Table of Contents
- Macro-environmental Analysis (PESTLE)
- Micro-environmental analysis
- Strategic direction
- Stages of Target Marketing
- Market segmentation – Customer retail
- Product positioning
- Target market
- Marketing objectives
- Place / Distribution
- Strategic Control
- Operational Control
Harley-Davidson is a popular American brand with a sizable following in the United Kingdom – perhaps the biggest outside of the United States (Harley Davidson UK, 2012). As early as 1913, the first Harley Davidson models were on the road and winning races, and by 1920, the company had also been sold outside of the United States (HD History Timeline, 2010). Enthusiasts define the HD bikes as having a one-of-a-kind architecture and a long background stretching back to World War I.
The Harley-Davidson Motor Company was founded in 1981, and it primarily designs, manufactures, and sells heavyweight (i.e., 651+cc) touring, custom, and performance motorcycles, as well as a complete range of motorcycle products, apparel, apparel, and collectibles. It is the only global motorcycle company with a US headquarters and the largest marketer of heavyweight motorcycles. It has dominated the US heavyweight motorcycle market in terms of new motorcycle retail revenue since 1986. It sells its products and services across a national network of over 1,300 dealerships. The largest HD dealership in Europe is based in Oxford Business Park in the United Kingdom, where it was established in 1989. (2012, Main Note)
The aim of this study is to come up with a strategic marketing plan that will enable Harley-Davidson UK to maintain its market competitiveness while also expanding its presence in the motorcycle manufacturing and retail industries. It will analyze the macroeconomic climate of the motorcycle industry in the United Kingdom, perform a microeconomic analysis of the sector in the form of a SWOT analysis, and build perceptual maps of the sector before agreeing on a marketing plan that would best serve the HD-market. The United Kingdom’s
The aim of this business strategy is to include a forward-looking analysis of Harley Davidson-outlook UK’s in the UK motorcycle market. Since the study will be proposing long-term actions, it will be constrained by environmental conditions that are outside our ability to forecast at this moment. As a consequence, certain assumptions will be drawn, which will act as the basis for future observations and debates.
- Reduced carbon quotas will be set for global markets, as agreed to in the Kyoto Protocol
- The UK economy will continue to be burdened by a massive expenditure and trade deficit; and
- Current variations in tastes and demands for heavyweight motorcycles will stay stable.
At this point, it’s also important to identify the particular market segment in which this market research would deal. Motorcycles are two-wheeled automobiles with a variety of modifications, engines, and capacities. On-road (street legal), racetrack-only, and off-road bikes are all included, as are low-powered vehicles, often known as mopeds (Research and Markets, 2011). Since HD products cater to this particular industry, this analysis would concentrate on the segment of the market for heavyweight touring, custom, and performance motorcycles, which applies to models with engine displacements of 651cc and higher.
Macro-Environmental Analysis (PESTLE)
- Political – The United Kingdom embraces the Westminster form of government, which is a strict representative parliamentary system that guarantees a sufficient division of powers between the executive branch (led by the prime minister), the bicameral legislature, and the judiciary. The structure also ensures that checks and balances apply. The World Bank avers that the UK is one of the most successful countries in so far as the application of the rule of law, control of corruption, government effectiveness, and regulatory quality are concerned. For government effectiveness, WB’s governance indicators show that the country has a high 91.0 percentile rank. There were some negative consequences that continue to prevail because of UK’s heavy involvement in the war on terror in Afghanistan and Iraq. There is an increase in the threat of terrorism as a result, which was evident in the July 7, 2005 London bombing and the subsequent public threats by Al Qaeda and associated Islamic fundamentalist groups. Due to heightened intelligence and police activities, further terrorist attacks have been foiled which is testament to the effectiveness of the government’s heightened vigilance to the continuing threat.
- Economic – The UK attained its last peak growth rate of 2.8 per cent in 2007, but from then the economy’s GDP contracted by 0.1per cent in 2008 and 4.9 per cent in 2009 on weakening consumption and investment demand. External demand continued to remain weak mainly because the global economy remains sluggish, only slightly recovering by 1.6 per cent in 2010 (see table below). The country’s employment rate continues to struggle to recover, although as the table shows it is expected to gradually recede as the economic situation eases.
