I, like the other 50000 Canadians living in Dubai, was thrilled when Tim Horton’s finally opened their doors in the city. Thank you The Apparel Group in general, and Mr Nilesh Ved in particular, for bringing this iconic franchise to our part of the world. After all, the Canadian word for coffee is rightly “Tim’s”…
We braved the long lines in the sun, chatting happily about Canadiana as we waited up to 45 minutes to order. We tolerated the strange ordering system put in place, with one over-worked cash counter serving the hundreds who queued up to get their fix. We hung about waiting to pick up our orders. We searched for a place to sit after we had finally been rewarded with our ordered food and beverages.
When I finally sat down and took my first sip of French Vanilla, I was delighted. It tasted exactly the same! Fantastic!
And then I finally took a look at the bill – in the rush of ordering, and the mass of people, I had just paid whatever was asked and not even thought about it. Now, I took a look and was confused. As I did the math in my head, I came to a startling realization.
The prices were roughly double the prices in Canada. I re-checked my math. It was correct. My French Vanilla was around $4, vs. around $2 in Canada. So, why would Tim’s, a Value-For-Money chain in Canada, take on a premium pricing strategy in Dubai? The prices are just a dirham ($0.30) or two shy of Starbuck’s, not that the coffee can be compared (I’m a loyal Tim’s fan, so I think their coffee tastes better!!). BTW, as an aside, the first location opened next door to a Starbuck’s and the consensus among my friends is that it has had a significant impact on their business.
Coming back to pricing, I believe that pricing is a key part of the marketing mix. It says what the product is worth. So, from one perspective, this higher pricing makes sense. It might be part of a skimming strategy, where as the franchise grows and the runaway demand stabilizes, Tim’s will either drop their prices on key SKUs, or start regular price promotions to get closer to the VFM positioning that is such a critical piece of its success in Canada. Or, it might be a decision taken by the powers that be to position the brand at a premium in this market, because the core loyalists of Tim’s (myself included) will pay the premium charged… time will tell.
The brand has been launched with tremendous outdoor support in Dubai, and is the talk of the town. The brand currently dominates the outdoor scene, with several huge billboards in key locations, not to the mention the building wrap in the picture above. There are plans to open 125 more branches across the GCC in the next 5 years, and I for one can’t wait!
Must go now, its time for a Tim’s