Every year Interbrand releases a list of the Top 100 global brands – ranking each company on its brand value and then assigning a dollar amount to that value. As such over the years, the Interbrand 100 has become the de facto metric on the strength of a company’s brand. For some time Harley-Davidson has been a stalwart of the Interbrand 100, with the Bar & Shield brand regularly getting the nod from the consultancy’s specialists — after all, how many brands are responsible for enthusiasts tattooing its logo on their body? However the past few years have seen a worrisome trend, as slowly Harley-Davidson has fallen farther and farther down the Interbrand 100 rankings.
Ever since Harley-Davidson split with its long-time ad agency Carmichael Lynch, I’ve been increasingly impressed with the Bar & Shield’s advertising efforts. Sure there are still some of the old marketing images that make the American in me want to go tortfeasor on the first Harley-Davidson dealership I drive by, but you’ve got to give Harely one thing, its trying. Dipping its toe into the crowdsourcing philosophy of ad creation, Harley-Davidson has already produced some fairly good ads like its “No Cages” campaign, and is hoping to build on that success.
Seeing traction with the “No Cages” campaign, Harley-Davidson has taken things a step further, and will now be able to crowdsource ideas directly from Facebook. Launching a Facebook app for the new social-collaboration, Harley-Davidsons fans on Facebook can now read the company’s advertising brief, submit ideas to Harley-Davidson, and vote on ideas submitted by other community members. While crowdsourcing advertising creative has been called evil (mostly by the people whose jobs are threatened by the collaborative movement), the plan here is pretty ingenious.
Harley-Davidson has issued a massive recall with the National Highway Safety Administration (NHTSA) all because of a faulty rear brake light switch. Affecting 250,757 units in all, the recall is for certain 2009-2012 Harley Davidson Touring, CVO Touring, and Trike motorcycles (full list after the jump). Because of excessive heat caused by the exhaust system, the rear brake light switch on these motorcycles might not activate when the brakes are engaged, or conversely may activate when no braking is occurring.
Harley-Davidson is also disclosing that the issue may cause brake fluid to leak at the brake light switch, which could affect the rear brake’s performance. With both issues apt to cause an accident, all 250,757 bikes are being recalled. The recall is expected to start October 31, 2011, and Harley-Davidson will contact affected owners and replace the brake light switch free of charge. Concerned Harley owners can contact the Milwaukee company at 1-414-343-4056, and as always the NHTSA is available at 1-888-327-4236 & safercar.gov.
Harley-Davidson has reported its third quarter sales and earnings to its stockholders, and the Bar & Shield brand is showing a modest up-tick in its Q3 sales. Growing 5.1% globally (61,838 units) for Q3, compared to 2010, Harley-Davidison has had similar growth in the US, where sales were up 5.4% (42,640 units). Year-to-date (YTD) sales globally were up 4.9% (194,829 units), continuing the bottoming-out trend in 2011 (up 4.7% in the US, or 127,930 units). Despite the modest sales increases, Harley-Davidson’s financials are significantly stronger than before, with the company posting a 95.9% increase in income from continuing operations.
Harley-Davidson had some good news to report in its Q2 2011 financial report, as the Milwaukee company reports selling 53,599 units to customers in the US during the three-month period, and total of 83,396 units worldwide (120,642 units worldwide so far this year). These sales figures translate into a 5.6% sales increase worldwide, and an even more impressive 7.5% sales bump in the United States market.
While those increases might seem modest, CEO Keith Wandell’s restructuring efforts have clearly been paying off for the Bar & Shield brand as operating income was up 36.8% for Q2, while revenue was up only 18% to $1.34 billion. This is also the first year-over-year quarterly rise for unit sales that Harley-Davidson has seen since the Q4 2006. Read that last sentence again, but it’s sort of a big deal for Harley-Davidson.
Artist Graham Smith is helping play with our brand awareness today, as the British graphic designer has done up several companies’ logos with the name of another (usually a competitor). The effect is an interesting one, as your mind tries to sort out the shapes it recognizes with the name it actually sees, much like the Stroop Effect in psychology studies – an interesting phenomena where names of colors were shown in a font whose color was different than the name. When subjects were asked to say out loud the color used for the font, it often resulted in the tendency to want to say word shown instead. We had the same effect looking at Smith’s work, making this an interesting take on logo design and a bit of fun psychology all wrapped-up into one. Examples after the jump.
