mark-avenue feb 2011 edition

6
next three years. What does this imply? Marketing money will now move closer to point of pur- chase than traditional media such as TV and newspapers. Earlier supermarkets had a belief that customers‟ relationship is with store and not manufacturers but a reversal in trend is going to be the next wave in which retailers will lose control. Today, customer walks into the store to make a pur- chase only after using the Internet to research about the brand they want to buy. Hence the power is shifting to brands which can play a crucial role in influencing purchase decisions. Having said that the objective here should be to "build a relationship with customer so that they take that relationship into the stores and manufactures don't have to work as hard to win in that mo- ment when they're at the shelf." As the markets become mature and competitive, consumer product companies are not seeing the ex- pected lift in sales from their tradi- tional advertising and promotional expenditures. Shopper marketing is the new way in which retailer and manufacturer work together to attract shoppers. The moment you enter into a su- permarket, 5,000 items start clam- oring in your face to grab your, ever so important, share-of-mind. And then you also find promotion flyers in the store “buy one get 30% off, buy two get 50% off” – influ- encing your purchase decisions. While shoppers might not put too much thought behind those pur- chases, creating campaigns that capture shoppers‟ attention and subsequently influence their pur- chasing decision is a serious busi- ness for retailers and manufactur- ers. In recent times, companies have been spending their energies and money on what they call “shopper” marketing. Shopper marketing is gaining popularity as stores and consumer goods manufacturers seek a way to capture the attention of a con- sumer whose spending is increas- ingly siphoned off by websites and other media. Though businesses believe in the purpose of this con- cept, they are not fully convinced of the definition a few burning questions: Is it about in-store\out- of-store deals? Does this take into account what a customer feel be- fore entering into the store, or merely what s/he sees on the store shelf? Experts from industry and from marketing research compa- nies have a divergent view on this. While experts from research agen- cies believe that it is simply a recy- cled consumer marketing with a „shopper‟ name put on it, experts from industry believe that Shopper marketing is bigger than customer marketing because it takes into account what customer is thinking when s/he is outside the store and not planning an immediate pur- chase. Tommy Hillman, a market- ing manager at General Mills, put forth an explanation that includes working closely with retailers "to help them win their share of wallet, aligning with their programs, offer- ing solutions that are going to ulti- mately benefit them the most." But roadblocks remain for success- ful shopper marketing; it is difficult to change the habits of grocers. The amount of shelf space allotted to a product depends upon the trade allowance and promotions for that product. Grocers‟ merchandising department doesn‟t work along with the manufacturers‟ marketing and sales team. For a successful shopper marketing, grocers and manufacturers have to collaborate more effectively. According to a study by Grocery Manufacturers Association and Booz & Co., 83% of food, beverage, health and beauty and household product manufac- turers said they plan to spend more on shopper marketing over the ‘Shopper’ Marketing: New game for retailers and manufacturers -Nikhil Gupta Inside this issue: Article—”Shopper” Marketing 1 ArticleRebranding of ‘Kizashi’ - The Ma- ruti Suzuki way 2 ArticleSmall Busi- nesses??? - Branding basics are here... 3 ArticleGreat Indian Noodle Market Growth Story 3 ArticleGetting Started with MAR- KETING 4 ArticleHarley DavidsonDo they sell ‘bikes’? 5 by Mercur-I Mark-Avenue February 2011 “Consumers will no longer see purchasing goods online, via mobile phones or from retail stores as three different activities”

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The monthly newsletter from Mercur-I, the Marketing Club of IIM Indore

TRANSCRIPT

next three years. What does this

imply? – Marketing money will

now move closer to point of pur-

chase than traditional media such

as TV and newspapers.

Earlier supermarkets had a belief

that customers‟ relationship is with

store and not manufacturers but a

reversal in trend is going to be the

next wave in which retailers will

lose control. Today, customer

walks into the store to make a pur-

chase only after using the Internet

to research about the brand they

want to buy. Hence the power is

shifting to brands which can play a

crucial role in influencing purchase

decisions. Having said that – the

objective here should be to "build a

relationship with customer so that

they take that relationship into the

stores and manufactures don't have

to work as hard to win in that mo-

ment when they're at the shelf."

