Category: Harley-Davidson

Introduction

Harley-Davidson Inc. was established during the first ten years of the 20^th century in Wisconsin. It is one of the major motorcycle manufacturers that was not hard hit by the Great Depression. It has also survived stiff competition from Japanese motor cycle manufacturing firms due to its high quality and competitive products and services.

The external analysis of the company reveals that Harley-Davidson Inc. is one of the companies that are highly recognized and admired worldwide. One of its notable marketing strategies entails excellent academy for training individuals who desire to learn riding motorcycles.

Issue I: Competition

On the basis of internal rivalry, the company inevitably faced competition from firms which manufacture similar products as well as enjoy larger market share and stronger financial bases. For instance, Yamaha Company is one of its close market rivals. Consequently, just like Harley-Davidson, the three other competitors also concentrate on production of heavy weight motorcycles.

These competitors include Honda, Yamaha and Suzuki which are all Japanese companies. In addition, Honda Company which stands out as the major competitor of the company in the United States of America enjoys a larger market share (Grant, 2005).

Causes of stiff competition

It is imperative to note that Harley-Davidson products are highly priced and therefore, it locks out customers who are of low-income levels. Additionally, in some European nations, the company has problems in attaining larger market share. In the markets that are considered big and diverse such as India, Harley-Davidson has failed to venture and exploit the same. Finally, the company has not met the requirements of the production process by analyzing the future of their product’s market segment (Bloomberg business week, 2011).

Impacts of competition

Competition has been heightened by the fact that most of the competitors have larger market segment, diversity and financial capabilities. Following stiff competition the company is likely to experience a fluctuation in its market share if no action is taking to retain and attract new customers. Apparently, los of market share due to increased competition also translates to a decline in the company sales and subsequently a reduction in profitability (David, 2010).

Recommendations

It is highly recommended that the company should penetrate the market by obtaining a larger market share from the existing ones such as UK, U.S and Japan. It can attain this by employing advanced marketing techniques such as online advertising and intensive use of social media. The fact that the company has a well established brand name, it can viably compete with other market rivals. Moreover, due to the fact that there is high level of competition in US market, the company can achieve more as a result of market penetration (Reuters, 2008).

Issue II: Reduced threats from potential entrants

In regards to potential entrants into the market, the company faces minimal threats since most entrants are quite often deterred by high amount of capital investments required in establishing Motorcycle Company. Furthermore, the motorcycle industry has already reached what may be referred to as maturity stage. Therefore, there are only four players in the market segment who are also major competitors.

The small number of players can also be attributed to the fact that optimum profitability may only be enjoyed when manufacturers take advantage of economies of scale.

Causes

One of the important elements in the operations of Harley-Davidson is the presence of substitute products or services. The main substitutes of Harley-Davidson products are cars, scooters and sports bikes.

This is because the company concentrates on production of luxurious motorcycles. Hence, it has fewer substitutes. In addition people who want to purchase heavy weight motorcycles produced by Harley-Davidson do not consider buying the existing substitutes. Consequently, lack of substitutes reduces the threat of entry by potential competitors.

Impacts

Barriers to entry imply that Harley-Davidson operates to nearly oligopolistic competition whereby they the power of suppliers. It has a large number of suppliers and hence if a supplier increases base price, the company has the option of switching to others without necessarily affecting production process.

The only materials that Harley-Davidson seeks from the suppliers are electrical and steel equipments in addition to shipping process (Bloomberg Business Week, 2011). The same significantly impact on the financial position of Harley-Davidson (Pahl & Richter, 2005).

Recommendations

Harley-Davidson should exploit the oligopolistic competition situation to increase customers’ power. They should not be tempted to exploit customers in terms of prices but they should continue developing attracting offer to their wide consumer base. In addition, they should continue treating their suppliers with utmost respect to ensure a smooth interaction (Grant, 2005). The fact that both young people and women are becoming more and more interested in the bikes should be treated as an opportunity whereby Harley-Davidson can utilize its position to tap into this emerging consumer base. Another aspect is that clients highly value motorcycles which are of high quality so they should continue offering the same. Moreover, the global market has continued to grow and it is wider than the existing market in U.S alone (David, 2010).

Issue III: Strong capital and market base

The strengths of the company can be analyzed on the basis of financial status of the company. Against this background, the company enjoys the wider international market. This has been en attributed to products of the company that are highly demanded in most European markets.

Causes

Harley-Davidson is the only company that manufactures heavy weight motorcycles in American addition to having a brand which is very strong. Consequently, the European market for heavy weight motorcycle is made up of performance and standards of Harley-Davidson’s segments which take up to 70% of the market share (Scott, 2008). In addition, the company has two segments in which it operates in. This consists of financial services of Harley-Davidson Company and the company’s motorcycles and other related products.

Impact

In 2003 financial year, the net income of the company increased by 30%b as compared to 2002 (Harley-Davidson Latin America, 2011). This data can also be accessed in the appendix below. The company further customizes its products and therefore it makes significant returns from the same as the cost is tied to specifications of customers.

Recommendation

The Company should further strengthen it marketing strategies such as public relations, events for customers, direct mails, use of magazines and even dealer promotions. This enables them to compete productively with their rivals and have a large market share (Harley-Davidson Latin America, 2011). Furthermore, Asian and European markets have been expanding over the years in addition to increasing demands for bikes in United States so Harley-Davidson should consider further investment in these markets (Grant, 2005).

Conclusion

In addition, the leadership should concentrate on product development. For instance, the company should consider expanding its products to females and younger generations who are becoming interested in motor bikes. The leadership should also concentrate on building the existing Asia market which has high population level thus higher market potential (Sandretto, 2011).

Based on the above analysis of Harley-Davidson Inc., it is pragmatic for the company leadership to consider the idea of not only expanding the Asian market but also the European one.

Furthermore, the firm should aim at marketing sales of motorcycles for both females and young enthusiastic buyers. In conclusion, the leadership should embrace both concentric and horizontal diversification as part and parcel of retaining and attracting new customers.

References

Bloomberg Business Week (2011). Harley-Davidson inc. Web.

David, R. F (2010). Strategic management concepts. London: Prentice Hall.

Grant, R. M. (2005). Contemporary strategy analysis. London: Wiley-Blackwell.

Harley-Davidson Latin America (2011).Timeline 1900s. Web.

Pahl, N. & Richter, A. (2005). SWOT Analysis -Idea, Methodology and a Practical Approach. London: Wiley-Blackwell.

Reuters (2008). A complete and comprehensive analysis of Harley-Davidson includes an overview. Web.

Sandretto, M. (2011).Cases in Financial Reporting. Boston:Cengage Learning.

Scott, M. (2008).Harley-Davidson-motor company. London. ABC-CLIO.

Appendix: Financial ratios of Harley-Davidson Company

SWOT analysis

Strengths

The Company has had a strong dedicated and innovative management for a larger part of its operation years.

• Harley, Davidson and the Arthur brothers saw it through the first years of inception.
• The group of company executives under the leadership of Vaughn Beals petitioned for the increase in import tariffs and came up with the H.O.G community.
• The current management under Victor & Spoils is meant to spearhead the modification of their products so as to attract the young generation.

The company has had a substantial capital base that allows it to conduct its business effectively.

• Most of the motorcycles are sold for over $20000 with the cheapest going for approximately $5000.
• Before 2000, it spent $1 billion in the maintenance of its leadership in motorcycle design.
• When Beals took over the company, it was valued at $75million.

The two cylinder design on its motor bikes that sets it apart from other motorcycles appealing it to the customers who wanted unique designs.

• The company retained the image of the cylinders as its icon for its entire history.
• The cylinders made the structure simple and thus cut down the production costs.
• The unique sound produced by the Harley motorcycles was due to the cylinders.

The first mover advantage.

• Hendee Manufacturing, Harley’s only competitor, went out of business in 1953 leaving the company to enjoy monopoly for more than four decades.
• Sportster, a brand of the company, was the first heavy-weight motorcycle in the world
• William Harley’s blueprint of a bicycle engine marked the history of the motorcycle revolution.
• The future competition from the Japanese industry was only founded after Harley-Davidson licensed its blueprints and equipment to Sankyo Company.

Great performance of the Harley-Davidson engines.

• The performance of the bikes in the race competitions, endurance contests and hill climbs was legendary.
• It dominated the racing arena with its official entry.
• The company’s motorcycles were preferred by the US military.

Creation of the Harley-Davidson community.

• With the inception of the HOG community, membership had grown to more than 500000 by 2000.
• More than 140,000 riders received a warm reception in the 95^th anniversary celebrations.
• The online HOG group propelled international sales.

Weaknesses

The company’s expensive price tag that appealed to the rich minority.

• The Ultra Classic Electra Glide was valued at $20,405.
• All customized bikes were in the range of $25000 to $30000
• The product available to the mass market was the Fat Boy valued for $6500
• Products from China were priced at less than $1000.

The poor management by the American Machine and Foundry (AMF).

• Under its management the quality of the companies bikes fell
• The company’s loyal customers were lost and profits fell
• Dealers were compelled to place cardboards under the bike to absorb the oil leaks.
• The Company was unable to handle competition from the reasonably priced Honda motorcycle.
• Poor employee involvement

Targeting one part of the market.

• The company reached only the baby boomers and did not bother to reach the younger generation.
• Pricing only targeted the able and left out those with low incomes.
• The company had to partner with Victor and Spoils in order to reach the young generation.

Opportunities

Ready market.

• When the first bike was manufactured, the need for a patrol bike by the Detroit Police Department served as a ready market for the company.
• The occurrence of World War I created a market for more than fifty percent of the company’s products.
• During World War II the company had to halt production of civilian motor bikes to concentrate on military bikes.

Reduced competition.

• Closure of Hendee Manufacturing, its major competitor, provided a golden opportunity for growth of the company.
• The increased import tariffs on Japan’s products reduced the foreign products available to the Americans forcing them to buy the company products.
• The inception of the H.O.G community made owning the bike a lifestyle.

Ease of expansion.

• In 1912, the company spread its sales to Japan and grew a network of over 200.
• By 1920, it was the largest motorcycle manufacturer in the worlds with 2000 dealers in more than 67 countries.

Concerned government.

• After purchase from AMF, the company petitioned for an increase in import tariffs and the percentage was raised from 4% to 40%.
• Once it had established itself, it called for the reduction in tariffs and laws were altered considerably.

Threats

Honda motorcycle sales at the time of purchase by the AMF.

• The company had reasonably priced products
• Honda also had sophisticated products that competed favorably with the Harley’s products.
• Harley-Davidson’s products had oil leaks that disgusted the customers.

The Imports from Japan to the US.

• The products were cheaper than Harley’s products.
• The import tariffs were favorable allowing the company to sell cheaply.
• Harley-Davidson had to petition for the increase in import tariffs due to the magnitude of the threat.

End of the baby boomers era.

