Update 2: Research weeks 3-5

During week three, I continued my research on international business in the beautiful, cosmopolitan city of Toronto. In Toronto, I met with my Aunt Lisa who worked at Tim Hortons during their expansion into American markets.  Lisa also worked at General Mills, an American firm present and successful in both Canada and the U.S.  Through interviewing my Aunt I learned about the various trials of Tim Hortons and many reasons why they have failed to be successful in American markets, specifically regarding consumer preference differences between Canadians and Americans. She also discussed the variances that exist in laws pertaining to advertising and marketing in Canada and America. I also interviewed a fellow co-worker of my Aunt who worked directly with the Tim Hortons franchisees in the U.S. and had first-hand knowledge on the marketing mistakes Tim Hortons made.

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During the interviews, I was shocked to hear how Tim Hortons’ misunderstanding of the subtle cultural differences between Americans and Canadians lead to such catastrophic results, including the closing of 54 stores in New England.  For example, Tim Hortons did not research the cup sizing in America and charged the price of a medium beverage for the size/volume of a small beverage, in comparison the American cup sizes.   In addition, Tim Hortons originally misunderstood the American consumer’s prioritization of needs. Tim Hortons focused their marketing efforts on the quality of their coffee rather than their baked goods and breakfast sandwiches because Canadians are more inclined to make the decision of where they want to eat, based on where they want to purchase coffee; however, in the U.S., consumers view coffee as a commodity good. Thus, unlike Canadians, Americans will make the decision as to wear they drink coffee, based on where they want to eat. As a result of Tim Hortons’ mistake, the completely changed their marketing efforts and focused on their food and baked good market instead of their coffee beverages.

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In addition to the interviews I continued more research on other firms who expanded across the Canadian-American border.  I also have begun to outline general trends from my research.  After analyzing the marketing strategies of firms who successfully expanded across the Canadian-American border, including Canada Goose, Wal-Mart, Lululemon, Aritzia, Nordstrom and of course Starbucks, I noticed specific patterns when comparing the different firms marketing strategies. In other words, there were clear commonalities when comparing the marketing plans of the successful firms regardless of the firm’s industry. The most remarkable decision that either made or broke a company’s international success was real estate and location. In fact, location turned out to be one of the major missteps that lead to the bankruptcy of Target Canada. For the firms who intended to learn from Target’s mistakes, real estate became one of the most researched aspects of investment prior to international expansion.

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After week 3, 4, and 5 I walked away with a substantial amount of information through interviews and academia on the successful firms who met the needs of their international consumer base. While, some just learned from the mistakes of the firms that failed before them, I have discovered that there are some clear trends to draw between the successful firms.  As a result, I intend to focus my future research on drawing similarities between the firms that successfully expanded internationally and how they differentiated themselves from the firms who fell flat.

Comments

  1. Vail Prior says:

    Hello!

    Your research topic is fascinating, and one I had never considered. Like most Americans, I assume, I thought that most American brands would be just as successful in Canada, due to geographic proximity and cultural similarities. It’s interesting to realize that it is actually subtle changes in marketing that can make or break international brand expansion. It also speaks to the importance of marketing research before and during expansion, as in the case of Target. Do you think they could have avoided disaster if they hadn’t built in the low-income areas, thereby missing their target segments? Or do you attribute it more to a hasty franchising scheme? Do you think there’s any possibility that Target may try to enter the Canadian market again? Also, I’m not sure how relevant this is to geographic expansion, but does online shopping seem to have affected the success of American brands in Canada and vice-versa?

    Thanks!