Harley Davidson: An Over reliance on Aging Baby Boomers
America is built on the success stories of individuals who decided to stand against the odds to become prominent and successful. A success story becomes captivating when the individual has grown in a unique way against all the possible challenges. One of the success stories is that of Harley-Davidson, who rose from a small shed owning a few motorcycle parts into a multibillion-dollar company. Internal strategies that are responsible for the consistency in the provision of high-quality products and exemplary customer service have created a strong public image for Harley-Davidson. The success behind Harley-Davidson is associated with the image that has been in development over the years that the company has been in operation. The primary target market by Harley comprised of middle-aged males who have been commonly referred to as baby boomers, but the market has changed, raising the need for new markets.
Harley-Davidson has been in operation for over a hundred years. The primary target market comprised of post-World Wars youth who prided in riding motorcycles as a sign of rebellion. The market has been supportive of customers flowing into the company outlets in search of the items associated with the company’s public image. However, the generational changes over the years have forced Harley-Davidson to find new strategies for developing new customer networks. However, several experts have not seen any significant need to employ new marketing strategies. The first customer network of baby boomers has significantly reduced, and thus the company is introducing an entire generation of riders. The general reduction in the size of baby boomers’ customer network came as a surprise, although the combine has managed to transit to the new generation of customers without much struggle.
The average age of customers plays a crucial role in determining the type of products to send to the market. Harley-Davidson has, however, remained silent on their average customer age, raising concerns on whether the company can manage a continued excellent customer relationship, as has been the case initially (Wheelen, Hunger, Hoffman & Bamford, 2015). Experts in several marketing fields have noted that the average age of customers in Harley-Davidson has been going up in recent years. The company has remained skeptical about experts who based their arguments on the growing average age among customers. Generally, the company has stood for the idea that the average age of customers is less significant compared to other factors such as technology in the dominance of a company in the markets. Generally, Harley-Davidson has employed several concepts that have been essential in the continued enjoyment of success in a world with changing dynamics.
Harley-Davidson has successfully employed similar concepts in marketing over the years. The original objective of Harley-Davidson was to create a comprehensive motorcycling experience across an extensive demographic customer network. The aim was to be achieved through the holding of events, rallies, and rides. The events were to be sponsored by Harley, and the customers were motivated with Harley wear to participate in the events and rallies. The company aimed to produce high quality and reliable products that were stylish and highly customized. The customization of products enabled customers to remain loyal to the company for being associated with its strong public image. Besides, a ‘rebel’ certified lifestyle was available for purchase by the customers and played a significant role in beating their competitors to the loyalty of customers. Besides, Harley-Davidson built crucial confidence in its products and thus gave at least two-year warranties to the customers, therefore a continued loyalty development among customers.
Marketing strategies play a crucial role in determining the level of success attained by a company. Harley-Davidson positioned its brand strategically as an American iconic and benefitted from a considerable following and recognition across the world. The strategies employed by Harley-Davidson were not concerned with going after competitor brands. Instead, Harley-Davidson decided to concentrate on the development of their brand without appearing concerned with the issues affecting other brands. The building of a brand associated with America drew attention from baby boomers who agreed to stand behind Harley-Davidson’s business. However, the success of the marketing concept was not safe from challenges. The strategy was only applicable to the original class of customers. A change in generations with time brought about varying requirements from customers since baby boomers were growing and changing their preferences.
The reliance on one group of customers was a significant challenge facing Harley-Davidson. The baby boomers were the only target population in the market available for Harley-Davidson. Generally, Harley-Davidson was unable to draw attention from other customer groups apart from the baby boomers. For example, Harley-Davidson noticed that sixty-five percent of the sales made in 2012 were done to Caucasian men aged thirty-five and above years. Also, the twenty-year association with the baby boomers was quickly fading because the baby boomers were growing old and losing interest in the products made by Harley-Davidson. The incoming generation preferred purchasing motorcycles from competitors because they liked colorful and customized products. The preference of competitors’ products gave Harleys significant challenges and had to react immediately to avoid losing their dominance in the market. Therefore, Harley-Davidson employed another clever concept by maintaining its products and working towards winning a new group of customers.
