Overview
The onset of the 21st century saw the inception of the Harley-Davidson Motorcycle Company. The motorcycle manufacturing firm started off its operations in Wisconsin, United States of America (Harley-Davidson, 2006). Although it had a small beginning, Harley-Davidson has grown to be a renowned global market leader in the manufacture and sell of heavy duty monocycles.
The company successfully went through the hard economic times of the 1920s, which was largely contributed by its unwavering strong background in leadership, marketing and customer satisfaction (Armstrong & Kotler, 2011).
One of the major challenges faced by Harley-Davidson in its history of successful operation in United States is when the government failed to instituted as well as monitor market forces of demand and as well as quality checks which led to the influx of cheap imports into the U.S market.
However, this just marked the beginning of a long journey for Harley-Davidson bearing in mind that the motorcycle manufacturer continued with the uninterrupted production of motorcycles with engine capacities above 750cc (Harley-Davidson, 2006). Customer satisfaction was and has been key to this overwhelming market presence.
On the other hand, Harley-Davidson is still struggling to penetrate the lightweight motorcycle market. The competition is tough in this line of production and unless the company transforms its value proposition, it may completely miss out on the yet to be tapped profitable lightweight motorcycle market.
In this paper, the case study of Harley Davidson has been discussed in terms of the marketing capabilities of the company (Harley-Davidson, 2006). In addition, some marketing strategies that can be adopted by the motorcycle firm have been proposed using relevant marketing theories.
Harley-Davidson case study summary and marketing theories
One of the outstanding features of Harley-Davidson is the creation of brand loyalty among its chronic customers. As part of its fundamental marketing strategy, the company has developed a culture of consistent liking and consumption of its heavyweight motorcycles among the long term customers.
As a result, it has managed to maintain its clients for a considerably long period of time in spite of the ever prevailing market competition (Armstrong & Kotler, 2011).
The most integral ideal being cherished towards customer loyalty is the ability of the company to critically consider the needs of its consumers. Harley-Davidson has a strong belief that customers from its most valuable asset add therefore should always be given the first priority. The department of marketing has put up efforts of reaching out not only the old customers but also the high end market that has not been tapped yet.
In order to achieve the best customer loyalty, it has taken the marketing department significant amount of time to study and analyze the needs, tastes and preferences of consumers. The ease with which customers can purchase Harley-Davidson products has been enhanced. In any case, the company believes in serving its customers with a touch of their emotions.
In other words, passion drives the marketability of the heavy duty motorcycles (Armstrong & Kotler, 2011). The feelings of customers are studied, their perceptions and reactions towards the company products are also evaluated in a regular customer care initiative.
Due to such an approach in marketing, the management at Harley-Davidson is quite convinced that they will also venture and conquer the light duty motorcycle market. Moreover, the marketing strategy is also viewed as the reason for the success behind the Harley Owners Group (HOG) that has grown to a 900,000 membership scheme.
The sale of motorcycles per se is not the sole duty of Harley-Davidson; the motorcycle manufacturing firm has laid more emphasis on the needs of its customers to experience independence and a free purchasing environment. Customers should feel to be buying Harley-Davidson products without being coerced or technically convinced through advertisement without their own will.
If this philosophy is anything to go by, then it implies that Harley-Davidson has a cultivated a buying culture of its motorcycles, a phenomenon absent in other brands (Armstrong & Kotler, 2011). Therefore, customer experience, according to Harley-Davidson, goes beyond the manufacture and sale of motorcycles; it is a unique lifestyle of its own kind.
Customers do not just buy for the sake of meeting their needs; they also do it as part and parcel of their lifestyle. Marketing a brand as a lifestyle product is an uphill task, so to speak. Harley-Davidson is not naïve of this fact. Consequently, the motorcycle manufacturing firm has set up rigorous marketing tools and devices to enable it maintain and reach out for the untapped markets.
Through its marketing department, the company has imitated a high-powered team of individuals charged with the responsibility of marketing Harley-Davidson brand. For instance, there are quite a number of travel adventures that the firm has organized in the past.
These adventures are meant to develop consumption and liking culture for its products. Both the existing and non-customers are usually invited to take part. The company also offers other after-sale services to customers.
