HARLEY

DAVIDSON
REJUVENATING AN ICONIC BRAND
 INTRODUCTION
One of the world’s best-known brands
Why did such a strong brand suddenly decide it needed a CMO?

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COMPANY HISTORY

• Founded the Harley-Davidson Motor

Company in 1903.
• Motorcycles aimed at leisure, sport
racing, police forces, delivery services,
and the military.
• World War II, cheap Harley-Davidson
surplus military motorcycles became a
platform for “bobbers” .
• The Booze fighters and The
Galloping Goose Motorcycle Club
formed.
• The Hell’s Angels transformed to
criminal gangs.

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MARKET COMPETITION
• 1959 to 1965, Harley-Davidson sales
grew from $16 million to nearly $30
million.
• Honda motorcycle sales increased from
$500,000 to $77 million, shattering
Harley-Davidson’s market share.
• In 1969, AMF bought Harley-Davidson
• In 1981 purchased the Harley-Davidson
motorcycle business from AMF.
• In 1986, Harley-Davidson became
publicly held.

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 DEMAND & MOTORCYCLE MARKET

DEMAND MOTORCYCLE MARKET

• The 1980s and 1990s, American
Baby Boomers buy hundreds of
thousands of Harley-Davidson
motorcycles to fulfill dreams.
• Paying over the list price
• 2 types: heavyweight bikes and sport bikes.
• Heavy weights were ideal for touring and
cruising.
• Sport bikes were designed for speed and
racing.
Four segments:

• Wait more than year for a new • standard

bike. • performance
• custom
• touring

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SALES
• THE 2007 WORLDWIDE RETAIL SALES OF DECREASED 1.8%
COMPARED TO 2006.

• THE DECREASE WAS DRIVEN PRIMARILY BY A 6.2% DROP IN

HARLEY-DAVIDSON DEALER RETAIL SALES IN THE UNITED
STATES.

• INTERNATIONAL RETAIL SALES MOTORCYCLES IN 2007 WERE

UP 14% OVER 2006. ON AN INDUSTRY-WIDE BASIS IN 2007,

• THE HEAVYWEIGHT PORTION OF THE MARKET WAS DOWN 5% IN

THE US BUT GREW 5.4% IN EUROPE COMPARED TO 2006. 6
 PRODUCTS
Five categories of Dream Bikes
• Sportster
• Dyna
• VRSC
• Softail
• Touring

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DISTRIBUTION

• Independently owned full-service dealerships

• 684 US dealerships
• 104 Secondary retail outlets
• 68 alternative retail outlets
• 12 seasonal retail outlets
• 80% of the U.S. dealerships sold Harley-Davidson
motorcycles exclusively.
• Alternative and seasonal retail outlets were not
authorized to sale new motorcycle.

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 CORE CUSTOMERS

• Median income $84300

• USA median income $52700
• 30% of customers had a college
degree or one year education
beyond high school
• 12% sales were to the female
customers.
• 22% share in young adults in
2007
• Motorcycle events like
rallies,rides. 9
BUELL
• Buell was founded by ex-Harley
engineer Erik Buell in 1983 and was
partially acquired by Harley-Davidson
in 1993 and fully in 1998.

• Buell bikes were lighter, faster, sportier,

and cheaper than Harley-Davidson’s
heavyweight bikes.

• 684 Harley-Davidson dealerships, 307

sold both the Harley-Davidson and Buell
brands.

• Harley-Davidson bikes, a gross profit

margin of 35%

• Buell bikes had only a 5% gross margin,

expected to increase to 10% in the near
future. 10
Targeted customers
• Owners aged between 25 to 55
• With median income of $80900
• 7% of the customers are females
• 1% share in Europe 0.7% in USA
• 5% gross profit expected to increase
to 10%
• HD profits are at 35%
• 87% are aware of HD and 5% of
Buell.

1
1
Problem
Sales Problem
• Age of average customers are
45+
• They want younger generation
to be their target market.
• Customers will be perishing with
age.

1
2
COMPARISON 01
PURCHASE
• 12% of U.S. retail motorcycle
sales of new Harley-Davidson
motorcycles were to female
buyers.
YOUNG ADULT MARKET
• Harley-Davidson had a 22% share
of young adult buyers (18‒34) in
2007 across all on-road
motorcycles, second only to
Suzuki, the market leader in this
segment.
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Competitors Analysis
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MAJOR COMPETITION IN JAPAN AND THEN IN EUROPE AND
MINIMUM IS IN USA.

Competitors
JAPAN
• BMW
• Ducati
COMPETITORS
• Not heavyweight bikes but are known
• YAMAHA for their speed and light weight designs.
• HONDA,
• Difficult for Buell to achieve the target
• SUZUKI market.
• KAWASAKI
OWNING 50% OF THE WORLD MARKET
PRICE FROM 3,000 YEN TO 40,000-YEN
AVERAGE COST IS AROUND 60,000 YEN EUROPE
BIKES GENERALLY RANGE FROM 400CC TO 1795CC

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 • No major competition.
• 1969 light weight cheaper Japanese
bikes emerged as competition.

