Situational analysis

Harley Davidson. an international bike company. started out as a little three adult male operation in 1903. by the Davidson brothers and William Harley fabrication heavyweight bikes. This included fiscal services for the minibikes. accoutrements and branded dress. It experienced great success during both World Wars. and managed to last the seeking times of the Great Depression. After World War II. Harley Davidson trade name Begin to construct on the image of the V-twin cylinder engine established in the 1920’s by switching from fabricating military motorcycles to recreational 1s. During the 1970’s and 1980’s Nipponese competition about destroyed the company. Rivals introduced technological advanced motorcycles at a lower cost due to mass production. Technological progresss and economic sciences of graduated table and efficiencies made competitor’s merchandises superior in some cases. Harley responded by a re-evaluating its selling scheme centered on a lifestyle image.

This included a re-organization and trade name edifice plan. including the Harley Owners Group ( HOG ) . Harley Davidson was able to re-capture its market portion. It established these groups along with better client service that helped it set up itself as a dominate company in the minibike industry. It had a differentiated focal point and assorted mark markets as the environments changed. It was positioned efficaciously as a manner of life with a sense of freedom as opposed to selling the best minibikes. The selling runs focused more on the life style associated with the merchandise and worked on its societal image. The selling squad used distinction to make more consciousness of the merchandise by reenforcing Harley from a psychological position as a symbol of freedom. developing and keeping relationships.

Harley Davidson South Africa was established in 1996 and has prospered due to really high one-year growing rates. It succeeded as an emotionally goaded trade name. one that clients choose for a sense freedom. biker image or as a position symbol. It is this affectional response that Harley Davidson capitalizes on in its selling scheme and that is re-enforced with the Harley Owners Group magazine. events and the international client rental service. Despite the company’s success it faces some alone challenges. Presently all ware is imported from the U. S. A. . as a consequence pricing determinations are debatable comparative to rivals. Harley continuously evolved its trade name but lacked focal point on black approaching consumer ( black diamonds ) and on adult females ab initio. It will necessitate to make some valuable market research and find the best manner frontward with really careful execution of the scheme to outdo mark black diamonds and increase growing in this ‘untapped’ . high disposable income market.

1: Merchandise Policy

Merchandise Policy is defined as “A strategic regulation or regulations covering how a good or service is promoted to possible consumers” ( Kotler and Keller. Year! ) . Harley-Davidson has since grown from one franchise to seven independent franchises between 1996 and 2007. Harley merchandise policy was to concentrate more into customers’ demands instead than the company. this is the scheme that was introduced in the early 1980’s and was later implemented in South Africa. These customer-orientated services have differentiated the company from rivals. in the heads of clients in South Africa as it was approximately image. sense of Freedom and position. This aid in disregarding the myth / repute of its “bad boy” image. This was seconded by the gender split of 28 % female and 72 % of male’s riders in South Africa. Harley South Africa set out to advance Harley’s into females who are independent with high salary income as the new market section ; the scheme was to handle them as peers and as proprietors in their ain right. Post 2007. the merchandise policy changed to “Black Diamonds” with an attempt to pull and increase the black market into Harley riders.

Their selling scheme was different as it had done really small above the line advertisement. traders were given freedom to find their ain promotional activities modified to their ain client’s demands and demands. Categorization: Forte goods – Customers are willing to do an drawn-out hunt to happen Harley and in some instances. might be willing to go 20 or 30 KM to happen the motorcycle. “Marketing mix” is a general phrase used to depict the different sorts of picks organisations have to do in the procedure of conveying a merchandise or service to market. The Product which is one of the 4P’s is used in specifying the selling mix and is categorized into 4 pillars viz. Product Mix ; Product Design ; Product Development and Product Life Cycle ( Kotler & A ; Keller. 14th Edition )

1. PRODUCT Mix:

Merchandise policy lies at the bosom of the selling mix and encompasses all qualitative facets of the merchandises offered. Product-mix refers to the scope of merchandises offered by an establishment. Offer merchandises that are valued and demanded by clients is cardinal to the success of Harley in South Africa.

2. PRODUCT DESIGN

The end of merchandise design is non to make a different merchandise to fulfill every possible client demand. Harley should plan merchandises that respond to several different demands with merely a few variables. Product design variables must be appropriate for the markets that the Harley has decided to aim.

3. PRODUCT DEVELOPMENT

Merchandise development is the procedure of continually polishing client-oriented merchandises. It includes several stages. such as researching client demands. testing thoughts. evaluating merchandises through pilot testing. revising merchandise design based on the consequences and eventually. establishing the merchandises. All of these stages are intertwined.

4. PRODUCT LIFE CYCLE

Below is the sum-up of the four stages of the Harley merchandise life rhythm which include debut. growing. adulthood and diminution.

