Chapter 2 Company and Marketing Strategy: Partnering to Build Customer Relationships 47

Real Marketing 2

Tim Hortons: Every Cup Tells a Story

Canadians, it appears, always have time for Tim Hortons.
Founded in 1964, the firm recently celebrated its forty-fifth
anniversary. Generations of competitors have come and
gone, but none have managed to defeat Hortons, headquar-
tered in Oakville, Ontario. In fact, it has become a Canadian
icon. Throughout its history, Hortons’ marketing sawyy has
turned this once simple doughnut shop into a giant with
3437 outlets that generated $2.4 billion in revenues in 2008.
Today, Tim Hortons rivals McDonald’s Canada for the number-
one spot in terms of fast-food sales. The dominance of the
chain can be seen in these facts: Tim Hortons is the fourth
largest quick-service restaurant in North America and the
largest in Canada, with approximately 42 percent of the sec-
tor traffic in Canadian stores. More than 40 percent of its cus-
tomers visit four times or more each week, and Tim Hortons
holds the largest market share of the breakfast market and
the second largest share of the lunch market in Canada. Tim
Hortons also employs over 100 000 people in Canada and the
United States, making it one of Canada’s largest employers.
Tim Hortons works relentlessly to build its brand, which
has become an idealized image of the Canadian national char-
acter: friendly, neighbourly, unpretentious, gently playful, fru-
gal, trustworthy, and yes, clean. It brings this brand image to
life by featuring real people in its ads—both customers and
employees. “Tim Hortons never fakes it,” notes Philippe
Garneau, a partner at Toronto's Garneau Wirstlin Philp Brand
Engineering. Tim Hortons communicates its brand image
through its “true stories” television vignettes, which are based
on the best of hundreds of suggestions the cormpany receives
from its customers every year. Each story
exemplifies the emotional relationship the
customer has with Tim Hortons and portrays
how Hortons fits into customers’ daily lives.
The company’s advertising is complemented
by a unique social media site, EveryCup.ca,
where consumers are encouraged to tell their
stories and experiences about how Tim Hortons
has enriched thelr lives.
The doughnut chain's long-running
“Roll up the Rim to Win" promotion has
become a beloved part of Canadian slang,
and sketches set at Hortons are shown
weekly on the comedy news show Royal
Canadian Air Farce. Some of the approximately
$9.5 million a year that Hortons spends
on advertising is also focused on its new
products—bagels, sandwiches, and soup—to Tim Hortons has formed a number of strategic alliances with U.S. firms to expand geagraphically, including
get consumers to see Tim Hortons as more co-branding stores with Cold Stone Creamery.
than just a doughnut shop and to build brand awareness in
the U.S. market. New products have also increased rev-
enues for both the corporation and its franchisees.
As impressive as these figures are, one has to wonder
what else Tim Hortons has done to achieve this success—
after all, it offers fairly standard products, such as coffee and
baked goods. Hortons’ strategy is deceptively simple. First, it
has followed one consistent product and positioning strategy
throughout its history. Its promise of “Always Fresh” is never
broken, and it makes this promise concrete in many ways.
For example, its interactive digital menus identify products
just as they are being taken out of the oven, Next, it builds
outlets in focal areas until there are enough outlets in the
area to justify advertising. As Patti Jameson, director of cor-
porate communications, notes, “Advertising is a lot more
relevant to people when they actually see the stores on the
street." Having the physical presence of a retail outlet makes
brand messages more relevant and meaningful.
Given Tim Hortons’ track record, it’s hard to imagine
how it could expand any further, There seems to be an outlet
on the corner of every major intersection. Yet even an institu-
tion needs to be willing to change and grow. And change is
exactly what Hortons has done in recent years. In a bid to
broaden its appeal and attract more women and young peo-
ple, the chain has branched out into new product lines, such
as iced cappuccino. It also retooled Its lunchtime offerings,
serving up Tim’s Own brand of soups and sandwiches.
The firm isn’t about to stop there. Since Tim Hortons
believes that the breakfast category is underdeveloped in the
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