module paper rev 2

8/2/2019 Module Paper Rev 2

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Anglia Ruskin Student ID Number: 1132242/1

MODULE TITLE: Marketing Design and

Innovation

Module Code BD15024S

ACADEMIC YEAR 2011/2012

Trimester I

Student ID # 1132242/1


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Evolution of the Motorcycle


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Executive Summary

This paper was written to look at the marketing, design and innovation of the motorcycle from its

inception to present day. Various models of innovation were applied to a timeline to highlight the

changes in design, technological advancements and benefits.

Marketing and Design models and techniques were then applied to the motorcycle industry, with

an emphasis on the Harley-Davidson Motorcycle Company, to ascertain how the industry was

segmented and what differentiation methods were utilized to reflect its design and positioning.

This paper also focused on a branding model. An evaluation was done based on the selected

brand and how well it subscribed to the chosen model. The results indicate that Harley Davidson

was effective in maintaining brand loyalty, awareness, association and perceived quality with itspublic.

Harley Davidson is aggressive with the marketing of its brand and product, the company is also

highly sensitized to the protection of its intellectual property and thus HDI remains globally

recognized.

As a recommendation Harley Davidson should consider repositioning itself to embrace the drive

towards alternative energy and energy efficient initiatives thus appealing to the environmental


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Table of Contents

Executive Summary .................................................................................................................................. ii

List of Figures ........................................................................................................................................... iv

List of Tables ............................................................................................................................................. v

1. Introduction....................................................................................................................................... 1

2. Innovation Process ............................................................................................................................ 2

3. Marketing and Design ....................................................................................................................... 6

4. Brand Appeal .................................................................................................................................. 10

4.1 Brand Loyalty ............................................................................................................................. 11

4.2 Brand Awareness ........................................................................................................................ 11

4.3 Brand Association ....................................................................................................................... 12

4.4 Perceived Quality........................................................................................................................ 12

4.5 Intellectual Property.................................................................................................................... 13

5. Conclusion ...................................................................................................................................... 14

6. References....................................................................................................................................... 15

Appendix AMotorcycle Innovation Sequence. ..................................................................................... A


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List of Figures

Figure 1 Roper Steam Bicycle ........................................................................................................................ 5

Figure 2 Gottlieb Gasoline Motorcycle ......................................................................................................... 5

Figure 3 Hildebrand & Wolfmuller Motorcycle with Radiator ..................................................................... 5

Figure 4 Harley-Davidson Dyna Super Glide ............................................................................................... 5

Figure 5 Honda Hybrid Motorcycle ............................................................................................................... 5

Figure 6 Branding System .......................................................................................................................... 10


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List of Tables

Table 1 Types of Innovation .......................................................................................................................... 4


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1. Introduction

Marketing, Design and Innovation separately has many definitions however the following is

most applicable to this paper. MDI is the discernment of a need and the ability to address that

need by taking an idea or invention and translating it into a good or service which is then brought

to market and commercialized through a robust market orientation strategy geared to getting the

product to the customer at the right time.

This paper seeks evaluate the innovative process for the motorcycle throughout the years from

inception to current day versions. It also provides an analysis of the various marketing and

design techniques and strategies utilized by the motorcycling industry. It addresses the brandappeal associated with the Harley Davidson Motorcycle Company and how the company

attempts to sustain that appeal.

The motorcycle historically has been seen as taboo, ironically hence its appeal. Hollywood has

always associated motorcycles as the mode of transport for the bad, tough and rugged. In reality

however it is fun, fast and provides a feeling of exhilaration as the senses are heightened. As a


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2. Innovation Process

Motorcycles are descended from the safety bicycles, bicycles with front and rear wheels of the

same size, with a pedal crank mechanism to drive the rear wheel. Naturally, motorcycles had

motors placed in a variety of ways to save having to pedal. Following are details on the

evolution of the motorcycle over the past 140 plus years.

Year Major Evolutionary Change

1867 American Sylvester Roper produced a velocipede or steam cycle, a motorized

bicycle with a two-cylinder, coal powered steam engine. The bicycle chassis was a

bone-crusher non spring type. The bike was popular at exhibits but a nuisance to

neighbors because of the noise and smell.

