Harley-Davidson: A Cult Brand Hit by Demographic Challenges

Abstract:

This case is about the demographic challenges faced by US-based iconic motorcycle maker Harley-Davidson Inc. (Harley). Harley was the world's leading designer and manufacturer of heavyweight motorcycles with over a 50% market share. Harley bikes were known for their distinctive design and heavy customization. The company created an experience around their bikes that emphasized freedom and empowerment. Analysts attributed Harley's success to its loyal customer base which basically comprised men over the age of 35.

The case discusses the marketing strategies of Harley including the product, price, distribution, and promotion strategies of the company. By adopting a focused differentiation strategy, Harley was able to command a premium for its products, analysts said.

However, since the late 1990s, Harley had fallen on hard times. The key problem facing the company was the changing demographics of its purchasers. The median age of a Harley rider, which was 35 years in 1987, increased to 47 in 2005 as majority of Harley's core customers, the baby boomers, were aging. Experts said the company's sales would be affected as baby boomers were fast approaching their peak spending years.

Moreover, the younger generation preferred sports bikes rather than the heavy American style cruisers manufactured by Harley, they said. Due to shifting demographics, Harley planned to step up its efforts to appeal to a broader range of customers in the US and other emerging markets including young adults, women, and ethnically diverse adults.

The case concludes by discussing how Harley could adapt to the changing marketplace and attract new customer groups, without alienating its traditional customer base and diluting the brand. This case is aimed at MBA/MS level students as part of the Brand Management/ Consumer Behavior/ Marketing Communication curriculum.

Issues:

The case will help the students:
» Understand the marketing strategy of Harley-Davidson.
» Study how Harley-Davidson emerged as a cult brand.
» Understand the impact of changing demographics on the company's business.
» Understand the issues and challenges faced by a brand in attracting new customers.
» Explore the future strategies Harley could adopt to attract new customers.

Contents:

Keywords:

Cult brand; Demographics; Consumer behavior; Shifting demographics; Brand loyalty; differentiation; Focused differentiation; brand dilution; Unique selling proposition; Lifestyle; Brand image; Community; Multi-generational and multi-cultural marketing strategy; Harley Owners Group (HOG); Harley-Davidson

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