As the markets become mature and

competitive, consumer product

companies are not seeing the ex-

pected lift in sales from their tradi-

tional advertising and promotional

expenditures. Shopper marketing

is the new way in which retailer

and manufacturer work together to

attract shoppers.

The moment you enter into a su-

permarket, 5,000 items start clam-

oring in your face to grab your, ever

so important, share-of-mind. And

then you also find promotion flyers

in the store – “buy one get 30%

off, buy two get 50% off” – influ-

encing your purchase decisions.

While shoppers might not put too

much thought behind those pur-

chases, creating campaigns that

capture shoppers‟ attention and

subsequently influence their pur-

chasing decision is a serious busi-

ness for retailers and manufactur-

ers. In recent times, companies

have been spending their energies

and money on what they call

“shopper” marketing.

Shopper marketing is gaining

popularity as stores and consumer

goods manufacturers seek a way to

capture the attention of a con-

sumer whose spending is increas-

ingly siphoned off by websites and

other media. Though businesses

believe in the purpose of this con-

cept, they are not fully convinced of

the definition – a few burning

questions: Is it about in-store\out-

of-store deals? Does this take into

account what a customer feel be-

fore entering into the store, or

merely what s/he sees on the store

shelf? Experts from industry and

from marketing research compa-

nies have a divergent view on this.

While experts from research agen-

cies believe that it is simply a recy-

cled consumer marketing with a

„shopper‟ name put on it, experts

from industry believe that Shopper

marketing is bigger than customer

marketing because it takes into

account what customer is thinking

when s/he is outside the store and

not planning an immediate pur-

chase. Tommy Hillman, a market-

ing manager at General Mills, put

forth an explanation that includes

working closely with retailers "to

help them win their share of wallet,

aligning with their programs, offer-

ing solutions that are going to ulti-

mately benefit them the most."

But roadblocks remain for success-

ful shopper marketing; it is difficult

to change the habits of grocers. The

amount of shelf space allotted to a

product depends upon the trade

allowance and promotions for that

product. Grocers‟ merchandising

department doesn‟t work along

with the manufacturers‟ marketing

and sales team. For a successful

shopper marketing, grocers and

manufacturers have to collaborate

more effectively. According to a

study by Grocery Manufacturers

Association and Booz & Co., 83% of

food, beverage, health and beauty

and household product manufac-

turers said they plan to spend more

on shopper marketing over the

‘Shopper’ Marketing: New game for retailers and manufacturers

-Nikhil Gupta

Inside this issue:

Article—”Shopper”

Marketing 1

Article—Rebranding

of ‘Kizashi’ - The Ma-

ruti Suzuki way

2

Article—Small Busi-

nesses??? - Branding

basics are here...

3

Article—Great Indian

Noodle Market

Growth Story

3

Article—Getting

Started with MAR-

KETING

4

Article—Harley

Davidson—Do they

sell ‘bikes’?

5

by Mercur-I

Mark-Avenue

February 2011

“Consumers will no longer see purchasing goods

online, via mobile phones or from retail stores as

three different activities”

The Japanese word "Kizashi"

means "something great is com-

ing". Maruti Suzuki India Ltd.

(MSIL) must be hoping its newest

luxury sedan of the same name

(launched in India in February

2011) lives up to that promise. But

there are many who question the

viability and even success of the

company's foray into the larger

luxury segment. What‟s our take on

this?

What comes to your mind first

when you come across the term

„MARUTI SUZUKI‟? It always ab-

solutely has to be a Maruti 800,

best known as „The Middle class car

of India, or an Alto, Wagon R

among many others. MSIL rules

the small car market in the country.

MARUTI as a brand itself is seldom

looked at, as a luxury brand. It is

more linked with the middle socio-

economic class and over past many

years Maruti has maintained & up

to an extent restricted its Target

Market to the same. Maruti Suzuki

brand is seen as most trusted &

relatively economic brand. The

luxury sedan segment represents

just 1% of the total Indian car mar-

ket and has grown 53 per cent in

the first three quarters of this fi-

nancial year to 13,838 units.

As per Mr. Shashank Srivastava,

CMO - MSIL , "We are putting

together a direct selling team dedi-

cated to Kizashi. We would spread

awareness through a 360 degree

promotional campaign with em-

phasis on digital activities to cater

to specific consumer groups."

