3 YEAR MARKETING PLAN ON HARLEY DAVIDSON IN UK

Student number: 1132601 Name: AMAN MALIK

CONTENTS

PART 1EXECUTIVE SUMMARY 1.1. Background of the company 1.2. Environmental Analysis 1.2.1 External Environment 1.2.2 Internal Environment 1.3. SWOT Analysis PART 22.1. Target Market Selection 2.2. Market Segmentation 2.3. Product Positioning 2.4. Characteristics of the Market Segment PART 33.1. Marketing Mix for each Market Segment 3.1.1. 3.1.2. 3.2. Monitoring of the marketing mix strategies adopted PART 4 4.1. Recommendation 4.2. Conclusion List of References

EXECUTIVE SUMMARY Globalisation is at its pace and in this rapidly changing business environment, it has become the need of the hour for the organization to establish and adopt new business strategies to cope up with the latest demand of consumers. In the world of globalisation, it has become important for businesses to expand their global markets to avail new opportunities and to withstand competition within their domestic markets. There are a number of companies who have created history in this huge and innovative business world. One of the most imminent company is Harley Davidson, a legendary name as a manufacturer of motorcycles. With its worldwide market, it is not able to hold a good and secure share in the UK market. The 3-year marketing plan is an attempt to provide a framework of how hardly Davidson will be able to make its roots deeper and stronger in the UK market. For this, it has to focus on how to increase its market share and to target on the changing trends and needs of its customers. To build its brand name it has to lay more emphasis on the market segments.

BACKGROUND OF THE COMPANYHarley-Davidson (NYSE: HOG, formerly HD, often abbreviated H-D or Harley, is an American motorcycle manufacturer. It was founded in Milwaukee, Wisconsin, during 1903, the first decade of the 20th century. The company has a rich history and cultural tradition. Founded in 1903, Harley just celebrated its 110th anniversary in 2013 with a series of events around the world that culminated in hundreds of thousands of motorcyclists rallying last summer on the shores of Lake Michigan. 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 1970 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. The first dealer of Harley Davidson was C.H. Lang of Chicago, who sells the first one of the first three production of Harley Davidson ever made. After this sell Harley Davidson never look back and doubled their production every year since then.

Within a very short time Harley-Davidson become the largest motorcycle company in the world. The demand for their bike was soaring at a very high speed. Harley Davidson was trying to push their market in Europe and other part of the world. Harley Davidson was no doubt a pioneer in the field of motorbike but they establish themselves as a market leader in 1950. But very soon they lost the market share and become bankrupt. But they did not have wait too long to get back into the track. Since then they are still holding the place of market leader in the motorbike industry. According to (Hoovers Profiles) Harley Davidson offers 35 models of touring and custom Harleys through a worldwide network of more than 1,500 dealers. MOTORCYCLE INDUSTRY IN UKIn the UK there are approximately 1.36 million registered motorcycles. The value of the UK market for motorcycles, mopeds and scooters was estimated at $755 million in 2010 and is forecast to increase 12%, to $846 million, by 2015. (U.S. Commercial Service Resource Guide for the European Motorcycle Industry 66). The motorcycle markets have recently passed through a difficult period, with volume and value sales falling back. Many of the recent difficulties faced by the sector emerged following the slowdown of the UK economy in 2007 onwards, with little evidence that the sector is completely over these. The company has been in the UK market for the past ten years, the company has not been able to secure a substantial market share. Sales of motorcycles and scooters have recently been in decline. New sales were down at around 93,800 units in 2011 or a fall of 35% on sales in 2007. By value the market has dropped back by 41%, with new sales valued at 438 million in 2011. (Mintel report 2012)

