THE 4 C
SITUATION
ANALYSIS:
HARLEYDAVIDSON
FALL 2013
EXECUTIVE SUMMARY
Harley Davidson is a well-established high end motorcycle brand that
has been helping people achieve their dream lifestyle for over a century.
Despite its unmistakable brand image and the loyalty of its customers,
Harley Davidson is suffering from an ever-aging customer base. The
average Harley Davidson customer (upper-class 48- year old male) has
been getting older at a rate of 6 months every year for the last 20 years.
While Harley Davidson is the largest manufacturer of heavyweight
motorcycles in the world by market share, Baby Boomers' children
prefer lighter, more inexpensive bikes.
This media plan is the result of extensive customer and competition
research emphasizing the target audience age issue that Harley
Davidson is facing. It will focus particularly on young adults between
the ages of 18 and 34, who have finished high school, and own a home.
This shift in advertising attention should happen without alienating its
already existing older customer base. The goal of this plan will be to
increase the target audience's preference and purchase interest by 15%
within the following year.
CATEGORY:
HISTORY
After World War II, American soldiers arrived home only to
realize that the motorcycles in the U.S. were not as fun nor
comfortable as the ones they had used in Europe. That is when
the first “bobbers” and “choppers” were created. These bikes
were the regular stocked bikes that had been customized by the
consumer. The “chopper” finally gained popularity upon the
release of the 1969 motorcycle film “Easy Rider.” At this time the
main companies that were in the chopper business were Harley
Davidson and Indian motorcycles.
CATEGORY:
TOP BRANDS
As of 2012,
PowerSports
Business published
the sales of
recreational, on-road
motorcycle dealers
in 44 states and
Canada.
CATEGORY: SALES ANALYSIS
1945-2005 Motorcycle Growth
Year
1945
1962
1970
1985
2002
2004
2005
Motorcycles Registered in the
U.S. (units)
198,000
646,000
2.8 million
5.4 million
936,000
1.1 million
1.2 million
The Motorcycle Industry Council lists 1973 as the zenith for annual
motorcycle sales, when Americans bought more than 1.5 million bikes.
Sales for 1979 topped the one-million mark, then cooled in the 1980s and
early 1990s. Motorcycling began its 13 years of increasing success back in
1993, with sales growing every year since. The potential reasons for this
steady growth include:
Recent Motorcycle Growth
A snap-back from the recession. Tough times kept people
from buying bikes and low sales kept dealers from
replenishing inventory.
Motorcycles are far more fuel efficient than cars
Sales have appeared to level off over the last 3-4
years. However, recreational motorcycle sales
increased just over 2% in 2012 compared to 2011.
The Motorcycle Industry Council reported U.S.
motorcycle sales for the first half of 2012 have
improved:


Recreational motorcycle sales rose only
1.8% (to 318,105 from 312,520) between
2011 and 2012
193,287 recreational motorcycles have
been sold in the first half of 2012 (January
to June), up from 187,571 in the same
period the year before (+3.0%)
Sales Margin Trends for Private Dealers
COMPANY:
HISTORY
1901- William S.
Harley and Arthur
Davidson created their
first “motor bicycle”
2004- Harley was
involved in
several class
action lawsuits
1920 Harley-Davidson
was the largest
motorcycle
manufacturer in the
world
1969 American Machine
and Foundry bought the
1917- The U.S.
company and began
demanded
cutting the workforce
motorcycles for
combat in WWI, Harley leading to labor strikes
and low quality
provided 15,000 bikes
January 1905Customers could buy a
Harley-Davidson
engine and create their
own bike
April 1905- Complete
bikes were being sold
on a limited bases
1906- Harley built their
first factory, allowing
them to increase
production to 150 by
1907
1907- They began
selling their
motorcycles for to
police departments
1942- Harley continued
to create motorcycles for
the Army during WWII
2003- Harley bought
Buell Motorcycle
Company, a sportbike manufacturer
2000- Police
departments began
reporting high speed
instability causing the
death of an officer
1980s Harley began to
exploit the retro appeal of
their bikes, to compete
against Japanese bikes
2009- The value of the
Harley-Davidson brand
fell by 43
2011- Sales improved
dramatically, income
from operations in the
third quarter rose
95.9%
COMPANY SALES
ANALYSIS
Harley- Davidson, Inc.
NYSE: HOG
2008
Recession
Sales
Dramatic
increase
since 2011
COMPANY:
THE 4 P’S
• Products
• Place: Harley-Davidson motorcycles are purchased
through authorized dealerships only. They cannot be
purchased through the factory, but they have over 800
stores in the US as well as stores in 67 other countries.