(a) „Way of Life' has replaced

'Count on Us' as the tagline of the

mother brand Maruti Suzuki. „Way

of life‟, Maruti hopes, would open

up products for consumers across

segment, whether she is a buyer of

Wagon R looking for safety and

reliability while making her pur-

chase decision or a customer for

Kizashi opting for sophistication

and finesse.

(b) MSIL has indicated a change in

its car distribution strategy in the

country. It plans to set a network of

as many as 20 plush outlets across

the metros. Until recently, the

company‟s presence was limited to

highly populated city areas with

high footfall of buyers of mass-

segment cars such as Alto, Swift

and Dzire mostly through private

franchisees. But for the luxury car

segment, MSIL found it pragmatic

to have its own presence in all

major metros, so that it could focus

more on post-sales service in a

better way.

(c) MSIL has set up a website

(www.kizashikicks.com) with vid-

eos, car comparisons and all the

data you‟d ever want to know about

Kizashi. Applications and adver-

tisements in this web-site feature

the Kizashi head to head against

the luxury sport sedan rivals.

But our question still remains

-Will Kizashi find space on

Indian roads?

(a) The unsocial people: The

daggers are already out on social

networking sites against „Kizashi‟ .

Netizens are finding it a little diffi-

cult to believe that Maruti Suzuki‟s

latest offering in India is a luxury

car. They are not sure if one will

spend Rs 17 lakh to have a Maruti

branded car. “Imagine you have

spent 17 lakhs on a car and then

you see big 'M' on the grill,” tweets

Saurabh. These Tweets somewhat

sum up the sentiment of consum-

ers and the marketing experts.

(b) The bumpy road: Customer

acceptability would be the biggest

hurdle for Kizashi. “Luxury car is

all about prestige, social status and

personal esteem, which brand

Maruti may not be able to deliver.

(c) Right Target Segment: Well

established Japanese rivals, Toyota

& Honda, and the European car-

makers, who have carved a niche

with strong brands like Mercedes

and BMW will make it more chal-

lenging for Kizashi to find its own

place. Maruti will have a tough

time shaking off the „every Indian‟s

car-maker‟ image. Experts believe,

“The Target Segment for the luxury

segment goes for the „status‟ factor

and Maruti as of now fails on that

front.”

Shashank Srivastava, wards off

such skepticism, as he feels that

similar doubts were raised when

Maruti had entered the A2 segment

with Ritz and Swift, and then in to

the A3 segment with DZire. “But

we not only performed in those

new segments, we are also market

leaders,” he says, adding, “we have

now entered the A4 segment with

Kizashi and we look to capture fair

market share in this segment too.

Maruti can excel on its brand

promise and values”.

Let’s see how Kizashi fares in

the Indian market…… Amen!

Two shoe salespeople were sent to

Africa to open up new markets.

Three days after arriving, one

salesperson called the office and

said, "I'm returning on the next

flight. Can't sell shoes here.

Everybody goes barefoot."

At the same time the other

salesperson sent an email to the

factory, telling "The prospects are

unlimited. Nobody wears shoes

here!"

Rebranding of ‘Kizashi’ - The Maruti Suzuki way

- Shashank Verma

Page 2 Mark-Avenue

Marketing Two-Upmanship

A salesman was demonstrating

unbreakable combs in a department

store. He was impressing the people

who stopped by to look by putting

the comb through all sorts of torture

and stress.

Finally to impress even the skeptics

in the crowd, he bent the comb

completely in half, and it snapped

with a loud crack. Without missing

a beat, he bravely held up both

halves of the 'unbreakable' comb for

everyone to see and said, "And this,

ladies and gentlemen, is what an

unbreakable comb looks like on the

inside."

MSIL’s biggest challenge is to change the

brand perception of the consumers.

In most of the marketing literature,

strategies for branding are targeted

towards large organization. The

highly noted terms brand promo-

tion, brand management and

brand equity might create an im-

pression that branding is meant for

big players.

Organizations seek a long term

strategy when marketing their

product. They need to target and

position rather than being a ge-

neric product. Branding is done to

differentiate the products by the

company name which should be

considered as brand. For example,

if you produce and supply un-

branded salt to retail outlets, then

your company name will act as a

brand. The corporate brand where

the sales and transactions happen

will identify your product. Well,

one of the most important advan-

tages is that brands help to identify

and distinguish the seller. Even

while selling commodities, the

buyer needs to identify the seller

and developing a corporate brand

that helps in getting repeat busi-

ness from the customer.

