Harley Davidson

INTEGRATED MARKETING COMMUNICATIONS PLAN

HARLEY DAVIDSON

Nerea Gómez ÁlvarezC7153957

BA (Hons) Marketing

CONTENTS1.- INTRODUCTION………………………………………………………………………2

2.- SUMMARY OF CONTEXT ANALYSIS………………………………………….3

3.- COMMUNICATION OBJECTIVES……………………………………………….4

4.- PROMOTIONAL STRATEGY……………………………………………………..5

5.- COMMUNICATION MIX……………………………………………………………6

6.- IMPLEMENTATION PLAN………………………………………………………..9

7.- CONTROL AND MEASUREMENT…………………………………………….11

8.- APPENDICES…………………………………………………………………………12

9.- BIBLIOGRAPHY……………………………………………………………………..18

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1.- INTRODUCTIONThe purpose of this integrated marketing communications campaign is to promote the opportunity to test drive and experience electric motorcycle “LiveWire” launched by Harley Davidson, within the UK population. A context analysis has been developed to understand the current situation of the brand in terms of external and internal influences so that the plan can be developed with these factors in mind.

Objectives will be set alongside the relevant strategies, which will be implemented to reach particular targets. Relevant target groups have been identified via the breakdown method mentioned by Fill (2013), segmenting the market into behavioural, psychological and profile criteria (Fill, 2013).

A marketing plan and communications mix will be presented to support the promotional objectives. The communication mix will involve trade shows and exhibitions, personal selling, word-of-mouth communication, digital media and social media. Costs, scheduling and control of the strategies will be calculated and measured over the designated seven-month plan (June to December 2015), driven by the use of an arbitrary budget.

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2.- SUMMARY OF CONTEXT ANALYSIS2.1.- STRENGHTSHarley Davidson has developed a strong brand equity, making the products memorable and easily recognizable and. It would help to cause greater acceptance of the LiveWire by the audience. The operational efficiency of the brand is useful to achieve a profitable LiveWire placement. In addition to a loyal customer base, the innovation of the product may draw the attention of many potential customers. Another advantage of the brand is the high quality products and the variety of them, which make consider the brand as an icon of freedom.

2.2.- WEAKNESSThe target that the brand is focused on is very limited and specific (discussed later), leaving out of the buying decision much of the market. So violent changes in the product offered could produce a rejection of the existing customer base of the brand. Bad experiences or problems with the new product may cause recalls and the loss of both current and potential customers. This can not be allowed considering the high price of the products, which can be another disadvantage when making purchasing decisions.

2.3.- OPPORTUNITIESThe company's business activities into several countries could be a big opportunity to increase sales and implement the acceptance of the new product launched. Furthermore, the emergence of a new product can contribute to the interest and attract the attention of younger targets. Also thanks to the appearance of Internet is much easier to promote the electric motorcycle. The future regulations on market can be a great advantage when acquiring a more eco-friendly motorcycle too.

2.4.- THREATSThe competitive landscape in the world of motorcycles is too broad and this can be a problem in making purchasing decision. Moreover, consumers have less disposable income from the recession and the seasonality of the market would not contribute.

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3.- COMMUNICATION OBJECTIVES3.1.- PROMOTE AND IMPLEMENT THE NEW LIVEWIREGetting a new product out for customers to see and try out is the first step in selling that product successfully. Even the best product will do little good for the public if they do not know it exists. Therefore, business owners or marketing professionals must utilize various marketing techniques to guarantee that the right audience knows about the product and that they receive the knowledge as effectively as possible.

The launch of this new electric motorcycle Harley Davidson has to be promoted through the various actions and techniques specified along the marketing mix plan. The aim is to implement market the product in a new and satisfactory manner, to convince the customer for the further acquisition.

3.2.- PRODUCT POSITIONING OF THE LIVEWIRE IN THE CONSUMER MINDS OVER ITS COMPETITORSLouis E. Boone and David L. Kurtz, in their book Contemporary Marketing, state that: "Product positioning refers to consumers' perceptions of a product's attributes, uses, quality, and advantages and disadvantages relative to competing brands. Marketers often conduct marketing research studies to analyse consumer preferences and to construct product position maps that plot their products' positions in relation to those of competitors' offerings."

