3. From 1903 Until Now
3
An American motorcycle manufacturer, founded in 1903
in Milwaukee, Wisconsin and incorporated in 1981
4 young men experiment with internal combustion in a tiny
wooden shed. Not only does the shed not burn down, but the
motorcycle they build goes on to serve for over 100,000 miles!
12/18/2012
4. Product Offering Mix
Motorcycles and Related Products
4
Motorcycles
• Five segments: Traditional, Cruiser, Touring, Sportbike, and Dual
Parts and Accessories
• Comprised of replacement parts (Genuine Motor Parts) and mechanical and cosmetic
accessories (Genuine Motor Accessories)
General Merchandise
• MotorClothes® apparel and riding gear
Licensing
• Licensed products include t-shirts, vehicle accessories, jewellery, small leather goods, toys and
numerous other products
Harley-Davidson Museum
• Harley-Davidson Museum and Archives, a restaurant, café, retail store and special event space
Other Services
• Service and business management training programs , customized dealer software packages
and motor rentals
12/18/2012
5. Product Offering Mix
Families Of Motorcycles
5
Dyna Sportster Softail Touring V-Rod Engines
Related Brand Extensions
12/18/2012
6. Product Offering Mix
Financial Services
6
Wholesale Financial Services
• Provides wholesale financial services to Harley-Davidson dealers
Retail Financial Services
• Instalment lending for the purchase of new and used Harley- Davidson
motorcycles
Insurance Services
• Offers point-of-sale protection products and sales training to Harley-
Davidson dealers in both the U.S. and Canada
Funding
• Diversified and cost effective funding strategy is important to meet
HDFS' goal of providing credit while delivering appropriate returns and
profitability
12/18/2012
7. Brand Management
7
Perceived Value Competitive Advantage
Rebellious Premium pricing
Outdoorsy Quality
Macho/Rugged Reliability with two year
Independence warranty
Freedom Support to the motorcycling
lifestyle
Individuality
Easy availability of motor
Expressing one‟s self parts, merchandise and
Adventure on the open road insurance services
Experiencing life to its fullest
12/18/2012
8. Positioning Strategy – Cult Brand
8
Cult products are normally priced well above the industry average
The Icon – The Idea of Selling not just bikes, but the „Harley
Experience‟
Formation of Harley Ownership Group
Created an image of lifestyle for biker
Multi-generational and multi-cultural
marketing strategy
U.S. core customer base:
Caucasian men over the age of 35
U.S. outreach customers:
Women, young adults, African-American adults, and Latino adults
Brand Personality: Excitement and Ruggedness
Unequivocal Customer Loyalty
Dare to be different and celebrate that difference
Relatively very small customer base, spreading the good word and
spending lots of money
12/18/2012
9. Customer Interface
9
Motorcycle consumer
shows, racing
activities, music
festivals, mixed martial
arts activities
After-sale services
Online catalog and
internet orders
12/18/2012
10. Competition
10
Major competitors outside US & also home bike makers in the
US
Heavyweight motorcycle market – highly competitive
Major Competitors:
BMW
Honda
Suzuki
Yamaha
Polaris
Custom bike manufacturers like Orange County Choppers
BMW head on rivalry with HD as it looks to lure HD loyalists
to its brand
Rivalry criteria- performance, styling, breadth of product
line, image, reputation, quality of after-sales services, price
12/18/2012
11. Competitive Market of US motorcycles
11
Harley Davidson‟s market share is 50% in the heavy –
motor segment
Others, 8.30%
Kawasaki, 7.50
% Harley
Davidson, 27.60
%
Yamaha, 12.50
%
Suzuki, 11.20%
Honda, 35.60%
Source: Data Monitor 2010 12/18/2012
14. Trend of falling financial statistics
14
Harley Davidson‟s market share is 50% in the heavy –
motor segment
Source: http://investor.harley-davidson.com/phoenix.zhtml?c=87981&p=irol-demographics 12/18/2012
16. Challenge # 1
16
Most “failed” brand extensions don‟t jibe with how
consumers understand the core brand or just seem
incongruous with a company‟s existing product line
Harley Davidson had fallen into the trap of thinking that
more products equals more sales
The Harley Perfume/ Wine coolers
Davidson Shampoo /
Cake Shower gel
Decorating
Kit
12/18/2012
17. Challenge # 2
17
Extensively mismanaged by focusing on only one
segment of the total motorcycle industry: the heavy
cruiser market
The market for heavyweight motorcycle as a whole is
losing out to smaller capacity fuel efficient
