There are two segments of coffee drinkers in my office, the Starbucks segment and the Tim Hortons segment. Not by value to price, not by demographics, and apparently not by how much time they are willing to spend waiting (as everyone could see waiting in front of either counter is equally time consuming :), these two groups are simply defined by how strong they prefer the coffee to taste (or to be). Shelley only goes to Starbucks once a while when she decides to reward herself with a latte or cappuccino. But never the regular coffee, as it's going to keep her up at night. A few seats away, Chris goes to Starbucks every morning. If she had to brew a cup from the coffee maker in the office kitchen, her compaint never changes - it's too light.
No overlap between the two segments, ever.
But it does not mean a coffee shop can not capture both segments. At least that's what Starbucks is trying to do. "If you haven’t tried our lighter roast yet, now’s the time."
Where does the growth come from? It's a serious question, particularly when you are the only or one of a handful of leaders in your segment. The most straight forward answer is crossing the fence and getting into a neighbor's backyard.
Believe it or not, Timmy's is doing the same thing. If you saw the Starbucks Blonde commercial, I bet you have seen the Tim Hortons latte commercial as well, because they almost run hand in hand.
Beyond coffee, this eating someone else's lunch game has been all over the places during the past couple of years. MacDonald's can't get more aggressive in pushing its coffee, while Tim Hortons strives to expand its lunch menu (btw, personally I like its Chili combo). While Wal-Mart has a larger home improvement section now than a few years ago, Rona has put gums and the like at cashier lines betting on impulse purchase.
Even in the regulated sectors. Although banks are not allowed to sell insurance products (other than creditor protection plans) in the bank, nothing stops RBC from opening insurance offices a (glass) wall away from its banking branches. On the other hand, when I selected that I need advice on "banking" on its website, Manulife gave me 15 Financial Advisors within 5KM of my post code.
While waiting to see RBC setting up its bank machines in Shoppers Drug Mart stores, I won't be surprised if I go to a Rogers store tomorrow and see a sales rep handing me a brochure of Rogers Bank mobile credit card app which I can use right on site to buy a cup of coke flavored tea from a Second Cup kiosk sharing store space.
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