HARLEY DAVIDSON CASEInternational Marketing

Group 5

SYNOPSIS

CONTEXT

• 1903: first H. D. Bike

• 1907: creation of Harley Davidson in Wisconsin

• HQ motorcycles

• 1912: 1st exportation (Japan)

• 1920: 1st dealership (Australia)

• Becoming successful in 20013

CONTEXT

• 2011: 3 US factories, 1 assembly unit in Brazil

• 2 segments: Motorcycles and Related Products (MRP) unit and Financial Services (FS) unit.

• Sales from international market: 34.7%

• Asia-Pacific headquarters in Singapore

• A cult, surviving brand4

ISSUES

• 2005: First try

• Indian norms

• Resistance from Indian Government

• Agreement

• They can only sell through dealers

5

STORY & ACTORS

• 2009: applications for dealers

• « Made in US » rather than cheap models

• Cost reduction: assemble in India (Bawal)

• Launch => success

• Partnership with HDFC Bank

• Customization kits

• Brand building events6

HARLEY DAVIDSON IN INDIA

INTERNAL FACTORSAN ENOUGH ATTRACTING

MARKET ?

• Growth rate of the Indian Market

• A highly growth of the population by 2010

• 20,8% => 6.1times more than France

• Demand ?

• « An ever growing appetite for bikes »8

INTERNAL FACTORSAN ENOUGH ATTRACTING

MARKET ?

• Does HD make a differentiation with the other brands ?

• Considered as the most luxury brand of motorcycles

• 2012: 4 of its models are considered the most expensive ones in India

• Potential clients for these luxury products ?

• Around 480 000 household earn between 1M$ and 50M$

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EXTERNAL FACTORSISSUES TO OVERCOME

Ecological/Political Factor

•Problem

• India’s emission standards

➡ Entry of the market blocked

•Solutions

• 2007: India accepted EURO III (bikes more than 800cc)

• Deal USA/India: Indian mangoes and banking licenses10

EXTERNAL FACTORSISSUES TO OVERCOME

Economical Factor

•Problem

• High import duties

•Solutions

• Tarif Rate Quota (not fair for competitors)

• Organization of a hyped rally ride (fail)11

ENTRANCE OF HARLEY DAVIDSON ON THE INDIAN

MARKET

Internal

Strenghs•≠ products than

the competition•Brand image:

US lifestyle•≠ products

proposed with ≠ prices

WeaknessesHigh prices

External

Opportunities•Diversity of the

market•Population

growth•Potential

customers: a part of the pop. has a high purchasing power

Threats•Emission

standards•High import

duty•The obligation

of selling through dealers

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HARLEY DAVIDSON LUXURY AND LIFESTYLE

PRODUCTS

INTRODUCTION

• Indian economy is growing (GDP & Per Capita Income)

• Purchasing power

• Standard of living

➡ Appealing target (ex: Youtube, 2009)14

SEGMENTATION

• India: one of the largest two wheeler industry

• Last decade: huge rise in the production

• 2009-10: 10.5M two wheeler sold

• 77% were motorcycles

15

SEGMENTATIONDEMOGRAPHIC & SOCIAL

ASPECTS• Indian target: male 20-45 years old

• Youngsters upper class 20-25

• Mature man, well settled, passionate, 25-45

➡ Luxury buyers 25-34

• Upper class

➡ Household with annual income 222 800$ -1 114 000$ => 23%

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POSITIONING

• Worldwide:

‣ Automative industry

‣ Sense of leisure & adventure

• India:

‣ All-Amercian Brand, « made in US »

DOES INDIA QUALIFY FOR THE LUXURY AND LIFESTYLE PRODUCTS

SUCH AS HARLEY DAVIDSON BIKES ?

Pros + Cons -

Rapid dev. of Indian economy➡10% annually➡physical infrastructures

Need to move bike from dealer towns to customers location

➡Too complicated transportation for customer

Segment of buyers of superbikes growing in 2011 at a rate of 40 to 45 per cent per annum

Lack of trained mechanics and VERY HIGH priced spares and service

Rise of enormous younger population with biking as a hobby

Limited availability of specialized fuel

India ranked 12th in terms of its population of high-net-worth individuals

having grown 20,8% in 2009

Unsafe roads with potholes and stray cattle

The interest for bikes in wider section of the society

➡even consumers in small towns

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POST-LAUNCH MARKETING ISSUES

POST-LAUNCH MARKETING ISSUES

Issue SolutionPrice

10 out of 15 bike models still imported from US and subject to 60% import tariff

Apply CKD assembly to remaining models

Increased competition from other bike brands BMW, Kawasaki, Hyosong and KTM India.

➡ Risk losing market share

Create more brand exposure:•Get brand endorsements by

celebrities•Sponsor a cricket team / any

other popular sportsPosition the brand as luxury in

marketing campaigns:•Quality: “Made in USA”, high-

end construction, durability•Aesthetics: Customizability,

iconic design•Performance: Speed tests, thrill-

seeking •Prestige: Showroom / dealership

design, professional services, rare/no discount

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POST-LAUNCH MARKETING ISSUES

Issue SolutionNeed to move bike from dealer towns to customer location

Provide delivery service for a fee

Lack of trained mechanics, high price of parts and services, burden of transporting bike to mechanic or vice versa

Open service outlets in smaller towns

Provide pick-up service for bikes

Set up training institutes for mechanics to be certified to work with Harley-Davidson bikes

Lack availability of specialized fuel outside cities

Lobby petroleum companies to set up fuel stations where demand is high

Unsafe roads and potholes with stray cattle

Invest in safety education and accident prevention training

Provide warranty coverage by FS

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Ophélie Toulet - Emmanuelle Friedlander - Margaux Mesurat Tamara Khismatulina - Christopher Tang

« Four wheels move the body. Two wheels move the soul. »

Thank you for your attention.