• The company’s main market was the baby boomers who felt the bikes fashionable and affordable.
• The younger generation was not interested in their products.
• They had to partner with Victor and Spoils in order to find new ways of modifying their products.
• Factors leading to the downfall in 1960-1980

Internal factors

1. Poor management by AMF resulted in a reduction in the sales of its products due to poor quality.
2. Highly priced products made the Honda motor bikes more appealing.

External factors

1. Competition from the sophisticated and cheap products from the Honda Company.
2. The low import tariffs encouraged imports as the products sold to the Americans were cheap and affordable.

Company’s position and market challenges

The company has always been in a good position to respond to the market challenges. For instance, when faced by the threat of imported products from Japan, they managed to convince the government to increase the import tariffs that offered the company a chance to grow.

Similarly, on realizing the sales were not very attractive, the company introduced the HOG community and anniversary celebrations that attracted more people to buy the product. Recently, the company has realized its market is shrinking and has invested in crowd sourcing principles to ensure they meet customer desires in their products.

Present concern

Owing to the decreasing sales of its motorcycles with the end of the baby boomer generation, the company has shifted its concern to production of low priced products to attract the young generation.

Moreover, it has increased production of women motorbikes at affordable prices. In order to produce commodities befitting the current generation, the company is applying crowd sourcing principles in order to move in the right marketing direction.

US Market analysis

The US market consists of the rich middle-aged customers that can afford the highly priced products and the young people with an average income. In terms of gender, the men are better customers of the luxurious good than their female counter parts. In addition, this market responds quickly to changes in the quality of products, fashion and incentives offered by the sellers of each commodity.

Porter’s Five forces Analysis

Harley Davidson’s goal for perfect competition relies on Porter’s five forces framework such as market rivalry whereby a business organization competes favorably in the global market arena as part of maintaining a well established competitive edge. The company’s market share and industrial concentration are favorably stable.

This is due to its diverse product differentiation and the ability to raise and lower commodity prices without incurring losses. Although it is faced with threats of product substitute that emanates from other market players, Harley Davidson overcomes the challenge of accessory substitutes by making frequent replacements.

On the same note, the global market is threatened by incumbent firms that tend to increase barrier to entry of new and smaller firms. However, Harley Davidson uses the barrier strategically through price reduction in order to gain competitive advantage.

PESTEL analyses for Harley Davidson Company

Political factors

Managers at the Harley Davidson Company are faced with diverse macro-environment challenges that impact the decisions they make. Some of the macro changes that effect its operations include the changes in government policy, demographic changes, trade barriers, new laws and tax changes.

One key macro-environment factor affecting its operations is the political factor. Additionally, there are myriad of political decisions that impact the operations of Harley Davidson in vital business areas such as health and education of the workforce as well as quality of economic infrastructure like roads.

Economic factors

The economic factors include exchange and inflation rates, economic growth, taxation changes and interest rates. These economic factors impact the behavior of the firm in such areas as deterring investments since it makes the cost of borrowing to increase and exporting of its products becomes difficult due to a strong currency which raises the price of commodities.

In addition, due to the current inflation problem, Harley Davidson faces the problem of raised operational costs and demands from employees who need higher wages.

Social factors

Socially, one of the factors impacting Harley Davidson’s operations includes massive changes in social trends. This has been found to impact the willingness and availability of its employees to work as well as the demand for its products. The impact of social factors is witnessed among the aging population who are part of its staff and require pension payments.

This increases the cost of payments and hiring of new staff. Besides, it has to deal with the impact of the aged on demand. As usual, the aged do not frequently demand motorcycles what makes the demand among this age group to be lower.

Technological factors

Harley Davidson is making use of new technologies to innovate new processes and products. Its motor cycles, accessories and merchandise are all created for new markets and with room for technological improvements.

Besides, it has adopted online business systems through which it markets and sells its products to online shoppers. Through technology, Harley Davidson has been able to lead in innovation, improve the quality of its products, create better two-wheel designs and reduce costs.

Environmental factors

Major environmental factors affecting this business include climate and weather changes. An external factor such as global warming is a significant problem to this company as it impacts both transportation and travel industries. Buyers prefer cars to motorcycles and this affects the sales of motor cycles and its business opportunities due to changing demand patterns.

Legal factors

Certain legal factors such as consumer laws, safety legislation, and employment as well as competition laws control and regulate its operations. Of greatest importance is the employment law that covers the issue of wages for employees, working hours, dismissal procedures and redundancy.

Competitive advantage

Some of the important competitive advantages at Harley Davidson include the fact that it has employed innovative capacity, strategic flexibility, organizational learning and effective technology. Besides, it has articulate strategic intent, competencies and resources that are non-substitutable and unique.

Ways for value creation/ ways for customer value creation

Harley Davidson value creation methods include customer engagements, encouraging blogs and debates on products, creating value through transparency, risk benefit, access and dialogue.

Evaluate H-D’s latest segmentation, targeting and positioning (STP) Strategies. What are its major Strengths and weaknesses?

Market segmentation in Harley Davidson is pursued with greater vitality to ensure that the existing market is understood even better and newer avenues to sell the products that have been identified. Lower prices for products to these economies act as part of crucial attraction factors and therefore essential marketing strategy for new products that are being introduced into the market.

Other market segmentation that could result in greater sales includes consideration of individual groups’ behaviors to determine their exact preferences especially in the emerging era of great creativity. In terms of target, its products target transport businesses and companies as well as individuals.

In terms of positioning, following the continued expansion of population in America, Harley Davidson products have not been made more available especially in major towns. However, to promote the availability of these products, the company has resulted to online sales where consumers can order for their choice of products and get them delivered.

Suggest 2-3 contingencies that H-D should contemplate (international/European/Asian markets? Younger generation customers, more focus on women customers? Parts markets? ) . What main changes to their current marketing strategy should H-D consider to minimise impact of these contingencies (just point them out and write 1-3 sentences in support)?

Harley Davidson should concentrate on younger generation customers and international markets. To cushion itself from contingencies, it should be updated periodically such as offering staff training and develop mitigation options as these are key in risk planning and business continuity.

H-D is switching its strategy to Crowd sourcing (last page). Evaluate this strategy in regards to H-D

Is switching to it a threat or an opportunity? Why?

Harley Davidson creative marketing initiatives based on crowd sourcing is a move aimed at engaging the broader community and its customers with its brand and the company. Besides, Harley Davidson intends to adopt crowd sourcing for community collaboration and consumer innovation.

Crowd sourcing is indeed an opportunity for Harley Davidson to increase its marketing initiatives. It will also use it as a production and problem solving model through which it reaches customers and communities and submits solutions to both its customers and employees.

Pros and cons? Would it work for H-D or not? Why?

Crowd sourcing can effectively work for Harley Davidson as it provides a forum where issues affecting workers and customers are explored quickly and at a cost that is comparatively effective. Besides, through crowd sourcing, Harley Davidson has the ability to tap from a wide range of opportunities and talents in the organization.

Additional crowd sourcing provides Harley Davidson with an opportunity to gain first hand information from customers on products and preferences. Lastly, this model creates a crowd sourcing organization that encourages contribution and collaboration key for business growth.

Analyze the major 5 principal factors behind switching to this new strategy?

One major factor why Harley Davidson made a move to crowd souring was to develop a consumer engagement project where a ‘community is involved to ensure that effective contributions or collaborations on products and services are made to enhance the performance of a business. Besides, crowd sourcing model was going to introduce the community to its product designs, innovations and new features.

These were to act as incentives for motivating the willingness of buyers to shop for its products. In addition, it was a step to allow the broader community and customers to feel as a part of the company and to be engaged in its business activities. In addition, the focus of adopting crowd sourcing was to ensure that consumers and the community are satisfied ,with products and services offered.

Advise to H-D of at least 2 major marketing strategies that they should consider strengthening their position. Applying RACES (Resources, acceptability, consistency, effectiveness, sustainability) criteria, which of these strategies would you advise the publication to adopt and why?

Sustainability- Crowd sourcing is strategies that will link Harley Davidson with its customers and the community and as such offer it a unique competitive advantage.

Effectiveness- Crowd sourcing is an effective means of presenting to a community or customers the initiatives of a business as.well as products and services. Crowd.sourcing will strengthen the position of Harley Davidson in the market.

H-D is a company with strong marketing. What changes into H-D marketing department could be made in order to support new Crowd sourcing strategy and help H-D to strengthen its position in the market?

Some of the important strategies that can be put in place include developing leadership capabilities to handle marketing teams and improving marketing skills. Building leadership capability is important in coordinating marketing activities while improving marketing skills is vital for overcoming dynamic challenges that are common in contemporary marketing.

Background

Marketing is an important exercise in both services and goods industry; it ensures that target customers access goods and services a company manufactures. Marketing involves processes that determine the kind of products or/and services of interest to customer then the company knows exactly what to manufacture or trade in.

Other than advising a company on the kind of products to make, marketing goes further and establishes the right method, channels, strategies and systems to get the products/services to target market (Mullins, Walker, 2010).

The American motor cycle industry is one of the fast growing economic sectors where motor cycles are used for various functions like trade, transport, sporting, as security officials automobiles, and sometimes for leisure.

Harley is an international motor cycle manufacturing company based in the United States of America; the company is respected for making reliable heavyweight (over 750 cc) motorcycles and genuine motorcycle accessories.

The automobile industry has been ventured by cheap aftermarket sales that compete with original accessories; the market is favoured by the cost and the room for customizing once motor vehicles offered by the automobile. The challenge by the secondary industry offers a challenge to Harley-Davidson Motor Company; report is a marketing plan that the company can adopt to compete effectively in the market.

Company overview

Harley-Davidson Motor Company was founded in 1903 by three childhood friends by the names William Harley, Arthur and Walter Davidson; the initial idea was to make racing bikes with engines however they advanced their idea to have the bikes used for transport.

In 1905, the company had started to be recognized and advertising its products in media in the United States; currently the company has its head quarters at Milwaukee, Wisconsin, United States and headed Keith E. Wendell, the company’s chief executive officer.

In 2010, the company recorded total sales of US$ 4.46 billion which translated to US$ 259.7 million; of the amount about thirty percent was derived from sale to foreign markets. As at December 2010, the company had 6302 members of staffs distributed in its outlets (Harley Official Website, 2011).

Executive Summary

No single statement can explain what is marketing; briefly, it is a link between customers and a company, the feedback from either side is crucial in improving goods and services produced. Harley-Davidson Motor Company is facing an increasing competition from aftermarket accessories, thus the marketing team has found it important to develop a marketing plan to form the base of an aggressive marketing for the products.

The main target market that the plan will focus on are existing customers, which the plan will embrace customer relation management strategies to build, maintain and manage customer loyalty; the second fold will focus on automobile users where the company will aim at convincing buyers to use its genuine parts; this will embrace strategic marketing tools like communication marketing strategies (MARCOM).

The last target market that the company will focus is diversification of its market base, to use this approach; the company will make use of blue ocean marketing strategies. The report will also include the suggested marketing budget for the launch of the strategy.

Target Market

The campaign strategy will be divided into three main target groups differentiated by their behaviour as far as use of Harley-Davidson Motor Company spare parts and those from after market sellers.

