branding strategy of Harley Davidson

Global Branding Strategies
Clara Dorval
Satheesh Kumar Chinnappan
Kannan Jaganathan
Pierre-Henri Reix
Jessica Sarrade
May 10, 2011

History of HD
1903 – William S. Harley & William, Arthur, Walter Davidson
1909 – First V-twin powered bikes, it became most enduring icons of Harley Davidson history.
1917 – 1/3 rd of the bikes were sold to the U.S military, at last 20,000 HD bikes were used in World War I (1918).
1922 – HD dealerships spread across 74 countries.
1933 – An Art deco “Eagle” is printed on tanks this starts the graphic design on HD.

1953 –Attractive logo was created for 50 th anniversary with caption “50 years-American made”.
1983-1986 – Entered into American & New York stock exchanges.
1997 – Two big plants constructed in Milwaukee & Kansas cities.
2002 – “Open Road Tour” debuted in Atlanta to celebrate upcoming 100 th Anniversary.
History of HD

History of HD
2002 – demand for heavy weight motor cycle in U.S grew up by 17% compared to IGR of 10%.
2003 – more than 950,000 bikes were sold in U.S & 28 million world wide expect to grow 5% every year.
HD recorded its 19 th consecutive year of record earnings in 2004.
Harley is the only major American Manufacturer of heavy weight motor cycles.
Have more than 15,000 employees.

Main features
Harley Davidson Softail Family
eg:narrow seats, tombstone tail lights, full length floor boards
Harley Davidson Sportster Family
eg: low-rise handlebars, bullet style headlight.
Harley Davidson Touring (Dressers) Family
large windshield & have a full front fairing. leather saddlebags, optional sidecar, & option to customize.
Engines
Big V-twins, Small V-twins, and the Revolution engine

Main figures
2009 - HD’s share of the U.S. heavyweight (651+cc) market was 53% &12% in Europe. (app.)
Capital Expenditures were $116.7 million in 2009 & $1.0 billion in the last 5 years.
$100 invested in Harley-Davidson at the end of 1986 would be worth approximately $9,000 at the end of 2009
The Company incurred R&D expenses of $143.1 million, $163.5 million and $185.5 million during 2009, 2008 & 2007 respectively.

HD’s motorcycle Shipments HARLEY-DAVIDSON, INC. NYSE: HOG Fact Sheet

World wide Revenue HARLEY-DAVIDSON, INC. NYSE: HOG Fact Sheet

2009 Worldwide Retail Sales of Harley-Davidson Motorcycle HARLEY-DAVIDSON, INC. NYSE: HOG Fact Sheet

VALUES OF HD
Values are the heart of HD business,they guide our action and serve as the framework for the decisions and contribution of our employees make at every level of the company.
Tell the truth
Be fair
Keep your promises
Respect the individual
Encourage Intellectual curiosity
Source HD website

Product extensions
Motor Cycles
Bike accessories
Buell motor cycles: wholly owned subsidiary of Harley by 2003 (closed now)

Brand extensions
Merchandise
Helmet
Clothes (Jackets…)
Mugs
Collectibles….
Beer
Bars

SWOT - ANALYSIS
HD operates in two segments- HD Motor Cycles& related products and HD Financial services(hdfs).
HD is the only American heavyweight motorcycle manufacturer.
Strong brand name & relationship with customers
HD having good marketing division and its divided as a dealer promotion, customer events, magazine and direct mail advertising and public relations.
Customization of the bike is HD’s major revenue maker.
Strengths

Weakness
High price
Top board of directors were all men
Lack of employee diversity
HD has problem in gaining more market share in some European countries.
Required production is not met.

OPPORTUNITIES
Women & younger riders are showing more interest in bikes
The international heavy weight market is growing and is now larger than the U. S. heavyweight market
Market share increasing in Europe and Asia for the last two years
Increasing demand in US markets for bikes Customers value quality parts

THREATS
Harleys average buying age is 42 years old & it still increasing.
The European Union’s motorcycles noise standards are more stringent than those of Environmental Protection Agencies in the U.S and increased environmental stand.
Some competitors of Harley Davidson have larger financial and marketing resources and they are more diversified.
Environmental protection laws.
Shifts in buyers needs & taste.

DIAGNOSTIC
The market: good
The brand: good
But we can increase the brand and the market
always improve

Positioning Expensive Good engineering Quality Innovative

Strategical view
Real experience through messages « living between two ballads » and the new offer of rent.
Guaranteeing quality.
Style and custom especially with HOG ( harley owners group).

Existing Brand Alliances
In USA: Shell and Harley Davidson (joint communication)
In offers about mapping oil-pit stations through the HD ride planner

Shell also will be the exclusive fuels sponsor of the Harley-Davidson 105th Anniversary Celebration
in August 2008 (joint communication)
+

In France: Lenôtre and Harley Davidson via the agency Fidback.
(joint communication)
Lenôtre, creator of High Fondness and the American legendary brand Harley Davidson joined with the agency of Fidback communication to present Wafer of Kings
Harley Davidson, limited edition 2011:
cake eaten in France on Twelfth Night.

These two famous brands have strong common values: the share, creativity, quality and the requirement.
The seven silver bean and engraved emblematic symbols of Harley Davidson were hidden in the cakes but also proposed in box collector (symbolic co-branding)

Ford and Harley Davidson: Trucks (ingredient co-branding)
Ford and Harley-Davidson delivers a new standard of "custom cool," combining the smooth handling and legendary durability of America's best-selling truck with the authentic styling of Harley-Davidson.