Let‟s get it straight! The first step

in creating effective brand is to

make conscious decision about the

spending. The investment to create

individual brand name or corpo-

rate name will bring a huge change

towards success. Branding over the

years will create brand personality

and hence the investment is a long

term strategy.

It’s not about money, Folks!

It‟s the level of involvement and

the precise decision to be taken by

the marketer for

the brand con-

sciously. Though

the small players

might have the

budget constraint,

even small steps

now will go a long

way in establishing

a powerful brand

in the future. It is

possible for small enterprises to

build powerful brand through a

consistent investment in smart

branding practices. This budget

shall be a systematic investment

rather to see it as an expense.

March Ahead! After the decision

is made to build a brand, next is to

develop powerful brand elements.

Brand elements include name,

logo, symbols, mascots, color

schemes, taglines etc. These brand

elements should be prominently

displayed in every communication

that goes out from the firm be it

visiting cards, gifts, brochures etc.

Foremost thing is to protect our

vital assets like Brand Name, Logo,

etc. This is very important to pre-

vent plagiarism and copy cats.

What about Promotion? The

ubiquity of media has given huge

number of low cost promotional

opportunities espe-

cially for small

brands. Basic rule, as

the competition in-

crease the rates go

down, Isn‟t it? Well,

media has kept the

low advertising rates

for second string

media. Small brands

can utilize the re-

gional media options in a much

more effective way than large

brands operating in a national

scale. Local newspapers, radio

stations, cable TV channels offer

excellent cost-effective path for

small brand promotions. Initially,

we can‟t expect a substantial ROI

through these low cost media pro-

motions or a significant impact in

sales. In the long term, such small

media exposure will reap, thereby

increasing the visibility of the

brand. For the corporate brands,

Page 3 Mark-Avenue

which operate in a B2B environ-

ment, should handle differently.

Not to forget the sales profession-

als are the biggest promoters of

the brand. It is important for small

businesses to ensure that the sales

force is communicating the right

kind of message to the customer.

To increase the visibility there are

communication materials like

brochures, pamphlets etc and

these materials offer some amount

of information about the company

and products. When endeavoring

to brand development, these mate-

rials are of immense value. In

general it is observed that these

communication materials are not

used as a branding tool but just

serve as a product catalogue.

Do you think brand building is

expensive? Not exactly, brands are

built over time systematically and

through consistent investment

plan. The ever growing environ-

ment has given us enough cost

effective promotional options

which should be identified by the

small players to build their brands.

Small Businesses??? - Branding basics are here...

- Harish Kumar Raju

The Great Indian Noodle Market growth story! - Kiran Krishnan

Knowingly or unknowingly we are

also contributing to the great In-

dian noodle market growth story.

The influence of Pi shop and our

own “mess” in creating an appetite

amongst us in consuming one of

the fastest growing instant food

products in India is truly com-

mendable (no pun intended). For

many of us, instant noodles have

become a way of life..! Err.. At least

a part of our life..! J

Noodles entered India in the early

90s when Nestle was brave enough

to introduce Maggi whereas other

major players like HUL, ITC etc

were observing how nestle was

going to go about changing the

tastes of Indian consumers. Maggi

was predominantly targeted at the

children and as an easy way out for

mothers who just need to spend 2

minutes for

feeding their

children! But

a s t i m e

passed by, it

started tar-

geting the

youth as well

as the work-

ing class persons in urban India.

According to the current market

estimates, the instant noodle mar-

ket in India is worth over Rs 1,300-

crore ($260 million) and is grow-

ing at a phenomenal rate of over 17

-20% per year. The market until

lately was of monopolistic nature

with only one player Nestle India

Ltd which had a

market share of 90+.

However recent

reports suggest that,

on an all-India basis

across urban mar-

kets, Maggi has been

steadily losing mar-

ket share to the new

entrants. From a 90.7% market

share in December 2009, Maggi

slipped to 86.5% in July 2010. This

can be attributed to the avalanche

of product launches in this seg-

ment by other main FMCG players

like GSK, HUL, ITC etc. These 3

new entrants have thrown their

hats into the ring over the last one

year withHorlicks Foodles, Knorr

Soupy Noodles and Sunfeast Yip-

peerespectively. And as per the

current trends, Maggi is more

likely to have lost more market

share after the last released statis-

tics on their market share.