The fiscal deficit increased to 5.6 per cent of GDP in 2008, eliminating the progress made from 2003 to 2007 when the deficit fell from 3.4 per cent to 2.7 per cent of GDP. The rise was due to reduction in tax revenues and increase in state spending intended to boost the economy. The bailout of banks considered too big to fail has accounted for a significant proportion of the state’s spending, raising the fiscal deficit further to 11.5 per cent in 2009. For the period 2010-2011, the UK’s budget deficit was reduced from more than ₤160 billion to about ₤146 billion in the light of expenditure cuts made by Conservative Prime Minister David Cameron. As a result, the country’s fiscal deficit receded slightly to 10.0 per cent for the year following; however, it continues to remain a concern since it is higher than the mandated 3.0 per cent maximum deficit stipulated in the Stability and Growth Pact of the European Monetary Union.
Key Economic Fundamentals
- Social –.The country continues to enjoy high standards of living, surpassing the US for the first time in more than a century according to the 2010 United Nations Human Development Index; however this is threatened by increasing income inequality. On the matter of social services, the government has come up against a number of challenges in order to maintain the customary level of public services. The principal constraint is the budget deficit which remains a matter of serious concern for authorities. As a result, seeking to maintain public works and social welfare projects at the current expenditure levels may prove to be untenable.
Another area of concern is the government policy on managed migration. A large proportion of the population, referred to as the ‘baby boomer generation,’ is now aging, and it was determined that a program of managed migration would help to offset the effects thereof. The rate of increase of the people older than 65, combined with the rate of increase of children, is disproportionately high compared to the rate of increase of the working age population, thus there is a strong possibility that the government’s revenue from taxes may fall below what it needs to defray the costs of retirement and welfare benefits for seniors.
- Technological – The UK is known for its strong scientific and research and development (R&D) capabilities across a full range of disciplines, not to mention the arts and humanities. In 2009, the UK National Statistics office reported R&D gross expenditure at ₤25,900 million, which represents an increase of 0.4 per cent over the previous year’s expenditure. Expenditure or R&D rose from 1.79 per cent of GDP in 2008 to 1.84 per cent of GDP in 2009. The quality of UK’s achievements in science and innovation are world renowned and continue to improve in spite of the weak economy. The present dilemma facing policy makers, however, is that of striking a balance is maintaining a competitive advantage on the one hand, and keeping the distribution of indigenous technology profitable. The R&D effort is costly, therefore the products of R&D should allow the developer to recover and profit by a certain amount before the technology is dispersed. There is thus a need for close monitoring by the government of sensitive R&D, such as for the defense industry for which the UK is known as a key player.
In addition, outside of the United States, the United Kingdom is home to the world’s biggest aerospace sector. With over 276,000 employees, this industry is one of the most internationally active manufacturing markets in the UK. Apart from that, according to the Science and Innovation Investment Framework for 2004-2014, the UK plans to increase knowledge density from 1.9 percent in 2004 to 2.5 percent in 2014. (Datamonitor, 2012).
- Legal – The laws that govern the UK business environment have been amended to prioritize the interests of investors. Past performance has exhibited a continuous commitment by domestic and foreign investors to maintain their fiduciary interests in the country. Moreover, most of the multinationals who establish a presence in Europe prefer to maintain their regional headquarters in the UK (Marketwatch, 2012), which is testament to the stability of UK’s legal framework to choose the country as base for commercial operations. The Wall Street Journal rated the United Kingdom 16th of the freest economies in the world in its Index of Economic Freedom 2011; it also ranked fifth in the World Bank’s Doing Business indices for 2010. Furthermore, the United Kingdom has extensive labor rules that have been updated in reaction to a number of concerns in order to comply with EU directives. The UK, on the other hand, refused to accept an EU plan to toughen criminal sanctions for hiring people who aren’t legally allowed to operate in the region.
