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Posts Tagged ‘Louis Vuitton’

According to an article by @bob_tita in the Wall Street Journal (WSJ – Paywall), Harley-Davidson plans to reopen its factories this week at lower production rates and stated it will be sending dealers an attenuated range of new motorcycles — meaning, time for a COVID-19 course correction.

You may recall that Harley’s U.S. assembly plants and most of its dealers closed in March as part of a nationwide effort to slow the spread of COVID-19.  Currently, as many of the company’s 698 U.S. dealers make plans to reopen, Harley’s director of product sales, Beth Truett, stated in a memo, which was viewed by the WSJ, that about 70% of them likely wouldn’t receive any additional new motorcycles in 2020.

The motor company is pivoting from the “More Roads” plan to now focus efforts and energy to appeal to customers of premium-priced brands with limited availability.

Speaking of availability… By definition, excellence is scarce.  Harley-Davidson has leveraged “scarcity” previously. Underproduce motorcycles and limit distribution, which creates long waiting lists that in turn create an exclusivity mystique. Will it work again?

And speaking of premium positioning…

Harley-Davidson Eau de Toilette – Example of brand dilution!

Price alone won’t make a brand premium and few companies can thrive on limited market coverage and low volumes by commanding premium prices in a particular niche.  One thing is sure: motorcycle customers are price-sensitive, even if they are ready to pay a premium price for a … Harley lifestyle.

This means Harley-Davidson has to be able to truly earn the added value.

Data supports what we already know to be true about premium brands: people with lots of money buy nice things. Whether you’re talking apparel (i.e. Phat Farm, Polo, Timberland and Tommy Hilfiger), Tequila, hand bags (i.e. Gucci, Fendi, Louis Vuitton and Prada), restaurants or footwear, it’s easy to recognize the pattern that the nicest, most expensive brands are favored by consumers with the highest household income. What is less obvious, are the fewer instances when wealthy people opt for the less-expensive, or when average-income people make deep trade-offs to purchase really pricey things.  There are a whole lot more average-income people than there are excessively wealthy ones.

Strong brands have a strong identity. Mediocrity doesn’t captivate or win the motorcycle sales race. There is a rule of thumb that says that a company ought to be able to explain its brand identity in seven words, give or take a couple.

The clock is ticking Harley-Davidson!

So, what is it about “premium-ness” brands that are able to inspire consumers to say “no” to some things so they can say “yes” to a brand that’s often or slightly out of financial reach? That’s the Harley-Davidson opportunity.  Finding the nooks and crannies to up-sell consumers on “premium-ness” choices—especially a candy coated brand in the top tier of the motorcycle pack.

The Harley downside risk is the “Porsche Effect“… becoming known as an SUV manufacturer that also produces a few sports car models rather than the premier sports car brand that also makes SUVs.

I’d like to better understand how Harley-Davidson can retain a premium brand identity if combustion engines, once the top tier of American motorcycle engineering, are being replaced by e-motors (LiveWire) that can be built by almost anyone, and if motorcycles feel and act like smartphones that you no longer even have to own?  It’s likely that the V-Twin motors of the future will no longer be a distinguishing brand characteristic.

New competitors are knocking on the Milwaukee door and customers are better informed, have tougher requirements and are able to interactively rate and influence companies and their products.

In the end, what Harley-Davidson claims about it’s premium brand doesn’t matter. What matters is whether or not consumers believe it enough to pay more for it.

Photos courtesy of Twitter Bob Tita/WSJ and Harley-Davidson.

All Rights Reserved (C) Northwest Harley Blog

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Interbrands Ranking of the Best Global Brands

Brand impact.  That’s what H-D desires.

Trust and customer loyalty are the words that matter most in today’s economic market place.

Let’s recap the various statements made by CEO, Keith Wandell on the Harley-Davidson brand.  I found it interesting and thought you might too:

October 2009 — “As our announcement regarding Buell and MV Agusta indicates, we are moving with the speed and decisiveness required to bring our business strategy to life,” said Wandell.  “The fact is we must focus both our effort and our investment on the Harley-Davidson brand, as we believe this provides an optimal path to sustained, meaningful, long-term growth.”

January 2010 — “Focusing our investment behind the uniquely strong Harley-Davidson brand provides the most attractive path to sustained, long-term growth,” Wandell said. “We also expect to achieve substantial gains in the efficiency of our operations through continuous improvement.”

April 2010 — “Throughout the past 16 months we have taken a number of actions to address the immediate challenges and establish a bold, clear direction that will maximize our opportunities going forward,” said Wandell. “We have come a long way in a short amount of time, and I could not feel better about the progress we have made and where we are headed.”

