Second cup VS Tim Hortons

RSM219

Fall 2011

Group Project

Second cup VS Tim Hortons

Coffee retail industry in North America is growing exponentially. Coffee is a part of people’s daily life in US and Canada. While on the way to work or university, one of the morning rituals is a stop at coffee shop for a cup of hot and energizing ready-to-go latte or mocha. Currently established “Coffee-giants” like Starbucks, Second Cup and Tim Horton’s are almost unbeatable powerful big players on the battlefield of coffee shop market in North America. Our target is to compare Second Cup and Tim Horton’s companies.

Second Cup

Second Cup was founded in 1975 as a small kiosk offering only whole bean coffee. However, Second cup has grown to more than 360 cafes across Canada and earned the status as largest Canadian-based specialty coffee retailer. It became so popular because of comfortable atmosphere created for socialization with friends and peers.

Second Cup targets consumers within the range of two generations (20’s to 35’s). Surprisingly, it is mostly female-focused as women making up almost 80 % of the patrons. As prices are higher than average, Second Cup provides the option of ordering high-scale coffees for those who are more knowledgeable about the coffee and more careless about the prices of competitors. It is a strategy “more for more”: the customers pays more but receives the premium quality and highest satisfaction. Moreover, Second Cup attracts the segment of customers, who do care about their health. They can purchase low fat and fat free products to maintain their healthy lifestyle.

Tim Horton’s

Tim Horton's is another huge coffee and fresh baked goods chain in North America. Comparing to Second Cup, Tim Horton’s has a competitive advantage in number of stores (around 2,500 stores in Canada). In 1964 a legendary hockey player for the Toronto Maple Leafs Tim Horton opened the first coffee shop in Hamilton, Ontario. Tim Horton’s was originally focused on Ontario province and Atlantic Canada. Nowadays, the chain has greatly expanded across the whole country.

Tim Horton’s targets regular customers, who are price-oriented and are not exotic-seekers. The core that attracts people is always fresh products. For a lower prices consumer gets less than 20 minutes old coffee and still warm donut. Tim Horton’s commercials with Sidney Crosby attract hockey fans of all ages (18-50) and young girls who like hockey because of this athlete. It also attracts business people and working adults. In other words, Tim Horton’s attracts almost every Canadian.

Main competitor. Starbucks

Starbucks is everywhere. It is the number one specialty coffee retailer consisting of almost 16,000 stores in over 35 countries worldwide. Starbucks has a strong reputation in service and products as well as relaxing environment. Starbucks have spawned a model to target a global consumer, offering high-end coffee.

However, Tim Horton’s will definitely survive as Starbucks targets another market segment with different items at higher prices. Second Cup’s strategy is very close to Starbucks’. They are both product and customer oriented companies with slight differences in market segmentation and pricing strategy. Unfortunately, Starbucks can be seen as monopoly; therefore, conquering the market in Canada for Second Cup is a slow process.

Дата добавления: 2015-11-04