Business laws aside, the government is seeking to meet the challenge of maintaining the country’s democratic freedoms and values while at the same time arriving at legislation to stop the threat of terrorism. The Terrorism Act of 2006 and the Prevention of Terrorism Act of 2005 have both attracted controversy among both the political parties and the broad society because of perceived intrusions into the citizens’ democratic freedoms; a balance has yet to be struck in terms of legislation to balance the interest of a liberal society and the threat of terrorism.
- Environmental – The UK is able to exert strong influence in the global forums on sustainability and environmental issues, due primarily to its leadership status as industrial global power and member of the Group of Eight, or G8. However, the UK has been cited by the European Commission in 2010 for the poor quality of its air, and to have it cleaned by June of that year. London has the highest level of air pollution in the region, and the UK as a whole has one of the worst levels of air pollution in the world. The gases and exhaust from factories and power plants across London are the main source of pollutants. If the nation continues to boost its air quality, a stiff punishment of $300 million may be enforced in the future.
The micro-environmental analysis deals with the analysis of the company’s internal marketing environment. It shall begin with a statement of the company’s strategic vision and mission, and proceeds to a discussion of its strengths and weaknesses in the face of opportunities and threats facing it.
a. Strategic Directions
Vision: Through offering remarkable bikes and exceptional consumer experiences, we bring visions influenced by the many roads of the world to life. We stoke our customers’ need to be able to express themselves freely (Harley Davidson website, 2012)
Mission: We travel with our consumers and use that deep bond to generate superior value for all of our partners in any industry we represent (Harley Davidson website, 2012)
Quality Mission: Clients for good… Harley-Davidson enjoys the strong personal bond that our goods, programs, and interactions foster with our consumers. We are motivated by our consumers’ brand loyalty and confidence in us to offer high content and the guarantee of a rewarding lifetime ownership experience. We show our dedication to excellence by cultivating a philosophy of personal integrity and stewardship in everything we do (Harley Davidson website, 2012).
The accompanying graph summarizes Harley Davidson’s capabilities, shortcomings, openings, and challenges in the United Kingdom.
Harley-Davidson UK operations, 2010
· Strong market position, brand image
· Wide marketing and distribution network
· Customer loyalty
· Weakening financial performance
· Lapses in product quality impacting on reputation
· HD accounts for only 12%-13% of UK market share
· Possible legislation and/or policy shift to favour motorcycles to minimize pollution and traffic congestion
· Largely unexplored younger market
· Regulatory compliance
· Intense competition
· Possibility of recession in UK
Sources: Datamonitor, MarketLine, MarketWatch, 2010
The company’s good presence in the UK and foreign markets assists in the creation of a global brand profile. The majority of Harley Davidson consumers have previously owned a model, and repeat purchases, especially of a durable, are a sign of brand loyalty (Newlands & Hooper, 2009, p. 313). Among the flaws, the firm admitted that there were certain substance safety issues, but they were not significant enough to warrant a recall.
Bayerische Motoren Werke AG, Ducati Motor Holding S.p.A, Honda Motor Co., Ltd., Polaris Industries Inc., Suzuki Motor Corporation, and Yamaha Motor Co., Ltd. are some of HD-competitors UK’s (aside from HD brand loyalists). Performance with consistency, product selection, design and logo, popularity, and price are the primary variables that characterize global motorcycle maker and distributor competition, all of which Harley-Davidson believes it will actively participate in (HD Annual Report 2011). Via a worldwide network of more than 1,300 retailers, the HD company sells 32 types of touring and custom Harley-Davidson motorcycles.
Stages of Target Marketing
The discussion in this segment will focus on factors leading to a definition of HD’s target market, including demographics, geographical, benefits, lifestyle, and usage. The target market shall be identified based on the foregoing survey of macro- and micro-environmental analyses.