For this project it has been analysed in detail the external and internal context of the company and it has also been deeply studied the characteristics of the target at which the product is intended. Thanks to these data a positioning plan has been developed to understand the consumer mind and to get our product more desired than the competition range.

3.3.- CATCH THE ATTENTION OF A YOUNGER AUDIENCE Gain the trust of the audience in this new product is a difficult challenge that in this case can be achieved by catching the attention of beginner riders and a younger target (See appendix 8.2).

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4.- PROMOTIONAL STRATEGY4.1.- MARKET SEGMENTATIONDuring the market segmentation process, the breakdown method (Fill, 2011) was used to reach a specific demographic, geodemographic and behavioristic segmentation base. The campaign target is 25-34 years old, placed in Mosaic UK’s demographic classification groups D (16, 17), H (34, 36), M (56) and O (62, 64) and type 3-5 of Acorn’s profiles. Therefore, the differentiated targeting approach will be adopted for this campaign as the marketing mix will be chosen in light of the emerging market.

4.2.- POSITIONING Although the target audience for the launch of this new product has changed (especially in terms of age) the brand wants to keep maintaining its principles of freedom, wildness and rugged individualism; that differentiate them from other competitors. We also want to place the LiveWire in the consumer's mind as one of the most eco-friendly motorcycles in the market.

4.3.- PULL STRATEGY This marketing plan will use mostly below the line promotion and a pull strategy to communicate with its publics. With the use of trade shows and exhibitions, personal selling, word-of-mouth communication, digital media and social media; this campaign will be able to communicate on a large scale and at a reduced cost. A pull strategy has been chosen because this will create dialogue with the consumer and generate feedback, which is really important when considering that this is a completely new product. By promoting the driving test on a more personal scale this can help build business-consumer relationship whilst creating a demand for the product.

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5.- COMMUNICATION MIXThe promotional strategies that have been chosen for the purpose of this plan are part of the overall effort to communicate with its customers about the Harley Davidson’s product LiveWire. The tools that have been selected in the mix best suit the strategies and the objectives set forth previously.

5.1.- TRADE SHOWS AND EXHIBITIONSOur main tools for the marketing mix are the exhibitions and trade shows. There are many reasons to use exhibitions, but the primary ones appear not to be “to make sales” or “because the competition is there” but because these events provide opportunities to meet potential and established customers and to create and sustain a series of relational exchanges (Fill, 2013).

Li (2007), cited by Geigenmüller (2010), stresses that the impact of trade shows on the development of valuable, long-term buyer-seller relationships is important. Shipley and Wong also state that the objective is to exchange information about products, services and corporate developments.

For these reasons, and seeing the communication trajectory that has developed the brand, trades shows and exhibitions are a great option to introduce our new electric motorcycle LiveWire new customers by the driving test. In this kind of motorcycle events the product features will be carefully presented, letting the future customers ask questions about it to experts (from which they receive immediate feedback)...

Also in these fairs Harley Davison provide the opportunity for potential buyers to enjoy a free test drive to check the effectiveness of the new product. So customers can have the experience of driving this electric motorcycle provides compared to the combustion engines and to those offered by other competitors.

In addition, open house days will also occupy an important place in our activity to show the benefits and advantages that the LiveWire offers compared to similar products. Thanks to this events in different places of the United Kingdom, professionals specialized in this type of motorcycles will exhibit and promote the driving test of this new product.

Multiple motorcycle tours that take place in this country will promote the launch of the new product, encouraging the objective target to acquire and test the LiveWire. A great advantage will be the large attendance at these events, so it will be easier to catch the attention of future purchasers or potential interested customers in these eco-friendly products.

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In these trade shows, exhibitions, open house days and motorcycle tours, brochures will be distributed to interested people and potential buyers so that later it will be easier to measure how many people have heard about the release.

