Strategic Direction and Marketing Objectives - Assignment Example

CONTENTS PAGE WORK 1. Introduction.2 2. Strategic Direction and Marketing Objectives3 3. Marketing Mix Elements4 4. Timing, Return, Cost, and Feedback of the Marketing Plan.5 5. Harley's attempt at attracting different customers6 COURSEWORK 2 1. Examples of new packaging turning around old products8 2. Importance of an innovative mindset.10 3. Stopping the decline.12 References13 COURSEWORK 1 1. Introduction There is a certain informality about Harley Davidson that separates it from the rest of its competition. While their competitors fly to major motorcycle events in formal attire, Harley-Davidson employees ride in their customary leather and jeans. These events make possible product loyalty among customers and add to company morale amongst employees, ensuing in what Ken Schmidt, former Director of Communications for Harley-Davidson Motor Company, says is an "ether buzz." "It doesn't matter if you are selling machine tools or widgets, you can create these experiences by being friendly and open with customers," - Ken Schmidt.1 The Harley-Davidson Motor Company has had its fair share of problems, at times facing bankruptcy. In the 1960s, Kawasaki, Honda, and Yamaha raided the American market, resulting in the Harley-Davidson's drastic drop of sales.2 The principle of owning an 'American Icon' has gradually faded out of public memory, owing to increased Japanese competition. Harley Davidson has powerful brand image and is sound financially, but there are certain palpable weaknesses in its marketing strategy. The target customers are forty plus men; and until Harley Davidson does something about this narrow market, it could well find itself being overrun by Japanese competition. 2. Strategic Direction and Marketing Objectives HD has selected the tactical direction to target a younger market that is technologically aware in order to augment its market in the performance cruiser market space. The new V-Rod motorcycle has given Harley Davidson a boost. To target the youth with this latest product line, the company has taken up the following marketing objectives: to develop its existing market (market expansion), branch out its product line (product diversification), and adapt its marketing combine to target a younger audience. During the 1970s, Harley Davidson faced a decline in market owing to high profile, Japanese models. However, it still managed to create a niche for itself in the market. This was done by phasing out feeble models, becoming choosier, through restrictive sales and promotions etc. Today, Harley Davidson is depending on its freshly adopted marketing objectives. First, it needs to place the V-Rod to appeal to people who are buying motorcycles for the first time. Here, its strong brand individuality comes in handy. Second, it has to set a proper marketing mix that appeal to a younger consumer base. It can successfully deploy the low end approach; in other wards attract a young audience through a low price tag. 3. Marketing Mix Elements The Harley-Davidson Corporation has found manifold ways to put its promotion strategy into practice. Harley Davidson's main promotional tool has been the HOG, since 1983. The company's commercials are centred around female images. Over 90% of the bikers are males; the HOG advertising campaign has consequently been thriving for decades. Harley Davidson also uses its cafes, located in most dealerships, for promotion. However, the most important promotional tool is still the brand image of an American product. Owning a Harley stirs nationalistic senses. Harley Davidson's distribution strategy can be best explained through its website. "Harley-Davidson's dealer's are the company's life-line to our customers, with a wide variety of product offerings, dealer's provide knowledge, service, and information to riders out on the road." The networks of dealers set up by the company are placed in localities that have access to the biggest concentration of potential customers. These dealerships are employed to distribute accessories, products, and merchandise. The company also does its promotion via dealerships with marketing shows, programs, and competent public relations. 