Market Segmentation – Customer retail
Data concerning the HD demographic profile gathered from a number of marketing and securities research firms provide the following information on the segment of customers who own an HD:
- 51% of all UK customers had previously owned an HD motorcycle (Datamonitor, 2010) – More than half of all owners of HD heavyweight motorcycles have previously owned an HD motorcycle. This indicates that being repeat buyers, majority of HD customers are well satisfied with the HD performance, and tend to develop a loyalty to the brand.
- 34% owned a competitive motorcycle within the past five years (Datamonitor, 2010) – One out of every three HD buyer has in the recent past owned a competitive motorcycle, indicating that a high percentage of HD bike owners are serious motorcycle enthusiasts who participate in competitive events, or like the status conveyed by the ownership of a high-powered precision motorbike.
- 15% were new to motorcycling or had not owned a competitive motorcycle for at least 5 years (Datamonitor, 2010) – Out of every 20 owners of HD motorcycles, only 3 are either novices or is not a current or serious motorcycle aficionado. This tends to suggest that Harley Davidsons are better targeted at experienced motorcyclists for whom riding a motorcycle occupies a significant part of their interests, time, effort and finances.
- In 2002, 10% of users were female increasing to 12% in 2006. (Datamonitor, 2010) – Traditionally, females were not catered to by HDs because, aside from being heavyweights and more easily handled by males, they tended to project an image of rebelliousness and adventure – characteristics more attributed to males than females. With the changing social attitudes, however, there are an increasing number of females who favour a Harley Davidson
- A distinct and passionate segment is comprised of the baby boomers who are trying to relive the carefree attitude of their youth (Seeking Alpha, 2009) – The HD brand was of significant use during the two world wars, but it became a symbol of rebellion during the sixties when it was at the height of its popularity.
- Since its prime customer base is ageing out of the industry, HD is facing “generational” headwinds (Seeking Alpha, 2009). – The average age of a Harley buyer is currently about 47; over the last 20 years, the average age has been creeping higher by 6 months each year. The number of new US customers approaching retirement age has started to decline, with a peak of one million per year expected by 2019. This is the age of the last of the Baby Boomers, as well as the first ten years of Generation X. Children of Baby Boomers are not so enamored with the brand.
- The median age of HD customers is 47, and it has been increasing by 6 months per year for last 20 years (Armstrong, 2010). – The average customer of Harley Davidson would be more senior than motorcyclists who patronize other brands. This ties in with the information in Seeking Alpha (2009), that Harley Davidson appeals more to the baby boomers, however as they age, fewer of the younger generation are replacing them as customers for HD. This suggests that HD has a waning appeal for the younger generations who do not share their parents’ taste in motorcycles.
- Consistent 88-89% male ownership rate (Seeking Alpha, 2009). – This likewise confirms the findings earlier arrived at that as high as 9 out of 10 customers of HD are male, although women are increasingly gaining a preference for HD motorcycles.
There are a number of benefits the customer derives from his ownership of a Harley Davidson. These include a number of psychological benefits, such as the emotions of freedom and price (Annual Report, 2011), a sense of individuality because of customization (Cooney, 2006), and the aesthetics of form and function (Annual Report 2011), aside from the physical benefits such as the ease of finding parking or garage space, cost reduction in terms of fuel efficiency and low-cost maintenance, and the ease of operation through heavy traffic. Interviews of customers described the Harley Davidson brand as ‘a person in disguise,’ appealing as a lifestyle, and the product and brand enhances their individuality and the customization is done according to their individual preferences. Harley Davidson is likewise stylized, taken as a symbol of Americana (Cooney, 2006, p. 24-26).
Ownership of a Harley Davidson goes beyond ownership of a vehicle. It becomes a lifestyle which distinguishes these owners as a group. The most prominent is the Harley Owners Group (‘HOG’), an international organization of Harley Davidson owners which has a membership of one million. The most important function of the group is to assist its members is getting the most of their ownership experience. The local chapters of the group meet regularly, hold events, and inform each other of membership benefits they may avail of (Clark, 2011; Crompton, 2012). In the United Kingdom, the oldest membership club is the Harley-Davidson Riders Club of Great Britain (HDRCGB). Originally known as the Harley-Davidson Club, it has been in existence since 1949. Presently it has 1,500 members spread around the UK, and actively organises parties, rallies, and events all year long. It has a bi-monthly magazine and an online forum. It is also a founder member of the Federation of Harley-Davidson Clubs Europe which holds a ‘Super Rally’ every year in a different country (HDRCGB, 2012).
