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A look at one of the most successful bike brands, Harley Davidson
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P R E P A R I N G F O R T H E N E X T
C E N T U R Y
A D I T Y A A S H I S H J I B I N P A Y A L
H A R L E Y D A V I D S O N
P R E P A R I N G F O R T H E N E X T
C E N T U R Y
T H E H A R L E Y S T O R Y
1 A LEGENDARY BIKE
Presentation Title Your company information
A M E R I C A N M O T O T C Y C L E M A N U F A C T U R E R
750 CC A N D A B O V E M O T O R C Y C L E S
Y E A R OF F O U N D I N G
P L A C E OF O R I G I N
C U L T S T A T U S : A L L A M E R I C A N B I K E
M O R E T H A N A C E N T U R Y O F L E G A C Y
C O N S T A N T I N N O V A T I O N
H I G H B R A N D L O Y A L T Y
M A R K E T L E A D E R : U S H E A V Y W E I G H T M O T O R C Y C L E S
E P I T O M E O F R A W P O W E R
2 T H E F O U N D E R S
W I L L I A M H A R L E Y
A R T H U R D A V I D S O N
W I L L I A M D A V I D S O N
W A L T E R D A V I D S O N
3 H I S T O R Y M A T T E R S
THE WORLD WARS
• F E A T U R E D IN WW 1 / WW 2/ GREAT DEPRESSION
• WW1 : 15000 BIKES TO US ARMY PROVIDED
• ONE OF THE COMPANIES TO SURVIVE THE GREAT DEPRESSION
• 90000 BIKES PROVIDED IN WWE
• MILITARY SPECIFIC VEHICLES
• RECEIVED 2 NAVY ‘E’ AWARDS FOR EXEMPLARY WAR SERVICE
4 DIFFERENTIATE TO
DOMINATE
“four wheels move the body but two
wheels move the soul”
-
The Eternal Biker
• B I K I N G IS A PASSION
• AN EXPRESSION OF FREEDOM
• HARLEY CAPTURES THE ESSENCE OF BIKING LIKE NO OTHER
• LEGENDARY : CULT : EPIC : FEW WORDS TO DESCRIBE HARLEY
• QUALITY : IMAGE : UNIQUENESS : 3 PILLARS OF HARLEY’S SUCCESS
• HARLEY CARRIES THE HARLEY BADGE : HARLEY LOOK : THE HARLEY SOUND
OWNING HARLEY IS A MATTER OF PRIDE
THE BIKE OF THE REBEL
HARLEY HAS BECOME A LEGACY, A HEIRLOOM OF SORTS
AN ALL AMERICAN TREASURE TO BE CARRIED FROM ONE GENERATION TO OTHER
SUMPTUOUS DESIGN
V TWIN ENGINE
RAW POWER
A SYMBOL OF QUALITY : FREEDOM AND NATIONAL PRIDE
5 THE EVOLUTION
5 SAMURAI SIEGE : THE JAPANESE CHALLENGE
• 1950’S : HONDA SMELLS BLOOD
• UNTAPPED CUSTOMER BASE OF OLDER MEN AND YOUNGER WOMEN
• HONDA RELEASES FAMILY ORIENTED ADS
• SWEET : NICE : PLEASANT : STABLE APPROACH
• FASTER , LIGHTER AND LESS EXPENSIVE BIKES
• 50CC – 250 CC BIKES RELEASED
• YAMAHA : SUZUKI : KAWASAKI FOLLOWED SUIT
• JAPANESE MADE GRADUAL INROADS
• DEMOGRAPHIC CHANGE : FIRST TIME BUYERS FAVORED JAPANESE
• MASS PRODUCTION : EFFICIENT
• CONSTANT IMPROVEMENT : REDESIGN
• REDUCTION IN TIME TO INTRODUCE NEW MODELS
• SOON JAPANESE ACCOUNTED FOR 85 % US BIKE SALES
• HARLEY PUSHED TO NICHE CATEGORY
• HARLEY ACCQUIRED BY AMF
• HARLEY PANICS : TRIES TO IMITATE JAPANESE MODEL
• LESS SKILLED WORKFORCE ADDED
• QUALITY COMPROMISED FOR QUANTITY