Core Benefits of having a Harley:

* Harley members have an enduring relationship built on trust and dependableness supported by good service and meaningful advice as most of the riders particularly females had no proficient capablenesss of some of the riders. * Become portion of the Harley household which include meeting with concern associates. portion a cup of java with new riders and besides talk to a friend. This has made most riders to hold a “sense of belonging” . * Harley offer in-house finance and insurance plan for riders / clients. * A full annual rank in the Harley Owners Group ( H. O. G ) comes with every purchase of a new. unregistered Harley bike.

* Associate ranks for H. O. G household members and riders besides benefit and become portion of the Harley household rank. * Owner’s ranks are renewable at a price reduction and they can besides go a member for life. * Full entree to the company’s web site. magazines each twelvemonth. and a subscription to the particular member publication. toll-free client service and even a touring enchiridion for trip planning. * Harley besides organizes and sponsor particular events for H. O. G members including motorcycle parades. *

Analyzing the Brand equity of Harley Davidson:

When buying a Harley. the client is endowed with an added value of a esthesis of freedom offered by the merchandise. the sense of belonging and a sense of exhibitionism offered by a Harley. Harley Davidson does non market the functional intent of the motorcycle but instead the emotional and psychological properties of freedom and belonging. The success of the selling attack and accomplishment of trade name promise of such psychological properties are good evidenced by the successful fiscal public presentation of Harley Davidson. The undermentioned instance facts indicate that Harley commands higher monetary values. market portion and profitableness:

* Steady portion of half the USA heavyweight bike market in 2006 ; * Annual growing in unit gross revenues in South Africa had averaged 46 % over the past few old ages. * Harley still held the bulk portion in SA market. an estimated 67 % . The above indicates that Harley Davidson has strong trade name equity certificates. We can farther analyze the trade name equity of Harley Davidson by using one of the Brand Equity Models. ‘The Brand Resonance Model’ ( Kotler and Keller YEAR ) and using the 6 cardinal edifice blocks of the resonance theoretical account to Harley Davidson:

Building trade name Equity

The right trade name cognition constructions targeted at the right consumer can construct significant trade name equity ( Kotler and Keller YEAR ) . An analysis of how Harley uses the 3 trade name equity drivers ( Kotler 2014 ) to construct trade name equity: 1. Brand elements – Harleys trade name benefits are less concrete ( freedom. sense of belonging etc ) and therefore it ensures that its trade name elements concentrate on emotional and psychological properties. E. g. mottos such as “The merriment is non in the finish. the merriment is in the journey” . In add-on company selling subjects ne’er emphasize on the motorcycles mechanical specifications but instead the associated life style for having a Harley. 2. Selling activities – product/service – Lifestyle – How do clients do contact with the Harley trade name:

* Internal Branding – Harley’s primary focal points is on internal stigmatization Harley makes extended usage of selling through its trade name community. the H. O. G. H. O. G members have a consciousness of kind” or sense of felt connexion to Harley. i. H. O. G. as a channel for internal selling has proved to be more effectual than Harley’s external selling runs. two. HOG is non organic but company-sponsored and facilitated because it’s one of the chief and primary selling activities. three. H. O. G is a concern scheme. The full concern theoretical account supports the H. O. G. four. Harley’s cultivation and technology of the H. O. G plays a important function in turning and beef uping the trade name * Individual Customer selling

v. Harley places a batch of marketing attending and focal point on the single client. Significant investing is made towards franchises being good equipped to provide for H. O. G meetings. six. High single client focal point pays off in footings of. important gross revenues originating from repetition clients. accoutrements. customisations of initial purchase. trading upwards after initial purchase etc. seven. Individual selling to adult females on a personal footing as they walked into the shop with their hubbies or partner’s. This was successful in constructing trade name equity amongst female clients. * External Branding is minimum. Harley does non make much mainstream advertisement. This has a benefit of cost salvaging from non holding to trust to a great extent on mainstream high cost advertisement channels. Harley prefers to turn through bing franchises. For illustration. Franchises are equipped with java countries where staff can link with clients that walk into the shops.

3. Leveraging secondary associations
* Harley often associates itself with charity drives and bike events. This allows it an chance to construct on its trade name promise of exhibitionism and belonging

While using the logic of the trade name value concatenation ( Kotler 2014 ) backwards. high profitableness & A ; market portion arise from strong client consciousness and client associations. which in bend arise from successful selling programme investing. It could be inferred that Harley has generated valuable return from its selling attack systematically over a period. bespeaking successful trade name equity edifice over the old ages.

