Marketing for Harley Davidson, Inc - Business Plan Example

Marketing Plan for Harley Davidson, Inc Marketing Plan for Harley Davidson, Inc Executive Summary The following marketing plan isaimed at increasing the net revenue Harley Davidson in the next financial year by attaining the following goals; increase the domestic net shipment to 65% of the total global shipments, increase the global net shipment to 275,000 units, expand membership of Harley Davidson Owners group and improve the brand community loyalty. The plan also outlines plans to expand global market share by opening new dealership stores in emerging markets. The marketing plan outlines marketing strategies to be utilized in order to achieve the above goals. Marketing segmentation in the Asian region and within the US is very significant. Japan and India have become very strong markets with Harley Davidson being the leading heavyweight motorcycle manufacturer in Japan. In the American market, there is a significant shift in customer base as we are seeing a new group of clients like women, African-Americans and young adults showing more interest in the motorcycles. Specific marketing strategies have been outlined on how to capture these groups. Heskett (2012, p. 105) says the advantage of new customers is that they tend to buy more and sometimes go for premium products. They also represent a source of more referrals for new customers. Situation analysis Harley-Davidson is the largest heavyweight motorcycle manufacturer in the America. The companys strategy has been to focus primarily on Harley-Davidson brand, expand its global market, attract new customers within the U.S and transform the manufacturing, product development as well as retail capabilities. During the last financial year, diluted earnings per share rose by 18.3%, while the net income rose by 15%. The rise in the net income went above $6 billion for the first time since 2006. The dealers from all over the world sold 267,999 new motorcycles which was a 2.7 rise from the previous financial year. This was mainly because of its 5.4% percent rise in the international sales. The companys gross margin increased to 36.4 % whereas the operating margin increased by 18%. Dividends to the shareholders increased by 31% while the same time, the company was able to repurchase $604 million in shares of the company stock based on discretionary. The company had a slight increase in its domestic sales to outreach new customers which comprise of men, young adults, women, African-Americans and Hispanics. International retail sales grew above 5% and contributed to more than 36% of total retail sales. Dealers within EMEA, Asia-Pacific and Latin America regions recorded highest new retail motorcycle sales. In Asia Pacific, China, New Zealand, India, Australia and Asian emerging markets recorded their best year ever. Sales in the Indian market doubled from the previous year and this is mainly because of the availability of Street. In Japan, the company regained the number one market share place making it the second largest market globally. In the last financial year, the company struggled with its sales with a slight increase of 1.1%. Nonetheless, the motorcycle shipment within America rose by 8.9%. This struggle can primarily be related to the low demand of heavyweight motorcycles due to the consumer spending falling, the unusual cold winter and the contraction of the American GDP by 2.1%. Currently, Harley-Davidson has over 1,460 independent dealers in over 90 countries globally. Out of these, 18 were added in 2014. This is a step in line with its plan to expand its market share. As a means of creating new customers, the company has established riding academies in America and other countries like China. In 2014, the academy in US trained more than 39,000 students with the rest of the academies training more than 500 students. The company has new 2015 model lineup for the project RUSHMORE bikes; Electra Glide, Freewheeler, Ultra Classic, CVO, Street Glide, Ultra Limited Low and Road Glide. The return of the Road Glide in the US market is estimated to boost the companys domestic sales as this model is a favorite to many. The street motorcycles sales are also expected to increase in the coming financial year. The combination of these two factors could see an increase of 6% in its motorcycle volumes in the US. Consequently, if the motorcycles volume in US will be able to get to 64% of the net shipment like it did in 2013, then net shipment for the company would go beyond the current estimations of around 275,000 units by almost 1,000. In the current financial year, the company is estimated to generate $890 million net income, with the US generating highest revenue of about $2.9 billion in motorcycle sales. Europe motorcycle revenue is estimated at %776 million and the rest of the markets estimated at $875 million. The company’s diluted earnings for each share are estimated to rise to $ 4.28 and the total revenues at $6.54 billion. The net revenue is estimated to be $6.54 billion. Products and Services Motorcycles Our main product is the Harley-Davidson heavyweight motorcycles. With the introduction of seven new models to the project RUSHMORE, the company currently sales 39 models of motorbikes that target different customers and market. The 39 models have been divided into eight model families which are; Harley-Davidson Street, Sportster, Dyna, Softail, V-ROD, Touring, CVO and Trike. The motorcycles from Harley-Davidson have been embraced by the majority of the market due to its long times sustained brand community. Most of the clients have been returning customers who have been using the motorbikes for years. Nonetheless, new customer base is built each day. As the leading manufacturer of the heavyweight motorbikes, the current market is able to get the best in terms of quality and expertise. The market will also need these motorcycles because of other related services offered by Harley-Davidson. The availability of financial services as well as