V/sJeremy Dorosin

Submitted To:

Prof. P.K.Bansal

H.O.D- M&S Deptt.

Amity Business School

Submitted By:-

PPT Group:- 5

Group No. :- 4

MBA-2011 Batch

Amity Business School

Team MembersRohit Chopra (C-54)Nikita Malhotra (F-19)Shalvi Sharma (F-20)Nancy Chopra (F-23)Ankit Middha (F-32)Eshan Bhateja (F-39)Ankit Sawhney (F-42)Saurabh Mediratta(F-55) (Group Leader)

Dorsin as VoicerProblem

M/c broke twice.Broken packaging of the product Missing Manual½ lb. of complementary coffee not provided

Action taken

Dorosin called the customer service regarding the complain

and asked for:- Replacement of M/c. that broke second time Send his friend and the bride a letter of apology Top of the model M/c($ 495) to his friend

Steps to Dorsin as Activist

Instruction Manual & ½ lb. of coffee not received.

Damaged box of M/c.

No response to several telephone calls to various offices.

Rust in the Espresso M/c and missing parts in the gift for the friend.

Demanded Top of the line Replacement ($2500) & letter of apology.

Disagreement of negotiating terms

Actions taken by Dorsin as Activists

Published ads in regional edition of Wall Street Journal

Installed a toll-free number for unsatisfied customers of Starbucks.

Appeared on several Radio and Television programs

Service Recovery SystemOn hearing the Complain of Dorsin, Store

Manager apologized and asked him to pick the manual & coffee from the Store.

In Telephonic Conversation, the customer service supervisor offered a proposal:-

Letter of apology to Dorsin`s friend (Ms. Cohen)

Replacement of both the M/c with better Quality M/c

Against the apology in newspaper, Starbucks offered to donate the same amount in charity

Failure Points of Service Recovery

Instead of asking Dorsin to pick the Manual and coffee from store, it should have been delivered at his home.

Initial demand of better M/c with apology letter should have been accepted.

Huge delays were caused in communication with store manger and customer care supervisor

Empathy and urgency of event lacked

Product Mix

55

21

1410

0

10

20

30

40

50

60

Co. Retail Sales

Coffee Beverage

Whole Bean Coffee

food items

H/w

The Product Mix varied for each store depending upon its size and location

Importance of H/w & Equipment

10% of Co. Total retail Sales.

Prices range from $75-$2000.

Objective:- To Establish Premier Specialty Coffee Brand

Gives competitive advantage of competitors.

Intense Competition in Coffee making M/c Market.

The company believed customers believed primarily on quality and convenience, and, to a lesser extent, on price.

Scenario in Coffee related Product Division

Intense competition for the Espresso machine market

Coffee makers also available at local department stores, gourmet kitchen specialty stores, and the national discount retails at a wide range of prices.

Big retail stores carried range of coffee-related products, including high quality coffee-making equipment (with 2 yr warranty) and over 30 varieties of whole bean coffees.

Smaller stores and kiosks carried a more limited selection of whole bean coffees.

Scenario in Coffee related Product Division

Stores also sold accessories bearing the Starbucks logo.

Coffee beverages competed directly against all restaurant, beverage and increasing no. of espresso stands, carts, and stores.

Whole bean coffee sales competed with numerous franchise operators and locally-owned specialty coffee stores in both the United States and Canada.

Coffees priced at or above the prevailing high-end coffee prices reflecting the higher quality of the company’s coffees and its higher level of customer service.

Average customer transaction was approx. $3.01, about the price of a large espresso

Broad Target Mkt.

Differentiation Focus

Cost Focus

DifferentiationCost Leadership

Narrow Target Mkt.

Cost-Efficiency Preferred Product or Service

Competitive Scope

Competitive Advantage

Porter`s Model of competitive Advantage

Customer Loyalty programs.

Increase After Sales Service efficiency to reduce the delay of resolution of problem for convenience of customer & Co.

Vending M/c in Corporate offices.

Exploratory Survey to understand taste preferences.

On experimental Basis increase the prices of equipment by small extent

Demands of DorosinDorosin’s demand was justified till the time

when he proposed that Starbucks:

Replace his machine (the Vapore) which had just broken for the second time.

Send his friend, the bride, a letter of apology.

Send the bride the nicest replacement they had, then asked what the next best machine was, which was the $495 model.

But later his demands became unreasonable ($2500 M/c) and no correlation could be between the shelter and his original complaints.

Resolution to Problem

Some of the ways to resolve this problem:-

To donate towards Dorosin`s Shelter through CARE,

the international relief organization.

To Launch an ad of apology in newspaper and promising best quality service. Also, sending the best M/c($2500) to Dorosin and his friend Ms. Cohen.

To counter attack Dorosin by publishing the letters of apology and the negotiation terms among them and prove him wrong.