Apart from HUL and GSK which

have positioned their noodles as

„healthy‟ snacking options target-

ing kids and mothers, others like

Indo-Nissin‟s Top Ramen, Capital

Foods‟ Ching‟s Secret and CG

Foods‟s Wai-Wai , though around

for long, are stepping up market-

ing efforts to take advantage of

category growth. Besides, private

brands like Big Bazaar‟s Tasty

Treat and Aditya Birla Retail‟s

Feasters are notching up share.

GSK is piggybacking on the brand

equity of Horlicks as well as its

strong distribution system to make

a dent in the market share of

Maggi. Foodles, a new instant

noodle brand was launched in late

2010, focussing on health issues,

with the tagline, 'Noodles without

the No'. Market reports points out

to the fact that the initial response

to Foodles was much higher than

GSK‟s expectations.

On the other hand, HUL is using

the strength of its Knorr brand --

already popular for its soups range

-- to muscle its way into the instant

noodles category. Insider sources

in HUL were even reported saying

that the top management were very

pleased with the performance of

Knorr Soupy noodles.

Tasty Treatwas the second biggest

instant noodles brand in its Big

Bazaar stores after Maggi. The

brand packaging was

revamped last year and

Future plans to roll out

additional variants in a

month‟s time taking the

number of variants to

nine from the existing

three.

Most of these new en-

trants are trying to

target the health con-

scious Indian youth by offering

healthy snacking options to stay

abreast of changing consumer

psychographics. The best example

is the launch of whole wheat Atta

Maggi, a variant to avert health

conscious mothers from switching

brands or even giving up the pur-

chase of noodles altogether in fa-

vour of healthier food choices for

their kids.

Key Buying Factors

These launches represent a smart

move by manufacturers to capital-

ize on the fundamental

shifts in socio-economic

patterns of the Indian

society, rather than a

„me-too‟ strategy. The

manufacturers are

trying to tap the poten-

tial, this change has to

offer.

Some of the chief rea-

sons responsible for

this explosive growth include:

1. Lack of time amongst the

youth coupled with the rela-

tive ease with which you can

prepare noodles

2. Instant noodles are perfect

for on the go consumption

3. Rise in the no of working

professionals living away

from parents.

4. Increasing employment of

Page 4 Mark-Avenue

women in the workforce has

led to a manifold increase in

households with no parents

at home to act as caretakers.

5. Indian consumers are more

amenable to changing their

eating habits and far more

demanding of more choices

now than he or she ever was

before.

6. Other reasons can be clus-

tered as country's young

demographic profile, increas-

ing family income, accelerat-

ing urbanization, global

travel, increasing exposure to

global cuisine and so on

Thus, to sum up, the competition

in this space is set to sizzle while

providing diverse consumer seg-

ments with an ever-increasing set

of options to suit their unique

preferences. So the next time you

enjoy your cup of noodles, remem-

ber to take a note as in to which

company‟s market share you are

contributing your money..!!

Getting Started with MARKETING - Kumar Vaibhav

Guerrilla Marketing

Guerrilla marketing is unconven-

tional, non-traditional, not by-the-

book, and extremely flexible means

of marketing. Some factors make it

different from old-fashioned mar-

keting

1. It‟s more about relationship

building rather than sales, for

long-term relationships are

paramount

2. Guerrillas strive to aim mar-

keting messages to individu-

als, not to groups

3. All guerrilla marketing is

intentional and direct and

meant to create an impact in

minds of customers

4. It uses psychology and basic

human behavior to make a

relationship

5. It is about giving customer an

experience and feel of the

product which result in in-

crease in brand awareness

The heart of guerrilla marketing

lies in having a plan which can help

you relate to your customers

through common sense and realis-

tic expectations .It is very effective

way of building relationships with

your potential customers and also

a great way to make people aware

about your products or company as

a whole. Guerrilla marketing keeps

the things very simple so that cus-

tomer is able to get most out of the

campaign and there is no doubt

about anything

Ambush Marketing

Ambush marketing is an act

whereby another company, often a

competitor, try to capture upon

public attention relating to some

event, thereby deflecting attention

towards itself and away from the

sponsor.

