Harley Davidson Inc: Marketing Analysis - Case Study Example

 Table of Contents Page 1.0 Introduction 3 2.0 Situation Analysis 3 2.1 Macro Environment (including PEST Analysis) 4 2.2 Microenvironment 5 2.2.1 Competition 5 2.2.2 Market Demographics 5 2.2.3 Market Needs 6 2.2.4 Market Trends 6 2.3 SWOT 6 3.0 Marketing Strategies 7 3.1 Mission 7 3.2 Marketing Objectives 8 3.3 Target Marketing 8 3.4 Positioning 8 3.5 Marketing Mix 9 3.5.1 Services and Service Marketing 9 3.5.2 Pricing 9 3.5.3 Promotion 10 4.0 Controls 10 4.1 Implementation Milestones 10 4.2 Marketing Organization 10 5.0 Conclusions 11 6.0 Bibliography 12 1.0 Introduction Harley Davidson Inc is a famous motorcycle company that ranks 45th in Interbrand’s 100 top brands and is frequently listed in the 100 Fortune Big Best companies of the world. In USA it is the predominant player but others like BMW and Honda are fast catching up using newer technologies to produce competing bikes. Other brands too are making a foray in the market. While Harley Davidson (HD) has been seeing growth and profits for 19 consecutive years, it cannot be complacent in view of the growing competition. It has therefore set its eyes on the emerging Indian market with its predictably booming consumer market. If this takes off, the huge customer base of millions could open new doors for HD. However a carefully crafted marketing plan needs to be drawn for the purpose. 2.0 Situation Analysis HD has had a dream run for several years. It has banked largely on its Macho Image which was aided by fun loving and beer guzzling characters in the classic film Easy Rider. Lately it has toned down this bad boy image but it retains the adventurous image it has built up. Apart from the charisma of the HD name and fame the business needs to attract the Indian customer which is comparatively more price conscious. The Indian customer is looking for brand image as well as a greater variety as is being sold by other competitors. A new entrant in the market is women who have shed their earlier shy image and now ride bikes and scooters. In fact some competitors have opened exclusive women-only scooter showrooms. HD needs to have an Ad agency and a PR agency to devise a comprehensive marketing Plan for the Indian market. 2.1 Macro Environment (including PEST Analysis) The external environment, also known as the Macro environment is comprised of factors that are beyond the control of the company. This comes out very well when a PEST analysis is conducted. PEST stands for Political, Economical, Socio-cultural and Technological factors. PEST Analysis of HD Political Analysis. There is one factor that can restrict the growth of HD in India. Due to restriction of Foreign Direct Investment component to 75%, FD must take in an India company as a partner with 25% stake. Without this it cannot manufacture its bikes in India. This condition also applies if it wishes to import its bikes and market them by itself. This may be a deterrent if it wants to go all the way by itself only. Economic Analysis. Bikers are usually from several segments; those who have just got employed, are single or just married, and those middle aged persons whose children are economically independent and wish to be re-born bikers. They also can be those who cannot afford to use their cars for travelling to the city due to restrictions but can afford to have a bike as a second vehicle. Apart from these other bikers are teenagers who have just come of age who usually cannot afford expensive bikes and go for inexpensive or second hand bikes... Socio-cultural Analysis. An upcoming segment is the women bikers who opt for scooters but may go for very light bikes; they are no longer inhibited and are not averse to enter the otherwise largely male dominated mode of transport and fun. Technological Analysis. There has been a vast improvement in technology which has made bikes trouble free and more easy to use. The technical improvements have made it possible to make riding more comfortable and fuel efficiency has increased affordability. (PEST) It can bee seen from the PEST analysis that external factors are generally in favour of increase in business. Many foreign bike manufacturers have set up facilities in India and have no regrets. HD can find a suitable partner and go ahead without qualms. Also congestions in the cities have also made bikes a more attractive proposition. With economic upliftment and additional employment opportunities the biking industry is poised for further growth. The introduction of scooters and lighter bikes is helpful in adding women to the list of bikers and the utility value is enhancing the overall market. 2.2 Microenvironment These are factors that are controllable by the company and include ambience like having an accessory shop within the showroom for attracting customers. Similarly tie ups with training schools to learn biking enhance the customer interest. Adding service facilities and offering accessories is an important feature too. 2.2.1 Competition The competition mainly lies with similar outlets offering similar facilities. Often service stations also compete by offering service facilities for bikes as it gives an opportunity for parts replacements which is lucrative business. 2.2.2 Market Demographics The market for bikers is divided into several segments. Age Group Demography Need Preference 18-21 Newly Employed Newly Married Single Fun Performance Conveyance Medium Range and High Featured Bikes 22-35 Mid-Level Executives City Travelling Medium Range 36-55 High Paid Executives Casual Travel Fun High End Bikes 2.2.3 Market Needs With growing employability the need for transport and fun is on the rise. This augurs well for the transport industry in general. Since the younger population is becoming mobile due to spread of the economy, bikes have a huge demand due to their manoeuvrability and moderate prices as compared to four wheelers. There is room for expansion in business. 2.2.4 Market Trends With Globalization of economy two distinct trends have emerged in India. Firstly the import of bikes is now easier and more variety from manufacturers from all over the world has opened up the market with new and high performing range of products. Secondly this had brought a sharp reduction in prices due to fierce competition and lastly it has induced quality consciousness and fuel efficient models have become more popular. Those businesses that go along with this trend are likely to prosper. 