Harley Case Analysis

As one Harley rider puts it, "It is one thing to have people buy your products. It's another for them to tattoo your name on their bodies." Harley-Davidson is the only major US maker of motorcycles and the nation's #1 seller of heavyweight motorcycles. Harley-Davidson has developed an experience when a customer purchases a bike. Experience selling is dependent upon the social and psychological identity and aspirations of the customer. Riders flock to annual company-sponsored rallies by the tens of thousands. Owners and wannabes buy Harley-labeled clothing and other official gear from an 800-page catalog of parts, accessories and merchandise. The most loyal demonstrate their allegiance by tattooing the brand name on their bodies. Harley has directed a ten-year roadmap for the future development of the company. A strategic path has been implemented to have unit sales growth of 7 to 9 percent annual and annual earning growth and have set forth ambitious sales goals. Harley has two core principles, which embody the strategy- growing value and strengthening the brand.

There are two important ideas to be noted here, as representing the goal of the brand relationship strategy: customization and differentiation. The main goal is to convince the final consumer that the product he will be using, the software itself, is not only created to suit his best needs (customized), but it is created by the very customer himself. In this sense, somewhat similar to the Harley Owners Group, albeit of a somewhat different nature, the team of programmers organizes brainstorming session and brainstorming groups in which the members of the final consumer firms get together with the programmers and customize the software application to fit the exact needs of the company. It may seem like the usual business meeting, but there are several rules to be followed.

In looking at the future for Harley, the question of future success is being considered. Harley's median buyer age is 46, which means half are older, in an industry where it's 38. The motorcycle of choice for outlaws and the young and restless has become a fashion statement for graying empty-nesters with money to burn. People who fall into the younger crowd, which include the millennium generation; desire faster and less-expensive Japanese sport and off road bikes, which is a nightmare for Harley to embark upon. This means Harley would continue to compete head on with the threat of Honda, Kawasaki and Yamaha. This is typical in the industry as it relates to the threat and competition arising from Japanese imports.

Harley's motorcycle deliveries rose 12 percent last year, better than the industry as a whole, which rose 10 percent, to 937,000, and in defiance of a sputtering economy that slowed sales of other discretionary purchases. Despite this, one of the risks I am concerned about is what will the comparisons for earnings and sales going to be next year.

As quoted in AARP magazine, "They were born to be wild---over 50 years ago," which included a picture of a 64-year old, leather rider on a Harley. This depicts the concern of the aging market and the challenges Harley will face in the future.

Brandy loyalty is vital when a company finds itself on a turning point of success or failure. This occurs because consumers perceive that the brand offers the right product features, images, or level of quality at the right price. Jeffrey Bleustein, chief executive and chairman of Milwaukee-based Harley- Davidson, believes this will be the key element which will keep Harley at record sales. The brand is as much about lifestyle as it is about the motorcycles. "The Baby Boomers got into this because they live a more frenetic lifestyle, and they're looking for some pleasure and fun. A motorcycle fits in nicely with today's lifestyle," Bleustein said. "An overnight ride with friends can feel like a vacation. Harley-Davidson stands for freedom, adventure, individual expression and being a little on the edge, a little bit naughty. People are drawn to the brand for those reasons. This will be a saving element for Harley. It has built a name and has become an icon. As a millennium, younger generation, I experience strong brand recognition when the word "Harley" is mentioned and I associate a level of respect to an owner of the motorcycle. If Harley continues to produce bikes, which meets the needs in accordance to the new generation desires a plan for success will be in place. The connection with the new generation as it relates to brand and lifestyle association with Harley will be even more important to the new generation.