Marketing Harley Davidson Inde

Editor's Notes

• #4 It’s in 1907 that is created the Harley-Davidson company, even though Haley and Arthur Davidson launched the first Harley-Davidson bike in 1903. Their famous logo “bar and shield” was trademarked in the US in 1911. They’re known for making high-quality motorcycles with varying specifications (the most famous series being the XL Sporters series, the FL series, the Fat Boy…). Their first Headquarter is located in the Wisconsin. Since the beginning, they wanted to go global; indeed they started exporting to Japan in 1912 and their first dealership in Australia was established in 1920. They become very successful, in 2001 as the growth of the motorcycle market in the US appears, the demand for Harley-Davidson bikes grow even more despite the increasing concurrence of other companies.
• #5 By 2011, they operate in 2 segments: Motorcycles and Related Products (MRP) unit and a Financial Services (FS) unit. Moreover, in 2011 they have 3 US factories and one assembly unit in Brazil. They also increased their sales from international market to 34.7% per cent of total sales in 2011.In order to keep extending into new markets, HD established its Asia-Pacific Headquarters in Singapore in May 2011. They know an important growth of their revenue and annual income by mid-2012. Harley-Davidson is a really famous brand; known for its spirit, it is considered as one of the oldest surviving cult brand with loyal customers. The company wants to keep expending and at this time in India the motorcycle markets is growing really fast. Moreover, a very strong market emerged in India thanks to the growth of its economy, nevertheless there is a growth of the professional class, associated to the vast investment in infrastructure and other industries, which lead to the emergence of an important young population with disposable income. It was a perfect target for the company so Harley-Davidson ceased the opportunity of this market.
• #6 It hasn’t been that easy though to enter the Indian Market. In 2005, HD wants to entry this market through the direct import route. But norms in India were differents (stringent emission norms for bike more than 500cc) and the motorcycles from HD couldn’t enter, HD tried to press for the relaxation of the norms but it derailed the company’s entry for almost two years. Moreover, the Indian government resisted as well because of the high import duties levied on its bikes. They finally accept the exportation of HD bikes into India in exchange for agreeing to the export of Indian mangoes to the US. Troubles continued as HD could only sell its bikes in India through dealers and not to individual users.
• #7 When they could only enter the market through the dealer’s network, they still took the opportunity. In 2009, HD launched the applications for dealers and there was a very positive response. Bikes were suppose to be imported from the US and sold through established dealers. By March 2010, HD found its 5 initial dealers across the country. They kept the spirit of the company, the essence of the brand (they also deliver in India everything that was part of HD like personal accessories, clothing and tattoos). They knew there was a high potential for the American marquee in India, that’s why they kept their models “made in US” and didn’t create new cheaper models for Indians. Later they decided to assemble a few of their models directly in India, to reduce costs. They chose Bawal, a city close to Delhi (second facility outside the US). It helped them to reduce import tariff and the retail prices of the bikes. They started assemble new models, by mid-2012, India offered 15 HD models. The launch was a success for several reasons. They tried to better understand the Indian customers and to develop the customization kits. Besides, test-ride was possible. They also partnered with HDFC Bank, for a wide range of financial services. They also conducted various brand-building events. Finally, after seeing the overwhelming response from the Indian market, they decided to expand beyond the major cities and to open new showrooms in other cities. With the success of the brand in India, Harley-Davidson is now aiming for a ten-fold increase in sales in India by 2015/2016 to 10 000 units a year.
• #10 Yes, the indian market is really suitable to lauch the products of the brand.But, HD, will have to face different problems linked with the external factors.
• #11 The ecological factors Problem The brand did not comply with the India’s emission standards regarding bikes more than 500cc blocked entry of the market Solutions in 2007, issue related : Indian government accepted EURO III, accepting bikes more than 800 cc Deals between the US government and the Indian one : regarding the exportation of indian mangoes and banking licenses of some Indian banks(ex : ICICI Bank, State Bank of India)
• #12 The economical factors Problem High import duties Solutions The system of Tariff Rate Quota (customs duties reduce for a determined number of imported bikes) offered by the indian government not applied because it was not fair for the other company Organization of a hyped rally ride -> fail too Conclusion Consequence of these factors : Harley Davinson had to change its strategie of selling selling its bikes indirectly through dealers
• #15 Intro- India is a developing country whose economy is growing at a decent rate. Its GDP (gross domestic product) and per capita income are constantly increasing. Due to this the purchasing power of people is also increasing and they have more disposable income to spend. The standard of living is also improving day by day. This makes India an appealing target for companies like Harley Davidson (YouTube, 2009). Their bikes are technologically very sound and sustain in any climatic conditions. After the establishment of its CKD assembly plant in India, the price of Harley Davidson products will reduce due to the cutback in custom duties.
• #16 SEGMENTATION: - India has one of the largest two wheeler industry in the world. Last decade has seen a huge rise in the production of two wheelers in India. In 2009-10, 10.5 million two wheelers were sold across the country. Out of these, 77-78 % sales were of motorcycles and the rest was divided in scooters and mopeds. (Chandramouli, R and Doval, P, The Economic Times, 13-04-2010).
• #17 Demographic aspect- The target market for Harley Davidson in India is males in the age group of 20-45. This segment consists of youngsters in age group of 20-25 who belong to well to do families. Also there are mature people in age groups 25-45 who are well settled and have a passion for motorbikes. As Harley Davidson Motorbikes comes in the premium bike segment, only those people who have a high disposable income will be able to afford these bikes. So Harley Davidson will target only the upper class people in society. According to the data in exhibit 5, the luxury buyers in age group of 25-34 compose the 53% of the whole luxury buyers and the are at the same time compase the main target audience for Harley Davidson bikes. Social class- many marketers segment the market on basis of social class such as upper, middle or lower class. According to the exhibit 4 the upper class with annual household income of 222 800$-1 114 000$ make a 23 % of the whole number of households.
• #18 POSITIONING: - Positioning of a product means creating a brand image in the minds of the consumers as they usually tend to pay money for the image rather than the actual product. The company felt that their customers saw their bikes as an all-American brand and wanted to purchase the bike having a “made in US” tag. Worldwide, Hrley-Davidson contented itself with the idea of lifestyle in the automative industry, a sense of leisure and adventure.
• #19 All in all India is ready for such luxury goods as HD bikes, the main factors of which are sustained economic growth, demand for luxury products. The Indian market for luxury products grew 20% in 2011 over the previous year’s sales.
• #21 Bawal Assembly (100km from Delhi) Need for local dealer partners who share passion and commitment to building customer relationships and the HD brand 5 dealers in Delhi, Mumbai, Bangalore, Chandigarh, Hyderabad Inability to sell bikes to individuals directly, only through dealer network (2009) What has already been done: - Efforts to understand the Indian customer - Bike customization kits to build custom bikes from scratch (altho questionable) - Imported the global experience (accessories, clothing, tattoos) - Test-rides for the HD experience - Partnering with HDFC bank to offer financial services
• #22 Bawal Assembly (100km from Delhi) Need for local dealer partners who share passion and commitment to building customer relationships and the HD brand 5 dealers in Delhi, Mumbai, Bangalore, Chandigarh, Hyderabad Inability to sell bikes to individuals directly, only through dealer network (2009) What has already been done: - Efforts to understand the Indian customer - Bike customization kits to build custom bikes from scratch (altho questionable) - Imported the global experience (accessories, clothing, tattoos) - Test-rides for the HD experience - Partnering with HDFC bank to offer financial services