TIM HORTONS IN HONG KONG
International Business Summative Assignment
Introduction and Rationale
Hong Kong is a special administrative region (SAR) of the People's Republic of
China. It comprises 200 islands located in Eastern Asia bordering the South China
Sea and China. Much of Hong Kong's terrain is hilly to mountainous with steep
slopes. The government system is a limited democracy; the chief of state is the
president of China, and the head of government is the chief executive of Hong Kong.
Hong Kong has a free market economy in which the prices of goods and services
are determined in a free price system. Hong Kong is a member of the Asia-Pacific
Economic Cooperation (APEC).
Today, we would like to introduce Tim Hortons to Hong Kong. The reason why we
believe Tim Hortons will be successful in Hong Kong is because Hong Kong is
known for the top freest economy in the world [1]
1.​ Country Facts and Statistics
Geography:
Located near the South China Sea, with more than 7.5 million residents of various
nationalities in a 1104-square-kilometre territory. Hong Kong is one of the most
densely populated places in the world. Similar to sub-tropical countries around the
world, Hong Kong has a relatively warmer and humid climate, temperature ranges
from 28 to 33 degrees during the summer and 14 to 20 degrees during the winter.
The city has a comprehensive transportation system, their underground railway
system runs through all 18 districts of Hong Kong. They also have the largest
shipping port in the South China Sea which offers 400 container liner services a
week to more than 500 destinations worldwide.
Companies are deemed to succeed :
Hong Kong is one of the three global financial centres and one of the most
developed cities in the world, they are often ranked as one of the best jurisdictions in
the world to open and operate a business. And thanks to their free market, low
taxiations and corruption-free economy, starting a business in Hong Kong is deemed
to be a success.
Social and Economical Demographics:
*Read the demographic*
Canada Population is around 30.4 million, while Hong Kong only has 7.5
Million people, so if we do some simple calculations, the population in Canada is 4.1
times more than Hong Kong.
Hong Kong’s top 3 trade partners include: the Mainland China which shared
more than half of the percentage share, Taiwan and the United States
2. Political Profile:
Hong Kong Political System
​
Hong Kong is governed under the principle of "one country, two systems",
under which China has agreed to give the region a high degree of autonomy and to
preserve its economic and social systems for 50 years from the date of the
handover. But Beijing can veto changes to the political system, and pro-democracy
forces have been frustrated by what they see as the slow pace of political reform.
Hong Kong Political Stability
In 2019, a new wave of protests broke out over the mainland's proposed
Extradition Bill, during a period of large-scale protests in 2020, the Standing
Committee of the National People's Congress passed the controversial Hong Kong
national security law The law criminalises acts that were previously considered
protected free speech under Hong Kong law and establishes the Office for
Safeguarding National Security of the CPG in the HKSAR, an investigative office
under Central People's Government authority immune from HKSAR jurisdiction. This
causes a wave of immigrant tide during the period of 2019-2022
Factual Data:
Government Type:
Under One Country Two System (Capitalism)
Head Of State:
Carrie Lam, Chief Executive Officer
Date of Government Elected and Appointed:
26th March, 2017, Appointed at July 1st
Most current election:
May 8,2022
Country’s view on trade:
Extremely Opened
Tariffs, Quotas and Embargoes:
Hong Kong is a free port with no general tariff on imported goods. Excise duties are
charged on four commodities - alcoholic liquors, tobacco, hydrocarbon oil and methyl
alcohol - irrespective of whether they are imported or locally manufactured.
Legal Issues:
Bribes, graft and Unauthorised Payment:
The Prevention of Bribery Ordinance (Cap. 201) (P0B0), enacted in 1971, is the
primary anti-bribery legislation in Hong Kong and is enforced by the Independent
Commission Against Corruption (ICAC). It contains provisions prohibiting bribery in
both the public and private sectors.
Intellectual Property Rights
In Hong Kong, the chief law enforcement agency for IPR is the Hong Kong Customs
and Excise Department, which works closely with affected industries and conducts
vigorous anti-piracy and anti-counterfeiting operations.
Labour Standards:
There are no specific laws on working hours. However, a continuous employee is
entitled to statutory holidays, statutory annual leave and at least one rest day every
seven days. Minimum wage in Hong Kong as of 2022 is HK$37.5 per hour (Around
CAD$6)
Political Issues:
Political Situation:
Slightly unstable
Political issues affecting business climate:
According to a survey from the European Chamber of Commerce in Hong Kong After
the implementation of The National Security Law, Around 25% of responding
companies said they planned to fully relocate out of Hong Kong in the next year
while another 24% said they are planning to partially move out of the city.
Human Rights Abuses:
Hong Kong does not have Child Labour or Gender issues.
3. Company/Product Current Status
The company we have chosen to produce and manufacture our products is George
Weston Limited, which is a food processing and distribution company established in
1882 and owns Loblaws, President's Choice, No Name and Joe Fresh.
Factual Data:
Owner:
George Weston
Number of Employees:
225,299
Corporate Structure:
Publicly listed company
Product Lines:
Retail brands include President's Choice, No Name and Joe Fresh, in addition to
bakery brands Wonder, Country Harvest, D'Italiano, Ready Bake and Gadoua. The
company is controlled by the Weston family, which owns a majority share in George
Weston Limited.
