Harley Davidson Biking Company: Bonding with the Biker

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Syndicate 2 Harley Davidson Motor Company:
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Bonding with the Biker
Prepared for: Marketing Management Bus 5043
Prepared by: S. Maharaj

February 2012
Case Study

PESTLE ANALYSIS
* Harley Davidson Motor Co was established in 1903.
* Despite faring badly in the 1970’s due to the threat that Japanese Competitors posed, by 2006 the company held over half the share of the US heavyweight motorcycle market, and a third of this market worldwide. This was as a result of a new strategy that was implemented in the 1980’s, that shifted the focus of the company onto its customers. * Harley Davidson was introduced to the South African market in 2006. Since then, 6 new dealerships have opened, nationwide. * While the growth of the company locally has been tremendous (largely attributed to the weather, that encourages people to be outdoors), the South African market accounts for only 0.29% of the total Harley market. * Locally, Harley dominates its market by holding 67% of the total market share. * The Riders Academy and HOG are initiatives that have boosted the company’s status in the minds’ of customers. These customer-orientated services are what have differentiated the company from competitors, in the minds of customers. * The average purchaser of a Harley Davidson motorcycle is male and in his mid-forties, with an average income of R596 000 (these purchasers make up 88% of the market). A large percentage of these riders are married, professionals. * Female purchasers account for 12% of the market and are usually career-orientated, independent and unmarried women who are around 29-30 years of age. South Africa has the highest representation of female riders worldwide. Research has also indicated that female riders are buying more expensive bikes (ranging from R137 000 upwards). * There is growing interest from the black diamond segment in South Africa, but the volatility and a pull towards cultural values as opposed to more western ideals have made this market difficult to target. * A customer will spend on average around R47 500 per annum in a Harley store, and the majority of sales of new, and trade-in bikes are made to existing Harley customers. * Harley Davidson motorcycles fall into the cruiser category in South Africa and its competitors include Triumph, Honda, Yamaha, Hyosung, Kawasaki, Loncin and Suzuki. These competitors have recognised the opportunity to supply motorcycles at cheaper prices. * The most common model in South Africa is the Sportster, which is not uncommon in emerging markets. * In South Africa, the rental market presents an attractive offer to foreign tourists wishing to take guided tours around cities or landmarks, or travel around the country on a Harley. This has been bolstered by the poor exchange rate. It was also advertised to HOG members wishing to bring friends to HOG rallies- but the rental market has not been capitalised on. * Items such as boats, jet skis, quad bikes and other such luxury items all represent competitors for the South African consumer’s disposable income. * Grey products (motorcycles that have been found in scrapyards and that have been restored, but not registered through Harley channels) form a huge part of the motorcycle industry in South Africa and are competitors to Harley’s market share. * The weak rand against the dollar and its fluctuations have made motorcycling an expensive sport for many to pursue. * In South Africa (which is considered to be an independent market and thus, does not have its own distribution warehouse), stock has to be ordered directly from the USA, thus driving up the prices of motorcycles and accessories. * Noise pollution and emissions are concerns for environmentally friendly customers and for some countries across the globe.

Question One: Critique Harley Davidson’s product policy. What are the core benefits of...
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