Often classified as a form of

“guerrilla” marketing, the term was

coined by Jerry Welsh, the origina-

tor of cause-related marketing

when he was at the American Ex-

press.

Although marketing is something

which is perfectly legal but it hurts

on legitimate sponsors badly, their

claims often provide no basis for

legal action. Marketers are often

concerned about ambushing be-

cause any

loopholes

can result

in giving

opportu-

nities to

competi-

tors who

are always

ready to

take on such opportunities with

both hands.

One such incident happened in

1996 Cricket World Cup. Coca-Cola

was the official sponsor and paid a

whooping amount for the rights so

they were Official partner of the

cricket world cup 1996 but PepsiCo

cheekily stole all the limelight with

its „Nothing official about it‟ cam-

paign.

Recently P&G launched marketing

campaign in Mumbai to launch

their new variants of Pantene

Shampoo so they came with the

huge outdoor hoardings all over in

Mumbai stating „A Mystery Sham-

poo!! 80% women say is better

t h a n

anything

e l s e ‟ .

This was

done to

c r e a t e

hype and

a n x i e t y

a m o n g

the peo-

ple about the brand which was to

be launched in some time

When the suits at HUL found out,

they saw an opportunity to score a

point. They ambushed P&G and

Mumbai woke up to another

hoarding that was upfront, and

suggestive of its source of inspira-

tion. It said: „There is no mystery.

Dove is the No.1 shampoo‟ It was

too open to attack, and Dove took

the bold step and stepped in.

cess of HD can be attributed pri-

marily to these strong relationships

that the company decided to build

with its customers, offering them

more than just a bike. This only

objective has enabled Harley-

Davidson to take its brand beyond

simple ‟success‟ and turn it into a

Cult Brand. Increase in HOG mem-

bership base to 450,000 today,

from around 73,000 members in

1987 just shows that.

A short flash-back

Harley-Davidson Motor Company

began with William Harley and the

Davidson Brothers in 1903 with

their first prototype of an engine

designed to assist a bicycle. Within

a few years, they had produced

their first trademark two cylinder,

the V twin engine. By mid 1920s,

HD was the largest motorcycle

manufacturer in the world and

became to be known for its modern

design, the “teardrop” gas tank and

front brake. Soon, they produced

new models to address the demand

of a new market that consisted of

recreational consumers with

money to spend. In the 1970s, HD

was in ailing situation with the

competition from Japanese bikes.

The company made a great come-

back in the 1980s with the help of a

tariff on imports and its new plan

to restructure. By 1987, Harley-

Davidson owned about 25% of the

“What a weird question it is? How

are you living under sun without

knowing about the Cult-brand!”

This must be the first thought

which came to your mind when

you read the title of this article.

You‟re right! But they don‟t “just”

sell bikes; instead they sell “Harley

Experience”. Brush through the

rest of the article to know how?

Imagine yourself to be looking

casually through the window of an

apartment, across the cross-roads

in Milwaukee, USA on the sunny

day of June 13, 1998. You can‟t

believe your eyes. And in the frac-

tion of a second, you can‟t even

believe your ears. You hear a

sound, thump, thump, thump.

Thousands of Harley bikers, riding

on their beasts appear like they‟re

invading the city. On the street,

50,000 proud Harleys roar

through the city. Can you believe,

among those riders are senior

executives, CEOs and many famous

people? That was the 95th birthday

of Harley and over 125,000 people

attended the „Come Home‟ rally.

And in 2008, on 105th anniver-

sary, only 75,000 riders were cho-

sen out of 150,000 riders who

registered. The city was flooded

with 500,000 HOG members dur-

ing 2008 rally.

Confused what is „HOG‟? That is

the acronym for Harley Owners

Group. The HOG was created as a

tool to strengthen relationships

between customers, dealers and

employees and also as a tool to

allure the potential buyers. The

company sponsored rallies and

gatherings wherein Harley owners

could participate, share experi-

ences and people not owning

Harley could try the bikes out.

Th e se pro mo tiona l even ts

strengthened the community, gave

the owners a sense of belonging

and pride. The company also or-

ganized campaigns like Super Ride

in 1983, where people were invited

to test ride the bikes and about

40,000 prospective customers

accepted the invitation. The suc-

Do they sell ‘bikes’? - Srinath Akula

heavyweight motorcycle market.

