Harley Davidson, A struggling icon
Harley Davidson is a brand that has always fascinated me. Its history is rich, its equity and heritage are amazing and it has established itself as part of American culture, just like baseball and apple pie. It is one of the very rare brands people have been willing to tattoo on their skin and has an iconic, almost religious status most other brands envy and lust after.
And yet: the brand is struggling badly. According to analysts’ reports, people seem to prefer buying used bikes or the recently relaunched Victory and Indian brands (owned by Polaris) rather than a new Harley. As a result, overall market share and sales are down versus a year ago, and so is the brand’s stock value.
But declining market share isn’t the brand biggest problem. Its biggest problem is its positioning and eroding brand equity. Historically, a brand’s sales erode first and faster than its brand equity. But after a few years of declining sales, the brand equity start to erode as well and that’s when the brand’s death spiral starts and it becomes very difficult to recover.
And I think Harley may be approaching the point of no return.
Now, it does look like the brand is feeling the pressure and has a sense of urgency to change things. In fact, the company intends to increase its product development budget by 35% in 2016 (versus 2015) and it marketing budget by 65%. And that’s great. However, I believe that this increase in resources and spending will only throw gas on the fire if it isn’t also accompanied by an evolution of its brand positioning platform, the only way to secure the brand’s long term success.
A category of one
Harley, over the decades, has established and created for itself a “category of one”. Nothing out there really compared to a Harley Davidson. That is until the recent revival and relaunch of the Victory and Indian brands that have started to successfully nibble at Harley’s market share. However, the Victory and Indian brands aren’t the real medium term and long term threat Harley is facing. Sure, they may be (and are) winning short term, growing quarterly sales and eating some of Harley’s cheese (good for them) but in the midterm they are running the risk to fall into the same trap as Harley.
In fact, the real problem Harley needs to solve is that this category of one it has created is slowly but surely losing relevance and eroding value. What has made Harley successful for so long is now working against the brand and I believe is acting as a major barrier to purchase.
So what can Harley Davidson to get out of this precarious situation? Well, for one it can learn from our best practice research on how to succeed with young adults and apply the “Ten Habits of Successful Millennial Marketers” to its own marketing. The second thing it can do is to seriously reexamine its positioning platform, identify the core values it wants to preserve to stay true to its history but also understand what values need to change and evolve in order to thrive again. Harley’s brand equity needs to evolve if it wants to survive.
An agile strategic thinking framework: Positioning-Roulette
First The Trousers Then The Shoes Inc. uses a unique methodology to analyze brands and create compelling brand stories called Positioning-Roulette (PR). PR is based on the analysis of over 1200 case studies of effective brand building which helped us identify the 26 universal approaches to successful brand positioning, which represent the core of our methodology. We can apply these 26 universal approaches to analyze a brand’s current situation and to help identify potential strategic solutions that will help the brand evolve and move forward once validated.
For fun, we’ve spent an hour or so doing just that, i.e. look at the Harley brand through the lens of Positioning Roulette. Here are some of the opportunities we’ve uncovered.
Value-Proposition based on intangibles: People don’t buy Harley for rational reasons. They buy Harley because of the brand mystique, not because it provides a better value proposition (what consumers actually get for your money) than Japanese or German motorcycles. It doesn’t. And that’s not necessarily a bad thing.
Also, Harley bikes are expensive (even though it introduced the Dark Custom line of bikes a few years as a point-of-entry line starting at $11,000 to appeal to younger buyers) and therefore out of reach for most riders under 35 years old. This is particularly important since Harleys are usually bought as a weekend toy rather than as the primary mode of transportation. Outside the US, the situation is even heightened, since the majority of bikes bought outside the US have a utilitarian purpose, for which a Harley is not suited (try to ride the dirt roads of India with your wife and two kinds in the back on a Harley).
While Harley may have to address this value proposition issue over time mainly through product innovation (and it looks like it will), the immediate implication is simply that Harley needs to continue to maintain its edge through emotions and intangible assets. It is in that space that Harley will find its salvation. A Harley, in other words, may not always do more, but they can endeavor to make owning a Harley mean more.
A fertile cultural context:
Culturally, Harley Davidson couldn’t be in a sweeter spot. The US is at a crossroads. People are tired of the establishment and are nostalgic for a past ‘greatness’ again. Americans want to be able to feel proud of their country again and long for better times, which helps explain the rise of presidential candidates like Trump for the GOP and Sanders for the Democrats, both seen as outsiders to the system and therefore an appealing alternative to the establishment candidates. This cultural sentiment is at a tipping point and might be worth further investigation as a way to help reposition the brand. In fact, Harley Davidson represents the epitome of Americana- a muscular, pure, powerful brand that cues everything that’s good and aspirational about this country. Therefore, Harley may have the opportunity to take a leading role in this movement and capitalize on this collective sentiment.
