A new global brand management strategy for Harley-Davidson

Global
Brand
Management
Harley-Davidson

Joren Lemiegre – A4040228

Global Brand Management: Harley-Davidson

1 EXECUTIVE SUMMARY
Harley-Davidson is one of the most mythological brands in the world. Every Harley-driver has its
own stories and every Harley-bike its own history. In the last decade however, Harley-
Davidsons’ core driver has become much older.

Because of the ageing Harley-consumer, the brand itself suffers from an old-fashioned image and
has problems of selling its bikes to younger consumers. These consumers seem to be more
attracted by performance and speed than what Harley-Davidson can offer today.

This does not mean however that Harley-Davidson does not have high brand equity and a strong
brand identity. With the help of a brand audit, the strengths of the brand have been analysed.
The recommendations on page 20 show how Harley-Davidson can take advantage of these
properties to differentiate itself from other competitors while becoming more attractive to
younger consumers.

These findings will be further elaborated in the brand communications strategy which can be
found on page 22 and which gives insights in the brand strategy needed to appeal to younger
consumers.

All these findings have been wrapped into four action points which can be found in the
conclusion. By applying these action points, Harley-Davidson will again become a strong brand
that has a place in every consumer’s heart.

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2 TABLE OF CONTENTS
1 EXECUTIVE SUMMARY 1

2 TABLE OF CONTENTS 2

3 INTRODUCTION 3

4 CONSUMER ANALYSES 4
4.1 Consumer profile all brands 4
4.2 Harley-Davidson consumer profile 5

5 BRAND INVENTORY 6
5.1 Brand mantra 6
5.2 Brand elements 6
5.3 Supporting marketing programmes 7
5.4 Branding strategies 9
5.5 Brand portfolio analysis 9
5.6 Competitive brands profile 9
5.7 Points of parity & points of difference 10
5.8 Strengths & weaknesses 11

6 BRAND EXPLORATORY 12
6.1 Brand associations 12
6.2 Brand positioning analyses 12
6.3 Brand perception analyses 13

7 BRAND EQUITY 14
7.1 General market approach to brand equity 15
7.2 Customer-based brand equity models 17
7.3 Brand asset valuator 18

8 RECOMMENDATIONS 20
8.1 Branding to generation Y 20
8.2 General recommendations 21

9 BRAND COMMUNICATION STRATEGY 22

10 CONCLUSION 24

11 BIBLIOGRAPHY 25

12 APPENDICES 28
12.1 Appendix 1: Description of main competitors 28
12.2 Appendix 2: Industry background 30

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3 INTRODUCTION
Harley-Davidson is one of the leading companies when talking about heavyweight motorcycles,
motorcycle parts, accessories and apparel. (DATAMONITOR, 2011a) Harley mainly operates in
the US where it has a market share of over 50% and employs about 6,900 people. In 2010, the
company sold more than 130,000 motorcycles in the USA and almost 80,000 motorcycles
worldwide.

Furthermore, Harley-Davidson is one of the strongest brands in the world with a very high level
of brand recall. Originally created to avoid bankruptcy, the Harley-Davidson community today
counts more than 1 million members worldwide. (FOURNIER, Susan and Lee, Lara, 2009)
Customers are not only buying a motorcycle, they are buying “the Harley-experience”.

However, Harley-Davidson cannot count on baby boomers forever to sell its products. The
typical HD-consumer is in its late 40s or older, not far from the group that buys Buicks. (ALIANO,
Alyson, 2005) In order to appeal younger consumers, Harley-Davidson will have to adapt its
strategy.

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4 CONSUMER ANALYSES
4.1 CONSUMER PROFILE ALL BRANDS
4.1.1 AGE
Which consumers are buying motorcycles differs strongly from brand to brand. From a global
perspective however, there are some notable similarities between motorcycle buyers all over
the world.

Different market reports from different countries mainly show the same figures according to
gender and age.

Most motorcycle owners are men but the amount of women riding a motorcycle has been
growing in the past 15 years. Women now account for 21.3% of motorcycle drivers.
(DATAMONITOR, 2011b)

The biggest group of motorcycle drivers can be found in the group older than 35. The percentage
of drivers under 19 is also very high but this is because of the inclusion of scooters in the
statistics. These are very popular among this category and account for a great part of the
motorcycle sales in this market.

All adults 100.0
Sex
Male 78.7
Female 21.3
Age
15-19 16.0
20-24 10.5
25-34 8.9
35-44 27.5
45-54 16.8
55-64 9.4
65+ 10.8
Table 1: Profile of motorcycle, moped and scooter owners by sex and Age (% of households owning)
(KEYNOTE, 2008)

4.1.2 USE OF MOTORCYCLES
There’s a big difference between continents in the use of motorcycles. While motorcycles in
developed areas like Western Europe are mainly used for leisure and personal transportation,
they are mainly used as working tools in Latin America. (FROST & SULLIVAN, 2002)

This has an effect on the type of motorcycles that are bought in different countries. Knowledge of
this use is indispensable for a successful market expansion.

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4.2 HARLEY-DAVIDSON CUSTOMER PROFILE
According to Scott (SCOTT, Missy, 2008), the typical Harley-Davidson rider in the USA is
somewhere between 30 and 40 years’ old and has an average household income of $ 84.300.

