Harley Davidson Case Study Essay
Harley Davidson Case Study
Harley Davidson Motor Company was founded by William Harley and Arthur, Walter and William Davidson. It is the producer and manufacturer of iconic and unique motorbikes, which are desired by millions of people around the globe. It is the most recognized company in motorcycle industry, creator of culture, lifestyle and tradition. It is one of few businesses which have gained the admiration and respect of consumers and competitors. History of Harley Davidson Motor Company started in 1901, when William and Arthur started building the engine that would suit into bicycle. In 1903 they introduced their first motorcycle, from that time company has been constantly growing and today it is considered as one of the most prestige motorcycle company in the world.
From the very beginning the aim of the company was very clear, to become the leader in motorcycle industry and to produce the best quality motorcycles. Opinions whether company managed to reach this aim are contradictory, but undoubtedly Harley Davidson has become a legend. Harley Davidson is associated with freedom, adventure, wildness, self-expression and boldness. It’s mantra says “It is not a destination, it is a journey”. Harley Davidson has even it’s own road songs, produced in 1994, it turned out to be a great marketing strategy. After the album has been released, company gained more customers. One of the most popular songs is “Born to be wild”. This song has become a “soundtrack” of Harley Davidson Company. It describes the company’s culture and has become a legendary song. Harley Davidson has remained loyal to tradition and culture, it still represents the same values as it did in early 90’s.
Number one strength of Harley Davidson is loyal brand community. Harley Davidson has always been putting customers satisfaction as a priority. Customers remain loyal to the company not only because of high quality products and unique style of motorcycles, but also because of the image and values that Harley Davidson represents. The strength and power. Harley Davidson established the H.O.G (Harley Owners Group) organization. This organization has become a home for 750,000 members, who share passion and admiration for the brand. H.O.G is the example of how a brand is able to create a subculture. Harley Davidson promoted a wild, free lifestyle. People were and still are attracted to those ideas. By joining the H.O.G they felt the feeling of belonging to Harley’s bold culture.
Especially in 90’s Harley’s ideas were extraordinary, people wanted to be the part of that unique community. Brand recognition, brand preference, brand insistence – Harley has successfully met all these criteria. It is world-wide recognized company, people tend to buy it’s motorcycles rather than other company’s and remain loyal to it. Harley Davidson expanded brand by producing accessories, like helmets, leather jackets, belts, which become a must for most of people who buy a Harley motorbike. Harley Davidson tend to build strong long-term relationships with it’s stakeholders, what relates in positive impact on the company. Being the only major American manufacturer of heavyweight motorcycles is highly beneficial for the company, as well as being the one of main manufacturer and user of V-engine configuration.
Strategy of competing of Harley Davidson focuses on design and quality of products, rather than on price. Therefore, products are expensive, which can be considered as a weakness. High price limits target market, as not everyone can afford the product. Harley Davidson as an American company focuses it’s market on the US. 67% of their revenue come from the United States. Depending on domestic market can lead company to failure. If the United States faces economic crisis, profit of the company will extremely fall. Although Harley’s motorbikes are high quality, competitors such as Kawasaki, Yamaha, Suzuki seems to produce even better quality motorbikes. They are directly focused on quality and speed of their motorbikes. Harley Davidson should consider implementing new technologies and improvements to their motorcycles.
The Asian and European market share have been gaining in recent year. The needs of Harley Davidson in Europe are increasing, which becomes a top one worldwide. Since lots of women and younger riders have been interesting in motorcycle, the range of customers has raised.(Richard, 2004, p9-10)
The European law of bike’s noise level is higher than those of U.S law, which urge the U.S motorcycle noise level to go up. At present, a lot of opponents are equipped with higher financial support and various marketing resource. It means there is greater competition from Harley-Davidson motorcycle on world market.(Richard, 2004, p9-10)
Analysis of 8Ps including product, price, place, promotion, people, physical evidence, process and partnership
After Harley-Davidson was taken over by AMF, AMF only focused on production rather than product’s quality so that Harley-Davidson’s credibility has been seriously damaged and sales dropped down. Beers joint 13 senior executives Harley-Davidson redeemed from AMF, the company always put quality as the first consideration. They put one hundred million dollars to improve equipment and production processes in order to enhance the quality of products. Harley-Davidson is similar with Rolls-Royce and Ferrari in terms of the manual manufacturing and limited production. Every motor need to be ordered in advanced. In order to reflect the personality of the Harley-Davidson riders, each motorcycle is customized according to every Harley-Davidson enthusiasts and a lot of accessories are available for modification. Thus, it is hard to find two Harley Davidson motorcycles alike.
Harley-Davidson’s customer orientation focuses on clients who are at the age of more than 35 years old and has high education and upper middle-income (HARI PRAKASH.N.V, 2004). Therefore, Harley-Davidson motorcycle price is more expensive than the price of cars. It is reported that the general popular Harley-Davidson motorcycle is $15000-20000 and Harley ROAD KING classic motorcycle model (in the 50s to 60s) is worth $ 25,000 and the old motorcycles model (in the 30s to 40s) can still be sold for more than $ 30,000 (Harley-Davidson Australia/New Zealand, 2012).
Since Harley-Davidson opened global market, it has not influenced the sale of Harley-Davidson in the US. So far, in the US Harley-Davidson motorcycle is still accounted for 70% of the market share. Harley-Davidson has conducted business in over 70 countries and continually enhances business strength with the knowledge of the professional marketing. Up to now, it has more than 1,300 authorized dealers throughout the world. In Asia, Harley-Davidson Company has about 30 authorized dealership and its marketing network has covered 10 countries and regions, including Japan, Brunei, Indonesia, Korea, Malaysia, Singapore, Thailand and China.
