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Case Analysis/Research 2017

Harley-Davidson Case Analysis

Harley-Davidson, Inc. H-D is the iconic American brand and one of the world's well-known manufacturer of heavyweight motorcycles, established in 1903. H-D started with 20-year-old William S. Harley, his friend Arthur Davidson and his brother Walter Davidson with design and work on a small engine of motor-bicycle in 1901. H-D sold over 15,000 motorcycles to the US military during the first World War (Zuberi, 2006), and more than 90,000 motorcycles during the Second World War. Also, H-D received two Army-Navy ‘E’ Awards for Excellence in Production.

Challenges

How a focused differentiation helped Harley-Davidson to be unique in the industry? How can Harley-Davidson maintain its iconic standing in the global motorcycle industry?

Solutions

The “Delivering Results through Focus” marketing strategy and its impact.

Harley-Davidson

As the years progressed, H-D besides motorcycles offers motorcycle parts & accessories, also under its brand offers home decor, ornaments, accessories, toys and scale figures of its motorcycles. Also, Harley-Davidson financial services provide a complete line of financing options and insurance products to customers.

Harley-Davidson

Generation has changed and their majority of customers who were from baby boomers generation that they were aged, also Japanese brands were gaining more market share, so H-D revised on its market and product development to focus on young and new riders, such as women, establishing riding academy, using social influencers and bands, and offering customization options for customers.

Harley-Davidson

“All for freedom. Freedom for all.”
is the H-D’s slogan and direct messages from H-D’s website, advertisements and other resources to its customers. H-D tries to unite people by offering “Time to live free[er]” also an emphasis on freedom beyond cultures, gender, and age.

Harley-Davidson

Harley-Davidson mainly focused on premium heavyweight motorcycles. “Harley motorcycles were not just products but symbols of American free-spiritedness as they demonstrated power, persuasion, and presence” (Masseeha Qumer).

The 4 Ps of Marketing

How a focused differentiation helped Harley-Davidson to be unique in the industry?

H-D developed its marketing mix factors creatively, and that was one of the main reason to be unique in the industry and increased satisfaction of their customers:

Product

Develop strong and high-quality products, unique shape and design, various customization options and personalization of the products particular to women.

Price

High price for products that helped to H-D’s brand to create a premium position and prestige in the mind of the customers.

Place

By 1920, H-D had dealers and showrooms in 67 countries. “Garage parties” wherein women could learn to ride. Also, American heroes riding academy to learn to U.S militaries with their spouses, so they created a close relationship and interactive brand experience.

Promotion

H-D used a creative way to improve customer’s experience and culture. “It has promoted rallies, bike ride tours, cross country marathon for Harley Davidson owners and introducing HOG culture” (Bhasin, 2017). Also, H-D offered coupons for discounts on services, free services, and spare parts.

The 4 Ps of Marketing

With these factors, H-D’s marketing team had perfect focus on their strengths, weaknesses, market opportunities and threats. For instance, They realized that they can not compete with the price of Japanese products, so they decided to work on premium and high price products by “turning left when the Japanese turned right” opined Christine Mattice, a journalist. They known, other competitors could not entirely make a copy of their products, because that was not about physical materials and objects, that was their customer experience and culture.
Also, instead of focus on generalization, they work on specific customers and lifestyle. They used psychological and sociocultural influences such as Polices, military officers, and celebrities, or sponsorship of HOG boys and women.

Challenges faced by Harley-Davidson in the twenty-first century

Harley-Davidson faced with three critical problems:

1) Elderly customer and new generation
In the United States, two demographic trends have the significant impact on the motorcycles industry, economy, and social, including Baby boomers as being born between 1946 and 1964, and Millennials, also known as Generation Y; early 1980s as starting birth years and the mid-1990s to early 2000s. Baby boomers were the primary customers of Harley-Davidson, and now the major problem is their aging customers. Also, Millennials have the different lifestyle, psychological and sociocultural influencers and needs, “who preferred sport bikes and dual-purpose motorcycles to cruiser and touring bikes” (Masseeha Qumer). If we want to compare baby boomers with Millennials, there are no replacing Baby Boomer men.

