Harley Davidson Company: Strategic Marketing Theories

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Table of Contents

Introduction
Case Summary
Application of marketing theories in the case study
How does Harley-Davidson build long term customer relationship?
What is Harley-Davidson’s value proposition?
Conclusions and recommendations
References

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.

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