car repairman. A man of many talents, Charlie gained valuable knowledge of the oil-change business while working in
the Special Mixtures Division of Goodyear. Charlie also learned from his father and brother while working on cars when he was growing up and later supplemented this knowledge by taking
formal automotive courses. All similarities between Charlie
and his fellow mechanics end there, however. Charlie also is a professional musician. He plays an upright bass and sings and owns a coffee plantation in Costa Rica.
When it’s time to get your oil changed, you have only
two choices—change it yourself or pay someone else (e.g.,
dealership, independent auto mechanic, or a “quick oil/lube” station) to do it for you. Many people choose quick oil-change stations because it is easier than doing it themselves and it is usually quicker and cheaper than going to a dealer or an
Folks just want to get in and out as fast and economically
as possible. Most companies that provide oil-change service
are indistinguishable. They charge about the same price and
are found on almost every major street. Most people pick one that is close to home and that has a short waiting line. The challenge faced by the quick-change services is to manage
demand. Most customers want service during the lunch hour,
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Chapter 2 The Nature of Services 33
after work, or on Saturdays. An oil-change business, therefore, wants to move customers in and out as quickly as possible.
Speed of service is the way they try to differentiate themselves from their competitors.
Charlie remembers the last time he paid to have his car’s
oil changed. He was in the waiting room with several other
customers when a lube technician came in to discuss a problem with an elderly lady. “Ma’am, you see this?” The technician held a PCV valve in his hand and shook it, producing a
rattle. “You hear that? That’s trouble. We’re gonna have to replace this PCV valve.” The woman looked puzzled, but she agreed with the mechanic. Unfortunately, she didn’t know that the PCV in any car is supposed to rattle. This event dismayed Charlie. He believed that customers deserved good service and honesty, and he was tired of seeing people get “ripped off.” He decided to do something about this problem by opening
his own business, Xpresso Lube, which would specialize in oil changes.
No one likes to wait a long time to have his or her oil
changed, especially because the facilities usually are not very pleasant. The waiting rooms are small, dirty, and furnished
with uncomfortable chairs. If a television set is available, it has a small screen and reception is poor. Any magazines are probably car related and months old. If there is coffee to drink, it
has been sitting in an old pot since early that morning!
Charlie designed the environment for his business to be different from that of the traditional oil-change station. He chose
not to compete with the other oil-change companies head to
head, but instead changed “the game.” When he converted
an old gas/service station into Xpresso Lube, people told him that it would never work. They said he had too much waiting
area and the stalls had lifts instead of the usual pits—so it would take too long to change a car’s oil. Charlie used these unusual features to his advantage.
During the development phase of his business, Charlie noticed two things about the local and national economies—both the espresso bar and oil-change markets were saturated. Consumers viewed these services as commodities and based their purchase decision on price. Charlie considered that factor and the unappealing environment of existing oil-change facilities—and, in a
moment of entrepreneurial revelation, decided to combine the coffee bar craze with an oil-change business.
Xpresso Lube was started with the purpose of...