Charlie Green took many steps in creating his service package for his Xpresso Lube. It is centrally located in Austin, Texas on the main street near thriving business and a University that are all within walking distance. This centralized location contributes to his success. Charlie was sure to make the implicit services at Xpresso Lube enjoyable while the customer enjoys an espresso while waiting for their oil to be changed. He supported the facility with an adequate waiting area, with carpeted floors and up-dated reading material. He has created a unique, trustworthy and pleasant business by combining his knowledge of coffee and his automotive expertise. Xpresso Lube combines the nature of the service act with a tangible product (coffee) and a tangible physical possession by changing the oil in a person’s vehicle. Problem Components
Despite Xpresso Lube’s well thought out service package, an economy in a recession can detour customers away from espresso purchases. The cost of a pricey espresso will have customers looking for a quick inexpensive way to get their oil changed. Furthermore, when money is an issue, a person’s time seems to gain value. This could cause a trickle effect because Xpresso Lube is not a place to get your oil change, if you’re in a hurry. This type of service would be categorized with the others services, “What are you willing to pay extra for?” Generating and Evaluating Alternatives
“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.” (Fitzsimmons, 2008). When an area is saturated, customers have options to take their business elsewhere when money is tight. With coffee prices increasing, Charlie needs to maximize profits by incorporating his coffee plantation in, Costa Rica with his Xpresso Lube. He could utilize a product he already produces. Furthermore, if Xpresso Lube is generating 30% of...
References: Fitzsimmons, James A. & Fitzsimmons, Mona J. (2008). Service Management Operations, Strategy, Information Technology. New York: Mc Graw-Kill/Irwin
Please join StudyMode to read the full document