It?s One Thing for People to Buy Your Product or Service, but It?s Another for Them to Tattoo Your
William Harley and Arthur Davidson, both in their early twenties, built their first motorcycle in 1903. During their first year, the company's entire output was only 1 motorbike; however, by 1910, the company had sold 3,200. Movies such as Easy Rider made Harleys a cultural icon and soon the company attracted people who loved its bad-boy mystique, powerfulness, rumbling voice, distinctive roar, and toughness. It sounded like nothing else on the road, and even Elvis Presley and Steve McQueen longed to ride one.
The Harley-Davidson Motor Company has had its ups and downs, and at times, the downs seemed as if they would end in bankruptcy. In the sixties, Honda, Kawasaki, and Yamaha invaded the American market, and when sales at Harley-Davidson dropped drastically due to decreasing quality and increasing competition, the company began to look for buyers and was finally sold. However, the new owners of Harley Davidson knew little about how to restore profitability. The quality became so bad that dealers had to place cardboard under bikes in the showroom to absorb the oil leaking.
Daniel Gross, in Forbes Greatest Business Stories of all Times, recounts how in 1981, with the aid of Citibank, a team of former Harley-Davidson executives began negotiations to reacquire the company and rescue it from bankruptcy. Among these executives was William Davidson, the grandson of the founder Arthur Davidson. In a classic leveraged buyout, they pooled $1 million in equity and borrowed $80 million from a consortium of banks lead by Citibank.
Harley's rescue team of loyal executives knew that the Japanese motorbike manufacturers were far ahead in regard to quality management, and they made a bold decision to tour a nearby Honda plant. Paradoxically, the Japanese had learned Total Quality Management from the Americans, Edwards Deming and Joseph Juran. The new business concept outlined by these two pioneers was a new management approach that, interestingly enough, had been rejected by American manufacturers. As a result, they offered this approach to Japanese manufactures that were eager to learn and implement it. Therefore, soon after their tour of the Honda plant, the Harley Davidson Motor Company decided to put into practice this originally rejected approach.
After implementing just-in-time inventory (JIT) and employee involvement, costs at Harley had dropped significantly; this meant that the company only needed to sell 35,000 bikes instead of 53,000 in order to break even. Their lobbying at Washington also helped, and import tariffs were raised temporarily from 4 to 40 percent on Japanese bikes. This extra breathing space was something that the U.S. motorbike company desperately needed for its recovery.
The combination of visiting a Japanese motorbike manufacturing plant and lobbying in Washington for import tariffs was a daring move on behalf of Harley's executives in their attempt to bring back profitability and growth to the company. Another important strategic move was the company's unique marketing and branding campaigns. Studies showed that about 75 % of Harley customers made repeat purchases, and executives quickly recognized a pattern that refocused the company's overall strategy. Simply put, they needed to find a way to appeal to the extraordinary loyalty of customers, which they found in creating a community that valued the experience of riding a Harley more than the product itself.
The sponsorship of a "Harley Owners' Group" has been one of the most creative and innovative strategies that has helped create the experience of this product. Without realizing it, Harley executives had pioneered a new paradigm that would be increasingly embraced by other industries in their quest to increase profitability by converting their product into an experience. The company started to organize rallies to strengthen the relationship between its members, dealers, and employees, while also promoting the Harley experience to potential customers. The Harley Owners' Groups became immensely popular; it allowed motorcycle owners to feel as if they belonged to one big family. In 1987, there were 73,000 registered members, and Harley now boasts to have no less than 450,000 members.
In 1983, the company launched a marketing campaign called SuperRide, which authorized over 600 dealerships to invite people to test-drive Harleys. Over 40,000 potential new customers accepted the invitation, and from then on, many customers were not just buying a motorcycle when they bought a Harley; instead, they were buying "the Harley Experience."
Harley-Davidson offered its customers a free one-year membership to a local riding group, motorcycle publications, private receptions at motorcycle events, insurance, emergency roadside service, rental arrangements on vacation, and a host of other member benefits. Branding the experience, not just the product, has allowed the company to expand how it captures value, including a line of clothing, a parts and accessories business, and Harley-Davidson Visa card.
If you were to scan the list of companies that delivered the greatest returns on investment during the 1990s, you would discover Harley-Davidson. Only a few companies have been successful in inventing entirely new business models, or profoundly reinventing existing ones. Harley-Davidson went from supplying motorcycles to antisocial raiders to selling a lifestyle to the aging bad boy wannabes caught in their midlife crises. Traditionally, Harley-Davidson bike owners came from the working and middle classes, but as quality and prices of the bad-boy-bikes rose, and with energetic marketing, the company soon attracted a different class of buyers-currently one third of Harley buyers are professionals or managers, and 60% are college graduates. The new customer segments of Harley are the Rolex Riders or the Rich Urban Bikers. Hell's Angels do not run in the same group anymore. Now there are groups of accountants, lawyers and doctors. Women also account for a significant portion of the new riders, and there are women-only riders clubs spreading all over the globe.
