Case Study on Xpresso Lube

I - Xpresso Lube’s Service Package

Supporting Facility

In Xpresso Lube, Charlie provided lifts in the workshop so that customers can have a view of their cars to take a look at the problems the staff had mentioned. This gains customer loyalty, by ensuring that the customers do not get ripped off, as to encourage the spreading of Xpresso Lube’s quality services via the word of mouth. There are two additional stalls for customers to have their car oil changed, in order to prevent a bottleneck from occurring.

In order to increase the level of comfort in Xpresso Lube, there is also a café, providing customers with beverages so that they can have the luxury of freshly made coffee while waiting for their cars to be serviced. All these facilities are indoor. However, Charlie did provide an outdoor space for his staff to work on customers’ cars when the weather is pleasant. This way, Charlie can deal with the flow of customers as they have more stations to serve their customers.

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A transportation facility is provided to fetch customers from workshop back to their offices and vice versa. As many of the customers only have time during their lunch period or the end of the day to service their cars. Therefore by providing this, they able to merely spend 10 to 20 minutes to get down to workshop and get their car serviced and get back to work.

Facilitating Goods

One of the main facilitating goods in Xpresso Lube is the coffee that they provide.

Customers receive high quality, freshly brewed coffee made at the point of order, rather than stale coffee brewed when the shop opens for the day. Having a coffee plantation in Costa Rica, Charlie is equipped with the knowledge in bringing in the best coffee beans as possible to ensure customer satisfaction.

Another facilitating goods is the oil Xpresso Lube provides to change the cars’ oil. Charlie has to make sure the oil they use is of quality so that it won’t damage his customers’ cars. Some of the higher end cars in the market cannot run as well with low quality oil, the oil will also harm their engines in the long run. Therefore, to ensure quality and satisfaction, Charlie has to take note of the oil he uses.

Information

After seeing other workshops providing false information to customers, ripping them off, Charlie is determined to provide correct and efficient information to customers. In order to ensure that, Charlie has provided his customers with the lift, so that his customers can see for themselves where the problems lie with their car, instead of just listening to some employee not knowing that in fact there is nothing wrong with the car. Charlie also has to provide efficient information of whether there are available slots for more cars to come in for servicing, by doing so he can have make arrangements with customers to make appointments and bookings. Charlie can hence, ease the flow of customers coming, preventing a bottleneck after working hours at 5pm.

Explicit Services

In Xpresso Lube, the explicit services the customers can see is the service attitude of Charlie’s employees, the quality of service being provided; whether the oil change is quick and of high quality, also the ability of the café to provide quality food and drinks to customers. Transportation services are also provided to reduce customers’ travelling time as mentioned above earlier. All this benefits can be seen by customers, the quality of the service the Xpresso Lube provides can also be perceived.

Implicit Services

Xpresso Lube provides a clean environment to customers, with carpeted floors, tables and chairs for customers while waiting. It tries to make its customers feel at home and comfortable, as workshops are usually very dirty and customers would hardly want to wait for a long time. This helps Xpresso Lube as it cements their brand as a comfortable and higher quality auto shop, especially when compared with its competitors, giving it a comparative advantage. Providing quality information is actually another implicit service. When customers realize that you have been giving them quality and accurate information, you will gain their trust and loyalty. This customer loyalty is very valuable as it means a high lifetime customer value and customer equity, which translates to higher profits in the long run.

II - Distinctive Characteristics of a Service Operation, illustrated by the Case Study

Intangibility

Xpresso Lube has illustrated different approaches of a service operation. After observing the existing oil-change companies, Charlie came out with a much improved concept which was fresh and new, combining a coffee bar with an oil-change business. This is a creative idea which will potentially captured customers’ attention and Xpresso Lube will subsequently became more reputable. Much emphasis on integrity, providing good and trustworthy services will no doubt help Xpresso Lube to retain and attract customers.