Nearly two-thirds of Harley-buyers have studied at least one year after high-school and 30% of
buyers have a college degree.

In its annual report, Harley-Davidson says the following about its consumers: “we’re number one
in U.S. heavyweight market share across a broad swath of outreach customers. We are the leader
among young adults ages 18–34. We’re number one with women. Number one with Hispanic riders.
Number one among African-Americans.” (HARLEY-DAVIDSON, INC., 2010)

This consumer profile is however limited to the American market. In developing countries,
Harley-Davidsons consumer profile is different for education and income. In India for example,
the typical Harley-Davidson buyer belongs to a higher class, is highly-educated and has one of
the highest average incomes in India. The reason for this is the high price for the Harley bikes in
these countries. (HARLEY DAVIDSON MOTOR COMPANY, 2011)

Even countries with similar cultures as the US show significant differences. In the European
market for example, Harley-Davidson has a very low market share and is not very popular
amongst young people. This is one of the major weaknesses of Harley-Davidson. The company
focuses too much on the US market and is not really following consumer trends in other
markets.

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5 BRAND INVENTORY
5.1 BRAND MANTRA
Harley-Davidsons brand mantra “Enjoy the ride” immediately shows that Harley Davidson is
about more than only transportation. The Harley-Davidson brand is all about escaping the daily
humdrum of life and the experience of the products that Harley is selling. Ron Hutchinson,
senior vice president of product development for HD, states it as following: “Let me be very clear
about one thing, Harley-Davidson is not in the transportation business. We are, however, in the
entertainment business” (CAREY, W. P., 2008)

5.2 BRAND ELEMENTS
According to Keller (KELLER, Kevin Lane et al., 2012), “brand elements can be chosen to enhance
brand awareness; facilitate the formation of strong, favourable and unique brand associations or
elicit positive brand judgements and feelings. “ Because these brand elements help to define brand
equity, Harley-Davidsons’ brand elements will be analysed in the next paragraphs.

5.2.1 NAME
In 2011, Harley-Davidson ranked 100th in Interbrands top 100 brands. (INTERBRAND, 2011)
This may not seem very spectacular, but regarding the sales of HD-motorcycles compared to
market leader Honda, this is a big achievement.

Keller states that a good brand name is easy to pronounce or spell, familiar, meaningful,
different, distinctive and unusual. (KELLER, Kevin Lane et al., 2012). Harley-Davidson may not
be meaningful or easy to spell, the name has been used over such a long time that is has become
a statement. Changing this name would be a very bad idea.

5.2.2 LOGO
The Harley-Davidson logo is easy to remember, easy to spot
and obvious. The orange letters on a black background are
immediately recognisable and just like the brand name, the logo
is very famous and well-known all over the world. During the
years, there have been some minor adaptions to the logo but
the logo is still recognisable as the original Harley-Davidson
logo.

5.2.3 SHOPS Figure 1: Harley-Davidson logo
While POS may not be part of Keller’s definition of brand
elements, shops are very important for the Harley-Davidson brand. The HD-shop is easily
recognisable, offers a wide range of Harley-Davidson products and above all, the employees
working in the shops know all about the motorcycles and the brand. These are the places where
customers get in touch with the brand and are therefore indispensable for the Harley-Brand.
(DATAMONITOR, 2011a)

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5.2.4 SLOGANS
Harley-Davidson has had a lot of different slogans during its lifetime. However different, all
slogans have one thing in common. They are consistent with the brand mantra and show where
Harley-Davidson stands for. Freedom, entertainment and easy-riding.

"It's not the destination, it's the journey.”
“Live to Ride, Ride to Live”
“The Road Starts here. It never ends”.
“It's time to ride.”
“Until you've been on a Harley-Davidson, you haven't been on a motorcycle”

5.3 SUPPORTING MARKETING PROGRAMMES
When taking a look at the different Harley-Davidson marketing programmes, the assumption
can be made that Harley works really hard on integrated marketing. Every single campaign,
initiative or event depicts the brand mantra and brand identity. Every country can decide about
its own campaigns and budget, but the boundaries to do so are set by the headquarters.

The result of this approach is that Harley-Davidson’s advertising campaigns are specifically
adapted to each target market while following the global brand values. There are too much
different programmes to evaluate, but the most important global initiatives will be analysed in
the following paragraphs.

5.3.1 JUMPSTART
The jumpstart programme is an experiential marketing programme aimed at new customers and
people who have never driven a motorcycle before. In order to convince new customers that
there’s nothing like being on a Harley-Davidson motorcycle, Harley offers the opportunity to try
one in a controlled environment. (HARLEY-DAVIDSON, INC., 2010)

Therefore, people can try a Harley-Davidson bike in-store all over the world. The bike is
mounted on a support stand so people can try shifting, throttling and steering without being on
the road.

5.3.2 HOG OR HARLEY-DAVIDSON OWNERS GROUP
One of Harley-Davidson’s oldest marketing programmes that is still running is the Harley-
Davidson Owners Group. As mentioned earlier, this community created by HD, counts more than
1 million members worldwide. Because of the connection between the brand and the consumers,
Harley-Davidson uses this group to receive feedback on products and to make improvements.

