MRKT330 Chp 9 Discussion

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1. (a) FAST FORWARD FROM THE 1990s TO THE PRESENT: WHAT MAJOR MISTAKE DID HARLEY DAVIDSON MAKE IN ITS MARKETING STRATEGY THAT LED THIS COMPANY’S SALES AND PROFITS TO STAGNATE IN THE 1980s? JUSTIFY YOUR DECISION BY OFFERING SOLID RATIONALE IN DEFENSE OF YOUR THOUGHTS. (I’LL PROVIDE A HINT—BUT COULD WELL RISK GIVING THE ANSWER AWAY—THUS, NOT ALLOWING YOU TO THINK IT THROUGH YOURSELF. EVEN SO, IT HAS SOMETHING TO DO WITH THEIR TARGET MARKET AND THE “STEREOTYPICAL” HARLEY DAVIDSON BUYER.) Harley-Davidson is one of the biggest motorcycle companies in the United States and is a recognizable brand for everyone. At the end of 2022, Harley-Davidson’s revenue for the year was $5.755 billion, a %7.85 increase from the past year. Harley-Davidson is a thriving company now, but back in the 1980s, they experienced a period of stagnation due to their poor marketing techniques. One of the main reasons why they failed to increase sales in the 1980s was that they relied too heavily on their target market . The target market is the group of buyers that a firm think will purchase their products, and for Harley-Davidson, they believed this market was solely older, white men. What they failed to do was apply market segmentation . This is the process of dividing the market into smaller groups. They believed that it was one target market and not many others. Specifically, the type of market segmentation that they failed to use was demographic segmentation or dividing the consumers by physical traits such as age or gender. During the 1980s, a new generation of motorcycle riders emerged, and due to the companies marketing being solely toward the older generation, revenue and sales dropped drastically. They failed to understand the differing attributes of their consumer, specifically with age. Nowadays, Harley-Davidson is using market segmentation to reach a broader audience, especially with woman. They realized that there was a surge in motorcycle purchases by woman, so they adapted their marketing strategy to meet their needs. According to the textbook, Contemporary Marketing , Harley Davidson ran target ads in women’s magazines and hosted annual “Garage Parties” specifically for women. This was done so that woman could demonstrate their love for motorcycles in a safe, judgment free zone were they could meet other riders such as themselves. This in turn can be a reason for recent increasing sales and why the company has grown so big. As you can see, there is a major difference in a firm’s success when only a target market is focused on compared to using market segmentation to branch out to the customer. Word Count: 348 References- https://www.macrotrends.net/stocks/charts/HOG/harley-davidson/revenue Kurtz, David L., and Louis E. Boone. Contemporary Marketing . South-Western, Cengage Learning, 2014. 2. IF YOU WERE THE VP OF MARKETING, WHAT MARKETING STRATEGIES WOULD YOU DEVISE TO INCREASE ITS HD’s CUSTOMER BASE (NUMBER OF BUYERS) WITH THE

OBJECTIVE TO INCREASE SALES, MARKET SHARE AND, IN THE PROCESS, PROFITS ? JUSTIFY YOUR DECISION BY OFFERING SOLID RATIONALE IN SUPPORT OF YOUR SUGGESTIONS. While market segmentation is an effective strategy to appeal to the consumer base, you have to look at 4 basic requirements in order for the segmentation to be effective. According to the textbook, Contemporary Marketing , the first requirement is the markets that you are dividing up have to have a measurable power and size. For a company such as Harley-Davidson, it is applicable for them to look at markets such as women or older men, but it doesn’t make sense for them to look at a younger audience under the age of 18. For one, to get a motorcycle permit, you must be at least 17 years old, and to market towards an audience that can’t use the product yet means that they can narrow down specific markets to focus on. The second requirement is to find a way to effectively promote the product to different market segments. For example, with the women market, you have to look at ways you can appeal to that audience, such as including women in certain advertisements or doing what was talked about in the previous question with offering annual “Garage Parties” for woman to network and feel comfortable in. The third requirement is to make sure the segment is large enough for good profit potential. According to demographic statistics, female owners still make up 19% of the motorcycle market. While male owners still dominate the percentage of motorcycle usage, it seems that the female population is large enough for Harley-Davidson to make a profit off of marketing toward that demographic. Lastly, the fourth requirement is to make sure that market to different segments is within the capabilities of the firm. As stated previously, Harley- Davidson is a massive firm with billions in revenue every year. They seem like a big enough company were they can use market segmentation with worrying about it being an ineffective strategy. If they were a smaller company, they would have to weight the pros and cons of marketing away from their target market. If Harley-Davidson uses these requirements to create good market segmentation, they can greatly increase their consumer base, which in turn will generate greater profits. Word Count: 358 References- Kurtz, David L., and Louis E. Boone. Contemporary Marketing . South-Western, Cengage Learning, 2014. https://ultimatemotorcycling.com/2019/02/07/motorcycle-statistics-in-america-demographics-change- for-2018/#:~:text=Following%20are%20the%20latest%20statistics,Female%20Owners %20%E2%80%93%2019%20percent

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