Export Experience:
Well experienced, export since 1953
Current(Canadian) Marketing mix for Product Selected
Product: features and benefits,packaging.:
Tim Hortons specialises in food items like coffee, donuts, pancakes, waffles, strudels
and lattes. All these menu titles have a variety of options under them.
Price:
Tim Hortons targets the masses and hence has a wide range of prices so that more
and more people can afford the products.
Promotion.:
Tim Hortons promotes its brand through a campaign called ‘roll up the rim’ where the
customers roll the rim of their coffee cups after the drink to see what prize they have
got. It takes place every year in February and prizes like TVs and vehicles are given
to lucky winners.
Place:
Tim Hortons is available in 4500 locations out of which 3000+ are in North America.
It is one of the major café chains in the world. All the stores are located in areas
where there is a great footfall of people. The cafes are cosy and have spacious
areas.
4. Marketing Your Product in Your Assigned Country
Culture:
Languages spoken.
-​ Official Languages are: Cantonese, English and Mandarin
Acceptable and unacceptable topics of conversation.
-​ Avoid sensitive topics such as expressing your opinions about the protest or
saying anything about the government and make fun of the chinese
government
Non-verbal communication.
-​ Personal space: Hong Kongers tend to stand close together when talking.
-​ Touching: Hong Kongers are generally reserved in their physical contact.
-​ Winking: Winking at someone is considered a very rude gesture in Hong
Kong.
-​ Pointing: Hong Kongers avoid pointing at people and things with their index
finger and use an open hand instead.
Business language.
-​ The Cantonese dialect is the most commonly spoken language in the territory,
though English is the language of the business and service industries
-​
Use of humour.
-​ Be humorous, Hong Kongers generally likes funny and humorous topics
Business customs including greetings, gift giving, dress, tipping, time management.
-​ Hong Kongers seldomly greet their colleagues unless they are close.
-​ Gift giving is preferred, this will enhance your relationship between your
coworker
-​ Dress formally
-​ Hong Kongers does not tip, but restaurants may charge service fee
-​ Hong Kong is an extremely fast paced city, try to plan as many job as you can
in your daily agenda.
Role of men, women, and children, at home and at work.
-​ Both men and women work, children will study at school
Business negotiations - style, types of conflict.
-​ In Hong Kong, the primary approach to negotiating is to employ distributive
and contingency bargaining.
-​ Always put buyer and potential buyer the top priority.
Celebrities or other elements of national identity
-​ Bruce Lee, Jacky Chan, Stephen Chow are the well known celebrities of Hong
Kong
-​ As of 2020, 78% of Hong Kongers recognise themself as “Hong Kong
People”, while the remaining 12% recognise themself as “China People”
5. International Marketing Plan
Product(s):
1. What needs/wants does your product fulfill in your selected country?
This will fulfil the physiological needs according to hierarchy of needs.
2. Who is the target market (consumer) of the product? How often will they purchase
the item?
Everyone, especially students or office workers, will buy the products very often.
3. Are purchases affected by climate?
Yes, as Hong Kong is a warm and humid city, cold drinks will be attractive.
5. Does your product conflict with traditions, habits, or beliefs of the customers in
your selected country?
Our products do not conflict with traditions, habits or beliefs of the customers.
6. What makes your product(s) unique for the country’s market?
The price on every item on the menu will be lower than the market.
7. What competing products are already available in your selected country? If
possible, state the product and company names that are being sold currently in your
selected country.
Beverages and snacks, companies such as Starbucks and Pacific Coffee
8. What are the competitive advantages of your product or business over other
domestic and international businesses?
Tim Hortons are one of the most well known coffee shop brand around the world,
entering Hong Kong will definitely bring a positive impact to their company’s sales
Pricing:
1. Under the Canadian pricing model, can consumers in your country afford your
product? Refer to the Big Mac Index in determining the correct level of your pricing.
Consumers in my country could afford Tim Hortons products, even though prices in
Hong Kong are quite high, but the products will still be slightly cheaper than the
market.
2. What factors do you need to consider when setting prices in your selected
country?
Consider the rent of the shop, utility bills and land tax.
3. Are your product’s sales very sensitive to price changes?
No
4. How important is pricing in your overall marketing strategy?
Very Important, as our marketing strategy is to provide good quality coffee and
snacks with a lower price.
Promotional Strategy:
1. What advertising materials will you use? Design an advertisement that would
accompany your product launch.
We will use television commercial and in store promotion flyers.
2. What media would you use to advertise your products? (E.g. Print, TV, Radio.)
TV, Radio, Social Medias and YouTube
Place:
1. Will you sell directly to the customer or will you use a retailer, sales agent,
joint venture, or some other arrangement to sell your product? Who are the
major retailers in your targeted country? How do you become an approved
Supplier?
We will sell directly to the customers as an individual retailer. Major retailers in Hong
Kong are Starbucks and Pacific Coffee. In order to become an approved supplier.
3. Talk about the logistics(see Chapter 8) of getting your product from the
manufacturer to the consumer in the targeted foreign country.
The coffee beans will be delivered from Canada and unbaked snacks or dough will
be prepared daily from a local factory and baked fresh in store.
6. Recommendations and Conclusions
-​ We recommend investing more in Hong Kong, as we are the most
economically developed country.
-​ We recommend putting the price tag and the quality first, in order to compete
with the two cafe chains in Hong Kong
-​ We also recommend creating a new product exclusively for Hong Kong, which
takes our hot and humid climate into consideration.