Marketing Strategy

Though you might criticize me of

being bookish, I can‟t resist speak-

ing about the 4Ps we learned in the

two marketing papers. There is no

single P of the marketing 4Ps,

which was given lesser importance

by HD. Let‟s look at the people

they aimed; in marketing words,

the Target Segment. In the mid

1980s, HD targeted the riders in

the young adult age range. But

during 1996, they started to redi-

rect their marketing efforts to-

wards targeting motorcycle riders

in the middle age (40-60 years old)

and old age (60+ years old) ranges.

As a result of this, there was a 40%

increase in sales. Let me get more

technical from here.

Product they offer

They just didn‟t confine to bikes.

Their product lines include many

products like helmets, gloves, eye-

wear, jackets, belts, tee shirts,

jeans, boots, bags, jewelry, wallets,

key chains, caps, lounge wear, and

home collectables. All of these

complimentary products help com-

plete the image of the cult. Comes

with Harley-Davidson a 2 year/

unlimited mile warranty, after sale

insurance, accessories, service of

fully trained technicians, specialist

engineering equipment, computer-

ized diagnostic equipment and

technical updates.

Places at which they offer

The company first conducts their

own research to strategically deter-

mine where to place the dealer-

ships that would optimize their

sales. Once an expansion in an area

is determined based on market

studies, Harley-Davidson selects

the dealer through interviewing the

candidates on their entrepreneurial

position and knowledge of motor-

cycling. And not all dealerships

provide the same products/

services. Also, HD doesn‟t offer

customers to order online, but they

Page 5

can customize through the website

How do they Promote?

Can you expect how much HD

spent on advertising from 1984 to

1996? BIG FAT ZERO!! That‟s true.

They spent all their money in

building a top-notch product and

creating the community which will

build the brand by itself. In 1997,

HD spent just about $1 million on

advertising.

HD always focuses on advertising

the brand, over advertising specific

products. They promote the image

and lifestyle that a Harley-

Davidson embodies. They allow

customers to visit Tour centers in

some of their plants. At these cen-

ters, customers will be guided

through the process of manufactur-

ing and assembling and they can

also buy souvenir. These are in

addition to what they do through

rallies and events. They also spon-

sor NBA team Milwaukee Bucks,

women riders‟ events and other

motor sports. HD bikes appeared

in innumerous Hollywood movies

including blockbusters like Termi-

nator-2, X-men etc.,

How much Price do they

charge?

Price is a very important factor in

HD's marketing mix. They use a

premium pricing system. The com-

pany believes, its products con-

tinue to command a premium price

because of the features, quality,

styling and strong resale value

associated with the custom prod-

ucts. As Harley Davidson owns

close to 50% of the US‟s motorbike

industry, it is evident to see that

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MercurI Team

Harish Kumar Raju, Kiran Krishnan, Kumar Vaibhav, Nikhil Gupta, Shashank Verma, Srinath Akula

‘Indian’izing

Rolls Royce said, “India is the sin-

gle most important market for us

in the next 5-10 years” and Lam-

borghini said “We came to India

their customers value the products

that they produce.

The Harley Davidson FXD 105th

Anniversary Edition reflects the

company's „value based‟ pricing

system. The cost to produce the

Special Edition FXD increased by

$200-$300, whiles its retail value

increased by $5625 in comparison

to a non-special edition FXD. That

is the power that can be enjoyed by

a premium brand.

not by chance but with a plan”.

Neither HD has a differing view.

HD launched 12 models in the

price range of Rs. 7 lakh to Rs. 34

lakh in India in July 2010 with

their first outlet in Hyderabad.

Their limited tri-color Indian edi-

tion gives a hint about the localized

marketing strategies they are going

to follow.

India‟s high import tariffs(60%)

and taxes(30%), roughly double

the prices of HD bikes which are

now imported as CBUs. But HD is

building its second assembling

plant in Gurgaon to import the

bikes as CKDs. This will be the first

assembling plant outside US for

Harley. The cheapest Harley Su-

perflow that costs around Rs. 5.5

lakh in India then would become

40-45% cheaper.

Then I too can think of upgrading

from my Avenger (Harley loo-

kalike) to a Genuine Harley. Am I

being overambitious ?

Page 6

Funny

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