Full version Harley Davidson International Management

Harley Davidson International Management

This print version free essay Harley Davidson International Management.

Category: Business

Autor: reviewessays 10 November 2010

Words: 5880 | Pages: 24

I. Summary of the case study “Harley-Davidson – rockers’ idol”

So, this case study is about Harley-Davidson, a brand of motorcycles and more precisely about its development since his foundation in 1903 by 21-year-old William S. Harley and 20-year-old Arthur Davidson.

So, in 2003, it was the celebration of the 100th birthday of the Harley-Davidson. And, in order to commemorate it, fans of this famous brand rode until Milwaukee to see the parade of 10 000 Harley-Davidson motorcycles. Through this celebration, we can see how recognized this brand is for the owners, or should I say fans. Indeed, this case also shows how the strategy and the marketing of Harley-Davidson are good; because Harley has fans and they will do all they can for their bikes and their brand.

For its 100th year, Harley Planned for selling 290 000 bikes. And in 2002, the firm reported a gross profit of US$ 1.4 billion on US$ 4 billion sales.

But, its history has never been so easy. Indeed, after 50 years of growth destroying the local competition in the US, Harley has known almost 20 years of hard competition in his market, and especially with Honda. And seeing a deterioration of its market share (only 30%), Harley has decided to abandon overseas markets. 1969 saw Harley-Davidson merge with the American Machine and Foundry Company (AMF). The merger would last until 1981, when 13 senior executives from Harley Davidson buy back the company. After the buyout is made official, the phrase “The Eagle Soars Alone” becomes a rallying cry.

So, this merger has ensured Harley-Davidson to continue its development and its improvement, and succeeded its come back in the first line. This new team achieved this thanks to a good marketing strategy, in other words creating customer value. This new strategy has ensured to create the feeling for the owners to belong to a family, such as the Harley Owners’ Group. One of the key issue of the new strategy is thus to accord importance to fidelity.

The most interesting point of this case is that Harley has different marketing strategy according to countries. Indeed, in some markets (US, Australia, Japan, Spain, Denmark) Harley-Davidson tries to attract new customers using advertisements, but in other markets such as the Europe, the strategy is more the usage of the promotion in specialized magazines. Another interesting point is that the Harley’s market shares in Europe in very low although the Europe market represents 35% of the worldwide large motorcycle market.

This case study shows too that Harley’s customers are not the “metal bikers” customers who used to be in the past. Indeed, Harley-Davidson attracts now more profession such as lawyers or doctors about 45 years with a medium income level. And, according to customers, buying a Harley-Davidson, it is like a dream and the possibility to be a part of the myth. The dream is about to escape the bored life riding a Harley-Davidson which is relaxing.

But, the brand stretching strategy of Harley-Davidson didn’t have the expected effects. Indeed, products such as wine and cosmetics (with a partnership with L’Orйal) have not a high volume of sales. However, products such as leisurewear and fashion ranges feel better.

So, the main issue of this case study is to know why Harley-Davidson has chosen different strategies according to markets, understand the idea of the brand stretching strategy of Harley-Davidson, and also to give some recommendations and ideas for the marketing strategy of Harley-Davidson.

II. Strategy of Harley-Davidson

1. Marketing environmental analysis

First of all, Harley-Davidson has realized since the 80’s an impressive marketing strategy giving to Harley-Davidson a brand name more than ever recognized, even compared to its first 50 years.

Indeed, the strategy was not to focus on reducing the costs, or on the distribution improvement, but the main element was to create customer value. In other words, H-D’s will was to give more credibility, trust, safety, desire, quality of product and service, and thus fidelity to its brand.

And in order to reach that goal, H-D centralized its marketing on these topics, creating for example a Harley Owners’ Group who rallies more than 900 000 members worldwide (www.harley-davidson.com). The main interest of this group is to ensure members to know each other, and become a second family who share the same interests, wills, and thoughts. And this strategy ensures Harley-Davidson to maintain a strong relationship with its customers, and thus a strong brand name all over the world. According to customers, the owners of H-D say that this brand understand them and their needs, and also that they are always there if a problem appears. These remarks can be linked with Harley-Davidson’s values. Indeed, according to H-D “Our values are the heart of how we run our business. They guide our actions and serve as the framework for the decisions and contributions our employees make at every level of the Company.”(www.harleydavidson.com); these values are:

Be Fair

Tell the Truth

Keep Your Promises

Respect the Individual

Encourage Intellectual Curiosity

We can also link this strategy with the mission statement of Harley-Davidson:

“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”

Harley Davidson Inc.