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5.3.3 BRAND MANAGEMENT EXTENSIONS
In order to analyse if these marketing programmes are applied correctly, Kapferer’s model for
brand management extension will be applied. Kapferer states that if a brand wants to stay
relevant in the long term, it has to work on the depth of the brand. Therefore, he has created
three levels of brand depth. Functional satisfaction, experiential enchantment and aspirational
fulfilment. (KAPFERER, Jean-Noel, 2008) Brands that play at the Aspirational product level are
normally the strongest brands as the relationship with their consumers is very strong.

The different programmes used in the above paragraphs each have their own place in this
model. The jumpstart-programme for example focuses on functional satisfaction and short-term
transaction. It fits in the lower left corner of the model.

A completely different programme is the HOG. This programme clearly fits in the upper right
corner of the model. These two extremes are necessary in order to maintain a good relationship
with the customer. A relationship with a brand can only exist when a consumer has tried or
bought the product. Therefore, a brand has to start in the lower left corner to become a strong
brand in the consumers’ mind.

Figure 2: The extension of brand management (KAPFERER, Jean-Noel, 2008)

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5.4 BRANDING STRATEGIES
5.4.1 SUB-BRANDS
All motorcycles produced by the company, are sold with the name Harley-Davidson but sub
brands are used to define the type of motorcycle and the target group. Examples of these sub
brands are Superlow, Nightster, Fat Boy and Soft-Tail.

5.4.2 BRAND EXTENSIONS
Next to these sub brands, Harley-Davidson uses some line extensions. A good example of a line
extension is the Fat Boy Low. It has the same design as the normal Fat Boy Motorcycle, but to
appeal to women, it has been made lower so it is easier to handle and ride.

Another branding strategy of Harley-Davidson are category extensions. Harley does not only
offer motorcycles, it also offers a wide range of apparel, gadgets and much more. However it
gives added value to the brand in a consumers perspective, Harley-Davidson has to be careful
with these category extensions. The launch of a Harley-Davidson perfume proved to be a step
too far for most Harley-Davidson fans. Haig puts it as following: “If your values are ‘strong,
masculine and very rugged,’ you shouldn’t be selling perfume.” (HAIG, Matt, 2011)

5.5 BRAND PORTFOLIO ANALYSIS
Harley Davidson produces different types of motorcycles ranging from Touring models to
Sportster models. All these motorcycles are sold with the Harley-Davidson brand name.

Until 2009, Harley-Davidsons’ brand portfolio comprised two brands, HD and Buell. While the
typical Harley-Davidson customer is 47 years’ old, Buell bikes were produced to attract a
younger audience. (VAUGHAN, Mike, 2010) In 2009, production of Buell bikes stopped and
Harley-Davidson does not sell this brand any longer. Vaughan thinks this is a major mistake, but
if Harley-Davidsons own sales figures can be trusted, his vision is wrong, at least if only the US
market is taken into consideration.

5.6 COMPETITIVE BRANDS PROFILE
According to Datamonitor (DATAMONITOR, 2011b), BMW, Honda, Suzuki, Yamaha and Polaris
are the biggest competitors of Harley-Davidson. Both BMW and Polaris are not part of the top
five in terms of market share described in chapter 12.2, but are strong competitors of Harley-
Davidson because of their connection with the up-level and heavy-weight motorcycle market.

A short description of every competitor and its products can be found in Appendix 1.

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5.7 POINTS OF PARITY & POINTS OF DIFFERENCE
5.7.1 POINTS OF DIFFERENCE
Harley Davidson has some major points of difference compared to its competitors. The brand
stands out in different areas.

Harley-Davidson Owners Group: First of all, Harley-Davidson has a very strong brand
community, the Harley Owners Group is very famous among consumers and Harley owners.
They gather for races, trips and much more.

Engine sound: The sound of the Harley engine is unique and immediately recognisable.
Everybody who hears it knows it is a Harley-Davidson driving by.

American Heritage: One of the strongest POD’s on the American market for Harley-Davidson is
their American heritage. The brand is not afraid to show it is purely American and loves to be so.

Design: Together with the American heritage, the design of Harley-Davidson motorcycles is very
distinctive from other brands.

Selling points: Harley-Davidson sells its motorcycles primarily in its own shops. These shops
are independently owned but Harley-Davidson gives guidelines about what is possible and what
not. In this way, customers visiting a Harley-store will get the same level of service and
assistance worldwide.

These are all very strong points of difference but it are these pod’s that could become a danger
for Harley-Davidson in the future. Not everybody considers these pod’s as sufficient to buy a
motorcycle.

5.7.2 POINTS OF PARITY
Technology: If there’s anything Harley-Davidson is not standing out at, it is the technology
behind the motorcycles. While BMW is constantly innovating, Harley-Davidson is lagging behind
and applies old technologies every brand already uses.

Quality: However the quality perception of Harley-Davidson may be quite high, Harley-
Davidson bikes don’t have an exceptional level of quality. Compared to other motorcycles,
quality of HD may even be considered low.

Performance: Harley-Davidson bikes may perform very well, compared to competitors, the
performance of HD motorcycles is quite average. This can be a big disadvantage to attract young
consumers.