Harley-Davidson had grown around a wise integration of product designs and customization. For several years, Harley-Davidson had been offering customization options to customers who were not satisfied with the already-customized motorcycles. Also, the young generation would easily be convinced to go back to the interests of their fathers by promising them the customization options. Therefore, Harley-Davidson decided to widen the customization field to accommodate a vast network of customers. The customers were allowed to choose the customization that fitted their preferences. Also, the consumers had become safety-conscious, and Harley-Davidson had to invest in developing safety measures in the products sold to consumers. Generally, the competitors were winning on the issue of safety measures, and Harley-Davidson had to react swiftly. Moreover, it employed the concept of consumer surplus to gain a competitive advantage in the market.
The competition was making operations difficult for Harley-Davidson, and the competitors were taking advantage of Harley’s fading customer base. Harley-Davidson, therefore, decided to employ consumer surplus as a tool for moving on top of the competition ladder. The consumer surplus comes as a result of the difference between use-value and exchange value. The use-value explains the value that a consumer sees every time they use the product. Generally, the consumer expects the use of value to be high to justify the quality of the product.
On the other hand, the exchange value is the value that the seller gets after a consumer purchasing a product. Generally, a company is in a better position to change the exchange value in a bid to attract more customers (Alonso, Bressan & Sakellarios, 2016). The difference between the use-value and the exchange gives the consumer surplus. Moreover, the use-value has to be higher than the exchange value to maintain a high consumer surplus. Harley-Davidson took advantage of the consumer surplus because it had been in the market for a long time and had built a strong base. Therefore, new customers were made to believe that the company prioritized the relationship with customers. Additionally, Harley-Davidson employed a resource-based view towards building a new customer base.
The resource-based view involves taking advantage of the consumers’ perspectives to win their loyalty. The attractiveness of a commodity can be enhanced to make it unique and rare in the market. Attractive products are always expensive to come up with, but efficient management can come up with strategies to improve the attractiveness of products while maintaining cost-effective approaches (Michael, Saban & Abdurahman, 2016). Valuable resources are generally defined as ones that bring profits to a company regardless of them being tangible or intangible. A rarity, on the other side, is defined as the availability of a product in the market. Products that flood the market tend to lose value due to competition regardless of their use-value. Also, inimitability is essential in beating competitors is products are designed to outdo the possibility of identical products being produced by rivals. The inimitability approach is similar to non-substitutability, and products need to be designed to maintain uniqueness. Generally, Haley-Davidson employed resource-based strategies to acquire a competitive advantage over its rivals.
Harley-Davidson concentrated on improving their products to obtain a competitive advantage over its rivals. The first attempt to enhance the attractiveness of their motorcycle to capture the attention of new customers (Michael, Saban & Abdurahman, 2016). The improved attractiveness improved the rarity of similar products; hence, the value remained high. Attempts from rivals would come with additional costs that Harley had accepted to incur in a bid to recover their threatened glory. Generally, companies only employ strategies that promise to give significant returns. Harley-Davidson had tasted the benefits of a loyal customer base and was willing to pay the price needed to maintain the loyalty.
The decision on whether to increase or decrease the application of the strategies is based on the success of the initial attempts. Harley-Davidson is already enjoying a new class of customers, and the strategies are therefore profitable. The company should, thus, increase the application of the strategies. However, caution should be taken when applying the strategies. If the cost of employing the strategies does not reflect the good progress of the company, the strategies should be left, so that the company can pay attention to the already established strategies.
In sum, the original target market by Harley comprised middle-aged males who have been commonly referred to as baby boomers, but the market has changed, raising the need for new markets. Harley-Davidson had built crucial confidence in its products and thus gave at least two-year warranties to the customers, thus a continued loyalty development among customers. However, the competition was making operations difficult for Harley-Davidson, and the competitors were taking advantage of Harley’s fading customer base. Haley-Davidson employed the resource-based approaches to acquire a competitive advantage over their rivals. Generally, Harley-Davidson has emerged triumphant in the market, owing to efficient management strategies.
References
Duarte Alonso, A., Bressan, A., & Sakellarios, N. (2016). A resource based approach in the context of the emerging craft brewing industry. European Business Review, 28(5), 560- 582.
Michael, M. S., Saban, G., & Abdurahman, A. Z. A. (2016). Factors affecting non-exporting small and medium enterprises’ intention to export: Resource based approach. Procedia- Social and Behavioral Sciences, 224, 199-206.
Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2015). Strategic management and business policy: Global innovation, and sustainability.