Harley-Davidson case study
Harley-Davidson case study
Instructions:
1.Explain in one paragraph a synopsis of this case. [1 paragraph]
2.Compare the market share and awareness of Harley Davison to its main competitors from the information provided in the case. [2-3 paragraphs]
3.Describe the marketing tactics that Harley-Davison used to build relevance with young adults. [2-3 paragraphs]
4.How did Harley solve the problem of acquiring Outreach and Young Adult segments of customers without weakening its success with its core customers? [2-3 paragraphs]
Solution
Harley-Davidson case study
- Explain in one paragraph a synopsis of this case.
The case revolves around the realization by Harley
Davidson, that despite strong sales in the previous decade and a strong market
share in the heavyweight motorcycle market, its core customer base is composed
of an aging population, with little absorption by the younger population, which
threatened the company’s very existence.
This led to a decision to hire a chief marketing officer (CMO) for the
first time in history to guide the company on the acquisition of a youthful
market, the ‘outreach’ customers, and shake off the ‘granddads bike’ as has
been the case.
2. Compare the market share and
awareness of Harley Davison to its main competitors from the information
provided in the case.
The motorcycle market comprises two broad categories, the sports bikes, and the heavyweight bikes, with Harley Davidson offering products in both categories. Its main focus was the heavyweight category, with at least 44% market share in the North American Market. Its main competition was based in Europe and Japan, including brands such as BMW, Ducati, Honda, Yamaha, Suzuki etc. These brands were more adopted by the younger customers due to their price, perceived quality, faster speeds, etc, making them the biggest obstacle to Harley Davidson Growth.
Despite this competition, Harley-Davidson still held the largest market share in Japan, also presenting the strongest global market, leading in the heavyweight market category. Despite this success, the company brand was weaker in Europe, with just 8.2% o the market, although its smaller and sportier brand, the Buell raked in 1% more in Europe than in the United States.
3. Describe the marketing tactics that
Harley-Davison used to build relevance with young adults.
On his early days at Harley Davidson, Richer focused on understanding what the company had done to attract and build relevance with the young adults as well as the challenges faced. He noted that some of the effort put by the marketing team included having garage parties to sensitize the outreach on the product offerings, dealer events such as small women-only events, riders-edge training program etc. Despite all this effort, the company was only making 17% of its revenue from this segment.
Following a market research conducted in 2006 for the European market which indicated the motorcycle preference for Young Adults, the company had created some bikes in the portfolio that reflected most of the aesthetics, such as the Street Bob, Night train, and the Nighter. This ensured that despite holding onto the core client base, the company made significant efforts in roping in the youthful market.
4. How did Harley solve the problem of acquiring Outreach and Young Adult
segments of customers without weakening its success with its core customers?
The introduction of the Buell brand, separate from the Harley Davidson, which offered a benefit of lower pricing, and was aimed at the European market and younger customers was one of the foremost efforts towards gaining the outreach and young adults segment. These bikes were anchored on technological innovations, were lighter, sportier and boasted of superior handling, in what was aptly called the ‘trilogy of technology’. The idea was to get the youthful population to buy the Buell brand through dealerships, who might decide to trade up to the Harley Davidson heavyweight bikes as they aged.
The newly hired CMO, Richer and his team conducted market studies and surveys that were useful in identifying the barriers that affected buying of the Harley Davidson Brand by the young Adults, which helped the company to uncover a number of insights, validating its challenges in locking in the youthful clientele. The new CMO, however, contends that with two great brands, Buell and Harley-Davidson, there is great leverage if the company can come up with a proper brand management strategy, in this case, the ‘house of brands’ or the ‘branded house’.