The first category encompasses customers of Harley-Davidson Motor Company spare parts; they can be seen as people who have loyal to the company and have the characteristic of using genuine products. The main focus on these customers involves enacting measures to maintain current market base and improve the relationship with the customers.

The main activities that will take place focusing on this target market are the following: measure approach; this is an approach where information from customers is collected; the information is on the level of satisfaction that customers are getting from the company.

The second move will be to manage products and service delivery, what the customers are finding as correctly done should be reinforced and what they find as wanting should be rectified.

With the feedback from the customers, then the company can decide on ways to improve service delivery; by service delivery, the company should be interested on the level of service that aftermarket accessories suppliers are giving then aim at surpassing the level set.

The second target market segment that the company will be looking at is the “undecided customers”, they are people who buy either Harley-Davidson Motor Company genuine spare parts or sometimes buy after market products. The reason for their behaviour should be determined by a market research. It is likely that they buy the available product, thus policies that make genuine parts available should be made.

The third target market that the management should look into is the untapped market; this is market that is less competitive with the aftermarket products. To venture into this, it can be through robust marketing campaigns that sells both bikes and spare parts. The company can decide to open its own market where they sell bikes then later on reinforce the use of genuine spare parts.

Competitors

The main competitors that the company will have to deal with are aftermarket sellers; they are people who sell spare parts or body and engine parts that can fit certain models of Harley-Davidson products. There are many reasons why some people prefer to use these products other than using the genuine parts.

One of the post quoted reason why some people prefer after market products is because they are made by specialists thus they are of high quality, other people prefer them because they are less costly than genuine parts. The above two reasons happens to be the strength of competitors; Harley-Davidson company should embrace the challenge and aim at countering the strengths of the companies.

To challenge the competitors, the company should venture in programs that improve the quality of their spare parts, in the case there is a certain modification that can breakeven when made as an accessory, and then the company should adopt such an accessory.

Price has always been an issue when marketing for commodities, there may come sometimes that Harley-Davidson products are expensive than those of the aftermarket, the management has two interventions to make; one ensure than the price of accessories represent value for money.

The second intervention that the company should ensure is that it has attained high quality products and efficiency in their products. The best weapon to counter competition rests in understanding customers, providing high quality products, aggressive marketing that educate users on differences, and products differentiation.

Product or Service

The subject of the matter in this marketing plan is the sale of genuine motor cycle parts; the accessories involve engine parts, body parts, and other related accessories like bolts and nuts. When creating the products, the company should be aware of the model and the demand that the parts will have in a specific area.

The products aims at offering repair accessories owners of Harley-Davidson products, it aims at winning customer loyalty in the market filled with aftermarket products. Different model of bikes require different repairs parts, thus they need to be made available; one of the main characteristic that the product will be selling to the people is its originality, quality, guarantees, and genuineness.

When developing and improving the products, the sales book will of great use as it will help the company analysis the market, on where is a certain product or certain model of bike; with the clear understanding, and then campaigns will be focused on the particular area that has a certain machine (Vorhies, Morgan & Autry, 2009).

Marketing Budget

When making a marketing strategy, there is need to develop the budget that various activities involved will fall under. Budget follows some costs heads that is a consolidate figure involving different individual costs.

The following budget will be incurred:

The above costs heads involves costs that can be classified under the heading.

Description of Location

Since there are different models of bikes, the location of market will be determined by the model and type of spare parts that may be applicable to the particular area. When the above has been determined, the locations that will make them accessible will be determined by the marketing team.

Some of the suggested places that the parts can be stocked include garages, supermarkets, automobiles accessories shops, and the bikes distributing channels. The main reason for determining the location is to ensure that the goods reach to the target customer at the right time in a form that is acceptable.

With the suggested place in mind, the marketing team should come up with the best transport, supply and logistics methods that should be implemented to get the goods to the customers. The right channel of communication should ensure that the company’s products get to the target market in the shortest time possible.

The nature of some of Harley-Davidson products users is that they are likely to attend motor shows and other promotional events, the management should set a budget that can be used to market the products one on one in these places (Lyus, Rogers & Simms, 2011).

Pricing Strategy

Price is an important marketing parameter that should be looked into when making a marketing strategy; it is through the price of a commodity that the company meets its expenses and gets a gain form the sale. There are two main elements that an effective price should have; the price should be high enough that the company will get some profit from the sale and the price must be affordable.

Harley-Davidson products marketing team will have to undertake a market price review where they will compare the costs and prices that competitors are able to sell, when they note them, they can work back and set their prices.

In the situation of Harley-Davidson products, the best pricing approach to use is the premium pricing approach, under the method the management sets a price that is slightly higher than the prevailing price; the reason for the high price is both psychological and economical.

From the psychological part, some people believe that quality is expensive thus they are likely to buy the products; the second reason is because the price set should represent quality offered by the company (Hsuen-Ho & Jia-Wei, 2010).

Summary and Implementation Plan

The implementation stage has a number of processes that will be involved, they are as follows:

Marketing research

Marketing research involves the marketing team undertaking a desk and field research that determines the company’s rate of performance verses the rate at which aftermarket products are selling.

The information offers the background that the strategy will be built on; the gaps realized should be analysed and meanings derived from them. The initial market research offers the team an overview of the areas they should address in the strategy.

Analysis of data

The initial stage was involved in the team collecting volumes of qualitative and quantitative data; the data from customers, bureaus, and internal information and industry reports should be reviewed to ensure that the problem that the company is facing is well understood. It is through problem and gap analysis that the company can come up with the most effective solutions.

Strategy development

With the data and problem well interpolated, there is need to have systems that are focused on the problem. The three main target markets needs different approach thus the marketing team should be clear on the approach to use and at which point they will have to quality a certain employee to the next higher level.

Policy enactment and implementation

Specific strategies to address a certain issue needs to be enacted through policies and infrastructures; the infrastructures needs to be put in place. For example to maintain customers there is need to have effective communication systems where the company can get feedback on various issues.

Enforcing, monitoring and controlling

When all is good to go, the management should ensure that it has enacted policies to maintain an improved relationship with customers. The policies enacted should be improved appropriately so that they do not fall out of relevance.

In the implementation stage, the management should have the policy of marketing mix in mind; the following sample of an applicable marketing mix can be used:

The above diagram gives a guide of the areas that the management should look into when enacting the marketing strategy (Day, 2011).

Conclusion

An effective marketing strategy is a competitive advantage tool; Harley-Davidson Motor Company should embrace tools of strategic marketing to remain competitive amidst increased suppliers of aftermarket repair accessories.

The company should embark on effective communication campaigns that create awareness and differentiation of its products; it should also embrace the concept of “Blue Ocean” to widen its market base indirectly.

For an effective marketing campaign that can stand competition, Harley-Davidson Motor top and line managers need to support efforts made by the marketing department; on the other hand the marketing department should work closely with research and development segment for more informed decisions.

References

Day, G. (2011). Closing the Marketing Capabilities Gap. Journal of Marketing, 75(4), 183-195.

Harley Official Website. (2011). Harley-Davidson Motor Company. Web.

Hsuen-Ho, H., & Jia-Wei, T. (2010). A Model of Marketing Strategic Alliances To Develop Long-Term Relationships for Retailing. International Journal of Business & Information, 5(2), 151-172.

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Mullins, J. W., Walker, Jr., O. C. (2010). Marketing management: A strategic decision making approach. Boston: McGraw-Hill Irwin.

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Introduction

Harley-Davidson Inc. is a US-based motorcycle manufacturer established in 1903 by collaboration between William Harley and Arthur Davidson. The company was considered world’s leading designer of motorcycles comprising of heavyweight, touring as well as performance motorcycles.

The company also deals with line of motor cycle parts and accessories. The supplies of motorcycles from Harley-Davidson were recognized based on their distinctive design as well as heavy customization.

The brand image of the company based on raw power formed crucial part of its unique selling proposition (Whalen et al, 2010). This made the company to focus on differentiation strategy targeting more specific products within various niche segments in the market (Whalen et al, 2010).

The nature of the powerful brand image HD uses within the market, led to building of deep relationship between the company, customers and matchless riding experiences. This contributed towards massive loyal brand following since the needs of customers using heavyweight motorcycle were catered for.

Marketing strategy of the company focused on company-sponsored events, various dealer promotions as well as advertisements in the media. Target market majorly comprised of baby-boomers who happened to be men above thirty five years of age.

However, the age limit has risen over the years to over forty years. This represented the age group who contributed towards Harley-Davidson’s iconic figure within United States of America.

Due to decline of customers within this segment, the company strategized in the year 2010 to re-organize their marketing efforts and at the same time focus on multigenerational and multi-cultural marketing strategy.

Such strategy focused on various age-groups, ethnic backgrounds and also being gender sensitive (Doole and Lowe, 2008).

Impact of new and emerging technologies on transport and it applications is currently evident. Advancement in technology have taken very sharp dimension and on upper dimension within the market.

Such technologies have been identified to include advances in automobile, accessories and computer production. Increase in the number of automobiles having web superior capabilities as well as new display technologies are on the growing trend.

Despite all these, experience within automobile industry reveals that it’s rather expensive to operate within developed countries due to expensive demands from consumers.

Such reasons should ensure that the identified gaps in knowledge regarding lucrative markets, and identified opportunities are dealt with amicably (Kotler and Keller, 2007).

However, as one of the best managed companies within various regions, HD takes pride on the high technological and modernized level of products and services provided.

Summary of environmental appraisal analysis for the U.K. market

Internal analysis

Harley-Davidson line of production deals with automobiles whereby they retail new and used products. Their market supply has been considered adequate by customers for close to over ten decades.

There is provision of various unique heritage and culture to employees which enables them to offer excellent services within the automobile industry.

HD stands as one of the world leading companies within automobile industry dealing with heavyweight motorcycles, motorcycle parts, accessories, apparel and general merchandise (Whalen et al, 2010).

The company has ensured concrete development within its various business segments. Such segments include that of motorcycles and that dealing with provision of financial incentives. The financial service segment deals particularly with wholesale as well as retail financing and insurance (Whalen et al, 2010).

There has also been much focus on various innovation- related measures which assist in enhancement of differentiation and methods of costing.

At the same time, much difference occurred from economic conditions and finance management within the organization. It is easier to develop performance indicators from the company’s financial records.

SWOT analysis

Strengths

Harley Davidson commands a considerable market share within European countries owing to the nature of its products which includes most sorted out heavy- weight motorcycles.

Part of the company’s strength emanates from its area of specialization which is narrowed down to two segments; motorcycles and its accessories as well as Financial Services. Harley-Davidson supplies heavyweight motorcycle within various international markets such as Middle-East region and Asia.

Additionally, the company boasts of a strong brand name which at one point was used as trade mark amongst American population. Such nature of strength exhibited enabled perpetual attraction of customers especially amongst baby boomers.

The Harley Owners Group (HOG) association established within the company has enabled expansion of customer base with approximately since they command approximately 750,000 members globally. This makes HD appear sole sponsor of motorcycle enthusiast within the industry.