1896 Ropers last model included a one-gallon water reservoir and provided about 8 miles of

travel on one filling. He tested his steam cycle as a pace-making machine for bicycle

races during which the peak speed was about 30 mph.

The steam bicycle was never a practical means of transport. Problems of carrying enoughwater and fuel paled in comparison to having a boiler, operating at nearly 300

oF, between

the rider's legs. (See figure 1 on page 5)


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1895 In France, a small, light, four-stroke engine, known as the DeDion-Buton engine was

introduced. The DeDion-Buton engine made possible the eventual mass production ofmotorcycles for public use.

1898 The Orient Aster was the first American company to produce motorcycles for general

public sale. The DeDion-Buton engine was copied and used for this production.

1903 William Harley and the brother Arthur and Walter Davidson partnered to form the

Harley-Davidson Motor Company. The bike was built to be a racer, with a 3-1/8 inch

bore and 3-1/2 inch stroke

1913 Harley Davidson designed a motorcycles for circuit racing.

Carl Hedstrom and George M. Hendee founded the Hendee Manufacturing Company,

which later changed its name to Indian. Indian became the best-selling motorcycle

manufacturer until World War I, when Harley-Davidson began to outpace Indian in

sales.

1920 Harley-Davidson had become the largest seller of motorcycles in the world, and

dominated for a decade. The decade was characterized by rapid technological

innovations and improvements. ( See figure 4 on page 5)

1940s Indian launched the first luxury bikes, the revamped Indian Chief, an improvement on

a 1920s model which featured curvy fenders, a powerful engine, and a top speed of 85

mph. The Indian Chief was the prototype for the cruiser.

1960s Japanese motorcycle manufacturers broke into the American market and began setting


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2000s Designers are focusing more on making vehicles that can cope with the global climate

change. Honda has developed a hybrid motorcycle that gets seventy miles to the gallon(See figure 5 on page 5). The military uses Kawasaki model that runs on diesel and gets

120 miles to the gallon.

(The Great Idea Finder, 2007)

The innovative process is very dynamic; as such there are several types of innovations which can be

placed in one of four categories or clusters:

Product Leadership which is applicable during the growth phase of the product Customer Intimacy and Operational Excellence are opportune during the mature phase, and Category Renewal has lost the ability to sustain future value creation.The table below reflects the different types of innovation that fall into each cluster. (Moore, 2008)

Table 1 Types of Innovation

Product Leadership

Zone

Customer Intimacy

Zone

Operational

Excellence

Category renewal

Zone

Disruptive Line-Extension

Value-

Engineering Organic

Application Enhancement Integration Acquisition


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Figure 1 Roper Steam Bicycle

Figure 2 Gottlieb Gasoline Motorcycle

Figure 3 Hildebrand & Wolfmuller Motorcycle with Radiator


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3. Marketing and Design

The uniqueness of motorcycles goes beyond its innovative history and extends into current day

designs and what is required to effectively market the product versus an automobile for example.

In this section of the analysis the focus is on the Harley-Davidson brand of motorcycles as it

compares to other motorcycling brands. Here, one also needs to consider the marketing strategy

for the product and how it will be positioned to ensure differentiation.

Market Segmentation enables companies to target different categories of consumers who

perceive the full value of certain products and services differently from one another. Generally

four criteria can be used to identify the different segments:

1) Geographic - region, climate, population density

2) Demographic - age, gender, ethnicity, education, occupation and family status.

3) Psychographic - values, attitudes and lifestyle

4) Behavioral - brand loyalty and benefits sought. (Trott, 2012)

Based on the criteria above the motorcycle industry has segmented the product into five


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A lot of people segment motorcyclist on the psychographic basis. They carry the belief that

those who own and ride motorcycles are hardcore, tattoo-laden, testosterone-filled males who

guzzle hard liquor and wind up in big bar fights. Even though this profile works well in the

movies, a vast majority of riders are easygoing, friendly people who give back to society. In

actuality, the world market for motorcycles is quite differentiated.