4. Timing, Return, Cost, and Feedback of the Marketing Plan Before the marketing strategy and plan is put into practice, a study of the plan's timing, its cost and return and the response involved in constantly bettering the product must be done. The best time is during buying seasons, like around demo events. These are the times that people are interested by products like V-Rod and expected to have the money to buy the product. The cost of executing the marketing plan is related to the assets involved in the research, along with the production of the V-Rod, as well as the promotion that goes into making the V-Rod known to motorcyclists and others. The best return that is desired from the execution of the marketing plan is a considerable and lucrative share in the performance cruiser market. A sizeable share in the market would be credited to the company's strategic plan of bringing in new 'low-end' buyers. This group of buyers is generally a younger demographic. The most significant facet of understanding the marketing plan is the response given by the consumer. To realize why a certain feature of the marketing mix is or is not working, consumers must be given an adequate opportunity to give their input. Harley's appeal lies more in its image than performance and fashion-driven companies are susceptible to changes of the generation. Naturally the younger people want to ride a different model to those used by old timers. They are quickly drawn to motorcycles that are anti-Harley. Sales of light sport bikes increased 90% from 1998 to 2001 (survey for 25 - 34 yr olds). Honda, Suzuki, Yamaha, and Kawasaki have a total 92% of that market. They still pale beside the thousands sold in Harley's cruiser segment. However, the youth of the country prefer sleeker machines than the Harley.3 Harley is now investing money into building new, youth-oriented models. However, making changes is complicated for a company with Harley's following. Altering its image too much is risking alienation of existing customers. The V-Rod's water-cooled engine, for instance, is a big change from Harley's customary air-cooled one, and to some uncomfortable riders an omen of more unwelcome changes to come. "The demographics are changing" though she insists the change isn't as dramatic as some have suggested. "But that doesn't mean there aren't other populations we don't want to tap into." - Joanne Bischmann, vice president of marketing at Harley 5. Harley's attempt at attracting different customers To attract the black community, Harley has started sponsoring the show of Tom Joyner, an African American radio host whose program reaches 8 million U.S. listeners. Harley is also promoting itself during the nationally televised college basketball tournament that takes over the U.S. sports calendar from mid-March to the first week of April and is also sponsoring the Roundup, the African American version of the yearly gathering of bikers in Sturgis, South Dakota. To target the Hispanic community, the company is advertising in Fuego and Hombre -- two Latin men's. To reach the female audience, it is putting a four-page insert into the magazines Allure, Jane and Glamour. Harley also hosts garage parties for women.4 Paul James, Harley-Davidson's communications manager, feels women are increasingly attracted to new models like Harley's low-seat Sportster, as these models are far easier to handle. 5 Harley has also added a section on its website dedicated to female bikers, with instructions on proper gear and how to ride securely. Harley says it was reacting to the rising popularity of motorbikes among women.6 The reasons some experts say will eventually lead to for Harley's demise are manifold: 1. Harley-Davidsons are expensive, especially compared to Japanese and Victory (American made) cruiser motorcycles. 2. Harley-Davidsons are technologically outdated. Compared to Japanese and Victory motorcycles, Harley Davidsons are outmoded and badly underperforming. 3. Harley-Davidsons do not integrate innovative designs into their motorcycles. The reasons given are classical reasons why businesses fail in the marketplace. The conditions described are also present conditions. Harley-Davidsons seem overpriced and obsolete machines from a once-glorious era. Coursework 2 Something as simple as a new package format can do a tremendous job of invigorating a mature brand or product. Generally, new packages works wonders by offering benefits that the original package did not offer, like ease of preparation, on-the-go convenience, and bigger shelf life etc.7 1. Examples of new packaging turning around old products Two examples of this phenomenon are StarKist tuna in compliant pouches, and Pringles potato crisps in single-serving cups. Putting tuna in a pouch was something StarKist started in 2000. It may seem too obvious an idea right now. However, at that time, replacing cans with pouches was simply revolutionary. The company's research showed that canned tuna's lack of freshness and inconvenient use were two major reasons consumers refrained from eating it often. The pouches on the other hand had no liquid and did not require draining. Concomitant to that, the product tasted a lot better and offered a harder texture than its canned counterpart. Furthermore, a can opener was not required. Single-serving packaging took care of a range of consumer benefits. StarKist tuna is available in 3-, 5-, 7- and 12-oz. sizes, and the larger foodservice size as well. The pouch material is a protected by aluminum foil, polyester, oriented nylon and cast polypropylene. The success