• Promotion:
• Price: Prices range anywhere
from $8,249 to $38,999
COMPETITIVE SPENDING
ANALYSIS: AD DOLLARS
SPENT BY EACH BRAND
Network
TV Dols
Cable TV
Dols
Magazine
Dols
Int Display Outdoor
Dols
Dols
Total
Dols
HarleyDavidson:
Motorcycle
2680
5060.1
1357.5
2370.5
11468.1
Honda:
Motorcycle
120.8
3300.4
952.9
918.8
5292.9
Yamaha:
Motorcycle
252.4
170.8
163.7
483.5
1070.4
Kawasaki:
Motorcycle
568.6
1578.1
340.4
16.4
2
2503.5
Grand Total
3621.8
10109.4
2814.5
3789.2
2
20334.9
MEDIA MIX OF COMPETITIVE
BRANDS & TOTAL
CATEGORY
Network
TV Dols
Cable TV
Dols
Magazine
Dols
Int
Display
Dols
HarleyDavidson:
Motorcycle
23.37%
44.12%
11.84%
20.67%
100%
Honda:
Motorcycle
2.28%
62.36%
18.00%
17.36%
100%
Yamaha:
Motorycle
23.58%
15.96%
15.29%
45.17
100%
Kawasaki:
Motorcycle
22.71%
63.04%
13.60%
0.66%
.08%
100%
Total
Category
(%)
17.81%
49.71%
13.84%
18.63%
0.01%
100%
Outdoor
Dols
Total
Dols
SHARE OF VOICE &
ADVERTISING
EFFECTIVENESS INDEX
Market Share
Share of Voice
Effectiveness
Index
HarleyDavidson:
Motorcycle
35%
71%
49
Honda:
Motorcycle
14%
17.6%
80
Yamaha:
Motorcycle
15%
8.6%
174
Kawasaki:
Motorcycle
15%
2.8%
536
Total Category
(%)
79%
100%
WRITTEN ANALYSIS
Harley Davidson has 71% of the Share of Voice by spending $7,941,600 on
advertising through Network TV, Cable TV, Magazine and Internet. While Honda, Yamaha and
Kawasaki also tend to focus on these media as well, Harley is the largest investor, spending
the most in every category except for Magazine where Honda prevails. Harley Davidson
spends the largest portion (33.5%) of its budget on Cable TV ads, which translates to
$2,659,700. This is a prominent difference when compared to Yamaha and Kawasaki who only
spend 19.3% ($181,900) and 20.2% ($63,600) in the same category.
Harley also paves the way in Network TV ads, spending 30.6% ($2,427,800) of its
advertising budget compared to Honda who only spends 6.3% ($123,200) and Yamaha with
19.3% (184,000). Kawasaki does spend a large portion of heir ad budget on Network TV with
62.6% going to this medium, but due to their smaller budget, this only translates to $196,900.
Harley Davidson is definitely not as reliant on the Internet as some of its
competitors. By spending 29.8% ($2,370,500) of its budget in this medium, it seems that Honda
(46.7%- $957,000) and Yamaha (50.5%-$483,500) depend on this area to reach their consumers
more than any other medium.
Harley-Davidson is clearly working hard to advertise their brand in the top media
markets and spending comparatively more money to ensure quality in their ads.
Overall, however these companies are spending more money in Internet advertising
altogether than they are in any other media, by investing 33% ($3,789,200) in the medium. Of
the markets they actually utilize, this category is spending the least amount of money in
outdoor advertising (.03%- $3,600), which only consists of Kawasaki. None of these companies
use Network radio as a means of reaching their audience though.
CONSUMER PROFILE/ MRI
Proj ‘000
Percent Down
Index
Education: Graduated High
School
3210
33.4
107
Age 45-54
2201
22.9
120
Occupation: Natural
Resources, Construction, and
Maintenance Occupations
1337
13.9
130
Occupation: Other Employed
2179
22.7
106
HHI: $75,000-$149,000
3295
34.3
116
Census Region: Midwest
2492
25.9
119
County Size: B
2987
31.1
102
Marital Status: Now Married
5416
56.3
102
Child Age: 12-17 Years
2134
22.2
124
Years at Present Address: 5+
years
6183
64.3
112
Home: Owned
7536
78.4
114
Home value: $100,000$199,999
2803
29.2
124
Race: White
8155
84.8
112
Demographic Variable
PROBLEMS
&
• Harley recalled many of its touring bikes built
between May 3and October 14, 2013
because of a problem with their hydraulic
clutch system
• Even with the decreasing average age, the
average still remains in the late 40s
• Harley “[refuses] to report numbers on its
ability to attract customers from new
demographics”
• Harley only spends 15% of its budget on paid
media, and focuses mostly on word of mouth
which isn’t effective for the digital age
• Still the biggest issue seems to be with the
brand image appealing more to the older
audience because of its association with 60s
rebellion
• Harley has had issues with safety and
reliability, some are unstable at high speeds
• Ali Larkins 2011 Public Relations Plan
•
•
•
“Media’s Portrayal of Harley enthusiasts, a
stereotype of fringe, flames and old
geezers in leather has emerged.”