So, through these first elements of explanation of Harley’s success, we can clearly see what Harley-Davidson’s strategic objectives are. Indeed, in order to be successful, organizations must determine clear financial and strategic objectives. Thompson-Strickland, in his book (“Strategic Management”, eleventh edition), outlined a number of strategic performance objectives and Harley-Davidson applied some of these. Harley-Davidson focused on gaining a greater market share, achieving higher product quality than rivals, maintaining a stronger reputation and a better branding strategy than its competitors, increasing levels of customer satisfaction and finally attaining stronger customer loyalty.

Thanks to the establishment of the strategic objectives of the company, managers can decide what the main goal of the company is, and therefore decide on the company’s strategic intent.

When Yamaha challenged Honda in the Japanese market, Honda responded with “Yamaha wo tsubusu” (“We will crush, squash, slaughter Yamaha”). Strategic intent gives direction to the company and a commitment to winning.

The strategic intent of Harley is based on creating a culture both within and outside the organization. Thanks to this culture a strong bondage is created between the company and its customers. The product takes second place while the emotions associated with the brand becomes the most important value. This separates them from their competitors, as this culture is difficult to recreate. Their approach allowed them to lead the way in the U.S. and Asian markets

According to Jeffrey L. Bleustein, Chairman and Chief Executive Officer of Harley Davidson, “We have the very important job of providing our customers with more than just motorcycles—we provide a complete motorcycle experience through our products, unique services and memorable events. And we are constantly making that experience better by building relationships with the people who ride our motorcycles” (code of conduct). Their business philosophy is built on bringing people together and creating communities.

In the 60’s and 70’s Harley’s strategic intent was based on “going shoulder-to-shoulder against the predominantly Japanese companies”. Harley could not compete on the price level, and the Japanese products were of superior quality, Harley decided to compete in other areas. Their new strategy was to connect with people on an emotional level.

They are not selling a product but a way of life, a way of thinking. Harley changed its strategy from selling products to selling community.

“If there’s one secret to our enduring brand and the passion it ignites in our riders, it’s that we deliver these experiences, rather than merely a collection of products and services”, explains a manager from the company.

The example of the “Saturn” shows how successful such as strategy is. The Saturn is a practical, unsexy, utilitarian car, priced for people who do not find joy in haggling on price. But like Harley Davidson, there is a sense of community among owners. People come into the dealership on Saturday morning; they have free car washes, coffee and donuts. They talk to each other and have one thing in common which is their car. This strategy to bring people together builds a sense of unity with the organization and creates strong brand loyalty.

And the fact that H-D has developed a Brand stretching strategy can also be an element of Harley’s success in developing relationships with customers. Indeed, owners can buy other Harley’s products than bikes; it means that they can be more than a biker, they can join Harley’s group buying leather accessories or clothes, and even cosmetics.

So, the marketing strategy of Harley-Davidson is successful, especially in the US, because US people have more that kind of mind. Indeed, Harley’s spirit is a distinct family, a second way of living. And, this is the most important because “corporate ‘personality’ has a big impact on business success” (Book of “International Business”, Stuart Wall & Bronwen Rees, 2004, Prentice Hall).

And now, the main issue for Harley-Davidson is to find the way for improving its sales in Europe and in Asia.

2. International Strategy

Since the end of the 80’s, Harley-Davidson’s strategy has been changed, trying to break into the European market. So, in 5 years the production has doubled (tripled in 8 years). Indeed, according to Jean-Luc MARS, CEO of Harley-Davidson France (www.moto-station.com), “the actual growth is the result of all the work done during the last 15 years”. According to him, Harley has worked a lot since the end of the 80’s (without talking about the H.O.G or other events) on the local market penetration (commercial, network, image/marketing), but also on the improvement of the manufacturing production quality.

