Monday, January 16, 2012

Tim Hortons - Why go bigger?

Who am I to question the marketing savvy of Tim Hortons. After all, they are a Canadian institution. They are a cornerstone of Canada itself, right?

They have just launched a new endeavor to renew their cup sizes, increasing the size substantially, to compete with their competitors.

My first impression of this is that it was ridiculous. Why would a company that is incredibly successful in every market that it enters change itself to be more like its competitors? Then it struck me, they have saturated the market. They literally can't squeeze any more people into their stores.

If you have tried to stop for a coffee any morning, any time near 10am or any time mid-afternoon, you know that they are at capacity.

This begs the question, if I am a national chain that is at capacity for customers and I want to increase profits, what do I do? I make the existing customers buy more. I increase the sizes of the items.

This is a brilliant move for Tim Hortons. Although, it is probably bad for the health and well being of the gullible, over-caffeinated,  customers that will buy the new monster size drink being offered.

I think I'll go make myself another coffee.

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