The future looks bright for the U.S. motorbike company. According to The Economist, overall U.S. sales increased over 20% in 2000, and more than 650,000 new motorcycles were sold in the U.S. in the same year, up from 539,000 the year before. Bike buyers spent an estimated $5.45 billion on new bikes in 2000.
Stay alert and get it early. The new branding paradigm is to sell a lifestyle, a personality and it is also about appealing to emotions of your customers. Increasingly, it will be more and more about creating an experience around the product. Brand managers and executives will need a new set of lenses. The rules have changed as well as the opportunities to maximize profitability and create value in the process. Nonetheless, the majority of companies continue to follow traditional ad campaigns and they seem to ignore the fact that the media has fragmented into hundreds of cable channels, thousands of magazine titles and millions of Internet pages.
Consumers are no longer sitting ducks for commercials; they are looking for new experiences. Whether it is the bad-boy-aura of the Harley riding experience, the exquisite coffee experience in Starbucks cafés, or the active participation in Net communities, more and more companies will need to follow these early new branding pioneers. They will need to look into the dynamics of their relationships with customers and the nature of their interaction. They will need to ask themselves some serious "out-of-the-box" questions if they want to move with the shifting value that is the result of constantly changing market conditions.
Branding has changed and so have marketing and advertising campaigns. New variability, heterogeneity where there was once homogeneity, newly emerging stratifications of wealth, new preferences, and new life styles are all characteristics of the 21st century customer that are here to stay. We better get used to it, at lease until the next paradigm is discovered. Remember, the companies that are creating new wealth are not just getting better; they are becoming different-mind-bogglingly different!
Bedbury, Scott. A New Brand World: Eight Principles for Achieving Brand Leadership in the 21st Century, Viking Press, 2002.
Gross, Daniel: Forbes Greatest Business Stories of All Time, John Wiley & Sons, 1997.
Hamel, Gary. "Innovation Now," in Fast Company (http://www.fastcompany.com/online/65/innovation.html), December 2002
Kotter, John P., Leading Change, Harvard Business School Press, 1996, pp. 4 ? 14.
Teerlink, Rich, and Ozley, Lee: More Than a Motorcycle: The Leadership Journey at Harley-Davidson, Harvard Business School Press, 2000. Young, James Webb. Technique for Producing Ideas, McGraw-Hill, p. 14.
Josef Schinwald is consultant in Performance Measurement and professor in Business Strategy at the University of Belgrano, Buenos Aires, Argentina, and his didactic material must not be replicated without the given permission to do so. Copyright © 2003-2005 Business Design Innovation. Josef is also owner of ValueQuest, LLC, a e-commerce business, and you can visit his sites at My Motorcycle Leather http://www.my-motorcycle-leather.com and Stylish Wedding Favors http://www.stylish-wedding-favors.com.
People Are Crazy... and Everyone Is A Racer
?And everyone is a racer. If you doubt that, you've obviously never driven in New York City during rush hour. Look closely at the driver of that Japanese luxury car. He's just as miffed as you the racer is at having to drive fifty-five miles per hour when the speedometer on the car clearly reads one hundred and fifty. Why can't we drive it at that speed if the car can come close to it. Man, just look at him fiddling with the knobs pretending to be tuning the radio into a station. We racers know what he is really doing is setting the frequency of his imaginary laser beam roadblock remover system. You know the ones; they make little bomb sounds as we pretend we are obliterating our foes on the drive home.
Ride Hard - Hydrate Harder
This summer is showing all of the signs of being a hot one. Temps have already been hitting the 100's here in the Midwest. With that kind of heat we have to remember that when we are out there riding, we are at it's mercy. When you're riding the possibility of get dehydrated and hot is substantially increased. Between the heat and the wind it can really zap you. This is especially true if you are taking long trips. I know this first hand. A couple of years ago I went on a ride from St. Louis Mo to Eureka Springs Ar. This was not an exceptionally long ride ( a little over 300 miles), but it was hot. I started the day off just fine. Got a good early start with the rest of the group. By lunch time the temps had hit 100 solid and the humidity was pretty close to the same. We ate lunch and started out again. For about an hour I was keeping up ok, but then I lost the group. They just seemed to vanish on me. I didn't realize it but it was me who'd got lost. Two more hours of driving around and one of the guys came up beside me. He later told me I was only going about 20 miles per hour and was wobbling all over the road. Luckily he forced me to pull over at the next gas station and stop for awhile. That night I was sick as a dog. Couldn't hold any food down, suffering from chills, and severe cramps.
Motorcycle Tires - Why Should You Care?
One of the most important parts of any vehicle is its tires. Not only are the tires subject to a large amount of wear and tear, but also their durability depends largely upon how you maintain them. But before we go into the details of motorcycle tires maintenance, let us first understand how you should determine which tires are best for you.
So You Want To Be A Custom Bike Builder? Start With A Motorcycle Kit!
So you want to be a custom bike builder? Well friend, before you rush out and buy that motorcycle kit, the one that will set you on the road to riches and fame, stop and think about the level of expertise and artistry the top builders have attained. More importantly think about how long it has taken them to attain it! Let's look at a few key issues?
