BIKERS AGAINST BORING RIDING
  • About Me
  • BLOG
  • Friends
    • Chewy
    • HARLEY DAVIDSON
    • The Aging Rebel
    • Stephen Crane
  • Contact

"new" harley davidson

9/15/2019

0 Comments

 
Picture
In the early 1980's, Atlanta based Coca Cola initiated a top secret research project called "Project Kansas."  Maybe "Project Georgia" didn't sound mysterious enough.  The marketing scheme took its name from a photo of Kansas journalist William Allen White drinking a Coke seated at a soda fountain.  By 1983, Coca Cola's soft drink market share had declined to 24% from a post-World War II share of 60%, largely because of competition from sweeter tasting Pepsi Cola. 

Desperate measures were called for.   

Coca Cola chief executive officer Roberto Goizuetta was receptive to the idea that changing the taste of Coke would lead to increased sales and recapture the company's lost market share.  In early testing of "New Coke," the sweeter cola consistently beat both regular Coke and Pepsi in taste tests, surveys and focus groups. 

Today, most observers believe "New Coke" was the number one most disastrous marketing blunder of all-time.  ​

Picture
On June 19, 2014, Harley Davidson announced to the public "Project LiveWire" - the first electric Harley Davidson motorcycle.  "While not for sale," the announcement proclaimed, "Project LiveWire is specifically designed for the purpose of getting insight into rider expectations of an electric Harley-Davidson motorcycle."


Harley-Davidson riders unveil Project LiveWire on New York’s Manhattan Bridge on June 23, 2014.
​
Research and development on the Project LiveWire bike started soon after Thomas Edison invented the electric light bulb.  Five years and three months after introduction of the first prototypes, the LiveWire is nowhere to be found in dealers' showrooms.  The general manager of a Harley Davidson dealership recently told me they are expecting their first electric bike "hopefully some time this month."  The owner of another Harley Davidson dealership told me they aren't expecting their first LiveWire until February 2020. 

Speaking of marketing blunders, hyping a new product for years followed by the inability to deliver the product to the consumer is right at the top of the list.  

"Harley-Davidson’s new motorcycle models include its first electric ride, the LiveWire. But the bike maker’s new lineup isn’t driving sales for its dealers," says a recent report by Wedbush Securities analyst James Hardiman. 

​Maybe that's because their dealers do not have any LiveWires to sell. 
​

Harley Davidson thinks it is in the transportation business.  They couldn't be more wrong.  Harley Davidson is in the iconic brand business. 

While selling emblazoned "Bar & Shield" logo t-shirts, leather jackets, gloves, hoodies (all known as "Motorclothes"), shot glasses, dart boards, watches, lighters and about a bazillion other items only accounts for 5% of total Harley Davidson annual revenue, the swag generates profit margins of more than 40% compared to 38% on parts and accessories, and 15% to 20% on the motorcycles themselves. 

Plus, customers wearing their Harley Davidson t-shirts out in public is a lot of free advertising.  These people are walking billboards.  And Harley owners love wearing this stuff (I certainly do).  They love wearing it because it flashes "the Brand" and communicates a certain lifestyle that goes hand in hand with owning and riding a Harley Davidson bike.  

When's the last time you saw someone wearing a Tesla t-shirt at Trader Joe's?  I can't remember either.   It is NOT about getting from point A to point B. ​
Back in June 2014, Matt Levatich, President and Chief Operating Officer, Harley-Davidson Motor Company said "America at its best has always been about reinvention.  And, like America, Harley-Davidson has reinvented itself many times in our history, with customers leading us every step of the way. Project LiveWire is another exciting, customer-led moment in our history."  

Matt - iconic brands do not need to be "reinvented."  I'm sure you learned that back in Marketing 101.  Or just ask the folks at Coca Cola. 

With less than a month left in the third quarter, Harley dealers say their retail sales are down between 5% - 10% from a year ago—and last year’s third-quarter sales were terribly weak. 

And we're still waiting on the LiveWire. 


Today, Coca Cola's 17% soft drink market share is higher than Pepsi and Mountain Dew combined and Coke is reportedly recognized by 94% of the world's population.  Let's end on a positive note - maybe people will actually buy a Harley Davidson motorcycle that costs about the same as a fully loaded Prius.  And makes the same amount of noise - none. 

​Let's ask the folks in Atlanta what they think. 

No biker deserves to be bored . . . 
0 Comments

OPEN LETTER TO MATT LEVATICH, CEO HARLEY DAVIDSON MOTOR COMPANY

9/15/2019

0 Comments

 
This post originally appeared Sept 3, 2018

Dear Matt:


For the past several months, I've been reading about the current woes of Harley Davidson. I understand you're shipping almost a third fewer motorcycles to your dealers than at the pre-recession peak in 2006.   Other challenges facing the Motor Company include high tariffs added to the cost of bikes manufactured here but exported to other countries, stuggling to find a foothold among millennial buyers and the "unappealing sterotype" of typical Harley Davidson customers. 

Your solution to the financial crisis in Milwaukee is sort of a "be all things to all people" approach.  News outlets are telling us the Motor Company will start producing a dozen new models in the next couple of years and 100 new models in the next 10 years. These will include electric motorcycles along with smaller engine, lighter bikes that young people who wear skinny jeans will want to use for every day commuting.  But given a choice, millennials are likely to choose a 15 cents per mile Bird scooter over an "inexpensive" $10,000 Harley. 

