Harley-Davidson Marketing Strategies Essay

In 1903, 21-year old William S. Harley and 20-year old Arthur Davidson the first fruition Harley-Davidson ride that was hand-built in a small garage in Milwaukee. Today, Harley-Davidson, Inc. employs more than 8,200 people and has 1,110 dealership worldwide. Its corporate home office ar still located in Milwaukee, Wisconsin. The domestic production facilities argon in the Milwaukee area, East troy weight and Tomahawk, Wisconsin York, Pennsylvania and Kansas City, Missouri. Design, customer focus and sales have placed this troupe is in a genuinely unique and desirable merchandising situation.Design is critical to the continued success of this ac familiarity. For some companies, the word use may bring thoughts of sweeping changes and new model transmission television channels. However, for the design team at Harley-Davidson, it inspires thoughts of being congregating to the classic lines and sounds of a Harley-Davidson motorcycle. This is not to say that the designers are n ot allowed and encouraged to improve on the staggeringly successful line of motorcycles, just the opposite is true. Ken Schmidt, director of communications for Harley-Davidson, stated that We are unendingly improving and modernizing the machine, yet not every component. That is what our customers want, and thats besides, I believe, what sparks the strong emotional attachments that Harleys generate.In the former(a) 1980s, the company was plagued with quality control and reliability issues that nearly caused the company to go out of business. At this point, it was up to the design and quality control engineers to revamp the mechanical and electrical portions while staying true to the classic line of the motorcycle. They succeeded in resolving the problems and saved the company. William G. Davidson, who heads up a team of five product designers, is quick to add, Its important to understand that were not in the business of making antiques. Every year we reserve further improvements t o our engines and chassis. But from a styling standpoint, we have to incorporate improvements without compromising the look. If we move a bolt or re-route one hose, our customers take note and call us on it. A Harley isnt shrouded in fibreglass like so many other bikes.Everything we do is right out in the open. This mindset prevents lifelong riders from expressioningalienated and accusing the company of marketing out in the pursuit of increased tax and profits. Harley-Davidson understands that it is as important to maintain their current enthusiasts as it is to stick new ones. No where is this more seeming(a) than in their mission statement We fulfill dreams through the experience of motorcycling, by providing to motorcyc numbers and to the general public an expanding line of motorcycles and branded products and services in selected market segments.Customer focus is another area of marketing where this company excels. Factory sponsored rallies and test drives are just two ways that Harley stays in touch with their customers. The largest sponsored ring occurs each year at Sturgis in the Black Hills of South Dakota. This event draws 400,000 riders from around the world. There are hundreds of company employees there as nearly, not only to enjoy the rally, but also to gather learning from the enthusiasts. There is no better or more efficient way to survey your customers than to speak with them flat after they just traveled to an event on your product. This close-to-the-customer philosophy allows the company to use these rallies as product development centers.It allows the company leadership to get instant responses on both current products as well as new products that may soon go into production. Customers respond positively to this type of product survey, because they feel like their opinion matters and will influence the next years product line. Another marketing tool that has been quite successful for this company has been the factory-sponsored test-dr ives. The factory sends a tractor-trailer filled with demo bikes to each dealership that is willing to participate. All of the new models are available and anyone with a helmet and a valid license to exit a motorcycle push aside try them out. For many of the dealerships, it is the busiest day of the year.Harley-Davidson headquarters employs eight merchandising specialists that develop designer stores. These stores are much different from the standard garage-type store of the past. These stores are designed to draw customers in, fence in them with motorcycles, and provide an inviting sell environment. Dealerships that have converted their shops to the Designer Store concept have seen soaring revenues and quick return on investments.Inventive marketing strategies have kept Harley-Davidson as the leader of Americas big-bike market. It is not just the motorcycles that are in high demand. Harley has developed a very profitable retail merchandising line. This line includes clothing, tattoo patches, coffee mugs, belt buckles, infant wear and memorabilia.Most would think that this company must spend a significant portion of their revenue on publicize. The opposite is true, in 1995 the company generated $1.3 billion in revenue while spending less than $2 million on advertising costs. Word of mouth is their main form of advertising. Company executives feel that their customers are their sales force, after all, fulfill customers are the better than advertising. Harley-Davidson is in a unique marketing situation because they are not selling transportation they are selling a lifestyle. Customers routinely wait between six and eighteen months for pitch of a new model. That type of product loyalty is hard to find and not easily developed.The time lag list for a new Harley-Davidson is now more than a year, and used bikes are more pricy today than when they were new. How can this possibly be true when new cars depreciate quicker than you can work on the payment? The reason is the supply-to-demand ratio and Harley-Davidson has mastered this ratio. Although they produced more than 300,000 bikes last year, demand is still on their side. legion(predicate) new customers look at purchasing a Harley as an investment that you can enjoy on a daily basis. The first turning point for the company was when they changed the engines back in 1984. The second was when the nestling boomers hit their mid-life crisis. Since then, dealers have struggled to keep display models on the floor. Scarcity allows the company to achieve higher profitability, and it also helps protect the investment for previous buyers.Women are the last great frontier for this company and they are root system to focus more on that segment of the market. They have begun to place advertisements in womens magazines in an attempt to change the companys image to a more family-oriented one. They have also begun to make engine room changes to some of the models. Some of the new bikes will hav esmaller handlebar grips, an easier pulling clutch, and lower seats. Riders Edge is a program at Harley dealerships providing riders education classes to help novices learn to ride and get licensed. Technology upgrades such as liquid-cooled, high-powered, engines and lightweight materials will make bikes more powerful, but also less difficult to handle. All of these changes are being implemented to encourage women to purchase their own bikes as opposed to simply being passengers.Customers can sense that the Harley-Davidson employees care about them and their concerns. The company takes this responsibility so seriously that they developed a list of core values. These are their values. They are the heart of how we run their business. They guide their actions and serve as the exemplar for the decisions and contributions their employees make at every level of the company. Tell the truth, be fair, keep your promises, respect the individual, and encourage quick-witted curiosity. Because of their supply-and-demand ratio, it would be very easy for this company to develop a take it or leave it military capability with their customers. A large part of the success has to be attributed to the high-value they place on the opinion of their customers.