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2012 Paint Palette

Have you been reading the headlines? There was a big earthquake in Haiti. Some men were rescued from a mine in Chile. Oh, and apparently there was a gigantic oil spill in the Gulf of Mexico.

What’s that you say? This all sounds like last year’s news?

Well, don’t tell that to Harley-Davidson. The motor company recently introduced 15 new models, which it considered innovative and groundbreaking  products:  a “tubeless” laced wheel option, and six new colors or color combinations on the touring models!   Then in a déjà vu lapse they announced the retention of last year’s integrated branding firm Graj + Gustavsen Inc. to continue advising the company on strategic branding initiatives related to apparel and apparel-related accessories.

It would seem that even Harley-Davidson understands that the touring models have so few innovations that their only hope of differentiating itself from the other players is through paint palettes…. So, the only buying question you’ll have to ask yourself, then, is: Does H-D make a convincing enough “color case” that you should invest about $20K in a “new” touring model?

Here’s the crux of H-D’s argument.  First of all, the new colors or color combinations are beautiful. The mostly unchanged motorcycles from 2011 are even more beautiful in 2012.  The unchanged frame is beautiful, too. It’s graphically coherent, elegant, fluid and satisfying. That, apparently, is the payoff when a single company designs and builds both the engine and frame housing?  The ‘advanced’ Harmon/Kardon radio retains its 1970’s BMW inspired ‘red’ glow and that glossy Vivid black paint — continues to be a magnet for fingerprints, boot scuffs, and unfortunately looks wicked great only in the dealer showroom. I think the words in the H-D press release were “The Legend Lives On.”  The band, Talking Heads, said it best… in the song “Once In A Lifetime.”  The “same as it ever was, same as it ever was” lyrics… really resonates for the 2012 touring models.

It’s been a while since I’ve had a good, proper, Harley-Davidson rant. Part of that has been the adventures of this year; I think it’s softened me and given me more patience, made me a little more graceful. Another part of it, probably closer to the heart of the matter is that I’ve been busy doing other things and a good rant takes time to incubate.

Well a rant has been building and I finally snapped as I read an article in last week’s “Wall Street Journal” (subscription required) where there was a front page story on Hyundai. How it went from a laughingstock to a runaway success in the car market. Now that they’ve solved the quality problem, now that they’ve caught up with Toyota and Honda, the company is confronted with a huge issue going forward, creativity. How do you lead when you’ve spent your entire manufacturing life following? Read WSJ article HERE.

The new Elantra is so far ahead of the market that Corolla sales have stalled and the new Civic has been blasted by critics as it fails to fly from the showroom. Instead of focusing on the econo box look, Hyundai imitated BMW and Mercedes-Benz. And the model was redesigned in four years instead of five, trumping its competitors in the marketplace.  The success of the Elantra is testimony to the change in culture at Hyundai. To one now focused on leading, on creativity.

This leads me to the question of is there a culture of innovation at Harley-Davidson?  When talking about innovation we often define the term too narrowly. In fact, innovation can – and does – occur in every industry of our economy, from consumer electronics to health care.  Yet, when I re-review the 2012 touring models, instilling creative thinking must be a work in progress.

For comparison, a few times a week, video screens around Hyundai’s headquarters in Seoul show a one-minute clip that has become a favorite. It shows an open office where workers wearing the same shirt and haircut are “beavering” away (that’s Oregon slang). Then a new person arrives with a different hair cut. Each time he voices an idea, the others shout him down. Eventually he gets the same haircut and everybody likes him. Then a question appears: ‘Aren’t we stuck in conventional thinking?’

I don’t know if a video loop like that would necessarily fly in a Milwaukee plant with the union workers, but that’s not the point of this post.

It’s about how most every American business is in a mad dash to innovate except for H-D.  The only answer can be the titans at the top are traffic cops sans creativity?  Don’t blame the public or the economy, blame the fat cat executives who are denying they’re the problem like the honchos at Goldman Sachs. What makes the rich believe they’re invulnerable, always right and entitled?   Somehow in the “dash-for-cash”, it’s all about shooting low, to the sweet spot, where most people live so the purveyors can make money.  Good enough just doesn’t cut it and of course there are exceptions, but generally speaking we’re in a low point for H-D touring motorcycles.

It’s a new game. No one gets to rest on his laurels. Making it today is no insurance you’ll thrive tomorrow, look at the carcasses strewn along the highway… OCC, Indian, or Big Dog.

We’ve got endless hype and yet sales are anemic.  Mediocrity thrives at Harley-Davidson because it’s all about the money.  About playing it safe… with new paint palettes!

Photo courtesy of  Hyundai and H-D.

All Rights Reserved © Northwest Harley Blog
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The Green Hornet -- Kato's V-Rod

That’s right.  Last Friday the Harley-Davidson V-Rod motorcycle went 3D in the latest super-hero action comedy, The Green Hornet.

With all the sequel’s you might get confused by similar movie names like the Green Lantern or Green Mile or Soylent Green!  But, I’m talking about The Green Hornet which is based on the 1960’s Marvel comic book series about a masked crime fighting duo.  It was made into a radio series and a TV show.  The TV show actually launched the acting career of Bruce Lee, who played Kato.  In the 3D movie version, Kato is played by Jay Chou who rides the V-Rod in several scenes throughout the movie.  Seth Rogen is the playboy turned crime-fighter and Kato sidekick.

The flat-black custom V-Rod features a chopped rear fender, Destroyer wheels and a one-off custom L.E.D. headlamp.  Clearly the only type of motorcycle that a big-budget superhero film can be seen riding…

The technology the movie and consumer electronics industry most wants to push down our throats, is 3D.  Just back from CES, I can tell you firsthand about all the blurry, double-vision flat panels that were hung on every available surface of the Las Vegas Convention Center — televisions that looked sharp only when you put on ridiculous-looking 3D glasses. Many of those glasses are just as big, heavy and expensive as last year’s versions (at $100 a pair, exactly how many friends will earn a place at your Comcast Super Bowl party?).