Heterogeneity

This market consists of different participants which includes the customers and the employees, who are the ones serving the customers so as to meet their demands. The kind of employees varies as different employees from different sections of Xpresso Lube serve customers differently. For instance, the front line workers are the ones who make contact with the customers directly to find out what are the customer’s requests whereas the back office operators are in charge of repairing and the actual oil change, invisible to customers. Besides, Charlie’s employees are well trained so as to provide quality services to his customers. Charlie also set up a car repair center, University Auto, which also meets the customers’ demands. This will lead to a further variation of employees and customers.

Customer participation in the service process

Xpresso Lube exists to serve the customer and to satisfy their needs and it is feasible only when the customers do their part, transporting their vehicle to Xpresso Lube or University Auto for service. On the other hand, both companies under Charlie could come out with statistics on customer preferences and identify the peak hour periods. This enables Charlie to be more focused and prepared so as to minimize errors during the service process. Unlike other companies of the same industry, Xpresso Lube requires the customers to have a review of their vehicle before extra services are provided. This is possible when lifts are available to bring the customers under the car safely.

Simultaneity

The service Xpresso Lube provides are created and consumed simultaneously. As the vehicles are being serviced, instead of just waiting, Xpresso Lube has the café which customers could spend time at, be it having their lunch, tea break or even relaxing with the presence of band performances. The conducive environment will definitely attract customers and customers may even be there without the need of servicing their vehicles. Recruiting band to perform is a creative way where it could help to keep the customers occupied and entertained. Having the lifts and all the advanced equipment may slow down the process and lead to a longer waiting time. However, the entertainment and café could help to cushion the fluctuation in demand and supply which is mainly caused by the waiting time. Thus in this case, service is provided in two ways.

Perishability

In this marketing world, service providers have to use different approaches to meet different demands of customers. There are many things which hinder customers from purchasing the services of Xpresso Lube hence, Xpresso Lube is providing alternate services, transporting services to and fro work, to reach out to more customers. Furthermore, these transporting services are beneficial in helping customers to avoid peak hours. As such, it will really aid in smoothing services and prevent congestions. In addition, the coffee café is large enough to accommodate the rising amount of customers.

In conclusion, Xpresso Lube has no doubt fulfilled all criteria of the distinctive characteristics of a service operator. These services delivered to the customers are favorable in expanding this business continuously.

III - Xpresso Lube’s Characteristics

In regard to Nature of the Service Act, Xpresso Lube’s nature of service act consists of tangible actions and its direct recipient of service is property. Xpresso Lube is an oil-changing business for auto mobiles and that it involves a direct relationship of service which can be seen as the personnel changing the oil of the auto mobiles making it a service with tangible actions. Xpresso Lube’s direct recipients of service are property as they involve the changing of oil of auto mobiles.

As for relationship with customers, Xpresso Lube’s nature of service delivery is through discrete transactions and the type of relationship between the service organization and its customers is no formal relationship. It is a discrete transaction as customers do not have to continuously go to Xpresso Lube over a period of time to change their oil rather they can just go one time and get it done. Their relationship with their customers is a no formal relationship as the customers do not have a continuous relationship with Xpresso Lube and are not tied down to being a member with Xpresso Lube.

Xpresso Lube emphasizes on personal exercise judgment in meeting customer needs and it also has a high degree of customization. Xpresso Lube has a high extent to exercising judgment in meeting customer’s needs as this can be seen with Xpresso Lube making a coffee bar to satisfy customer’s boredom while waiting for their car to be serviced. Xpresso Lube also has a high degree of customization in that it allows customers to see their cars being serviced as their cars are being placed on lifts instead of in pits unlike other car servicing businesses.

Xpresso Lube’s extent in which demand exceeds capacity is high in the sense that peak demand regularly exceeds capacity and its extent of demand fluctuation over time is low. This can be seen in that during peak hours, there will be a long waiting time for customers to have their car serviced but this has been countered by Xpresso Lube in having a coffee bar minimizing customer’s boredom while waiting. As oil-changing companies are considered a commodity, their demand fluctuation over time is low.

