Harley Davidson Case Study


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An analysis of the Harley Davidson Case Study about building brand communities.

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Harley Davidson Case Study

  1. 1. Building Brand Community on the GROUP 4   Harley-Davidson Posse Ride Prepared for: MMA035, Dr. Csilla Horváth Prepared by: E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet December 10, 2009 Case Study
  2. 2. Building Brand Community on the Harley-Davidson Posse Ride 1. What are the benefits of long rides as Posse, for customers of Harley Davidson (HD)? Evaluate the relational effects based on Exhibits 7 and 10, which refer to pre and post evaluations. For any Harley Davidson customer, long rides – such as the Posse – hold some clear benefits. Firstly, each participant is given the chance to discover part of the USA. The long rides explore the country in depth and give participants the chance to explore various landscapes, hidden parts of the USA or legendary roads, thus broadening their horizons. Secondly, HD customers come into contact with people sharing the same passion for HD, riding bikes and adventure, turning such rides into social gatherings for Harley enthusiasts. Furthermore, the rides offer customers the thrills and excitement associated with biking over long distances, with unpredictable weather conditions, changing sceneries, road mishaps and great road stories. The customers see these trips as big American adventures, a change from the daily routine and a way of experiencing complete freedom. A more tangible benefit is that participants of this sort of rides have the chance to pride themselves of having participated in such endurance races and can even show it via the memorabilia they can gather along the trip (e.g. t-shirts, caps, pins, photographs). Also, some participants consider these rides an unconventional vacation – a chance to escape the daily routine and embark on the journey of their lives, be it on their own or with friends and family members. Last, maybe the greatest benefit for the HD drivers is the feeling they get when engaging in such an experience. However, if we look to Exhibit 7 and 10, we can conclude that the Posse II adventure was not a great success in terms of the improvement of the relation between HD and the Posse participants. Graph 1 (please see Appendix), combines the mean numbers of Exhibit 7 and 10. Looking at the bar charts, one can see which aspects of the HD questionnaire were evaluated best before and which after the ride. In general, we can say that the overall mean of the evaluations has slightly decreased (from 5.68 to 5.53; see Table 1), already indicating that Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet
  3. 3. Building Brand Community on the Harley-Davidson Posse Ride aspects of the ride have lessened the satisfaction of the participants with HD. If we closely examine Graph 1, we can see that this is mostly due to the lesser evaluations of the statements ‘HD rally knows what riding a bike is about’ (0.9 decrease), ‘My Harley is a part of my daily life’ (1.5 decrease), ‘Harley really understands my needs’ (0.6 decrease) and ‘I am satisfied with HOG’ (0.6 decrease). On the other hand, some aspects were evaluated better after the ride: ‘If I were to replace my motorcycle I'd buy another Harley’ (0.6 increase) and ‘I will definitely sign up for another long distance HOG rally’ (0.6 increase). After analyzing these results, we may conclude, that the participants are very satisfied with their bikes, and that the ride was a positive experience. However, aspects of the augmented product of HD where not evaluated that well. People seemed to have higher expectations of HD’s understanding of their needs and motive for riding. From a relational point of view, we may conclude that the Posse rides help increase loyalty towards HD. Nonetheless, HD should pay more attention to their customers’ needs when organizing such rides, as many participants might become unsatisfied with HD during the event. 2. Can the Harley Owners Group’s (HOG) Posse be characterized as a community? Similarly to the view advocated by McAlexander, Schouten & Koenig (2002), the HOG Posse brand community is customer centered, as “the existence and meaningfulness of the community inhere in customer experience rather than in the brand around which that experience revolves.” (p. 39) HD riders want to be part of it and share their feelings about the rides, which consist of about 500 participants. According to McAlexander, Schouten & Koenig (2002), “a community is made up of its member entities and relationships among them.” (p.38) The members can be pinpointed on the basis of their shared interests or characteristics: they share a passion for biking, the Harley Davidson brand, enjoy travelling and see themselves as different than their car-driving friends. Most importantly, HOG creates and negotiates meaning; HOG members define the Harley Davidson brand and help it grow Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet
  4. 4. Building Brand Community on the Harley-Davidson Posse Ride by sharing stories about the Posse rides. They come together once a year for the Posse ride, and spend the rest of the time reminiscing about the previous ride, wearing their Posse t-shirts and proudly telling their acquaintances about their past or future adventure. They receive information about the Posse through the HOG magazine; only around 500 bikers can take part in the Posse, so the community is exclusive, since many HD riders want to be part of it. The Posse allows customers to affiliate themselves with the brand and its customers. What is most important, there seems to be an “unspoken, cultural understanding” (Fournier, 2000, p.9) shared among HOG members. On the road, a “group ethos began to gel with the formation of groups, and friendships and the intimate road experiences that bind together friends” (Fournier, 2000, p.19), thus contributing to the forming of bonds between participants. The participants develop their own community rituals and habits, such as the story nights or the Posse oath. The participants are clearly devoted to the brand and develop strong social attachments with one another during such events. 3. If so, is a community static or dynamic? Support your answers with data from the Posse event, referring, for example, to day-to-day changes! For the Posse rides, the community can be characterized as dynamic. Although many of the participants were veterans previous rides (e.g. the Route 66 rally), new members joined every year. The participants are true supporters, as they have to book their holidays around the Posse ride if they want to participate. Brand communities can be characterized via their “geographic concentration, social context and temporality” (McAlexander, Schouten & Koenig, 2002, p. 39). The main characteristic Posse participants have in common seems to be their love for their bike and the biker lifestyle. They come from various American states, various backgrounds and economic strata. For those with daily jobs, it is difficult to schedule such events without taking time off-work. As a result, the people who do join the Posse ride are Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet
  5. 5. Building Brand Community on the Harley-Davidson Posse Ride true HD enthusiasts. In terms of social contexts, the community keeps in touch via various media: from the monthly magazine to face-to-face communication during and sometimes even after events. Communication is dynamic, as members usually keep in touch long after the Posse events, establishing bonds that may last for years. In terms of temporality, the bonds people create during the rides are enduring and may be either temporary (during the events) or periodic (e.g. meeting for regular events, visiting one another in their spare time, organizing trips together). Spontaneity and dynamism can be encountered on most aspects of the Posse ride: from the events organized by the dealers, where local bikers might come to greet and meet the participants, to the impromptu story nights. HD management knows it would be impossible to control such a big group of riders at all times, so they allow the events to unravel with little participation from their side, giving participants a sense of freedom. Riders can take individual paths, can ride in groups of by themselves and can even decide not to complete the entire race. 4. How would you evaluate the interaction between HOG managers and customers? 4.1. Use information/descriptions from the case for your assessment and match it with HOG’s stated goals. Founded in 1983, the Harley Owners Group (HOG) is a factory-sponsored motorcycle enthusiast club, whose initial goal was to neutralize and control the negative influences of outlaw biker gangs on the overall biker image (Fournier, 2000, p.1). Nowadays, the group focuses on promoting the Harley Davidson lifestyle experience and bringing the company closer to its customers. The interaction between HD managers and their customers will be evaluated by comparing the managers’ behavior with HOG’s stated goals. Harley Davidson focuses on a ‘close-to-the-customer’ philosophy. Thus, employees should know their customers inside out, understand their needs thoroughly and anticipate the future steps the company should take naturally. To summarize, the employees should be so close to Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet
  6. 6. Building Brand Community on the Harley-Davidson Posse Ride the customer, they are actually the customer. This customer-oriented philosophy leads inevitability to a high level of interaction between managers and buyers than in most other companies. This high level of interaction is shown by several aspects. 4.2. Are there one or more different types/ways to get close to the customers for HOG managers? What types of interactions exist based on the case? At Harley Davidson, employees are taken from their desks and asked to interact with the HD bikers by participating in riding experiences, which are meant to create a feeling of mutual understanding and brotherhood between HD employees and regular customer, feeling that is an integral part of the biker experience. Management teams have to undergo the same treatment as regular participants during the race, standing in the same queues as their customers. This equality facilitates the interaction with the customers and is appreciated by the other participants, as it can be seen as a sign of respect. Many of Harley’s employees, ranging from blue-collar to white collar workers, see themselves as ‘bikers’. This leads to such a close relationship between management and customer that they would form personal bonds that would endure in time, extending visit invitations and keeping in touch long after the ride was over. This personal connection with customers brings managers closer to understanding the essence of the relationship between a rider and his Harley bike. On a negative note, customers can also be united by their dissatisfaction with the brand. According to Harley employees, their customers are not shy to complain (Fournier, 2000, p. 21). During riding activities, managers are close to their customers making it easier for the customers to express their grievances and demand explanations from those in charge. Nevertheless the staff tries to connect with the customers throughout HOG events, hoping to have an honest conversation about the goods and the bads of the HD brand. Participating in a Posse is a learning experience for HD employees and is worth the opportunity costs of missing several work days. What management learns from joining a Posse is valuable customer insight which they can use to assess customers’ current and future Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet
  7. 7. Building Brand Community on the Harley-Davidson Posse Ride needs and become more aware of the experience that makes riders choose a HD bike. It is not only about understanding the customers but also about learning about their attitudes towards the Harley Davidson brand or engineering input for future designs.. This last type of customer knowledge is more business-related. Summarizing, we can state that the current customer-management interaction is in line with HD’s stated goals. The HOG-events are visited by a public with a relative high income which has in general a positive influence on the places which they visit. HOG-events are not associated with outlaw biker gangs, meeting one of the first requests of the HOG. Furthermore the HOG is founded with the aim of improving the Harley Davidson lifestyle experience and to bring the company close to its customers. No doubt that also these premises are met as the participants are extremely enthusiastic and are very passionate about the Harley experience. Furthermore it is clear that customer and company gain closeness through HOG rides. This is also true for local dealerships which host local chapters and thus get the chance of establishing a direct contact with their customers. 4.3. What should the HOG managers’ role, and therefore Harley Davidson’s role be, in the development of this community? Are they the owner of the community? The HOG has an essential role in developing the community since they are initiators and organizers of the rides. In our opinion, they should continue with developing the HOG community for several reasons. Firstly, the company gets the opportunity to learn valuable information about its customers; deeper and more elaborate than any quantitative data, customer profile information can be used to customize marketing plans and develop better products in the future. Furthermore since the members of this community are spending more money on Harley Davidson products than non-members, the decision to continue developing the community is very sensible from a profit perspective. Active members have a higher value and spend more on vehicle purchases, part and accessories and general merchandise than not- active members, who in turn spend more than non-members. Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet
  8. 8. Building Brand Community on the Harley-Davidson Posse Ride Lastly, the community complies with HOG’s goals thus contributing to the success of the company. However, building a community with hundreds or even thousands of Harley bikers is not an activity easy to control. HOG’s success depends mainly on the behavior of the participants and their personal perception of the activities which are not fully controllable, and can fluctuate. Even if HOG stops organizing ‘community’ events, there is still a chance impromptu member activities will continue without the involvement of HOG indicating that HOG does not have complete control over the community. However HOG has certainly an influential role in this area. 5. How would the Posse ride contribute to HD’s corporate goals? How would it contribute to its financial objectives? Should the company work harder to improve ROI of the Posse ride? Harley Davidson’s mission is to “fulfill dreams “ (Fournier, 2000, p.7) The