Harley-Davidson: A Cult Brand Hit by Demographic Challenges

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Case Details:

Case Code : MKTG293
Case Length :15 Pages
Period : 2000-2010
Pub Date : 2012
Teaching Note : Not Available
Organization :Harley-Davidson
Industry : Motorcycles
Countries : US; Global

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Since the early 1990s, the median age of a Harley rider had risen consistently from 38 to 47. Experts said that as the baby boomers7 who had transformed Harley into an American icon were aging, they were less likely to ride a motorcycle given the physical constraints. In late 2010, the company decided to revamp its marketing efforts and adopt a multi-generational and multi-cultural marketing strategy focused on non-core customers such as young males, women, and ethnically diverse adults. However, some experts contended that as Harley tried to adapt to the changing marketplace and attract new customer groups, it should continue to maintain its traditional customer base.

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"How do they do it without hurting existing customers and destroying the brand? That's the $64 million question," said Geoff Meredith, president of Lifestage Matrix Marketing.8

Early Years

Harley was established in 1903 by William Harley and Arthur Davidson (Arthur) who built the first Harley motorcycle, a racer bike, in a small wooden shed in Milwaukee. Later, Arthur's brother Walter Davidson (Walter) joined the business. The first Harley dealership opened in Chicago in 1904 and sold one of the first three Harley motorcycles ever produced. In 1906, the company built a new factory in Milwaukee and also launched its first product catalog. In 1907, William A. Davidson, brother of Arthur and Walter, joined the company. The Harley-Davidson Motor Company was incorporated on September 17, 1907, with the stock being split among the four owners.

Harley bikes had a characteristic design and were known for heavy customization that gave rise to the chopper style of motorcycle. The heavy use of chrome and the styled tail fenders highlighted the typical image of the bike. Customers were attracted by the bike's distinctive roar and toughness. Harley motorcycles were used in local races and rallies. Their popularity rose after Walter rode a Harley motorcycle to victory in a 1908 race9. In 1909, Harley developed its first V-twin powered motorcycle10. The V-twin engine gave Harley motorcycles an aggressive appearance of raw power...

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7] In the US, the term Baby Boomer is used to describe a generation of individuals born between 1946 and 1964.
8] Lifestage Matrix Marketing is a California-based marketing consulting company.
9] In 1908, Walter Davidson won the 7th Annual Federation of American Motorcyclists Endurance and Reliability Contest with a perfect score of 1,000 points.
10] The V-twin engine derived its name from its cylinders which were set opposite each other at a 45 degree angle. The V-twin powered motorcycle was the fastest motorcycle during those times and could travel at a speed of 60 miles per hour.

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