parts, accessories and merchandise are added advantage to our clients. Currently, people in the market not using Harley Davidson motorcycles are using heavyweight motorcycles from Ultra Motorcycle Company Inc, Viper Motorcycles Company among others. HDI customization Harley-Davidson offers customization services to clients at an affordable fee. These customizations range from fitting of parts, improving and boosting of the functionality of the motorcycle, general style and appearance. Other customization services offered are manufacturing of customized motorcycles in accordance to the clients specifications and preference. There are few companies offering these services. Harley Davidson offers a more personal touch to the motorbike. Riding academy The company offers riding courses for its new clients or those who want to improve their riding skills. The courses have been dividing into new rider’s course and skilled rider course. The company also holds motorcycle boot camps for the trainees and loyal clients. The riding academy is done by well trained and experienced personnel that cannot be accessed anywhere else. Parts, Accessories and Merchandise Genuine and original parts are also supplied to the users of Harley Davidson motorcycles by the company. There are also branded merchandised such as clothing, helmets and boots for sale. The branded merchandise help the customers is part of the brand community. The parts and accessories found at Harley Davidson are of high quality and genuine. Most of people in the market use imitations from other companies. According to Black (2011, p. 95) after manufacturing and launching a product, the manufacturing usually analyze the product identifying a weakness and come up with improved spare parts. This is why it is important to buy parts from the original manufacturer. Harley-Davidson Financial Services As a way of helping clients acquire the right product and the product they desire, the company offers financing to customers who want to buy from the company. These financial services are offered in USA and Canada. This service is also available to dealers who might be having financial constraints. The rates charged for the financing is favourable and most people can afford it. Most of the clients depend on loans from banks and other financial institutions for this service. Business statement Mission Harley Davidson focuses on five major operations; manufacturing of heavyweight motorcycles, sale of parts, accessories and merchandise, customization of motorcycles, riding courses through riding academy and financial services to clients and dealers. There is a need for customer to have a unique lifestyle as well as quality motorcycles. There is also need for quality and genuine parts for the motorcycles we sell to the clients. Many clients prefer to have their items branded and customized in their preferences and liking. Through our customization services, the customers get the freedom to choose the style they love most. There are many financial constraints and this is solved by offering financing to clients who want to purchase the motorcycles but in one way or another they are not in a position to do that. According to Scott (2008, 148) Harley Davidson Financial Services (HDFS) operates under the name Harley Davidson Credit and has helped dealers and retailers from Harley Davidson as well as Buell in their operations. Harley Davidson Insurance has been offering motorcycle insurance policies and debt protection for people who buy bikes. Key Market The products and services offered by HD target all people ranging from young adults, women, African-Americans as well as Hispanics. Over the past years, majority of the clients have been white males who are over the age of 35 years and who earn over $80,000. Times are changing and slowly the target market is diversifying. Distinction Harley Davidson has lifestyle as its unique selling preposition. Anybody who buys products from Harley Davidson is viewed to have a unique lifestyle. There are other distinctive features like the strong community (Harley Davidson Owners group) with intensive consumer dialogue. The designs of the motorcycles are also unique with a recognizable engine sound. Marketing Objectives Increase the domestic net shipment to 65% of the total global shipment Increase the global net shipment to 275,000 units Expand membership of Harley Davidson owners Group by 20% Improve brand community loyalty. Target markets and segments America Europe Asia-Pacific Latin-America America is the largest market for HD. In recent years, we have witnessed significant and drastic shift of customers from the typical white men of the age of 35 year and above. Other groups have become regular customers. These target groups are Women, Young adults, African-Americans and the Hispanics. a) Young Adults - 18 - 34 years of age. Bought four times more of new on-road motorcycles 601 cc+ than closest competitor b) Women - 35 year and above. Bought nine times more of new on-road motorcycles 601 cc+ than closest competitor c) African-Americans -35 years and above Bought six times more of new on-road motorcycles 601 cc+ than closest competitor. d) Hispanics- 35 year and above Bought seven times more of new on-road motorcycles 601 cc+ than closest competitor e) Men of 35 and above - Bought nine times more of new on-road motorcycles 601 cc+ than closest competitor. In Asia, India and Japan have been key markets. Japan is the companys second largest market. The Street motorcycles had highest sales in India than any other area. We intend to focus on these three key areas. Market Research There are few heavyweight manufacturing companies that have strong brand community like Harley Davidson. The number of loyal customers continues to grow and this has led to high demand of our products. Being the leading manufacturer of heavyweight motorcycles in the U.S, the companys brand has been associated with a unique lifestyle for people who own the motorbikes. More and more now want to be associated with the