Other market studies have established the following lifestyle indications among HD customers:
- Younger male clients prefer all the ‘bells and whistles’ (e.g., fully accessorized, including hard luggage, windscreen, chrome works, etc.). During their youth, the older customers had preferred to customize the bikes themselves and dressing up their Harley Davidson was a hobby they did by hand. Nowadays, the younger generation is not really interested in doing the modifications, thus opportunities for doing business in services could be explored by either the dealers or subcontracted to third-party service providers under the supervision of the dealerships (Devmane, 2012).
- Since the crisis economy, customers are “price shopping” more and more (HD history.com, 2012). Formerly price was not so much a concern among Harley Davidson buyers because the dream is usually bigger than the price tag; besides, HD’s prices were historically considered competitive, partly because former owners used to undertake the modifications themselves. The HDs for sale today would tend to cater to customer preferences which would include the accessories and attachments, thus cost would be a factor for consideration.
- Due to advancing HD technology, customers are becoming more reliant on the HD service shop for even simple maintenance and repairs (HD history.com, 2012). This is consistent with the preference of the younger customers for the ‘bells and whistles’ described in the preceding discussion. Resort to maintenance and repairs by third parties raises a concern for quality and costs, but eventually a network may be set up by which the compliant shops which do good work will be better known.
- Harley-Davidson owners prefer to be older and have a higher degree of schooling and wages than most motorcycle owners (HD history.com, 2012). The impact is for HD designs and products to suit the lifestyle of the new generation, suited to a more cosmopolitan milieu while retaining the symbolism and romance associated with the Harley Davidson.
- Customers converting from other labels pay for around half of all current Harley-Davidson purchases (HD history.com, 2012). This speaks particularly well of the satisfaction obtained by HD buyers, coupled with the fact that more than half of HD buyers has already purchased this brand before. This observation is supported by the growing sales for HD UK which runs counter to the downtrend in sales for all brands of heavyweight motorcycles in UK. It suggests that HD is garnering greater market share from other brands.
- More women are participating in motorcycling. This shows up in sales of the Sportster 883 model, 9% of which are female riders (HD history.com, 2012). A new interactive website called the Buzz Wall was created by Harley Davidson is sounding off these women who either already ride a motorcycle or want to learn how. The site features women’s stories about why they want to ride or why want to learn to ride, and who are passionate about Harley Davidson (PR Newswire, 2012).
The heavyweight motorcycle produced by Harley Davidson could be used for both short-range, regular or daily travel and long-range travel. It may be used for both leisure and for business, and for competition or simply for transportation.
The discussion on product positioning will require conceptual mapping to arrive at a tactical marketing approach for HD-UK. The strategic needs fulfilled by the HD culture is depicted in the diagram below:
As earlier discussed, the Harley Davidson product does not merely satisfy the functional need for transportation, but also the emotional need for a sense of belonging provided by membership to a global organization and its affiliates which distinguishes its members from all other motorcyclists. The customers’ aspirations (many have said they had dreamt of owning a Harley Davidson) are also fulfilled, in living the Harley Davidson lifestyle characterized by freedom and rebellion – at least as far as owning the brand image is concerned.
There are three target markets which have been identified in the market survey demographics earlier conducted. These are the traditional senior males who comprise HD’s typical customers; the young white males and the women. The reason that the two latter groups have been underrated in the past is that Harley Davidson’s image was one of freedom and rebelliousness among the young American men of the fifties to the seventies (HD being the only motorcycle manufacturer in the US). The baby boomer generation has grown, and while remaining loyal, this primary market is aging. Therefore, HD must target the three markets unconventionally associated with the HD brand, by allowing its image to evolve sufficiently to appeal to them while retaining its original allure.
