Harley Davidson
Presented by :
Ashish Chatarath
VISION
No one can accurately predict the future.
What I can predict with the utmost confidence
are the things that won't change at Harley-
Davidson - namely, our commitment to
providing more great motorcycles; to
enhancing the unparalleled Harley lifestyle
experience; and to continuing to provide
excellent financial performance.
- Jeffrey L. Bleustein, Harley-Davidson CEO
MISSION
We fulfill dreams through the experience of
motorcycling, by providing to motorcyclists and
to the general public an expanding line of
motorcycles and branded products and services
in selected market segments.
HISTORY:
•Arthur’s brothers, William Harley and Walter
Davidson, started Harley-Davidson Motor Company in
1903
•Inspired by a French company’s motorcycle with an
integrated engine.
•In 1905 a Harley-Davidson motorcycle won
a 15 mile race in Chicago. By 1907 the
Company had developed quite a reputation in motorcycle
racing with numerous wins in races around Milwaukee-
areas.
•Harley-Davidson developed dealers helped sell 150
motorcycles in 1907.
•Harley-Davidson developed a more powerful V-twin
engine that turned out to define the look of the
company’s motorcycles. Company also started selling
spare parts.
•Supplied 17,000 motorcycles for the U.S. military
during the World War I and became the largest
motorcycle producer in the world by 1920.
•It was one of the few companies
to survive the Great Depression.
•The popular Bar and Shield logo was used for the first
time in 1910.
•Suspended production of civilian motorcycles in 1941 to
produce almost 90,000 motorcycle for the U.S. military
during World War II.
• Many war veterans bought Harley Davidson as there
was a strong American pride associated with it.
•HD introduced new models for enthusiasts, including
the Hydra-Glide in 1949, the K-model in 1952, the
Sportster in 1957, and the Duo-Glide in 1958 due to
grew in the recreational motorcycle market.
•Reputation began to erode soon after its acquisition by
American Machinery and Foundry Company in 1969.
•Company earned a bad name for poor quality products.
•Market was flooded by Japanese manufacturers
offering high quality low priced motorcycles.
•Under leadership of Teerlink a restructuring plan was
implemented known as Circles of Management to bring
workers and dealers together.
•New marketing philosophy was developed based on
desires of customers. Positioned HD motorcycles as
lifestyle products.
•HD acquired Buell Motorcycle Company in 1993
•In 1995 the company acquired Eaglemark, a financial
service company.
•Harley-Davidson opened its 358,000 square foot
Kansas City, Missouri, plant in 1998 to produce
Sportster, Dyna Glide, and V-Rod models and built an
assembly plant in Brazil in 1999 to aid in its Latin
American expansion.
•The new capacity allowed HD to
set production records each year
during the early 2000s to
reach 290,000 units
by year-end 2003.
Overview of the industry:
Demand grew dramatically after world war II in
developed countries.
Enthusiasts began to form motorcycle clubs through
which they socialized & participated in rallies and races
such as Daytona Bike Week in Florida & Sturgis Rally in
South Dakota.
Hell’s Angel Motorcyclist Club established in 1948 in
Fontana.
Hell’s Angels made people fearful of bikers and in
turn reflected badly on Harley Davidson.
Honda successfully exploited Harley’s Outlaw image.
Hell’s Angels image spilled over entire industry
Contributed to decline in motorcycle demand.
Release of the movie ‘Easy Rider’ in 1969 helped
restore HD’s image to a great extent.
In 2002, demand for heavyweight motorcycle in the
US grew by 17% compared to an industry growth rate
of 10%.
In 2003, more than 950,000 motorcycles sold in US
and 28 million world wide and expected to grow by
approximately 5% annually.
A rising income level in emerging markets was the
primary force expected to drive industry growth.
The industry was segmented into various groups
according to engine size & vehicle style.
Europe was the world’s largest market for
motorcycles, with 1.1 million registration of 125+ cc
motorcycle in 2002.
Global Competition:
•Rivalry centered on performance, styling, breadth of
product line, image and reputation, quality of after
sales services & price.
•Great degree of price variability as compared to
Japanese motorcycle. Japanese offer high performance
bike at low prices.
•By phasing out weak models, limiting sales and
increasing promotions HD was able to carve out a niche
in the marketplace in the 1980s.
•Manufacturers maintained relationship with suppliers
to produce or assemble components.
•Dealers preferred to represent manufacturers with
good reputation & strong consumer demand; responsive
customer service and parts delivery; formal training
programs for service technicians.
HD
Differentiation Strategy:
FOCUSED DIFFERENTIATION
TANGIBLE DIFFERENTATION
•Observable product characteristics:
• size, color, materials, etc.
• performance
INTANGIBLE DIFFERENTATION
•Unobservable and subjective
•characteristics relating to:
•image, status, identity
Promotional Strategies:
2.The HOG community [ the cult effect]
4.Cafes
6.Websites
8.Truly American product
10.Organizing Rallies
Targeting the younger market with the new product line,
the company has adopted the following marketing
objectives:
1.Market expansion
2.Product diversification
3.Modify its marketing mix to target a young
demographic
Sales and Distribution
•HD dealers operated showrooms that allowed customers
to examine and test-ride motorcycles & offered various
biking merchandise. Also responsible for distributing
newsletters & promoting rallies.
•Dealer and mechanics trained in subjects like retail
management, inventory control, diagnostics etc.
•Dealership courses through web-based distance learning
program. 96% of company’s dealers participated in HDU
courses in instructor led classes and online classes.
•BRAG was also supported by HD dealers.
•Demo rides through out United States.
•Inexperienced riders and women were much more like
to purchase motorcycles after taking a training courses.
25 hour riders edge program increased sales to women
by 9%.
•Sold apparels and merchandise in 50 nontraditional
retail locations.
•161 dealer in Japan, 50 dealer & 3 distributors in
Australia/New Zealand market.
•European distribution division based in the UK where
were 436 independent dealers
KEY POINTS
•The company developed a long-lasting relationship with
employees to ensure continued success, and joined in
community affairs to enhance the company's image.
•The company discontinued the operation of the
Transportation Vehicles segment and sold the related
division and paid off its debts with that money.
•The company developed a long-lasting relationship with
employees to ensure continued success, and joined in
community affairs to enhance the company’s image.
•The company licensed the production and sale of a
broad range of consumer items.
Marketing Mix followed by the company…
•Product
For survival it exploited the ‘retro’ look. Many components were
outsourced from foreign manufacturers to increase quality.
Pricing
H-D realized that it would not be possible for it to compete with
the Japanese manufacturers on the pricing front. Manufacturers
like Honda not only manufactured a low-priced high-quality
product, but also spent heavily on advertising their products...
Distribution
H-D started selling its motorcycles through its dealers in 1904
and has a close partnership with them till today.
Promotion
Has built a community of enthusiasts by creating a brand
experience for customers. Heavy promotion in bike rallies.
Promotion done primarily by local dealers.
Looking ahead..
• First, HD needs to expand its potential customer
base to include enthusiasts and non-enthusiasts
males in the 35-44 age group.
• Secondly, HD needs to position the V-Rod to also
appeal to first time buyers of motorcycles. HD's
strong brand identity can help pull in new clients.
• Third, HD has to set an appropriate marketing mix
that will help attract a younger consumer base. By
using the low-end approach, which involves
attracting a young audience to a brand name
product with a low price tag (similar to what
Jaguar and BMW have done), HD can expand its
popularity to the domestic and international
market.
THANK YOU