The marketing strategy adopted by Harley-Davidson is not void of relevant marketing theories in daily practice. Firstly, the brand name ‘Harley-Davidson’ has proved to be a very effective auto marketing tool for several decades now.
Customers have been deriving satisfaction out of the motorcycles manufactured by the company. the fact they have built formidable trust around the brand of the company makes it possible for them to remain loyal in their purchases (Harley-Davidson, 2006).
In addition, the consumption experience by Harley-Davidson’s customers is one of its own kind since the firm makes sure that the general and imperative needs of the customers are catered for. it is against this backdrop that the company’s brand name is not only popular, it is also a household name that both active and potential customers would like to identify with.
On the same note, decision making by customers is yet another area that the marketing department has put more focus on. It is crucial to observe that the purchasing trend of customers is largely driven by the nature of decisions they make (Kotler, Roberto & Lee, 2002). This can be explained from the utility theory of decision making.
The utility is paramount in marketing. Consumers will consider the best outcomes as the main driver to their decision making (Gilmore, 2003). The theory tends to perceive customers as rational beings who are not skewed on their choices but would rather settle at a particular brand since the anticipated results suit their needs well. Hence, optimum benefit is instrumental for customers.
The utility theory is pragmatic on the usefulness of the product being purchased rather than the cost price of the product. Indeed, Harley-Davidson has taken this into consideration since the company has ensured that its heavy duty motorcycles are not just within the expected standards by customers but also of high quality.
This has been laced with the marketing philosophy of selling with passion and touching the customers’ feelings right at the point of sale. However, consumers may lack rationality when making purchasing decisions in some cases (Baker & Saren, 2010). Besides, the various intrinsic inputs that may influence decision making patterns when buying may not be easily recognized by customers.
Such a limitation among customers when making decisions may not be fully addressed by utility theory. Hence, satisficing can be used to flesh up the limitations of utility theory. The satisficing model elaborates that the process of decision making does not continues once the anticipated outcomes are met.
Drawing from the Harley-Davidson marketing experience, there is a higher probability that its chronic customers do no longer makes purchasing decisions when acquiring their purchases from the company since they are outside the brackets of utility theory.
At this juncture, it is worthy to note that successful marketing should go beyond utility theory. Consumers can remain loyal to a particular brand irrespective of stiff competition from market rivals.
Similarly, the use of a marketing theory referred to as consideration is a vital tool in marketing strategies. According to the theory of consideration, customers play an equally integral role as the identity of a business organisation (Gummesson, 2002).
The theory further stresses that the decision making process by a firm should consider the relative value of consumers since they form a subset of a firm without which any decisions made may lack utility. The Harley-Davidson video case study emphasizes the momentous contribution and role of customers in the company. All the strategies are developed around the consumption experience of consumers.
The marketing theory of involvement is yet another strong standing point for Harley-Davidson (Kleinaltenkamp & Ehret, 2006). One way of attracting and sustaining the attention of customers is by involving them in most company activities that elicit fun and great feeling.
The management at Harley-Davidson has made every attempt to involve its pool of customers as well as the prospective ones in lively activities like adventurous riding exercises. Sponsorship of such events by Harley-Davidson is a marketing decision I the right step.
As mentioned earlier, the motorcycle manufacturing firm is not merely buying the advertising space for marketing its products; it is also in the process of creating a consumption culture of its heavyweight motorcycles alongside building a lifestyle from it.
Case study questions
How does Harley-Davidson build long term customer relationship?
The management at Harley-Davidson value customer relationship as the foundation of business growth. In achieving this, two main building blocks are used. To begin with, the company employs customer satisfaction in its bid to create long term relationships. Unless customers are satisfied by the services and products on offer, it will be practically impossible to maintain their loyalty for long.
Secondly, Harley-Davidson is very critical on the value of customers. It is common knowledge that customers who are treated with dignity, a sense of passion as well as liberty are highly likely to remain put with a particular brand (Sheth, 2006). The company values the choice, liberty and independence of its customers, attributes that go a long way in enhancing customer value.
