By James “Hollywood”Macecari
Member of the ONA Press Association
“Restructuring steps have starved dealers of new bikes to shrink inventory and improve pricing. Since taking over as acting CEO in February, Zeitz has announced plans to cut roughly 14% of the workforce, prune its dealer network and delay product launches.” The Detroit News
Ceo Jochen Zeitz has a plan indeed, to reduce the number of dealerships and cut inventory. Sounds like a 1990’s move Harley-Davidson used in order to prop up pricing and bring in a whole different type of motorcycle enthusiast. 3rd Quarter sales are up by 30% indeed, but what’s really behind those numbers? If you cut production and limit dealerships, of course you will get an increase in revenue. This is a magic trick Harley-Davidson is using to improve its position on the stock angle. For those on the ground and actually in the lifestyle, no one is fooled with how miserable Harley-Davidson brand has become.
Harley-Davidson has given up on overseas expansion
“Harley said it’s exiting 39 markets where weak volumes and profits don’t generate enough cash to support investment. It will focus on 50 key markets, and in 17 of those it will rely on outside distributors to sell bikes. It plans to deliver its motorcycles in India through Hero MotoCorp Ltd. after announcing it is pulling out of the country last month.” The Detroit Free Press
Harley Davidson has come out publicly and announced that it will limit overseas expansion, worst yet, they will be using “Outside Distributors,” to sell bikes. My question for the dealerships, “what are your thoughts on this situation?” More importantly, how do you feel after putting an investment into a Harley-Davidson franchise, them using outside distributors to sell bikes? It’s already bad enough that they are cutting your inventory, but now they are giving a cut of your pie to distributors that haven’t put in the investment you have.
“The restructuring steps have starved dealers of new bikes to shrink inventory and improve pricing. Since taking over as acting CEO in February, Zeitz has announced plans to cut roughly 14% of the workforce, prune its dealer network and delay product launches. He was officially appointed CEO in May.” The Detroit Free Press
Starving the local dealer network will turn even more bikers off Harley-Davidson, especially when most of their customers support their dealers over the company over themselves. To be honest, people have lost faith in the brand. People see they do not matter and now the dealerships do not either. This is a double whammy to the way people view the brand.
Company abandons plans to appeal to younger riders
“Harley-Davidson Inc. is going back to the basics of making big, expensive motorcycles for its most devoted customers, abandoning a decade long quest to reach new types of riders.” The Wall Street Journal
One of the facts that a company has to face, you have to be able to bring the next generation of consumers to your product. Harley-Davidson now says it will only pursue middle age riders. If Harley-Davidson thinks this will be a way to keep the brand alive, they are sorely mistaken.
The one thing Harley-Davidson had was brand loyalty. Brand loyalty is non-existent for those just getting in the motorcycle scene. Harley-Davidson owes its whole existence to those old timers who pushed the idea Harley-Davidson was the only brand to be on. If you’re not on a Harley-Davidson then you were not a real biker. This isn’t the case anymore. People who are in the real world only care about two wheels, it doesn’t matter the brand. Actually, younger people are into Japanese brands because they are more reliable and in their price range.
Your strategy will only work for a few years, especially when the next generation starts aging. Do you really think they will change their minds just because they get older? No, this isn’t going to happen, if anything it will backfire on you.
Who is running Harley-Davidson Marketing Strategy? Mass Media is no longer the way to go.
Has someone told Harley-Davidson to get into present times with their marketing strategies? Marketing through traditional mediums like TV commercials, newspapers and magazines no longer reach the people who will buy your products.
Harley-Davidson hasn’t leveraged YouTube creators as it should. YouTube creators have a niche when it comes to motorcycling. There is a small tight community that talks about everything from Harley-Davidson to Biker News. Anyone with a brain would’ve thought about getting with some of the creators whose audience is exactly what Harley-Davidson is looking for. Nope, instead Harley-Davidson chooses to go with Mass Media and sponsorships that will never yield the same results as a YouTube Creator.
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What’s this have to do with sales? Harley-Davidson wastes millions of dollars a year on failed advertising and marketing strategies. UFC for example. How many motorcycles are sold because they have a logo in the middle of a ring? I could probably guess not that many. In the meantime they partner with some YouTube creators and get right to the people who will buy that motorcycle.
Another reason I bring up YouTube Creators. YouTube Creators capture the younger age demographic they need. 21-39 are the age group that normally doesn’t watch or read that much mainstream media. Most in this age group are on internet platforms. Internet platforms like YouTube and Facebook are where most of their information is consumed. These platforms are also the ones the audience bonds with, something Harley-Davidson no longer has.
Harley-Davidson is its own worst enemy.
Many argue the problem is with the pricing of its motorcycles. I argue it’s a whole host of problems when it comes to troubles at the company. The company is doing what it has always done, screwing the pooch when they have a good thing going. The glory years of the 90’s and early 00’s is long past. Harley-Davidson got high on its own success. In the meantime they lost sight of the basic principles that help make it successful. The company owed it success to its customers. Customers that rode with them for decades, that is until Harley forgot about them. I always say Karma is a bitch. That is true more today than ever before.
Your discontent for those who put you where you’re today, gave those same people the option to go to your competitor. Indian Motorcycles under the leadership of Polaris has been slowly grabbing your base of customers. The exodus from Harley to Indian is only going to get much stronger. Indian Motorcycles has a better lineup and they care what their customers think. This is the direct opposite on how Harley treats its customers. This in my opinion, will put the final nail in the coffin of Harley-Davidson. The same people who got you to where you are will be the same ones who take you down. Think about that the next time you want to cut inventory and raise prices so only a few can afford your product.