A
US

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COMPETITORS

Sales
60
2007
50

40

30

20

10

0
Harley Buell Honda Suzuki Yamaha Kawasaki Others
Davidson

2007 2006 2005 2004 2003

Harley Davidson Buell Honda Suzuki

Yamaha Kawasaki Others

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Competitive Edge

Brand Loyalty Customer Loyalty

Name Recognition Brand Quality

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Demographics
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USA

BIKES TYPES

• 1987, the median age of Harley-

Sporters is of $14,999. Davidson customer was 35.
Iron 883 is of $ 9,749.
Iron 1200 is of $ 10,249. • By 2007 it was 47.3.
Forty eight is of $ 11,549.
Softail Standard is of $ 13,599.
Street Bob 114 is of $ 14,999. • Harley-Davidson had a 22% share of
Softail Slim is of $ 15,999.
Low rider S is of $ 17,999.
young adult buyers (18‒34) in 2007
Sport Glide is of $ 18,599. across all on-road motorcycles
Fat Bob 114 is of $ 18,799.
Fat boy 114 is of $ 19,999.
Heritage classic is of $ 18,999.
Electra Glide Revival is of $ 29,199.
Electra Glide Standard is of $ 18,999.
Road King is of $ 19,499.
Road glide is of $ 21,699.
Street glide is of $ 21,999.
AGE
Road king special is of $ 22,999.
Road glide special is of $ 26, 699.
Street glide special is of $ 27099.
Sreet glide limited is of $ 28,299..
Pan America 1250 is of $17,319.
Pan America 1250 special is of $ 19,999.
Free wheeler is of $ 27,999.
Tri Glide Ultra is of $ 34,999. 20
Cvo Tri Glide is of $ 48,999.
 GENDER INCOME EDUCATION
• The average U.S. retail purchaser • Nearly three-quarters of the
• Harley-Davidson motorcycle was of a new Harley-Davidson U.S. retail sales of new Harley-
a married male in his mid to late motorcycle was males with a Davidson motorcycles were to
forties. median household income of buyers with at least one year of
• Approximately 12% of U.S. retail approximately $84,300 education beyond high school,
motorcycle sales of new Harley- (compared to the U.S. median of and 30% of these buyers had
Davidson motorcycles were to $52,700). college degrees.
female buyers.

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 EUROPE

BIKES TYPE

• HARLEY-DAVIDSON FLTRXSE is of €20,900 USD.

• HARLEY-DAVIDSON FXST Fat Boy Custom Evo Vergaser

RICKs Fat boy
Is of €24,990 USD
The average age of Harley Davidson
customers  in Europe is 44 to 55 and above.
• HARLEY-DAVIDSON Softail Custom is of €19,000 USD.

• HARLEY-DAVIDSON Screamin Eagle Street Audio system is of AGE

€19,900 USD.

• HARLEY-DAVIDSON FXST Fat Boy Custom Evo Vergaser

RICKs Fatboy is of €24,990 USD
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• HARLEY-DAVIDSON Scream in Eagle Street Audio system is of
 GENDER INCOME EDUCATION
• 98% customers are male • The average U.S. retail purchaser • Most of the customers have a
of a new Harley-Davidson college degree.
motorcycle is of elite people with
income 74.501105 euros.

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DECISION

STAY THE COURSE DOUBLE DOWN ON BUELL ENDORSE BUELL

• Allocating additional • Strengthen the Buell
CURRENT DUAL BRAND resources with the goal brand and make it more
STRATEGY AS HARLEY IS of building up the Buell relevant to young adults.
LEADING BRAND AND brand while preserving
BUELL AS TARGETING the strength of the
YOUNG ADULTS. Harley brand

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3 DECISION IN 3 DIFFERENT MARKETS

FOR JAPAN: DUAL BRAND FOR EUROPE: ENDORSE
STRATEGY BUELL AS A SUB BRAND
• Core customers in • Buell holding the 1% share
extremely competitive in the market.
market with 83% of the • Competition from BMW
expenditure. and Ducati in Europe can’t
be overlooked
• 17% will used by Buell to
further penetrate the • 5% of the population is
market with aim to aware of Buell
target the young adult • If it will be endorsed as a
market. sub brand the target
market will be reached.
FOR USA: DOUBLE DOWN
ON BUELL’
• Repurchase intent of
80% and 52% of which
previously owned Harley
Davidson so this will be
best market.
• 80% US dealerships will
be used to make people
aware of Buell
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THANK YOU!
Ali
Nakhaba
Hafsa
Mahnoor
Feroze