of pouched tuna has been significant, and not just for the StarKist brand. Surveys reveal that sales volume for the tuna pouch segment has increased by about 12 percent of the $1.5 billion U.S. tuna group since StarKist started the trend The Procter & Gamble Co., Cincinnati, gave a fresh look and feel to Pringles potato crisps when it started to package the potato chips in single-portion cups. The product is packaged in packs of eight, 18, 24 and 32 cups. The Snack Stacks package - as it was dubbed - is noticeably different from Pringles' iconic can - the package in which the product was launched in 1971. The polypropylene Snack Stacks cups are preserved with rotogravure-printed foil lidding. A cup holds 23 g (the old composite can weighed 200 g). Quite different from the curved front of the Pringles composite can, the multipacks provide a flat, rectangular facing that offers a billboard effect for the brand while on the shelf. "(The Snack Stacks package) is really convenient for moms and fun for kids, but portion control is the driver for this package "Having the product in the cup is a great way to have that portion control. It's a bit of a dosing meter." - Jim O'Rourke, purchases group manager-global snacks at Procter & Gamble. The package was also convenient, ideal for school lunches and on-the-go snacking. Consumers duly responded as hoped. Since the product's introduction in 2002, Snack Stacks have been the most rapidly growing segment of the Pringles collection within North America, says the company. Marketers will exaggerate the positive and eliminate the negative aspects of their offering, much like a lawyer who takes one side of an argument and blows up its positives. At the same time, companies would be wise to avoid creating false images of their products. First, if consumers try the product and are disappointed with its performance, they will tell many others of their disappointment. In this case, the company gained a sale but lost a market. Second, competitors will threaten to sue a company that is trying to gain an advantage by falsifying its product's performance. So while there are plenty of techniques for exaggerating, smart firms will describe their true competitive benefits rather than over-promising and underperforming.8 2. Importance of an innovative mindset An inventive mindset is a priceless asset for the growth of any company. It is the cure for complacency as new product development, but also product revitalization. Managers will often embrace the idea that nearly all consumer product categories hold areas of opportunity for development. Sometimes they allow the mature market frame of mind to quicken business decline.9 When sales of a product are declining or flat, marketers often label that segment mature. In several firms, that term is an alternative for "dead." While some markets doubtless mature and stagnate, others undergo untimely demise because managers decide to declare them dead. Consequently, no one in a company takes the lead to be creative or to revive them, at a time when a inventive approach can help turn mature markets into flourishing markets. There are segments of the food industry that have been given new life with a dose of inventive thinking that supports the continuing trend for foods expedient to eat and easy to eat on the go. Spine food companies, as a matter of fact, have a primary idea screen of "can it be eaten with one hand" General Mills is a company that concentrates on building expediency and transportability into most of its new products. Its Gogurt yogurt stick promotes on the-go snacking, as it is enclosed a handheld tube. Columbo yogurt is more convenient to eat at home or on the go as it has a two-piece plastic spoon on lid's bottom. Honey Nut Milk 'n Cereal Snack Bars allow consumers to enjoy milk and cereal minus the bowl. These snack bars are real milk and offer the nutrition of a bowl of milk and cereal within a handheld, transportable snack bar. Uncle Ben's Rice Bowls make eating an enjoyable rice dish quick and easy with different varieties in microwaveable and throwaway bowls. A creative mindset is the key to revitalizing mature markets and bringing about successful new products. A company had to pursue product innovations or else it will decline and get crushed. A University of Illinois study reveals that leaders in an industry acquire 50% of sales from products that were introduced within the past five years, compared to 11% for companies in the last third. 10 3. Stopping the decline It is possible to put off the decline of a product by deploying several strategies: 1. Increasing promotion 2. Improving the product - adding features and benefits, which will make it seem different from the original product. 3. Introducing variations and add-ons - giving a greater choice of purchasing options 4. Broadening the market place (finding new market).11 References Read More