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5.8 STRENGTHS & WEAKNESSES

Figure 3: SWOT-analyses Harley-Davidson

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6 BRAND EXPLORATORY
6.1 BRAND ASSOCIATIONS

Figure 4: Brand associations based on personal experience and (ROBERTS, Kevin, 2004)

6.2 BRAND POSITIONING ANALYSES
According to Kapferer, positioning a brand means “emphasizing the distinctive characteristics
that make it different from its competitors and appealing to the public” (KAPFERER, Jean-Noel,
2008)

These distinctive characteristics are also backed by Jobber. He describes brand positioning as
choosing the right target market and defining the right differential advantages. (JOBBER, David,
2010).

6.2.1 TARGET MARKET
As pointed out in chapter 4, the typical Harley-Davidson targets where white, masculine baby
boomers who are attracted to freedom and rebellion. This generation was getting old very fast
and Harley had to target other groups. Recently, HD introduced special motorbikes and
marketing programmes aimed at women. These programmes still have to prove their
effectiveness, but are one of the hopes of HD. Furthermore, other social groups like youngsters,
the black community and Hispanics have been targeted more recently.

6.2.2 DIFFERENTIAL ADVANTAGES
The differential advantages have already been discussed in “5.7.1 Points of difference”. As
pointed out there, Harley has some clear differences with other motorcycle manufacturers but
the question remains whether the contemporary motorcycle buyer is interested in these points
of difference.

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6.2.3 A BRAND FOR WHEN AND A BRAND AGAINST WHOM ?
Maybe more interesting for Harley-Davidson’s positioning are the two elements Kapferer adds
to positioning: “A brand for when?” and “a brand against whom?” (KAPFERER, Jean-Noel, 2008)

A brand for when is an ideal positioning method for Harley-Davidson since they are already
focussing on this in their brand mantra. A Harley-Davidson is not only to get from A to B; it is to
get there in a very pleasant and exiting way.

This focus can help to further improve the positioning “against whom”. Harley-Davidson
positions itself against other motorcycle manufacturers who go for speed instead of pure driving
pleasure. A good example of this can be found in a lecture from Ken Schmidt at Westminster
College where he tries to show the difference between Harley-Davidson and other motorcycles:
“I want everybody to lean as far forward as you can, and if your back doesn't hurt, you're not doing
it right. You are now going to ride one of those imported bikes seen zipping around the streets.”

6.3 BRAND PERCEPTION ANALYSES
The perceptual map helps to measure brand equity explained in chapter 7, but can also be
helpful when assessing the brands position in the customers mind compared to competitors.
Figure 5 shows an example of a perceptual map applied to Harley-Davidson and its main
competitors. It has been based on personal experience and research conducted by Tiwari on the
Indian market. (TIWARI, Vinayak, 2011)

Advanced Technology / Innovative

Traditional Trendsetter

High Performance
Figure 5: Perceptual map based on personal experience

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7 BRAND EQUITY
In order to understand the meaning of Harley-Davidson as a brand, a good understanding of
brand equity and how it can be measured and leveraged is necessary.

Kotler defines brand equity as “the added value given to products and services. Brand equity and
value is reflected in how consumers, think, feel and act with respect to the brand, as well as the
prices, market share and profitability that the brand commands for the company” (KOTLER, Philip
et al., 2009)

This is a good definition of brand equity but it does not show how a higher level of brand equity
can serve the company. Therefore, Keller’s definition of brand equity is better: “Brand equity is
the differential effect that brand knowledge has on consumer response to the marketing of that
brand” (KELLER, Kevin Lane et al., 2012)

One of the shortcomings of Keller’s definition is that it is purely customer based. Aaker
approaches brand equity from a business perspective and defines it as following: “Brand equity
can be considered as the additional cash flow achieved by associating a brand with the underlying
product or service.” (AAKER, David A. and Biel, Alexander L., 1993)

Stemming from these different definitions, two main approaches with their own models can be
applied onto Harley-Davidson. The customer-based model according to Keller, and the general
market approach by Aaker.

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7.1 GENERAL MARKET APPROACH TO BRAND EQUITY
A AKER
Aaker’s brand equity model mainly focuses on added value. Both the added value for the brand
and the consumer are studied in this model. Aaker identifies five dimensions to measure brand
equity. Awareness, association, perceived quality, brand loyalty and other propriety brand
assets.

Each dimension delivers in its own way added value to the consumer and the brand. Figure 6
illustrates Aaker’s brand equity model with its five dimensions and how each dimension delivers
added value.

Figure 6: David Aaker's brand equity model cited by Keller (KELLER, Kevin Lane et al., 2012)

In the following paragraphs, Aaker’s model will be applied to Harley-Davidson. This will help to
determine Harley-Davidsons’ brand equity and to improve it.

Brand loyalty is key for Harley-Davidson. Since the introduction of the Harley Owners Group,
the repurchase rate of Harley-Davidson has been very high. According to Scott, (SCOTT, Missy,
2008) more than 80% of Harley-buyers, buys a new Harley-Davidson when they want another
motorcycle.

Aaker states that a high brand loyalty helps to reduce marketing costs and to attract new
consumers. A big part of Harley-Davidson motorcycles is sold through word-of-mouth. Reducing
marketing costs however, is not the same as doing no marketing at all. Coca Cola for example, is
the biggest brand in the world, but still spends billions of dollars on advertising each year.