2.3 SWOT A SWOT analysis offers the management a quick review of the status to arrive at fast decisions. SWOT means strengths, weaknesses, opportunities and threats. Strengths 1. HD Brand 2. Variety of Brands Sold 3. HOG Membership Weaknesses 1. Premium Prices Opportunities 1. Expanding Market 2. Tie-up with Training Schools 3. Training facilities 4. Special section for women Threats 1. Other competitors with Lower priced product range (Value based Management) 3.0 Marketing Strategies A proper segmentation will help in defining the target customers. Once this is done the sections in the showroom should be designed to suit the tastes of the buyers. Further the sales staff should be recruited and trained to handle each segment according to their preferences and tastes. Internal ambience should match the needs of the customers. Externally advertisement and publicity would be organised according to targeted segments. Bike Magazines are very popular and favourable write-ups are needed to be given about HD at frequent intervals announcing new arrivals, schemes and offers to entice customers. It is also advisable to enter into local competitive racing under HD banner or to promote the name and build customer recall. Harley Owners Group should be extended to India and free membership of the Easy Rider should be offered as well. 3.1 Mission High Quality and Performance bikes should be the company mission in order to serve the customer in the best possible way. 3.2 Marketing Objectives The Marketing Objective is to have a Plan that is both achievable and measurable. The targets are to be set for each move or action, both financially and in terms of other resource allocation like personnel. The measurability can be gauges by giving it a time frame with set conditions of money and material resources. The marketing objectives section will indicate targets to be achieved across several marketing decision areas.  Marketing success can be measured on several non-financial market metrics. (How to write a Marketing Plan) 3.3 Target Marketing This is part of segmentation of the market and will deal with how to research the needs of the customer of the targeted segment. There is need to find out the customer buying pattern and behaviour pattern which will eventually categorize the size of the market. This will help in finalizing the quantum of product range that will be projected for sales. 3.4 Positioning In marketing positioning has come to mean the process by which attempt is made to create an image or identity in the minds of their target market for its brand and range of products, or the organization itself. The aim is to develop a perception in the mind of the target market about the brand and image. In India both Press and TV commercials are inexpensive as compared to the west, HD should make full use of these media to position its bikes. Another important factor is that celebrities as icons and brand ambassadors have a great effect on the Indian mindset. HD must engage some Macho celebrity either for the India Cricket Team or a well bodied actor from Bollywood to mesh with the young and fun loving Indian audience. 3.5 Marketing Mix For catering to diverse segments different varieties of bikes must be displayed for sale in the showrooms. The Indian market is diverse and it is best to cater to all of them. The most popular one however will be the one which is light both in weight and on the pocket. 3.5.1 Services and Service Marketing Servicing plays a vital role and this should be enhanced with the latest machinery and equipment for both fast and quality service. It is also recommended that this aspect of business should be highlighted with sales as well as otherwise communicated to both customers and non-customers. This will lead to adding customers as those who come for service only will be attracted for their next purchase by the quality of service provided. Service also includes sales of spares and it is a profit centre by itself and therefore needs special attention and competitive pricing. It is further suggested that with every sale a few free services should be thrown in to retain the customer. 3.5.2 Pricing While pricing has to be aggressive yet they must not be ridiculously reduced as they contribute to the bottom line. The price marking should be near about that offered by competition and instead of reducing prices it is advisable to give extra attention to quality and some extra accessories that will attract the customer and retain his loyalty for the future. An incentive scheme or a prize winning lottery scheme is also advised. 3.5.3 Promotion There is a difference between promotion and publicity. Promotion is best achieved through organizing sales, road shows or by participation in third party events like race track appearances, exhibitions and sometimes by involving in charity or similar events that give great exposure to the company or the product. HDis advised to enter such promotion schemes so keep itself in public view and to build up an image for itself. 4.0 Controls For a successful marketing plan it is important to have complete control over targeted and actual expenditures and it is achievable by following the under mentioned procedures. 4.1 Implementation Milestones For any projection there must be milestones for the amount and period involved. These should be practical and achievable and these are to be monitored and measured on a regular basis to located snags and problems. These should then be either removed quickly or to be revised if they have been miscalculated in the beginning. In both cases this is both informative and educating for present and future respectively. 4.2 Marketing Organization It is prudent and advisable in case of HD to engage a professional PR agency as well as an advertising agency. They can even be one company. A suitable advertising budget will give them a huge exposure in the very widespread Indian Market. Maximum exposure should be done through the TV as this medium reaches all corners of India, both urban and rural. 5.0 Conclusions HD is a recognised name in the market today and it has assured and loyal customers. It is a wise move on their part to get hold of a strong Indian partner. It is prudent on their part to back up this effort by organizing a marketing division as well as engage ad and PR agencies to supplement their marketing efforts. The outlined plan is quite in line with the strategic moves of the company and should be fruitful in the short term. In the long run, the results will be able to define more areas that will require attention to get more mileage out of such future plans. 6.0 Bibliography Dibb, Simkin and Bradley, The Marketing Planning Workbook published in 1996 by Thomson (London). How to write a Marketing Plan available at: http://www.knowthis.com/tutorials/marketing/marketingplan1/10.htm PEST Analysis available at: http://www.marketingteacher.com/Lessons/lesson_PEST.htm Value based Management available at http://www.valuebasedmanagement.net/methods_swot_analysis.html Read More