The brand has, therefore, the opportunity to tap into this cultural tension and become an instigator of cultural change (while staying away from politics) and thus regain relevance by helping people feel personal pride and pride in their country again. Dodge has done it with Detroit, Harley can do it with the USA.
Defining brand attributes:
From our perspective, two brand attributes stand out for Harley. One could help the brand, but the other is hurting it.
An unappealing user imagery:
People nowadays define themselves more by their behaviors rather than by their appearance. The stereotype of the Harley rider is (culturally) still this bad ass and slightly intimidating rider at best (thank you Easy Rider), but also (based on people’s every day experience on the road) the OWGs, the old white guys trying to reclaim their lost vitality or youth. And frankly, this second stereotype doesn’t represent someone most people aspire to become (sorry OWGs, don’t skin me yet, just read on).
However, what is interesting and aspirational about Harley riders is not their looks (or the way they are stereotyped) but their characters and their actual behaviors. When you start to interact with bikers you quickly realize that they are actually really successful, nice, every day people who love their country and their families. Those are people with a very strong sense of community and a sense of duty, all highly relevant values nowadays, all values most people can identify with. Also, when you dig a little deeper one also realizes that a lot of biker clubs do a lot of good, community focused, deeds. Who hasn’t heard of the bikers against the Westboro Baptist Church or the BACA group (Bikers Against Child Abuse) who are dedicated to helping, protecting and providing a safe haven and a “family” to abused children. In that context, the intimidation factor actual helps to help the kids feel safe and protected. Besides these two highly visible efforts, most bikers clubs also do regular fund raiser rides, something most people will support, identify with and aspire to.
Harley should change its brand user imagery by emphasizing that Harley riders do rather than what they look like or are stereotyped. These Harley riders’ behaviors are highly relevant and appealing to many young adults nowadays and might be worth further exploring as a way to help re-position the brand (i.e the brand for people that DO…rather than for people that LOOK like…). This approach would also help the brand become more “inclusive” rather than “exclusive”.
A unique product experience and brand experience:
People increasingly define themselves by the experiences they make and the stories they collect rather than by their material possessions. Harley has several distinctive brand attributes but one that really stands out is that it is the epitome of an “experience brand”, something more and more people crave. The design of the bikes, the unique sound and rumble of the engine, the feeling experienced when riding the bike are all highly relevant sensory benefits when expressed and brought to life properly and in the right context.
Another opportunity for Harley Davidson would be to embrace the fact that it is an experiential brand and extend this unique attribute beyond its product experience to encompass the whole brand experience. In other words, maintain one of its core attributes and equities but translate it into a broader brand promise around experience seeking, something most consumers out there crave.
Category drivers in need of evolution:
From a communication point of view, Harley seems to be stuck in a pattern. Historically, the brand seems to have built its communication on the insight that many people dream of one day owning and riding a Harley but tend to delay their purchase –the emphasis being on “one day” and “delay their purchase”. In other words, the brand has tried to activate “dreamers”. Recently, they’ve focused on a slight variation of this insight, the fact that most people buy a Harley to ride with their significant other, a family member or a friend. People often become riders themselves because of a family member. I am not sure how well these approaches work but I suspect that it may have helped to get some of the lower hanging fruit. However, I don’t think that it will help the brand long term as both approaches just help reinforce the brand’s current platform. This approach merely reinforces Harley’s equity rather than help evolve it. It doesn’t tell consumers anything new about the brand, anything that would get them to reconsider the brand.
Harley needs to tap into a different set of consumer motivations and category drivers if it wants to evolve and appeal to a broader audience. The ones it has used in the past may have helped short term sales, but they haven’t helped shed a more relevant light –and therefore consideration- on the brand.
A shift from the brand (exclusive) to the consumers (inclusive):
One of the key problems Harley faces is that the territory it occupies is very well defined and very strong. But it is also a little too dominant and overbearing. Harley was put, purposefully or not, on a pedestal. From a branding perspective buying a Harley is like joining, embracing and submitting to an exclusive church. When buying a Harley, riders buy into a cult, something people start to get increasingly reluctant to do.
To illustrate this point, just look at Harley’s line of apparel, symptomatic to a bigger brand problem. Harley’s merchandise looks actually pretty cool and is of high quality but expensive. However, the problem is that all this merchandise is very heavily Harley branded. When you buy a Harley jacket, or pants, or shirt or gloves, you basically accept to become a walking (or riding) Harley billboard. This is probably something that attracts the OWGs. The problem is that this was a very popular in the 80s (wearing heavily branded merchandise and fashion), but not any longer. Nowadays people instead prefer to mix and match various style and brands (new and classic) to create and express their own individual personality. And that’s kind of difficult with Harley.
Another opportunity for Harley might be to come down from its pedestal, become more inclusive rather than exclusive and allow its consumers to use the brand as fuel to express their own individuality rather than just amplify the Harley brand. People today want to have the option to “participate” or even “lead” but with Harley they are merely given the option to follow. People also still want to “belong” to a group or community, but Harley’s version of “community” doesn’t seem to have the traction it used to have any longer. Shifting its focal point from itself to its consumers will provide the brand with a broader appeal.
An evolution of the brand’s archetype:
Another way to look at Harley is through the lenses of its archetype. Harley’s brand archetype has always been the “Outlaw”, the rule breaker, the brand that helps you (or rather the 55 year old white guy) feel like a misfit and a bit of a “bad-ass”.
The problem, however, is that this archetype (or at least its current expression) seems to have lost relevance in its current form. Society has evolved towards a more accepting and inclusive structure. The people we look up to and admire aren’t necessarily reflecting the outlaw archetype any longer. The 1%er has a totally different meaning nowadays. So, as a result, Harley could either re-examine what it means to be an “outlaw” today and find a more contemporary and relevant interpretation of it. Alternatively, it could explore the opportunity to evolve the archetype into either a Hero archetype (a brand that helps you be a better self) or even better into an Explorer archetype (the brand that helps you experience new things & ultimately independence), both of which better fit today’s consumers core values and aspirations better than the “outlaw”. Evolving or changing a brand’s archetype is not an easy feat or something that should be done lightly. But in Harley’s case it might be worth exploring carefully (a shift from the Jester archetype to an Explorer archetype, for example, helped Taco Bell turn around its business and gain a renewed relevance with consumers).
This evolution of the brand’s archetype would have a deep impact on everything the brand does and therefore how it is being perceived by consumers.
So what is the right answer for Harley? Based on the little information we have, it would be presumptuous to make an actual recommendation. The point of this article wasn’t to solve Harley’s positioning problem but to illustrate how Positioning Roulette can help uncover new opportunities and ways forward by providing the strategic agility to look at the brand from various, very different perspectives, something most positioning development methodologies aren’t able to. In the hour or so we’ve spent thinking about the brand we’ve been able to identify 7 very different perspectives on how to approach Harley’s branding problem. Imagine what a more informed, rigorous and collaborative process that would explore all 26 universal approaches of Positioning-Roulette would yield.
I believe Harley can turn around its business situation if it manages to evolve its unique position, maintain its core equities while adding new, more relevant and more contemporary equities that help better align it with today’s consumer base. Our model illustrates that there are many opportunities to do so. Further, the brand still has a tremendous amount of goodwill. Harley Davidson belongs to this exclusive club of brands that people really want to see succeed. Not many brands can claim that.
The big questions, therefore, are “will the brand be able to overcome its own internal culture and evolve?” and “will it be able to strike the fine balance between the stability and consistency that the brand’s current OWGs want and what new consumer segments and society at large aspire to?” The opportunities are there. They just need to be explored and validated.
P.S.: A Word On Indian & Victory
In the introduction, we mentioned the brands Victory and Indian and the fact that they seemed successful in stealing share from Harley Davidson recently. In the short term, and after having been absent for a while, both brands needed to re-establish their credentials and their brand heritage. Attacking Harley, and positioning themselves as an alternative in the same iconic sub-segment may have been the right way to do so in the short term. It gives this core consumer segment a choice. However, both brands will soon start to suffer from the same problems Harley does, because those problems are symptomatic of the subcategory in which all three brands are operating.
Both brands would be smart to change and evolve their positioning platforms and marketing approach soon if they don’t want to face the same issues Harley is now facing. The advantage both have is that they are new still fairly new, i.e their equity doesn’t weigh as much on them as it does for Harley Davidson.
What do you think? What could Harley do to get out of the situation it is in? And feel free to contact me to find out what Positioning Roulette and First The Trousers can do for you.
First The Trousers Then The Shoes Inc. (First The Trousers or FTT for short) is a brand strategy and innovation boutique dedicated to helping brands compete and grow in today’s always evolving attention economy. We help uncover fresh and actionable insights that trigger action, identify innovative ideas to stimulate brand growth and inspire fresh perspectives on businesses and categories. The words our clients use to describe us include: experienced, passionate, terrific, insightful, elevating the thinking, helping us to think differently, highly collaborative, responsive and very recommendable. Wonder if we can help you solve your business problem, help you facilitate strategy workshops, help train your teams and if might be the right fit and partner for you? Contact us to find out.