According to fool.com, prospective buyers will "suffer sticker shock" from looking at the 110-mile range $30,000 LiveWire electric motorcycle and will look to see what else is available. What they'll find are competing electric motorcycles that offer better performance at half the price or less, and that is a major miscalculation Harley Davidson shouldn't have made.

I get it that you report to a board of directors who then report to Harley Davidson's shareholders.  I did a little research and discovered 87% of Harley's shareholders are "institutional holdings."  Institutional ownership is the amount of a company's stock owned by mutual funds, pension plans, investment firms, hedge funds and other large pools of dollars.  By comparison, Amazon's and Apple's institutional ownership is around 60%.  So I guess it really is all about quarterly results and earnings per share.  You certainly don't want Vanguard or Berkshire Hathaway dumping Harley Davidson stock. 

In his book "Out Bad," Donald Charles Davis aka The Aging Rebel states "the Motor Company almost succumbed in the late 1970s and there would be no Harley Davidson today if it were not for the loyalty of motorcycle outlaws. Outlaws do not own Harleys simply because they think Harleys are still good motorcycles.  Outlaws own them out of reverence for tradition.  Then they usually rebuild them."

I don't have a problem with Harley Davidson marketing its products to young people, women and new riders.  I do have a problem with you forgetting who you are, what the Harley Davidson brand stands for and what got you to where you are today.

As much as you want to believe Harley Davidson is in the "transportation business," you couldn't be more wrong.  Harley Davidson is in "the feeling you get when you plant your butt on a big, loud American made motorcycle that makes you forget about everything except staying alive and being present in the moment" business.  You are in "the feeling you get when your black fire-breathing Harley stops at an intersection next to a BMW with 'SEXIBOY' license plates" business.  You are in "the feeling you get going across the Mojave desert at 90 mph and a crosswind hits you so hard you're amazed the bike is still going in a forward direction" business.  And you are in "the knowing I'm a badass" business.  

There are still plenty of people out there that want to experience these feelings.  Generation and gender do not matter.  Do not abandon these people. 

A recent article by Claire Suddath titled "Harley Davidson Needs a New Generation of Riders" on www.bloomberg.com summed up the situation very succinctly:  "Harley is caught between dueling ideologies about what it represents.  It's searching for a middle ground, one that will let it reach into the future without letting go of the past.  If there is a path, it must be pretty narrow, because the rest of the country hasn't found it either."

​Good luck with that.

Back in the rah-rah days of 2006, your company produced a two-and-a-half minute promotional film called "Live By It."  You can find the film today on YouTube.  Here is a verbatim transcript of the film's voice over narration:

"We believe in going our own way, no matter which way the rest of the world is going.  We believe in bucking the system that's built to smash individuals like bugs on a windshield. Some of us believe in the man upstairs.  All of us believe in sticking it to the man down here.  We believe in sky and we don't believe in the sun roof.  We believe in freedom.  We believe in dust, tumbleweeds, buffalo, mountain ranges and riding off into the sunset.  We believe in saddlebags and we believe that cowboys had it right.  We believe in refusing to knuckle under to anyone.  We believe in wearing black because it doesn't show any dirt  Or, weakness.  We believe the world is going soft and we're not going along with it.  We believe in motorcycle rallies that last a week.  We believe in roadside attractions, gas station hotdogs and finding out what's over the next hill.  We believe in rumbling engines, pistons the size of garbage cans, fuel tanks designed in 1936, freight train sized headlights, chrome and custom paint.  We believe in flames and skulls.  We believe life is what you make it.  And, we make it one hell of a ride.  We believe the machine you sit on can tell the world exactly where you stand.  We don't care what everyone else believes.  Amen."

Your chief operating officer, Michelle Kumbier, admitted recently that Harley had never done much consumer research.  "We'd mostly gone on gut feel.  We thought we knew our existing customer base and what they wanted." 

Do you remember "Live By It?" Does Ms. Kumbier remember it?  Sounds to me like you knew your customer base very well.  So what happened?  What changed?  Did you develop amnesia?  Was this all just marketing bullshit?  Or does "Live By It" describe the "unappealing sterotype" Harley owner with ape hangers and tattoos whom you now choose to disown?   

Oh right, your fully diluted earnings per share haven't been very good lately. 

This week Mayans MC will premiere on the FX cable network.  Mayans MC is a spin off of the hugely successful seven-season show Sons Of Anarchy. The show follows a Latino outlaw motorcycle club along the southern California/Mexico border. Like Sons, The show will get huge ratings. 

I hope you are paying attention.  There's a lot of us out here.  

P.S.  Mayans MC's debut was the week's most watched cable show that wasn't a football game.  Are you listening?

P.S.S.  For the first quarter of 2019, Harley Davidson was able to generate earnings of $0.80 per share.  That was down from the year-ago period's $1.03 per share.  Although Harley beat Wall Street's forecast of only $0.67 per share. Someone said it's easy to step over the bar if you set it low enough.  The motorcycle industry also remains in trouble, with sales down 4.7%.  Harley's first quarter US sales were down 4.2%, international sales were down 3.3% compared to 1Q2018.


No biker deserves to be bored . . . ​
0 Comments

    Archives

    September 2019

    RSS Feed

Proudly powered by Weebly