Harley-Davidson Marketing Term Paper

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Harley-Davidson Marketing

Harley Davidson Marketing

Harley-Davidson has shown itself to be one of the best, if not the best, motorcycle makers on the planet. Indeed, even with stiff competition from faster and sleeker bikes like Honda, Yamaha and others as well as more rugged bikes that are more similar to Harley such as American Ironhorse and so forth, Harley is clearly in a league of its owns just looking at objective sales and other performance data over times. Whether it be recession or other challenges, Harley remains resilient and has an extremely loyal customer base that never betrays them. While Harley-Davidson should by no means be complacent or lackadaisical about their future, they are positioned quite well so long as they remain true to their fan base and their heritage.

Analysis

The one thing that Harley-Davidson can claim that very few companies in existence, let alone motorcycle companies, is that they are literally an American icon much like the golden arches and Big Macs of McDonald's and the sport of baseball. When people think about motorcycles in the United States, Harley-Davidson is always going to be in the discussion, presuming it is not the main focus of the discussion. Even so, Harley-Davidson is not resting on its laurels as they state clearly and completely that they are not "resting on their laurels" and that they are always "improving and modernizing the machine" even if they are very slow and reluctant to tinker with aesthetics. After all, that would be like Jeep completely revamping the Wrangler. If they did so, the Wrangler fans would revolt early and often. Indeed, even with the improvements, Ken Schmidt, the director of communications for Harley-Davidson, notes that they are well aware that the bike company has been around for ninety-three years and the "classic elements" of Harley-Davidson bikes should not be changed. Essentially, it is normal and expected that the internals and mechanics of the bike improve and modernize over time but the design elements cannot be touched. Harley-Davidson's icon status rests on that cornerstone and it would be extremely unwise of Harley-Davidson corporate to go against that (CDF, 2015).

Harley-Davidson has done extremely well even the recent economic troubles of the "Great Recession" from 2007 to 2009. From 2009 to 2013 alone, Harley-Davidson added 118 new dealer points and more than a third (35.9%) of their bikes when to locations outside of the United States. For the record, it is not just older and more seasoned riders that enjoy Harley-Davidsons. Indeed, Harley-Davidson is the biggest seller when it comes to young adults 18-34 years old as well as white men over the age of 35, the more "stereotypical" Harley-Davidson customer and rider. In fact, Harley-Davidson has been the top in that segment for six straight years as of 2013, so that means they held their perch as the top dog in motorcycles throughout all of the Great Recession. They probably didn't sell as many as they do now given that the economic travails are mostly over. However, to hold up even with economic malaise holding for roughly half a decade is quite impressive (Harley-Davidson, 2015).

Another part of the equation is that Harley-Davidson is more about lifestyle than it is about getting from point A to point B. Just as richer and more affluent customers make it a point to drive marques like Mercedes and BMW, the discerning bike driver, at least those that are concerned about community and a reputable name in rugged motorcyles (as opposed to the quicker bikes of Honda, et al.) usually center on Harley-Davidson. Again, Harley-Davidson is far from being the only name in that market but they are the biggest and it is not really close. Harley-Davidson is very discerning regarding how it spends its marketing dollars. Indeed, it was confirmed in 2013 by Harley-Davidson Chief Marketing Officer (CMO) Mark-Hans Richer that Harley only spends fifteen percent of its budget on traditional media. They spend a lot of their marketing budget on parties and events such as the big bike party they held in Rome and other "epic" adventures that are meant to foster and grow the sense of community and camaraderie that Harley-Davidson owners tend to have. The reach of Harley-Davidson has been so deep that Richer had the chance to show off Harley-Davidson's wares to Pope Francis himself.

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Richer is by no means a corporate face that does not ride his own bike. Indeed, he has ridden motorcycles since he was nineteen years old and he worked for General Motors before coming over to Harley-Davidson. Indeed, if Richer was not a motorcycle enthusiast himself and was just "doing a job," Harley owners would probably bristle to say the least. Richer himself admits that the creative ideas that they do use, both new and evolved, come from their Facebook page. The Harley-Davidson is literally helping and aiding in what changes are made and which ones are not. Despite his history in the automobile industry, Richer is quick to point out that Harley-Davidson does not consider itself an automotive brand and they do not operate like traditional brands. Indeed, they were one of the first traditional brands to do business with the Ultimate Fighting Championship (UFC) organization (McCarthy, 2013).

There are three main prongs to Harley-Davidson's current strategy. They have all been touched on already but will be coalesced and given in sequence here. The thee rules and strategies they follow are to create customers at a young age, keep them as a customer for life and to never do something to alienate the overall customer base such as revamp or redesign any classic style elements of the motorcycle. They are prone to target people in the military and they attempt to make a strong linkage between military service and the Harley-Davidson name. Even with the prestige, the Harley-Davidson price point is very competitive with other firms. For example, Harley's lower-level bike is the Road King and it's priced at about $16,999. This is only five hundred dollars above the Honda ST1300 and about three thousand more than the Yamaha Super Tenere. Obviously, the Harley-Davidson is the highest of the three but it is the most prestigious by far and it is not terribly higher than the other two (Englund, 2010).

Harley is not just about bikes and the parts that go into it. They actually have six overall segments which include the motorcycles themselves, the parts/accessories, the general merchandise (e.g. MotorClothes apparel), licensing, the Harley-Davidson museum and other services. The "other services" includes service/business management training programs, customized dealer software packages and motor rentals. They have five major divisions of bikes including the Dyna, the Sportster, the Softail, the Touring and the V-Rod. Their licensing racket includes jackets, beer, mugs, glasses and helmets. They also financial support their dealer network through things like wholesale financial services, retail financial services, insurance services and funding avenues. Perceived value dimensions include rebellious, "outdoorsy," macho, rugged, independence, freedom, inviduality, expressing one's self, adventure on the open road and experiencing life to the fullest. The competitive advantage dimensions that Harley enjoys includes premium pricing, quality, reliability with a two-year warranty, support for the motorcycling lifestyle and easy availability of motor parts, merchandise and insurance services (Siddharth, 2012).

The status of Harley-Davidson as an American icon is nothing new. As far back as 1997, it was clear to many in the media and in the American lexicon that Harley-Davidson shared a status with companies and brands like Coca-Cola, Tide, McDonald's, Levi's and Nike. What all of those companies, including Harley-Davidson, share are long-term and high-visibility campaigns that trumpeted a very simple and basic message. However, even Harley has struggled as they were on the verge of bankruptcy no less than twice during the 1960's. Despite this and despite pundits and critics that say that Harley-Davidson is typified by "relics" and outdated ideology and methods, Harley-Davidson is still standing strong. This was held to be true nearly twenty years ago in 1997 and it is still holding true today per the opinions and assessments of their financial and other objective performance metrics (Rifkin, 1997).

Conclusion

Harley-Davidson, as noted before, needs to be careful about its future. Indeed, they need to be sure to avoid the economic malaise and setbacks of the Great Recession and the 1950's. They need to avoid inflaming the passions and opnions of the members of their collective that expect them to stay true to the Harley-Davidson design and aesthetic. While some people ordering new Harley-Davidson motorcycles may have to wait for a year or two to get their bike, that avarice and desire for Harley-Davidson can disappear quite quickly if Harley-Davidson diverges from what.....

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