“Our most tangible threat is our (cheaper)
foreign competition- Kawasaki, Suzuki,
Yamaha and Honda.”
“A Harley Davidson motorcycle is
considered a luxury item not a necessity.”
So people current lack of disposable
income threatens the brand
OPPORTUNITIES
•
•
•
•
•
•
•
•
They are now making the Iron 883, a cheap bike
much like the more expensive Harleys but only
$8,399. It has helped them gain 48.6% of the
under 35 years of age market.
According to RL Polk, a provider of automotive
information and marketing solutions to the
automotive industry, the average age of the
Harley rider is going down, but the average age is
47 (which is one year later than the youngest
baby-boomer)
The 500cc motorcycle in development could be
good for targeting a younger crowd, however it
would not appeal to everyone because it will be
made in India, not America
According to Harley-Davidson’s Chief Operating
Officer, Matthew Levatich, they are possibly
making an electric motorcycle
Their 2014 lineup includes new bikes with many
advancements including anti-lock brakes, better
headlights, better aerodynamics
It sponsors the UFC events
Harley is targeting social media for advertising but
still only pages that you can “like”
Harley is crowd sourcing for a lot of its new
advertising
MARKETING
OBJECTIVE
The objective of this 2014 year long branding
campaign is to increase sales volume of HarleyDavidson brand motorcycles within the younger
user population by 15%
TARGET MARKET
DEFINITION
Demographic Variable
Figures and Calculations
Age 18-34
29.9% Down
High School Grad
33.4% Down
Homeowner
78.4% Down
Race: White
84.8% Down
Target Market Size Calculations
.299 x .334 x .784 x .848= .07
.07 x 9,613,000= 672,910
Target Size
672,910 people in target market
Name of Target
Market
Young Adults
Target Market
Statement
Young adults are age 18-34, white, high school
grads who own their own home. The size of the
target market is 672, 910 people.
TARGET MARKET:
QUALITATIVE
PSYCHOGRAPHIC PROFILE
The personification of the ideal target audience for
Harley Davidson is hard working, blue-collar, high
school graduates. We can name our ideal customer
Dave. Dave is usually between the ages 45-54, and
has a household income of about $75,000. Dave is
married and has children in their teens. Dave is most
likely to be from the Midwest region, making him a
lover of the outdoors. Dave is a hard worker, who likes
to unwind by taking a stroll on his Harley Davidson on
the weekends.
ADVERTISING OBJECTIVE &
POSITIONING STATEMENT
Advertising Objective:
To increase interest and preference of Harley-Davidson as a
viable option of motorcycle transportation through test
drives by 15% before the end of 2014.
Positioning Statement
For men between the ages of 18 and 34, Harley-Davidson is
the ideal motorcycle to purchase because it’s big, it’s loud,
and it’s all-American
MEDIA OBJECTIVES
Period
Reach
Frequency
GRP
% of Entire
GRPS
Budget
Breakdown
January
40
2
80
2.8%
$280,000
February
40
2
80
2.8%
$280,000
March
70
3
210
7.5%
$750,000
April
75
3
225
8%
$800,000
May
80
4
320
11.4%
$
June
80
4
320
11.4%
$
July
40
2
80
2.8%
$
August
40
2
80
2.8%
$
September
75
3
225
8%
$
October
85
4
340
12.1%
$
November
85
5
425
15.2%
$
December
85
5
425
15.2%
$
2,810
100%
$10,000,000
Total
MEDIA
OBJECTIVES
•
A pulsing advertising schedule adjusts to the weather dependency of motorcycle usage
while emphasizing the high purchase months and maintaining awareness during low
purchase months.
•
To recover from the end of the previous year, in January and February (dead months)
start off by reaching a modest 40% of the target audience at least 2 times.
•
Gradually increase reach and frequency in March and April in preparation for the
warmer months and to take advantage of upcoming tax returns, taking GRPs from 2.8%
in earlier months to a high point of 8%.
•
The moderate to warm temperatures in May and June make them the most popular
months of the year to motorcycle aficionados. In response to the large percentage of
recreational motorcycle sales that take place in these months, bring GRPs up to 11.4%
with a combination of 80% reach and frequency of at least 4.