Buell Riders Adventure Group (BRAG) is one of the affiliate company’s granted rights of manufacturing products under HD’s brand name.

Further strength can be identified through various market segments dealing with different issues such as promotions, customer events, media advertisements and direct-mailing (Magretta, 2002, pp 86-92).

Weakness

HD’s weak points as it gears up for the UK market can easily be identified in the nature of pricing they use on their products. This has made it difficult for the company to extend its market share within Asia and European other countries.

At the same time, there are internal problems revolving around capacity in production which limits HD’s supply of heavy motorcycles to future market segments (Whalen et al, 2010).

Opportunities

There’s currently high demand for Harley Davidson motorcycles within regions having high percentage of Middle-Class earners. These countries are found within the European market which at the moment presents the largest motorcycle market in the world.

There is potential market amongst the younger generation as well as sports events within America and Asia with quality being the major concern.

Threat

The loss of considerable domestic market is attributed to emergence of innovative competitors such as BMW and Hyundai which supplies quality but relatively cheap products to the market.

At the same time some of the competitors within the market have stronger financial base and well coordinated marketing network which ensures smooth operations of their diversified products lines.

Potential threat may arise from subsidiary companies using HD’s brand name since they can be tempted to compromise quality (Doole and Lowe, 2008).

External factors

External Strategic analysis

The general environment of Harley Davidson will be analyzed by use of PEST analysis model. For the purposes of capturing various changes within the environment, it is important that Degree of Turbulence (DOT) model be utilized.

At the same time, the motor cycle industry within the United Kingdom from which HD is expected to operate will be analyzed by use of Porter’s Five Forces analysis (Whalen et al, 2010).

The Degree of Turbulence

Strategic analysis of the UK environment requires the application of DOT which reveals on the stability of the industry within the current market situation. The choice of strategy is very important since it will determine the mode of entrance the company uses within various markets.

There are always two main approaches used either emergent or prescriptive approach. However, various factors within specified market environments determine the level of turbulence within the environment. The factors considered in such a case include; changeability and predictability (Whalen et al, 2010).

According to UK statistics, changeability can be recognized through high chances and probability for environment to change. Changes within the environment are brought about by many other factors categorized as either complexity or novelty.

Such factors providing complex impacts include; political, technological as well as social aspects. Global economy represents one of the complex potential factors which might affect penetration of Harley-Davidson Company into United Kingdom market.

This is because HD is a multinational company having most of its operations within the international market. Based on this, various changes on technology, prices as well as overall GDP ultimately affect overall performance of HD within emerging markets (Whalen et al, 2010).

On the other hand, Novelty factors focuses on the frequency of occurrences of new situations towards the company. Harley-Davidson is considered to operate within high technology environment as exhibited by its major competitors from Japan and other such as BMW.

This makes it possible for any company to turn things up-side down within the market based on its level of advancement in technology. Such changes as described above can be determined through application of predictability factor.

Predictability is usually determined based on “rapidity of change” or “anticipation on future impacts”. These qualities are used to determine rate of transformation within the market as well as availability and quality of information applied on future prediction respectively.

Rapidity of change within the UK can be evaluated by examining changes on market responses towards products supplied. This can be linked to the nature of GDP within the regional countries which will ultimately determine the level of supply of HD heavy motorcycles, other premium goods and services.

However, with respect to “visibility of the future”, HD should be capable to predict the trend within the future market of motorcycles within the region. This is since the trend is shifting towards environment friendly automobiles, hence “forecastable” to predict market inclination.

The company’s positioning based on pricing will largely determine their profit margin. Various changes within the environment, calls for adjustments to the strategies applied by Harley-Davidson within other regions. Such changes within the UK environment can best be described through application of PEST analysis (Whalen et al, 2010).

PEST Analysis

PEST analysis is basically built based on historical data, making it more challenging to predict the future form previous events within the market.

Despite the analysis from degree of turbulence which could be used in predicting the future, PEST analysis cannot be utilized for the same purposes making it difficult for the company to predict their future trends from past events. Further, such results cannot be directly transferred to the future.

For the purposes of analyzing UK market, HD will divide its results based on short-term and long-term events which are done based on the provided financial data. Scale of 1 to 5 can be used to quantify events based on most and least favourable environment for HD products.

Using such scales can make it easier comparison between factors. However, HD Company will utilize the most relevant factors within the analysis to predict their performance within the target market.

Political factors

Previously as revealed from the case study, several obstacles in the form of political factors have led to stagnation of HD products within some markets.

This could be seen through enforcement of new laws within countries. However, the most defined area within the market which has attracted several legal enactments is rate of global warming based on greenhouse gas emissions.

Additionally, nature of disposal of old products and durability of the products determines market acceptance within some territories (Whalen et al, 2010). There are tight legislative restrictions on emissions within the OECD member states.

This presents some challenge to HD’s heavy motorcycles since they consume much fuel leading to unwanted emissions (Whalen et al, 2010). European countries have enacted their own standard of operation i.e. EURO 5 which gives directions of operations within automobile industry.

The law ensures that all manufacturers are responsible for their product’s performance for the first five years of operation within the market (Whalen et al, 2010).

This is the same as United States market which has defined rules enforcing regulations on green house gas emissions. Such restrictions on emission have the capacity if increasing costs within various areas of development, testing and manufacturing for Harley-Davidson.

The process of recycling used and old vehicles is also given equal importance within UK, with the laws stating that various automobile manufacturers are under obligation to retrieve back specific components of their gadgets.

Such directives provide additional operational costs on HD, since they are required to be responsible for recyclability of various automobile components. This would make the company to forcefully take into account cost of scraping various components expected from used motorcycles.

Consequently, there are various forms of crises based on political instability within the emerging markets in the region. Such cases affect the company’s profitability depending on the size of the market and total revenue collected.

Despite all these, there exist high prospects on company’s future based on the nature of the UK market. Political instability results into unexpected outcomes which poses adverse effects on HD’s bottom line.

This shows that the state of political stability will have tremendous effect on HD’s operations within emerging markets (Whalen et al, 2010).

Economic factors

Statistics reveals drastic fluctuations in the world GDP growth within the last few years. Records reveal that in the year 2008, GDP was recorded to be at a decline of over 2.5%. The successive years recorded growth rate of over 1.5% followed by approximately 2.5% (Whalen et al, 2010).

Such projections are true reflections on the expected nature of recovery within the future anticipated to be over 3% by the year 2015. It is therefore important for various automobile companies such as HD to carefully differentiate their target markets.

This involves analyzing growth within emerging markets and already established markets within western economies. The GDP growth within the European countries is estimated to be at 1.8% (Duval, 2010). However, within the UK region, there is threat based on credit risk especially with big percentage from debt financing.

Based on its financial records, HD should position itself to finance its operations within UK market from matching maturities of bonds to various activities. At the same time, derivatives could be used neutralize risk on interest rates.

The other risk faced within European market involves fluctuations in various currencies used. However, this can be reduced through natural hedging where production facilities of the company are stationed within the major market.

This would ensure that the revenue generated is spent in the same currency leading to reduction on rather anticipated currency risk. United Kingdom market requires specialized facilities capable of serving the elite population present.

This leads to increase in cost of production hence making it difficult to control revenue and operational costs. Currency risks within this market are majorly associated with US dollar and British pound which would account for significant percentage of HD’s total currency exposure.

However, deals within foreign countries are neutralized through hedging which happens between Euro and US dollar based on the fact that large revenue is obtained from United States operations which happen to be HD’s country of origin (Whalen et al, 2010).

The nature of strength exhibited by dollar against Euro makes currency risk one of the major concerns within the UK market. Current globalization makes operational and manufacturing costs high owing to high cost of raw materials of which in this case comprises of steel and aluminium.

Such trends affect ultimate prices of goods due to scarcity of raw materials and increasing demand for motorcycles.

Socio-cultural factors

The demographics of the market within UK are promising owing to growth experienced within the middle-class. This would represent HD with the desired market segment. However, the market within UK usually demands for products which are environmentally friendly.

Technological factors

There are lots of difficulties when it comes to technology since there is emergence of highly innovative firms hence gaining competitive advantage is not easy task. However, the nature of engines within their heavy motorcycles makes HD to gain significant competitive advantage over other competitors.

Inclination towards environmental issues is creating avenues for the development of environmentally friendly products within the area of transportation.

There are certain peculiar attributes notable within market segments which have been singled out. In this context, it is evident that whenever all these socioeconomic factors get managed, the consumer rates of HD’s products might just be equivalent to those high rates observable within other industries.

Therefore, there is an evidence of the increasing importance of the institutional elements of the decisions and performance of motorcycles and associated products.

The role of the marketing department in influencing major decisions and the fate of technologically out-dated innovations is seemingly vital and can never be underscored.

There are also indications that the various underlined cognitive factors act synergistically with other institutional factors to influence buying decisions of most customers within UK (Daley, 1993).

Identification of two new target markets appropriate to HD in the U.K. market

The company has for the past years developed new line of products contributing towards enhancement of their products based on value-added services and at the same time utilizing business customers.

The new target market would be defined as knowledgeable and maturing but very much familiar with older product technologies. This requires HD to lower their prices and at the same time be innovative for the purposes of maintaining their level of relevance amongst consumers within the target market.

They should focus majorly on needs-based segmentation process which provides opportunities for reaching different consumers. Such segments are usually characterized by low pricing, reliability in quality as well as constant supply.

Implementation of new products amongst the younger generation within UK should be accompanied by new branding systems for the purposes of eliminating cases of confusion amongst customers (Whalen et al, 2010).

The recreational industry within UK also provides one of the most lucrative market segments.

One of the marketing strategies that managers should apply for the purpose of remaining competitive within this industry is advanced technology and at the same time upgrading their establishments with the intention of appealing to more customers.

Available literature demonstrates that sports organizations spend considerable sums of money each year to design, build, and elegantly furnish their establishments. The organization should focus on needs of trainees using HD’s products such as motorbikes.

Such applications assist in implementation of effective organization’s goals and objectives. There should be reinforced elaborate plans focused on establishment of relationship amongst participants within various sporting sections.

The organization should be capable of supplying high profiled riders and their sponsors through application of appropriate technologies within their gadgets.

Such actions enable tremendous contributions towards individual enhancement of skills which at times is necessary for productivity purposes. At the same time, HD should utilize performance ratings for the purposes of establishing anticipated results from various sports segments.

Such performance ratings are based on departmental components and their accomplishments based on organization’s goals. The process involves defined planning of activities whereby objectives from various activities are aligned to those of the company for the purposes of efficient management.

Various positive experiences are identified in the process of supervision and major decisions made based on efficiency of applied concepts. Such activities are based on consumer’s learning processes and ability to match the required standards.

Overall performance ratings are done on annual basis hence making it possible identification of incompetent areas and afterwards implementation of appropriate plans (Chan and Lynn, 1991).