III. Strategic Planning

In order to know what are the issues Harley-Davidson has to focus on for its international development strategy, it is important to have more acknowledge about the market, and also about itself. Indeed, strategic decisions can be made only if we have all the information needed about itself (competencies, financial health), and its market (competitors, forecasts). And, the best way to reach this goal is to do an external and internal Analysis. So, this is all about strategic planning which aims are to define firm’s missions and objectives, but also to find growth opportunities and what could be a threat in the future. And, according to Kenneth Andrews of the Harvard Business School, corporate strategy is “the pattern of decisions in a company that determines and reveals its objectives, purposes, or goals, produces the principal policies and plans for achieving those goals, and defines the range of business the company is to pursue” (Book of “International Business”).

1. External analysis

a. P.E.S.T Analysis

This analysis means that external factors operates on firms and can be an element to take in account to implement the strategy. Indeed, these factors are Political, Economic, Social, and Technological.

• Political

Laws exist in each marketplace, governing levels of pollution, plant emissions and the working environment. The Harley Company needs to be made well aware in advance of safety & environmental standards in order to fully comply, therefore avoiding bad publicity and possible financial and legal repercussions. According to Harley’s Code of Conduct, one of the environment responsibilities is “Preserving the planet” and “Consider the environmental impact of business decisions before proceedings”. There is an act in France, for example, governing motor noise emissions, and this is naturally quite relevant to Harley as its owners take pride in the engines loud noise.

Following the tragic events of September 11th 2001, Americans are said to have become more patriotic which will no doubt have led to them taking increased pride in all things American. Harley is seen by many as one of the greatest U.S. symbols and will have achieved an evermore endearing place in the hearts of Americans.

• Economical

EU enlargement has seen the inclusion of Eastern European countries since the 1st of May 2004 with large markets. Such markets will not have been sufficiently explored and exploited by Harley previously due to political and economic factors. Today nations like Poland and Czech Republic are required to adapt their economy and legal frameworks to a style more suited to the western world. This provides Harley with further opportunities for market expansion. It maybe worthwhile to consider the possibility of locating productions in the new EU countries to avoid taxes on imports and trade barriers, and perhaps even strengthen distribution to markets from a near-central European outlet. The suitability of the workforce, infrastructure, supply network and legal frameworks are among some of the main criteria, which would require close inquiry before considering such a move.

On the other hand, another economical factor can be a threat for Harley-Davidson. Indeed, the Harley Company presently maintains a strong position on the Stock Exchange even if some analysts say that it is poised to plunge. This would serve as a major threat to the company’s future. Harley representatives claim that demand and growth for their products remains strong, yet critics may point to the fact that Harley has sold so many bikes to baby boomers, its core customers, that slowing growth is inevitable. Another threat then can be the revenues of the sales in the European market regarding to the low value of the Dollar compared with the Euro. But, the decrease of the Dollar can be seen as an opportunity in the European market if we considered that the price will be for sure more attractive in Euro. So, Harley could increase its sales in Europe thanks to lower prices. This is confirmed by Jean-Luc Mars, CEO of Harley-Davidson France, who said recently that “a significant effort will be done on our tariffs, particularly on news, in order to be accessible to a bigger number of passionates” (www.moto-station.com).

• Social

Here, we can put forward tow social factors. First of all, we can say that Harley-Davidson transcends many cultures. Indeed, Harley’s customers belong to several different cultures but conform to one culture, the one created by Harley. So, thanks to this culture, H-D is reliant on word of mouth and has a solid reputation. And maybe, this is these two last elements that provide to H-D safety against disillusioning its valued clients. And, we can also say that bike’s owners who use Harley as a source of identity are spreading the marketing message effectively with passion and a certain amount of passion.

The second social factor is the growing number of female buyers. This will provide opportunism for the future. For example, in 2003 they comprised of almost 10% of the Harley market, compared with 7% in 1997 (Demographics: www.harley-davidson.com). This opening to a new growing market can also offer an opportunity for the cosmetics products of Harley-Davidson to recover, because women are more used to use this kind of products.