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However high the brand loyalty may be, this does not prove that Harley-Davidson is doing a
good job. More than 50% of Harley-bikes sold today, are sold to previous Harley-owners. That
means that in the long run, Harley-Davidsons buyers’ group will become smaller and smaller.

Brand awareness: There is no academic proof that Harley-Davidson has high brand awareness
but, considering Harleys positioning in Interbrands’ Top 100, the assumption can be made that
this is the case. This high brand awareness helps Harley-Davidson to be added to a new
consumers’ consideration set and to help the consumer to make its choice. Since the brand is
already known, there is less need for the consumer to be made aware of the existence of Harley-
Davidson.

Perceived quality: When talking about the quality of Harley-Davidson, there is a big difference
between perceived quality and actual product quality. According to Datamonitor, poor product
quality is one of the major weaknesses of Harley-Davidson. (DATAMONITOR, 2011a). Last year,
Harley-Davidson had to recall more than 100,000 motorcycles. Luckily for HD, the perceived
product quality does not match the real product quality.

The weight, image and looks of Harley-Davidson help to maintain a high quality perception.

This helps HD to charge a higher price for its motorcycles than competitors and to motivate
people to buy a HD-bike instead of other brands. In the future however, Harley-Davidson will
have to work on its real product quality. Perception may be very important; delivering low-
quality products followed by product recalls can seriously damage the brand and will lead to a
lower quality perception in the future. A good example of a brand that has had this problem is
Toyota. When they had to recall cars because of problems with the acceleration, the perceived
product quality dropped instantly.

Brand associations: Harley-Davidson makes one think about a lot of different things as shown
in chapter 6. These associations help Harley-Davidson to differentiate itself from competitors
and to give consumers a reason to buy. Consumers on their side are helped by these associations
in the search for a motorcycle.

Other proprietary assets: A quick search on FPO’s search engine learns that Harley-Davidson
has 541 patents. Compared to other companies like Yamaha, which has over 9000 patents, that
is rather insignificant. Patents can help companies to establish a competitive advantage and even
to block other companies of releasing a product. In the long term, this lack of patents could harm
Harley-Davidson. A problem Google faces at the moment with Android OS.

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7.2 CUSTOMER-BASED BRAND EQUITY MODELS
B RAND E QUITY P YRAMID
Keller describes four steps for building a strong brand. Establishing the brand identity, creating
an appropriate brand meaning, eliciting positive brand responses and forging brand
relationships with consumers. (KELLER, Kevin Lane, 2001)

These four steps are used to create the brand equity pyramid with six so-called “brand building
blocks”. These blocks are necessary to build a strong brand and are illustrated in Figure 7

Figure 7: Customer-based brand equity pyramid (KELLER, Kevin Lane, 2001)

In order to assess Harley-Davidsons brand equity, the CBBE-pyramid has been applied to the
brand in Figure 8.

Loyalty
Community

Stylish Freedom
Unique Enjoyment

American-style Rebellious
Good Quality Epicurean

Motorcycles

Figure 8: CBBE-pyramid applied to Harley-Davidson. Based on (KELLER, Kevin Lane, 2001)

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7.3 BRAND ASSET VALUATOR
Another interesting tool for measuring brand equity is the Brand Asset Valuator designed by
Young & Rubicam. The BAV is built on four pillars which diagnose the strength of the brand and
the brand stature or emotional capital. These four pillars are: differentiation, relevance, esteem
and knowledge. The difference with other models is that BAV measures how well a brand
performs vs. the other brands in BAV. (YOUNG & RUBICAM GROUP, 2003)

Figure 9: The four BAV-pillars (YOUNG & RUBICAM, 2010)

Crucial for diagnosing the health of the brand is the relationship between these four pillars.
According to Young & Rubicam, a brand has room to grow if differentiation is bigger than
relevance. This is the case for Harley Davidson. The other way round means that the analysed
brand is a commodity brand such as Minute Maid.

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All these factors together help to build the BAV power grid. With help of this power grid, a
brand’s strengths and weaknesses- as well as its growth prospects can be mapped out. (YOUNG
& RUBICAM, 2010). Harley Davidson is a typical example of a brand with a high level of
differentiation, combined with a lower level of relevance. On the other side, the knowledge of the
brand is quite high while the brand-esteem is not that big. Therefore, Harley-Davidson fits in the
decline section of the BAV power grid. It is still a strong brand, but the fundamentals on which
the brand has been built, start to erode.

Figure 10: The BAV power grid applied to Harley-Davidson. Based on (YOUNG & RUBICAM, 2010)

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8 RECOMMENDATIONS
8.1 BRANDING TO GENERATION Y
The goal of this paper is to get insights into the Harley-Davidson brand and to make it more
attractive to young people outside the US. In the following paragraphs, generation Y and how
they can be targeted more efficiently will be described by using research of Van den Bergh on
this subject. (VAN DEN BERGH, Joeri, 2011)

8.1.1 AUTHENTICITY/ REALNESS
Van den Bergh states that authenticity is still one of the major drivers for young people to
consider a brand. (VAN DEN BERGH, Joeri, 2011). Authenticity however, is not anymore about
origin, history and heritage but all about being honest to yourself, to your consumers and to
society. The classic interpretation of authenticity should never be shouted but only be
whispered. Eristoff has used this insight to build its “Pretty honest for a vodka-campaign”

Recommendation 1: If Harley-Davidson wants to appeal to young people, it has to keep it
real and it has to stay true to itself.