In the US, the bike rider demographic is generally white married men between the ages of 31 and

60. This is confirmed by survey data from the Motorcycle Industry Council, a private industrygroup.

Product Platform is a set of subsystems and interfaces that form a common structure from

which a stream of derivative products can be efficiently developed and produced. A platform

approach to product development significantly reduces manufacturing costs through savings in

the procurement of component and materials which can be shared amount different individual

products.

Harley Davidson manufactures five families of motorcycles: Touring, Dyna, Softail, Sportster,

and VRSC. The first four of the motorcycle family subscribe to the same product platform,

powered by an air-cooled, twin-cylinder engine with a 45-degree V configuration. The VRSC

platform is powered by a liquid-cooled twin cylinder engine with a 60-degree V


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The motorcycle industry has positioned itself in the following ways:-

Affordability relative to an automobile Better fuel economy Environmentally friendly because of low emissions Lower insurance premium Ease of maintenance More parking flexibility because of the size

Product Differentiation for the purpose of this paper is based on quality, features and service.

According to Levitt (Levitt, 1986) there are four levels on which products, in this case motor

cycles, can be considered for differentiation:-

The core product which encompasses the basic features which are needed to becompetitive in a particular market, such as frame, wheels, transmission and engine.

The expected product speaks to customer expectations of a product, for example,comfort, accessories like headlights and rear view mirrors

The augmented product which speak about the features, services and/or benefits to bederived beyond normal expectations


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signaling technology on all of it motorcycles. The turn signals are self-cancelling and they also

have the ability to judge the distance from a turn enabling them to know how long to remain on.

As an augmented product HDI offers financing and insurance facilities primarily to its dealers

and their customers. This initiative fosters camaraderie between the dealerships and its

customers; it also keeps the wealth within the HDI group.

The company participates in the motorcycling lifestyles via the Harley Owners Group (H.O.G),

which participates in events, rides and rallies. Harley Davidson Academy of Motorcycling

formed Rider Edge which offers an educational package to experience and new riders which

teaches basic and advanced motorcycling skills and knowledge. (Harley-Davidson USA, 2012)


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4. Brand AppealA brand is a name, term, symbol or design, or a combination of them intended to identify the

goods or services of one seller or group of sellers and to differentiate them from those of

competitors. A successful brand comprises of effective product, distinctive identity and added

values as perceived by the customers.

Mudambi (Mudambi, et al., 1997) suggests that branding is based on random utility theory,

where customers form preferences based on their perception for attributes. Decisions are then

made upon these preferences with customer selecting the product with the highest expected value

or utility.

Degree of

branding

Buyer

perception &

attitude

Branding

Strategy


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The Aaker Brand Equity Model emphasizes:-

Brand Loyalty Brand awareness Perceived quality Brand association Other proprietary assets such as patents, trademarks and channel relationship.

4.1Brand Loyalty

This is the degree to which a particular brand is associated with the general product category in

the mind of the consumer. Brand loyalty for Harley-Davidson is based on sentiments. They areconsidered more than motorcycles-they are legends. It is an American icon brand and the symbol

is based on a pattern of associations that include the American flag and the eagle; reflective of

the passion and freedom Americans enjoy.

4.2Brand Awareness


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4.3Brand Association

It is now difficult to define an average Harley-Davidson buyer. The demographics range from a

blue-collar worker to a high-power executive located all over the world. The common thread is a

desire to escape the routine and become anyone you would like to be. While their competitors

base their advertising on product technology and features, Harley promotes based on association,a mystique appearance, rebellious association, free spirited and the pride of owning a legend.

With Harley, you can live out your fantasies, as well as experience camaraderie with fellow

bikers. Branding the experience, not just the product, has allowed the company to expand the

customer value.

4.4Perceived Quality

When a person buys a Harley-Davidson motorcycle, they receive a free 1-year membership tothe Harley Owners Group (HOG), which was developed in 1983 as a program to keep people

active with their Harley. Simultaneously, it keeps the company close to its customer. HOG has


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4.5Intellectual Property

There are four main methods of establishing intellectual property (IP); Patent, Copyright,

Registered and use of Trademarks. In some cases the success of a product is hinged on how well

the IP of the brand is managed. Without use of IP the selection of product, in some cases, would

revert to a decision which can be random, highly sensitive, based on value and/or content of the

product.

