Harley-Davidson: Chasing a New Generation of Customers

  By Group 6
Comment on Harley-Davidson’s (HD) performance till 2006. What prompted the appointment of Mark-Hans Richer
as HD’s first chief marketing officer (CMO)? What were the potential challenges that Richer could identify?
 

HD enjoyed continued growth in 2000s and its brand image was strong
Appointment of Richer as HD’s first CMO
• Its core customer base of baby boomers was aging. In
1987, the median age of HD customer had been
35;by 2007, it was 47
• Company want to target young riders and change its
image as Granddad’s bike without losing its core
customer base
Challenges for Richer
• Young Adults found the experience of visiting the
dealership a daunting and intimidating one
• It is not unusual for a Young adult to assume that every
Harley costs $20 grand when in fact least expensive
Harley costs $6,699
Discuss the competitive landscape of HD.

• 44% market share in North America in • Aging core customer base

heavyweight category • Very low market share in
• High brand loyalty European Market
Strengths • Unique design • Image as Granddad’s bike Weaknesses
• Strong community • Dealership aversion
• Strong Brand Image • Lack of awareness about the
actual price of HD
SWOT
ANALYSIS

• Emerging markets such as India,

China, Brazil, Russia
• Company’s attitude
• Two quality brands to leverage
Threats • Very low gross margin on Opportunities
• Young adults characterized sports
Buelll’s bike
bike as constricting,
• Economic downturn
uncomfortable and lack in
• Availability of cheaper
durability
alternatives
Identify the growth opportunities for HD in 2007. You may use Ansoff framework to discuss the
growth opportunities.

Market Development
Davidson can carry out their journey to also some of the developing countries which has high
population and also high potential like china and India
Market Penetration
Focus on the European market where the demand for sports bike is huge and Buell has just 1%
share
Product Development
Launch new products for the young riders who preferred stripped down, elemental, dark bikes
over the chrome cruisers
Drawing insights from their market research and internal company knowledge, what marketing
decisions were taken? Had you been the CMO, what would you have done to set the future path
of HD
Brand Management Strategy

“House of Brands” Strategy “Branded House” Strategy

• Leverage the Harley Davidson and Buell brand • In this strategy , use one central,
• Buell competed in the sports bike category powerful brand across various product
towards which young adults are more inclined categories
• Young Riders might enter Harley-Davidson dealer • But in this case two brand are
universe via Buell, then later trade up to HD completely different from each other,
heavyweight bikes as they grew older they only share the dealers network
Recommendations
• Increasing brand awareness about the products
• Focus on emerging markets where there is scope for high growth
• Different Positioning
• HD as High End, Expensive Tourer
• Buell as Cheaper, Functional Sports Bike
Critically analyse the Dark Custom initiative in the backdrop of brand hierarchy strategies
• Young Adults much preferred stripped down, elemental, dark bikes over the chrome cruisers sold
to Core customers
• Harley-Davidson Styling had created some bikes in the portfolio that reflected the aesthetic, such
as the recently introduced Nightster, Street Bob, and the older Night Train
• Harley Davidson when realizes that young adults want dark bikes they developed CrossBones and a
blacked-out model in the Harley Sportster line called the Iron 883 with a moderate investment of
less than $1 million
• Iron 883 is scheduled to launch in January 2009 at $7,499
THANK YOU