Marketing Research Proposal GR Project PDF

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Marketing Research Proposal GR Project...

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MARKETING RESEARCH MARK2007 RESEARCH PROPOSAL TIM HORTONS COMPANY

Thi Minh Thao Pham - 101149317 Brandon Vo - 101230867 Minh Hien Anh Hoang - 101203100 Dmytrii Dardan - 101171379 Hussain Zaheer – 101265052

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1. Situation Analysis ● Why is this research needed? Tim Hortons has been facing problems such as losing retention and acquisition of consumers from new competitors. In order to improve and understand these problems, we need strong data through research that can help provide us a way to decisively spend our resources effectively. In order to accomplish this, we need to build focus groups that revolve around specific target groups that have been chosen through the research we have compiled. Another important test would be to find a successful way to build customer trust as the article “How Tim Hortons continues to successfully build customer trust” has stated. (How Tim Hortons continues to successfully build customer trust, 2015) ● The key competitors in the Canadian market in terms of market share and growth rates As per reports Tim Hortons is the current market leader in terms of market share having a lion’s share of around 73% followed by Starbucks at roughly 18% and McCafe has doubled its share to a new high of 13%. (Shaw, 2018)

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● Recent innovations in this category and impact on category performance Over the five years to 2019, the Coffee and Tea Production industry in Canada has from strong consumer demand for coffee and tea, with coffee being the most popular hot beverage in Canada. According to data from the Government of Canada, coffee accounts for almost all of the caffeine consumed by adults, coming in at 80.6%, and tea in second, at 12.3%. In particular, consumer demand for specialty tea has stimulated industry revenue, as many consumers have purchased high-cost black, green and herbal tea varieties. The industry has also benefited from relatively stable prices of raw material, such as coffee beans and tea leaves, during the period despite the traditional price volatility characterizing the world price of coffee in particular, permitting industry operators to grow their profit margins during this period of relative stability. This, in turn, has further contributed to industry growth. While coffee and tea producers can mark up prices to reflect high raw commodity costs, this trend was mitigated in part due to strong price-based competition. Nevertheless, industry revenue is expected to increase at an annualized rate of 10.2% to $3.1 billion over the five years to 2019, including 4.8% growth in 2019 alone. Moreover, profit margins are anticipated to increase from 8.6% in 2014 to 10.6% in 2019. (Koronios, 2019)

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● Identify recent trends/developments in the external business environment Economic Environment The Economic environment looks at the factors that affect the business within the economy’s current trends. Tim Hortons must capitalize on the ability to allocate scarce resources and flourish when the economy is growing. Individual’s living standards play a large role in their success. Tim Hortons needs to operate based on current economic trends by offering products that customers need, at differentiated cheap prices. Tim Hortons must further adapt to the promotions that competitors are implementing in order to sustain growth during poor economic times. Further, the challenging economic conditions has led to an intensified competitive environment, with companies working to reinforce value positioning and increasing promotional activities. Technological Environment The technological market is growing, with new technology to make everyday life easier for individuals being invented every day. For example, smart phones have created apps to stay in touch with the quick serve restaurant of your choice, and even the ability to pay through scanning your phone. Further, with the continual growth of the Internet, less and less consumers are watching TV and in correlation, commercials, every day. Tim Hortons must continue to adapt to changing technological trends in order to assure the efficiency, and convenience that they claim to offer. Political/Legal Environment Factors affected by the political/legal environment that have a direct correlation with the way Tim Hortons operates include wage laws, and tax policies. With inflation increasing, employees must receive a larger wage in order to continue the standard of living they are used to. Further, there is a current trend towards an increase in minimum wage which in turn diminishes the retained earnings Tim Hortons can make, unless they make the necessary changes to the price of products or COGS, are made to maintain a net profit margin they believe qualifies them as successful. Cultural and Social Environment Trends in demographics, lifestyles, attitudes and personal values among the general population can be of some concern to Tim Hortons. (Lehmann, 2008). The most important trend in Canada to be noted is the growing trend towards a healthier lifestyle, including increased knowledge and perceptions about the affect a healthy diet can have. It is evident that consumers, in Canada, are paying closer attention to the label of foods in order to ensure what they are eating 4

is a healthy alternative. (Health and Wellness Trends for Canada and the World, 2012) Currently a perception within the market is that Tim Hortons products are high in fat and sugar, and thus this trend could prove to decrease sales, and future profitability.