• Technological

Increased technology increases consumer expectations. Maintaining its reputation quality is a pre-requisite. Harley has incorporated an Enterprise Quality Plan to ensure quality throughout the organization. Increased quality assurance and control in turn comes with further customer expectation. Other motorbike companies continue to update their models with added digital features.

b. Porter’s Five forces Analysis

Michael Porter identified 5 forces that determine the long run profit attractiveness of a market or market segment. These include industry competitors, potential entrants, substitutes, buyers and suppliers.

• Rivalry among existing firms

The cruiser segment is highly competitive and companies must invest heavily in marketing, advertising and product development in order to be successful. Competitors in this segment, such as Honda, Yamaha, Kawasaki, Suzuki, and B.M.W. are forced to devote considerable parts of their budgets to marketing. Because of Harley’s strong position, companies try to improve their competitive situation by introducing new products, product lines and variations existing products. This implies large investments and only the strongest organizations can keep up with these market requirements. Some of these companies are beginning to establish a strong presence in a number of markets and Harley Davidson will have to remain vigilant in order to maintain its favorable position of the market leader.

The industry players are aggressive and this contributes to the intense competitive environment within the industry

• Threat of new potential entrants

The height of barriers to entry determines the level of threat new entrants is to companies in an industry. As mentioned before the cruiser segment is highly competitive and it is difficult for new entrants to establish a strong foothold in the market. We can take the example of the French brand named Voxan who didn’t succeed in this market. The barriers to entry are high, as great amount of capital are required to survive. Indeed, there are a number of strong brands in the cruiser segment, however when most people think of cruisers they think Harley. A lot of money is required to erase that thinking. The high levels of brand loyalty and the reputation of the established brands make it difficult for new entrants to threaten the position of the major players.

So, the marketing barriers to entry remain high and the avoidance of the potential market obstacles would be associated with extremely high costs.

• Bargaining power of suppliers

According to the code of conduct, available on Harley’s website, “suppliers are considered part of our team and should be treated in a manner consistent with our values“. And, according to Harley, they “need to give prospective suppliers, consultants and contractors a chance to compete fairly for our business and select them based on quality, cost, delivery and their commitment to working with us to continuously improve quality and costs. For example, it is inappropriate and unfair to suggest to any supplier that we will not buy from them unless they purchase from us“.

So, according to this code, we can say that Harley wants to create a strong relationship with its suppliers, and chooses them carefully in a different way than the traditional approach of selecting a supplier.

• Bargaining power of buyers

A segment is unattractive if the buyers possess strong or growing bargaining power. There are a number of brands to choose from in this industry (Honda, Yamaha, Triumph, etc…) and the customers have a wide variety of choices. Theoretically this should shift the balance of power to customers. But, Harley does not compete on the basis of its products, its principal force. Their business philosophy is based on building a sense of belonging and community. Because of this unusual approach Harley Davidson is able to occupy a specific place in the minds of consumers. These consumers are ready to pay almost any price to experience the emotions provided by Harley Davidson motorbikes and culture. This superior offer is difficult to refuse and allows Harley Davidson to “call the shots” when setting prices. The company currently enjoys the benefits of limited buying power of its customers; however the increased activities of industry competitors might change this situation as companies are trying to imitate the strategies applied by Harley.

• Threat of substitutes

A segment is unattractive when there are actual or potential substitutes for the product. Substitution makes it difficult for companies to sustain high profits. Motorcycling means freedom, adventure, and individual expression. Harley Davidson provides these feelings; however there are a number of substitute products that can satisfy these psychological needs, such as holidays, traveling, or sports.

The average Harley customer pays Ђ16.000 (Warning Signs in the Road Ahead) and the typical Harley motorcyclist is middle aged and middle class. This money could easily be spent otherwise. One must not forget the growing popularity of sport bikes especially among younger consumers. The threat of substitution is difficult to ascertain and Harley-Davidson must monitor the trends and the substitutes closely. If technology or competition advances in the substitute industries, prices and profits of the industry are likely to fall.

2. Internal Analysis

This analysis is about the evaluation of the strategic capacities in order to determine the capacity to seize opportunities and face with threats. So, on this internal analysis I will especially focus on the SWOT analysis which refers to Strengths, Weaknesses, Opportunities, and Threats (the two latest have been seen in the external analysis).

a. Strengths

These are things that the company does well or is perceived by those outside the company as being well done. Harley-Davidson has a lot of strengths that it can rely on. Each of it is strong and makes the company stand out from the competition.