Harley-Davidson always insists on construction of product culture. Harley-Davidson culture has represented passion, individuality and freedom. Many people regard it as the inheritance of the traditional American cowboy culture. The core of the Harley-Davidson product design and marketing strategy is concerned on how to make the brand distinctive in the minds of customers. According to the customer’s personal preferences, the company would customize exclusive Harley-Davidson car for its customer to enable customers to achieve the purpose of demonstrating self-personality. Another great feature of the Harley-Davidson marketing strategy is always concentration on its own customers. Harley-Davidson focuses on the middle-aged man of about more than 35 years of age who have a higher income and a good education. This market segments can bring the company more profits.
Most of Harley-Davidson employees are motorcycle enthusiasts and because of that for customers Harley-Davidson employees are also passionate to solve their problems. The report (John W. Schouten, 1993) claimed that since 1983, Harley-Davidson established the Harley Owners Club and the purpose is to offer opportunities to members to share the experience more conveniently. Till 2001 HOG distribution around the world has 1200, and there are 660,000 members in 115 countries. HOG has created a Harley culture to link the consumers, motorcycle and the company together and Harley-Davidson gradually has gained more loyalty from customers in the past decades.
According to a Harley-Davidson earning report (Wikinvest, 2012), for the first quarter of 2011 it claimed that income had increased 73.5% compared to that of last year and it totally is $119.3 million. At the same time, retail sales had increased by 3.5% and comparing to last year the most sales volume came from Europe. Finally, total income is $1.1 billion from motorcycle sales and had increased by 2.5%. Therefore, good development and objective revenue of company can strengthen customer’s loyalty.
Harley-Davidson has established official website and it offers a quick way for customers to realize the company and gain the information they want. In addition, the website supplies reservation service so the customers can save their time.
Because of Harley-Davidson’s wonderful function, since 1980 Harley-Davidson motorcycle has started to be used as the police car and the company has kept good cooperative relations with local government. Currently, Harley-Davidson police motorcycle services for more than 3600 police and government departments in America, Europe and Asia. They are mainly applied to patrol and performance on some special tasks.
1) The standard Harley-Davidson retails around $30,000. How is investment in a Harley-Davidson more than just a financial investment? Harley-Davidson has got more than just a financial investment because Harley- Davidson understands what the consumers are looking for and maintains satisfying the needs of the consumers. A better understanding of consumer behavior would affect the market strategy of the company. In addition, Haley’s spirit can be summarized as the following three points: passion, pursuit of freedom, the enjoyment of life and those factors can represent how attitudes towards life most people are looking forward to.
2) In what ways is the Harley Davidson brand more than a functional brand?
Functional brand satisfies basic customer needs with a product. Some brands become icons, such as Harley Davidson. Harley Davidson not only produces iconic motorcycles but gives a life time experience, allowing customers to feel the freedom of riding such an iconic item. Over the time H-D has gained millions of fans and customers who remain loyal to the brand. As many say once you ride H-D motorbike it’s impossible to change it for any other bike. In 1983 the HOG (Harley Owners Group) was established. This organization unites members from all over the world, giving opportunity to share love and passion for Harley Davidson. Members organize rides, trips and events. HD created community and subculture.
3) The Harley-Davidson brand is an iconic American Brand, symbolizing the American way. How has this brand achieved such a strong presence around the world, including Australia?
There are three ways that Harley-Davidson brand has achieved success and became famous around the world. Firstly, the purpose of product design and marketing strategy of the Harley-Davidson is focusing on how to make the distinctive brand in the world; they must work closely with their clients to understand their thinking and really needs. Secondly, Harley-Davidson Company has been able to establish their brand image in the market since they has been focusing on the quality of their products. Thirdly, Harley-Davidson Company possesses the unique brand culture.
4) A high number of consumers chose to tattoo a Harley Davidson brand on their bodies. What would lead a consumer to tattoo a brand such as HD on their body?
Harley Davidson has become a cult. By tattooing brand’s symbol, one expresses loyalty and love to the brand. Such tattoos give a feeling of belonging to the unique community, relationship between a customer and a brand. Their express emotions, feelings and memories one has with the brand. Harley Davidson is associated with freedom, power, boldness and self-expression. Passion for HD is so strong that many customers choose to tattoo HD’s symbol. It shows how much customers are involved into the brand and its culture.
To sum up, the history of Harley-Davidson was showing in order to know background of Harley-Davidson Company. Also, SWOT Analysis which is strength, weakness, opportunity and threat explained the internal and external information of Harley-Davidson. This report described how 8Ps making marketing orientation more accurate in this company. It is recommended that Harley-Davidson should consider reducing prices to satisfy the younger generation consumers who have lower consuming level. In addition, Harley-Davidson could pay more attention to expanding other regions to get more profit.
Harley-Davidson Australia/New Zealand (2012)
John W. Schouten (1993), Pages 389-393, Market Impact of A Consumption Subculture: the Harley-Davidson Mystique http://www.acrwebsite.org/search/view-conference-proceedings.aspx?Id=11476
Richard,A,C.(2004),‘Strategic Management: Case Analysis ’, Network world, http://www.scribd.com/doc/12517953/HarleyDavidson-Strategic-Analysis,(viewed 12 December 2012) HARI PRAKASH.N.V (2004) Strategy management –Case analysis: Harley-Davidson http://zh.scribd.com/doc/12517953/HarleyDavidson-Strategic-Analysis
Wikinvest (2012) Harley-Davidson (HOG)
University/College: University of California
Type of paper: Thesis/Dissertation Chapter
Date: 1 November 2016
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