At the carwash

We've had one main car wash on Hwy. 66 in town for as long as I've lived here (referred to as #1). For an automatic wash, it was around $3. Several years ago, another car wash came into town, just down the highway from the first (referred to as #2). Their prices were higher, around $8 for an automatic wash. At first I was stunned, but they were newer, better, and faster. If you factor in inflation and overhead it makes sense. So I started going there. It was more convenient for me anyway.

Most recently, a new car wash has made a debut in town (referred to as #3). They are called the $3 Car Wash. Their format is completely different, but very cool. You drive up, it latches onto your car, and it pulls your car through. It also uses sloppy sponges instead of brushless, which I'm not crazy about, but my kids love it.

From a business point of view, I have several observations.

• Naming a business based on the main price point is not a good idea. Will the $3 car wash always be $3? Surely not? Inflation happens, right? Then what, change the signage and rename the business?
  
• When #2 came into town, #1 raised their prices to $5 per wash. Their thinking was 'if the guy down the road charges $8 and stays busy, I can get away with charging $5.' When car wash #3 came into town charging $3 for an automatic wash, the other two businesses lowered their prices to stay competitive. Here's a table to recap:
  

• The key difference between #2 and #3's entrance into the market is their focus. #2 came on the scene with a better offering, as opposed to lower prices. #3 came on the scene with the Wal-mart focus, out price the competition. This threw #1 and #2 into a panic, so they both dropped their prices. (note: #1 raised prices after #2 opened, but dropped them again after #3 opened).
  
• So what's to keep #3 from dominating and putting the other two out of business? #3 has horrible hours. It says it's automatic, but their setup requires someone to be there and man the station when they are open. I've tried to go there three times and they've been closed. Another reason #3 won't shut down the others anytime soon is because of location. While all three are located on Hwy 66, they are far enough apart and on different sides of the road. It's all about convenience. I go to whichever car wash is most convenient, which happens to be #2 right now, so I'm super happy they lowered their prices. Thanks car wash #3 for making that happen -- you're the best ever!