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Question:

Prepare a report for the Board addressing the following:
 
- An analysis of the various customer segments for Harley Davidson
- A comment on what you perceive their Value Proposition is for each segment
- A comment on the buying behaviour for each segment
- Recommendations for how to market and appeal to one of the segments identified in previous sections incorporating a pricing strategy, promotion strategy and a distribution strategy.

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Answer:

Executive Summary

The three M's of the firm named Harley's Davidson which is management, manufacturing as well as marketing helps the firm to attain success in the market and thereby attain vast market share. The study here tries to provide details about the firm’s strategy and plans through which it captures market and also evaluates the gap that is left by the firm and lays down suggestions for filling of these gaps.

Introduction:

Harley-Davidson Inc generally abbreviated as H-D otherwise Harley, is actually an American motorcycle producer. Founded in the Milwaukee, Wisconsin while first decade of 20th century, the firm was among two vital American motorcycle maker where Indian was the other. The firm survived Great Depression and also survived the period of most poor quality management and competition through Japanese manufacturers. Right from 1977 till 2014 only motorcycles that were sold to public beneath Harley-Davidson brand actually were the heavyweight motorcycles that were designed for the highway cruising, along with the engine displacements better than some 700 cc (Chan, 2010).

 

About the case:

With growing international economy, Harley Davidson is looking for paths towards improvement of their share in the market. Several excellent firms also have learned the ways in which they need to beat their rivals through implementation of novel management and marketing, as well as manufacturing tools as techniques. Harley-Davidson also is one of such excellent firms that has a challenged to cope up with the marketing processes and fight with all its rivals existing in the market. The study intends to demonstrate through the case study which will prove the firm’s effort towards coping up with the market.

Aims plus objectives:

There are several aims and objectives of this study. They are mentioned below:

1. To properly analyse several customer segments intended for the firm named Harley Davidson

2. To provide proper comment on Value Proposition of the firm for each of its segment

3. To write points related purchasing behaviour of each segment

4. TO supply several recommendations for the ways in which market appeals and also include an appropriate pricing strategy and promotion strategy as well as an exact distribution plan (Das, 2014).

Discussion:

Though Harley was a very profitable firm during the First World War and second also, this status rapidly changed while 1970's. After leveraged takeover, Harley's novel owners comprehended that for making needed improvements; they also were required to determine things that went wrong. Later to the careful analysis, management developed following list that were vitally contributing to problems beforehand experienced:

  • Corporate management was focusing mostly upon the short term returns.
  • Management never lend ears to employees otherwise gave them liability for quality of things they made (Harley Davidson selects Trespa Virtuon for showrooms, 2004).
  • Greater inventories of the parts guzzled up cash as well as reduced productivity.
  • Belief within the quick fixes intended for problems, like throwing in the computers plus state-of-art machinery towards improving the productivity.
  • Elevated break-even tip that left Harley Davidson vulnerable towards unpredictable fluctuations of the market.
  • Management woke up extra late towards threat of the foreign competition as of the "it can't occur here" condition.
 

Various customer segments for Harley Davidson 

Harley-Davidson actually enjoyed domination within motorcycle industry intended for several decades. In 1970's, Japanese producer flooded market with very high quality, less priced bikes. Right from 1973 - 1983, the market share for Harley went from some 77.5% to about 23.3% along with Honda carrying 44% of market by the year 1983. Harley-Davidson also could not fight on price alongside Japanese motorcycle manufacturer, so it even had established some other values in the market and advanced the quality. At the same time, United States user base was also undergoing a vast revolution that mandated consumer oriented products. Harley even had to alter from firm which orders what customers can have towards the strategies on the basis of direct input taken from the customers (Homburg, Krohmer and Workman, 2004). Proper marketing philosophy also was developed on the basis of the customer’s needs wants and desires, gathered via surveys, interviews as well as focus groups.

Demographic- Based on age and gender. Harley targets mostly male and people aged amid 18-35. The Street also is first all novel platforms that Harley released in all its career of13 years plus must help firm grow share in the market in outreach customer sections. Harley-Davidson even carries a strategy to expand its global presence as well as reach novel demographics within U.S. and in the international markets. Presently, a large number of our customers reside within U.S; moreover, global retail sales also have been enhancing as a current of the total sales (Homburg, Krohmer and Workman, 2004).

Geographic- Harley-Davidson in reality is presently executing multi-generational as well as multi-cultural marketing strategy in the U.S. The success of this strategy is measured by internally monitoring share in the market within targeted consumer segments of the Core, young adults like men and women aged amid 18-34 years, women like Caucasian women above 35 years and also a very diverse men plus women like African-American as well as Hispanic that are above 35 years of age (Jackson, 2007).

