2

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School

George Brown College Canada *

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MGMT2041

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Marketing

Date

Feb 20, 2024

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docx

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Uploaded by AmbassadorKudu589

2. Starbucks: Positioning: The primary direct competitor is Starbucks, renowned globally as a premium roaster, marketer, and retailer of specialty coffee. Another segment involves packaged coffee and tea products under their licensed trademarks, distributed through channels such as licensed stores, grocery outlets, and national foodservice accounts. Starbucks' strength lies in its positioning strategy, emphasizing a personalized in-store experience, such as writing customers' names on their cups. This unique selling concept aligns with the demand for personalized services in a technologically driven world, though ongoing criticisms suggest a decline in individualized service and occasional neglect of customers ( Geereddy, N.,2013) . In terms of strengths, Strong Market Position and Global Brand Recognition: Starbucks boasts a robust market position and global brand recognition. It dominates the worldwide market, holding 36.7% market share in the US and operating in over 60 countries ( Haskova, K.,2015). In 2013, it ranked as the most recognized brand in the coffeehouse segment and secured the 91st position among top global brands ( Haskova, K.,2015) . The effective marketing strategy involves merchandising products and licensing the brand logo ( Haskova, K.,2015) . Products of the Highest Quality: Quality is a hallmark, with a commitment to maintaining the highest standards, avoiding standardization for the sake of increased production ( Haskova, K.,2015) . Strategic store placements in prime locations with high traffic, including downtown areas, suburban retail centers, office buildings, university campuses, and off-highway locations, contribute to their success ( Haskova, K.,2015) . The strategy leverages their competence to penetrate prime markets and focuses on customer convenience. Starbucks stores embody the unique character of neighborhoods and operate in an environmentally friendly manner ( Haskova, K.,2015) . Location and Aesthetic appeal of its Stores: The "Starbuck Experience" is a key aspect of their customer approach, featuring free wifi, great music and service, a warm atmosphere, and creating a community meeting spot ( Haskova, K.,2015) . Human Resource Management: Strength also extends to human resource management, considering employees as main assets and offering benefits like stock options, retirement accounts, and a healthy work culture ( Haskova, K.,2015) . This commitment resulted in Starbucks ranking 91st in Fortune Magazine's 100 best places to work ( Haskova, K.,2015) . Goodwill among consumers due to Social Responsibly Initiatives: Social Responsibility Initiatives, emphasizing community friendliness and environmental concerns, contribute to positive consumer goodwill. Additionally, Starbucks utilizes technology and mobile outlets through their mobile application, "Starbucks app," available on both Apple and Android platforms ( Haskova, K.,2015) . Customer loyalty is fostered through programs like Starbucks Rewards and the Starbucks card, offering convenience, support for gifting, and increased store visits. However, Starbucks faces challenges, notably high prices for their premium products, which may hinder growth during economic slowdowns and divert customers to more affordable brands. The aggressive expansion and saturation in the market, evidenced by opening 8078 stores in the US, raises concerns of self-cannibalization and may impede long-term goals ( Haskova, K.,2015) . The company's significant dependence on the US market leaves it sensitive to fluctuations in the US economy. Negative public

perceptions and increased scrutiny necessitate investments in corporate social responsibility activities ( Haskova, K.,2015) . A notable weakness is the lack of compatibility with coffee cultures in other countries. Starbucks' strength lies in its positioning strategy, emphasizing a personalized in-store experience, such as writing customers' names on their cups. This unique selling concept aligns with the demand for personalized services in a technologically driven world, though ongoing criticisms suggest a decline in individualized service and occasional neglect of customers ( Geereddy, N.,2013) . 3. Krispy Kreme: Krispy Kreme is another biggest competitor of Tim Hortons. This brand provides high-quality and sweet delights including a traditional glazed version, hot coffee with the extend version of filled doughnuts, crullers, and fritters across the globe. It dominates the Pacific Northwest of the USA with 1,400 retail locations along with the one in 33 nations. Strengths: Global presence: Global presence in an array of countries including the US, South Africa, Thailand, Russia, Mexico and others is the first strength of Krispy Kreme which not only showcase profitability, but also demonstrates its impact on diverse economies ( Gibson, A.,2022). This widespread expansion helps to approach the target market and ensure customer’s convenient accessibility which results in the diversity of customer base and the opportunities in different markets ( Gibson, A.,2022) . Affordability: The tremendous popularity of Krispy Kreme doughnuts also comes from affordable offerings along with their unique and signature taste. These two attractive offers grasp the attention of cost-conscious eaters and create a strong value proposition ( Gibson, A.,2022) . It is no doubt that they are successful with this pricing strategy which drives customer loyalty and market appeal. Good reputation: By providing the high-quality doughnuts that meet customer expectations with the affordable prices and staying in the market for the long period of time under positive brand name, Krispy Kreme has built its strong and well-established brand name ( Gibson, A.,2022) . This contributes to customer trust, fosters long-term customer loyalty and differentiate it from competitors ( Gibson, A.,2022) . Strong IT structure: Another factor of Krispy Kreme’s strength is their well-developed and efficiently integrated IT infrastructure. By establishing a strong virtual presence on a variety of social networking sites and the effective social media management, this IT system increases operational efficiency and the comprehension of current market trends which lead to strong customer relationship ( Actual Simple,2023) . Weaknesses: Limited products: Krispy Kreme is well known for doughnuts and mainly offers that product, aside from coffee which is considered as a potential drawback ( Gibson, A.,2022) . It may not meet the diverse needs and preferences of customers who can seek different type of sweets or alternative beverage options, depending on the seasons ( Gibson, A.,2022) . For instance, people would not think of having a slice of doughnut under the hot weather and dehydrating condition. Franchise dependence: Franchisees will benefit the expansion strategy to the larger market, but its downside is maintaining consistent quality and customer care all over the locations ( Gibson, A.,2022) . The independent operation of franchisees will let the brand expose to the risk in the store management, compliance to standards and the quality of customer service which might affect the overall brand experience and customer satisfaction ( Gibson, A.,2022) .

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