Small-town Tim’s goes big time

It's hard not to extol the brand virtues of Tim Hortons. 'It has so many things right from locations to consistency to its wholesome yet tasty foods,' says Wendy Evans, a retail analyst with Toronto's Evans and Company. 'I can't think of many other retailers [that compare].'

It’s hard not to extol the brand virtues of Tim Hortons. ‘It has so many things right from locations to consistency to its wholesome yet tasty foods,’ says Wendy Evans, a retail analyst with Toronto’s Evans and Company. ‘I can’t think of many other retailers [that compare].’

Part of the wizardry that makes the brand a standout in 2005 is continuing to do what it does best: churning out new product innovation every four weeks [see sidebar] supported by corresponding creative by long-time agency Toronto-based Enterprise Creative Selling. ‘It helps keep the brand top of mind,’ says Bill Moir, Tim Hortons’ EVP marketing, of the year-round strategy, ‘and it keeps the customer interested.’ In the process, the creative has even gotten a little quirkier, a testament to a brand that has gotten very comfortable with its identity.

But the in-store experience at its roughly 2,500 locations in Canada (about 270 in the U.S.) is also key to upholding the brand experience, Moir says. ‘Our bringing new products to market and doing that effectively is one of the strengths of the system, but it’s not just marketing. It’s [also] the training of people. We’ve got 50,000 to 60,000 people who work in those [franchised] stores.

We have to build upon the brand image through various programs to create interest to bring traffic to the door, but ultimately it rests at the storeowner – they have to deliver the promise.’

Tim’s ensures they get this very important component right with a department devoted to providing extensive training, guides and training CDs to the stores’ employees. District managers also make the rounds and even certain products are ‘soft launched’ in stores, allowing staff to learn everything about the product and ensure that in-store equipment works before the marketing hits. ‘I think the consistency across the system is a key area that keeps us building the business,’ says Moir.

And build the business they have. According to its 2004 annual report, published by parent company Wendy’s International, the 41-year-old company had a whopping 70% market share of the Canadian coffee and baked goods category. Each store generated on average $1.7 million in sales, with total sales of just over $3.1 billion. Revenues were a whisker away from $1 billion. Also telling that things are looking good: The company is preparing for its initial public offering, currently slated for the first fiscal quarter of ’06.

John Williams, a consultant with J.C. Williams Group, says part of the initial Tim’s smarts was reaching out to a ‘not super sophisticated, down home, middle Canada’ segment. ‘That’s a whole hell of a lot of people in Canada,’ he says. But something has changed recently for the normally unpretentious brand.

About three years ago, it developed some uncharacteristic chutzpah and decided to take on the big city slickers.

‘In many of the smaller markets in Atlantic Canada and Ontario…we’re reasonably well penetrated,’ says Moir. ‘We weren’t in the core of downtown Toronto for a long time. We’ve had the opportunity to understand what works there,’ he says. ‘We’ve had a focus on getting to that market and it’s working very well for us.’

Designing stores with ‘great colour combination and a great feel to them’ has been part of the winning urbanite strategy and its one that the quick-service restaurant chain plans to capitalize upon with expansion plans that include targeting other major city centres, including Montreal, as well as Western Canada and the outskirts of Quebec.

Also on the horizon: the U.S.

‘It’s the same as the West or Quebec,’ he says. ‘It’s a very important market to us and [we will] take the same approach…to any newer market.’

Moir was reluctant to offer many other plans given the pending IPO, but he did say that in addition to expansion and staying hard-and-fast to the marketing strategy that clearly works, the Tim Card, a cashless card designed to speed up lineups, is still being tested.

‘We’re in a very privileged position in the marketplace. We get a lot accolades. It’s been a lot of hard work over many, many years,’ says Moir, who has been with the company for 15 years. ‘Maintaining that brand persona and what it means to people and delivery at store level…you can’t let up on those things.

So it’s much more of the same [for the future]. You can never let up.’

Tim Hortons in 2005

Product innovation is key to the brand’s continued success. Every year there are 12 to 14 new campaigns, each running over a four-week cycle. Here’s a look at launches over 2005.

February – Launched the revitalized mushroom soup.

March – As always, the very popular ‘Rollup the Rim to Win’ campaign.

April -Launched the Toasted Chicken Club sandwich.

May – Chocolate. ‘We run a number of these themed [programs] around bakery items,’ says Bill Moir, Tim Hortons EVP marketing. ‘We had four or five new products as part of [the chocolate] theme. We went into it not knowing if we would keep some of those products around, but the response to the chocolate Danish was very, very positive.’

June – Yogurt berries product. ‘It’s a product that has a healthy connotation. The month previous was chocolate, which is indulgent. You have people looking for those ends of the spectrum. Part of

what we’ve looked at is ensuring that we have options for customers.’

August – Cinnamon rolls.

September – Revisited its steeped tea product, originally launched a year ago.

October – Hearty Vegetable Soup campaign. ‘It’s a soup that we’ve had, but reworked.’ Also launched the Hot Smoothie.

November – Southwest Chicken sandwich.

December – Coffee merchandising, which is entering its fourth year, offering a selection of canisters, mugs, and gift packs for holiday gift giving season.