Building Brand Community on the Harley-Davidson Posse Ride M740 CORPORATE REPUTATION AND BRAND MANAGEMENT

Building Brand Community on the Harley-Davidson Posse Ride M740 CORPORATE REPUTATION AND BRAND MANAGEMENT

Agenda 2 Executive Summary Background Key Issue Analysis Company SWOT Brand Identity Customer Quantitative Alternatives Assessment Matrix Recommendations

Executive Summary 3 Should the Posse Ride rolling rally continue? If yes, how do we maximize its effectiveness? Customers are generally satisfied and the ride continues to be a profitable driver of brand awareness. Improve existing Posse ride by solving common complaints and integrating rider feedback.

Background 4! Harley Owners Group (H.O.G.)! Division of the Harley Davidson Motor Company formed in 1983 to bring the company closer to its customers 1983 33,000 Membership 1999... 500,000 Destination Rallies " Extremely labour intensive Rolling Rallies " Unique, themed rides that start and end in different cities

Background 5 Posse II Posse I " " High adventure, low cost ride Started in 1997 " " " " " " Sequel to the epic adventure Border-to-border run Many repeaters from the Posse I ride Capped at 500 but only 425 registered Passport stamps along route stops at dealerships Large rider investment of both time and money

Key Issue Facing H.O.G. 6 Problem Statement: Does the Posse Ride rolling rally continue to meet corporate marketing objectives? Evaluate 3 key elements: 1) Brand connection 2) Profitability of the rides 3) Overall satisfaction of the ridership

Company Analysis 7 Current Brand Vision We fulfill dreams of personal freedom. Strengths Attracting new riders Optimizing the retail chain Championing retail excellence Harley Davidson Core Values Teamwork Accountability Knowledge Innovation Honesty Initiative Capabilities Delivering high quality to retain customers for life

SWOT Analysis Posse Rides 8 STRENGTHS - Consistently high interest in ride - Strong brand recognition - High customer loyalty - Rides are low cost and highly profitable WEAKNESSES - Unorganized ride planning - Ride is only feasible for a small percentage of H.O.G. members - Impossible to develop a single event that will satisfy everyone s needs OPPORTUNITES - Baby-boomer retirees could lead to increased membership - Many different types/routes of rides available to maintain interest THREATS - Adverse weather could affect ride route - Weak economy could reduce sales and ride revenue - Negative connotation with Harley subculture

Brand Identity Analysis H.O.G. 9 Service Attributes Develop social ties Local chapter newsletters Local values, but H.O.G. ethos Ownership benefits e.g. Fly & Ride program Rallies linking riders together into a broader community The H.O.G. Scope Division of HD Inc., supported by local, national, and international levels Open to all HD owners Close-to-the-customer philosophy Our service features an enhanced riding experience for Harley owners who seek challenging rides and desire a sense of camaraderie. Quality Customer satisfaction high (3.7 on a 4-pt scale) Demand exceeds supply Strong brand loyalty

H.O.G. Members - Defined 10 The typical customer for H.O.G. is male with an average age of, 41 and a median household income of. $55,570 They typically hold jobs in the technical and entrepreneurial fields. Our typical customer is influenced by. other Harley owners They are motivated by the need to. experience the freedom of the open road The following needs are not currently being met:. engagement and connection with Harley

A stroll among the riders at a rolling rally reveals a good deal of gray hair and relative affluence

Value Add of H.O.G. 12 500,000 members - $40 annual membership fee (1 st year complimentary) 167,000 active members spending $850 more annually 75% renewal rate for H.O.G membership $465 million $2,630 Active Member $80 Inactive Member Assuming an average membership of 3 years

Customer Response 13 Pre- and post-ride surveys were analyzed using a modified Net Promoter Score (7 point scale). The results were broken down by: " Lifestyle experience " Brand connection " Intention to repurchase

Lifestyle Experience 14 I have made lifelong friends because of Harley 18% I would definitely sign up for another long distance rally 17% I would recommend this ride to a friend 34%

Brand Connection 15 Harley really cares about me as a customer 19% Harley really understands what riding a bike is about 36% Harley really understands my needs 46% I am satisfied with H.O.G. 38%

Intention to Repurchase 16 Pre-Ride Survey If I were to replace my bike, I'd buy another Harley. Pre-ride NPS 82% Bottom 2 Middle 4 Top 2 Post-ride NPS 100% 18%

Alternatives 17 1. Maintain the status quo Riders are generally happy with the existing ride, but what about their concerns? 2. Improve existing ride Concerns could be addressed and the experience made better, but is it worth the additional cost? 3. Cancel ride altogether It would free up resources for other opportunities, but would it let riders down?

Assessment Matrix 18 Alternatives & Ranking Criteria Weight Improve Status Quo Cancel Brand Connec+on.50 3 2 1 Profitability.40 2 3 1 Rider Sa+sfac+on.10 3 2 1 Total 1.0 2.60 2.40 1.00

Recommendations 19 Planning " Up to one year before ride Create contest or survey to involve H.O.G. members in future route selection Select a group of H.O.G. members to act as an advisory board for possible events

Recommendations 20 Execution " Ride registration to completion Assigned registration times to avoid long lineups Have dealers ship riders purchases to head office to eliminate the need to carry Invite non-participating H.O.G. members to host events along the ride route Designated meet-and-greet with Harley employees

Recommendations 21 Post-Ride " Evaluation and follow-up Conduct post-ride survey with Posse ride participants to evaluate improvement Further Posse ride merchandising such as videos, yearbooks, and postcards Discount card for members in order to track purchase patterns

22 Discussion Questions?

Return on Posse II 23 Additional H.O.G. $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 75% 85% 95% 100% Retention Rate of Posse II Riders *http://investor.harley-davidson.com Average Profit Margin is 34.7%*