Harley-Davidson as an organization should focus on individual social benefits. This is based on frequent review of articles containing cases on social enterprises within sporting industry which enables them perform various adjustments within some of their respective units such as gymnasium.

However, most of their operations should focus on business prosperity in case of recessions. This acts as strong contributor towards frequent updating of their system based on market trends.

The management should unveil possible trend showing sustained growth and better long-term prospects for such enterprises compared to other for-profit enterprises. This discovery echoes true sentiments for companies operating within such industry.

For example, stories within various articles focus on products and services provided through service industry. At the same time, there are more online discoveries concerning necessary improvements required in making customer experience of executive standards within automobile industry (Whalen et al, 2010).

In the process of allowing access to information, the management of HD should consider operating common website alongside other sports websites within the region. Such operations allows for easy coordination between fans, management and players.

The only lacking facility is that which enables payment to be done over the internet, such improvement would facilitate more online bookings hence decreasing overall transaction costs (Mintzberg et al., 2003).

Management of growth processes with HD focuses on intangible and tangible assets as well as available sports products and accessories. This focuses on providing intended returns based on organization’s marketing strategies.

The management at the same time should focus on issues touching vital points such as management of capital investment alongside appropriate working systems.

Smooth flow of processes within HD is influenced by availability of highly skilled and motivated employees, having updated and accurate information on the current marketing trends within UK segments.

Various measures have been implemented by the company some of which include acceptable level of satisfaction from consumers and balancing on various innovations based on gender.

At the same time, HD should incorporate instruments for the purposes of measuring every initiative undertaken in the process of improving level of competency (Mintzberg et al., 2003).

Development of differentiated marketing mixes for each target market identified

Harley-Davidson products and services accommodate economy to upscale class within business, sports and leisure market environment. Various brand names are used under the umbrella of HD depending on the region of operation.

The brand name HD is identified to have strong positioning within the upper and medium scale market range. The brand’s presence in all the continents is felt through durability and nature of HD’s products.

At the same time the hotel has strong positioning within transport sector. There is well developed and established information technology which HD utilizes to attract customers such as online technology.

The younger generation comprising of X, Y- generations as well as millennial can be easily reached through computerized technologies such as mobile phones and social media. Such marketing channels ensure that services are rendered by use of accurate information regarding specific tasks.

Such technological adjustments create possibility of using services creating some sense of attraction amongst users since they expect quick responses. This calls for IT technicians to develop highly accurate and fast search engine software.

Emergence of new technology with the integrated marketing mix has led to creation of new software capable of handling rapidly growing market segments. This enables use of new technologies for the purposes of content management and deliveries.

Development of social networks comprising various groups such as colleagues can possibly be exploited for the purposes of providing efficient and effective marketing services to customers.

However, such new technologies have led to emergence of such activities as abandonment of courses, display of boring content and at the same time difficulties in real assessment of work done by sales team.

Such problems can be dealt with by use of semantic technologies capable of providing new connections and content deliveries suitable for destines occasions. Such progress with new technology has enabled vendors to create messages capable of adapting to the device’s content and location (Kruk and Grzonkowski, 2006).

Creation of semantic digital libraries such as JeromeDL assists in software controlled repositories capable of running eLearning content. Due to new technology, it is vital to develop research team capable of reviewing online social projects after every short period during the project cycle.

The audit team should be self- dependent without personal interest in the project. New technology demands that auditing on IT system should be carried out to avoid unnecessary hacking of company’s records and data.

New technology has advantages and disadvantages of carrying out the project, achievements and relevance of the management’s priorities. Finally, integrative management process that meets the priority, definition, scope, mission, budget schedules, and control are made possible by the technology.

Management within HD is however endowed with responsibility of ensuring that online social enterprise applied in reaching the market set clear conditions for achievable schedule, budget and tasks.

A standard contract for the signature should be drawn for the purposes of allowing various considerations on all necessary obligations.

Such projects allows existence of good auditing which depends on appropriate processes, essential setting priorities, goals, schedules, project definition, supportive culture, and budgetary control for project implementation.

The lessons learned from technological innovations should be stored to ensure that clients are comfortable (Reiter, 2005).

Concept of globalization has led to generation of various changes within every industrial sector and creates a path towards the modernization. Introduction of computers and mobile phones are said to be the first modernized communication system.

There is an agreement that use of computers and use of the information technology can enhance the effectiveness of communication in terms of operation of the organization, therefore, the same effectiveness can be also present in its application in every department.

Computerization can be the most basic yet efficient process that an organization can demand in their every department. In accounting department, it is common for the accountants to commit mistakes in recoding the accounts because of the similarities of most of the accounts.

However, the application of a computerized system in the accounting can only lead the entire processes into obtaining appropriate solution into organization’s computerized accounting system (Sharma, 2008).

Integrated marketing mix utilizes existing Information Technology comprising of various elements contributing to their current monetary and non-monetary operations.

To satisfy the shareholders, the continuous change in operations has led towards complete evolution of computerized accounting system (Sharma, 2008). Computerization of the bookkeeping system can assist the financial and cost-accounting system, administration, and over all control in the accounting department.

It is expected that the computerization or the application of the information system provides technical basis for the purposes of developing sound managerial decisions.

In the long-run existing information can be analysed and then applied for the operation of Information Technology based companies. Such computerization methods assist in effective management of all segments and at the same time providing additional support required.

Related studies capturing the intricacies of analyzing nature of market segments within UK with respect to desired consumer needs have been conducted. Particularly, these have been conducted within the ethnographic investigations of most upper-middle-class and the sub-urban Shaker Heights society.

Most studies have also applied the cultural-ecological explanation model to investigate and analyze the many intertwining elements or conditions that may influence buying behaviour of consumers within such segments.

For instance, the cultural-ecological model related to the minority population segment integrates major groups of factors that may easily shift their based on the nature of goods supplied to them.

These include:

1. the manner in which a particular community manage and handle various transportation means based on culture;
2. how these minorities interpret and consequently respond to such technological advancements.

It is critical to observe that the first set of factor deals with the general system prevalent within a society. However, the second factor deals with personal or individual predisposition about certain manipulative or affective factors eminent from the major systems of the society.

The last factor is also unique because it majorly relies on the distinct history as well as the minority conditions or status within the larger European market. In general, these factors may be viewed to be the set of conditions originating from the community forces.

The focus of most studies have also intensively reviewed and analyzed the general consumer perceptions based on beliefs and practices. Some of these have potentially included factors such as their fundamental educational convictions as well as behaviours.

Their associations with the general market system and effective products and their explicit convictions and behaviours have also been critically analyzed and investigated.

The manners in which target population interprets and consequently respond to the notable cultural and technological disparities remain significant. This is due to their united identity citation.

In addition, the marketing strategies and approaches applicable and pertinent to these target markets are vital in the analysis and examination of the basic reasons or factors influencing and leading to product’s success or underperformance.

The information or facts from most of such investigations and studies have been assisting in the comprehension of the existence of performing automobiles not just within the urban setting, but again within the suburban communities.

Thus, it is notable that the class-based inspection of the challenges confronting UK market is still insufficient. Evidently, current studies on rate of use of motorcycles amongst younger generation seem limited and minimal.

Thus, the research will contribute considerably to the mentioned marketing catastrophe currently experienced by HD. It is crucial to consider these provisions within the marketing context. The marketing trends assumed by some competitors within the industry have proved devastating within recession periods.

These require immediate attention from the concerned sectors. This has been evident even within most research cases and study findings in automobile industry.

Therefore, it can no longer be assumed that the prevalence or domineering of some companies within certain market segments has potential influence or manipulation within their performance levels.

Harley-Davidson have to build great brand awareness throughout different international markets in order to play a crucial role in the consumer selection, and that could be achieved by establishing foreign representative sales and marketing offices within their desired target market countries.

International representatives would be divided on 3 main parts:

Asia (Beijing, China) – Beijing, the capital of the People’s Republic of China, is the nation’s political and cultural centre. It has become a well-developed modern city, an economic centre and being one of the biggest industrial bases in China.

It is the centre of China’s politics, culture, science, commerce, international interchanging, etc. In addition to that, China has a very large share of business in Chicago.

Hotel Tempus would comfortably accommodate business customers, as well as we would be attractive for leisure travellers due to a current “Mad Men” hype in China.

In Europe, London is the main business hub and the most cosmopolitan city in the United Kingdom. It exhibits a great cosmopolitan culture courtesy of its endless array of skyscrapers and a bustling city-life.

Having an office in London would benefit HD in terms of strategic location being close to largest companies, establishing corporate connections and gaining more business oriented customers.

In addition to that, London has direct flights to other strategic regions hence providing huge market advantages. In Canada, Toronto serves as its financial capital serving as the cultural capital of English Canada, and the largest city in Canada.

Whereas, Montreal is the most expensive city in Canada, situated in French part of Canada, being very historical and artistic. Establishing representative office and marketing campaign in these two regions, would generate flow of both leisure and business customers to HD products.

Sales and Marketing Department structure and work process (Fill, 2005)

Hiring of sales and marketing staff for an operation comes with the responsibility to provide effective sales management, which is controlled by Director of Sales and Marketing.

Sales team main focus should be reaching out to new and existing customers, through the primary channels that are individual for each particular type of guest, and conducting personal sales. Personal sales are often the most effective means of customer contact, especially in cases where market demand is high.

Personal sales call is used for the purposes of building rapport with clients or potential clients and selling those intended products and services.

Responsibility of a sales team would be equally distributed among employees of Sales division, each member of staff having a personal relationship with a population segment hence providing individual level of service and care in order to accommodate needs of customers.

Sales provide large revenue generating centre, which bring in direct profits.

Marketing

Marketing is a complex process that requires thorough research and focus on customers, marketing staff would provide sales team with a lot more tools to help them know the customer, for example creating a well-organized and professional sales kit.

Only the information pertinent to the client’s particular needs should be included, in order to get the business and convince consumers on the quality of HD’s products.

Accordingly to a desired target audience (domestic and international), the marketing department should serve as an extensive unit, consisting of small groups of people, especially at the phase of pre-opening marketing and launch.

Such individual employees should be held responsible for: Managing Social media and response, twitter, blogs, maintain and expansion of email database.

Performing creative marketing strategies, direct work with analytics and research agencies as well as engaging in publicity and corporate branding.

In addition to that, there should be an advertising agency serving the purposes of improving media decisions. This enables precise work on target markets and hence making efficient use of stipulated advertising budget.

The selection process of an ad agency should be conducted based on certain criteria’s, which would include mandatory portfolio experience with automobile firms, reputation, and ability to do a research and work within international markets.

Moreover, outsourcing company’s work would provide additional advertisement and marketing of the established network within HD’s brand.

Channels of reservations

Being in such aggressive and highly competitive environment HD must consider working with a suitable distribution channels for the purposes of reaching major target markets.

Technology has created a massive change within automobile industry; the days where there were no reliable ways of guaranteeing delivery of goods are gone.

As things move there is no escape from the digital revolution, and as a modern market, HD should consider these changes for long-term strategy based on attracting more customers.

