Case: Village Volvo

QUESTION 1
Q ) Q.1) Describe Village Volvo’s service package. g p g Service package: Bundle of goods and services that is provided in some environment. E.g. atmosphere along with meal in any restaurant. restaurant

SOLUTION

Service facility: New butler building- 4 work bays, an office, waiting area, storage room, mechanics Facilitating goods: replacement auto parts Information: schedule appointments, Customer care Vehicle Dossier (CCVD)- Continuing file for each vehicle Explicit services: quality repair on out of warranty Volvos at a reasonable cost, warranty service Implicit services: worry free auto repair, time utilization p y p , during repair, high customer service ( during contact hours & scheduled repair)

QUESTION 2
How are the distinctive characteristics of a service firm illustrated by Village Volvo?

SOLUTION
Customer participation in the service process: waiting room equipped with a TV, comfortable chairs, coffee, a soft drink vending machine, magazines, newspaper Simultaneity: vehicle repaired only when it comes, variation in repairs/day, not only quality but other measures like customer satisfaction Perishability: capacity of Village Volvo, an hour without repair Intangibility: reputation of Village Volvo Heterogeneity: variation of problems from vehicle to vehicle

QUESTION 3
Characterize Village Volvo in regard to the nature of the service act, the relationship with customers, customization and judgment, the nature of demand and supply, and th method of service delivery d l d the th d f i d li

SOLUTION
Nature of Service Act
People Tangible actions Services Directed at people’s bodies Things Services d S directed at goods d d and other physical possessions Services directed at intangible assets

Intangible Services directed at people’s actions mind

SOLUTION
Relationship with the customers p
Membership relationship Continuous delivery of service Discrete transaction Village Volvo No formal relationship

SOLUTION
Exten to which custome contact personne nt h er el exerc cise judgm ment in meeting in ndividual custo omer need ds

Customization and Judgment J g
Extent to which service characteristics are customized HIGH LOW

HIGH

Village Volvo

LOW

SOLUTION
Exte to wh ent hich sup pply is co onstrained

Nature of demand and supply pp y
Extent of demand fluctuations over time
WIDE
Peak demand can be met w/o major delay Peak demand regularly exceeds capacity

NARROW Village Volvo

SOLUTION
Method of Service delivery y
Natu of int ure teraction betwe n een customer & service organiz zation

Availability of service outlets
Single Site
Customer travel to service firm Service provider travels to customer Transaction is at arm s arm’s length

Multiple Site

Village Volvo

QUESTION 4
How could Village Volvo manage it’s back office g g (i.e. repair operations) like a factory?

SOLUTION
For smooth demand:
Using reservation or appointment Use price incentives ( warranty service)

Almost fi d no. of mechanics Al t fixed f h i Inventory – Customer waiting Inspection – t t d i I ti test drive

QUESTION 5
How can Village Volvo differentiate itself from g Volvo dealers?

SOLUTION
By repairing out of warranty Volvos Reasonable price p Custom car care
service (specific time each week, schedule appointment) Short test drive with the client at the time of appointment Custom Care Vehicle Dossier: Continuing file on each vehicle Warranty service Preliminary diagnosis: estimate of cost & time

SOLUTION
Advise client of unexpected problem and costs Well equipped waiting room for clients Few hours dedicated for only customer contact During repair, note on problem that might come in the futurecustomer & CCVD All worn out replaced parts kept for customer inspection Car inside is vacuumed after repair Recycle used p y parts & waste p products Volvo medals