Throughout its history, Harley-Davidson has remained focused on its branding. Today's market is ever increasing and changing, with riders wanting more for their money. With a limited demographic and product range, Harley-Davidson has to focus on its new customer segments to raise its market share in UK. ENVIRONMENTAL ANALYSIS Harley Davidson (HD) was once almost at its worst ever situation. But now the company has turned around its position with a successful history of motor cycles known for their quality. The company's position became bad due to its complacency in practicing an effective

supply chain management. With the result the company received the supply of components, parts and other raw materials at excessively high costs and low quality. This has tremendously increased the cost of production of the company. However the company made a thorough analysis of the various internal and external factors that affected its growth and success and refined its supply chain management based on the analysis of its general environment. Such an analysis has brought the company to fame within a reasonable time. With this background, this analyses the impact of various environmental factors on the general environment of the company. Industry Analysis Mintel (2010a) indicates that between 1998 and 2008, motorcycle and scoter ownership grew at a faster rate in comparison to car ownership. Over the decade, the number of motorcycles in consumption rose by 71%, while the number of cars only increased by 24%. In order to consider the strategic capabilities that Harley-Davidson has in place, it is important to analyse the industry in which they operate in; paying particular attention to recent trends. Due to the current economic climate, the motorcycle and scoter industry has been seen by many as a highly competitive industry to operate in. In 2009, the global industry was valued at $50billion (Moya, 2009). THE EXTERNAL ENVIRONMENT Analysis of external environment is done using PESTLE model. 1. Social Environment - The changes in the lifestyle of the majority of youth population the world-over has resulted in an enhanced business for HD. This phenomenon is further geared in the upward direction by the nature of the youth population, since `speed and style ' is in their blood. HD capitalizes on this aspect by the innovative designs that have proved successful for them. Moreover, the growth rate in population has made the age distribution in favour of HD as the number of people below the age of 25 forms a majority of the world population except for countries like Japan. This has made the number of customers attracted towards the products of HD more. With the idea of earning more income and also with the availability of more employment opportunities in urban areas there is a clear regional shift in population, and this result in increased consumer activism. With career advancements, the purchasing power of the people and youth in particular increases creating additional demand for the HD products.

2. Political Environment - There are certain political factors which affect the general environment of HD both positively and negatively. For instance, the environmental protection laws have been made more stringent and this has put additional pressure on the company for a continuous research and development to identify processes and materials that are environmental friendly. Various tax laws and antitrust regulation also play a vital role on the performance of the company as expansion beyond a certain point would prove uneconomical. The Human resource legislation mostly in favour of the employees also does have an impact on the profitability of the company as it has to adapt to minimum wages and other statutory payments to employees. As far the internationalization of the business of the company is concerned the moving of production facilities to those locations where men and materials are available at cheaper cost, the company is bound by foreign trade regulations and special incentive schemes that sometimes prove advantageous to the company. 3. Economic Environment - UK is one of the largest economies in Europe with an estimated GDP of 1,317 b in the year 2012 (Mintel 2012). Though this represents a slight decline from the year 2011, forecasts show that UKs GDP is expected to increase by 9% up to the year 2017. Economic issues have particular resonance with competitive rivalry and the power of suppliers. Rising fuel prices will affect both Harley-Davidson their suppliers and Harley-Davidson's competitors (Massey, 2010). Competitive rivalry is high in this industry. Because motorbikes are often seen as a luxury, pricing the products can be sensitive. Harley-Davidson for example are offering spare parts, extended warranties, environmentally friendly and innovative products to distinguish themselves from competitors. Again, economics and competitive rivalry are brought together on the issue of superbikes. Because of Japan's successful movement in this market, they have established a strong place in a competitive sport and priced their products cheaply in accordance. It therefore affects the customer's perception of Harley-Davidson's place in the motorcycle market, as well as their pricing policies. However, those having a predominant place in this sport do have conflicting interests, i.e. Yamaha and Honda have diversified into musical instrument and other motor vehicles, in effect distinguishing Harley-Davidson as a loyal and specialised motorbike manufacturer. 4. Economic and Technological Environment With concerns with the environment, there is a high level of pollution damaging the environment, people are choosing to use buses, trains etc. Harley-Davidson is therefore attempting to reduce the risk of substitutes by playing