5.2.- PERSONAL SELLINGLike so many enduring brands, Harley-Davidson has recognised that the key to sustainability of both demand and price lies in creating an organisation that supports the brand with excellence, not only through engineering, but also through a fantastic service and personal selling. This strategy ensures that the brand delivers its promise every time, and delights each customer in a special and specific way. Delighted customers come back for more, and tell their friends (Word of Mouth), so the community grows.

Harley Davidson certainly sells motorcycles; they are engineered to a philosophy spurned by many, but loved by devotees. Far more, though, Harley Davidson’s dealers will sell a passport to a brave new world, passion, friendship and excitement but respectful with the environment: an enduring experience, in a world which is increasingly willing to pay for the privilege.

“The formula to achieve this involves a variety of things, some tangible, such as guarantees of environmental sustainability, some ephemeral, such as the feeling of kinship gained from employees that share the customers’ passion”. So by the treatment of dealers from the nearest stores, it will be much easier to gain the trust of the customers in the new electric motorcycle launched and this will catch the attention of many potential purchasers to try the driving test.

5.3.- UNCONTROLLED ACTIONSAdvantages of Harley Davidson brand are the involuntary actions (uncontrolled) caused through their actions. The customers themselves or brand lovers bother to make promotion of it. The places where this exchange of opinions and news on developments of new products occur are the local chapters or H.O.G’s (Harley Owners Groups) distributed throughout the country. These places allow people share a passion for Harley-Davidson motorcycles to come together. When joining a local chapter, customers always have plenty of opportunities to meet with friends, have fun, support worthy causes, and ride the new LiveWire!

If participants in this kind of groups are convinced of the advantages of the new product, they themselves will provide information to interested persons and encourage their friends to find out about the LiveWire driving test (Word-of-Mouth communication). They become “personal sellers” and impellers of the release in an involuntary way.

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The actions taken previously also help create publicity by the traditional media, which will help in attracting new customers and interested persons. They will make a great promotion of the text-drives and the new product and it will become possible for the LiveWire to appear for free in magazines or reports related to the motor world.

5.4.- DIGITAL MEDIA AND SOCIAL MEDIAAll movement and news of the brand are mainly transmitted through the website, which is complemented by the app (available on Android and App Store). These online spaces comprise the cornerstone to get access to all information and features about the LiveWire and the events and test-drives in which the release of the motorcycle will be promoted.

Social networks like Facebook or Twitter also exert an important role in launching the new product (reporting on the features and dates of the remaining actions belonging to the marketing mix). They allow interaction with potential purchasers, providing answers to questions, instant feedback...

Obviously, all the above actions (personal selling, trade shows, exhibitions, open house days, guided tours, HOG's and local chapters) will guide interested people to the web site or app via bidi codes. It will also encourage the customer to participate in social networks via post, likes, tweets... that will attract new people to become interested in the novelty.

According to the Chartered Institute of Marketing (2013) “social media and mobile marketing are now increasingly important means of reaching Harley’s highly mobile target groups, and forming a community of riders. Over five hundred dealerships have Facebook page, and the company provides good materials to enable them to customise and maintain these and to keep them fresh. Tweeting has also become an important and very international tool”.

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6.- IMPLEMENTATION PLAN6.1.- COSTINGIt was based on an arbitrary budget (Fill, 2011). The table provides costs for each communication tool as well as the total cost for the campaign. The campaign will cost £53.640 in total.

COMMUNICATION MIX COSTTrade shows and exhibitions £1.500 per exhibition x 24 exhibitions

= £36.000Open house days £7,5 per hour x 2 staff persons = £15

£15 x 6 hours a day = £90

£90 x 6 days a week = £540

£ 540 x 6 months = £3.240Motorcycle tours £1.200 per tour x 12 tours = £14.400Personal selling The same amount that the company

already paid its staff sellers before.Local chapter or H.O.G’s (Word-of-Mouth Communication)

£0

Publicity £0Social networks and digital media £0

TOTAL £53.640

6.2.- SCHEDULINGThe campaign is designed for a total of 7 months and it is divided in two parts:Before the launching (June):

The webpage, the app and the social networks will announce during the first month the release of the new electric LiveWire. These sites will begin to provide the first data of the product (but not too much to cause intrigue among the public) as well as information on campaign events and places that the test-drives will be launched.