There is a new breed of third party intermediary i.e. Google, Face book, Apple); their power grows, as they gradually become the preferred points of entry for consumers to do purchasing of equipments.

The categories of meta-search (Google, hotel Finder, Room Key), social, (Face book, Trip Advisor) and mobile (mobile apps) European actual economy requires a much more aggressive approach to sales and distribution.

As a matter of fact, the ultimate goal of any motorcycle company is to be visible on all distribution channels so that consumers can easily access the products.

Channel management is about managing a multitude of channels along with optimizing the level of sales and revenue which could generate and additionally manage company’s reputation online and offline (Van-Weele, 2005).

Each channel should be audited in an organized manner for the purposes of ensuring efficiency within potential markets. The channel and the processes supporting sales should be designed to be customer-centric where it is best suited to serve, and position appropriately within the distribution ecosystem.

This makes company products accessible and compelling in comparison to other competitors. Online customers would require individual channels of purchase. This would ensure that HD’s sales and marketing department reach out to customers through correct channels, foe example women from the target market.

HD’s task should focus on satisfaction of different customers having different needs, and ensuring they are satisfied for the purposes of maintaining relationships with existing customers and gaining new ones (Chandon et al, 2000).

Conclusion

From the information contained in the case study, there is necessity of HD’s management to develop and implemented electronic management system which enables bringing together of all operations within common network. There should be total improvement in chain management within the entire market.

This can be justified from the overall market performance which makes it possible, the necessary adjustments within consumers’ trends and market developments. Renovations within the revenue management system has contributed towards development of forecast system meant to optimize sales and pricing strategies.

Such developments enables managers to have easy time in following various developments within the entire market hence making necessary adjustments based on informed decisions.

Efficiency experienced in the operation of revenue management within can be attributed to the technological development within entire market system (Reiter, 2005).

On an annual basis, HD should establish new level of knowledge concerning consumer buying patterns based on psychology. Within this line of thought, it is easier to discover the necessity of developing significant marketing strategies.

Their effort to deliver to individuals, groups and organizations should be prompted by secure and knowledgeable workforce capable of identifying and satisfying consumer needs within different segments.

Harley-Davidson should invest in consumer behaviour research which enables the organization to have the capacity of obtaining extensive data on consumer spending patterns.

This can be very instrumental in strategizing for emerging markets. Consequently, they have improved on their responses and decision-making processes for the purposes of ensuring relevance within motorcycle industry.

There are decisions that are always very important when establishing strong base within potential market segments. In addition, HD should manage to keep their competitors in consideration, since main focus is on finding differences in superiority and taking advantage of such situations.

As an organization they should strive to identify where they record best performances, and at the same time focus on the quality of products within the market. Service branding appears to be a very important factor owing to the fact that consumers normally make their judgment based on their previous experiences.

In such cases HD should maintain an attractive brand name hence prompting an increase in market share.

The management should meanwhile set-up an investigation team charged with responsibility of looking into the various milestones hence come-up with concrete results and solutions capable of countering any form of failure.

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Reiter, H 2005, “The Contrasting Policies of the FCC and FERC regarding the Importance of Open Transmission Networks in Downstream Competitive Markets”, Federal Communications Law Journal, Vol. 57, No. 2, p. 243.

Sharma, U 2008, “Accountant as Institutional Entrepreneurs: Changing Culture at a Fijian Telecommunication Company”. Web.

Van-Weele, A 2005, Purchasing and Supply Chain Management: Analysis, Planning and Practice, (4th edition), Thomson International, London.

Whalen, B, Santos, G, Kaier, R & Snyder-white, D 2010, “Harley Davidson Motor Company.” Alpha Dogs, Vol.3, No. 2, pp.1-29.

Key Issues

Throughout the 1950s and 1960s, Harley-Davidson was a leading producer and marketer of superior motorcycles that targeted tough consumers such as Hollywood rebels and military officers. However, the emergence of new competitors such as Honda exposed various issues that affected the firm’s competitiveness. The first issue was the company’s inability to monitor the needs of the expanding market. The other issue was the ineffectiveness of Harley’s manufacturing system. Additionally, the firm’s choice of the baby boomer generation was a mistake. Finally, the company failed to embrace the power of lean production.

Recommendations

The recommendations presented below can make a huge difference for Harley-Davidson.

1. The firm should target an increasing number of potential young consumers.
2. Harley-Davidson can use lean production to streamline production.
3. Harley-Davidson should produce cheaper motorcycles characterized by superior features.

Rationale

1. The decision to focus on the younger generation will present positive results. The younger generation has the resources and desires to support this new strategy.
2. Lean manufacturing has been supported by many theorists because of its ability to reduce wastes and maximize production. The stages of lean encourage firms to focus on the unique needs of the targeted consumers. The motorcycles will have advanced features in order to compete in the market.
3. Harley-Davidson’s motorcycles have been admired for its V-Twin engine. However, the firm should include new features in order to make the brand successful.

Pros and Cons

Lessons Gained from the Class Materials

The class materials presented unique ideas that can be used by marketers to achieve their potentials. Giant businesses can use big data effectively in an attempt to realize their business potentials. The main lesson from this fact is that big data can help companies predict consumers’ purchasing patterns and improve the marketing process. The second lesson is that the gathered data should be analyzed by psychologists and marketers in order to predict consumer behaviors accurately. This practice is critical in order to ensure the marketing process is personalized. The third lesson is that big data can mislead businesses trying to understand the preferences and expectations of specific consumer groups (“How Statistics Can Lie”).

For example, a situation occurred when a certain marketer informed me about a superior smartphone in the market. The marketer wanted customers to purchase the iPhone 5 a few weeks after its official launch. The marketer could not explain to customers why the phone was expensive than its rivals in the market (“Big Data, Big Problems? Nate Silver Explains Why We Need Better Habits For Weighing Up Information in this Data-Rich Age – Video”). He was unable to outline the unique features that made the iPhone an outstanding device. That makes consumers unhappy with the marketer because he treated the iPhone 5 as a must-have gadget.

This experience taught us several ideas about marketing. For instance, marketers should gather critical information from targeted consumers in order to develop positive relationships. Marketers should listen to their customers instead of forcing them to purchase a product (Duhigg par. 15). The opinions of different consumers should be respected. These approaches can make it easier for marketers to manage relationships and eventually realize their objectives.

Works Cited

Duhigg, Charles. “How Companies Learn Your Secrets.” The New York Times Magazine. 2012. Web.

Leslie, Nathan. “How Statistics Can Lie.” YouTube. Web.

Silver, Nate. “Big Data, Big Problems? Nate Silver Explains Why We Need Better Habits For Weighing Up Information in this Data-Rich Age – Video.” The Guardian. 2015. Web.

A core competency is defined as the capital and capacity that defines the competitive advantage a company has over its competitors over time. Core competency is used to portray the personality and is drawn from the capabilities of the company. Our company is Harley Davidson. Other examples of core competencies in other firms would be how Sony prides itself in producing and assembling small and miniature-sized electronic appliances. In our case core competencies of Harley Davidson can be distinguished by the standards that dictate what a core competency is and what is not. A core competency must be valuable, uncommon, inimitable, and organized. A value chain analysis assists a company in making an evaluation of overheads and activities that are centered towards delivering value to its clients (Mitchell, 2009).

Harley Davidson’s value chain activities that may be considered as core competencies include:

• Value chain activities that may be considered core competencies for H-D include: Inventory management and order processing, whereby the company strictly organizes the inventory in its plants using the just in time policy. In this policy, a request for an inventory part is passed through a signal in the form of a ticket and a reply through the provision of the requested part is made. This removes the overproduction of certain parts and ensures that the quality of the motorbike is sustained. It also improves the company’s return on investment as it also saves on costs such as warehousing.
• Marketing and sales: Harley Davidson is known worldwide due to the successful marketing campaigns that they have done in the past. Adverts of the motorcycles have been done by creating a retro appeal whereby the machines being assembled to have the look and feel of motorcycles assembled during wartime. This has created and exploited brand loyalty among its customers. Through its marketing efforts, the Harley Davidson brand is being compared to others such as Google and Microsoft (Mitchell, 2009).
• Services: Harley Davidson is known to offer technical support through its large network of dealers all over the world. This creates a direct connection for the company to its customers and it also gives them a form of communication whereby the customers can voice their concerns which can be easily be picked up by the company. The company also does repairs and maintenance for Harley Davidson customers and this ensures that value is created for its customers.
• Research and Development: H-D is known for pushing the envelope when it comes to the innovation of its motorbikes. The staff at the company has always come up with several inventions of different engines such as the famous V twin engine and the V-Rod which was invented with the help of engineers from other firms such as Porsche. Research and development are not limited to the bikes assembled but also to the production and distribution processes.
• Regulatory Affairs: H-D is known for its strict compliance with environmental policies to meet standards set out by the various environmental bodies such as the EPA and European Union. In 2005, the company was the first to register in the one clean-up program which was meant to clear out any forms of waste that affected both the soils and groundwater at its former plant in Pennsylvania. Its efforts have been congratulated and recognized by the EPA director of operations.

Despite the core competencies of H-D’s competitors, H-D continues to beat the competition mainly because of the brand image it has cultivated over the years. The retro feel infused into the motorcycle is responsible for driving up the prices of the bike. A Harley Davison bike is considered luxurious because of the years and heritage that it maintains (Mitchell, 2009).

References

Mitchel, D. (2009). Harley-Davidson Chronicle – An American Original. New York: Publications International Limited. pp. 68–69

Introduction

The word ‘American’ is in almost, if not all, descriptions of the Harley-Davidson motorcycle. So what makes Harley-Davidson so American? According to Lynch (2003), the design embodies the American free spirit. Quoting CDF.org, Lynch (2003) writes, “Perhaps more than any other 20^th century product, the Harley Davidson motorcycle is revered as an American icon-symbol of free spiritedness, love, and verve for living life with all your sense”.

Almost everything about the Harley-Davidson motorcycle, from the manufacturers to the design and what it embodies speak ‘American’. According to Yates (2003), “the Harley-Davidson brand is so rooted in American culture that the history of the company intertwines with the history of America itself”.

However, Harley Davidson did not only become a symbol of American culture, but also changed attitudes towards motorcycle riding- an influence that has continued to date.

Brief Background Information

The company was founded in 1903 by William S. Harley and two brothers, Walter and Arthur Davidson. The first Harley-Davidson motorcycle was manufactured in a small shed in Milwaukie (Wisconsin), the original base.

According to Lynch (2003), the shed measured 10 by 15 feet, with a hand-painted sign with the words “Harley Davidson Motor Company” hanging at the front. Since then, despite a few attempts into modern designs, the company has stuck with its “traditional cruiser motorcycles running on its signature “air-cooled V-Twin engines” (Lynch, 2003).

The Harley-Davidson motorcycles have over the years been associated with various notions and attracted various attitudes. Harley Davidson has been known to produce quality products famous not only for their quality, but also their dependability.

