Harley-Davidson: Marketing an American Icon

Perhaps more than any other 20th century product, the Harley-Davidson motorcycle is revered as an American icon - a symbol of free-spiritedness, love, and a verve for living life with all your senses. While this gives Harley marketing advantages, it carries the responsibility of upholding the qualities that customers identify as the essence of Harley.

Just mention the word design and the guys at Harley move closer. Their eyes sharpen, and right away they want to know where you're coming from. Make no mistake, design carries a unique, time-honored definition at Harley-Davidson, America's oldest and most renowned motorcycle company. "Everything about us starts with the motorcycle," says Ken Schmidt, Harley's director of communications. "When we speak of design our minds turn immediately to the bikes we build and the reasons our customers love them."

As it should. After all, a Harley-Davidson motorcycle is more than just a mode of transportation or ordinary product. It's an American icon that is much loved and recognized around the world. So, while the Harley-Davidson Motor Company is dedicated to continuous innovation, it has opted for evolution more than revolution to carefully preserve the elements that make a Harley distinct - the trademark V-twin engine, the teardrop gas tanks and oversized speedometer, among other styling details.

"We are constantly improving and modernizing the machine," Schmidt comments, "yet every model retains the classic components. That's what our customers want, and that's also, I believe, what sparks the strong emotional attachments that Harleys generate."

These elements have been part of Harley design almost since the company's beginning in 1903. In the ensuing 93 years, the company has been building the things of which dreams are made - rumbling muscular machines that owners claim liberate and transform them as if by magic.

Joining the Harley Owners Group (or becoming a H.O.G. member), is not so much about buying a bike as embracing a unique recreational lifestyle. No other "product" can draw thousands of enthusiasts to weekend rallies staged around the country. Or evoke such pride and identification that the owner tattoos the corporate logo on his arm. "There's something going on here that is greater than the sum of its parts," says William G. Davidson, Harley's vice president of styling. He should know. Willie G., as he's called by riders from Maine to Malibu, is the grandson of William Davidson, who with Walter Harley and two brothers started the company nearly a century ago. Since the early '60s, Willie G. has been involved in the design of every model the company has produced, and he is unquestionably the protector of all things sacred at Harley-Davidson. The family connection continues, since all three of Willie G.'s children are involved in design and product development for the company. His daughter, Karen, oversees the design and licensing of Harley's MotorClothes line.

Sitting in his studio at the company's headquarters in Milwaukee, Willie G. surveys the gas tanks and fenders laying around the room. He points to an engine hanging on the wall as if it were a prized painting. "That's the heartbeat of the company, right there," he says. "Our classic V-twin engine. It's a highly evolved and sophisticated cousin of the one my grandfather developed in 1909. That's a trademark, and like other unique elements of a Harley, we protect and nurture it very carefully."

Willie G., who heads up a team of five product designers, is quick to add, "It's important to understand that we're not in the business of making antiques. Every year we make further improvements to our engines and chassis. But from a styling standpoint, we have to incorporate improvements without compromising `the look.' If we move a bolt or re-route one hose, our customers take note and call us on it. A Harley isn't shrouded in fiberglass like so many other bikes. Everything we do is right out in the open."

Today Harley-Davidson motorcycles fit into four distinct product families, each rich in history and tradition. The entry-level Sportster model features engine sizes of 883 or 1200cc. The larger DynaGlide, with advanced chassis and suspension system, is Harley's smoothest-riding cruiser. The Softail model features an invisible rear suspension for rider comfort without altering the classic "hardtail" bike look. Harley's big touring bikes, with names like ElectraGlide and Road King, boast amenities like four-speaker stereo and cruise control. Central to Harley's design approach and marketing strategy is attention to what makes the company special to its customers. One reason the company's executives and employees connect so well with their customers is because every morning they see them in the mirror. Their market research begins with themselves. Rich Teerlink, Harley-Davidson, Inc.'s president and CEO, says, "For us, it's a way of life." It's not surprising to walk through Harley's headquarters and see motorcycle helmets lying on top of file cabinets. Harley people ride their bikes to work and spend vacations touring and attending rallies with fellow Harley riders.

The benefits of company-sponsored rallies influence all areas of the company's work. Giant outdoor festivities, these rallies feature live music, food booths, field games, prizes for categories ranging from "oldest rider" to "rider coming the longest distance," and dozens of vendor stalls selling everything from customizing services to branded accessories. Ongoing since 1938, one of Harley's largest sponsored rallies at Sturgis in the Black Hills of South Dakota, annually attracts more than 400,000 riders from around the world. Many riders plan their annual vacation around the event. Hundreds of Harley employees are there too. "When a Harley owner explains a great riding experience or rally he's been to, or even a problem he may have had, it's important to be able to say, `I know what you mean,' or `How can I help you,'" says Jeff Bleustein, Harley-Davidson Motor Company president. "A lot of what you see in our product lines - and even the way we run our rallies - are the direct results of input we've received from our customers." Indeed, most weekends you'll find Willie G. at a rally rubbing elbows, hearing stories, fielding questions and stoking the Harley legend.

We're riders," says Willie G. "We understand motorcycling by strapping on the leathers and getting out there. The best way for us to perpetuate the adventure is by living it and sharing it. That's unquestionably part of our strategy. The rallies, like the one in Sturgis or Daytona Bike Week (in Florida), really serve as our product development centers. We see thousands of bikes and what our customers are doing to them. We get new ideas through our discussions. And then the riders take demo rides on our new models and give us feedback. If you want to know what Harley-Davidson is all about, how we develop a design strategy, just make the scene at a rally and listen to our riders. They set the tone, and believe me, they're not bashful."