vehicles, dual-purpose daily use vehicles and new All
Terrain Vehicles (ATVs)
High rise in oil prices and heavy-weight vehicles are
more oil-consuming
12/18/2012
18. Challenge # 3
18
The baby boomer generations is aging and new
generation needs to be tapped into
Average buying age is 42 years and old
12/18/2012
19. Challenge # 4
19
Rivalry Threat: Strategic Alliance between Suzuki and
Kawasaki through product diversification
Some competitors of Harley Davidson have larger
financial and marketing resources - Risk Spreading
12/18/2012
20. Recommendations
20
Redefine the Harley-Davidson brand to attract the younger segment
Focus on the top-selling and strategic models in its
lineup, supplementing the rest of the market through aftermarket
options
Expand Harley-Davidson Models to Include Bikes Outside of the
Heavy Cruiser Segment under a different brand name
Careful Investments and reduce licensing costs
Direct the R&D efforts optimizing the oil consuming engines
12/18/2012
21. Key Takeaways
21
Focus on your brand values
Don‟t alienate your core
customers – avoid brand
dilution
The more you add, the more
you risk undermining your basic
differentiating idea, which is the
essence of your brand
12/18/2012
Loyal brand community which keeps active through clubs, events, and a museum
Licensing – The Company creates an awareness of the Harley-Davidson brand among its customers and the non-riding public through a wide range ofproducts for enthusiasts by licensing the name "Harley-Davidson" and other trademarks owned by the Company.
The total heavyweight (651+cc) motorcycle market is comprised of the following five segments:Traditional (a basic motorcycle which usually features upright seating for one or two passengers);Sportbike (incorporates racing technology, aerodynamic styling, low handlebars with a "sport" riding position and high performance tires);Cruiser (emphasizes styling and individual owner customization);Touring (incorporates features such as saddlebags, fairings, or large luggage compartments and emphasizes rider comfort and load capacity); andDual (designed with the capability for use on public roads as well as for off-highway recreational use).
Measures the success of this strategy by:monitoring market shares (where available) across its various customer definitionsmonitoring brand health in various markets
Harley-Davidson became quite liberal in its licensing policies, allowing many products with no connection to motorcycles or the biker lifestyle to be licensed
one should not put all their eggs in one basket, which is exactly the faux pas being committed here by Harley-Davidson in its product offering. Businesses, especially public ones, should always have an eye on sustained long-term growth, and a key element to that goal is a well-diversified position in their appropriate industry.
New hybrid motors using alternative energy sources
The brand need to focus on the quality and not on cheap productsFocus on your brand values. If your values are ‘strong, masculine and very rugged,’ you shouldn’t be selling perfume or wine coolers. A range of baby clothes may also be a bad idea.Don’t alienate your core customers. For brands that inspire strong loyalty, the temptation is to test that loyalty to its limits by stretching the brand into other product categories. However, this is a dangerous strategy and can lead to what marketing experts refer to as ‘brand dilution’ – in other words, a watered-down brand.Remember that more is less. ‘When you study categories over a long period, you can see that adding more can weaken growth, not help it,’ writes Jack Trout in his book, Big Brands, Big Trouble: Lessons Learned the Hard Way.‘The more you add, the more you risk undermining your basic differentiating idea, which is the essence of your brand.’Keep it tight. Harley Davidson built its brands by staying true to what it does best, namely making big, classic, US motorbikes. The further it moved away from this original focus, the further it got into trouble. Any brand which attempts to be a ‘Jack of all trades’ will ultimately fail to carve a strong identity in any category.Handle ‘lovemarks’ with care. According to advertising guru Kevin Roberts, truly successful brands don’t have ‘trademarks’. They have ‘lovemarks’. In a now famous article for Fast Company magazine’s September 2000 issue, Roberts cited Harley Davidson as a supreme example of a lovemark and commended the company for not following the marketing rulebook.