Bell & Ross and Harley Davidson (ingredient co-branding)
Luxury watch maker Bell & Ross have teamed up with british bike customizers Shaw Harley Davidson (the most distributing) to create this custom chopper: the Bell & Ross inspired Nascafe Racer.

Gibson and Harley Davidson (joint communication)
Harley-Davidson and Gibson Guitar hosted “Night of Custom”, celebrating the art of ‘customization.’
Bringing together music and motorcycles,
the event saw exclusive music performances
including a phenomenal set from British rock band
Feeder who headlined in front of an intimate
audience of 100 people

Similar to the Harley-Davidson motorcycle brand, no other musical instrument brand encapsulates the Rock and Roll culture like Gibson.

Brand Extensions Failures
The Harley Davidson Cake Decorating Kit
It didn’t do well with its cake-decorating. Customers don’t like this type of product. They didn’t subscribe to this idea.

Perfume/ Shampoo / Shower gel
For lovers of the motorcycle, this was an extension too far.
Harley Davidson had fallen into the trap of thinking that more products equals more sales. And it usually does, at least in the short term.

But after, the image of Harley Davidson is less good.

Wine coolers
As you would expect, the bikers were not impressed. It was a bad idea, customers prefer beer Harley Davidson.

Conclusion
The brand need to focus on the quality and not on cheap products: out of DNA.
Customers want coherence.
So the DNA is very important: it’s the heart.
The company need to do entension brand but to concentrate on the quality, like alliances brand in the european market successful association

« Making real dreams caused by worldwide roads by offering our customers exceptionnal sensations. We nurture their passion for freedom so that they can express their mind. »
Our Vision

« Providing bikes and all the world around through a faithful community »
Our Mission

« Organizing a complete offer including not only a bike but also some clothes, accesories, routes and integration to a community »
Our Action

Profile ( 3 axis)
Gender: girls 10 boys 19
Age : students 22 older people 7
Nationality: foreigners 10 french 19 = 29
The profile of questioned people is more masculine, younger and quite well-balanced.
Brand structure methodology

Statiscal Analysis répétition % YES % NO % band 50 9 15 7 35 12 look 46 8 15 7 31 10 famous 30 6 8 4 22 7 bike 20 4 3 2 17 6 legend 22 4 4 2 18 6 leather jacket 22 4 4 2 18 6 USA 25 5 19 9 9 3 landscape 22 4 16 8 6 2 masculine 27 5 13 6 14 5 culture 21 4 12 6 9 3 travel 32 6 12 6 20 7

Brand structure Periph ery CULTURE Band Look Famous Brand Travel Legend Bike Core USA LANDSCAPE MASCULINE

proposed strategies

Brand extensions

Extension in international work company / Television and video production company
( TV shows, TV programs)
Potential in a customized channel or some biking entertainment shows:
The more possible opportunity is to sell motor shows.
Otherwise, we can maybe take over an existing motor channel ( AB moteur, motor TV).
Risk: very expensive.

Create a independent label of music
Potential to sign rock bands.
To help young and old bands.
To have very strong values: creativity and quality.
To endure
the Rock & Roll image.

Core CULTURE Periph ery Band Look Famous Brand Travel Legend Bike Core USA LANDSCAPE MASCULINE

Brand alliances

Restaurant chains for a symbolic co-branding
Potential in quality and close-to-greater major
routes restaurant chains:
We can collaborate with Buffalo Grill for a flavour roadtrip (bull, corn, eggs..) in Europe.
+

In USA and around the world, we can focus on Morton’s steakhouse:
a special meal Harley Davidson for Morton’s
+

Core Band Look Famous Brand Travel Legend Bike Core LANDSCAPE MASCULINE USA CULTURE Periph ery

Johnny Hallyday for a symbolic
co-branding (In France)
limited edition : To create new features,
new customization
Johnny reflects the image of the brand
because he has the physic and the music:
Rock & roll

Core Band Look Famous Brand Travel Legend Bike Core LANDSCAPE USA CULTURE MASCULINE Periph ery

Lady Gaga for a symbolic co-branding
Joint communication is done, in her clip « Judas »

But create for this co-branding a new
motorcycle: more little, more sport
(like Buell motorcycles) for females and
young customers
With Lady Gaga: because joint communication was successful for the image of the brand and:
controversial image
rock’n’roll attitude
strong, popular image
american image
talented singer and creative person

To concentrate on a new segment: female, more young people.
Motorcycle: less expensive (like Buell)
Young image for Harley Davidson with this alliance.

Core Periph ery LANDSCAPE USA CULTURE MASCULINE Look Band Travel Bike Famous Brand Legend

Joint communication with WWF
The World Wide Fund for Nature ( WWF ): an international non-governmental organization working on issues regarding the conservation, research and restoration of the environment.
+

Communicate on the respect of the environment.
The nature is important for customers.

Core Band Look Famous Brand Travel Legend Bike Core CULTURE USA LANDSCAPE MASCULINE Periph ery

Recommandations
Expand european market
Made new alliances with some local bike companies to produce low cost motor bikes eg: India
Increase diversity programming (Tour, museum)
Explore opportunities for physical plant expansion into other geographical areas to increase labour pool (US + international)

Conclusion
Harley- Davidson have to change American culture and helped the future of motorized vehicles.
Must implement latest technology & facilities.
Loyal customers are not sufficient for company to survive.
“ it’s a journey but not a destination”

Thanks for paying attention

branding strategy of Harley Davidson

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