M740 CORPORATE REPUTATION AND BRAND MANAGEMENT

Building Brand Community on the Harley-Davidson Posse Ride

Agenda 2

•  Executive Summary •  Background •  Key Issue •  Analysis

•  Company •  SWOT •  Brand Identity •  Customer •  Quantitative

•  Alternatives •  Assessment Matrix •  Recommendations

Executive Summary 3

Should the Posse Ride rolling rally continue? If yes, how do we maximize its effectiveness?

Customers are generally satisfied and the ride continues to be a profitable driver of brand

awareness.

Improve existing Posse ride by solving common complaints and integrating rider feedback.

Background 4

!  Harley Owners Group (H.O.G.) !  Division of the Harley Davidson Motor

Company formed in 1983 to bring the company closer to its customers

Rolling Rallies "  Unique, themed rides that

start and end in different cities

1983

33,000

1999...

500,000 Membership

Destination Rallies "  Extremely labour

intensive

Background

"  High adventure, low cost ride

"  Started in 1997

"  Sequel to the “epic adventure” "  Border-to-border run "  Many repeaters from the Posse

I ride "  Capped at 500 but only 425

registered "  Passport stamps along route

stops at dealerships "  Large rider investment of both

time and money

5

Posse I Posse II

Key Issue Facing H.O.G. 6

Problem Statement: Does the Posse Ride rolling rally continue to meet corporate marketing objectives? Evaluate 3 key elements:

1) Brand connection

2) Profitability of the rides 3) Overall satisfaction of the ridership

Company Analysis 7

Current Brand Vision “We fulfill dreams of personal freedom.”

Capabilities Delivering high quality to retain

customers for life

Strengths •  Attracting new riders •  Optimizing the retail chain •  Championing retail

excellence

Harley Davidson Core Values

Teamwork Accountability

Knowledge Innovation

Honesty Initiative

SWOT Analysis – Posse Rides

STRENGTHS

- Consistently high interest in ride

- Strong brand recognition

- High customer loyalty

- Rides are low cost and highly profitable

WEAKNESSES

- Unorganized ride planning

- Ride is only feasible for a small percentage of H.O.G. members

- Impossible to develop a single event that will satisfy everyone’s needs

OPPORTUNITES

- ‘Baby-boomer’ retirees could lead to increased membership

- Many different types/routes of rides available to maintain interest

THREATS

- Adverse weather could affect ride route

- Weak economy could reduce sales and ride revenue

- Negative connotation with Harley subculture

8

Brand Identity Analysis – H.O.G. 9

“Our service features an enhanced riding

experience for Harley owners who seek

challenging rides and desire a sense of camaraderie.”

The H.O.G. Scope •  Division of HD Inc.,

supported by local, national, and international levels

•  Open to all HD owners •  Close-to-the-customer

philosophy

Service Attributes •  Develop social ties •  Local chapter newsletters •  Local values, but H.O.G. ethos •  Ownership benefits e.g. Fly & Ride program •  Rallies – linking riders together into a broader community

Quality •  Customer satisfaction

high (3.7 on a 4-pt scale)

•  Demand exceeds supply

•  Strong brand loyalty

H.O.G. Members - Defined 10

The typical customer for H.O.G. is ________ with an average age of ____, and a median household income of ________. They typically hold jobs in the _________________________ fields. Our typical customer is influenced by__________________. They are motivated by the need to ___________________________________. The following needs are not currently being met:___________________________________.

male 41

$55,570 technical and entrepreneurial

other Harley owners experience the freedom of the open road

engagement and connection with Harley

“A stroll among the riders at a rolling rally reveals a good deal of gray hair and relative affluence”

Value Add of H.O.G. 12

$465 million

500,000 members - $40 annual membership fee (1st year complimentary)

167,000 active members – spending $850 more annually

75% renewal rate for H.O.G membership

$2,630 Active Member

$80 Inactive Member

Assuming an average membership of 3 years

Customer Response 13

Pre- and post-ride surveys were analyzed using a modified Net Promoter Score (7 point scale).

The results were broken down by: " Lifestyle experience " Brand connection " Intention to repurchase

Lifestyle Experience 14

I would definitely sign up for another long distance rally

↑17%

I have made lifelong friends because of Harley

↑18%

I would recommend this ride to a friend

↑34%

Brand Connection 15

Harley really understands what riding a bike is about

↓36%

I am satisfied with H.O.G. ↓38%

Harley really understands my needs

↓46%

Harley really cares about me as a customer

↓19%

Intention to Repurchase 16

Pre-Ride Survey If I were to replace my bike, I'd buy

another Harley.

Bottom 2 Middle 4 Top 2

Pre-ride NPS 82%

Post-ride NPS

100%

↑18%

Alternatives 17

1.  Maintain the status quo ¤  Riders are generally happy with the existing ride, but

what about their concerns?

2.  Improve existing ride ¤  Concerns could be addressed and the experience

made better, but is it worth the additional cost?

3.  Cancel ride altogether ¤  It would free up resources for other opportunities, but

would it let riders down?

Assessment Matrix 18

Alternatives & Ranking  

Criteria   Weight   Improve   Status  Quo   Cancel  

Brand  Connec+on   .50   3   2   1  

Profitability   .40   2   3   1  

Rider  Sa+sfac+on   .10   3   2   1  

Total   1.0   2.60   2.40   1.00  

Recommendations 19

Planning "  Up to one year before ride

Create contest or survey to involve H.O.G. members in future route selection

Select a group of H.O.G. members to act as an advisory board for possible events

Recommendations 20

Execution "  Ride registration to completion

Assigned registration times to avoid long lineups

Have dealers ship riders’ purchases to head office to eliminate the need to carry

Invite non-participating H.O.G. members to host events along the ride route

Designated meet-and-greet with Harley employees

Recommendations 21

Post-Ride "  Evaluation and follow-up

Further Posse ride merchandising such as videos, yearbooks, and postcards

Discount card for members in order to track purchase patterns

Conduct post-ride survey with Posse ride participants to evaluate improvement

22

Discussion Questions?

Return on Posse II 23

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

75% 85% 95% 100%

Average Profit Margin

is 34.7%*

*http://investor.harley-davidson.com

Retention Rate of Posse II Riders

Add

ition

al H

.O.G

.