Amity Business School

V/s
Jeremy Dorosin
Submitted To: Submitted By:-
Prof. P.K.Bansal PPT Group:- 5
H.O.D- M&S Deptt. Group No. :- 4
Amity Business School MBA-2011 Batch
 Team Members
Rohit 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 Voicer
Problem

M/c broke twice.

Broken packaging of the product
Missing Manual
½ 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 System
On 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

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

60 55

50

40
Coffee Beverage
30 Whole Bean Coffee
21 food items
20 H/w
14
10
10

0
Co. Retail Sales
 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
 Porter`s Model of competitive Advantage

Broad
Target Mkt.
Cost Leadership Differentiation

Competitive Scope

Narrow Cost Focus Differentiation

Target Mkt.
Focus

Cost-Efficiency Preferred Product or

Service

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 Dorosin
Dorosin’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.