over brand extension

Introduction Harley-Davidson is an American motorcycle manufacturer with a rich history and cultural tradition. Founded in 1903 in Milwaukee, In 1929, there were 241 motorcycle manufacturers in the US. After the Depression, only two remained: Harley and Indian. By 1953, Indian went out of business, leaving Harley-Davidson as the only American motorcycle manufacturer. Financial difficulties in the 1970s are led to the parent company, AMF putting the motorcycle division up for sale. Without a buyer, a group of Harley managers bought out the company and rescued it with a business turnaround that included brand extensions into licensed goods, such as apparel and related accessories. Now a publicly owned company, Harley has scored double digit growth for eighteen consecutive years. Harley transformed itself into a strong marketing company with a focus on lifestyle image and product quality.

Background
A brand over-extension
While motorbike apparel (Motorclothes® merchandise) and ornaments probably matched the Harley Davidson cult heritage brand, the company had lost focus. In the 1990s, it extended the brand too far. It introduced products like wine coolers, aftershave and perfumes. Even the loyal fans did not like the idea, as it did not resonate with the tough brand identity. The company was clearly not focusing on what it knew best – building strong bikes. Customers wanted strong bikes and accessories that complimented the brand, but ties and infant clothes went too far. Activities like cruise biking were good initiatives by the company to involve the customer and enhance brand loyalty. However, Perfumes and wine coolers were eroding the mystery of the H-D brand. After strong criticism from the loyal customers, the company pulled of many inappropriate products. H-D had learnt a branding lesson. More products did not mean more revenue and overextending the brand meant a short-term focus.