Harley Davidson

1903 Harley and Davidson begin manufacture• Sell four bikes 1904• Sell eight bikes

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Harley Davidson

1915• 18,000 bikes manufactured and sold• Indian joins the category• All bikes sold to the military

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Harley Davidson

Post 1918• Model T Ford at times cost less than a Harley

bike• Demand collapses• During the recession bikes sold for as much as

$2,000 equal to a family car

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Harley Davidson

1940• 90,000 Harleys are manufactured and sold Post 1945• Bikes bought by criminal elements• Sales increase at a slower rate than cars

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Harley Davidson

1947• Hollister, California• Hell’s Angels 1953• The final competitor, Indian closes leaving

Harley the last of 114 manufacturers

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Harley Davidson

1945• Bike registrations were 200,000• Sales were flat at 50,000 p.a.• Anecdotal research revealed customers don’t

a lightweight bike

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Harley Davidson

1960• Bike registrations were 400,000 1964• Bike registrations were 960,000 1971• Bike registrations were 1,400,000

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Harley Davidson

• Soichiro Honda• Great mechanic• Has his first piston ring patent by the time he

is 14• Opens his first garage at the age of 21• At 24 he is employing 50 other mechanics• His quality is so highly regarded it is seconded

by the military in WW11

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Harley Davidson

• His factory is bombed and he loses everything at the age of 41

• Purchases 500 field telephone engines and makes 500 bikes

• 1949 he is making Honda bikes • 1950 he produces 3,600 bikes• 1952, employs 1,000 staff

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Harley Davidson

1960• Harley Davidson owns 75% of the bike market 1965• Harley Davidson owns 5% of the bike market• Honda owns 80%

How did he do it?

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Harley Davidson

• Enters his bikes in the prestigious Isle of man races in 1954. His bikes are high quality but too small

• However, by 1961 Honda owns most world championships

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Honda -Marketing MixProduct• 50cc (small as) bikes• Six colours– First 3 colours – red, white and blue

• Averages 55 m.p.h. and cover 300 kms. On 30 cents worth of petrol

• Stripped down bikes are regarded as good a watch – perfect.

• Product lines expanded to heavier bike by 1965 when 40% of owners wanted to trade up

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Honda -Marketing Mix

PriceSell for $300 when the rest of the market

averaged $1,500

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Honda -Marketing Mix

Place• In the heart of New York City – Madison

Avenue and the like.• 1500 dealers by 1965 in every state. Harley

had 880

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Honda -Marketing Mix

Promotion• Win social acceptance of bikes• Educate the public to this mode of travel• “Go happy, go Honda”, “You meet the nicest

people on a Honda”

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Honda -Marketing Mix

Promotion• Target market portrayed as family, friendly,

frugal, easygoing and nice• Ads placed in Life Magazine, Saturday Evening

Post• Commercials run on the target market’s (16 –

25 y.o. young professionals) radio stations

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Harley Davidson

Problem• 1966 all companies suffered losses except

Honda.• 1965 he rents bikes - $40M worth

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