same lifestyle. Motorcycles from Harley Davidson have a unique design compared to the rest of the manufacturers. The motorcycles have a recognizable engine sound. The company has wide range of accessories that may be of an added advantage to the clients who opt to buy the motorbikes. The fact that the company also offers customization services ensures that the clients have a choice of diversity as well as uniqueness. They are able to choose the designs they prefer most. Through Harley Davidson Credit and Harley Davidson Insurance, the customers will get the motorcycles they want by being financed. SWOT analysis Competition The company is facing competition both with the domestic market and on the global market. The following are the main competitors. Ultra Motorcycle Company Inc. Triumph Motorcycles limited Viper Motorcycles company Honda Yamaha Suzuki Kawasaki The last four brands have been a great completion especially in Japan. These are companies originating from Japan and they have been giving HD a very high competition. Nonetheless, HD is the leading brand in Japan. HD has been keen on the following factors to ensure the company stands out despite the competition. Established an intense consumer dialogue Strong brand community Strong loyalty through Harley Davidson Owners group Great American heritage and culture Positioning and branding We aim to make the HD motorcycles fashionable and relevant to all age ranges from the youngest to the oldest. By making the motorcycles fashionable, people will try their best to acquire one in order to be seen as having the latest trend. For a long time, the motorcycles have been associated to men of 35 years and above. We aim to capture all ages and gender. In recent years, more women have been purchasing motorcycles and this is encouraging. The above branding targets will be achieved by offering financial assistance through Harley Davidson Credit. Financial services will be made more flexible to young people who are mostly challenged financially. The service will also be made more accessible to women. In order to make the motorcycles more fashionable, we will have an endorsement with two major celebrities. One will be a musician and the other a sports person. The endorsements will be gender sensitive where either of the celebrities will be a woman. This will help us win more female clients. According to Knowles, Diamantis and El-Mourhabi (2004, p. 98) celebrity endorsement can aid the development of a brand image, efficiently assist the development of brand equity, and also strengthen the brands competitive position. Marketing Strategies Advertise the re-introduction of Road Clide in the American market in order to increase the net shipment in the country. Increase the number of dealers in other parts of the world in order to increase the net shipment. Introduce special offers on parts for members of the Harley Davidson Owners group in order to attract new members Increase the number of events by 15% in order to improve brand community loyalty. Market Tactics 4 P’s Product: Harley Davidson Motorcycles Price: $19,000 - $40,000 Promotion: TV commercials, brand endorsement, billboards, online, events, brand endorsement. Place: Wisconsin, North Dakota, New Delhi, Mumbai, Alberta, Gauteng, Tokyo, Product: Harley Davidson Merchandise Price: $100 - $5,000 Promotion: TV commercials, brand endorsement, billboards, online, events, brand endorsement. Place: Wisconsin, North Dakota, New Delhi, Mumbai, Alberta, Gauteng, Tokyo, Product: Harley Davidson customization Price: $5,000 - $50,000 Promotion: TV commercials, brand endorsement, billboards, online, events, brand endorsement. Place: Wisconsin, North Dakota, New Delhi, Mumbai, Alberta, Gauteng, Tokyo Product: Harley Davidson parts and accessories Price: $50 - $5,000 Promotion: TV commercials, celebrity brand endorsement, billboards, online, events. Place: Wisconsin, North Dakota, New Delhi, Mumbai, Alberta, Gauteng, Tokyo Budget Marketing Tactic $ Budget % of Total Marketing Budget TV commercials $100,000 10% Celebrity brand endorsement $600,000 60% Billboards $100,000 10% Online $100,000 10% Events $100,000 10% Total $1,000,000 100% Monitoring of results a) Advertisements and commercials done through the TV will be monitored through the website. The commercials will direct the viewers to the website for special offer if they indicate the time they saw the advertisement on the TV sets. b) The effect of celebrity brand endorsement will be monitored and analyzed by the number of new customers within the period of endorsement. c) The billboards will be placed in different cities and different locations. By analyzing the location of the customer, we will be able to know whether the billboards in such locations were effective. d) Online marketing and promotion will be monitored by the number of orders made though online stores and also the traffic to the website and social media platforms. e) Events will be monitored by the number of people in attendance and the trend of sales in weeks to follow after the event. Execution calendar Activity Due Date Manufacturing of motorcycles complete, parts and accessories, merchandise and set up of customization plant Early-May Sales Meeting Early-May Celebrity Brand Endorsement agreement Mid-May Press release about the endorsement Late-May. TV commercials, Billboard, Online marketing Early-June. Event publicity Early-June Product launch Late-May. References Black, A. (2011). Unofficial dyson dc07 workshop manual: All you need to know to perform any diy repair to your. S.l.: Scruton Publishing Co. Bottom of Form Top of Form Scott, M. (2008) Harley-Davidson Motor Company Westport, Conn: Greenwood Press Bottom of Form Top of Form Knowles, T., Diamantis, D., & El-Mourhabi, J. B. (2004) the globalization of tourism and hospitality: A strategic perspective. London: Thomson. Top of Form Heskett, J. L. (2012). The culture cycle: How to shape the unseen force that transforms performance. Upper Saddle River, N.J: FT Press. Bottom of Form Read More