Harley Davidson could win the new generation of riders by creating a set of affordable and modern entry models. In addition to that, Harley Davidson should expand their dealer network and promote their new models on social media. Following marketing mix is recommended:
- Developing new models together with the young target groups
- Focussing on smaller, customizable and trendier motorcycle models
- Creating value by adding modern product features such as a GPS tracking system against theft or an integrated charging device for smartphones
- Creation of a few basic models, which can be expanded according to the client’s budget (mass-customization)
- Creating an attractive digital experience: For example a digital motorcycle configurator or a personalizable app with emergency data, chat function and personal templates to upload branded selfies to social media channels
- Partnering with local IT-Start Ups to develop compelling digital features (Failory.com, 2020)
- Creating new, affordable and culturally adapted merchandising products
- Adapting prices to millennials reality of life
- Creating a flexible pricemodel
- Expanding the dealer network rapidly
- Simplify outlets
- Improve E-Commerce
- Using targeted social media ads-campaigns to push outlets and products
The traditional brand, which for decades has inspired the baby boomer generation, is making a big effort to inspire the new generation of buyers for its products. But it’s not working very well for the old giant of the motorbike industry. Sales figures continue to decline despite new models and modernization of their logo. Even though Harley Davidson tries hard to make the new models moremodern, fundamental problems remain: The machines are still big, heavy, loud and too expensive for the new target groups. Somehow Harley Davidson makes a lost impression in the midst of a smart, environmentally conscious and networked generation. The difficult start and the withdrawal of the first e-bike „LiveWire“ has shown two things: Product development is difficult and expensive and secondly, market research should not be neglected before developing a new production. This project started five years ago. It was a time when it was still difficult to estimate how financially strong the next generation would be. However,five years ago one could have known that Millennials, given their debts from student days, could not spend USD 30,000 on a motorcycle. Harley Davidson is now at risk of losing touch with the Millennial market if they do not immediately and very consistently respond to the needs of this generation. The market in India clearly shows that the battle for market share in the premium segment has begun. However, the premium segment in India and Asia in general is on a completely different price level. So what does that mean for Harley Davidson?
In order to gain market share in the millennial market, Harley Davidson should consistently address the needs of the younger generation in their planned model offensive in the 250cc to 500cc category. To ensure the profitability of the entire product line, the number of models should be kept small. By creating a few basic models, which can be expanded individually according to the customers‘ budgets, efficiency and consequently, the margin, can be guaranteed even at lower sales prices. With this customization-model Harley Davidson could create an entry point for millennials into the premium segment. As soon as a Harley is back within reach for the young target groups, the Harley Davidson warranty program becomes very attractive and can be used as a sales argument. However, the development of models tailored to the target group is not yet done.
There are further reasons why Harley Davidson should also develop its motorcycles strongly in terms of technology: adding value to their motorbikes, making them harder to copy and collecting data from customers. The technology that Harley Davidson uses actually is easy to reproduce. At a time when low-cost producers are evolving and starting to move into new segments, it’s vital that Harley Davidson incorporates new technologies and unique concepts into their new models. But as a traditional motorcycle manufacturer, it is difficult to compete against large companies like Honda, which are able to develop new technologies within the group and implement them in different product categories. For this reason, Harley Davidson needs young partners from the tech scene who can help them find the „killer features“ that will excite Millennials.
The „More Roads to Harley Davidson“ growth plan envisages a massive model offensive in various markets and in new product categories such as e-motorbikes and e-bikes. But the successful market activities of competitors in the Indian market show clearly how hard it is to secure market share in a competitive market. Harley Davidson’s model offensive should therefore be reduced to a few models, so that forces are released for the multiple tasks that are waiting for Harley Davidson: For example, the consistent expansion of sales and service points, the establishment of its own factories, the creation of an attractive digital user experience and launching of powerful marketing campaigns. This whole range of activities is associated with a major investment and therefore requires the company to focus.
Harley Davidson’s program recognizes the generational problems. However, their growth plan is not focussed enough and brings considerable investment risks for the entire company.
Ajmera, A., Vats, R. (2017). Royal Enfield’s big bike could test Harley’s India dominance. Reuters. Retrieved from https://www.reuters.com
Reuters is an international news agency which has its headquarters in London. In this news release the author reports about the launch of the first heavyweight motorcycle by the Indian manufacturer Royal Enfield. He states that Royal Enfield with his large distribution network will put Harley Davidson in trouble.