Xpresso Lube’s nature of service delivery is that customer travels to the service organization and the availability of service outlets is a single site. As it is a car servicing business, customers have to bring their cars to the place. As Xpresso Lube does not have any expansion of outlets, it is therefore a single site type of availability of service outlet.

IV - Xpresso Lube’s Location

The fact there was a vacant space behind the old gas and service station that Charlie turned into Xpresso Lube meant that he was able to turn it into a automotive service , offering transportation services for customers who will be able to get to work while leaving their car in the mechanic’s hands. Charlie was hence able to saturate the market/Austin with his car service with Xpresso Lube, as well as University Automotive.

Also, as said in the case study, its location on the main street has attracted many from different walks of life and that its vicinity to shops makes it attractive. Customers are able to shop at neighboring shops while waiting for their car to be serviced. Being on the main street also means that Xpresso Lube is accessible, visible, has a high traffic volume. There is room for expansion and the surrounding environment fits the shop, with many shops around.

Also, due to the nature of the business, parking is not necessary.

Austin also has a music culture, claiming to have the nation’s best live music. More importantly, Austin is home to the University of Texas, as well as major technology firms like 3M, Apple, Hewlett-Packard, eBay, Google, and Intel, just to name a few, giving it the nickname ‘Silicon Hills’. This means that Xpresso Lube is operating in a bustling environment, with much traffic, therein lies its demand for its services.

Austin also happens to be connected to the interstate I-35 and hence, there would be drivers from all over the country who may try their services out due to the convenience.

Hence, Xpresso Lube’s location in Austin has proven successful for its business model.

V - Suggestions of additional services for Xpresso Lube

The main service objective of Xpresso Lube is to create a unique, pleasant, honest experience for their customers. They do not want customers to feel that they are being treated unimportantly.

Xpresso Lube has already made their customers feel that they have provided a very unique service package by having the café and the workshop integrated, the bands performing during evenings, the transportation service they provide and the subsidiary car repair workshop they also offer. They have also managed to turn a once boring and messy experience into a pleasant one by carpeting the floor of the café and providing chairs and tables for them to enjoy their cup of coffee and listen to music while waiting for their car to be serviced. Every process during the servicing was made clearly to the customers without any uncertainty by using those hydraulic lifts and a skilled and patient mechanic.

Xpresso Lube can bring their service package to another level by including another important area into the package, ownership. As far as its concern, all the above only provide a very comfortable, pleasant experience for the customer. The customer will just go to Xpresso Lube when their car needs the servicing it needs for it to run on the road again.

Road Trips

Xpresso Lube can organize their own road trips during the weekends for their customers to participate and make new friends. The experience of driving the wide west road, going to small pit stations to refuel their vehicles and carry on with the journey with a group of friends is a very enjoyable experience. This idea is very similar to the Harley Owners Group® or also known as the HOGS. This is an international group that unites by a common passion. These members owns the famous Harley Davidson Motorcycles.

Members of the HOGS are very close to one another, everyone from any occupation, blue collar, white collar can ride together as an equal. The general idea for Xpresso Lube to bring into play its very similar, everyone is equal regardless of occupation or any other group, everyone will treat each other as equal, as a family. This will even further bonds the customers and Xpresso Lube into another level where very little has succeed. Customers will feel that they belong to Xpresso Lube, they will feel that they are a part of Xpresso Lube.

Internet Services

Xpresso Lube can also consider adding a wireless internet connection via modems/routers, laptops and printers in their café or lounge. This would enable customers to check their email, complete some work, print out documents or other activities for no extra surcharge. This would allow busy businessmen who would want to do something more productive at the service shop to work, or let university students on the go print out assignments. This would mean turning their café into a internet café.

Children’s Play Corner

Of course, adding a children’s corner would not hurt, in order to keep the children happily occupied and relatively more quiet. Simple games and puzzles or even a Wii or Xbox (for a bigger budget) would occupy the children for hours while the parents have a chat over coffee. This would attract more working mothers who drive to drop by as they would not have to engage a baby sitter at the last moment for only an hour or so. Having designated story telling sessions would also attract parents to drop their car, as well as their children there while they catch up with friends over coffee.