One of the company’s greatest strengths is its brand name. Although the company does not invest heavily in advertising, it is still one of the most commonly recognised brand names in the motorcycling industry. The company has always accepted the power of “word of mouth advertising”, which sometimes can be negative, but which has proved to be very profitable for Harley-Davidson.

Another strength related to the brand name is the company’s image and reputation. Harley Davidson’s reputation is one of tough, durable motorcycles for everyone. The traditional image of a Harley Biker was the “long haired, black leather clad, Hell’s Angel”. But that image has progressed to now include the high-powered executive who “wants to get away from it all” at the weekend.

Customer loyalty is another Harley Davidson’s strengths. Once people buy their first Harley-Davidson, they are hooked to the brand, and rarely switch to a competing brand. These results come from the high level of customer service and support offered to owners by the company through its networks of dealerships and H.O.G. At rallies organised by H.O.G., management of the company often interact with owners, enquiring if everything is all right with the product and also looking for ways to improve the “Harley experience”. Harley-Davidson, through its dealerships also offers a wide Range of accessories making it possible for an owner to customise their motorcycle.

A further strength of the company is its innovative spirit. It innovates not by targeting new market segments so much as by improving the range and depth of existing products and accessories for the existing customer. Harley-Davidson has used the advancement of technology to provide a better, faster and more efficient service for everybody involved with Harley-Davidson. For example the company’s website gives very little information about the products on offer. Instead it gives an in-depth look at the experience one gains by joining the “Harley Family”.

b. Weaknesses

Like every company Harley Davidson has its own weaknesses.

One of the biggest problems faced by Harley-Davidson is the change in the demographics of purchasers. Over the past ten years, the company has seen a worrying trend in that the average age of a Harley-Davidson buyer has increased by 7 – 8 years. A decade ago the average was 37. Now it has increased to 43 – 44 (www.harley-davidson.com). The company needs to look at ways of combating this trend before it becomes too late.

The eighties saw the near bankruptcy for Harley-Davidson stemming from their slowness to react to the sudden influx of Japanese companies and their high-class, lower priced products. This showed a weakness in the managerial effectiveness of Harley-Davidson, which took a number of years to sort out. The company had become complacent at the top of the market and when required were unable to make the necessary changes. Having now overcome these problems, Harley-Davidson must ensure for the future that management is willing to adapt the market changes quickly.

A further weakness of Harley-Davidson is that it is unable to meet demand for the motorcycles (Hog Heaven – The story of the Harley-Davidson empire, 1998). As a result of the long waiting lists, some customers simply “get tired of waiting” and switch to a competitor brand. Whether this is through production inefficiencies or just that the company wants to create a sense of “must have”, this strategy could in the long run prove a weakness, if customers are made to wait too long.

Another weakness of Harley-Davidson is the narrowness of the product line. Some stock market analysts have predicted that Harley-Davidson is a disaster waiting to happen because the company is a one product company. Competitor brands have more than one product line and in the long run will be able to invest more trying to “eat away” the market share of Harley-Davidson.

IV. Strategy to implement

1. Strategic issues

According to me, and according to the strategic planning, there are four strategic issues that Harley-Davidson has to face with. The most important is the European market where H-D has to increase its sales, then, linked with the first issue, there is a fierce competition with the Japanese firms such as Honda and Yamaha. The other issues are the women market and the accessories which are in decline.

So, as we know, Harley-Davidson is not very famous in Europe where Harley’s market share of 650 cc plus motorcycle is less than 7% (6.6%), while in North America Harley-Davidson has a huge market share (46.4%), 21.3% for the Asian market. The main industry competitors are Honda, Suzuki, Yamaha, Kawasaki and BMW. Harley-Davidson is the market leader in the U.S. market with 46.4% market share. Their domestic position is quite secure however the rival companies are all aiming to increase their impact on the North American market.

