Nacho Chesse

As many enthusiasts may describe it, the pride of owning a Harley-Davidson is the pride of owning an 'American Icon'. Harley-Davidson's (HD) positioning strategy can best be defined by its mission statement: "We fulfill dreams through the experience of motorcycling- by providing to motorcyclists and to the general public an expanding line of motorcycles, and branded products and services in selected market segments." Now in its 100th year, however, the ideal of owning an 'American Icon' has slowly dwindled out of the public's mind, due mostly to the competition from Japanese manufacturers like Honda and Yamaha. HD's strength's of its powerful brand image, maintaining good customer relationships, strong financial position, and superiority of technology and design are hindered by its weaknesses related to product capacity and unfulfilled demand for their products2.

Strategic Direction and Marketing Objectives

HD has chosen the strategic direction of targeting a younger market that is technologically conscious in order to increase its share in the performance cruiser market space. With the introduction of the new V-Rod motorcycle, HD is in a position of attaining a sizeable share in the performance cruiser marketplace. To target the younger market with the new product line, the company has adopted the following marketing objectives: to expand its current market (market expansion), diversify its product line (product diversification), and modify its marketing mix to target a younger demographic.

During the 1970's, HD was facing a decline in market share due to increased competition with Japanese companies. By phasing out weak models, becoming more selective, and limiting sales and promotions, HD was able to carve out a niche in the marketplace which it enjoys today3. Now again faced with a period of decline, HD is relying on its newly adopted marketing objectives. First, HD needs to expand its potential customer base to include enthusiasts and non-enthusiasts males in the 35-44 age group. (INSERT MEDIAMARK DATA HERE) This is accomplished through the introduction of the V-Rod and positioning it in the market to a younger demographic. Secondly, HD needs to position the V-Rod to also appeal to first time buyers of motorcycles. HD's strong brand identity can help pull in new clients. Third, HD has to set an appropriate marketing mix that will help attract a younger consumer base. By using the low-end approach, which involves attracting a young audience to a brand name product with a low price tag (similar to what Jaguar and BMW have done), HD can expand its popularity to the domestic and international market.

Marketing Mix Elements

For Harley-Davidson's marketing objectives to be successful, the company has to implement the four elements of a marketing mix for the V-Rod. These four elements are strategies that involve the product, pricing, promotion, and distribution.

The product strategy is any decision that helps the company continue to develop new products around its signature American image and positions the company in the market as such. The main reason for the introduction of the V-Rod was the need to create a bike that would appeal to a younger demographic and attain a greater market share for the company. By using the low-end targeting method (as discussed previously) with the introduction of the V-Rod, this can be considered HD's first step toward implementing its strategic and marketing objectives.

As for the pricing strategy, HD must be careful to implement a pricing decision based on the low-end targeting method. Priced at $17,000 MSRP, HD's V-Rod has the second highest price tag in the performance cruiser market. Although HD does have a 22% share of the total market, HD's pricing strategy has three main factors that have influenced how it has priced the V-Rod: 1) the used motorcycle market, 2) lower priced motorcycles, and 3) HD's inability to keep up with demand4. In order for HD to attain a greater market share, the company must examine how these three factors will continually play a role in pricing and adjust accordingly.

The Harley-Davidson Corporation has found multiple ways to implement its promotion strategy. HD's primary promotional tool since 1983 has been the HOG. The company's advertisements and commercials are focused around female images. Since 93% of bikers are males, the HOG advertising campaign has been successful for decades5. HD also uses another strong promotional campaign through its cafes, located in most dealerships.