It is partly for this that the company served the country in both world wars, as well as several police forces across the U.S. On the other hand, it has been associated with ruggedness and rebellion, thanks to troublemaking biker gangs who have always used Harley-Davidson as the motorcycle of choice.

Harley Davidson’s Influence on Motorcycle Riding

Harley Davidson motorcycles turned many people into riders. This was especially based on the simplicity of its designs that did not require much expertise. Speaking of designs, 1903 marked an important time of technological revolution that had began in the last quarter of the gone century. The invention of the internal combustion gasoline engine and light bulb was an important one for the founders of Harley-Davidson.

Having no technical training or experience and down on budget, the three first experimented with blueprints of the “De Dion-Bouton engine” (Lynch, 2003), a French engine running on a single cylinder. Their idea was to build a simple and rugged machine that had “extra strength designed in the traditionally weak points” (Yates, 1999). In other words, the company’s core design philosophy rested on the premise of utility and practicality.

The company website describes its first motorcycle as a “Bike built to be a racer, with a 3-1/8 inch bore and 3-1/2 inch stroke (Lynch, 2003). The Harley-Davidson motorcycles went on to have a significant impact and reputation on racing. Moreover, the company’s bikes also won much recognition in endurance races, such as hill climbing.

One of the very obvious impacts that Harley-Davidson has had is establish motorcycling as a culture. One way of viewing this is to take note of Harley-Davidson as an American symbol. It does not matter where one finds the Harley-Davidson motorcycle. It will always be the American brand. If only for its Americanness, many people, including those who were not necessarily riders, fell in love with motorcycle riding.

Just as an example of how much strong the culture of Harley Davidson was back then and has continued to be, when Harley Davidson finally broke off from the AMF and returned its headquarters to its original base in Milwaukie (having been relocated to New York by AMF), new competitors had invaded the market. Japanese companies were producing motorcycles in the model of Harley Davidson and at cheaper prices.

Harley Davidson had lost up to 50 percent of its market share. However, it re-established itself and rose to the top again. Harley Davidson provided what the new companies could not provide. Bitchin wrote, “The Harley, the true symbol of human frailty and audacity, was to be honoured and revered, not for its utility or its sheer excellence, but for its god-awful, all-American, in your face, hog-stomping, ball-busting, real-life representation of man’s own imperfections” (Yates, 1999).

The second perspective of viewing this assertion is to consider the various groups associated with Harley-Davidson. The most notable of these are the biker gangs. The earliest biker gangs consisted of the Second World War veterans, who felt isolated from the civilised society and, thus, turned to violence. “These veterans feeling cast out of normal society embraced the motorcycle not only as a recreational diversion but a weapon against the established order” (Yates, 1999).

There were, for instance, the Pissed off Bastards of Bloomington (also known as POBOB) and the Booze Fighters. Harley-Davidson became their main motorcycle of choice. That rugged reputation that many came to associate with Harley-Davidson in the 1940s has – albeit in a subtle way- rubbed off on motorcycle riding in general today.

Generally, most people back then viewed motorcycles and motorcycle riding merely as tools and means of transport (getting from point 1 to another point 2). However, the design of Harley-Davidson did not just take into account the matter of aesthetics. A Harley-Davidson motorcycle is an object of raw beauty.

The Harley Davidson motorcycles have fenders’ with smooth and flowing curves, their fuel tanks are characterised with trademark smooth lines, their bodies have beautiful reflections and their big engines have power and purrs in the only way known to belong to Harley-Davidson.

These not only set the Harley-Davidson motorcycle apart from the rest, but also turn it into a work of art. As a result, the Harley-Davidson motorcycles did not just become a means of getting from point 1 to point 2, but also a source of passion. Motorcycle riding also became a recreational exercise. Motorcycles have also since become symbols of adventure. Thus, people who own and ride the Harley-Davidson motorcycles do not just say ‘hi’ and go by. They connect, sharing stories of their experiences with their bikes.

Conclusion

In conclusion, Harley Davidson has not only been an icon of the American culture. It also started transforming attitudes towards motorcycle riding. Importantly, through simplicity and utility philosophy in design, it made riding look easy to a lot of people. But most importantly, it turned motorcycle riding into a culture.

Motorcycle riding became more than just a means of transportation. It also became a source of pleasure and passion. Ultimately, the influence of Harvey Davidson is positive in certain ways and negative in others, but that influence remains notable in the field of motorcycle riding today.

Lynch, J.W. (2003). Harley Davidson, a Spirit of American Freedom for 100 Years. Thesis for Master of Arts in Corporate and Public Communications: Seton Hall University

Yates, B. (1999). Outlaw Machine: Harley Davidson and the Search for the American Soul. New York: Little, Brown, and Company.

Introduction

Harley-Davidson Company has been in the motorcycle manufacturing business for decades now. The American based company was launched in Wisconsin at the start of the 20^th century as a small yet promising motorcycle manufacturer. Due to its strong managerial and marketing background, Harley-Davidson outwitted the Great Depression era that witnessed many manufacturing firms going under receivership while others closing down completely.

The unfavorable competition brought about by lack of adequate quality control of the US markets was yet another challenging moment for Harley-Davidson (Harley-Davidson, 2006). Nonetheless, it survived the harsh markets, moved on and later emerged as one of the global leaders in the manufacture of heavyweight motorcycles with over 750 cc. engine capacity.

Today, Harley-Davidson motorcycles are known globally due to their distinctive design similar to that of a chopper. Unfortunately, the firm has not been successful in its bid to venture and invest in the light motor-cycle industry largely due to dominance by other market rivals. Through its loyal brand community, the motorcycle manufacturer has spread its marketing tentacles far and wide.

Its logo alone generates about five per cent of the firm’s net income. This paper explores a case study of Harley-Davidson and the strategic marketing theories and concepts used. The paper also offers some recommendations that the company could adopt to improve its marketing competences.

Case Summary

Customer loyalty is the strongest marketing strategy of Harley-Davidson, a phenomenon not common with most brands especially those operating in the high end manufacturing market. One reason attributed to this overwhelming success in the company’s marketing strategy is the fact the marketing department has laid more emphasis on the needs of customers, the latter being the most vital asset owned by the company (Harley-Davidson, 2006).

Firstly, the company marketers have taken significant amounts of time to understand the ideals of Harley-Davidson customers, what they really want and how their purchasing needs and preferences can be met at any given time. For the company, it is imperative to serve its customers with passion. This entails evaluating their feelings as well as their rationale behind buying at Harley-Davidson.

According to the marketing team, attention to details is paramount in understanding the needs of customers (Harley-Davidson, 2006). The management at Harley-Davidson confirms that it is out of customer satisfaction that it has grown into a five billion dollar company and the largest group sponsored by a company worldwide(Harley-Davidson, 2006). Currently, there are over nine hundred thousand members attached to Harley Owners Group (HOG).

As the management admits, the company does not just sell motorcycles. Harley-Davidson believes in creating a sense of independence, free will as well as liberty to its chronic buyers so that they do not just purchase the machinery alone but the intrinsic benefits that come along with it. Hence, the motorcycle manufacturing firm has gone beyond creating product consumption experience.

Buying at Harley-Davidson has become a lifestyle to its customers. Therefore, the management realizes that supporting such a high level consumption experience as well as a life style requires rigorous marketing tools. This has been attained through the establishment of a network of individuals who work smart and tireless hard to deliver the mission and vision of the company.

In one of its common marketing strategies, the company often sponsors travel adventures alongside other breathtaking events for its customers and other interested users. For instance, it may occasionally opt to offer free clothing and other riding accessories for passionate motorists and other fun-loving individuals (Harley-Davidson, 2006).

Application of marketing theories in the case study

There are quite a number of marketing theories, concepts and models that are applicable in the Harley-Davidson case study. To begin with, it is vital to understand that the consumption experience of consumers at the company is largely driven by how best the very customers make their decisions (Gummesson, 2002).

The myriad marketing principles applied by the marketing team at Harley-Davidson is clear evidence why consumers will choose their products against those of the competitors. For instance, the brand name of the company has remained to be a very strong marketing tool over the decades especially in reaching out to new customers who may not have had prior shopping experience with the company.

From the utility theory of the decision making model by consumers, it is proposed that the purchasing decisions made by consumers is heavily dependent on the anticipated outcomes of the very decisions made. In this regard, consumers are treated at actors who are rational in their decision making process and will only settle at what will bring optimum benefit and satisfaction to them.

Hence, the marketers at Harley-Davidson are quite aware of this and as it is the sole reason why customers are given the first priority as real assets to the company.

Nonetheless, it is definite that consumers may not always be rational in decision making. Better still, they may equally fail to fully recognize the various inputs which affect their overall decision making patterns. In addition, they can fairly estimate frequencies of events but the process of translating the latter into probabilities is typically cumbersome for consumers.

Although the utility theory of decision making paradigm by consumers has been embraced for long, it has notable limitations that cannot be elaborated by the given marketing model. A more simpler and satisfactory backup of the utility theory is the one referred to as satisficing. According to this model, consumers tend to stop the process of decision making once their immediate needs are met.

This can be used to explain the loyalty nature of customers attached to Harley-Davidson products. They no longer need to make further decisions on whether to purchase heavy motorcycles and related products from Harley-Davidson since their buying needs have already been satisfied.

The marketing department at Harley-Davidson has largely utilized a marketing theory referred to as consideration. This theory has it that consumers are of equal importance to the brand name of a company. In other words, customers act as a subset to the company upon which all decisions are made.

As customers continue to attach more importance in purchasing motorcycles from Harley-Davidson, the management of the company is equally enforcing the theory f involvement. As the motorcycle manufacturing firm continues to launch new brands to the market, it has to intensely involve its active and prospected consumers.

This is evident in the manner in which the company engages its customers and interested users of its products in events such as adventurous riding and contests so that they can develop liking for the Harley-Davidson motorcycles.

How does Harley-Davidson build long term customer relationship?

Harley-Davidson has a variety of strategies in place aimed at building long term relationships. First, the company has revolutionized its customer experience on the purchase of heavy motorcycles.

It has dominated the market with the manufacture of high quality products that go along way satisfying customers (Hunt, 2002). The company has embarked on a serious quality program of its motorcycles so that it does not only retain and build long term relationships with its chronic customers but also work towards maintaining market leadership.

Second, the Harley Owners Group (HOG) is another strategy being employed by the company to build long lasting consumer experience and relationship. There is a close working relationship among the HOG members aimed at fostering better customer satisfaction in the heavy motorcycle industry.

Through the large pool of HOG membership numbering over 900,000, customers have been netted and retained far and wide. This has consequently assured the company of its profitability and survival even during the hard economic times.

Third, Harley-Davidson has a comprehensive company sponsored adventures aimed at bringing together its customers and other fun loving users of its heavy duty motorcycles in field events.

It is a form of social corporate responsibility that seeks to reach out for the wider population with some form of entertainment while at the same time creating demand for its motorcycles. The company also offers some clothes and other residing accessories for the users of its motorcycles as way of attracting their attention to the Harley-Davidson brand.

What is Harley-Davidson’s value proposition?