Brand Trust. (2018, November 21). How the Digital Transformation Shapes Luxury Brands. Retrieved from https://www.brand-trust.de/en/article/2018/summary-study-digital-luxury.php
This article states that digitization is changing the consumer behavior of new target groups. Millennials are seen as the future luxury buyers who will account for 40% of luxury sales in 2025. To reach these new customer groups, luxury brands must create unique customer experiences.
Brigham, T. (2020, July 2). Make it. I’ve been a ‚millennial therapist‘ for more than 5 years—and this is their No. 1 complaint. CNBC. Retrieved from https://www.cnbc.com/
Make it is a section on CNBC that is dedicated to business, money and career. Under the rubric Science of Success Tess Brigham, a psychotherapist from St. Francisco writes about her experiences with millennials. She states, that the majority of her millennial clients have trouble making decisions because of the many life options.
Case Study Harley Davidson. (2020). Management Decision Case: Developing and Growing Brand Equity in an Iconic Brand. Harvard Extension School.
Dettlin, L., & HSU, W. (2017, Oktober 27). International Monetary Fund. Playing Catch up. Retrieved from https://www.imf.org/external/pubs/ft/fandd/2017/06/dettling.htm
The International Monetary Fund (IMF) is an organization that was created in 1945. The IMF’s self-declared goal is to ensure the stability of the international monetary system. In this article the author states that millennials have been able to accumulate less wealth than previous generations of the same age.
Deloitte. (2019). Deloitte Millennial Survey 2019. Retrieved from file:///C:/Users/mycomm%20GmbH/Downloads/in-about-deloitte-millenial-survey-report-noexp%20(1).pdf
Deloitte is a multinational professional consulting firm headquarters in London. The report states, that millennials and generation Z are not very optimistic about their professional careers, their lives in general. The report 8th annual millennial survey shows, that millennias in India tend to be more confident about their future.
Ell, K. (2018, February 3). Harley-Davidson tries to regain its coolness factor. CNBC. Retrieved from https://www.cnbc.com
In this article the author mentions several reasons, why younger generations are not interested in motorcycles made by Harley Davidson. One reason which the article mentions is, that Harleys are too expensive for many people, specially for young generations. In addition to that the author states, that younger generations want smaller and cheaper motorcycles.
Harley Davidson. (n.d.). Motorclothes. Retrieved 2020, April 1 from https://motorclothes.harley-davidson.eu
Motorclothes is the official merchandise website of Harley Davidson. The online shop offers mainly branded jackets, pants, T-shirts, gloves and helmets. The online shop also documents the history of Motorclothes with a historical timeline.
Ipsos. (2016). The Millennial Influence. Retrieved from https://www.ipsos.com/sites/default/files/2017-05/vocalink-the-millennial-influence-europe.pdf
Ipsos SA is an internationally active market research company with headquarters in France. This study has been commissioned by Vocalink, a Mastercard company. This Research is about how millennials use new technology and about their in financial attitudes and behaviours.
KTM. Company website. Retrieved 2020, April 4 from https://www.ktm.com/in/
The official website of the motorcycle brand KTM. KTM, short for „Kronreif Trunkenpolz Mattighofen“, is a European motorcycle brand which was founded 1934 in Mattighofen, Austria. In India KMT motorcycles are built in partnership with the indian company Bajaj. Recently the company started to target the premium motorcycle segment in India.
Marshall, G. W., & Johnston, M. W. (2019). Marketing management (3rd ed.). New York, NY: McGraw-Hill Education.
McD, MotorCycles Data. World Motorcycles Market. In the 2019 sales down 1.6 million units. Retrieved 2020, April 2 from https://motorcyclesdata.com/2020/02/28/world-motorcycles-market/
Motorcycles Data is is a Consulting firm specialized in the motorcycle industry. MotoCycles Data is tracking over 600 brands, 33 000 models and over 80 markets. This article provides information on global market trends and developments in the largest motorcycle markets in the world.
McD, MotorCycles Data. India. First Quarter 2020 sales down 20% with the full year projected below the 15 million. Retrieved 2020, April 2 from https://motorcyclesdata.com/2020/04/01/indian-motorcycles-market/
This article is about the two wheeler market in India. It describes motorcycle trends and the market outlook for 2020. It also contains a summary of the 2019 sales figures of the largest motorcycle manufacturers.