8.1.2 SELF-IDENTIFICATION WITH THE BRAND
The new generation are stimulus junkies. They have grown up in a society where advertising
and stimuli are omnipresent. They know advertising is there to sell products but they couldn’t
be bothered less about it. Content is king but they have more trust in people than ever. Friends
help this generation decide what to buy and employees or shop personnel are key to sell
products. Brands that appeal to this generation use social media and don’t push their messages
but engage the new consumer by offering him control.

Recommendation 2: Harley-Davidson has to engage with young people through social
media and offer them the power to become brand ambassadors. Harley-Davidson has to
friend its consumers.

8.1.3 UNIQUENESS
Another thing that is very important for branding to young people is uniqueness. On this subject,
Van den Bergh’s theories are aligned with the preliminary paragraphs about brand equity. In
order to appeal to young people, brands have to be unique, that is, they need to position
themselves with a unique brand DNA or brand identity. Furthermore, this complies with Aaker’s
model because it is all about brand perception. In order to make this work, a consistent
positioning through the years is indispensable. A brand that is doing very well in this area is
Lynx which has been using the same brand mantra for decades: “helping man to attract women”.

Recommendation 3: Harley-Davidson has to stick to its brand positioning and brand DNA.
Trying to change this identity will damage the brand.

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8.1.4 BRAND LEVERAGE
According to Van den Bergh, traditional brand equity models as described in chapter 7 are no
longer sufficient. Instead of these traditional models that focus on awareness, image and loyalty,
he adds the Net Promoter Score (NPS) as key brand metric. In research he conducted, a clear
relationship was found between consumers talking about the brand and brand leverage. “If
generation Yers highly rate your brand on each element, your brand image will improve and they
will talk about your brand which will have a positive effect on your brand strength (brand
leverage)” (VAN DEN BERGH, Joeri, 2011)

Recommendation 4: Stick with Van den Bergh’s CRUSH-model and keep the Harley-
Davidson brand and communication Cool, Real, Unique, Self-identifiable and Happy.

8.2 GENERAL RECOMMENDATIONS
8.2.1 QUALITY
As mentioned in chapter 5, the product quality of Harley-Davidson is one of its weaknesses. This
will have to be fixed.

Recommendation 5: If Harley-Davidson wants to keep high brand equity, it will have to
improve the quality of its products.

8.2.2 BRAND MANAGEMENT EXTENSION
If the brand wants to stay relevant for every consumer, Harley-Davidson will have to develop
marketing programmes for every life stage of the consumer. New consumers and old consumers
both have a different depth of relationship with the brand but both need tailored communication
plans.

Recommendation 6: Apply Kapferer’s model for brand management extension and adapt
marketing programmes to different consumer life stages.

8.2.3 BRAND EXTENSIONS
Harley-Davidson made a mistake by launching too much category extensions like perfume but
not only this kind of category extension can harm the brand. It is not wise for Harley-Davidson to
start producing bikes in the race category or performance category. First of all, extending the
Harley-Davidson brand in these categories will damage the brand DNA and secondly, buyers of
these kinds of motorcycles will never be convinced about Harley-Davidsons brand values. They
have other values and they will never match those of Harley-Davidson. Creating a new sub-
brand can be a solution if it is financially possible.

Recommendation 7: If Harley-Davidson wants to avoid brand dilution, the brand has to be
more careful with category extensions.

Line extensions on the other side, can help to strengthen the brand and to make it more
attractive to certain target groups.

Recommendation 8: Continue introducing line extensions but avoid too much line
extensions to remain profitable.

21


9 BRAND COMMUNICATION STRATEGY
Placing the brand communication strategy behind the recommendations may seem a bit strange,
but since this brand communication strategy is based on the recommendations, it is better to
present it here.

T ARGET AUDIENCE
The target audience of the new brand communication strategy are young people between 20 and
35 who are attracted by values like freedom, pleasure and dreams with a touch of rebellion. Men
as well as women have to be taken into consideration, eventually with different but consistent
communication plans.

Because of the current customer profile of Harley-Davidson, the new brand communication has
to appeal to baby boomers as well without driving them away from the brand.

O BJECTIVES
- Making Harley-Davidson more appealing to young consumers and raise sales in this
category without repelling existing consumers.
- Creating a real relationship with each type of consumer
- Keeping a strong brand equity throughout all consumer groups
- Improving the brand image among young consumers

C REATIVE STRATEGY
The new creative strategy will be based on the CRUSH-model to appeal to younger consumers.
The focus will lay on realness, uniqueness, self-identification with the brand and happiness with
a rough edge. As seen in chapter 8, young people are attracted by these values and this kind of
creativity. Every marketing campaign will have to respond to this model.

Furthermore, the creative strategy will mainly focus on user-generated content. Harley-
Davidson is a strong brand with lots of fans who like to show this. Engaging these fans by
stimulating them to create their own content and sharing it, will give the creative boost Harley-
Davidson needs.

