Marketing Director, Harley-Davidson
For Pallavi Singh, director, marketing, Harley-Davidson India, events like the recently held 6th Western HOG (Harley Owners Group) Rally at Aamby Valley, which saw the participation of over 700 riders, are fertile insight-mining grounds.
The brand boasts over 16,000 HOG members in all.
"When you buy a Harley, you become a HOG member but you have to renew your membership annually. Being a member means participation in rallies, road-side assistance, special couches/mugs at restaurants, special parking at hotels like Taj...these are the things that are of value to our riders; '10 per cent off' and '20 per cent off' doesn't work here... that, in my opinion, is something that spoils the market, in fact," Singh, who is a Harley rider herself, tells afaqs!.
Harley-Davidson has been present in India since 2009. The brand currently has 14 models (most recent - Street Rod) and 60 per cent market share in the 601+cc motorcycle segment, in this market.
When we spoke in 2014, you said small town India - (Surat, Pune) - was emerging as a surprise market for Harley. How did that pan out over the last three years? I believe markets like Guwahati and Coimbatore are opening up...
Last year was not as good as we expected. This was, in part, due to demonetisation, which did hit this segment.
From a point of view of concentration of volume, the bread-and-butter for Harley is still the metros. It will always be.
But the desire to own a Harley is very high in smaller towns. Markets like Ludhiana, Lucknow and Dehradun have opened up. We're responding to this desire by opening up dealerships in these locations. We're hoping markets like Kolhapur and Trivandrum will bring some excitement in the days ahead.
In general, demand is very high in the North and West of the country.
How has the Harley consumer evolved over the last three years?
We see a pool of our customers now upgrading to bigger motorcycles. The trend is - within the Harley range, customers are upgrading faster. This is always a good sign, across markets.
While we do have customers in the 25-26-years age group, from a quantum perspective, the 28-to-33-year-old is a relatively newer demographic for us - they are first-time big bike riders.
The 35-55-year-old is now part of our more core audience.
Women have started to come in more. We have close to 80 female riders across India, today (in 2014, there were 20). Last year, we formed a group called 'Ladies of Harley'.
As marketing head, you are responsible for expanding the brand's user base. But in a segment for which demand is driven by passion, how does one go about generating interest where there is none?
From a marketing standpoint our intent and strategy is to maintain a fine balance between bringing new customers into the fold and not ignoring our existing customers.
We have a core customer and an outreach customer. We have been re-focusing our energy on our existing customers a lot more of late. More motorcycles on the road will bring in more customers. Also, when customers ride more, they walk into the dealership more, they want to upgrade/customise the motorcycle, they want a new jacket... this helps the dealer and consequently, the business.
With the launch of the Street 750 (2014), we opened the gates to so many riders, who would otherwise not think of riding a Harley. Street 750 is not the quintessential Harley; the sound and aesthetics of Harley are there, but it's for riders who'd otherwise ride a motorcycle from a competing brand. But now, they've come in.
In India we are very influenced by family. So that's something we've brought into our marketing, through HOG. If your partner/spouse has a Harley, you can become an associate member and be part of our rallies. These programs are important for the future customer as well.
The price point is something we've really focused on. The price has come down. With that, we've opened Harley-Davidson up to a lot more people. We want to create intent, demand and new riders.
Does a price drop take away from the 'premium-ness' of the brand? Or is it a trade-off you're willing to make?
We're a premium brand and will always be one. The cost of our entry level motorcycle, Street 750, is around Rs.5 lakh. Spending that much on a motorcycle is still a big deal. It is premium. You can get a car for that much.
And we'll never bring the price down just to get more riders. We brought the price down to build a whole new segment of consumers. That's the strategy - thinking of pricing and new segments together.
We're not an 'automotive brand'. Yes, there's an engine, two wheels, and there's a road. But when it comes to the way the brand is perceived by our customers, there's nothing 'auto' about it... Ray-Ban, for example, has dropped its prices a lot over the years but has not let go of its brand identity.
How do you split your marketing spend across media channels?
80 per cent of our spend is for experiential (offline) marketing. 20 per cent is for conventional/traditional marketing.
What is 'traditional marketing' for Harley?
Focused print advertising - auto, lifestyle, fashion magazines. Digital is part of this 20 per cent.
We have a tie-up with PowerDrift (YouTube channel about automobiles); the content is released on their platform as well as ours. The questions future customers have before investing in our product - 'This is a big motorcycle, how can I handle it?', 'What if it falls?', 'Will I hurt myself?', 'How do I brake?' - are answered through this content. This is another way of investing in the future customer, who, through this content feels, 'Yes, I can learn how to ride a motorcycle.'
We do this through our Boot Camps too; here we tell potential customers about the brand and take them on a small ride, through which they can experience what it would feel like to be part of the Harley community. We don't just give them the keys and ask them to ride solo... we take them on a ride with a lead rider, a sweep rider... they feel the brotherhood right there.
CMOs within a product segment have a sense of fraternity among themselves... and a reference point. Because you handle a premium brand like Harley, do you sometimes find yourself too far removed from the goings on in the marketing community? Which segments do you follow closely?
(laughs) Yes... that's a great question.
I read a lot about the fashion segment. It's similar to ours, in some ways. Also, at Harley, merchandise (which is sold on Myntra) is a big deal.
Music is another segment I keep a close eye on; like fashion and riding, music is also about self expression and individualism.
Harvard Business Review is my Bible.
When going to market with a new variant, what's the biggest concern?
Ensuring the communication that goes out to our customer base is done right and on time. If this communication is not right, we'll fall flat.
And who sells our brand? Our dealer and distributor network does. So they have to be pumped up for a new product to work.
Right, given the nature of the segment, a lot of the marketing is done at the dealership level. Does handing over the brand reins this frequently give you a sense of loss of control?
Yes, it's a good question.
Yes, the nature of the product is such that it has to be sold from the dealer network. We can't sell this product by giving spec-sheets and putting a banner... there's a huge amount of B2B marketing. I work closely with our partners and stakeholders.
So my struggle is - engaging with them constantly.
What is your biggest marketing challenge?
Being part of the marketing team at Harley-Davidson is a huge responsibility. When someone buys our product, they have huge expectations.
Keeping a customer engaged is a challenge. We have to ensure they feel as connected to the brand as they did when they first picked up the motorcycle. We try to do it with events and rides, but a lot of people will fall out in the middle. How do we ensure that if they ever want to come back to owning a motorcycle they come back to Harley-Davidson? That's the challenge high indulgence, experiential brands like ours face.