P R E P A R I N G F O R T H E N E X T

C E N T U R Y

A D I T Y A A S H I S H J I B I N P A Y A L

H A R L E Y D A V I D S O N

P R E P A R I N G F O R T H E N E X T

C E N T U R Y

T H E H A R L E Y S T O R Y

1 A LEGENDARY BIKE

Presentation Title Your company information

A M E R I C A N M O T O T C Y C L E M A N U F A C T U R E R

750 CC A N D A B O V E M O T O R C Y C L E S

Y E A R OF F O U N D I N G

P L A C E OF O R I G I N

C U L T S T A T U S : A L L A M E R I C A N B I K E

M O R E T H A N A C E N T U R Y O F L E G A C Y

C O N S T A N T I N N O V A T I O N

H I G H B R A N D L O Y A L T Y

M A R K E T L E A D E R : U S H E A V Y W E I G H T M O T O R C Y C L E S

E P I T O M E O F R A W P O W E R

2 T H E F O U N D E R S

W I L L I A M H A R L E Y

A R T H U R D A V I D S O N

W I L L I A M D A V I D S O N

W A L T E R D A V I D S O N

3 H I S T O R Y M A T T E R S

THE WORLD WARS

• F E A T U R E D IN WW 1 / WW 2/ GREAT DEPRESSION

• WW1 : 15000 BIKES TO US ARMY PROVIDED

• ONE OF THE COMPANIES TO SURVIVE THE GREAT DEPRESSION

• 90000 BIKES PROVIDED IN WWE

• MILITARY SPECIFIC VEHICLES

• RECEIVED 2 NAVY ‘E’ AWARDS FOR EXEMPLARY WAR SERVICE

4 DIFFERENTIATE TO

DOMINATE

“four wheels move the body but two

wheels move the soul”

-

The Eternal Biker

• B I K I N G IS A PASSION

• AN EXPRESSION OF FREEDOM

• HARLEY CAPTURES THE ESSENCE OF BIKING LIKE NO OTHER

• LEGENDARY : CULT : EPIC : FEW WORDS TO DESCRIBE HARLEY

• QUALITY : IMAGE : UNIQUENESS : 3 PILLARS OF HARLEY’S SUCCESS

• HARLEY CARRIES THE HARLEY BADGE : HARLEY LOOK : THE HARLEY SOUND

OWNING HARLEY IS A MATTER OF PRIDE

THE BIKE OF THE REBEL

HARLEY HAS BECOME A LEGACY, A HEIRLOOM OF SORTS

AN ALL AMERICAN TREASURE TO BE CARRIED FROM ONE GENERATION TO OTHER

SUMPTUOUS DESIGN

V TWIN ENGINE

RAW POWER

A SYMBOL OF QUALITY : FREEDOM AND NATIONAL PRIDE

5 THE EVOLUTION

5 SAMURAI SIEGE : THE JAPANESE CHALLENGE

• 1950’S : HONDA SMELLS BLOOD

• UNTAPPED CUSTOMER BASE OF OLDER MEN AND YOUNGER WOMEN

• HONDA RELEASES FAMILY ORIENTED ADS

• SWEET : NICE : PLEASANT : STABLE APPROACH

• FASTER , LIGHTER AND LESS EXPENSIVE BIKES

• 50CC – 250 CC BIKES RELEASED

• YAMAHA : SUZUKI : KAWASAKI FOLLOWED SUIT

• JAPANESE MADE GRADUAL INROADS

• DEMOGRAPHIC CHANGE : FIRST TIME BUYERS FAVORED JAPANESE

• MASS PRODUCTION : EFFICIENT

• CONSTANT IMPROVEMENT : REDESIGN

• REDUCTION IN TIME TO INTRODUCE NEW MODELS

• SOON JAPANESE ACCOUNTED FOR 85 % US BIKE SALES

• HARLEY PUSHED TO NICHE CATEGORY

• HARLEY ACCQUIRED BY AMF

• HARLEY PANICS : TRIES TO IMITATE JAPANESE MODEL

• LESS SKILLED WORKFORCE ADDED

• QUALITY COMPROMISED FOR QUANTITY

• AD POSITIONING TWEAKED : THUMBS DOWN BY TRADITIONAL BUYERS

• EXISTING BUYERS ALIENATED

• HONDA UPS THE ANTE : INTRODUCES GOLDWING 1000 CC

• HARLEY LOSES OUT IN HEAVYWEIGHT CATEGORY

6 LEARN FROM THE ENEMY

• HARLEY ADJUSTS ITS SIGHTS

• REDEFINES GOAL AS “SURVIVAL”