22


M EDIA STRATEGY
The new media strategy will mainly focus on social media. Harley-Davidson already has a strong
Facebook-page but more content-creation and interaction is required in order to appeal to
younger consumers. Social media are also very suitable for user-generated content as mentioned
in the creative strategy.

Next to social media, traditional media can be used in combination with new techniques to draw
the attention to the brand. Examples are print media combined with QR-codes, NFC-enabled
billboards or virtual reality set-ups as used by Lynx to promote its new fragrance.

In addition to that, smartphones will be used to engage consumers even more. An application to
share “Your Harley-moment” could be interesting. Especially if this application adds extra value
by using the GPS to show beautiful places for a road trip, interesting motoring spots and all this
combined with the possibility to share with other Harley-drivers.

P RODUCT STRATEGY
1. Improve the quality of the products by applying a total quality management system
where every step in the production process is checked.
2. Introducing more line extensions to appeal to different target groups while avoiding to
drift away from the brand DNA. It is important to stay loyal to the design while
incorporating cool and modern touches like nonglossy paint.
3. Making the Harley-Davidson apparel more fashionable for younger consumers and
women without removing the rough edges.

23


10 CONCLUSION
Harley-Davidson is still a strong brand which appeals to a very large group of consumers. The
brand has made some major mistakes in the past, but seems to be on the right way to refocus on
the brands key strengths. This strategy seems to work in the US where Harley-Davidson is
selling more bikes to young people and new target groups than ever. In order to appeal to the
global market however, there are some major problems to be tackled.

First of all, Harley-Davidson has to adapt its communication strategy to younger consumers. This
can be done by updating the used media with new techniques and to engage on social networks
with new and potential consumers.

Secondly, research shows that the new generation values authenticity and uniqueness more
than ever. This is good news for Harley-Davidson which distinguishes itself from competitors
with these values. Harley-Davidson has to seize this opportunity by sticking to its values by
introducing modern techniques and modern design touches combined with the old elegance of
Harley-Davidson. Retro design with a modern touch has never been cooler before.

Furthermore, Harley-Davidson has to stay away from categories that will harm the brand DNA
and brand equity. Racing and performance motorcycles do not comply with the brand identity
and cannot be introduced unless under a different brand name. The values of the target group
for this kind of motorcycles will never comply with Harley-Davidsons’ brand values.

And finally, all this, has to be done without chasing away the current Harley-buyer. This
customer still has to be able to identify itself with the brand. Therefore the feeling to belong to a
strong community is more important than ever. HOG is a very successful marketing programme
and it has to be supported all year long.

By applying these techniques, Harley-Davidson will remain a real lovebrand with high brand
equity. Harley-Davidson stands for fun, experience and happiness with a little touch of rebellion.
Every Harley-rider has its own story, but everyone single one of them has the same dream:
Freedom

24


11 BIBLIOGRAPHY

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building strong brands. New Jersey: Lawrence Erlbaum Associates Inc.

ALIANO, Alyson. 2005. He really got Harley Roaring. BusinessWeek, 21 March, p.70.

BUSINESS MONITOR INTERNATIONAL LTD. 2012. Brazil Autos Report. Ipswich.

CAREY, W. P. 2008. Enjoy the ride: Harley-Davidson's user community. [online]. [Accessed 14
February 2012]. Available from World Wide Web:
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DATAMONITOR. 2011a. Harley-Davidson, Inc.: Company profile. London.

DATAMONITOR. 2011b. Industry Profile: Global motorcycles. London.

DATAMONITOR. 2011c. Bayerische Motoren Werke AG (BMW Gorup) Company Profile. London.

DATAMONITOR. 2011d. Suzuki Motor Corporation. London.

DATAMONITOR. 2011d. Yamaha Motor Co., Ltd. London.

DATAMONITOR. 2011e. Polaris Industries Inc. London.

DATAMONITOR. 2012a. Honda Motor Co., Ltd. Company profile. London.

FOURNIER, Susan and Lara LEE. 2009. Getting brand communities right. Harvard Business
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FROST & SULLIVAN. 2002. Motorcycles market in Latin America. Booming? [online]. [Accessed 17
February 2012]. Available from World Wide Web:
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FROST & SULLIVAN. 2008. The impact of rising fuel prices on consumer behaviors. [online].
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FUREY, Cynthia. 2010. Marketing the Harley Way. Dealernews. 46(8), pp.56-56.

HAIG, Matt. 2011. Brand failures: the truth about the 100 biggest branding mistakes of all time,
2nd edition. United Kingdom: Kogan Page Limited.

HARLEY DAVIDSON MOTOR COMPANY. 2011. Harley-Davidson opens Asia Pacific headquarters.
Marketing Weekly News, 4 June, pp.1-1.

HARLEY-DAVIDSON, INC. 2010. 2010 Annual Report. [online]. [Accessed 17 February 2012].
Available from World Wide Web: <http://www.harley-
davidson.com/en_US/Media/downloads/Annual_Reports/2010/HD_Annual2010.pdf>

25


HONDA MOTOR CO., LTD. 2011. Annual Report 2011. [online]. [Accessed 15 February 2012].
Available from World Wide Web:
<http://world.honda.com/investors/library/annual_report/2011/honda2011ar-all-e.pdf>

INTERBRAND. 2011. 2011 Ranking of the top 100 Brands. [online]. [Accessed 15 February 2012].
Available from World Wide Web: <http://www.interbrand.com/en/best-global-brands/best-
global-brands-2008/best-global-brands-2011.aspx>

JOBBER, David. 2010. Principles and practice of Marketing, 6th edition. Berkshire: McGraw-Hill.

