In this case study we will analyze Harley-Davidson unique way of marketing. How they chose to invest the majority of their marketing budget back in their customers, to give the ultimate Harley experience and way of life.
And how all of the above translate to exceptional brand loyalty and growing sales in traditional and new demographics.
Harley-Davidson has positioned itself as a way of life, with an extremely loyal and growing customer base. Harley Davidson’s H.O.G (Harley Owners Group) has about one million members1, and it is being referred internally as the ‘Original Social Network’ 2 H.O.G. members enjoy benefits such as a magazine subscription (Hog Tales and Enthusiast), the H.O.G. Touring Handbook, a dedicated roadside assistance service, an insurance program that was designed specifically to their needs, a theft reward service, a travel center, and a “Fly & Ride” program allowing H.O.G members to rent Harley-Davidson bikes wherever they fly3.
In addition, Harley-Davidson encourages their customers to customize their bikes and make it ‘their own’. They are community members who take pride in their creation and/or special connection to the community by personalizing their motorcycle and giving it their own personality.
As a result (or as a cause), Harley’s customers, and H.O.G members are extremely engaged and are being brand advocates throughout the country and
Traditionally, the ideal Harley-Davidson customers were Caucasian men ages 35-plus5.. However, in recent years Harley-Davidson has been targeting other segments of the motorcycle users pool.
Harley-Davidson is aiming to reach a more diverse customer pool. Harley-Davidson has an “outreach” program targeting new segments, such as: young adults 18-34, women, AfricanAmericans and Hispanics. In the U.S., 2012’s sales to these segments grew at twice the rate their traditional U.S. customer base sales for that year6.
Sticking to their marketing philosophy (Lifestyle), Harley-Davidson also created additional benefits under H.O.G dedicated for women riding Harley. Their ‘Ladies-Of-Harley’ (LOH) club was established to encourage women to be more involved in the ‘Harley Way of Life’ and community7.
Today, 30%-40% of Harley-Davidson riders are women8.
Questions and Answers
Q: What does Harley-Davidson position it self in the market and what is the key to its marketing success?
A: Harley-Davidson positions itself in the market as a way of life more than just a transportation mode. And the key to its success is the exceptional relationship between the brand and its customers. Harley’s relationship with its customers, is so unique, to the point where Harley-Davidson crowd-sourced most of its marketing campaigns to the customers themselves9, knowing that they know themselves better, and they can do an exceptional job (as they do) in representing the brand.
Q: How does Harley-Davidson build a long-term customer relationship?
A: Harley-Davidson encourages their customers to get involved in the brand by customizing their motorcycle and to ‘express their true self in steel, rubber and chrome’10. In addition it is encouraging local clubs, shared rides and trips and other group activities through their H.O.G. club.
Q: What is Harley-Davidson’s value proposition?
A: Harley’s value proposition is more in the community and way of life, than anything else they offer. It is the sense of community, belonging, patriotism and the free expression of one’s true self.
Q: Relate the concept of customer equity to Harley-Davidson. How does HarleyDavidson’s strategy focus on the right relationships with the right customers? A: Harley-Davidson has one of the highest customer equity out there. By building a relationship that simulates a cult. Their customers desire the “Harley’s way of life” and show an amazing behavioral loyalty towards the brand. A Harley-Davidson customer is not necessarily a Harley-Davidson motorcycle owner. It is anyone who relates to the Harley experience and way of living.
For example, Harley’s clothing line11, the H.O.G. Associate membership12, and other peripheral experiences are addressing all Harley enthusiasts, not just motorcycle owners.
Summary and Conclusion
Harley-Davidson’s way of marketing is through its established and growing customer base, it is amazing that a company that invests 85%13 of their entire marketing budget in their current customers is growing stronger by the year, and expanding into new market segments.
To summarize: “Harley is not automotive. It might have an engine, it might have wheels, and it might run on roads, but that’s where the similarities stop,” 14 -Mark-Hans Richer, CMO
Forbs, Behind The Brand, Harley-Davidson’s ‘Original Social Network’, by Jennifer Roony 30, May 2013 (http://www.forbes.com/sites/jenniferrooney/2013/05/30/behind-the-brand-harleydavidsons-original-social-network/) 2
. Its members are extremely engaged and are being brand advocates throughout the country and the world.
Principles of Marketing, Global Edition, by Philip Kotler / Gary Armstrong, p.17 (ISBN 027378-699-7) 4
Forbs, Behind The Brand, Harley-Davidson’s ‘Original Social Network’, by Jennifer Roony 30, May 2013 (http://www.forbes.com/sites/jenniferrooney/2013/05/30/behind-the-brand-harleydavidsons-original-social-network/) 5
Harley-Davidson, Corp Relations, Demographics (http://investor.harleydavidson.com/phoenix.zhtml?c=87981&p=irol-demographics) 6
Harley-Davidson, Corp Relations, Demographics (http://investor.harleydavidson.com/phoenix.zhtml?c=87981&p=irol-demographics) 7
MCHOG, Ladies of Harley, (http://www.mchog.com/MCHogLadiesOfHarleyMain.htm)
Harley-Davidson The Spirit of America, Documentary (http://www.imdb.com/title/tt0456137/) How Mark-Hans Richer Is Driving
Harley-Davidson’s Marketing Agenda, Video Interview, Forbs, 30 May, 2013 (http://www.youtube.com/watch?v=4c5nBtF-AGU) 9
Customize your Harley, Harley-Davidson (http://www.harleydavidson.com/en_US/Content/Pages/Owners/customize.html) 11
Harley Davidson, Men and Women clothing lines. (http://www.harley-davidson.com/store/) 12
Harley Davidson, Membership types. (http://www.harleydavidson.com/en_US/Content/Pages/HOG/membership-types.html) 13
Mark-Hans Richer, Harley-Davidson CMO, Ad Age interview July 10, 2010 http://adage.com/article/242952/ 14
Mark-Hans Richer, Harley-Davidson CMO, Ad Age interview July 10, 2010 http://adage.com/article/242952/