Harley-Davidson is in trouble again. The iconic American brand faces another C-suite crisis as it is losing another CEO. And, this will likely mean another strategy. Harley-Davidson has cycled through at least two in the past 10 years. Two CEOs ago, the strategy was affordable, smaller bikes that would appeal to a younger generation. The now former CEO changed that strategy. The Harley-Davidson strategy changed to more expensive, large bikes to appeal to the 1960’s biker crowd inspired by the movie Easy Rider.
Both strategies were demographic strategies based on age.
Age as a selling point is good if you manage adult and baby diaper brands. But it is not so good for brands in general. Think GM’s long-departed Oldsmobile brand and “This is not your grandfather’s Oldsmobile” – a brand-killing strategic approach, literally. To win, find a target audience based on personal values, behaviors, wants, needs, and occasions.
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Research over decades demonstrates that although age is an important factor, successful brands strategize using occasion-driven need states. That is, they figure out the particular users, why they want the brand, and how, when, and where (context) they will use the brand. Yes, needs-based, occasion-driven market segmentation. In the late 1980s, Mars did this for each of its major global confectionary, pet food, and main meal brands. And those segmentations (with updating) have stood the test of time.
Harley-Davidson once did needs-based occasion-driven segmentation very well. It’s truly insightful, needs-based, occasion-driven segmentation grew the brand to global, enduring profitability and drove customers to tattoo the Harley-Davidson logo on their bodies—the ultimate in truly passionate brand loyalty.
However, brands have recently abandoned the needs-based, occasion-driven market segmentation approach, focusing instead on generics such as price, variety, ease, or luxury.
Over thirty years ago, a food company with multiple brands researched why people snack. The research, ground-breaking at its time, incorporated insights from nutritionists, food scientists, anthropologists, dieticians, and biochemists. The study showed numerous need states and occasions for brand usage. For example, physiological needs and occasions like hunger, nourishment, and energy were broken down into other differentiated needs. For example, hunger could be preoccupying or light. Preoccupying with hunger got in the way of activities requiring focus. Energy could be for sustenance or lift. The meal occasion differed depending on the need. There were psychological needs, like time and pleasure. Time needs to focus on a break (an occasion), enhancing an occasion, or extending a memory. Pleasure needs focused on indulgence (escape, reward, or treat) and belonging (group or family).
The marketing challenge for this company was to develop brand positions that were meaningfully differentiated across this needs/occasions-defined map. What you need depends on who you are and where you are. Occasions are important. Are you at home or away from home? Away from home may be in private (at a desk alone), lunch box or in public (walking down a street or in a break room at the office, with friends, with business associates). Focusing on the three drivers of people, needs, and occasions helped direct product design, innovation, and brand positioning. This redefining of the brand portfolio led to significant marketing success.
The beer industry learned this needs/occasions lesson in the 1980s. In the 1980s, contrarians were opining that brand loyalty was dead. When it came to beer, these loyalty nay-sayers saw that beer drinkers were buying different brands, not just their favorite brand. It turned out that the loyalists were still loyal. However, these loyalists were loyal to other brands for various occasions. Drinking a beer at a fancy restaurant was not the same as drinking a beer with friends on Sunday, watching football in jeans and a T-shirt.
Certain fast food options are delicious, but not meant for eating in your car. Remember McDonald’s Salad Shakers? Salad is good, but eating from a “shaker” is impossible while driving.
Harley-Davidson may have its C-suite challenges and its Board of Directors issues, but it needs more than an age-focused strategy. Hopefully, the new Harley-Davidson leaders will focus on needs-based occasion-driven insights. Harley is a challenged brand. To pull out of its hole, the iconic American brand will require many changes. The brand is already facing resistance relative to tariffs abroad. A needs-based, occasion-driven segmentation will help propel Harley-Davidson on the road to enduring profitable growth.
The facts are that need states and usage occasions dictate what we want for a specific occasion and, then, what we prefer to choose. Knowing why people do what they do is a fundamental piece of information. Knowing the context for usage is also fundamental. Knowing why and context must drive all actions on behalf of the brand, including new product innovation or renovation. Successful brands focus on doing the due diligence to deeply understand the reasons why and the context for usage that drive their customers’ and potential customers’ preference for their brands.
Contributed to Branding Strategy Insider by: Joan Kiddon, Partner, The Blake Project, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I
At The Blake Project, we help clients worldwide, in all stages of development, define or redefine and articulate what makes them competitive at pivotal moments of change. This includes pricing strategies that propel their businesses and brands forward. Please email us to learn how we can help you compete differently.
Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Growth and Brand Education
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