Foundations of Marketing 5th Edition by Ferrell,William Pride

Exercise 1

Harley-Davidson: More Than Just a Motorcycle
Harley-Davidson's customers can spot each other instantly by the iconic black, white, and orange logo on their motorcycles, clothing, and saddlebags. More than a century after the first Harley-Davidson motorcycle hit the road, the company's annual worldwide sales total more than $4 billion. Harley-Davidson dominates the U.S. motorcycle market, and sales are also strong in Japan and Europe. Its annual output of 200,000 motorcycles covers 35 models in seven product lines (Sportster, Dyna, Softail, VRSC, Touring, Trike, and CVO). An important part of the Harley- Davidson product is customer services. Harley dealerships help differentiate its product with customer training, warranties, guarantees, repairs and accessories. Harley dealerships become social centers for customers to interact and have fun.
Although Harley-Davidson teetered on the brink of bankruptcy in the 1980s, it roared back by limiting production to focus on a consistently high level of quality. Like other automobile and motorcycle manufacturers, the company is facing decreased sales due to the slow economy, but Harley-Davidson hope to revitalize the company with its new products. The new motorcycles combine the brand's image of freedom and individuality with styling, performance, and features that appeal to younger buyers and women buyers. To attract first-time buyers as well as experienced riders trading up to better bikes, Harley-Davidson prices its motorcycles starting at $6,999 and also offers financing and insurance. Each model's price depends on its specific combination of features and styling.
Buyers can also order limited-edition motorcycles custom built with distinctive paint designs and accessories. Customers see their bikes as a way of expressing their individuality. However, Harley-Davidson selects only a small number of orders annually for custom-built bikes. Not surprisingly, these custom products are in high demand. The product modifications that go into custom bikes are almost like new models of the same brand, but they represent a one-time production run.
To encourage the next generation of biking enthusiasts to learn to drive a motorcycle and then buy the Harley-Davidson bike of their dreams, many of the company's dealers offer the Rider's Edge driving course. Since 2000, when the course was first offered, more than 150,000 people have graduated and earned a motorcycle license. The Rider's Edge also helps experienced riders to hone their driving skills and learn special techniques for riding in groups.
Group riding is such an important part of the overall product experience that the company founded the Harley Owners Group (HOG) to foster a sense of community among its customers. Today, more than 1 million HOG members enjoy benefits such as access to dozens of exclusive group rides, a special customer service hotline, and a members-only website. They also receive two magazines: Hog Tales, with articles about members and member events, and Enthusiast, with articles about Harley-Davidson's goods and services. In addition, customers can use the Harley-Davidson website to plan travel, book hotels, rent bikes, or ship their bikes for their next riding adventure.
Knowing that customers are passionate about motorcycles and about Harley-Davidson in particular, the company arranges tours at four of its factories in Wisconsin, Pennsylvania, and Missouri. It opened the Harley-Davidson Museum in Milwaukee, Wisconsin, home of its headquarters, with 130,000 square feet of exhibits. Many of the exhibits feature products from Harley-Davidson's past, including a sample of the bikes, boats, golf carts, and snowmobiles the company once manufactured. Museum-goers can get a taste of the Harley experience by climbing onto one of the company's current bikes for a virtual ride through beautiful country scenery projected on a big screen.
The museum also looks ahead by highlighting Harley- Davidson's latest technology, its newest engines, and the inner workings of its new-product development process. One exhibit shows how a new motorcycle starts life as a sketch, is transformed into a clay model, becomes a testable prototype, and ultimately enters full production. "In creating this museum, we wanted to make sure that it told an evolving story," says the museum director. "We have a rich heritage, but we also have an exciting future."
How does Harley-Davidson use customer services to differentiate its motorcycle products