Harley Davidson, Inc. strategically manages its portfolio of intellectual property. The company

and its subsidiaries own and continue to increase its diverse IP portfolio related to its

motorcycles and processes for their production. Protection of Trademarks is especially important

to the motorcycle division and licensing activities since the Harley Davidson trademark and the

Bar and Shield trademark are highly recognizable to the public and are valuable assets. This will

become increasingly important as the company progresses forward with investments in new

products, designs and technologies.


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5. Conclusion

The motorcycle industry continues to redefine itself by the continuous introduction of innovative

technologies. This is reflected in its evolution from a steam powered bicycle to a technologically

advanced mode of transportation, which has a diverse market appeal. Notably due to stricter

environmental policies being sort after by various governments especially in the US where the

impetus is on less dependency on oil and its derivatives, Harley Davidson has not considered

repositioning its brand to reflect environmental alternatives such as alternative fuel powered and

electric powered motorcycles. This is an area where HDI competitors have invested a significant

amount of R&D efforts.

We are in the era where consumer buyer behaviour heavily dictates the direction of the

motorcycling industry. Despite a global recession the Harley Davidson brand appeal continues to

be strong. The organisation continues to invest in the acquisition and protection of its intellectual

property. This aggressive approach allows the company to continue with its brand extension

initiatives.


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6. ReferencesAlff, D., 2012. Motorcycle Touring Pro. [Online]

Available at: http://www.motorcycletouringpro.com/types-of-motorcycles/

[Accessed 7 December 2011].

Fred, 2008. Infotechdesign.net. [Online]

Available at: http://infotechdesign.net/itd/a-case-study-of-harley-davidsons-business-practices.html


Harley-Davidson USA, 2012. Harley-Davidson. [Online]

Available at: http://www.harley-davidson.com/en_US/Motorcycles/why-harley.html


Hutt, M. D. & Speh, T. W., 2004. Business Marketing Management: A Strategic View of Industrial and

Organizational Markets. 8th ed. Ohio: South-Western.

Levitt, T., 1986. The Marketing Imagination. New York: The Free Press.

Moore, G. A., 2008. Stanford University. [Online]

Available at: http://scpd.stanford.edu/dtu/

[Accessed 11 November 2011].

Mudambi, S., Doyle, P. & Wong, V., 1997. An exploration of branding in industrial markets. Industrial

Marketing Management, Volume 26, pp. 433-446.

Richardson, A., 2011. Harvard Business Publishing. [Online]

A il bl t htt //bl hb / /2011/02/l f h d l d ht l


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Appendix AMotorcycle Innovation Sequence.


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A

Sequence of Innovation in the Evolution of Motorcycles

Year Design Reason Innovation1867 The introduction of steam driven cycles Motorized bicycle primarily for exhibits Application

1896 Inclusion of 1 gallon water reservoir on the steam bicycle Improve mileage capability and speed Enhancement

1885 Gasoline powered motorcycle. Standard wooden bicycle with

centre mounted single cylinder four stroke internal combustion

engine.

Move away from steam units because of the

dangers inherent in the design

Disruptive

1894 Water cooled engine with a radiator. Step through frame. Fuel

tank was mounted on the down tube and water tank/radiator

was built into the top of the fear fender

More compact and better speed Enhancement

1895 Small, light, four stroke engine Mass production of motor cycles for public use Product

1898 Similar platform as 1895 Mass production in another country Line extension

1903 Engine with a 3 -1/8" bore and 3 -1/2" stroke Racing Application

1940 Curvy fender, powerful engine Combination of luxury and speed Experiential

1970 Electric starter, disk brakes and smaller frame Market penetration Product

1990 Aesthetically pleasing, complex mechanically, technologically

advanced

Customization for individuals (designer

motorcycles)

Experiential

2000 Hybrid electric motorcycle Global climate change Disruptive

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