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After the launching (July-December): Four trade and exhibitions will take place once a week. So it would be

24 exhibitions and trade shows in total. The open house days will take place during six days a week (Monday-

Saturday) six hours a day. The motorcycle tours will take place twice a month. So it would be 12

tours in total. Local chapters or H.O.G’s will always be open to the public and the

exchange of opinions will be possible at any time after the release of the LiveWire and the test-drives.

The social networks and the webpage will be always updated, showing real time information on events or news related to the launch of the new motorcycle and the tests-drives.

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7.- CONTROL AND MEASUREMENTThanks to the brochures distributed during the trade shows, exhibitions, open house days and motorcycle tours, it will be easy to measure the number of people informed about the release of the product. Also, using tools such as Google Analytics and counting the likes, posts and tweets related with the campaign it can be measured the estimated amount of people who have search information about the Live wire. The number of free media appearances (publicity) will also be a good guide for calculating the audience that the campaign has reached. Another tool of control, and perhaps the most valid, is the number of people that will want to try test-drives of the LiveWire after the campaign.

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8-. APPENDICES8.1.- EXTERNAL ENVIRONMENTPESTEL ANALYSISPOLITICAL + LEGAL

Safety regulations Fuel use regulations Pollution restrictions

We have to consider the modification of laws and safety regulations that the new vehicles on the market must comply. Moreover, we must also observe and control the rates of use of fuel on motorcycles, to take in moderation raw material required (petroleum). Additionally, UK government is increasingly more committed to the environment and seeks to reduce pollution levels emitted into the atmosphere.

ECONOMICAL Global recession is affecting UK economy Employment slowly recovering Increase in the prices for raw materials in manufacturing

The global crisis has affected the economy of British citizens, creating unemployment among the population. Therefore the level of investment in vehicles has declined significantly in recent years, strongly affecting the industrial sector. In addition, prices of raw materials have become more expensive, making the cost of manufacturing even more expensive.

SOCIAL Masculine biker image

Media and advertising have contributed to create a strong masculine image displayed in the automotive world. Motorcycles are associated with masculinity and this image is deeply rooted in society. Therefore, it is a difficult task to get moving this fame to the feminine world.

TECHNOLOGICAL Increase efficiency of engines Research funding

Technological advances are continuously improving over the years and allow a change for the better in the product market offering. Research funding and development programs have allowed the technological advances in the automotive world, increasingly enabling the production of efficient vehicles and engines.

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ENVIRONMENTAL High environmental impact Decrease in the amount of raw materials

The raw materials needed for the manufacturing of motorcycles are increasingly in short supply and therefore the purchase price goes up gradually. In addition, emissions from these vehicles potentially affect the environment, increasing pollution levels.

8.2.- CUSTOMER CONTEXTAccording to the Chartered Institute of Marketing 2013 the regular Harley-Davidson customer (end-user) is an educated married male in his mid-forties with a household income of $78,600. However, Harley Davidson states in their website that “the most basic way to define our target public is young men and women between the ages of 25 and 34. But, that would be insufficient. The people we want to target are much more complex, much more real”.

In general, they want to target “those with the fire of rebellion inside, aching to break from the daily monotony. Responsibility is not lost on them — they want to succeed as well as keep their freedom”.

Among Harley owners a vast percentage are fiercely loyal. One devotee categorizes loyalty to Harley-Davidsons in the following manner: “There are two types of Harley riders, those who if Harley-Davidsons were no longer available would just stop riding altogether, and those who are devoted to motorcycles first, and who happen to like Harleys”.

Baby-boomers (people born between 1946 and 1964) are exiting the scene and being replaced by a possibly a bigger generation of buyers who are not only younger, but more Hispanic, not as likely to be married or have children, and likely to be less rural. The new generation of potential buyers brings unfamiliar spending habits, personal values and retail demands.