• EXECUTIVES VISIT HONDA FACTORY : LEARN THE (JIT) METHOD USED BY HONDA

• HARLEY’S MULTIMILLION DOLLAR INVENTORY SYSTERM INEFFECTIVE

• HARLEY’S PRODUCTION SYSTEM FLAWED

• HARLEY REDESIGNS : ADOPTS PRODUCTIVITY TRIAD

• SEEKS GOVT SHIELD FROM JAPANESE AMBUSH

7 THE COUNTER

PUNCH

• PRODUCTIVITY TRIAD WORKS

• INVENTORY TURN INCREASED TO 17 TIMES/YEAR

• PRODUCTIVITY UP BY 50 %

• WIP REDUCED BY 75 %

• US REVENUES INCREASE BY 80 % : GLOBAL INCREASED 1.7 TIMES

• MARKET SHARE IN HW SEGMENT INCREASED BY 97 %

• 1989 : HARLEY GOES PUBLIC THROUGH A WELL RECEIVED IPO

• LEADERSHIP INSTITUTE INTRODUCED

• ORGANIZATION RESTRUCTURED

• REWARDS/INCENTIVE SYSTEMS PUT IN PLACE

• HOG : HARLEY DAVIDSON OWNERSHIP GROUP INTRODUCED

• HOG, WITH 900000 MEMBERS IS THE LARGEST COMPANY SPONSORED CLUB

• WOMEN RIDERS WERE CATERED WITH “THE WOMEN OF HARLEY” GROUP

• NEW CEO JEFFREY BLEUSTEIN COMES ON BOARD IN 1997

• HARLEY TRANSFORMS WITH NPD, UPGRADED TECHNOLOGY

• BETTER DEALER NETWORK

• ANNUAL REVENUES GROW TO $5 BN : NET INCOME T0 $890 MILLION IN 2004

• 2005 :BLEUSTEIN RETIRES AS CEO : STAYS AS CHAIRMAN

8 THE ROAD AHEAD

• MARKET FOR HARLEY BIKES MATURING

• CORE CUSTOMER BASE : BABY BOOMERS ARE AGEING

• YOUNGER GENERATION NOT CONNECTING WITH HARLEY

• NEEDTO FACE JAPANESE AUTOCORPS HEAD ON

• STRONGER THE BRAND WITH THE OLDER GENERATION, WEAKER IT IS WITH THE YOUNGER LOT

• HARLEY NEEDS TO SHIFT DEMOGRAPHICS

• HARLEY ACCQUIRES BUELL TO CATER TO YOUNGER BUYERS

• V-ROD AND NEW SPORTSTER LINE UNVEILED

• V-ROD IS A SHIFT FROM TRADITION FOR HARLEY WITH ITS LIQUID COOLING

• SPORTSTER REDESIGNED WITH LOWERED PRICES

• MORE FOCUS ON WOMEN RIDERS

• MARKETING THROUGH EVENTS AND MEDIA

9 INNOVATIONS

10 CONCLUSION

• HARLEY NEEDS TO ALTER ITS DEMOGRAPHICS

• NEEDS TO CATER TO YOUNGER LOT

• BUT WITHOUT LOSING ITS CORE MARKET

• NEED TO REWORK COSTS WITH DEALERS FOR ITS CUSTOMER PROGRAMS

1

THE BRAND EXCELS IN DELIVERING THE BENEFITS

CUSTOMERS TRULY DESIRE

• HARLEY COMMANDS EXCEPTIONAL BRAND LOYALTY

• EVERYTHING ABOUT HARLEY : THE BIKE : THE PERFORMANCE : THE STYLE IS A

CUSTOMER’S PRIDE

• LEGACY : LEGENDARY POSITIONING GIVES CUSTOMERS A SENSE OF ESTEEM

• FANTASTIC INNOVATIONS LIKE RIDER’S EDGE, RENTAL BIKES, RALLIES

• HOG/ THE LADIES OF HARLEY BRING IN A SENSE OF COMMUNITY

• SHARES THE PASSION FOR BIKES AND BIKING

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2

THE BRAND STAYS RELEVANT

• YOU CANNOT THRIVE FOR A CENTURY WITHOUT BEING RELEVANT

• HARLEY HAS ALWAYS BEEN INNOVATING RIGHT FROM ITS V TWIN ENGINE

• A GLUT IN BETWEEN WHERE HARLEY STRUGGLED WITH RELEVANCE

• STRONG COMEBACK WITH V-ROD /SPORTSTER

• ACCQUISTION OF BUELL

• CATERING TO WOMEN BIKERS

8/10

3

PRICING STRATEGY IS BASED ON CUSTOMER’S