The rumors that Harley-Davidson has been eying a liquid-cooled motor design have always been in abundance, and 10 years ago we saw the company test the waters of that pool with the Porsche-engineered lump that was found in the V-Rod. While the VRSC line may not have been as big of a success compared to the other models in Harley’s line-up, the water-cooled bastard child of Milwaukee still seems to sell in the tens of thousands each year, even after nearly a decade of only cosmetic revisions.
Faced with an aging demographic, an uninspired motorcycle line-up, and 21 takes on the same motorcycle design, there’s a push internally at Harley-Davidson to break-out and find a new way to engage riders, especially younger riders. The core ethos of change seems to start at the motor itself, and Harley-Davidson has already done the rounds at various electric motorcycle and drivetrain companies. There also exists amount of external and internal pressure over Harley’s pervasive use of air-cooled motors, and now whispers of a water-cooled v-twin power plant have gotten louder in Milwaukee. With those rumors now reaching a boiling point (see what I did there?), Harley-Davidson has patented a very clever way of adding liquid-cooling to its iconic v-twin motor design.
Lawyers have begun an investigation into the recent rumors that private equity firm Kohlberg Kravis Roberts (KKR) was targeting Harley-Davidson for a stock takeover. Suspecting that Harley-Davidson executives breached their fiduciary responsibility to Harley-Davidson, Inc., investigators were tipped-off to potential breaches at the Milwaukee company after its stock rose by $2 (+5%) immediately after the rumors were first published in financial reports.
It seems like only two months ago that I wrote that the “Great Distribution Experiment is Over“, and that electric motorcycle companies Brammo and Zero Motorcycles need to get on-board with established motorcycle distribution methods. As I mentioned in what I’m sure many found to be a snooze fest of an article, there are of course drawbacks and flaws to the dealership model, but for early-stage cash-strapped companies like the ones in the E2V market, this is a battle of the middleman is best to be fought another day.
I have to apologize to my regular readers, as I’m sure the relevancy of such an article to your daily “eat, sleep, ride” lifestyle was dubious at best, but from time-to-time the words on this site are meant for a select group, but better aired publicly (even if it does land me in a heap of trouble from time-to-time). As such, it’s refreshing to see then that Zero has recently announced its signing of several key dealerships, and now we get word that Brammo has hired Jim Marcolina away from Harley-Davidson, to build the Ashland, Oregon company’s dealer development team. So…umm…group hug?
Before yesterday afternoon, I had a hard time getting excited about Polaris. I think they make snowmobiles…but I’m not sure. This is how engaged with their brands I was, but of course this has all changed with the news that Polaris Industries, Inc. has acquired Indian Motorcycle for still undisclosed terms. Covering the business strategy side of motorcycling for the past two and a half years, I can tell you that there are few moves or decisions that strike me as truly inspired, but that events of the past 24 hours are surly Mensa-worthy.
Before I can talk about Polaris and Indian, I have to talk about another motorcycle company: Harley-Davidson. Kingdoms are fated to topple, but looking at Harley-Davdion and its dominance in the American motorcycle scene, let alone in popular culture, the legacy of the Milwaukee company seems assured to endure the test of time. So many companies have tried to be the next Harley, and all of their failures reinforce that concept that no company does “Harley” better than Harley-Davidson. Virtually creating the the legacy cruiser segment, and Harley-Davidson’s success in this regard is also the double-edged sword that is slowly prostrating the Milwaukee brand.
If I had to give one piece of advice to a company wanting to compete with Harley-Davidson, it would be real simple: don’t. Seemingly at the risk of painting itself into a corner, Harley-Davidson has refined its marketing message so thoroughly that it has honed in on a particular type of rider, and exhibits such a distinct persona of motorcycling that the company’s identity has found itself heading full-speed down a one-way street of branding. Thus the low-hanging fruit of competing with Harley-Davidson is to go after the brand where it cannot go.