Harley’s pursuit of a sustainable target market indicates the need to engage with the younger generation bikers. LiveWire launching project can be a great opportunity to draw attention to the younger market niche and achieve a new generation of loyal customers. This target segment is living in a critical point in their lives, they truly defining who they are.

These young people have a fresh, entrepreneurial spirit, who break from the ordinary life path and forge their own way. There is no better way than buying an innovative and exclusive product on the market, a product that additionally comes from a great brand that guarantees its effectiveness.

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The vast majority of young adults (67%) live under their parents’ roof. Thus, young people living at home are more carefree, and better able to socialize, enjoy their freedom, and to make capital purchases such as a car or motorcycle. They are also tech experienced, leading the way in smartphone ownership, and expecting to access information on the go (through apps) or the Internet.

According to the Chartered Institute of Marketing 2013 “this group are serious and practical in their outlook, with educational pursuits (42%), saving money (40%), improving job prospects (31%) and getting a job (31%) being their main concerns, whilst only 15% focus on partying, having a more varied social life, or going on holiday. Living in the multimedia society, they have more awareness of the issues they are facing, as well as ways to reduce the impact of those issues on their long-term future”.

CUSTOMER CONTEXT (MEDIA THEY CONSUME) According to the Adults’ Media Use and Attitudes Report computer, mobile phone and hand-held devices all have higher levels of use among younger age groups. Almost three-fifths (58%) of all 16-24 year old media engagement is through one of these devices, compared to 18% for people aged over 55. By contrast, use of the more established devices and media, such as TV sets, radio sets, and print, generally increases with age.

As shown in the chart, television and computers top the list of devices most used by our target (young adults between the ages of 25 and 34). These media are followed by radio and smartphones. Therefore, this illustrates that although the level of traditional media remains influential, more and more users choose to use the new technologies that allow Internet access from multiple platforms.

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8.3.- BUSINESS CONTEXTIn the United Kingdom there are two companies that sell exclusively electric motorcycles: Brammo and Zero. Both companies could be great competitors if we consider their experience with electric engines. Also the range of products they offer is quite wide and varied, offering customers many options to choose from.

However, these brands are not as well known as those that produce combustion motorcycles. Between these traditional companies are numbered models of electric motorcycles and scooters. Nonetheless, many of these products have not yet been commercialized and the projects of manufacture and sale are being analysed. Which have been identified as possible more powerful competitors in the UK market are the product range BMW C Evolution, the Suzuki Extrigger and the Yamaha PES1 and PED1.

8.4.- INTERNAL ENVIRONMENTALSWOT ANALYSISSTRENGHTS

Strong brand equity making the products memorable, easily recognizable and superior in quality and reliability will cause greater acceptance of the LiveWire by the audience.

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Operational efficiency brand experience when cut costs, increase revenue, improve management and control and make the best use of assets will help the profitable LiveWire placement.

Loyal customer base retaining customers is less expensive than acquiring new ones, and customer experience management is the most cost-effective way to drive customer satisfaction, customer retention and customer loyalty.

Innovation of the product electric motorcycles are still not widespread among society but its new appearance on the market may draw the attention of many potential customers. Moreover, electric seems to be the next big trend in motorcycling. According to Forecasts Navigant Research 55 million electric motorcycles and scooters will be sold worldwide from 2014 to 2023. Electric engines offer almost no noise, no vibration, total linear power availability and no moving parts.

High quality product and good product range the group of features and characteristics of the brand and the product range determine a great desirability and acceptability among the market, so it will be easier to implement the electric motorcycle in the niche.

Considering the brand as an icon Harley Davidson fills a void in the customers lives or provides them with experiences that make them feel emotionally connected to the brand and the sub-culture of people who experience it together. Richard F. Teerlink, Harley Davidson’s former chief executive, said: “It’s not a hardware; it is a lifestyle, an emotional attachment”. Harley Davidson symbolises freedom, rugged individualism and a sense of “bad rebellion”.