•
Decrease media budget to $280,000 in July and August, as summer sales are slowing
down but to actively keep Harley Davidson in customers' minds.
•
As the last quarter of the year begins, September and October will serve as stepping
stones between the slow late-summer months and the busy holiday months. Reach will
increase from 75% in September to 85% in October while frequency stays consistent at
5.
•
The holidays will improve media receptiveness and gift purchases will lead sales to
skyrocket in November and December, making the Harley Davidson end-of-year
campaign the most important one of the year. By reaching 85% of the target audience at
least 5 times, GRPs will peak at 15.2%.
MEDIA STRATEGY:
MEDIA MIX
Medium
Percentage Weight
Dollar Amount
Interactive
70%
$7,000,000
Internet
20%
$2,000,000
Cable TV
7%
$700,000
Magazine
3%
$300,000
MEDIA STRATEGY:
SUMMARY
•
Though there are not currently any figures to support interactive
advertising as an advertising medium, we still recommend taking
advantage of it so customers can get a first hand experience with
the vehicles and make an informed decision to buy a Harley.
•
Internet Advertising will attract the attention of the new target
market who spends much of their time on the internet. As of 2012,
the average American spends more than three hours on the
internet a day.
•
We recommend advertising on Cable Television because it is still
the most used medium and if the ads are put on the right
channels, the target audience should be easily reached.
•
Magazines have proven to be a successful form of advertising for
Motorcycle companies in the past, so Harley should continue to
advertise in magazines to reach both its new target market and
current target market.
MEDIA TACTICS
Medium
Vehicle
Interactive
Displays at
sporting
events
Index
Number
Colum
nB
(Down)
Units
Dayparts
Weekend
Sports
Test Drives
Motorsports
Events
Internet
Weekend
Sports
eBay
131
27.7
ESPN.com
86
19.3
YouTube
Cable TV
Magazine
15 Second
ESPN
Channel
89
38.4
15 Second
TV (Daytime)
III (Light)
SpikeTV
120
30.5
15 Second
TV (Daytime)
III (Light)
Motorcyclist
356
5.9
Full Page
Playboy
119
4.8
½ Page
MEDIA TACTICS:
SUMMARY
•
Displays at sporting events will be a good way of reaching the target audience
because many men between the ages of 18-34 are interested in sports so
advertising at the games will bring the advertising to the possible customers.
•
Test Drives will allow possible customers the opportunity to ride the bikes for
themselves and come to the conclusion that Harley is the best bike for them.
•
Motorsports Events are a great place to connect with motor vehicle enthusiasts.
•
We recommend eBay be used as an advertising medium because its high index of
131.
•
ESPN.com much like the display ads will target the new demographic where they
are already likely to be.
•
YouTube is currently the third most popular website on the internet and has a very
diverse audience.
•
ESPN will reach the new audience in there homes on one of the most popular
channels for men.
•
Spike TV, with its programming tailored specifically for men and an index of 123, is
a great medium for targeting men between the age of 18-34
•
Motorcyclist has served motor cycle companies well in the past with its large index,
it is one of the most important mediums to continue advertising in.
•
Much like Spike TV, Playboy is tailored for men and has a relatively large index of
119.
FLOWCHART
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
GRP
Interactive
Displays at sporting events
Test Drives
Motorsports Events
Internet
eBay
ESPN.com
YouTube
Cable TV
ESPN Channel
Spike TV
Magazine
Motorcyclist
Playboy
Monthly R/F/GRP
40/2/80 40/2/80 70/3/210 75/3/225 80/4/320 80/4/320 40/2/80 40/2/80 75/3/225 85/4/340 85/5/425 85/5/425
2,810
% of GRP/ Budget
2.80% 2.80% 7.50%
8%
11.40%
11.40% 2.80% 2.80%
8%
12.10%
15.20%
15.20%
Budget
$280,000 $280,000 750,000 $800,000 $1,140,000 $1,140,000 $280,000 $280,000 $800,000 $1,210,000 $1,520,000 $1,520,000 $10,000,000
WORKS
CITED
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http://www.statista.com/topics/1305/motorcycles-in-the-us/
http://www.chopperexchange.com/SellingTips/Tip/1024
http://www.motorcycle-usa.com/6/2014/Buyers-Guide-Manufacturer/2014-Harley-Davidson-Buyers-Guide.aspx
http://www.harley-davidson.com/en_US/Motorcycles/motorcycles.html?locale=en_US&bmLocale=en_US
http://www.campaignbrief.us/2013/08/harley-davidson-launches-new-t.html
http://brand-innovators.com/brandnews/harley-davidson-revs-up-project-rushmore/
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