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Posts Tagged ‘premium price’

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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At Sturgis 2012 and the marketing spin on the delayed launch of new 110th Anniversary models.

A couple weeks back, Harley-Davidson announced its 2013 model lineup.

I’ll cut to the chase.

What the marketing department portrays as a launch at the intersection between craft, art, and technology… it is in truth mostly carryovers and there is little to stimulate excitement other than a new paint scheme.  Adding fuel to the excitement starved debate is how H-D was late to release the 2013 motorcycles compared to previous years.  Why did the motor company avoid the traditional opportunity to showcase the new models at Sturgis?  Instead having a wooden crate on display with the launch date stamped on it for later in August.  I was disappointed and thought it was a bit lame, but it likely stopped people from asking the pesky question of where are the ’13 models, over and over of the Sturgis staff.  They could just point to the box…

Post Sturgis and as expected (and previously blogged HERE) there are a number of 110th Anniversary models receiving the press attention. Understandable, given its the kick-off celebration of the 110th Anniversary.  Recently at the Harley-Davidson Museum, and then in a Europe continuation of the festivities at European Bike Week in Faaker See, Austria, on Sept. 4-9, 2012.  However, the ‘official’ Harley-Davidson Anniversary Celebrations will unfold in Rome, June 13-16, 2013, and in Milwaukee, Aug. 29-Sept. 1, 2013.

H-D vendor area at Sturgis 2012

There will be ten models available as part of the 110th Anniversary Editions.  They will have unique serial number plates and Anniversary Vintage Bronze/Anniversary Vintage Black paint (CVO models get Diamond Dust/Obsidian paint).   Each will feature commemorative solid bronze fuel tank badges plated in black nickel and then distressed to highlight the bronze. A bright gold-tone Bar and Shield cloisonné is inserted in the main body of the “single wing” badge along with special anniversary badging and trim.  All of the Anniversary Editions will be loaded up with factory-installed options as ‘standard equipment’ including a premium price between $665 and $2,495 over the non-Anniversary models.

The ten 110th Anniversary Edition Harley-Davidsons are:

  • 1200 Custom 110th Anniversary Edition (limited to a quantity of 1,500): MSRP $11,699
  • Super Glide® Custom 110th Anniversary Edition (limited to a quantity of 1,450): MSRP $15,999
  • Fat Boy® Lo 110th Anniversary Edition (limited to a quantity of 1,750): MSRP $19,499
  • Heritage Softail® Classic 110th Anniversary Edition (limited to a quantity of 1,900): MSRP $20,799
  • Road King® 110th Anniversary Edition (limited to a quantity of 1,750): MSRP $20,999
  • Electra Glide® Ultra Limited 110th Anniversary Edition (limited to a quantity of 3,750): MSRP $25,999
  • Tri Glide® Ultra Classic® 110th Anniversary Edition (limited to a quantity of1,450): MSRP $33,499
  • CVO™ Ultra Classic® Electra Glide® 110th Anniversary Edition (limited to a quantity of 1,100): MSRP $38,599
  • CVO™ Road King® 110th Anniversary Edition (limited to a quantity of 900): MSRP $30,999
  • CVO™ Road Glide® Custom 110th Anniversary Edition (limited to a quantity of 900): MSRP $33,999

Historically the Anniversary models become a collector item and sometimes retain higher resale value.  In addition, for 2013, the motor company is pushing the Hard Candy Custom program, a shout-out to the styling movement from the chopper era of the 1960s that showcases metal flake paint, and styling details.  The motor company also introduced the new CVO™ Breakout™ model.

Photos taken by author at Sturgis 2012 and courtesy of H-D.

All Rights Reserved © Northwest Harley Blog

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