The value proposition of Harley-Davidson lies heavily in the way the company conducts its business strategies. Although the management of the company is confident in the quality of its motorcycles, it has a strong conviction that satisfaction derived from thorough understanding of customer’s feelings, likes and dislikes as well as preferences is long lasting and is perhaps the best business strategy to adopt.

In order to achieve this value proposition, the company has created a mentality of a lifestyle in the consumption of its products (Copley, 2004). It is not merely the need of customers to purchase motorcycles from Harley-Davidson, developing great liking and passion for the various company brands is of utmost importance. The company has attributed this value proposition as the major growth factor at Harley-Davidson.

Relate the concept of customer equity to Harley-Davidson. How does Harley-Davidson’s strategy focus on the right relationships with the right customers? The total lifetime and markdown value of all customers attached to a given company is referred to as customer equity. In other words, customer equity will largely determine how a company shapes its strategies as part and parcel of meeting the needs of its users.

In the case study of Harley-Davidson, customer equity is being driven by three main factors namely value, brand and retention equities. The utility value of Harley-Davidson motorcycles is critically assessed by the company and any necessary modification are made in order to maintain or improve the value of their products.

Besides, the Harley-Davidson brand is regularly assessed by the customers in terms of what the company claims to be offering against what is actually received. Finally, the retention equity will see into it that customers attempt to stay put with a particular brand and hence it is upon the company to comply with the needs of customers since the latter shapes the overall business strategy being adopted by the company.

Hence, customer equity enables Harley-Davidson to choose the most applicable tool among the aforementioned drivers in satisfying the diverse needs of its wide array of customers.

Conclusions and recommendations

Although Harley-Davidson brand has remained competitive and stable even during the hard economic times, there are still numerous concerns that the management has not addressed adequately.

Its value proposition currently stands at developing passion for its products. However, this may not be sustainable as a business strategy over time owing to the changing and unpredictable customer preferences in addition to the entrance of other market players.

Indeed, the company’s bid to venture in light motorcycles has not been successful so far since the old strategies may not be productive in a market where competition is rife. It is against this backdrop that the following recommendations have been suggested as way out for Harley-Davidson to remain profitable even as it expands its brand portfolio.

To begin with, the management at Harley-Davidson should ensure that customer satisfaction is not just driven by passion per se. the price of its motorcycles as well as the availability of its brands should be satisfactory to its consumers (Roth & Mullen,1991). It is a basic requirement in a business strategy that Harley-Davidson cannot ignore.

Secondly, the company can differentiate itself from other market rivals by creating superior service levels to its products. Customers must be able to distinguish between the services offered by Harley-Davidson and market players. For instance, response to queries from customers should be fast enough. In addition, improved delivery and other after-sale services should stand out for Harley-Davidson to boost competitiveness.

Finally, variety of customer experience strategies should be applied throughout the lifetime of the company (Gilmore, 2003). For example, both existing and prospective customers should be educated on how to make better buying decisions. It is pertinent for customers to be fully aware of the product knowledge and not merely making it a lifestyle. Customers who have the right knowledge of the products they are willing to buy are more likely to remain loyal for long.

References

Copley, P. (2004). Marketing communications management: concepts and theories, cases and practices, Burlington: Elsevier Inc.

Gilmore, A. (2003). Services marketing and management, London: Sage Publications. Gummesson, E. (2002). Total relationship marketing, Oxford: Elsevier Science.

Harley-Davidson (2006). Video Case. Web.

Hunt, D.S. (2002). Foundations of marketing theory: toward a general theory of marketing, New York: M.E. Sharpe, Inc.

Roth, M.B. & Mullen, D.J. (1991). Decision Making: Its Logic and Practice, Savage: Rowman & Littlefield Publishers Inc.

Characterizing HD’s core challenge(s), importance, urgency, etc., as of 2005

Harley-Davidson’s challenges are characterized by an aging consumer base in the midst of booming and affordable brands such as Yamaha and Honda. The American company, which has created a legendary pathway for the global motorcycle industry, is known for its emphasis on building customer loyalty. However, it has encountered many challenges that have created a point of weakness in the sale of its heavyweight motorcycles. With its consumer demographic gradually aging, its competitiveness has greatly fallen, especially amongst the younger riders.

There is a need to expand its overseas market with a view of improving profitability. Besides, Harley-Davidson has to come up with new brands that are more desirable and affordable for customers of all age brackets. In the accomplishment of this task, the company should not underestimate the performance and consistency of the Japanese stocks that are offered at a comparatively low price.

With the drastic decrease in the stock price by about 17-percent following the altered sales projection in 2005, the company needs to implement an alternative marketing strategy. The urgency of this decision has become a hot topic amongst the firm’s sales analysts. The aging consumer demographic makes the need to reintroduce new brands little by little to meet ridership demands inevitable.

Qualitatively deconstructing HD’s world with PEST, PORTER, and CRACK

PEST Analysis

Political – The Harley-Davidson brand is widely regarded as an icon amongst the American people. The company has ventured into other markets in Asian countries such as China and India, whose operating conditions are deemed indeterminate. It had also gained about 11-percent of the European market by 2004. However, ecological apprehensions that have risen in such markets have grown into political subjects, challenging its future sales projections.

Economical – The Harley-Davidson Company is currently facing various economic headwinds that have hit its business hard. Although the company survived various harsh economic times, including the great depression, it is still miles away from selling 275,000 units in the home market. This target was only achieved in 2006 after the company reviewed its sales strategy. The stiff competition from foreign European and Japanese motorbike manufacturers has led to a loss of about 80% of the US market. These companies offer enormous discounts that have been backed by the US strong dollar. Due to the company’s need to protect its traditional brand and image, there are no noteworthy markdowns that will be given to its heavyweight motorcycles.

Social – The prime challenge is facing the company is aging consumers. In the US, most of the buyers of the Harley-Davidson brand are couples aged over forty years with an average income of approximately $78,000. The high prices of the brand have alienated the youthful generation and female riders. Research has proven that only 9% of the company’s heavyweight motorcycles are sold to women.

Technological – The difference in technology between Harley-Davidson and other brands has played a key role in the determination of the company’s success in the international market. Although new technology allows for the production of more fuel-efficient and ecologically responsive engines, many customers prefer Harley-Davidson’s exclusive V-engine design that produces a unique sound. For this reason, their brand fails to meet the standards of the European and some Asian markets. Other brands such as Yamaha, Honda, Kawasaki, and Suzuki that are more environmentally friendly have taken up a larger share of the market. With some companies producing more fuel-efficient and quieter heavyweight motorcycles, the Harley-Davidson brand still faces a significant challenge. However, it has gained access to innovative technology through the Buell Motorcycle Company, a move that is likely to improve its traditional design without alienating its customers.

Porter’s Five Forces

The intensity of competition, the threat of new entrants, and substitutions – the Harley-Davidson Company faces competition from other companies, including Suzuki, Yamaha, and Honda, that have also tapped the heavyweight motorcycle industry. All these Japanese manufacturers have differentiated products that target a broad consumer market across the globe. Such companies have gained access to enormous capital and technology; hence, breaking the huge capital investment barrier that hinders them from venturing into manufacturing heavyweight motorcycles. To sustain its business competitively amidst the three brands, the Harley-Davidson Company should be vigilant in product innovation.

Power of buyers – Harley-Davidson mostly sells its products to end consumers who are known for the loyalty to the company’s brand. This strategy creates a meaningfully low financial risk. Despite the high pricing pegged on the Harley-Davidson brand, customers have the desire for the product due to its improved quality and outstanding service experience. This situation has improved the company’s value equation.

Power of suppliers – the company uses a multiple supplier system that monitors the quality and pricing of its motorcycles and spare parts. However, depending on their effectiveness, the company can change suppliers without affecting its rate and quality of manufacturing.

CRACK Analysis

Competitive angle – the Harley-Davidson Company has the opportunity to offer high-end differentiated products that will satisfy the desires of many customers worldwide. Currently, the giant motorbike producer is heavily sponsored by its brand enthusiasts. The company ensures customization of its products with unique accessories increases its profitability.

Relevance window – the motorcycle giant company, has a great market opportunity in the European countries. Indeed, the international leisure motorbike consumer base has outgrown its home market in the US. Nevertheless, there is still untapped potential amongst the youth and women in America where the Harley-Davidson brand is an icon.

Action for growth – the acquisition of the Buell Motorcycle Company has been a key step to innovation. However, there is a need to integrate products targeting the youth and women into the company’s production plans. The demand for lightweight and sporty motorbikes that are affordable is comparatively high amongst the younger consumers.

Clarity of vision – Being an iconic owner of one of the world’s most treasured heavyweight motorbikes, the company is now focused on the improvement of its Harley-Davidson brands with a view of satisfying the desires of diverse consumer segments.

Market opportunity – A sizeable market for the company in both the US and international arena is foreseeable. Currently, it has regained control of 48% of the US market.

Key Performance Ratios and judgment of their financial position as of 2005

In this performance ratio analysis, the current liabilities were assumed to be $1,295,441. A high current ratio shows that the company is financially secure. The 4.23 current ratio shows that the company had fair sales alongside a relative demand for motorcycles.

What are three high-level, stand-alone go-forward strategic options, with the “status quo” being one? What are the pros and cons of each? Which one do you recommend and why?

Strategy 1: Integrate consumer experiences and emotions into brand elements and mechanics – Various studies on consumer behavior show that they have a tendency to go for limited edition products. The Harley-Davidson Company adopts an exclusive culture that has been used for years to boost sales. However, it should focus the design of its motorbikes on the experiences and emotions of its consumers. The advantage of this strategy is that the company will diversify its products and supply to more lucrative markets globally. However, it can be a disadvantage to a company whose core principle is to protect originality and exclusivity.

Strategy 2: Product diversification – For many years, the Harley-Davidson Company has depended on the baby boomers for the success of its business, alienating the youth and women who find heavyweight motorcycles unaffordable. Product diversification is one of the high-level, stand-alone strategies that will take the company to the next level. This new strategy should focus on providing product designs that are both attractive to women and affordable to the youthful generation. A major disadvantage of this strategy is that it fails to fit the culture of Harley-Davidson.

Strategy 3: Pursue both short-term and long-term partnerships with European and Asian countries – Its working capital is continually declining amidst the increasingly stiff competition from rival companies. The company has not received any support from American financial institutions. However, it has a choice to pursue both long-term and short-term financial relationships with European and Asian countries. This strategy will see its cash flow grow exponentially even during the ongoing economic downturn. The only disadvantage with this strategy is that the company will incur debts that can slow down profitability.

If HD went ahead with your recommendation, would you buy HD stock if money was available? Why or why not? (Just curious!)

Yes. For instance, product diversification will offer an opportunity for a new market niche that can attract considerable profits. Since the youthful generation and women will now gain access to limited edition motorbikes as opposed to the iconic heavyweight models, selling more differentiated, affordable, and yet unique quality brands will compete with other brands provided by companies such as Honda, Yamaha, and Suzuki.