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Jiffy Lube was founded in 1979, by W.J. 'James' Hindman. The company was built around an innovative 10-minute oil change service that grew like wildfire. In 1980, there were 10 service centers in operation. A short ten years later there were more than 1,000 Jiffy Lube service centers giving fast, reliable, courteous oil changes to customers around the country (MacAyeal, 2004).
At that time, Jiffy Lube was acquired by Pennzoil. Eight years later, Pennzoil merged with Quaker State and Jiffy Lube's major competitor Q-Lube. The Q-Lubes would be renamed Jiffy Lubes, and in 2002, Royal Dutch/Shell acquired the Jiffy Lube brand.
Today, there are more than 2,200 Jiffy Lube service centers in North America providing oil changes and a variety of other automotive maintenance services. These are both corporate owned and franchised facilities. Approximately 20% of Jiffy Lube's facilities are corporate owned. The largest franchisee is Lucor (MacAyeal, 2004).
The demographics that Jiffy Lube seeks to take advantage of includes the ever-increasing number of motor vehicles on the road in North America, in particular, the United States.
In addition, society is changing as well. As life becomes more and more hectic for the average American driver, leisure time is valued even more. For this reason, consumers are looking for ways to save time in addition to saving money. Jiffy Lube has designed its services to offer these two features as their primary benefit to consumers.
Jiffy Lube has done a superior job of positioning itself as a time and money saver. Customers see Jiffy Lube as a valuable service provider that not provides professional automotive maintenance service all while saving time and money.
Although Jiffy Lube's competition resides in other quick service oil change facilities, other organizations are competitors too. These competitors include do-it-yourselfers who are willing to take on routine maintenance tasks. In addition, full-service mechanics also are stiff competitors in the industry. And, lastly, new car dealerships offering service packages as part of their purchase agreements does impact Jiffy Lube's business. In order to compete, Jiffy Lube has to emphasize its service differentiations in the quick and cost efficient service offerings.
Jiffy Lube's strategies of low cost leadership and product differentiation fit in perfectly to counteract these threats. It is enhanced by their continued growth strategies as Jiffy Lube further builds their business and intensifies their current positioning. However, they may be missing out on taking full advantage of a powerful market segment, that of commercial and fleet vehicles. Couple this with possible unique partnerships, such as that with gas stations or fast food chains, and Jiffy Lube still has incredible growth potential in their industry.
Demographics are an incredibly important marketing aspect that affects Jiffy Lube strategies as well as their potential for profitability. In particular, the number of vehicles in operation in the United States is of considerable importance to Jiffy Lube. Luckily for Jiffy Lube, the number of automobiles in the United States has been on the increase since the turn of the 20th century.
According to Lewis Lord (1999), "at the start of the century (...) America had only 8,000 cars" (p. 48). That number quickly soared as the horseless carriage was introduced across the nation. By 1996, Americans had over 206 million automobiles and trucks on the road ("State motor-vehicle registrations - 1996," 2004). Not satiated, the American consumer's love for the automobile continues to grow.
Five years later, the number of motor vehicles on American roads grew by almost 13%, to an astounding 232 million vehicles in 2001 ("State motor-vehicle registrations - 2001," 2004).
This continuous growth in automobiles has been a boon to Jiffy Lube. More automobiles mean, in the most simplistic terms, more potential customers with more vehicles to service. In addition, the changing nature of consumers has had a powerful positive effect on Jiffy Lube's growth and profitability.
In today's world, time is the most valuable commodity a person has. American society has become dependent on fast food, high speed Internet service, and expressways, all in hope of garnering a few extra precious moments to spend on the all too limited leisure activities. Jiffy Lube's time saving automobile service centers is a perfect answer to today's consumers' needs. Whether they take advantage of the Jiffy Lube Signature Service Oil Change, or the plethora of other maintenance services ranging from air conditioning evacuation and recharge service to wiper blade replacement service, consumers will find themselves in and out quickly and courteously.
Jiffy Lube has truly benefited from these two important demographic changes, and has been able to successfully take advantage of these opportunities. They have increased their numbers of service centers to meet the increasing needs of consumers, and to ensure that they are offering the most time efficient service in the industry.
The additional adjustments that are being contemplated include opening additional stores, in more suburban areas, as well as offering new services to compliment their existing line up. Jiffy Lube believes that although the population density of urban areas has been very beneficial to their locations, in offering a large number of customers, consumers in more suburban areas, that have to commute to work, would be particularly interested in their time saving services. In addition, by adding services to their current roster, they will be able to provide even more value to their customers, making their facilities truly one-stop service centers.
Customers see Jiffy Lube as an affordable, reliable, and time saving automobile service provider. Competition, such as local automobile service centers and other chains are often viewed as more expensive and not as quick to service. The one advantage a local, full service mechanic may have is the ability to make major repairs to a vehicle. However, oftentimes consumers are leery of such places for routine services, as they fear that the business will recommend unneeded repairs in order to pad the bill. As Jiffy Lube only provides routine maintenance services, consumers know that any repairs that are recommended are factual, as Jiffy Lube will not profit from the repairs being made.
Jiffy Lube has a clear understanding of their customer's wants and needs, which is the primary reason why they've been so successful. They have created a unique market segment of solely providing routine maintenance services in a quick and cost efficient manner. The bulk of their competition resides in full service automotive shops.
The top three competitors, according to Hoover's (2004) are: ChevronTexaco, Pep Boys, and Valvoline, however, Jiffy Lube receives more intense competition from privately owned small full service mechanics, as well as do-it-yourselfers.
Market shares are currently trending away from do-it-yourselfers, as many people are valuing their leisure time more and more. This is good news for Jiffy Lube. However, many new car dealerships are offering free oil change and other routine services with the purchase of new vehicles, as a way to differentiate themselves in their intensive industry. This means that many new vehicle owners do not need to pay to have their car serviced.
To counteract this trend, Jiffy Lube has reaffirmed its primary strength in the speed and ease a customer can have service performed on their vehicle. While a consumer waits, they can have their vehicle serviced without an appointment. At dealerships, and other full service repair shops, appointments are often required and they may require possession of the vehicle for an entire day. This is Jiffy Lube's competitors' primary weakness. They simply are not organized to provide the high efficiency service that Jiffy Lube can.
Jiffy Lube has clearly defined marketing objectives. Their goal is to garner valuable market share from their competitors, while providing the highest level of speedy customer service possible. This is inline with their customer mission statement of, "At Jiffy Lube, we're dedicated to preserving the health and value of your vehicle."
Customer satisfaction, although subjective, is measurable and attainable. This is discerned via customer feedback cards, allowing the consumer to rate their experience at Jiffy Lube. Increased market share is also quantifiable and can be seen in increased sales revenue and increased number of services performed. These objectives are a strong driving force in the company and appear to be very effective, and as such should not be modified.
There are several strategies that Jiffy Lube is employing to reach their objective. If one was to consider their strategies in light of Michael Porter's Three Generic Strategies, it becomes clear that Jiffy Lube is using cost leadership as its means of securing a competitive advantage. This is accomplished as their services are offered at some of the lowest prices in the industry.
In addition, they have tried to differentiate their offering, by offering a variety of maintenance services, not simply oil changes, making them a one-stop routine car service provider. They further differentiate their product by making their service time as quick as possible. This is especially valuable to busy customers, and…[continue]
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