Exhibit 12.1 (Credit: OIST / flickr/ Attribution 2.0 Generic (CC BY 2.0))
After reading this chapter, you should be able to answer these questions:
- What is the nature and function of distribution (place)?
- What is wholesaling, and what are the types of wholesalers?
- What are the different kinds of retail operations?
- How can supply-chain management increase efficiency and customer satisfaction?
- What is promotion, and what are the key elements of a promotional mix?
- How are advertising media selected?
- What is personal selling?
- What are the goals of a sales promotion, and what are several types of sales promotion?
- How does public relations fit into the promotional mix?
- What is social media, and how has it changed promotion?
- What is e-commerce, and how does it affect promotion?
Steve Piehl, Harley-Davidson
A road not taken is the next adventure waiting. Live to ride; ride to live. These are just a few of the creeds that Harley riders live by. Whether it’s the vision of the open road, the shine of chrome, or the smell of dust mixed with exhaust, people are drawn to Harley-Davidson motorcycles. How often do you see someone with “Honda” tattooed on their chest? Harleys are the stuff that dreams and identities are made of.
Steve Piehl, who was the director of communications at Harley-Davidson before retiring in 2015, helped shape people’s dreams for more than 25 years. He used traditional marketing channels such as print, radio, and television advertising; however, Harley also, understandably, approaches marketing nontraditionally.
The focus of Harley marketing is not selling a product, but selling an experience. Piehl explains, “The difference of that experience is what has given us success. We don’t categorize what that experience is. We leave it up to people to make it their own.” For some, a Harley is a ticket to freedom; for others, it is a knockout ride to work. Harley’s promotion of accessories supports this idea. As Piehl says, “No two Harleys on the street are the same.” A part of the purchasing process is a meeting with a “chrome consultant” who can help with customizing and accessorizing your bike. In this way, the bike becomes part of one’s identity.
Part of Harley’s focus on experience is its support of motorcycle riding as a sport. On its website and at the dealerships, it provides tips and classes for rider improvement. Through the Harley Owners Group (HOG), a membership group of Harley owners, Harley promotes events and rallies where owners can get together and ride. They form what Piehl calls “brothers and sisters of the road.”
It is with this focus on the “sport” that Harley creates its most powerful marketing tool: the motorcycle mentor. Through the nature of the Harley community, previous owners coach new owners on buying a more advanced bike, taking an overnight trip, or packing for long-distance rides. Piehl says, “We would be doing a disservice if we said we reach everyone with our product announcements. But when we put it out, it works its way through the customer base. Our owners sell our products. They encourage people to get more involved in the sport.” And tools such as chat rooms on the Harley website or magazines such as HOGtales and Motorcycle Enthusiast facilitate that sharing.
So how does Harley-Davidson measure its marketing success? It participates in Customer Satisfaction Index studies to measure satisfaction for people who purchase new motorcycles. But it is the statistic that over 90 percent of Harley owners will repurchase a Harley that carries the weight. “When we get a customer, we can pretty much keep them. Our marketing is to get new customers and to keep existing [customers] happy,” Piehl says.
It is just another part of Harley’s creed: We believe life is what you make it, and we make it one heck of a ride.
Sources: Interview with Steve Piehl, “Sturgis Motorcycle Rally Is Tamer, Still not a family Affair,” Hagerty, https://www.hagerty.com, August 29, 2016; “What Is Harley Davidson’s Marketing Strategy?” http://marketrealist.com, March 31, 2016; “Steve Piehl Is Retiring from Harley Davidson,” Cyrilhuzblog.com, July 23, 2015, http://cyrilhuzeblog.com/2015/06/23/...arley-davidson.
This chapter continues to reveal the role of marketing, starting with a discussion of the distribution system and concluding with a look at traditional and nontraditional marketing channels. It explores how organizations use a distribution system to enhance the value of a product and examines the methods used to move products to locations where consumers wish to buy them. Distribution is also known as “place” in terms of the 5Ps, key components of the marketing mix. It is important to have an understanding of the members of a distribution system and to explore the role of wholesalers and retailers in delivering products to customers. In addition to understanding how the supply chain works to increase efficiency and customer satisfaction, marketers must also develop tactics for promotion, the last element of the marketing mix. Promotion is comprised of six parts, which include traditional advertising, sales promotion, personal selling, public relations, social media, and e-commerce.