5+Marketing+Strategy


 * Marketing Strategy**

Tim Horton’s Ice Cappuccino promotion plan is based on pricing strategy which involves production improvement and customer education. We are not simply cutting the price, we are giving customer more value than before.

**Price Cutting:** Tim Horton’s customer segment is mainly mid to low income level customers, and according to our market research, almost more than half of the current customers think that Ice Cappuccino should be cheaper. This means that our current pricing plan has almost taken all the customers’ values for the product.

Also, according to market research based on price cutting plan, the volume is expected to increase by 77.8%.

**Production improvement:** For the current production process, the cappuccino mix is packed in bags and delivered to Tim Horton’s stores. When a customer orders one cup of Ice Cappuccino, it involves 6 steps:
 * 1) Prepare cup, takes 5 seconds
 * 2) Add cream, takes 10 seconds
 * 3) Prepare Ice Cap Mix, takes 20 seconds
 * 4) Blend, takes 30-50 seconds
 * 5) Add lid, takes 5 seconds
 * 6) Serve to the customer, takes 10 seconds

Total time required: 1minute 20 seconds to 1 minute 50 seconds According to this production process, Ice Cap is a time consuming product, it may cause potential customer loss during the rush hours, and especially in the highly competitive areas, for example, the downtown Toronto area.

But when the production process changed, Tim Horton’s factory produce slushy liquid mix, and deliver to retail location. The whole production process for one Ice cap can reduce to 4 steps: Total time required: 30 seconds
 * 1) Prepare cup, takes 5 seconds
 * 2) Pre-blended mix and slushy ice cap mix, takes 10 seconds
 * 3) Add lid, takes 5 seconds
 * 4) Serve, takes 10 seconds

Reduce the production time, we will provide more value to our customers, they will spend less time waiting in line and more willing to try Ice Cap when the waiting line is not quite long.

**Customer Education:** By price cutting and change the production process, our customers might think the quality of Ice Cap will reduce, and according to our market research, about 46.25% of the current customers worried about the quality of the cheaper Ice Cap. We will use the designed promotion theme, through normal Tim Horton’s advertising channels, TV, radio, bill board and in-store poster to educate our customer, Tim Horton’s is always fresh and Canadian, the quality will remain the same, we’re just trying to value our customer more.