Honda remains the main competitor with a 20.2% market share in North America. Even though they trail behind Harley in the high profit market for heavy bikes, Honda sells more bikes worldwide than Harley-Davidson. Honda provides a wider selection of products ranging from super sport bikes, cruisers, scooters and motor cross bikes. The popularity of cruiser bikes is increasing and last year the registrations for heavy weight motorcycles rose by 22%, but Harley’s share fell from 50.2% in 1997 to 46.4% in 2002. This means that companies like Honda are quite successful in taking customers away from Harley.

Rival manufacturers such as Kawasaki or BMW have all made a serious attempt to establish them at the heart of Harley’s market. The Japanese bikes were often considered to be ‘sissy’ cycles by Harley lovers. This image is slowly changing and the Japanese companies are trying to ‘out Harley’ the Harley models. Yamaha motor USA is starting to improve its position in its various markets. The U.S. sales have increased for 47% since 1998.

Despite these successes, companies have had a tough time in creating an image for themselves particularly in the cruiser markets. Harley continues to dominate the U.S, market and is also the leader in the Asian/Pacific markets with 21.3% market share.

So, compared with Honda, its main competitor, H-D is better in North America and in Asia-Pacific, but certainly not in Europe. What is very interesting, it is the fact that the Asian market is more or less equitably shared. In other words, there is not too much gap between all the competitors, especially between Harley-Davidson and Honda (21.3% against 19.1%). But, this is totally different in Europe for Harley-Davidson who has only 6.6% of market share. So, to my mind, this market is the most promising. That’s why Harley-Davidson has to focus especially its marketing in the European market in order to win market shares, and reduce the gap between its competitors.

Moreover, Harley net revenue in Europe is the second behind the U.S. With only 6.6% of market share the European market is already the second net revenue. So, if Harley succeeds in increasing its market share in Europe, its net revenue could be in high growth.

Then, in order to fully understand its market, and in order to compete in a more serious way its competitors, Harley-Davidson must identify the distinct segments that their competitors focus on and what distinctive product service benefits they offer.

Honda’s activities are forcing Harley-Davidson into a niche market. The company is known for its flexibility and is progressively introducing bigger and better bikes. The Japanese manufacturer is starting to increase its competitive pressure by applying some of the strategies implemented by Harley. Honda is beginning to improve its relations with its customers and is also trying to build a sense of community among its customers. The Honda Rider Club of America is Honda’s attempt to achieve the same sense of belonging Harley bikers have with their beloved brand. The club allows customers to gain 24-hour emergency roadside services. The club also organizes a number of events and rallies for the Honda fans. Honda is also trying to create the next generation of loyal Honda bikers. Honda organizes a number of “Motor-Cross Camps” for young riders. Some of the main activities include riding courses races and riding trips and family activities, the main way to gain the loyalty of young bikers who will hopefully stay loyal to the brand, as they get older. These community-building strategies are proving to be extremely beneficial for the Japanese firm. The Honda new models such as the Shadow 750, the VTX 1300S are Honda’s attempts to steal some of Harley’s market share by recreating the Harley feel. Superior technology is the main strategy to achieve this goal.

Yamaha is also trying to outperform Harley and is improving its mass customization skills. The Yamaha website offers a section that allows customers to design their own bike and choose the look and functionality they desire. The interface ensures customers to choose from 75 Yamaha accessory items and makes it easy for the customer to purchase the bike online. The Yamaha V Max model, the Drag Star, and the Road Star models attract customers with their slick design and technological tweaks. The Yamaha sports models are also very successful and the company is still maintaining a strong position in world markets.

European rivals are also trying to make an impact on this lucrative market. Italy’s Moto Guzzi recently introduced the V11 EV custom cruiser. BMW introduced 3 models of its R1200C cruiser and thanks to clever advertising is beginning to improve its position in the U.S. and Asian markets.

According to the website www.moto-station.com, only 12% of the Harley’s customers are females. But female bikers are more and more interested by bikes. And Yamaha and Kawasaki are trying to take advantage of this growing interest of female bikers and many of their ads feature women on motorcycles.

