Reference no: EM132198318

Harley-Davidson Wheels Out an Electric Bike; Hog Maker Aims for Younger Riders With ElectricMotorcycle Test Harley-Davidson Inc., known for gasoline-powered motorcycles thundering with machismo, is testing a battery-powered model that it hopes will appeal to younger people concerned about the environment. "We'd like to get customer feedback," Matt Levatich, Harley's president and chief operating officer, said in an interview, adding that the product is at least two years away from being offered for sale. For now, he said, the lithium-ion batteries in prototype models have a range of roughly 100 miles between recharges under typical riding conditions. They can go from zero to 60 miles an hour in "just under four seconds," he said. The Milwaukee-based company said on Thursday that "select consumers" around the country next week will start getting a chance to ride prototype cycles with rechargeable batteries. Harley wouldn't be the first to offer such a motorcycle. Companies including Zero Motorcycles Inc., Brammo Inc. and Mission Motorcycles Inc. now sell battery-powered motorcycles, and bigger manufacturers are experimenting. BMW AG sells a battery-powered scooter, dubbed the C evolution, in Europe. So far, said Harley's Mr. Levatich, sales of electric motorcycles are "insignificant." "We anticipate it's going to appeal to a younger, more urban demographic," a Harley spokesman said. The company said the test was part of a goal of "preserving the riding environment." The company still hasn't decided whether or when to put such motorcycles on the market and is looking for feedback from bike owners before proceeding further, he said. The project, dubbed LiveWire, has been in the works for four years, he said. Chris Narayanan, 39, said he is curious about the battery-powered bike. "I'd give it a try if I had the opportunity," said the New York resident. For now, though, he is having fun with his 1998 Harley Sportster 1200 and plans to upgrade to a bigger Harley in a few years. "It's an interesting gamble for Harley. I know they want to appeal to younger riders and get them into Harley." Justin Massey, general sales manager for a Harley-Davidson dealership in Hammond, Ind., thinks the sporty, racing-bike styling and first-of-its-kind status for Harley will attract an audience on its tour of dealerships. "I'm sure it will create quite a buzz," said Mr. Massey, who doesn't know if his dealership will be on the tour. "It's a good-looking bike and people will want to be around it."

2 Rather than the rumbling sound of traditional Harleys, the new machines sound more like a jet engine, only much quieter, Mr. Levatich said. The project wasn't launched in response to environmental regulations, he said. Rather, current technology allows the company to produce a battery-powered cycle and "we feel we should," Mr. Levatich added. James Hardiman, an analyst for Longbow Research, called the project a surprise. "It's a pretty big departure from anything they've ever done," he said, and should help Harley appeal more to a younger and more environmentally conscious crowd. Initially, "you're not going to get very far from one charge," he said, but battery technology is going to get "a whole lot more efficient in the years to come." For people who don't already ride motorcycles, Harley promised to offer a "simulated riding experience" rather than a road test. Experienced riders will be invited for highway rides. In recent years, Harley has striven to reduce its reliance on aging white male baby boomers and appeal more to young people, women and minorities. As part of the company's strategy, two new bikes, known as the 750 and 500, are being rolled out. These smaller bikes are aimed at younger riders, who might find a traditional Harley touring bike too large or heavy to handle, particularly on crowded city streets. The company didn't release a possible price for the LiveWire. High costs and limited range have kept demand low for battery-powered cars so far. Harley-Davidson is the dominant U.S. supplier of heavyweight motorcycles. For this year's first quarter, the company reported that its share of sales in the U.S. market for new motorcycles with engines of 601 cubic-centimeters displacement or greater was 56%.

3 Please use information in the above article, the knowledge you have learned in class, and your own research to answer the following questions.

1. Please conduct a SWOT analysis of Harley-Davidson.

2. Please segment the consumer market for motorcycles in the US using needs-based segmentation strategy.

3. For each needs-based segment, determine which demographics, life-styles, and usage behaviors make the segment distinct and identifiable (actionable by marketers).

4. Based on the information in the article and your own research, determine the overall attractiveness and profitability of each segment.

5. The article says that Harley-Davidson has announced plans to introduce electric motorcycles. Which segment(s) either currently targeted or could be potentially targeted should the Harley-Davidson new product be aimed at?

6. For each segment that you have identified, please create a “value proposition” and product-price positioning strategy based on that segment’s unique customer needs and characteristics.

7. The branding challenge for Harley Davidson is how to pursue new target markets for its motorcycles through new products like LiveWire without undermining its existing market penetration with its established market of traditional heavy-weight motorcycle riders. For the new battery-based electric motorcycles, please devise appropriate price, promotion, and distribution strategies to meet the above challenge.