WEAKNESS Product recalls/issues bad experiences or problems with the new

product may cause recalls and the loss of both current and potential customers.

Prices of motorcycles product price and high involvement required could affect decision making by the audience.

Limited customer base, not diversified. Aging customer base the target that the brand is focused on is very limited and specific (discussed later), leaving out of the buying decision much of the market. So violent changes in the product offered could produce a rejection of the existing customer base of the brand. Furthermore, aging customer base could affect dealer service profits.

OPPORTUNITIES Global expansion the company's business activities into several

countries in several regions throughout the world could be a big

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opportunity to increase sales and implement the acceptance of the new product launched.

New product launches the emergence of a new product can contribute to the interest and attract the attention of new targets, increasing the market brand niche.

Popularity in racing bikes the popularity of motor sports and racing bikes can encourage the purchase of new motorcycles’ models and help to promote them.

Increased use of the Internet thanks to the appearance of Internet is much easier to promote the electric motorcycle and find new customers, despite continuing loyalty of the above.

Future regulations on market future market regulations are increasingly demanding low levels of pollution to the atmosphere and controlling the use of raw materials such as oil. This can be a great advantage when acquiring a more eco-friendly motorcycle.

THREATS Competitive landscape the competitive landscape in the world of

motorcycles is too broad and this can be a problem in making purchasing decision.

Consumers have less disposable income from the recession the global crisis has caused a decline in purchasing these products and the customers have less disposable income to spend on new products.

Seasonality of motorcycle market the market seasonality is a disadvantage when purchasing LiveWire. The weather in the UK does not allow its use too long and dry days are rare compared to other countries.

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9.- BIBLIOGRAPHYAcorn (2013) ‘The consumer classification’.

Boone, L. E. and Kurtz, D. L. (2012) Contemporary Marketing. Cengage Learning.

Chartered Institute of Marketing (2013) ‘Delivering Customer Value through Marketing’.

‘Customer loyalty’ Beyond Philosophy. Available at: http://beyondphilosophy.com/customer-experience/customer-loyalty/ (Accessed: 9 November 2014).

‘Demographics’ Harley Davidson. Available at: http://investor.harley-davidson.com/phoenix.zhtml?c=87981 (Accessed: 25 October 2014).

De Pelsmacker, P., Guens, M., and Van Den Bergh, J. ( 2010) Marketing Communications: A European Perspective Harlow. FT Prentice Hall

‘Event Calendar’. Harley Davidson UK. Available at: http://www.harley-davidson.com/content/h-d/en_GB/home/events.html (Accessed: 10 October 2014).

Fill, C. (2013) Marketing Communications. Pearson.

‘Financial and Strategic Analysis Review’ (2013) Global Data. Available at: http://callisto.ggsrv.com/imgsrv/Fetch?banner=4d609cd7&digest=27b6b6d33026b58ef227e0025dda7d42&contentSet=SWOT&recordID=47405_GDAUT29887FSA (Accessed: 5 November 2014).

Geigenmüller, A. (2010) Journal of Business & Industrial Marketing. Emerald Group Publishing Limited.

‘Harley Davidson UK’. Harley-Davidson UK. Available at: http://www.harley-davidson.com/content/h-d/en_GB/home.html (Accessed: 10 October 2014).

Holt, D. B. (2004) How Brands Become Icons: The Principles of Cultural Branding. Hardvard Business Press.

Mosaic United Kingdom (2013) ‘The consumer classification of the United Kingdom’.

‘Operational Efficiency’ (2006) Investopedia. Available at: http://www.investopedia.com/terms/o/operationalefficiency.asp (Accessed: 9 November 2014).

Percy, L. and Elliott, R. (2009). Strategic Advertising Management. Oxford University Press.

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Shimp, T. (2007). Integrated Marketing Communications in Advertising and Promotion. Thomson South-Western.

‘What is brand equity? Definition and Meaning’ Business Dictionary. Available at: http://www.businessdictionary.com/definition/brand-equity.html (Accessed: 11 November 2014).

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