<font color="#FF3333"><b>AdAsia 2003:</b></font> Cult Branding: The Harley Davidson experience

The Harley turnaround experience is perfect proof of the fact that breaking rules can make great business sense

The comeback of Harley Davidson from the brink of disaster is one of the most remarkable brand turnaround stories in international marketing. At AdAsia 2003, Clyde Fessler, the motorbike company's former vice-president for general merchandise (and later, business development), recounted this brand fable ending with the exhortation, "If you do what you've always done, you'll get what you've always got."

Fessler was part of the original team that set about turning the iconic American brand around in 1981 following a management buyout from AMF. At that time, 30,000 Harleys were sold in a year; in 2003 the number will be around 3,00,000, a quarter of them overseas.

Fessler took the audience through Harley's history, from its founding in 1903 to its gradual decline in the 1950s and the entry of Japanese bikes into America in the 1960s which hastened the process. Harley Davidson was merged with the multinational company, AMF. This increased sales briefly before the brand returned into decline and neglect. The management bought out the motorcycle division from AMF in 1981.

The situation was terrible. Harley had an awful reputation for quality and prices were 30 per cent higher than Japanese imports. Worse, its finances weren't a patch on its solid rivals. A third of the staff was fired, and the company, already shaky, lost $50 million in two years after the buyout.

Identifying its strengths as the Harley heritage and American styling, the management decided to deal with competition by doing things differently: the company would "Go left when they turn right…" The strategy was to talk to the inner core of loyal Harley users to improve the product quality and hope for positive word of mouth.

Advertising played a big role. To begin with, it never showed the product. The first ad in the makeover emphasised the improved quality and made its point by showing a bunch of large Harley riders with the headline, ‘Would you sell an unreliable bike to these guys?' Nearly 80 per cent of the advertising was aimed at existing buyers in the hope that the word would ultimately carry to new users. Much of the other brand advertising, said Fessler, strove to "drive a wedge between Harley and the competition" by constantly taking potshots at the Japanese and emphasizing Harley's own heritage. One ad, for example, laughed at the Japanese brand's inclination to copy Harley's styling.

Simultaneously, the company worked at improving the quality of its dealership. Where Honda's dealers were typically businessmen, Harley's had traditionally been brand enthusiasts hoping to buy a Harley at a discount. Fessler said that the company worked hard at creating a "unique buying bonding experience".

Harley users continued to look somewhat threatening, typically big, bearded men wearing black. To gently nudge them towards changing their look and thereby attract more people into the Harley fold, the company launched Harley garments. Finding that a third of the sales were to women who rode pillion, the company introduced a range of clothes for women. Today, the ready-to-wear range has become a major money spinner.

The other big innovation the company tried was in promoting riding clubs. Today, the Harley Owners Group (HOG) has 7,50,000 members who pay $40 annually for the privilege. All the money that comes in goes into encouraging users to ride their bikes more or in interesting places. To celebrate the brand's 90th birthday in 1993, the company invited Harley owners from across America to drive to Milwaukee, Wisconsin: an unbelievable 1,20,000 bikers (with bikes) turned up.

The company is now on solid footing. One of the most delicious aspect of the turnaround is that Japan is now Harley's second largest market after the US. © 2003 agencyfaqs!