Motorcycle registration outcomes show that Harley-Davidson actually is segment leader within the U.S. going on-road motorcycle registrations, regarding the heavyweight i.e. 651cc+ registrations as well as all displacement registrations, all across the targeted demographic consumer definitions including the following:

Core Customers

Women

Diverse Customers

Young Adults

Value Proposition for every segment

Value proposition refers to a promise of the value that is to be supplied as well as acknowledged plus a belief through customer that the value would be supplied as well as experienced. A proper value proposition of Harley is applied to the entire organization, and even to some of its parts thereof. Creating an exact value proposition also is a portion of the business strategy of the firm.  Harley develops a value proposition on the basis of a review as well as analysis of benefits, costs plus value which the firm delivers to all its customers, probable customers, as well as other constituent clusters in and out of the firm (McKenna, 1985).

Harley-Davidson actually stands for total independence, freedom as well as individuality and expressing self, adventure upon open road, plus experiencing life towards the fullest. A proper functional advantage is alluring at several phases than the emotional advantages. It is all about answering question like does Harley create better motorcycle as compared to Honda? Some emotional self-animated benefits of such brands surely are extra prevalent. Therefore, it makes an exact sense towards moving beyond operational benefits as well as considers the self-expressive and social plus emotional advantages as a base for value proposition of the brand.

Geographic- Harley’s customers in US consider the brand as a luxury brand and also assume that the firm has higher values and that the firm supplies what it promises (Reeves, 1977)

Demographic- As per age the customers amid age 18 to 34 feel the happiness and freedom while riding to bikes of Harley and also feel relaxed and contended while.

 

Buying behavior for each segment

Harley’s customer’s shows a very usual buying behavior. Its customer’s are generally verylotal to the brand and tend to buy the brand whenever they go for purchase.  The brand engenders intense loyalty because it is found in hearts of the Harley-Davidson owners. Harley’s audiences are granite like.” Bikers from all across nation lounge upon their less-slung Harleys, exchange biker tales, as well as sport T-shirts announcement the customer’s actually push Harley than drive an Honda. Riding intense emotions, Harley has roared its path to top of fast-developing hardwearing motorcycle marketplace (Vanderveer and Pines, 2007). Harley's "Hogs" also capture over some 1/5th of total U.S. sales of bike and additional to the half of heavyweight sector. Both segment as well as sales of Harley sales is actually growing vastly. In reality, for many years of running, sales also have far surpassed the supply, with the customer rapidly catalog of up till 3 years for the popular replicas as well as street prices that are running well higher than the suggested catalog prices. Marketers of Harley Davidson also spend a vast deal of the time thinking related to the customers as well as their purchasing behavior. The firm also needs to understand who the real as well as probable customers are and also that what they actually think as well as how they really feel, plus the reason why these customers buy Harley and not a Yamaha otherwise Suzuki or even a large Honda which is American Classic. There are several difficult questions that the firm needs to answer in order to find the right path towards the attainment of all its marketing aims and goals. These are in reality difficult queries; even Harley’s management themselves in reality don't know precisely what motivates all of their purchasing. But the Harley management even puts some top priority upon understanding the customers as well as finding things that what makes the customers happy and satisfied.

Harley Davidson actually makes very good and luxury bikes, as well as towards keeping up with shifting market, firm has tried to upgrade all its showrooms as well as sales looms. But the Harley buyers are purchasing extra than merely quality bike as well as a smooth trade pitch. Towards attaining a better and proper understanding of the customers' motivations and satisfaction, Harley-Davidson has conducted proper focus groups within which the firm invited bikers towards making the cut & paste collages of the pictures which also expressed all of the firm’s feelings regarding Harley Davidson. The firm can see a bunch of the hard-core bikers purchasing the firm’s bike as the bike supplies them what they want (Wang, 1997).

Many studies have confirmed that the firm Harley and it’s customers are actually doing extra than merely purchasing motorcycles. The buyers of the bikes of Harley make an appropriate lifestyle statement as well as display a proper attitude. As analysts suggests, buying a Harley actually makes people the toughest and the worst guy on block. Harley renews the spirits as well as announces the independence of the buyers. As Harley home page of the web in reality announces, the Thumbing starter of the Harley-Davidson also does extra than the fire engine. This fires the actual imagination."

Demographic- the demographic segment seems to be very loyal to the firm and actually tend to purchase the Harley bikes each time they go for buying a bike and the firm also makes these buyers feel extra happy and contended when they use the bike (Weinstein, 2000).

Geographic- The real as well as classic look and throaty sound contribute towards its mystique. Owning such "American legend" also makes Americans a part and parcel of something greater and bigger, and also makes them feel as a part of Harley family. The reality that customers have to remain to attain a Harley bike also makes it extra satisfying to carry one. Actually, the firm deliberately restricts all its output. And the aims and goals of the firm is to finally run the production at all the level that's forever. Such a vast and strong emotions as well as motivations also are captured within a current Harley-Davidson promotion (Weinstein, 1997).