This "close-to-the-customer" philosophy, as CEO Teerlink calls it, extends to the dealerships as well. More than just a retail outlet, they are a gathering place where Harley riders come to trade stories and talk with others who share their riding passion. It wasn't always that way. "Our dealerships, for the most part, used to be glorified garages, with a couple of mechanics in the back and a box of T-shirts out front," recalls Willie G. Six years ago Harley aggressively put in place a retail strategy to establish a true collection of products all linked under a common and strong visual identity, and through its dealerships endeavored to create a top-to-bottom presence.

Today the company promotes the Harley lifestyle experience through "designer store" dealerships that have either been completely remodeled or built from scratch to provide a warm and inviting retail environment. Floor plans and display counters are laid out to draw customers in and surround them with motorcycles, and all one needs to ride one. Parts, once stored in the back room, are handsomely displayed in user-friendly packaging. There's a separate area for Harley's line of MotorClothes, complete with dressing rooms. Many stores also feature customer lounges and rider meeting rooms with Harley-Davidson pinball machines, antique bikes and rally videos. No detail is ignored and each is designed to enhance the owner's experience and underscore the premium quality of Harley-Davidson products.

Dealerships that convert their shops to the Designer Store concept have typically seen soaring revenues and rapid return on investment. Not surprisingly, nearly half of the company's 1,110 worldwide dealers have made the switch, with more planning to convert.

At Harley's Milwaukee headquarters, a staff of eight store-design and merchandising specialists collaborate with dealers to create new Designer Stores in keeping with regional environments. A dealership in Mesa, Arizona, for instance, will have a distinctly southwestern desert look, while in Miami the theme is art deco.

Harley-Davidson's merchandising line - which ranges from clothing, tattoo patches, coffee mugs, belt buckles and infant wear to memorabilia - are also intended to support and amplify the riding experience. Today's Harley customer is as likely to be a factory worker, engineer, housewife, graphic designer or salesperson and typically family-oriented.

The conviction to stay connected and involved with their customers is born of humbling experience and a very close call. There was a time in 1984 when Harley-Davidson nearly went under. Japanese competitors were flooding the U.S. market with high-tech bikes and Harley's machines were suffering quality problems. The company's leadership, particularly Willie G., remembers those dark days and understands how vital it is to perpetuate the Harley mystique. Today Harley has 56% of America's big-bike market (751+cc), and it is expanding production capacity to keep up with growing worldwide demand. Annual shipments of Harley motorcycles more than doubled from 1988 to 1995. With demand for Harleys at an all-time high, buyers patiently wait between six and 18 months to take delivery of a new model.

Although the company generated more than $1.3 billion in revenues in 1995, it spent less than $2 million in advertising. "We're not dependent on advertising or other traditional marketing techniques as automobile companies or even our competitors are," says Schmidt. "They're selling transportation. We're selling dreams and lifestyle. There's a big difference."

Schmidt adds, "Because our bikes are so visually and audibly compelling, you get a bunch of them together, whether by the dozen or the thousands, there's going to be excitement and curiosity. Add to that the fun associated with motorcycling and you've got natural word-of-mouth promotion. In a very real sense, our customers are the sales force, and the bikes, accessories and clothing serve as our calling cards."

The company's catalogs, brochures and annual reports complement this arrangement. A Harley poster is included in every annual report, since so many owners want to hang them in their garage, and Harley bike catalogs are designed by Carmichael Lynch Advertising in Minneapolis to be collector's items. Rarely are they thrown away, instead they're likely to be found on coffee tables all over the world. Interestingly, Harley never shows people on bikes in advertisements. "The idea," says Schmidt, "is that with a Harley-Davidson, you can be anyone you want to be."

Preserving Harley heritage is a challenge when appealing to an audience that identifies with the company's unbridled, free-spirited image. "This isn't a company that sticks to a hard-line design manual," says Willie G. "While we utilize a very tight design and engineering philosophy to produce a very distinct and complex product, the image and feeling of Harley-Davidson is expressed many ways." A review of Harley's familiar bar-and-shield logo on its bikes and products shows that the company freely interprets this logo while still managing to look like Harley.

VSA Partners, the design firm that produces Harley's annual reports and other corporate communications, understands Harley's unpretentious yet conscious use of design. VSA's Dana Arnett, himself a Harley rider, says that the annual report's down-to-earth style, journalistic black-and-white photography, and even the fact that CEO Teerlink is shown in leather jacket and casual attire, rather than in a formal boardroom setting, are intended to reflect Harley's persona. "Doing the annual teaches us never to apply a rigid design standard or preconceived notion of what Harley materials should look like," says Arnett. "It changes each year because the experience changes and grows. We just keep our ears to the ground to hear and feel the rumble. You can see it in the annual reports because that's what Harley customers want to see."

And who better than a Harley customer to explain what that means. Alec Wilkinson writing in The New Yorker says, "If you ride a Harley, you are a member of a brotherhood, and if you don't, you are not." For Harley, it is that complex and that simple. All their products spark a feeling, kindle a memory and point to the journey ahead. For Harley management, if it doesn't, it doesn't qualify as a genuine Harley.