Moreover, Harley-Davidson has also made use of the Harley Owners Group (HOG) as a building block for long term customer relationship.
For instance, the company has from time to time organized and sponsored outdoor events to boost the relationship between the company and customers and also among customers themselves. Besides, the numerous publications by the company have been viable outreach tool for harnessing customer relationship.
What is Harley-Davidson’s value proposition?
One of the value propositions for the company is that the price tag is rather on the higher end. The sale of heavy duty motorcycles costs more than the sale of lighter ones with engines capacities below 750cc. although the high price tag may be viewed as slightly disadvantageous to the company; it is indeed the business strategy for Harley-Davidson.
Specializing in this line of production attracts the high end of the market. This may be more profitable than dealing with lighter machineries.
Besides, the motorcycles cannot be used during bad weather in addition to the fact that there are usually non-monetary costs associated with safe keeping of the motorcycles is yet another value proposition for the company. Nonetheless, the best value proposition should be the benefits received by the consumers of Harley-Davidson brand.
Joanne Bischmann in the video case study attempts to emphasize the value received by customers (Harley-Davidson, 2006). As note in the video, customers stand to benefit from freedom, free will, and self-expression as well as the fun and full enjoyment brought about by the company products. Customers are not just buying the motorcycles, they are also interested with the value proposition derived from the purchases.
Relate the concept of customer equity to Harley-Davidson. How does Harley-Davidson’s strategy focus on the right relationships with the right customers? Customer equity is well covered under the derived profits as well as loyalty. There are other numerous possibilities through which Harley-Davidson could derive its profits.
However, the company is not merely focusing on the other varied channels; it has laid more emphasis on building long term customer relationship through authenticated friendship. Its chronic customers who should also be profitable is the core concern for the company in as far as customer equity is concerned.
This profitability is derived from the high-margin products from Harley-Davidson. As part of focusing on the right customer relationships, the company has largely focused on the delivery of three main marketing variables namely customer value, brand stability as well as retention equities.
In order to maintain the brand quality and focusing towards the right customer relationship, Harley-Davidson continually inspects and modifies its products to meet the expectations and needs of customers.
Recommendations
In spite of the global presence of Harley-Davidson in the manufacture and sale of heavy duty motorcycles, the company can still make a few more strides in capturing both the high and low-end markets.
Firstly, Harley-Davidson should devise other competitive marketing strategies that will successfully land them in the light commercial motorcycles bearing in mind that the previous attempts by the company to venture into this market failed. This can be achieved by changing the consumption culture of its long term customers (Baker, Graham & Harker, 1998). They should be educated on the relative benefits of embracing lighter motorcycles.
The value proposition for the company should go beyond passion for its customers. It is vital for Harley-Davidson to focus on new markets through rigorous marketing campaigns like the internet, billboards and other mass media channels (Wierenga, 2008). Relying on old customers per se may not be sustainable for a long period of time.
Finally, Harley-Davidson should also diversify its production portfolio as one way of minimizing market risks. The company can attain this by incorporating the manufacturing of both the heavy and light commercial motorcycles in its plant.
References
Armstrong, G. & Kotler, P. ( 2011). Marketing: an introduction, (10th ed.), New York: Pearson Prentice Hall.
Baker, J.M., Graham, P. & Harker, D. (1998). Marketing: managerial foundations, South Yarra: Macmillan Publishers.
Baker, J.M. & Saren, M. (2010). Marketing Theory: A Student Text, London: Sage Publications.
Gilmore, A. (2003). Services marketing and management, London: Sage Publications. Gummesson, E. (2002). Total relationship marketing, Oxford: Elsevier Science.
Harley-Davidson (2006). Video Case. Web.
Kleinaltenkamp, M. & Ehret, M. (2006).Relationship theory and business markets Journal of business and industrial Marketing, 21(2): 63-64.
Kotler, P., Roberto, N. & Lee, N. (2002). Social marketing: improving the quality of life, London: Sage Publications.
Sheth, N.J. (2006). Does marketing need reform?: fresh perspectives on the future, New York: M.E. Sharpe Inc.
Wierenga, B. (2008). Handbook of marketing decision models, Rotterdam: Springer Science.