Does this sound remind you of any particular bike??
History Founded in 1903 in Wisconsin, UnitedStates by William S. Harley ArthurDavidson &William A. Davidson Leading American manufacturer ofHeavy weight motorcyles After the World War II, It was theleading manufacturer of motorbikesmarket in the US and had monopoly inthe market due to closure of its mainrivals Sells through over 1500 dealersworlwide
MISSION“We fulfill dreams through the experience of motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles and branded products and services in selected market segments”
A Biker’s Sign• Synonymous to: – adventure – attitude – freedom – individualism “I would rather push a Harley than drive a Honda”
Competitive Position Europe Market Share - 9% Asia PacificU.S Market Share Market Share 48% 25.8%
Describe the HD’s general pricing strategy.What does the company’s positioning have to do with its pricing strategy? •Harley Davidson doesn’t sell you a bike, they sell you experience. •Harley Davidson quickly learned they could not compete with the foreign competitors on price. •Therefore they developed a strategy of value over price. •Japanese manufacturers used plastic while Harley used steel, which is able to be rebuilt. •Harley was careful not to exceed demand in production of their motorcycles. Currently, people must wait six to eighteen months for a new motorcycle and the price for a year-old Harley is 25% to 30% higher than a new one. • By not being able to meet demands, an attitude of must-have has developed. •Communication through pricing – a premium brand.
Should Harley alter its price, givenstrong price pressures from rivals? Prices of Harley Davidson Prices of rivalsSPOSTER 6,95,000- 11,95,000 KAWASAKI NINJA 2,70,000DYNA 13,95,000-15,45,000 SUZUKI HAYABUSA 12,50,000SOFTAIL 18,45,000-19,45,000 DUCCAITTI 14,09,705V-ROD 18,95,000 YAMAHA YZF 12,50,000TOURING 20,45,000-21,95,000CVO 34,95,000
Reasons for not altering its price even though there is pressure from rivals Brand Dilution It is positioned as Catering to the niche market of affluent customers Brand association Market leader in cruiser bikes in America Strong brand name Customization of bikes this is Harley Davidsons major revenue maker Rivals have competitive pricing Harley Owner’s Group
Recommendations for reducing price pressure from rivals Plan to assemble the bikes in Asian countries so starting a new plant in India can solve this problem. Negotiations with the Government can solve these problems. Harley-Davidson has a good brand name so it’s easy for them to eat up the competitor market share if they can provide some more customer benefits Expand the HOG (Harley Owners Group) to Asian countries, if the company can provide the customer satisfaction that they are providing to the U.S customers to the Asian customers they can increase the sales.
Cont… Younger generation and female(11%) are now coming to this segment so expand the motor cycle segments to younger generation and females.
What should HD do to improve its market share in Europe?
Recommendations• HD is not available in some European countries like Austria , Spain , Sweden etc• There is no customization facility available in Europe which are there in U.S like alloys, customized paint , customized paint, stage kit etc• No events are organised in Europe as compare to events are organised in U.S such as men’s motorcycle boot camp , Harlistas , Iron elite etc• All the products of HD are not available in European countries such as TRIKE , and some variation of sportster , touring etc
Recommendations• They need to more advertise but not to be advertise as an American biking icon because it depicts that it is only for Americans• They need to make changes in their product according to Europe culture like custom American chopper producers such as Big Dog Motorcycles and American Iron Horse are promoted as All-American bikes• HD bikes create so much noise pollution that it create a negative image of product in mind of some Europeans• As the demand for HD bikes increasing in Europe market it increased by 22.7% in last year they should set up a new assembly centre in Europe it will also helps in decreasing cost of production
What can Harley do to justify a near double Price tag ancreate buyers interest in India?
Reason For the Double Price• Imports its bikes into India as Completely Built Units (CBU’s), paying 60 % import duties for the bikes and 30 % local taxes which double the MRP• So for eg. Ultra Classic Electra Glide(CVO) which costs USD 35,999 (INR 16,02,000) in US, costs INR 34,95,000 in India
Harley Davidson in India• “We are not a motorcycle company. We are a culture on two wheels. And we want to convert dreams of owning a Harley into a reality for Indian motorcyclists.”• Strong motorcycling culture already present• Harley Owners Group (HOG)- initially, these rides in India were coordinated by the company, but now, these events are coordinated by dealers themselves• Rock Riders mates music with Harley-Davidson motorcycles(thoroughbred biker’s taste in music in Rock).• The Indian customer belongs to a state of mind rather than a particular demographic profile.• India-specific model in consideration(could displace a lower capacity than the 883)• Targeting younger riders with offerings like the Forty-Eight, Iron 883, and Cross Bones. These bikes have the (retro styling popular with younger riders today)• The customization programme will help the customers make their bike unique (Whatever is available to Harley owners abroad in terms of accessories and customized parts is also available to the Indian buyer)• Boot Camps, Harley-Davidson(invites riders to come and taste life aboard its thick two-wheeled slice of Americana)• Breakthrough initiatives - Boot Camps, Founders Ride, Harley Rock Riders and Freedom Film Festival• Income Alliances with banks for financing (Down payment + EMI’s)
Future Plans of the Company• Planning to assemble its bikes in India after countries like Malaysia, Brazil, Indonesia and Singapore, to lower its prices and boost sales.• The company could bring this Figure down to 30 % if it starts to assemble its bikes from Completely Knocked Down (CKD) kits sourced from abroad.• Product development centre for the design and development of bikes for the Indian market.• The company is also looking to start rental services of its bikes through its dealer network by the end of next year
The Indian Scenario• To be the biggest market in Asia in the next ten years• High on Harley’s priority list because of its burgeoning middle-class population and desire for American products.• Premium bikes to account for 1-2% of total motorcycles sales in 6-8 years (Annual motorcycle sales currently stand at 12 million)• Potential buyers – Upgraders from smaller motorcycles , mostly young working professionals with a high disposable – older (40 and above) born again bikers who had a passion for bikes in their younger days – Diehard believers in SUVs(Another symbol of adventure and escape into the great outdoor) SUVs were considered outdoor vehicles. Now the big bikes are becoming the getaway vehicles’
Recommendations• Bikes from other manufacturers don’t have the heritage that a HOG does, which gives Harley a leg up and can help to justify its higher price points.(Attached Class)• Brand Ambassador( in harmony with the brand image, sophisticated, affluent, raw)• India Specific Models (Price Rationalizing)• Focus campaigning/advertising (Marketing Niche-Lifestyle – class focused)