 

Recommendations:

There are several suggestions that are to be given to the firm in order to attain better results and capture larger market share. Marketing stimuli actually consist of four Ps that are product, place, price and promotion. Some other stimuli also include vital forces as well as events in buyer's ecology: economic, technological and political, as well as cultural. All such inputs enter buyer's black box, at the place where they also are turned in some set of various observable purchase product options, brand choice and dealer choice as well as buying timing, plus the purchase quantity.

Promotion

Primary promotional techniques and tools for the firm Harley motorcycles are HOG actions. Not merely does the firm serves like a user relations device, yet as a path towards showcasing as well as demonstrating novel products. Harley must develop a very strong impression in the minds of consumers. Within a year the firm must try to develop a brand name licensing program that would in return provide all its income for the dealers as well as factory at time of expanding whole Harley experience. The firm’s program might also put a stoppage towards bootlegged the Harley Davidson goods and the offered priceless promotions (Yugov, 1989).

Product

Harley needs to find its strength and analyze its weaknesses in heavyweight section. They even need to identify as well as properly exploit all its mini niches where it needs to target market and win customers for attaining proper success in the market. Also the firm must now try to attain more market share through producing for some middle class people so that Harley becomes a known and liked brand in all the segments including the middle class one. Some customized goods and touring plus sport street motorcycles, may also help the firm to enhance its market share. The firm can also bring in several colors of bikes in order to attract the younger generation and hit the segment properly. Several new model of bikes can be brought in by the manufacturer with an intention to make the market aware of something novel and unique and one that hits their brain as well as heart. Some new styles can be  brought in or developed as Harley has always developed in and  around  its signature image towards ensuring that product is not merely a higher quality part of equipment yet is even charismatic.

Price

Harley-Davidson should now quickly learn about its competitors and now the market well. It must now try to hit the market and attain the market share through providing a price that would help the firm to attain better customer value and also exist for longer time in the market as well as give a proper cut throat competition to the firms exiting in the industry. For this the firm can lower its price by making more and more products and attaining economies of scale and thereby aim on supplying more bikes to the market with less price which would also attract some other segments of the market and thereby help the firm to enhance its profit.

Distribution

The distribution of the bikes by firm must be more and more intense and thereby the firm can attain better market share. It must work on enhancing and developing proper distribution channel where customers would be forced to wait for the bikes they have ordered for and thereby the customers can be explicitly attracted by the firm and thereby this might help the firm to enhance the value perception people carry in mind regarding the firm and its products. The customers of Harley actually have to wait long for the bikes they order thus the firm must work on this and try to take proper action on this issue so that the firm could fill this gap through enhancing its distribution channel and working on development of novel outlets.

Conclusion:

Good relations and continuous improvement as well as customer management and involvement in proper marketing actions, are not merely words in the management book of Harley-Davidson. Rather by adopting all such strategies and plans the firm properly attracts several customers and is capable in building the brand loyalty and brand management is appropriately done by the firm. The firm needs to improve upon certain field and then all it needs to do is to take certain actions to enhance its capability and fill the gaps that are negatively affecting the firm.

 

References

Chan, K. (2010). Harley Davidson Inc. – a case in international accrual accounting analysis on the risk, profitability and/or cash flow from estimation and management discretion. International Journal of Managerial and Financial Accounting, 2(4), p.401.

Das, K. (2014). 'Harley Davidson' Success Speaks- Brand Image and Culture: An HR Perspective. Bonfring International Journal of Industrial Engineering and Management Science, 4(2), pp.48-56.

Harley Davidson selects Trespa Virtuon for showrooms. (2004). Pigment & Resin Technology, 33(6).

Homburg, C., Krohmer, H. and Workman, J. (2004). A strategy implementation perspective of market orientation. Journal of Business Research, 57(12), pp.1331-1340.

Jackson, S. (2007). Market share is not enough: why strategic market positioning works. Journal of Business Strategy, 28(1), pp.18-25.

McKenna, R. (1985). Market Positioning in High Technology. California Management Review, 27(3), pp.82-108.

Reeves, G. (1977). A Note On Integrating Inventory And Product Sales-Mix Models. Decision Sciences, 8(1), pp.332-335.

Vanderveer, R. and Pines, N. (2007). Customer-Driven Positioning: The next generation approach to pharmaceutical product positioning. J Med Market, 7(1), pp.71-76.

Wang, C. (1997). Bases for International Market Segmentation. Journal of Segmentation in Marketing, 1(1), pp.5-21.

Weinstein, A. (1997). Strategic Segmentation. Journal of Segmentation in Marketing, 1(2), pp.7-16.

Weinstein, A. (2000). Segmentation 2000. Journal of Segmentation in Marketing, 4(1), pp.1-4.

Yugov, P. (1989). Improving the quality and expanding the product mix of converter steel. Metallurgist, 33(10), pp.194-195.

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