Harley has already understood this new opportunity. Indeed, Harley has made an advertising showing a woman on a Harley-Davidson. Here is the main topic of the publicity: “A man is admiring a Harley-Davidson motorcycle that's parked on the street. An attractive woman passes by and says "nice Harley", which is all the guy needs to start flirting, boasting that he likes to live on the edge, etc. Unfortunately for him, the real Harley owner chooses that moment to arrive and climbs aboard her bike. His reaction is to try to convince the object of his affection that the bike is being stolen right in front of them in broad daylight”.

And, another key issue for the future is the problem of the accessories. Indeed, those products such as perfumes or cosmetics are decreasing a lot. So, Harley-Davidson should take a decision about this unsuccessful strategy of brand stretching. But, this strategy has a lot of success regards to the leatherwear and fashion area. According to me, Harley-Davidson should continue to improve this brand stretching and not leave the market of cosmetics and perfumes. Indeed, this is this strategy that has ensured the customers to be able to belong to a second family, and has allowed to Harley this reputation to be closer to the customer. If you remove the cosmetics and perfumes, some fans could lose something and could change their mind about Harley-Davidson. Indeed, the History of H-D is all about fans. Furthermore, the female market is growing a lot, and is for sure the best way for Harley to regain some market share in this brand stretching.

2. Recommendations

First of all, Harley-Davidson should find a new approach to its European marketing campaign in order to conquer European markets. Indeed, in Europe, Harley-Davidson is not yet a culture as it is in the United States. Maybe, the design of the bikes, or the size, are not adapted to the European market where roads are not as big as in the U.S., and where the circulation in big cities does not allow to ride a big cruiser bike, and for sure does not ensure pleasure in riding such a bike with a lot of cars all around. But, it is maybe the same in the U.S. cities but there are much more possibilities to enjoy riding a Harley thanks to big and large roads such as the famous road “Route 66”.

And, in order to face with this problem, Harley has developed a new bike particularly adapted to the European market (www.moto-station.com), presented the last 24th of January.

But, this is not the main problem. Indeed, Harley has to face with a lack of this culture, group, family, and pleasure, which are present in the U.S. So, in order to give these sensations in Europe, and establish a stronger image, Harley should realize an advertising campaign putting forward those elements of recognition of the Harley Group.

Here are some ideas about what could be the advertising campaign: A bike is going very fast, not a Harley-Davidson. Another bike, a Harley-Davidson, is not going fast with the new Harley. The man on the first bike makes fun of the second bike and passes it. But, they meet each other on a red light. The scenario continues in this way and each time they meet each other on a red light, more Harley-Davidson’s bikes are present. It’s like they know each other, shaking hands and talking… So, the message of this ad will be the pleasure to ride with a Harley, without stress and relaxed. So, at the end, the message could be “Ride without stress, let yourself be guided by your instinct”. And above it we could see the slogan “The Eagle Soars Alone”.

Other promotions could be present in specialized magazines. Indeed, this strategy could ensure Harley-Davidson to touch more people in the target. This idea could be present in different kind of magazines in order to touch specified targets. So, magazines for women can be used in order to contact the female market, non-bikes magazines in order to touch non-bikers, and bikes-magazines in order to keep the brand name and the recognition of the owners.

Then, to my mind, another problem of Harley-Davidson’s strategy is the fact that H-D is only present in one segment, the cruisers. Indeed, its competitors such as Honda or Yamaha are presents in all segments (sport, cross-country, cruiser, …). According to me, this is the reason why the median age of Harley riders is growing up. So, Harley-Davidson should try to go to other segments, in order to diversify its customers. Harley has well understood this promising gap in the market, buying back the firm Buell, famous for sport bikes. And, according to Jean-Luc Mars, CEO of Harley-Davidson France, “Buell ensures to conceive radical bikes without endanger the foundations of Harley’s brand. Buell also ensures to develop internally Harley-Davidson France and its network, our entire acknowledge of the bikes market, and to innovate on original marketing techniques”.

But, this is the first step in this promising segment, where young people are for sure the more present. Honda and Yamaha, for instance, are very well recognized in this market. And, according to me, the reason is the fact that they are present in “grand prix” doing races and winning championships, and thus becoming famous all over the world. Indeed, races can prove the quality, the competitiveness, and the reliability of a brand. It is not a hazard that Honda won from 1994 to 2003 the 9 championships in the biggest and the hardest class, 16 championships won in total.