• AD POSITIONING TWEAKED : THUMBS DOWN BY TRADITIONAL BUYERS
• EXISTING BUYERS ALIENATED
• HONDA UPS THE ANTE : INTRODUCES GOLDWING 1000 CC
• HARLEY LOSES OUT IN HEAVYWEIGHT CATEGORY
6 LEARN FROM THE ENEMY
• HARLEY ADJUSTS ITS SIGHTS
• REDEFINES GOAL AS “SURVIVAL”
• EXECUTIVES VISIT HONDA FACTORY : LEARN THE (JIT) METHOD USED BY HONDA
• HARLEY’S MULTIMILLION DOLLAR INVENTORY SYSTERM INEFFECTIVE
• HARLEY’S PRODUCTION SYSTEM FLAWED
• HARLEY REDESIGNS : ADOPTS PRODUCTIVITY TRIAD
• SEEKS GOVT SHIELD FROM JAPANESE AMBUSH
7 THE COUNTER
PUNCH
• PRODUCTIVITY TRIAD WORKS
• INVENTORY TURN INCREASED TO 17 TIMES/YEAR
• PRODUCTIVITY UP BY 50 %
• WIP REDUCED BY 75 %
• US REVENUES INCREASE BY 80 % : GLOBAL INCREASED 1.7 TIMES
• MARKET SHARE IN HW SEGMENT INCREASED BY 97 %
• 1989 : HARLEY GOES PUBLIC THROUGH A WELL RECEIVED IPO
• LEADERSHIP INSTITUTE INTRODUCED
• ORGANIZATION RESTRUCTURED
• REWARDS/INCENTIVE SYSTEMS PUT IN PLACE
• HOG : HARLEY DAVIDSON OWNERSHIP GROUP INTRODUCED
• HOG, WITH 900000 MEMBERS IS THE LARGEST COMPANY SPONSORED CLUB
• WOMEN RIDERS WERE CATERED WITH “THE WOMEN OF HARLEY” GROUP
• NEW CEO JEFFREY BLEUSTEIN COMES ON BOARD IN 1997
• HARLEY TRANSFORMS WITH NPD, UPGRADED TECHNOLOGY
• BETTER DEALER NETWORK
• ANNUAL REVENUES GROW TO $5 BN : NET INCOME T0 $890 MILLION IN 2004
• 2005 :BLEUSTEIN RETIRES AS CEO : STAYS AS CHAIRMAN
8 THE ROAD AHEAD
• MARKET FOR HARLEY BIKES MATURING
• CORE CUSTOMER BASE : BABY BOOMERS ARE AGEING
• YOUNGER GENERATION NOT CONNECTING WITH HARLEY
• NEEDTO FACE JAPANESE AUTOCORPS HEAD ON
• STRONGER THE BRAND WITH THE OLDER GENERATION, WEAKER IT IS WITH THE YOUNGER LOT
• HARLEY NEEDS TO SHIFT DEMOGRAPHICS
• HARLEY ACCQUIRES BUELL TO CATER TO YOUNGER BUYERS
• V-ROD AND NEW SPORTSTER LINE UNVEILED
• V-ROD IS A SHIFT FROM TRADITION FOR HARLEY WITH ITS LIQUID COOLING
• SPORTSTER REDESIGNED WITH LOWERED PRICES
• MORE FOCUS ON WOMEN RIDERS
• MARKETING THROUGH EVENTS AND MEDIA
9 INNOVATIONS
10 CONCLUSION
• HARLEY NEEDS TO ALTER ITS DEMOGRAPHICS
• NEEDS TO CATER TO YOUNGER LOT
• BUT WITHOUT LOSING ITS CORE MARKET
• NEED TO REWORK COSTS WITH DEALERS FOR ITS CUSTOMER PROGRAMS
1
THE BRAND EXCELS IN DELIVERING THE BENEFITS
CUSTOMERS TRULY DESIRE
• HARLEY COMMANDS EXCEPTIONAL BRAND LOYALTY
• EVERYTHING ABOUT HARLEY : THE BIKE : THE PERFORMANCE : THE STYLE IS A
CUSTOMER’S PRIDE
• LEGACY : LEGENDARY POSITIONING GIVES CUSTOMERS A SENSE OF ESTEEM
• FANTASTIC INNOVATIONS LIKE RIDER’S EDGE, RENTAL BIKES, RALLIES
• HOG/ THE LADIES OF HARLEY BRING IN A SENSE OF COMMUNITY
• SHARES THE PASSION FOR BIKES AND BIKING
9/10
2
THE BRAND STAYS RELEVANT
• YOU CANNOT THRIVE FOR A CENTURY WITHOUT BEING RELEVANT
• HARLEY HAS ALWAYS BEEN INNOVATING RIGHT FROM ITS V TWIN ENGINE
• A GLUT IN BETWEEN WHERE HARLEY STRUGGLED WITH RELEVANCE
• STRONG COMEBACK WITH V-ROD /SPORTSTER
