, such as recyclable packaging, ethically sourced coffee, and energy- efficient stores, to align with consumer values.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

3. Enhanced Digital Experience: Starbucks should focus on enhancing its digital platforms, enabling seamless online ordering, personalized marketing, and innovative loyalty programs to retain tech-savvy customers. Tim Hortons: 1. Menu Modernization: Tim Hortons should modernize its menu by introducing healthier food and beverage options, accommodating the increasing demand for nutritious and diverse choices. 2. Customer Experience Improvement: Tim Hortons should invest in improving customer service, store ambiance, and digital ordering systems to enhance customer satisfaction and loyalty, attracting both new and returning customers. 3. Localized Offerings: Tim Hortons could consider introducing localized products and promotions to cater to regional preferences, creating a sense of community and enhancing customer engagement. Reason: 1. Consumer-Centric Approach: Both Starbucks and Tim Hortons should prioritize a consumer- centric approach, aligning their strategies with evolving consumer preferences. This includes offering healthier options, focusing on sustainability, and providing a seamless digital experience. 2. Adaptation to Local Markets: Starbucks and Tim Hortons should be adaptive to regional differences. Tailoring their offerings to match local tastes and preferences can create a stronger connection with the community. 3. Embracing Sustainability: Given the increasing emphasis on sustainability and ethical practices, both companies should invest in environmentally friendly initiatives. This can enhance their brand image and appeal to environmentally conscious consumers. 4. Digital Transformation: Continued investment in digital technologies is essential. Mobile apps, online ordering, and loyalty programs not only enhance customer convenience but also provide valuable data for personalized marketing and product development. In conclusion, a combination of menu diversification, sustainability initiatives, customer-centricity, and digital innovation will likely be the most successful strategies for Starbucks and Tim Hortons in the future. Adapting to changing consumer expectations and market trends while staying true to their core brand identities will be key to their sustained growth and competitiveness. Q3. Which marketing metrics would be most helpful for an executive in charge of developing new products for a coffee chain? Ans. For an executive in charge of developing new products for a coffee chain, the following marketing metrics would be highly valuable to assess the performance and reception of new offerings, as well as to make informed decisions for future product development strategies: Sales Data: Track the sales performance of new products, including total revenue, sales growth, and sales per store. This metric provides direct insights into the product's commercial success.

Customer Feedback and Surveys: Collect feedback directly from customers through surveys, reviews, and social media comments. Understand customer sentiments, preferences, and areas of improvement for the new products. Customer Retention Rate: Measure the percentage of customers who continue to make purchases of the new product after their initial purchase. A high retention rate signifies customer satisfaction and loyalty. Customer Lifetime Value (CLV): Calculate the CLV of customers who purchase the new product. This metric helps in understanding the long-term profitability of acquiring customers through the new Churn Rate: Monitor the rate at which customers stop purchasing the new product. A high churn rate may indicate issues with product satisfaction or competition offering. Net Promoter Score (NPS): Measure customer loyalty and satisfaction by asking customers how likely they are to recommend the new product to others. High NPS indicates strong customer advocacy. Product Return Rates: Monitor the percentage of sold products that are returned by customers. High return rates might indicate dissatisfaction or quality issues. Competitive Analysis: Compare the performance of the new product against similar offerings from competitors. Understand market share, pricing strategies, and customer reviews for comparative analysis. Conversion Rate: Analyze the rate at which potential customers are converted into actual buyers of the new product. This metric helps in assessing the effectiveness of marketing campaigns and product messaging. Profitability Metrics: Evaluate the gross profit margin, contribution margin, and overall profitability of the new product. Ensure that the product contributes positively to the company's financial health. REFRENCES. 1. Ibid . 2. TerraCioflfe, “The results are in: Tim Hortons is no longer Canadians’ favouritecoffee shops,” Maclean’s , October 22, 2017,https://www.macleans.ca/news/canada/the-results-are-in-tim-hortons-is- no-longer-canadas-favourite-coffee-shop/(accessed July 1, 2019); Hollie Shaw, “McDonald’s $1 coffee and higher-pricedmenu items challenge Tim Hortons' dominance,” Financial Post , May1, 2018,https://business.financialpost.com/investing/mcdonalds-1-coffee-and- higher-priced-menu-items-challenge-tim-hortons-dominance(accessed July 1, 2019) 3. Arwa Mahdawi, “What happened to Tim Hortons? The downfall of Canada’s brand,” The Guardian , July 9, 2018, https://www.theguardian.com/world/2018/jul/09/tim-hortons-canada-coffee- brand-popularity-downfall (accessed July 1, 2019).

4. “Are Canadian millennials drinking more Starbucks or Tim Hortons?” Dished, December 4, 2018, https://dailyhive.com/calgary/koho-millennials-coffee- starbucks-tims(accessed July 1, 2019). 5. Thompson,“How Café Culture is Shifting in the Wake of COVID-19.”

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Mini Marketing Case Study 2

Related Documents