a bigger part in helping the environment. Harley-Davidson has produced an environmental warranty and has signed up to the One Clean Up Program, (York Site Remedy, 2005). This could therefore mean that people are less likely to change to substitutes based on environmental issues. Harley-Davidson's purchase of Castalloy in 2006 supported their dedication to the environment (Porter, 2006), as Castalloy had been protected by environmental risks by the Australian Government (BNET, 2006). By also developing their technology to run on zero emission electricity, Harley-Davidson and others have developed their product portfolio (Anupam, 2009). This development in technology has also had significance on the power of substitutes. Designing Harley-Davidson's bikes in a certain way, they are again able to attract customer's loyalty to the brand. Anti-lock breaking systems and clutchless'' transmissions are beginning to be developed by Harley-Davidson and other competitors (Mintel, 2010a). Coupled with this, Harley-Davidson has prided them on having a distinctive sound. As a result, the company have trademarked this using Noise Vibration Harshness technology (BNET 2002). 5. Legal Environment - Various legal regulations including tax systems, traffic laws, age restrictions and legal requirements for owning a motorbike are also considered to be having significant influence on manufacturers and sellers of motorbikes. In this regard, Harley Davidson is restricted by the law to ensure that its motorbikes are roadworthy (as required by the traffic laws), and that it complies with the tax system in the UK (Bernstein 2010). THE INTERNAL ENVIRONMENT 1. Dealer chains There are about 29 dealers of Harley Davidson in UK. The company website is the easiest way to access the detailed information about the dealers. 2. Customers The consumers of Harley Davidson are the individuals and the targeted market is the ageing population between 35 and 45 years. But looking towards the changing demographic trends, Harley Davidson is focusing the line of bikes on the young population below the age of 35 years. The company is expanding its brand among the young and influential group. Also, Harley Davidson is coming in the market with products for females too. 3. Competition The motorcycle market supports a number of manufacturers and brands, although since the 1970s, the UK market has largely been the preserve of Japanese manufacturers. While the last decade has begun to see a breakdown of the dominance of the market by Far Eastern companies, the two biggest manufacturers in 2011 were still Japanese

ones: Honda (15%) and Yamaha (12%). Other names of note currently include Italian manufacturer PVG Group, which offers scooter brands such as Aprilia and Piaggio (9%), UK manufacturer of motorcycles, Triumph (8%), German motorcycle manufacturer, BMW (6%) and Harley Davidson (4%). (MCIA/Mintel 2012) SWOT ANALYSIS Strengths It has domestic and international market. It is known for its high quality, style and uniqueness. Strong network distribution through the world. It has strong customer relationship Strong brand loyalty and HOGs

Weakness Opportunities Increasing demand in US market for bikes. Market share increasing in Europe and Asia. Recovering economy in UK will increase the sales of bike. Women and younger riders are increasingly becoming interested in bikes. Innovation could help Harley Davidson. Harley Davidson does not emphasize price in its product. It had difficulty gaining market share in some European market. Japanese bikes are less costly. Not a strong global influence. Weak research and development. Marketing strategy is centralised. Limited product range. Products are very expensive

Threats International competition. The ever increasing fuel prices may necessitate over-reliance on public transport services.

Substitute products can harm Harley Davidson. Government regulations are always threat to Harley Davidson.

PART 2 TARGET MARKET SELECTION This section deals with the present target market and the future target market which have to focus for increasing the market share in UK. The different categories employed in this section is discussed below MARKETING SEGMENTATION With the help of market segment, the needs and wants of targeted group of consumers can be developed and focused accordingly. Marketing segmentation includes the following categories: 1.

References1. http://www.wikiwealth.com/swot-analysis:hog 2. http://www.authorstream.com/Presentation/vicky86-91794-harley-davidson-final-onehd-others-misc-ppt-powerpoint/ 3. http://www.wikiswot.com/SWOT/4_/Harley_Davidson.html 4. http://www.oxbridgewriters.com/essays/business/identifying-harley-davidsons.php 5. www.wikipedia.com 6. www.harleydavidson.co.uk 7. http://www.aber.ac.uk/en/media/MMM3210-11.pdf 8. http://thekneeslider.com/harley-davidson-is-winning-younger-buyers/ 9. Harley-Davidson Reports 2009 Results". (2010). Wall Street Journal http://online.wsj.com/article/PR-CO-20100122-903313.html?mod=wsjcrmain. Retrieved arch 5, 2011.