2) Global economic downturn
The recession affected companies and people. In third-quarter 2017, Harley got 40% drop profit, also15.6% in 2018. People reluctant to luxury items at, and this uncontrollable factor, government, and international tariffs and regulatory are another challenges for Harley-Davidson and other competitors. "I think we have got a very significant psychological scar from this great recession" (Hanbury,2017)

3) Competition with Japanese and other premium US motorcycles manufactures.
Besides economy and aging customers, Harley faced competition from premium US motorcycle manufactures, and other Japanese manufactures Which they got US and global market shares such as Indian Scout Bobber, Victory Motorcycles, Big Dog Motorcycles, Yamaha, Honda, and Kawasaki. According to the reports. The new generation needs for a “new American bike,” and that is not adopted with the history of Harley-Davidson.

The “Delivering Results through Focus” marketing strategy and its impact

Harley-Davidson provided a long-term marketing business strategy called “ Delivering Results through Focus,” in 2009. During the recession and its aging customer and competitors activity, they realized that they need to market development and products development to regain their market share.
Also, create a new experience and satisfaction for their new customers and global expansion. So, based on its strategy they restructured manufactures operations to improve products and improve speed to market.

“Our full-year 2009 results were affected by the difficult economy, as well as the planned actions we took that resulted in restructuring charges of $224 million”

(Harley-Davidson, 2009).

On the other hand, Harley-Davidson announced that discontinued the Buell line of sports bikes and divested itself of MV Agusta.
According to this strategy, Harley-Davidson's 2027 objectives are to build over 2 millions new riders in the U.S, grow their international business to 50% of annual volume, launch 100 “high-impact" motorcycles, and grow their business without growing their environmental impact.

4M

Riders in the U.S.

+50%

Grow International Business

+100

New Motorcycles

+25%

Deliver Superior ROI

How can Harley-Davidson maintain its iconic standing in the global motorcycle industry?

Harley-Davidson

Harley-Davidson sold over 100,000 motorcycles during the World War I & II to the US military, and that helped to gain good profit, then they focused on baby boomers. However, at this time they need new buyers. At recession time product price is essential, and they should develop and offer more affordable motorcycles.

Harley-Davidson

“Women, while the fastest growing segment of the motorcycle riding population, are largely being ignored ” (M.C. Atty, 2018).
Harley-Davidson focused on women’s market with personalized and offered with lower frames and saddles and soft clutches. Also, they establish “The Ladies of Harley” group to generate interest in young women.

Harley-Davidson

“Used motorcycles have been stronger.  Our analysis shows used bike prices are rising, which is good news for riders looking to trade up. Harley has embraced the used market as part of its strategy to build ridership” (Barrett, 2018).

Harley-Davidson

Attracting young and new riders outside of its primary demographic, focus on women riding, keeping the Harley-Davidson’s traditional customers and updating versions of classic bikes can help to maintain its position.

References/Image Credits

  • Barrett, R. (2018, January 16). Harley-Davidson, other motorcycle manufacturers face big challenges in 2018.
  • Bhasin, H. (2017, December 25). Marketing mix of Harley Davidson.
  • Ell, K. (2017, November 29). Women help rev up the motorcycle industry.
  • Engel, J. (2013, April 27). Wandell: Harley-Davidson proving American manufacturing can succeed in 21st century.
  • Hanbury, M. (2017, July 13). Millennials could be a problem for America's most iconic motorcycle brand.
  • Harley Davidson. (n.d.).
  • Harley Davidson. (n.d.).
  • Harley Davidson Timeline. (2014).
  • HARLEY-DAVIDSON ANNOUNCES 3RD QUARTER RESULTS, UNVEILS LONG-TERM BUSINESS STRATEGY. (2009, October 15).
  • Masseeha Qumer, S., & Purkayastha, D. (n.d.). Harley-Davidson's Focus Strategy.
  • Wagner, Herbert (1999), Classic Harley-Davidson, 1903-1941, MotorBooks International, p. 13, ISBN 978-0-7603-0557-7
  • Zuberi, T. (n.d.). Investigations Harley Davidson Motorcycle
  • "A Snapshot on my way home!" photo by Eberhard Grossgasteiger on Unsplash
  • Harley-Davidson Photo by Nathan Dumlao on Unsplash
  • Harley-Davidson Photo by Colton Kresser on Unsplash
  • Harley-Davidson Photo by Harley-Davidson on Unsplash
  • Harley-Davidson Photo by Casey Horner on Unsplash
  • Harley-Davidson Photo by Jez Timms on Unsplash
  • Economic Photo by M.B.M on Unsplash
  • Harley-Davidson World War by on Thrillist
  • Harley-Davison Photo by Jia Ye on Unsplash
  • Harley-Davidson Photo by Harley-Davidson on Unsplash
  • Riding Through Mexico Photo by Dane Deaner on Unsplash