Target Market:

Harley Davidson’s new mark market is the. ‘Black Diamond’ . This has been their focal point as they believe this market has possible. In 2007 the market totalled 2. 6 million. while they managed to do gross revenues numbering 709. This meant they had 27 % of their mark market. This was a bead when compared to the old twelvemonth. Post 1994 this mark market has had chances that did non be before. We besides saw the outgrowth of BEE. which continues to do Black people more financially stable. This therefore makes this market an ideal market to concentrate on.

Market profile: Equally much as the female rider mark market is turning ( 28 % by 2007 ) and has possible Harley demands to understand that there are still cultural issues that this market has to cover with. Such issues include that fact that for the black community for a adult female to drive a bike it might be non acceptable. Therefore. this would necessitate Harley to come up with schemes to cover with this cultural perceptual experience in order for them to profit from this market.

Future merchandise policy:

Merchandise Portfolio: Harley Davidson has managed to present accoutrements which are priced otherwise. This works as those that can non afford to purchase the bikes can still settle for other biker accoutrements therefore bettering borders. Harley needs to go on to widen its merchandise mix. Normally a biker will purchase one motorcycle unless they can afford to purchase more. therefore for Harley to go on deriving from this consumer they need to besides concentrate more on their accoutrements which non merely rockerss like but besides non rockerss and household members. It was mentioned that 70 % of the buyers were non rockerss.

Harley nevertheless needs to be careful that its merchandise system does non disfavor its trade name. This is seen as an sole trade name and one needs to be careful that a merchandise variegation does non convey down the value of the trade name and consequence in consumers comprehending it as cheap. It is hence of import that we keep the current merchandise portfolio every bit sole as possible to protect the trade name.

With the addition in fuel monetary values. Harley might necessitate to see a two-way stretch where they might necessitate to bring forth cheaper bikes which are more fuel efficient to promote people who might non desire to see puting in a Harley due to costs.

Schemes for growing:

Driving in a Harley nine is a dramatic minute. whether or non the motorcycle itself was bought for show. Cruisers are differentiated merchandises and Harley is the leader in that market but that is a dual border blade as its guaranteed popularity and high outlooks as a consequence. They are efficaciously selling a life style and for more people to purchase into it and to maintain those on board they need to concentrate on beef uping the merchandise distinction. design. trade name and service distinction. Bikes as an extension of personality and clients will tie in with a merchandise that delivers on the highest promise. The design of the motorcycles and characteristics that are most utile and necessary to the rider are of import. the customisation has resulted in alone terminal merchandises for each client. the quality in footings of public presentation and conformity demand to me maintained at a degree above the competition.

Because client demands and gustatory sensations vary. the service degrees required to maintain clients happy besides varies. the service dimension of the concern is hence of import in making a scheme. By making consciousness about the merchandise and pricing mix and different after gross revenues service options available to the client ( bringing. preparation. audience. HOG. care and fix options ) . Harley Davidson SA can bridge the information spread and entreaty to a larger market.

Targeting the Black diamond:

This is one of the fastest turning sections in the South African economic context. the bulk being immature and qualified and gaining a more than descent changeless wage. Largely turning up station apartheid. this group is less stereotyped and more adventuresome and likely to seek new things than was antecedently non associated with the age section. This is the new fiscal musculus of the South African economic system and Harley Davidson should research it strictly as a possible market for its richness and exploratory capacity if non for its sensed desire for luxury and position. As a merchandise that provides pleasance. merriment and value. there is no ground non to tap into this virgin market that hasn’t yet grasped its stance or individuality relative to the old politically influenced coevals.

Harley-Davidson Servicess

Harmonizing to Kotler and Keller. ”The client will judge the offering by three basic elements: merchandise features & A ; quality. services mix and quality. and price” ( Refer to Fig 12. 1 ) . In our technologically age it is now easier for any company merchandises to be replicated and even produced much cheaper excessively. This makes the component of “service quality and mix” really of import to sellers. The service quality and blend Harley-Davidson offers to its clients will be a beginning of competitory advantage.

The client value hierarchy diagram places an ‘augmented product’ at a really high degree ( Fig 12. 2 ) . Customers will value an augmented merchandise because of its extra characteristics and services that come with it. Harley-Davidson should take for service distinction at all phases of the purchasing procedure and after purchase: ( Ordering Ease. Delivery. Bike-riding preparation. client consulting. care and fix ) .

The client service forces employed by Harley-Davidson will impact the quality of service. The company would necessitate to guarantee that they hire and train the right people for the occupations. Employee satisfaction would be critical to doing certain the employees have a positive attitude as they work with clients.

The selling section at Harley-Davidson has to understand the demands and wants of their clients in order to fulfill them. Customers are concerned with dependability. service dependableness and care costs of the minibike.

A service-quality direction system would besides necessitate to be set up plus monitoring systems to guarantee that all client ailments are handled decently.