Honda Super Cub and 50cc Honda Cub - The Volkswagen Beetle of Motorcycles!
A very clever design: the Honda Super Cub was the combination of a moped and a scooter. It attracted many people due to its friendly and non intimidating look. People who before had felt threatened by bigger motorcycles, approached and adopted this model very quickly.
Motorcycle Protective Clothing That Works!
There is some great looking motorcycle clothing on the market these days, but believe me not all of the motorcycle clothing offers as much protection as you think. In Europe, for motorcycle clothing to be lawfully sold as "safety" clothing, it has to pass a series of European standards, which are pretty lengthy but are available on my website. The standards cover the clothing's performance in abrasion, tearing and impact tests, and when they have passed; they are sold with the CE mark. However, no such regulation is available in the USA, so what should you look for?
Necessity of Motorcycle Parts
If you are one of the many people who consider your bike as invaluable as your family, then we know you're head over heels. We may be judged heavily for this perception but you might even be willing to dump your partner just so you could spend time riding and caring for your bike? though, we hope you are not that obsessed.
Frame Slider Design and Selection
Call them crash protectors, crash bobbins, fairing protectors or frame sliders, all these products ultimately seek to do one thing - protect your expensive bodywork or the essential and often expensive structural parts of your motorcycle from damage in the even of a fall or tip-over. The frame slider concept is as old as the proverbial 'crash bar' and today there are as many designs and brands as there are models of bikes. The proliferation of these types of products testify to the success of the idea of providing a sacrificial item to absorb some of the damage in the event of a fall. We are by no means experts on this concept nor were we the first to come up with it, but in this article we hope to provide you with an unbiased view so that you can make an informed decision when you're ready to put down your hard earned cash.
Motorcycle Suspension Setup: Getting to Grips with a Black Art
Suspension Set-up: The basics
Motorcycle Parts - OEM or Aftermarket ?
This is always a difficult one to answer when shopping for motorcycle parts and I firmly believe that each one of us must decide what's best for our bikes AFTER carefully evaluating each of the possibilities.
Mini Moto Tips
These are some quick adjustments and tips for the B1 liquid cooled minimoto that I have found helpful.
Mini Moto Mayhem
Mini Motos have been around in the UK for around ten years now. The first bikes we're cobbled together with parts that were already available. Small 2 stroke engines, mainly from garden machinery, were used. This type of engine is still used today for a few models and is referred to as an 'industrial' engine. But now the mini moto has been given an overhaul and has taken off in popularity.
Save Money on Used Motorcycle Parts
For every motorcycle enthusiast, it is indeed very taxing to maintain bikes as good as new ? its engine running and all its other parts functioning. We know for a fact that it's not only for the sake of transportation but also for a little satisfaction of our vanity ? seeing everyone admire us, atop an excellent piece of machine. Like any road going vehicle, a motorcycle's performance is based on the smooth running of thousands of parts, large and small. It is a nuisance indeed to find some faulty parts on a vehicle and prevent owners from enjoying its full use.
Workings of a Motorcycle Muffler Suspension
Motorcycles are becoming more popular because of its convenience and relatively inexpensive cost compared to automobiles. They are capable of the same speeds as cars and can also be licensed for use on public highways.
Kids Like to Ride Motorcycles Too
Roaring up on a motorcycle has a strong draw for all of us who have adopted the biker lifestyle. This draw often hits our children too. I know that for me my kids love to ride and probably want to do it as much as I do. I love taking them for rides and sharing the experience with them. But there are some additional considerations that have to be taken into account when loading them on the back of your motorcycle.
Yamaha Motorcycles - Creativity and Spirit of Challenge
"If you are going to do something, be the best" Ginichi Kawakami, Yamaha Motor Company First President.
0 to 60 in 4.5 Seconds
Speeding is illegal, yet we sell racing motorcycles and cars which are so powerful and look so intimidating that a police man could write the owner a ticket even if it were parked. Take today's crotch rocket, nearly all of these motorcycles can barely get out of second or third gear going sixty miles per hour. We complain when our teenagers drive these bikes like they are meant to be driven. Silly of us to think that anyone is going to drive these bikes and never speed?
Liquid Cooled Minimotos (PocketBikes), How Fast Are They and Are They Affordable?
As the latest craze of Minimoto Madness continues in the United Kingdom. The demand for pocket bikes means that the consumer is now looking for more better quality products which are not only affordable for the average earner but also produce great horsepower and fast speeds.
Motorcycle Helmets - Mind Your Head!
To most riders, motorcycle helmets do not fit into their dream accessory. They feel helmets are restrictive and unnecessary and do not add to their aesthetic appeal. But it is important to know why you need to wear a helmet while riding a bike and what it does for you.
Online Shopping for Motorcycle Accessories
When shopping for a certain item and material, the way to do it is to shop like a woman. Who else knows how to shop till they drop but women, right? Isn't it that husbands, partners, spouses and lovers often complain about the amount of time and the energy given to shopping by their women even for just one item they need?
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