The UK motorcycle industry is forecast to accelerate at an anticipated compound annual growth rate (CAGR) of 8.2% within the five-year period from 2010 to 2015. The value of the industry is expected to reach $ 6.613 million by the end of 2015 (Research and Markets, 2011). For the sake of conservatism in the estimation of future sales, the market will be assumed to increase by 5% per annum for the next 10 years. This is a reasonable estimate since it has been the growth rate for sales of heavyweight motorcycles in the past year.
The projected market shares and sales volume are shown in the table following. Among the assumptions made for these projections are:
- Annual attrition in total motorcycle market for white senior male by 5%;
- Annual increase for white senior male up to 20%;
- Annual increase for females and other ethnicities up to 15%; and
- Target market shares after 10 years should be 10% above target shares for the first year for each market segment.
Target Market Shares and Projected Volume Sales per Identified Market Segment
|Identified markets||Short term
(by end of year 1)
(by end of year 5)
(by end of year 10)
|Current market (male, middle aged)||15%||26,304||17%||13,683||25%||1,511|
|Younger generation, male||15%||6,922||20%||16,813||25%||52,294|
|Other demographics (institutions, etc.)||15%||4,615||18%||10,088||25%||34,862|
|Total unit sales||41,533||49,848||113,512|
Created by Author
In setting target market shares, the annual growth rate of the market and the actual current size of the market was taken into consideration, because in order to simply maintain the current market share in a growing market already requires additional production, much more so if increase in market share is contemplated. The table on target market shares and the projection on sales volume shows that by the first year, sales should increase by 6% over the 2011 figures; by the end of the fifth year, sales should jump by 20%, and by the end of the tenth year the momentum should more than double the sales from the fifth year.
Harley Davidson should develop product features which combine the legend and romance of motorcycle riding with contemporary lifestyles and an image that is gender and racially inclusionary.
For women and other diverse groups: HD has begun marketing to women by setting up women’s riders events and creating a Women Riding Stories in the HD website where women can relate their own experiences. Women’s Riders Month was set in May with an International Female Ride Day set to kick it off. Likewise, dealerships in new markets such as India are being catered to globally by HD (McBee, 2011), for which reason the company is designing and manufacturing products and services to suit the tastes of a diverse cultural group, while retaining the passion and freedom in motorcycle riding, and the feeling of belonging with the HOGs.
For young men: Most of the present mainline submodels have been developed to cater to young men, and it is likely that promotion and strategic distribution, as well as targeted messaging that brings the iconic ‘rebel’ image to the attention of these prospective customers, will be effective means to promote sales particularly of the Road King and Sportster submodels.
Consistent with the strategy of pursuing a balance of product differentiation and cost leadership, HD-UK can continue exploring economies of scale by marketing to a wider market and distributing fixed costs, thus lowering costs per unit. The economic crisis has caused UK customers to be more price conscious, and thus HD should continue to deliver quality for value at prices its target market can afford.
The following table provides the products and the prices of the Harley Davidson submodels for the year 2013. Retail prices are determined by the parent company HD-USA in order to ensure that price discrepancies do not take place that creates undue competition among its subsidiaries. If HD-UK sets its prices much higher or lower than other subsidiaries, it is likely that dealers or customers from other countries may just import from whichever subsidiary has lower prices, particularly if the order is by fleet or in substantial numbers.