KAPFERER, Jean-Noel. 2008. The new strategic brand management - Creating and sustaining
brand equity long term. London: Kogan Page Limited.

KELLER, Kevin Lane. 2001. Building customer based Brand equity - A blueprint for creating strong
brands. Cambridge.

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European perspective, second edition. Essex: Pearson Educatioon Limited.

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World Wide Web:
<http://www.marksherrington.com/downloads/Brand%20Planning%20eArticle.pdf>

KEYNOTE. 2008. Market review 2008: Motor industry. Middlesex.

KOTLER, Philip, Kevin KELLER, Mairead BRADY, and Malcolm GOODMAN. 2009. Marketing
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SCHEMBRI, Sharon. 2009. Reframing brand experience: The experiential meaning of Harley-
Davidson. Journal of Business Research. 62(12), pp.1299-1310.

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26


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Valuator>

27


12 APPENDICES
12.1 APPENDIX 1: DESCRIPTION OF MAIN COMPETITORS
HONDA
Honda is the largest manufacturer of motorcycles in the world. In 2011, Honda sold more than
11 million units worldwide. (DATAMONITOR, 2012a)

Honda produces several motorcycle lines including sports, business and commuter models. The
engines range from 50cc to 1,800cc.

The way Honda motorcycles are sold differs by country. In Japan, Honda mainly sells its
motorcycles in Honda outlets while in the rest of the world, Honda motorcycles are sold by
independent dealers.

Honda motorcycles are well-known in the performance and racing segment. The bikes are fast,
reliable and stylish. While Honda chose to sub brand some models in the seventies like the
“Honda Dax” and the “Honda Fury”, nowadays Honda bikes don’t have real names anymore.
Instead of names, Honda has different series. Some of the best-known Honda series are the
XR/XL-series for dirt-racing and dual-sports, and the GL-series that compete directly with
Harley-Davidson in the touring segment.

BMW
BMW is a rather small player in the motorcycle market. BMW sells and produces BMW-
motorcycles and Husqvarna-motorcycles. In 2010, BMW sold approximately 110,000 units.
(DATAMONITOR, 2011c)

BMW’s focus mainly lays on R&D and manufacturing efficiency. BMW-motorcycles are highly
technological and advanced. BMW is all about transportation and comfort and speed are very
important.

SUZUKI
Suzuki is the third largest producer of motorcycles in the world. With a production of almost 3
million units, Suzuki has a global market share of 6%. (DATAMONITOR, 2011d)

Models range from scooters over dirt bikes to bikes specially designed for motorsports. In the
domestic as well as in the overseas market, Suzuki bikes are sold by subsidiaries that can freely
decide about marketing and sales.

The strengths of Suzuki are the strong orientation towards R&D, the strong strategic alliances
and the image built through the years.

28


POLARIS
Polaris is a very small player in the world market but one of Harley-Davidson main competitors
on the American market. Polaris specialises in off-road vehicles and heavy-weight motorcycles
for transportation and recreation. (DATAMONITOR, 2011e)

Polaris products are sold by a network of independent dealers which is one of the strengths of
the firm, next to the wide product portfolio.

YAMAHA
Yamaha is the second largest motorcycle producer in the world. Next to motorcycles, the
company sells boats, snowmobiles, engines and much more.

In 2007, Yamaha sold over 4 million motorcycles worldwide and produced three of the best-
selling motorcycles in the UK. (KEYNOTE, 2008)

29


12.2 APPENDIX 2: INDUSTRY BACKGROUND
12.2.1 TRENDS
The motorcycle industry has been growing all over the world in the last decade. Especially in
developed countries, motorcycles became more and more important. According to Keynote
(KEYNOTE, 2008), sales of motorcycles reached a 5-year high in 2007. The same trend was
noted in the USA. Between 1997 and 2007, motorcycle registrations have grown a whopping
75%. (U.S. DEPARTMENT OF ADMINISTRATION, 2009)

Last years however, the sales of motorcycles slightly dropped and the growth rate of the global
motorcycle market over the period 2006-2010 was only 3.1%. (DATAMONITOR, 2011b)
Especially the sales of the large-engine motorcycles dropped in favour of scooter-related
vehicles. The main reason for this behavioural change can be found in the raise of fuel prices.
(FROST & SULLIVAN, 2008)

Table 2: Global motorcycles market volume: million units, 2006-2010 (DATAMONITOR, 2011b)

12.2.2 BRANDS & MARKET SHARE
The most important player in the global motorcycle industry is Honda. With a market share of
26%, it stays far ahead of the competition. Yamaha, the second biggest motorcycle company,
follows with a market share of 18.8%. Harley-Davidson may be a well-known brand, on the
global market, the company cannot be found in the top five motorcycle companies.

Table 3: Global motorcycles market share: % share, by volume, 2009 (DATAMONITOR, 2011b)

30

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