● Summarize key findings from recent consumer studies conducted about this product category Top Customer’s Comments 1. “Timmies cheap and does the job” 2. “Starbucks for sitting in, Tim’s to go.” 3. “Starbucks for a special occasion, usually Timmies”

(Saini, 2018) ● How has your chosen brand evolved over time? Comparing Tim Hortons which all of us know today, to the one which was fifty years ago, we may say that there are lots of changes being done. The issue which was known to every customer was leaking leads and after twenty years the company changed it. The line of product became wider now you may also order a sandwich, earlier it was simple - just coffee and donuts. The name had been changed twice and the signboard. (Deschamps, 2018)

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2. Defining the Problem ● What is the Management Problem? Declining annual sales and lowered popularity amongst the Millenials hurting the supposed Canadian national brand - Tim Hortons ● What is the Research problem? To better understand why the frequent coffee consumer has decided to either stay with Tim Horton’s or choose a new brand to purchase from. 3.Research Questions ● Which market segment is currently not buying our products? ● Why is the identified market segment choosing a competitor? ● What can we do to get this market segment back? 4.Research Design ● How do you plan on conducting the study?  We will choose to conduct a focus group that is randomly selected among the Tim Horton’s customers at George Brown College. Furthermore, our main part of analysis will be from the data obtained from the survey we will be conducting at various Tim Hortons in the Greater Toronto Area. Based on the responses from the survey, our team will analyze and determine the root causes of discontent from the consumption ● Who should be recruited for participation? Recruits should reflect the current or potential consumers of the product or service Participants for these focus group discussions will be recruited at random from within our class at George Brown College. We believe these group of people would reflect a major section of Tim Hortons/Coffee drinkers market segment i.e. students and young professionals in the age group of 17 - 30. This group will majorly be comprised of millennials, who in turn are the ones seeing the shift in the industry and are ideal candidates to share insights and help us understand this market and its real issues. ● Number of interviews, the number of participants per group, estimated length of each interview, location etc. 6

Number of interviews: 300 Estimated length of each interview: 3-4 minutes Number of participants per group: more than 2 people per group Location: George Brown College St James Campus and downtown Toronto Field methodology: Questionnaires ● Project Schedule Provide  key milestones and dates for the entire research and reporting process. This research would require approximately 4 weeks, as outlined below: Survey programming: 5 days Data collection: 2 weeks ● Final data tabulation: 3 days ● Final report: 3 days ● ●

References: Deschamps, T. (2018, August 17). After 20 years, Tim Hortons is finally changing its leaky coffee cup lids. Health and Wellness Trends for Canada and the World. (2012, November 26). Agri-Food Trade Service. How Tim Hortons continues to successfully build customer trust. (2015, June 25). Business Review Canada. Koronios, E. (2019, April). Coffee & Tea Production in Canada. Retrieved from IBISWorld Industry Report 31192CA: https://clients1-ibisworld-com.gbcprx01.georgebrown.ca/reports/ca/industry/currentp erformance.aspx?entid=272#KED Lehmann, D. &. (2008). Analysis for Marketing Planning. New York: McGraw Hill. Saini, S. (2018, December 6). Tim Hortons Vs. Starbucks: The Power of Brand.

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Shaw H( 2018, June 22) “McDonald's extends its cafe chain rollout as it battles Tim Hortons and Starbucks”. Financial Post. https://business.financialpost.com/news/retail-marketing/mcdonalds-extends-its-cafe-chain-ro llout-as-it-battles-tim-hortons-and-starbucks

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