|2013 Dyna Submodels||MSRP||Destination||Total|
|2013 Harley-Davidson Dyna Street Bob||£8,609||£222||£8,830|
|2013 Harley-Davidson Dyna Super Glide Custom||£8,741||£222||£8,963|
|2013 Harley-Davidson Dyna Wide Glide||£9,933||£222||£10,155|
|2013 Harley-Davidson Dyna Fat Bob||£10,264||£222||£10,486|
|2013 Harley-Davidson Dyna Super Glide Custom 110th Anniversary Edition||£10,595||£222||£10,817|
|2013 Harley-Davidson Dyna Switchback||£10,728||£222||£10,950|
|2013 Electra Glide Submodels||MSRP||Destination||Total|
|2013 Harley-Davidson Electra Glide Classic||£13,046||£252||£13,297|
|2013 Harley-Davidson Electra Glide Ultra Classic||£14,436||£252||£14,688|
|2013 Harley-Davidson Electra Glide Ultra Limited||£16,026||£252||£16,277|
|2013 Harley-Davidson Electra Glide Ultra Limited 110th Anniversary Edition||£17,218||£252||£17,470|
|2013 Harley-Davidson Electra Glide CVO Ultra Classic||£24,900||£252||£25,152|
|2013 Harley-Davidson Electra Glide CVO Ultra Classic 110th Anniversary Edition||£25,562||£252||£25,814|
|2013 Road Glide Submodels||MSRP||Destination||Total|
|2013 Harley-Davidson Road Glide Custom||£13,112||£252||£13,364|
|2013 Harley-Davidson Road Glide Ultra||£15,099||£252||£15,350|
|2013 Harley-Davidson Road Glide CVO Custom||£21,854||£252||£22,105|
|2013 Harley-Davidson Road Glide CVO Custom 110th Anniversary Edition||£22,516||£252||£22,768|
|2013 Road King Submodels||MSRP||Destination||Total|
|2013 Harley-Davidson Road King Base||£11,721||£252||£11,973|
|2013 Harley-Davidson Road King Classic||£13,178||£252||£13,430|
|2013 Harley-Davidson Road King Base 110th Anniversary Edition||£13,907||£252||£14,158|
|2013 Harley-Davidson Road King CVO||£19,867||£252||£20,119|
|2013 Harley-Davidson Road King CVO 110th Anniversary Edition||£20,529||£252||£20,781|
|2013 Softail Submodels||MSRP||Destination||Total|
|2013 Harley-Davidson Softail Blackline||£10,330||£222||£10,552|
|2013 Harley-Davidson Softail Slim||£10,397||£222||£10,619|
|2013 Harley-Davidson Softail Fat Boy Lo||£11,125||£222||£11,347|
|2013 Harley-Davidson Softail Fat Boy||£11,258||£222||£11,479|
|2013 Harley-Davidson Softail Deluxe||£11,523||£222||£11,744|
|2013 Harley-Davidson Softail Heritage Softail Classic||£11,655||£222||£11,877|
|2013 Harley-Davidson Softail Fat Boy Lo 110th Anniversary Edition||£12,913||£222||£13,135|
|2013 Harley-Davidson Softail Heritage Softail Classic 110th Anniversary Editio||£13,774||£222||£13,996|
|2013 Harley-Davidson Softail CVO Breakout||£17,549||£252||£17,801|
|2013 Sportster Submodels||MSRP||Destination||Total|
|2013 Harley-Davidson Sportster 1200 Custom||£6,953||£202||£7,155|
|2013 Harley-Davidson Sportster Forty-Eight||£7,019||£202||£7,221|
|2013 Harley-Davidson Sportster Seventy-Two||£7,085||£202||£7,287|
|2013 Harley-Davidson Sportster 1200 Custom 110th Anniversary Edition||£7,748||£202||£7,950|
|2013 Harley-Davidson Sportster 883||£5,297||£202||£5,499|
|2013 Harley-Davidson Sportster SuperLow||£5,364||£202||£5,566|
|2013 Street Glide Submodels||MSRP||Destination||Total|
|2013 Harley-Davidson Street Glide Base||£13,112||£252||£13,364|
|2013 Trike Submodels||MSRP||Destination||Total|
|2013 Harley-Davidson Trike Tri Glide Ultra Classic||£20,529||£567||£21,096|
|2013 Harley-Davidson Trike Tri Glide Ultra Classic 110th Anniversary Editio||£22,185||£567||£22,752|
|2013 V-Rod Submodels||MSRP||Destination||Total|
|2013 Harley-Davidson V-Rod V-Rod Muscle||£10,032||£222||£10,254|
|2013 Harley-Davidson V-Rod Night Rod Special||£10,231||£222||£10,453|
Place / Distribution
Presently, the retail distribution network of Harley Davidson is entirely reliant on dealerships, but not in the conventional understanding of dealership. Harley-Davidson has cultivated long-standing relationships with its licensees. HD’s strategic distribution program rests upon a system of relationships and partnerships, where the main concern is to maintain the integrity of the brand. The licensees with which HD has established relationships likewise establish relationships with key retailers. These have proven effective and are the key to much of the company’s success.