July 2010 — “Despite the decline in second-quarter retail motorcycle sales, we believe interest in the Harley-Davidson brand remains strong among riders of all generations. In fact, Harley-Davidson is the U.S. market share leader of on-road motorcycles among young adults. We will continue to focus our resources on expanding the global reach of the brand and developing new products that will reach even more riders going forward,” Wandell said. “I would like to thank our employees for their continued hard work and support of our strategy.”

How’s all that brand focus working out Mr. Wandell?  Check it out.  According to Interbrands 11th annual ranking of the “Best Global Brands,” Harley-Davidson (#98) saw a decline of 24% in brand value!! For the first time ever, it nearly fell OFF the top 100 list of global brands.

Quick to provide an “interpretation” and point out their view of the pitfalls of Interbrands ranking system – Harley-Davidson spokesman Bob Klien stated“Given the financial focus of the Interbrand rankings, the results aren’t really all that surprising,” and then went on to say “It’s to be expected given the economy and the effect it’s had on the motorcycle industry and Harley-Davidson.”

Not that surprising.  Huh?  If it’s a financial focus let’s contrast the H-D brand with the auto industry which has had a difficult time in this economy too.  Mercedes Benz (#12) and BMW (#15) were able to sustain and build their value through innovative design and a focus on delivering premium value vehicles with luxury features. Award-winning products like the Q5 helped Audi (#63) lead industry growth this year with a 9% increase in its brand value.  Even the media’s preoccupation with the Toyota (#11) recall which caused the brand to lose -16% of its brand value was handled in a way that it out performed H-D!

What about other luxury brands?  Even with the economic downturn, luxury brands Cartier (#77), Armani (#95), Louis Vuitton (#16), Gucci (#44), Tiffany & Co (#76) and Hermes (#69) all saw the value of their brands increase in 2010 by continuing to invest in their heritage and legendary status. Outstanding customer service and a focus on unique in-store and online experiences allowed them to stay strong, even while consumers cut back spending.

Interbrand publishes the ranking of the top 100 brands based on a unique methodology analyzing the many ways a brand touches and benefits an organization, from attracting top talent to delivering on customer expectations. Three key aspects contribute to a brand’s value; the financial performance of the branded products or services, the role of brand in the purchase decision process and the strength of the brand to continue to secure earnings for the company.

The Harley-Davidson brand investment does not seem to be working.  Now what?

Photo courtesy of Interbrands.

All Rights Reserved © Northwest Harley Blog

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couillard_dressRemember Julie Couillard, the woman who never received the Attire 101 memo and exposed a significant portion of her cleavage during the Canadian government swearing-in ceremony at Rideau House?  Her upper torso made all the newspapers. 

Previously I posted about Ms Couillard’s arrangement with Stéphane Sirois (Hells Angels) and how resolutely she brought down Maxime Bernier (Minister of Foreign Affairs) after he left secret government documents pertaining to Afghanistan in her apartment HERE.

Anyway the former “biker chick” moved on with her life.  Like many stiletto and Louis Vuitton wearing women before her she cashed in on the notoriety and published a tell-all memoir/book about her affair with the disgraced Mr. Bernier.  She secured a job at a Montreal radio station, and obtained invites to the so-called A-list parties to fill those long, cold nights.

julie_couillardAfter fading from the spotlight she has now decided to sell the provocative blue dress.  Yes, the same dress she was wearing as Maxim Bernier’s “date” (photo above) during the Conservative government’s swearing-in ceremony.  In the fashion industry this event has to be second only to the Lewinsky blue dress!  What is it about blue anyway?

I have no insight into motivation, but Ms Couillard’s new cause is a fashion show in the name of epilepsy.  It’s been reported that at the age of 12 Ms Couillard was diagnosed with epilepsy.  I’m no fashion expert, but it’s safe to assume the dress will sell for more than she paid for it and what great way to draw attention to herself (again), if that is her intention, and auctioning the dress off for a good cause.  Despite my opinion, what a stroke of genius it was donning that dress for her boyfriend’s swearing-in ceremony.  A brilliant marketing move on her part.  I can’t say that I blame her for exploiting her Outlaw Motorcycle “Club” relationships, her love affair with Bernier and others for fame and fortune. 

Is publicity a much too valuable commodity to be wasted on wannabes?

UPDATE: April 29, 2009 – Ms Couillard’s dress is auctioned for over $1000.

Photo courtesy Macleans.  A very detailed overview of Ms Couillard’s book is HERE.

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