CASE (A)

HIGHLIGHTS

Fed Ex offers two money back guarantees

Fail to deliver package by 10.30 am next day, even if delay by 60 seconds.

Failure to tell the exact status of package within 30 min of call.

The Case exposes shortcomings in

Service

Warranty advertised heavily

Money Back Guarantees (MBGs)

Long Tradition in marketing and retailing practice

Understanding of how consumers value this instrument still lacking.

Effect of MBGs
Cognitive effect

Evokes a positive emotional response Increasing consumers purchase intentions and willingness to pay price premium.

Actions
MBGs should be designed with stricter return conditions

The results should understand the consumer impact Pricing the items

MONEY BACK GUARANTEE(C)

DISCUSSION POINTS

ISSUES IN LETTER Measures to cover cost of service failure

Definition of error rate Study of implication of errors Short term financials Vs Long term Solutions Competitors response to guarantee schemes

Handling Customer Complaints Routing through complaint addressal department

Tracking of complaints to understand the magnitude

GUESS WHAT HAPPENED TO THE LETTER??