The firm’s strategy veers away from broad distribution because this is not the right fit for the Harley Davidson motorcycles and equipment, preferring to maintain well-defined distribution channels through which impact may be delivered more directly and effectively. The HD licensees are deeply invested in the success of the program. Much like the customers, licensees regard the HD brand as more than just a product brand, but a symbol to which they are attached (Cooney, 2010, p. 30).
Harley Davidson aims to win over the younger generation, therefore its promotions should include customer interactions through digital communications. Website access is complemented by HD’s twitter account and its facebook app “Fan Machine,” but the virtual community is overshadowed by HD’s riding community, the HOGs in the regions around the world and the Harley-Davidson Riders Club of Great Britain. Promotion should emphasize the personal bond shared by all HD riders because of the legacy and common passion for HD motorcycles. To further promote the brand image of freedom and rebelliousness, HD debuts on the FX hit series Sons of Anarchy in its fifth season. In addition to the traditional promotional offers, HD sets riders events for HOG, HDRCGB, and other HD riders’ associations. The HD culture is also advanced by such slogans as “Freedom to be,” “It’s in my blood,” and “2 Wheels Move the Soul,” which developed over the Buzz Wall, HD’s interactive website.
Harley-Davidson UK is a fully owned subsidiary of Harley-Davidson Group in USA, therefore it has full legal control over the ownership of the entire stock of HD-UK. As part of its legal obligation, the parent company also has governance over the subsidiary, and is responsible for regulating and overseeing the activities of the firm that may cause injury or damage to others. Therefore, in case of product design failures that require recall or compensation for damage or injury, the parent company must necessarily assume liability for it
As earlier described, marketing strategy on a global scale is important in order to ensure that subsidiaries do not compete against each other. There must therefore be a coherent strategy mapped out by the parent company on a global basis, to sufficiently separate the regions over their respective license areas. Within the regions, however, the parent company should leave the great part of marketing strategy to HD-UK and the other subsidiaries, since the host country management would be more cognizant of the tastes and preferences of its market. Therefore, the determination of the place and promotion, and to a limited extent price and product, because these are determined by the parent company, is under the strategic control of the subsidiary HD-UK.
The operational control at HD-UK involves the sales and accounts, the employee-employer relations, the compensation packages (i.e., to a level agreed upon with HD-USA), and other administrative matters. In this matter HD-UK is given wide latitude, although not full autonomy, since HD-USA exercises oversight and remains liable for actions taken by HD-UK. The subsidiary is, however, responsible for marketing strategy and control involving place and promotion, while it should work in collaboration with the parent company when strategizing for prices and specific product models, to maintain consistency with the global strategy while seeking to maximize market opportunities and foster brand loyalties in the UK.
At first blush, Harley Davidson appeared ready to wind down its phenomenal run with the passing of its most avid customers, the baby boomer generation. However, the firm’s increasing unit sales in UK at a time when the heavyweight motorcycle industry was contracting shows that there is a resiliency in HD performance that indicates a possible return to the growth phase. HD in UK should target the younger generation, women, and ethnically diversified motorcycle enthusiasts, and develop an interest for HD among new and potential riders, by creating an image that blends its legend of freedom and rebellion with contemporary inclusion and community bonding. Product image should evolve while retaining the firm’s reputation for customization; prices should be kept low and aim for value for price; promotions should foster stronger ties among members in both virtual and actual riding communities; and distribution should continue through dealerships which have through the years fostered their own loyal customers. Harley Davidson UK shows every chance of continued growth and prosperity through product differentiation and cost leadership.
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