Based on the CPM, it is evident that the coffee shop environment at Tim’s location is competitive. Tim’s, which is a small shop, is competing with two major coffee retail chains. It seems that where one area seems to struggle, the other uses it as its strength. Tim’s and Starbucks are fighting for a leading position, while Dunkin Doughnuts is behind but should not be eliminated from the equation as it has its strengths as well. The competitive environment represents that of pure competition where companies produce similar products, and many consumers buy them. The companies cannot influence price significantly but have to differentiate themselves through other means and marketing.
The CPM shows that Tim’s has a strong lead over its competitors in terms of value, locale, and merchandise. The coffee shop’s location is really preferential, being near a university and a metro station, a location that can be easily accessed by those passing by, which is the majority of the store’s foot traffic. The value indicates that pricing is just correct, and considering that Tim’s is second in profitability, being a minor strength, it is a good tradeoff and differentiation strategy to the main competitor Starbucks which uses its tremendous brand perception to have above-market prices and increase profitability. Tim’s product is also surprisingly a strong advantage, perhaps contributed by the small shop style approach rather than the corporate ingredients utilized by the other two. As noted, Starbucks is first in terms of brand perception and profitability, which is expected with its international brand recognition, but it is also a leader in the organization where Tim’s struggles. Tim’s operates and plans based on the owner’s/manager’s perceptions and opinions, while Starbucks does everything by the corporate formula starting with how shops are opened to the way furniture in the store is placed and decorated. Overall, it is a very competitive environment as each location has a few weaknesses, and consumer choice is diverse.
The 4P’s of marketing consist of product, price, promotion, and place. Based on consumer reviews, changes should be made to promotion, place, and product. In terms of promotion, Tim needs more awareness. It is significantly less recognized compared to competitors, and this poor brand name recognition may be impacting consumer perception as well. In terms of place, it includes both the physical store and channels of marketing used. As was evident, the store, while atmospheric, had issues with furniture and seating arrangement. Considering that a large part of coffee shops are customers spending some time there working and ordering continuously, the furniture should be comfortable while seating arrangements should be maximized to capacity. Finally, there is the aspect of the product. While the coffee itself and its value seem to be attractive to consumers, the service is not. Several reviews noted slow service, particularly due to overwhelming capacity and slow register. It may be viable to hire more staff, invest in a newer POS system for rapid checkout, and provide training to all staff to have a system in place on how to serve consumers quickly and efficiently.
Tim’s marketing strategy should therefore focus on its strengths and general brand positioning, which diversifies it from competitors. The shop’s unique competitive advantage is that it is a local business, not a corporate chain. That means it can change rapidly, if necessary, make key changes to improve business or customer experience, and be creative with its promotions. It also maintains that atmospheric feel of being a local, homey, cozy coffee shop which many of its customers strongly value. Combined with its relatively strong product offering, Tim’s can actively compete with the coffee chains on the local market, which may have the advantage of brand names and higher margins due to developed supply chains, but often struggle with understanding local consumers.
However, all things considered, Tim’s marketing budget is likely much smaller. Therefore, it has to be utilized smartly and to its full potential. For example, after renewing its furniture and seating arrangements, Tim’s can advertise it as an update to the interior and that it can now welcome more people. However, it should continue playing to its strengths of location and value of the product. Ensuring that there is clear consumer awareness on the way to the university and metro station that Tim’s exists there is vital for foot traffic. Meanwhile, marketing the brand as an atmospheric, comfortable play to relax or work is effective in attracting and building loyal consumers who would come in every day and make purchases while enjoying the comforts of the shop, such as soothing music, free wi-fi, and comfortable furniture. Overall, the marketing plan for Tim’s should be easy to develop and continue building on existing elements but making improvements based on competitive improvements that were made inside the store. It is, however, important to remain flexible on the marketing strategies for the business, seeing what works and what does not, and adapting to the demands of consumers.