PERCEPTIONS OF VALUE

• HARLEY WAS ALWAYS A PREMIUM SEGMENT BRAND

• THE VALUES IT PROVIDES OUTWEIGHS THE PRICE

• HARLEY HIGH ON SENSORIALS AND HIGH SELF ESTEEM IT GIVES TO CUSTOMERS

• ONLY IN 2004 , TO CATER TO THE YOUNGER AND NON TRADITIONAL MARKET , PRICES

WERE REDUCED TO $6500

• THIS WAS A BID TO CAPTURE THE ENTRY LEVEL, LOWER PRICED MARKET

• RENTAL PROGRAMS INTRODUCED FOR EASY BUY

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4

THE BRAND IS PROPERLY POSITIONED

• POSITIONING IS HARLEY’S GREATEST STRENGTH

• ALL AMERICAN : RAW POWER : MACHO BIKES

• CAPTURES THE PASSION OF BIKING/SENSE OF FREEDOM

• THE BIKE FOR THE REBEL : ROCKSTARS, HOLLYWOOD REBELS

• ADS POTRAYING LEATHER CLAD RIDERS , MILITARY RIDERS GAVE AN IMAGE OF

TOUGHNESS

10/10

5

THE BRAND IS CONSISTENT

• HARLEY HAS ALWAYS BEEN CONSISTENT WITH ITS POSITIONING

• THE MARKETING CAMPAIGNS POTRAYED THE TOUGHNESS

• HOLLYWOOD REBELS LIKE BRANDO REPRESENTED HARLEY

• THE LOOK : THE SOUND : THE CELEBRITIES : EVERYTHING ABOUT HARLEY EXHUDES

RAW POWER

• LEATHER JACKETS : ACCESSORIES : HOG Etc POTRAY GRIT AND POWER

• 9/10

6

THE BRAND PORTFOLIO AND HIERARCHY MAKES

SENSE

• HARLEY HAS A WIDE RANGE OF BIKES

• CATERS TO VARIOUS SEGMENTS RANGING FROM BABY BOOMERS, WOMEN AND

YOUNGSTERS

• UMBRELLA BRAND HD IS THE BLOCKBUSTER BRAND

• V-ROD /SPORTSTERS CATER TO THE NEWER GENERATION

• SPORTSTERS PRICED LESSER TO CAPTURE NON TRADITIONAL MARKETS

9/10

7

THE BRAND MAKES USE OF AND COORDINATES A FULL

REPERTOIRE OF MARKETING ACTIVITIES TO BUILD

EQUITY

• MARKETING MAJORLY THROUGH EVENTS AND MEDIA

• APT USE OF CELEBRITIES

• HOG RIDES, HD NIGHTS, RIDE OF A LIFETIME, BOOT CAMPS

• RELEVANT ADVERTISEMENTS

• HARLEY CAMPAIGNS ARE HANDS ON WITH HIGH CUSTOMER PARTICIPATION

• SHORT FILMS , PROMOS, ROCK EVENTS

9/10

8

THE BRAND MANAGERS UNDERSTAND WHAT THE BRAND

MEANS

• THE HARLEY MANAGERS ALWAYS UNDERSTOOD THE CORE VALUES OF HARLEY

• UNTIL 80s THE BRAND WAS CONSISTENT IN QUALITY

• POST AMF , THE BRAND SUFFERED IN QUALITY

• TEERLINK BECAME CFO AND HE BEGAN THE RESURGENCE

• SINCE THEN BLEUSTEIN FOLLOWED SUIT WITH RETAINING THE EPIC HD QUALITY

8/10

9

THE BRAND IS GIVEN PROPER SUPPORT AND ITS

SUSTAINED OVER THE LONG RUN

• APART FROM ITS BRILLIANT PRODUCT, HD IS SUPPORTED WITH MANY INITIATIVES

• HOG CLUB

• THE HARLEY LADIES GROUP

• LIVE EVENTS

• HOG NIGH OUTS, BIKE TREKS

• HOG MEMBERSHIP 900000

10/10

10

THE COMPANY MONITORS THE SOURCE OF

BRAND EQUITY

• BRAND EQUITY IS EVERYTHING IN HD

• MANAGERS MAKE SURE THE BRAND EQUITY NEVER FADES

• CONSISTENT POSITIONING AND BRANDING HELPS IN CONSISTENT BRAND EQUITY

• INNOVATIVE CAMPAIGNS HAS STRENGTHTENED THE BRAND EQUITY

• HOG CLUBS, SOCIAL GROUPS , EVENTS MAKE SURE BRAND EQUITY IS NEVER LOST OUT

9/10