CONSUMER BEHAVIOR CASE

Harley-Davidson Wheels into India

Can Milwaukee-based Harley-Davidson roar into India—the world’s second-largest
market for motorcycles, after China—and attract buyers despite strong competition
from local and global bike brands? With more than a century of tradition behind its
iconic American brand, Harley isn’t starting from scratch in India. It enjoys high brand
recognition worldwide and began planning for a presence in India in 2005. Two years
later, a U.S.-India trade deal paved the way for foreign-made, heavy-weight bikes
like Harley’s to be imported and sold throughout the country. Once Harley had the
green light to go into high gear, it began recruiting dealers in five metropolitan areas.
Marketers for Harley see India’s economy growing rapidly. Its expanding
middle class has both considerable buying power and an appetite for world-class,
brand-name products. Most of these consumers have seen Harley bikes in
Hollywood movies, and some have met Harley owners or tested Harley bikes at
cycling events. Harley’s research shows that affluent motorcycle enthusiasts tend to
own more than one bike (one for weekday commuting and another for weekend trips,
for instance). “These are people who have worked hard, earn well, and can now
allow themselves the chance to explore their passions,” explains the managing
director.
Still, Harley must compete against long-established bike brands such as
Royal Enfield, which has its own loyal customer base. Consumers in India can
compare Royal Enfield’s four-stroke engines—responsible for the “thumper” sound
associated with the brand—with Harley’s more powerful V-twin engines, which
produce that brand’s signature thundering sound. Looking at price, they will find
Royal Enfield’s bikes carry a lower price tag than Harley’s, in part because of import
duties. Consumers concerned about the availability of repair services will also
compare Harley’s handful of dealerships with Royal Enfield’s countrywide dealership
network.
Harley’s unique image of independence and individuality is a clear point of
differentiation. The company also has other competitive advantages. One is that it
offers a full range of motorcycles and accessories, with customization options that
bike buyers particularly value. The company is developing special customization kits
so buyers can mix and match Harley engines and parts to create one-of-a-kind
motorcycles in India as they do in other markets.
A second competitive advantage is that only Harley buyers can join the Harley
Owners Group (HOG), a global group whose one million-plus members are invited to
events such as bike training “boot camp,” weekend rides, and film festivals
exclusively for Harley owners. HOG members also get to attend the company’s
owners-only rock concerts featuring top Indian bands. “We want to give bike lovers
the full ownership experience in India,” Harley’s managing director says about local
HOG activities.
A third advantage is that Harley dealerships permit buyers to test-drive every
bike in the product line, which not every competitor allows. Test-drives help buyers
try out the various features, experience first-hand the difference between individual
models, and form an impression of how it would feel to ride a Harley bike.
 Harley is starting out strong in India. Before the first bike was delivered, the
company had hundreds of pre-orders. As in most of the world, the majority of buyers
are men. Unlike most Harley markets, however, here the fastest growth in sales is to
men in their 30s and 40s. Women are also being targeted, according to the director
of marketing in India: “While we strongly believe Harley-Davidson is more of a state
of mind and it transcends gender and age, we see a tremendous potential with
Indian women riders.” In fact, Harley is already the most popular brand among U.S.
women bike buyers, a trend that could spread to India in the coming years.i

Case Questions
1. How is Harley-Davidson using marketing to influence emotional aspects of the
motorcycle buying process?
2. What role are consumer characteristics likely to play in a consumer’s decision to
buy a Harley-Davidson in India?
3. In terms of the anchoring and adjustment process, what challenges and
opportunities does Harley-Davidson face in marketing to Indian consumers?
4. Using the consumer behavior concepts in this chapter, explain the marketing
thinking behind allowing buyers to test-drive any of the Harley-Davidson bikes.
Do you agree with this marketing decision? Why or why not?
5. How might consumers use thought-based decision models when considering a
motorcycle purchase in India? What are the implications for Harley-Davidson?