Posse rides offer their participants the chance to escape their daily routines and embark in the journey of their lives, a journey they probably would not dare to take otherwise. Moreover, in line with HD’s goal of having a customer-centric business model, the events provide valuable insight into the mind and heart of the Harley Davidson consumer and their relationship and experience with the Harley bike. Harley Davidson has always taken pride in the quality of their products, so seeing them in action on the road and observing the interaction between the user and the product can provide insights for engineers that are looking to constantly improve the HD bikes and may be a smart way of detecting early problems in the manufacturing line. For Harley Davidson success and tradition are important parts of the corporate strategy. Ensuring a tradition of similar events and consistency can help strengthen the core brand by reinforcing the key values of the company. Active HOG members such as the ones that participate in the Posse rides contribute over $575,0001 more than regular ones to HD’s 1 Estimate for 500 participants. Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet
  9. 9. Building Brand Community on the Harley-Davidson Posse Ride revenues. The budget for Posse II was estimated at just $100,000, which indicates a net revenue of $474,000 generated by the Posse II participants, roughly $950 per participant. Although other factors such as the work hours imputed for the preparation of the events and the actual time on the road has to be considered, we can still claim that Posse rides are indeed valuable for the financial performance of the company. Also, while on the road, the riders have the chance of visiting various Harley Davidson dealers and make purchases from them in terms of spare parts, memorabilia, or other merchandise items. Although successful events, there is always room for improvement of the Posse rides. Firstly, the organizers should ensure that the overall experience is constantly positive, and anticipate any problems, such as the t-shirt shortage. The negative word-of-mouth generated by poor planning could hurt the company and the brand. In order to increase the event’s ROI, selling opportunities should be capitalized more by enabling customers to make purchases along the way, and not having to carry the products throughout the journey (e.g. through home deliveries). These rides could also provide the chance for management to evaluate individual dealers and identify room for improvement in order to ensure a higher customer satisfaction overall. The entire event should be considered a chance for evaluation, testing and research. 6. Should HD continue with Posse and other rides? What role should HOG play in the marketing mix? At HOG, as Alan Landry, one of the participants of Posse II says: “They present experiences we wouldn’t have otherwise” (Fournier, 2000, p.19). A ride gives people a feeling of freedom and when finished a sense of completion. Together with their new made Harley friends they have achieved something unique. Thus, one reason not to abandon these rides is the pleasure the ‘hard-core’ Harley customers gain from it. But it does not resume to simple fun activities. These rides make these Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet
  10. 10. Building Brand Community on the Harley-Davidson Posse Ride enthusiastic Harley customers a valuable asset for Harley, giving the participants a strong feeling of partnership and the chance to create tight bonds with people sharing a common passion. Partly due to limited registration, which provides a feeling of exclusivity, Posse rides become a religion, or better yet: a culture. With its core value of freedom, the belonging to this culture can be expressed through memorabilia such a t-shirts bought on the ride as a token of participation, or shared tattoos of the HD logo or emblem of the Posse ride. These rides have even developed their own rituals, such as the spontaneously originated story night and the Posse oath. This subculture of Harley customers becomes a very important spokesman for the company. As two Posse II participants said: “the conversation is going to come with people and it will be talked about for years.” and “I’ll bet this ride is going to come up in our conversation a half a dozen times a month just because we’ve got pictures” (Fournier, 2000, p. 21). Because of the feeling of being ‘a Harley person’ that is carried out by these participants, and associations of adventure, patriotism, toughness, getting out of corporate life and togetherness that come with it, other people, be it bikers or not, could get affinity with it and want to join as well. But it is not only this positive word-of-mouth that is a benefit. The checkpoints during a ride in the form of Harley dealerships also create many opportunities. Many tourists are attracted by the commotion, including people from around the neighborhood riders or non- riders. This is a great promotional stunt for Harley. For the dealer it is a great merchandise opportunity as well. And for management, the benefit lies also in the fact that they see how the dealerships are run across the country. The final benefit of these rides lies in the contact it provides between management, employees and customers. An expectation among management is to attend at least one event Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet
  11. 11. Building Brand Community on the Harley-Davidson Posse Ride annually. Costs of not working at these times are balanced against the opportunity to get to know the customers; how they feel about the entire brand, and get new product ideas. To back up the qualitative benefits of these rides, there is also quantitative proof of its success. These rides become means of activating HOG members, and increasing their customers’ worth. Furthermore, a pre- and post survey at the Posse II ride indicates that after being on the ride the eagerness to participate on another ride increased to a 100% strongly agree response, as did the answer to the question whether a replacement bike would again be a Harley. It is clear from the previous explanation that the rides organized for members of the HOG have a large word-of-mouth function. Of course participants of these rides do not comprise all of the members, only the active members (about 1/3). However, this WOM function can also be ascribed to the entire HOG. Membership holds that you receive the company’s magazine, have access to the Fly & Ride program and receive several rider benefits. It gives new Harley owners who receive a one year free membership a direct feeling of belonging to the Harley community. This community again could be considered a culture, be it not as strong as the subculture of active members who participate in rides. As one member puts it: “It’s a mystique, a lifestyle as opposed to a brand” Lisa Landry (Fournier, 2000, p. 10). The memorabilia, such as pins and t-shirts, where the H.O.G. is responsible for again functions as artifacts or symbols of the Harley culture. That the H.O.G. is responsible for creating a culture makes it a very strong promotional tool, and thus should be placed under promotion in the marketing mix. Harley does not even have to advertise heavily, the members of the H.O.G. will spread the word as will the events that are organized by the H.O.G. Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet
  12. 12. Building Brand Community on the Harley-Davidson Posse Ride References Fournier, S., McAlexander, J. & Schouten, J. (2000): Building Brand Community on the Harley-Davidson Posse Ride, Harvard Business School Cases, Boston; McAlexander, J. H., Schouten, J. W. &Koenig, H. F. (2002): Building Brand Community, Journal of Marketing, Vol. 66, January 2002, pp. 38–54. Appendix Graph 1: Pre-ride and post-ride Survey Results: Means Pre-ride and post-ride Survey results Pre-ride mean Post-ride mean 7 6,5 6 Rate 5,5 5 4,5 4 3,5 G ti s my lif e d th d s m ut i e en th O. rs le Ia n d of m bo d ne e m . e. l ar nd ai ly ne H. fr i he as is a ke sto ll a nc on yH ow t li a ot I a rs ta y d cu un r es r id in is ta all l pa is a e rs to an en wi m t m b ik ley pe a s e d ev of b e b uy rid y ar fi e g a of r le n se lon rH g rt is to e d Ha I 'd si g ip w c au in th sa he er pu e tk cl e at d ou th ot a m en ou at wh ld gr cy no yu ab i th wh u m ki n nds te ab or co H a n d e fo r a d m H a is in ot H a tan r e nds lot e co re ley ym fri a rs sh re up sa yc y y ta ar g de r le r le m ld rs tH lon n y all ou sa ce bu of li fe Iw la l ly y y ly yu e y r le e p M e ea r le ns i te on re ad Ha all se Ir fin to m No re de y la e e M y er av r le ee i ll Iw Iw Ih Ha If If Questions Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet
  13. 13. Building Brand Community on the Harley-Davidson Posse Ride Table 1: Questions , means and answer percentage pre-ride and post-ride questionnaire Questions Pre-ride Post-ride Mean Disagree Middle Agree Mean Disagree Middle Agree I would recommend this ride to a friend 5,7 3% 45% 52% 6 0% 17% 83% My Harley says a lot about kind of person I am 5,4 7% 38% 55% 5,5 0% 50% 50% No one but Harley could put on event like this 5,2 1% 35% 55% 5,3 17% 33% 50% If I were to replace my motorcycle I'd buy another Harley 6,4 7% 4% 89% 7 0% 0% 100% I have made lifelong friends because of my Harley 6 7% 21% 72% 6,2 0% 17% 83% I feel a sense of kinship with other Harley owners 6 7% 14% 79% 6,3 0% 17% 83% I will definitely sign up for another long distance H.O.G. rally 6,4 3% 11% 86% 7 0% 0% 100% Harley really understands what riding a bike is all about 6,1 3% 21% 72% 5,2 17% 33% 50% Harley really cares about me as a customer 5,1 3% 42% 55% 4,8 17% 33% 50% I really understand what Harley is all about 5,7 3% 31% 66% 5,5 0% 42% 58% My Harley is integral part of my daily life 5,3 7% 42% 55% 3,8 42% 33% 25% Harley really understands my needs 4,8 13% 49% 38% 4,2 33% 50% 12% I am satisfied with H.O.G. 5,7 11% 24% 65% 5,1 17% 50% 33% Overal mean: 5,68 5,53 Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet