Download - Sale Force Mgt

8/6/2019 Sale Force Mgt

1/10

Harley Davidson Company: Sales Program

I. The EnvironmentManagers and organizations need to anticipate and adapt to change by keeping in touch with theenvironment external to the company. At one point, Harley Davidson almost went bankrupt when they

lost connections with their customers and the external environment.

A. External Environment 1. Economic factors such as economic growth, interest rates, and exchange rates can all have a hugeeffect on the profitability of a company. Everyone knows that interest rates and exchange rates all effectconsumer spending, especially for luxury items. Harley Davidson products are considered unnecessaryor luxury items so they take the biggest hit. With the recession scare as well, Harley Davidson isdefinitely struggling a bit at the moment.

2. One of the biggest political aspects on the Company is the motorcycle tariff. The petition was filedunder Section 201 of the Trade Act of 1974, known as the "Escape Clause," which allows an industry torequest import relief from foreign competition when increasing imports are causing or threateningserious injury to the domestic industry. In these cases, the ITC investigates the claim and then reports tothe president. If the finding is affirmative, the executive branch examines the matter and the presidentmakes a decision within 60 days. In 1983, Reagan approved the tariff. Unfortunately, this tariff seemedto create an economic hit for Harley Davidson.

3. Harley Davidson is considered to be one of the most technologically advanced motorcycle companiesin the world. Harley Davidson has expanded their design horizons with their implementation of REAL D,which allows them to more effectively leverage their prototypes. Their technology has definitely come alot way since the Davidson brothers built their first motorcycles in their backyard in 1903.

4. Harley Davidson has always had a strong social and cultural following. Their customers are care free,usually middle-aged men that just want to be connected with the open road. Harley Davidson is a bigicon to the American culture and is represented in many fashions.

5. Harley Davidson is concerned with protecting the natural environment just as much if not more thanothers. As an example, a St. Louis based company called Vertegy, is helping the new dealership inO Fallon, Illinois, stay as green as possible. The 33,000 square foot building will use green architectureand be a candidate for LEED certification. LEED stands for Leadership in Energy and EnvironmentalDesign.

B. Internal (Organizational) Environment 1. Harley Davidson s main goal is to manufacture and market their product. Their mission includes thefollowing:Fulfill dreamsProvide an expanding line of motorcycles, products, and services


2/10

Develop relationshipsIt takes more than just building and sellingUnforgettable experiencesDedication to creating experiencesValues include: telling the truth, be fair, keep your promises, respect the individual, encourage

intellectual curiosityThese values are important in how they run their businessThese values define the company s characterActive communication of the importance of these valuesEncourage employee participation

2. Harley Davidson employees are all very unique. It has been stated that 14% of all employees areguard or reserve. Positions that employees may participate include the following:Retail SalesFashion MerchandisingProductionBusiness and FinanceMotorcycle TechnicianRetail Management

3. During their most recent ten year period, compound annual growth rates have increased thecompany s revenue. The majority of the company s income comes from Harley Davidson sales. The2006 Net Revenue is as follows:

NET REVENUE:H-D Motorcycle $4,553,561 $4,183,515 $3,928,232 $3,621,488 $3,161,046Parts & Accessories 862,251 815,678 781,621 712,829 629,202General Merchandise 277,490 247,861 223,712 211,388 231,503Buell Motorcycle 102,227 93,069 79,029 76,064 66,949Defense and Other 5,157 2,091 2,596 2,505 2,2705,800,686 5,342,214 5,015,190 4,624,274 4,090,970

4. To be successful Harley Davidson should exceed in five supply chain areas. These are as follows:ProductionFulfillmentCustomer ManagementForecasting and PlanningProcurement

5. One thing that Harley Davidson offers in their dealerships is service. The environment is state of theart Harley Davidson approved facilities with award winning Harley Davidson trained technicians.


3/10

6. Harley Davidson is currently technologically advanced. They currently have the funds to be able tohave the best research teams and the best technology.

II. Marketing Strategy

A. Harley Davidson has utilized many effective marketing strategies to appeal to the interests of manyindividuals today. Currently the age group interests that these motorcyles appeal to include those ages32 to 44. This Harley image includes blue-collared workers, stereo-typical Harley owners, and now evenhigher profile individuals. It has been stated that the average income levels of individuals who seekinterest in this form of entertainment include those with incomes that range from $30,000 to$72,000. Additionally the youth college grads are now accounting for approximately 31% of all HarleyDavidson riders (Bruce, 2004).

B. Currently Harley Davidson offers a significant range of products to suit many individuals. Initially,Harley Davidson s selection of bikes was limited to one color and three styles to select from. Sincethen, many other designs have been implemented to include many colors, other than gray, that nowappeal to an individual s style of choice. Types of motorcycles that are currently on the market includethose of touring, customized, sport/touring, and sport/street in regards to the heavyweightmotorcycles. Additionally, many models exist that consist of Sportsters, Super Glides, Low Riders,Softails, Sport Glides, Tour Glides, and Electra Glides to name a few. With each bike, Harley Davidsonadds to their current high-profile image, which represents superior quality and individual character(Rifkin, 1997).

C. It was early that Harley Davidson realized the price competition among other foreigncompanies. Because of this, Harley wanted to promote value before price. This was accomplishedthrough the use of heavy metals, including steel, to build effective and strong products. With theincreased durability of these products, came longer production time. By keeping this in mind, Harley sstrategy was to not have demand significantly exceed supply. Before long, consumers were viewingthese products as a must have and waiting for up to eighteen months before receiving theirmotorcycles. These effective pricing polices and strategic planning interventions have contributed tothe success and originality of these motorcycles today (Rifkin, 1997).

D. Harley Davidson products are well known in many areas throughout the world. The market has beendivided to include regions of Japan at 16%, Europe consisting of 10%, Australia at 38%, and the UnitedStates owning 54%. These figures could be inflated but have not based on an agreement the UnitedStates made to limit 30% of their products that can be sold to overseas markets. To improve theeffectiveness and knowledge of their dealers, Harley Davidson headquarters also arranged a HarleyDavidson University where dealers attend classes to improve their roles in the company. As dealers of this corporation, each individual is treated like a partner and a customer. Through the use of thesetactics, it allows dealers to feel as if they are making vital contributions to the company and aiding in itslong-term success (Rifkin, 1997).


4/10

E. The Harley Davidson Company does not solely focus on the promotion of a motorcycle, but rather theconnection that is built between customers. It is important to this company that an effectiverelationship be established with all clientele. In this respect, the company is offering much more than abike to consumers, by placing emphasis on an individual s dreams and personal lifestyle. The HarleyDavidson Company contributes their success to the customer loyalty and satisfaction they have achieved

through many individuals ( Harley Davidson, 2007).

F. Today many Harley Davidson dealerships offer a unique experience through their effective designtactics as a means of personal selling. By creating a welcoming atmosphere upon entrance, thecustomer is able to feel at ease. The design incorporates several motorcycles displayed throughout thestore, in addition to all the necessary accessories needed to ride. Instead of placing their parts in aseparate location in the store, parts have now been moved for customer viewing. The large clothingline is also displayed with available dressing rooms for fittings. Lounges and rider meeting rooms havebeen equipped with visible antiques, games, and even rally videos. With these fine details includedthroughout the store layout, Harley Davidson dealerships are able to give customers a rewarding andenjoyable experience as they look forward to establishing a lasting business relationship ( HarleyDavidson, 2007).

G. Over time, Harley Davidson has developed its products to target many audiences through the use of effective advertising techniques. There are now many magazines offered to the general public thatdisplay an array of Harley Davidson products. The company has also expanded its product by means of clothing production through many retail stores for those individuals who have not experienced a visit tothe dealership. Harley Davidson Cafes are also now appealing to the interests of many individualsthrough the idea of establishing locations close to the dealerships with designs that intrigue customersto see the added benefits the company has to offer. Through these expansions, the dealerships arenow able to provide not only bikes, but clothing, accessories, and financing (Rifkin, 1997).

H. Harley Davidson s most effective sales promotional strategy is known as their HOG (Harley Owner sGroup) activities. These events emphasize the importance Harley places on its effective customerrelations, in addition to the promotion of new available products. Promotion of these products is seenthrough many different advertising means. Harley Davidson is also known for its chic image byutilizing models on their bikes wearing fashionable Harley merchandise. The image that is createdallows individuals to feel personal freedom and independence . To represent this freedom andpassion, Harley Davidson uses the eagle and the American flag symbols (Rifkin, 1997).

I. Harley Davidson uses effective public relations through their HOG entertainment activities. With thepurchase of a Harley motorcycle, an individual receives a free annual membership to this group. TheHOG was established as a means of keeping riders close to the company. At these events, owners canask questions, purchase merchandise, register their motorcycles, or even participate in demonstrationrides. In doing so, this also keeps motorcycle owners interested and excited about continuing their usewith this product. From a management perspective, it is important that their employers seek interest infeedback from their customers to continue to appeal to their interests. Company officers spend a great


5/10

deal of their time at these weekend rallies through the months of April through October promoting theHarley Davidson Company to the best of their abilities. The personal customer relationship that thiscompany establishes with its clientele has continued to contribute to the expansion and interest in thesehighly recognized products (Rifkin, 1997).

III. Sales Management Activities

A. The account management policies and sales force organization of Harley Davidson are fairly straightforward and simple. Harley Davidson s sales force is broken up into regions primarily through manycountries, the U.S. being the biggest market. Each region has its own supervisor and salesrepresentatives. Accounts in these regions are handled by these teams. By using this format HarleyDavidson is able to cover virtually all of its potential sales market and give extra attention and service toits large key accounts. These teams are the primary way for Harley Davidson to reach out and get theirproducts to the customers (Bruce, 2004).

B. Harley-Davidson motorcycles are sold worldwide by over 1,000 dealers. In the USA alone, thecompany holds 54% of the market share. They own 16% in Japan, 10% in Europe and 38% in Australia.They could sell more in foreign markets but they have an agreement with American dealers that theywon t sell more than 30% overseas (Bruce, 2004).

C. 1. In order to have a successful sales strategy, one must always be researching new productsand ideas for the future. By doing this the business and salespeople, will have a better understandingon what to strive for in the future to improve their business and overall sales. Developing a forecastbased on trial and error and some new ideas will hopefully lead to greater success. Harley Davidsondoes not know what the consumer wants without extensive research. Predicting what the consumer isgoing to want on a daily basis will continue to be a challenge (Johnston, Marshall 2006). In 2005, HarleyDavidson cut their profit forecast as demand for their motorcycles dropped in the first quarter. Theirshares fell about 19%, which was their largest drop in 14 years. They cut their annual production goal by10,000 units. This was due in part to a 1% drop in American sales. America is Harley Davidson s biggestmarket. Edward Aaron, an analyst with RBC Capital Markets in Denver, stated that Supply has been sofar below demand for so long that no one has really known the true level of demand. It s reasonable tosay that long-term growth is going to be much lower than we ve seen (Ohnsman, 2005).

2. Harley Davidson has quotas that each sales manager needs to hit. Quotas are necessarybecause they encourage and ensure profit for the business. Budgets are also necessary in order to turnprofit and stay afloat. In order for Harley Davidson to be profitable, there must be money set aside forthe individual needs of the business. There is a maximum amount of money to go around and thedecision makers and financial department must make sure this crucial matter is carried out (Hot Metal,2008).

3. Harley Davidson makes it convenient for customers to figure out how much they can affordto spend on one of their motorcycles. There is a section on the website, called a budget planner that you


6/10

input all of your monthly incomes and monthly expenses into. It will then do some calculating and tellyou exactly how much you can afford each month on your monthly payment for a Harley. This is veryconvenient for those consumers who are really interested in purchasing but aren t sure how much theycan afford (Budget Planner, 2008).

D. 1. Harley Davidson stores are placed all over the United States. One dealership is Route 43 it islocated on I-43 in Sheboygan, WI (Route 43 Harley Davidson). They also have a couple of different oneslocated in South Dakota. J & L Harley-Davidson and J & L Harley Davidson South located in Sioux Falls(J&L Harley Davidson). Glacial Lakes Harley Davidson Shop located in Watertown, SD (J&L HarleyDavidson). Another one can be found in Chicago IL this one is called Chicago Harley Davidson (ChicagoHarley Davidson). Those are just a few of the places that you can find Harley Davidson Shops. Formore places you can check the Harley Davidson website at: www.harley-davidson.com.

2. In order to purchase items of interest one may go to the Harley Davidson stores or shoponline at the company s website.

E. Most individuals prefer to shop online due to the convenience of faster order placement.F. Harley Davidson, along with a competitive base salary, currently offers a generous amount of benefitsto each and every employee. Included in these benefits are the following:Dental PlansMedical PlansVision PlansRetirement Savings PlansLife InsuranceDisability

Holidays and VacationOther benefit programs: these to include individualized benefits and insurance programs ( Benefits,2008).

G. Harley Davidson offers incentives to both their employees and their customers. It is very importantthat they keep both happy so that they want to keep coming back to Harley Davidson, either to work orto purchase another motorcycle. Incentives that Harley Davidson offers their customers are annualsales, low financing and a H.O.G membership with a motorcycle purchase. There are always specials onthis year s model and even sometimes on the last year s models. Right now you can purchase a 08Harley for as low as $99 per month. By being a part of HOG you automatically get a subscription to Hog

Tales magazine. You also get a HOG membership manual and you get access to the member s onlysite. As a member you have access to their mileage program that awards pins and patches for the milesthat you ride your Harley. The only way that you can be a part of this incentive is to own a HarleyDavidson. It is a very nice incentive for those individuals who purchase the motorcycle because thenthey have access to all these other activities and events with other owners (Harley Davidson).

IV. Outcomes (Development of Goals for Sales Force)


7/10

A. Harley expects 2008 earnings of as much as $4 a share, topping analysts' expectations of $3.86, theaverage of 13 estimates compiled by Bloomberg (Ohnsman, Keane, 2008). For the first quarter, Harleyexpects that the shipments will be 68,000 to 72,000 bikes, up from 67,761 a year earlier. Harley thinksthey are ready to enter 2008 although they are being very cautious. Harley Davidson believes its

manufacturing expertise and focus on operational excellence, and other factors such as increasedproduction, quality and pricing for features, position it to continue to drive a net income growth rate in2008 and 2009 that will be in excess of its revenue growth rate (2007)

B. Harley Davidson has expected to deliver earnings-per-share growth of 11% to 17% annually through2009 driven by solid revenue growth, operating margin improvement and the benefits of free cash flow(2007). Harley Davidson expects its annual earnings-per-share growth rate to return to 11% to 17% in2008 and 2009 (2007)

C. Harley expects the economy in 2008 to be very challenging. With the amount of Harley Davidsonsbeing sold each year it is hard to determine what the selling expenses will be for 2008 this year in theyear.

D. In 2008, capital expenditures are expected to be between $240 and $260 million (2008). On January28, 2008 in the mid morning Harley Davidson stocks dropped 2%. UBS analyst Robin Farley said Harleyfaced "an uphill battle" in 2008 that would probably require additional production cutbacks. Farley alsopredicted that all of the 2008 earnings growth Harley is promising will come from share repurchasesrather than organic growth (Reuters, 2008).

E. If you are looking for a place to check out different types of Harley Davidson motorcycles you can alsocheck out their website at www.harley-davidson.com. If you want to contact the Harley DavidsonMotor Company directly people write to them at Harley-Davidson Customer Service 3700 W JuneauAvenue Milwaukee, WI 53208 or if you would like to speak with a Harley Davidson Customer ServiceRepresentative call (414) 343- 4056 (2001). At this time the Harley Davidson Company does not havean e-mail address. If you are looking for some Harley Davidson Financial Services hey have HarleyDavidson Credit and if you have any questions you can contact then at (800) 699-2336 (2001). Theyalso have Harley Davidson Cycle Insurance and you may contact them at (800) 832-4449 extension 4961(2001).

F. The report below compares the year end income from 2006 and 2007. As shown below netincome in 2006 was a bit more than in 2007.

December 31, December 31,2007 2006

Net revenue $5,726,848 $5,800,686Gross profit 2,114,100 2,232,847


8/10

Operating expenses 883,457 823,857Operating income from motorcycles & related products 1,230,643 1,408,990

Financial services income 416,196 384,891Financial services expense 204,027 174,167

Operating income from financial services 212,169 210,724Corporate expenses 17,251 22,561Income from operations 1,425,561 1,597,153Investment income, net 22,258 27,087Income before provision for income taxes 1,447,819 1,624,240Provision for income taxes 513,976 581,087Net income $933,843 $1,043,153

Earnings per common share:Basic $3.75 $3.94Diluted $3.74 $3.93

Weighted-average common shares:Basic 249,205 264,453Diluted 249,882 265,273

Cash dividends per common share $1.06 $0.81

V. Control

A. Evaluation and control of sales force performance: Sales for Harley Davidson in the third quarter for2007 grew 8.8 percent in the International market compared to the third quarter in 2006. During thefirst nine months of 2007, worldwide retail sales of Harley Davidson motorcycles decreased .9 percentcompared to 2006 (2007). Harley Davidson motorcycles seem to be selling better in the InternationalMarket and not so good everywhere else. Retail sales 2007 decrease 4.7 percent and Internationalmarket increased by 12.9 percent.

References

Bruce, Reginald A. (2004). A Case Study of Harley Davidson's Business Practices. Retrieved January 24,2008, from A Little Shack Website: http://stroked.virtualave.net/casestudy.shtml

Fox Harley Davidson. 2007. Harley Davidson Inc. 20 January 2008. http://foxharleydavidson.com.

Harley Davidson. 2001. Harley Davidson Inc. 20 January 2008. http://harley-davidson.com.

Johnston, Marshall, Mark W., Greg W. (2006). Sales force management 8th edition. New York, NY:


9/10

McGraw-Hill/Irwin.

Ohnsman, Alan (2005). Harley-Davidson Cuts 2005 Forecasts as Demand Drops. Retrieved January 30,2008, from The New York Sun Web site: http://www.nysun.com/article/12239

Rifkin, Glenn (1997). How Harley Davidson Revs its Brand. Retrieved January 24, 2008, fromstrategy+business Web site: http://www.strategy-business.com/press/16635507/12878

(2001). Harley-Davidson Contact Us. Retrieved January 30, 2008, from Harley Davidson Web site:http://www.harley-davidson.com/wcm/Content/Pages/Selector/selector.jsp?locale=en_US

(2007, January 15). Harley Davidson: Marketing an American Icon. Retrieved January 24, 2008, fromCorporate Design Foundation Web site: http://www.cdf.org/issue_journal/harley-davidson_marketing_an_american_icon- 2.html

(2008, January 30). Harley-Davidson Budget Planner. Web site: http://www.harley-davidson.com/PR/MOT/NUMS/en/budgetplanner.asp?locale=en_US&bmLocale=en_US&WebLogicSession=DB0lz21534m6StZDQP3eswmEGCyCkfhUHxzOYNNheKVjZ2n62571!996869163!181237812!7005!8005

(2008, January 30). Hot Metal Harley-Davidson. Web site:http://www.hotmetalharley.com/miscpage_009.asp

(2008). Benefits. Retrieved February 10, 2008, from Harley-Davidson USA Web site:http://www.harleydavidson.com/wcm/Content/Pages/Career_Opportunities/benefits.jsp?locale=en_US

(2007, October 19). PR Newswire. Retrieved February 11, 2008, from Harley-Davidson Reports 2007Third Quarter Results Web site: http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/10-19-2007/0004685594&EDATE=

Ohnsman, Keane, Alan, Angela G. (2008, January 25). Bloomberg. Retrieved February 12, 2008, fromHarley Davidson Profit Falls 26% on U.S. Sales Slide Web site:http://www.bloomberg.com/apps/news?pid=20601103&sid=aUZYM1UaNJsA&refer=us

(2008, January 25). Motortrend. Retrieved February 12, 2008, from Harley-Davidson Reports FourthQuarter and Full Year Results for 2007 Web site:http://www.motortrend.com/features/newswire/91/33947/

(2008, January 29). TMC Net. Retrieved February 12, 2008, from Market Review: Warner ChilcottLimited vs Current Events Web site: http://www.tmcnet.com/usubmit/2008/01/29/3235865.htm

Reuters, (2008, January 25). CNBC. Retrieved February 12, 2008, from Harley-Davidson Profit Tumbles


10/10

on Weak US Sales Web site: http://www.cnbc.com/id/22838777

(2007, May 3). Yahoo Finance. Retrieved February 12, 2008, from Form 10-Q for Harley Davidson INCWeb site: http://biz.yahoo.com/e/070503/hog10-q.html

Download - Sale Force Mgt

Top Related