Our World in Data. GDP per capita. Retrieved 2020, April 4 from https://ourworldindata.org
This platform is an effort between researchers at the University of Oxford and the non-profit organization Global Change Data Lab. The platform focusses on topics around poverty, diseases, climate change and other problems. The goal of this platform is to make progress against the world’s largest problems by making them accessible and understandable.
Partington, R. (2019, April 10), millennials being squeezed out of middle class, says OECD. The Guardian. Retrieved from https://www.theguardian.com/business/2019/
The Guardian is a daily newspaper from Great Britain. In this article the author talks about a report from the Organisation for Economic Co-operation and Development (OEDC), which found out, that the middle class in 40 developed countries is shrinking.
Pew Research Center. (2015, September 3). The Whys and Hows of Generations Research. Retrieved from https://www.people-press.org/2015/09/03/the-whys-and-hows-of-generations-research/
Pew Research Center is offering information about attitudes and trends shaping America and the world. This article is about the different generations, for instance where they start and when they end and which factors are associated with generational differences.
Singh, R. K., (2019, Oktober 7). Harley struggles to fire up new generation of riders with electric bike debut. Reuters. Retrieved from https://www.reuters.com/article/us-harley-davidson-electricbike-focus
In this article the author states that the younger generation is not buying the new e-motorcyle from Harley Davidson. As a main reason he mentions the premium price of almost USD 30 000. In addition to that he thinks, that the market for this type of motorcycle does not exist.
Singh, R. K., (2019, Oktober 14). Harley-Davidson halts electric motorcycle production. Reuters. Retrieved from https://www.reuters.com/article/us-harley-electric
Harley Davidson has stopped production and deliveries of their new e-motorbike after encountering technical issues. The article mentions Harley Davidson dealers who stated that the bulk of order came from old, existing riders and not from young customers.
Pritish, R. (2019, April 14). Riding high: Luxury bikes find a booming market in India. Financial Express. Retrieved from https://www.financialexpress.com/industry/vroom-vroom-how-Millennials-changing-the-pace-of-high-end-bikes-in-india/1547403/
The Financial Express ia a business newspaper. In this article the author states, that the segment of luxury bikes is increasing. He supports his claim with data from the Society of Indian Automobile Association (SIAM).
Schwartz, B. (2004). The Paradox of Choice: Why More is Less (1st ed.). New York, USA: HarperCollins.
In this book, the author describes at which point choice can become a burden. He comes to the conclusion that too much choice leads to unrealistically high expectations and a blockade in the decision making process. This phenoenon can also be observed in millennials, which have plenty of life options.
Statista. (2019). Transportation. Vehicles & Road Traffic. Harley-Davidson’s worldwide motorcycle retail sales in FY 2017 and FY 2019, by country or region. Retrieved from https://www.statista.com/statistics/252220/worldwide-motorcycle-retail-sales-of-harley-davidson/
Statista is a platform for statistics from Germany. These statistics show impressively how Harley Davidson sales figures have fallen worldwide between 2017 and 2019. The losses on the domestic market in the US were particularly large.
Statista. (2020). Facebook usage penetration in India from 2015 to 2018 with a forecast until 2023. Retrievd from https://www.statista.com/statistics/553725/facebook-penetration-in-india/
According to Statista, 25% of the population in India currently use social media. It is expected that the social networking site’s penetration will increase to over 30% by 2023. Given the growing population, India’s total population is estimated to be around 1.42 billion by 2023.
Statista. (2019). Die zehn Länder mit der jeweils größten Bevölkerung in den Jahren 1950, 2000 und 2020 sowie Prognosen für 2030, 2050 und 2100. [The ten countries with the largest populations in 1950, 2000 and 2020 and forecasts for 2030, 2050 and 2100]. Retrieved from https://de.statista.com/statistik/daten/studie/157531/umfrage/laender-mit-der-hoechsten-bevoelkerungszahl/
This statistics show largest populations in 1950 and 2000 and the corresponding forecasts for 2020, 2030, 2050 and 2100. It is predicted that India will become the most populous country in the world within ten years.
ZAK. When Products become Brands. Selfhood. [Video]. Retrieved 2020, March 20 from https://www.youtube.com/watch?v=1fFe5bJ804E
Brands need to understand the customers, because customers under 30 years old, want to connect with brands and they want to feel validated. They feel especially recognized when companies enter into a dialogue with them on social media.