Marketing Mistakes and Successes, 12th Edition

CHAPTER SIX

Harley-Davidson: Building an Enduring Mystique

This century-old firm has exhibited stark contrasts in its history. In its first sixty years it destroyed all of its US competitors and had a solid 70 percent of the motorcycle market. Then in the early 1960s, its staid and unexciting market was shaken up, rocked to its core, by the most unlikely invader. This intruder was a small Japanese firm that had risen out of the ashes of World War II and was now trying to encroach on US territory.

Almost inconceivably, in half a decade Harley-Davidson's market share was to fall to 5 percent, and the total market was to expand many times over what it had been for decades. This foreign invader had furnished a textbook example of the awesome effectiveness of a carefully crafted marketing effort. In the process, this confrontation between Honda and Harley-Davidson was a harbinger of the Japanese invasion of the auto industry.

Eventually, by the late 1980s, Harley made a comeback—but only after more than two decades of travail and mediocrity. As it surged forward in the last years of the old century, it had somehow built up a mystique, a cult following, for its big bikes. On January 7, 2002, Forbes declared Harley to be its “Company of the Year,” a truly prestigious honor. But let us go back first to the dire days of the Japanese “invasion.”

THE INVASION

Sales of motorcycles in the United States were around 50,000 per year during the 1950s, with Harley-Davidson, Britain's Norton and ...