• ACCQUISTION OF BUELL
• CATERING TO WOMEN BIKERS
8/10
3
PRICING STRATEGY IS BASED ON CUSTOMER’S
PERCEPTIONS OF VALUE
• HARLEY WAS ALWAYS A PREMIUM SEGMENT BRAND
• THE VALUES IT PROVIDES OUTWEIGHS THE PRICE
• HARLEY HIGH ON SENSORIALS AND HIGH SELF ESTEEM IT GIVES TO CUSTOMERS
• ONLY IN 2004 , TO CATER TO THE YOUNGER AND NON TRADITIONAL MARKET , PRICES
WERE REDUCED TO $6500
• THIS WAS A BID TO CAPTURE THE ENTRY LEVEL, LOWER PRICED MARKET
• RENTAL PROGRAMS INTRODUCED FOR EASY BUY
9/10
4
THE BRAND IS PROPERLY POSITIONED
• POSITIONING IS HARLEY’S GREATEST STRENGTH
• ALL AMERICAN : RAW POWER : MACHO BIKES
• CAPTURES THE PASSION OF BIKING/SENSE OF FREEDOM
• THE BIKE FOR THE REBEL : ROCKSTARS, HOLLYWOOD REBELS
• ADS POTRAYING LEATHER CLAD RIDERS , MILITARY RIDERS GAVE AN IMAGE OF
TOUGHNESS
10/10
5
THE BRAND IS CONSISTENT
• HARLEY HAS ALWAYS BEEN CONSISTENT WITH ITS POSITIONING
• THE MARKETING CAMPAIGNS POTRAYED THE TOUGHNESS
• HOLLYWOOD REBELS LIKE BRANDO REPRESENTED HARLEY
• THE LOOK : THE SOUND : THE CELEBRITIES : EVERYTHING ABOUT HARLEY EXHUDES
RAW POWER
• LEATHER JACKETS : ACCESSORIES : HOG Etc POTRAY GRIT AND POWER
• 9/10
6
THE BRAND PORTFOLIO AND HIERARCHY MAKES
SENSE
• HARLEY HAS A WIDE RANGE OF BIKES
• CATERS TO VARIOUS SEGMENTS RANGING FROM BABY BOOMERS, WOMEN AND
YOUNGSTERS
• UMBRELLA BRAND HD IS THE BLOCKBUSTER BRAND
• V-ROD /SPORTSTERS CATER TO THE NEWER GENERATION
• SPORTSTERS PRICED LESSER TO CAPTURE NON TRADITIONAL MARKETS
9/10
7
THE BRAND MAKES USE OF AND COORDINATES A FULL
REPERTOIRE OF MARKETING ACTIVITIES TO BUILD
EQUITY
• MARKETING MAJORLY THROUGH EVENTS AND MEDIA
• APT USE OF CELEBRITIES
• HOG RIDES, HD NIGHTS, RIDE OF A LIFETIME, BOOT CAMPS
• RELEVANT ADVERTISEMENTS
• HARLEY CAMPAIGNS ARE HANDS ON WITH HIGH CUSTOMER PARTICIPATION
• SHORT FILMS , PROMOS, ROCK EVENTS
9/10
8
THE BRAND MANAGERS UNDERSTAND WHAT THE BRAND
MEANS
• THE HARLEY MANAGERS ALWAYS UNDERSTOOD THE CORE VALUES OF HARLEY
• UNTIL 80s THE BRAND WAS CONSISTENT IN QUALITY
• POST AMF , THE BRAND SUFFERED IN QUALITY
• TEERLINK BECAME CFO AND HE BEGAN THE RESURGENCE
• SINCE THEN BLEUSTEIN FOLLOWED SUIT WITH RETAINING THE EPIC HD QUALITY
8/10
9
THE BRAND IS GIVEN PROPER SUPPORT AND ITS
SUSTAINED OVER THE LONG RUN
• APART FROM ITS BRILLIANT PRODUCT, HD IS SUPPORTED WITH MANY INITIATIVES
• HOG CLUB
• THE HARLEY LADIES GROUP
• LIVE EVENTS
• HOG NIGH OUTS, BIKE TREKS
• HOG MEMBERSHIP 900000
10/10
10
THE COMPANY MONITORS THE SOURCE OF
BRAND EQUITY
• BRAND EQUITY IS EVERYTHING IN HD
• MANAGERS MAKE SURE THE BRAND EQUITY NEVER FADES
• CONSISTENT POSITIONING AND BRANDING HELPS IN CONSISTENT BRAND EQUITY
• INNOVATIVE CAMPAIGNS HAS STRENGTHTENED THE BRAND EQUITY
• HOG CLUBS, SOCIAL GROUPS , EVENTS MAKE SURE BRAND EQUITY IS NEVER LOST OUT
9/10