Maybe Harley-Davidson will brand a pair of co-designed Porsche/Harley glasses that are less hideous — or even launch them when The Green Hornet hits the Blu-ray disc window?!  I think the star of the movie is that 1965 Chrysler Imperial!

Photo courtesy of H-D and Sony Pictures.

All Rights Reserved © Northwest Harley Blog

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Think Snow Bumpersticker - HD Advertising (circa: 1972-74)

It was a big year for Harley-Davidson as they shifted from downsizing, labor agreements and weathering the recession to now looking forward to growth in 2011.  With freezing temperature and snow falling in many parts of the U.S., I’ve compiled some 2010 highlights to provide you some entertainment as you warm up with hot chocolate:

January
1.    Downtown H-D Renton, WA., one of the northwest dealers named among top 100 (Link: HERE)
2.    H-D reported its first quarterly loss since 1993 (Link: HERE)
3.    H-D announces the new, but “old” Forty-Eight Sportster (Link: HERE)

February
1.    H-D donates 28 new Buell and H-D motorcycles to assist in the earthquake disaster (Link: HERE)
2.    H-D marketing continues to pitch brand with young-rebel-with-tats ethos (Link: HERE)
3.    H-D internal documents indicate 382,000 absenteeism hours in the factories (Link: HERE)

March
1.    H-D promotes danger as Seth Enslow breaks Bubba Blackwell’s jump record (Link: HERE)
2.    H-D dealer (Shumate) in Kennewick, WA., closes under a mountain of debt. (Link: HERE)
3.    H-D CEO, Keith E. Wandell 2009 compensation package becomes public as the $6M dollar man (Link: HERE)
4.    H-D marketing pulls out all stops on innovation and launches Super Ride II (Link: HERE)

April
1.    H-D consolidates motorcycle testing in Arizona Proving Grounds (Link: HERE)
2.    H-D files mass layoff notice with Wisconsin department of workforce development (Link: HERE)
3.    H-D CEO, Keith E. Wandell is “encouraged” as Q1 motorcycle sales revenue declines 20% YOY (Link: HERE)
4.    After 26 years of service Bill Davidson is put in charge of the Museum (Link: HERE)

May
1.    H-D CEO, Keith E. Wandell states in interview that H-D is like GM…a fading American industrial might (Link: HERE)
2.    H-D threatens to leave the state of Wisconsin (Link: HERE)
3.    H-D CMO, Mark-Hans Richer is no man crush of this blog (Link: HERE)

June
1.    H-D launches XR1200 Refresh (Link: HERE)
2.    H-D launches Wii based-game: “Road Trip” (Link: HERE)
3.    H-D at the National Law Enforcement Museum (Link: HERE)

July
1.    H-D opens Hyderabad, India showroom to pandemonium (Link: HERE)
2.    H-D reports Q2 earnings with financial services being largest money maker (Link: HERE)
3.    H-D launches the 2011 model lineup of 32 bikes vs. 38 the prior year (Link: HERE)

August
1.    H-D announces closure of sidecar business which operated since 1914 (Link: HERE)
2.    H-D announces 1-MILLION fans on Facebook (Link: HERE)
3.    H-D sold back MV Agusta to its previous owners (Link: HERE)
4.    H-D announces that after 31 years they’ve parted ways with PR firm Carmichael Lynch (Link: HERE)

September
1.    Erik Buell releases teaser ads promoting a new street bike based on 1190RR (Link: HERE)
2.    H-D gives away free posters of any of their 32 models (Link: HERE)
3.    H-D under threat of moving out of state announces ratified 7-year labor agreement (Link: HERE)
4.    H-D “spins” the fact that massive branding efforts result in a 24% brand value decline (Link: HERE)

October
1.    H-D reports Q3 earnings with motorcycle sales declining 7.7% worldwide and 14.4% in the U.S. (Link: HERE)

November
1.    H-D management “negotiates” with Kansas City plant to accept a new labor agreement or we’ll leave state (Link: HERE)
2.    H-D turns down a $25M tax credit deal by Wisconsin State (Link: HERE)

December
1.    H-D never disclosed a $2.3 BILLION deal with Federal Reserve (Link: HERE)
2.    H-D announces first ever “Crowd Sourcing” for new marketing ideas (Link: HERE)

Photo courtesy of H-D.

All Rights Reserved © Northwest Harley Blog

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HOG Bank

Start with the “charisma and swagger” of Charlie Sheen, add a little Lady Gaga recklessness, mix it all together with the sensibility of John Mayer, and you’re well on your way to a vibrant digital marketing campaign.

Or at least that’s what Harley-Davidson’s, CMO, Mark-Hans Richer seems to believe.

Taking a page from celebrities and musicians who blazed the path before them they’ve embarked on a crowd-sourcing recipe with Victors & Spoils, a Boulder-based crowd sourcing agency who intends to deliver successful digital marketing.  It would seem that every American company on the planet is amassing a rapidly growing list of crowd sourcing digital data to give marketers an even more precise method for targeting their ad messages to specific consumers.

I know, you hate social media.  More people despise Twitter than use it.  You thought Foursquare was a church.  You like Facebook, but you fear its Big Brother qualities.

Well, you probably don’t understand that Twitter is the number one news source for news happening right now.  But if you can’t wrap your head around that, maybe you should look into SproutSocial, which allows you to track your company in social media.  And if you don’t think social media is key to any company’s future, you’re on the road to extinction.

Mr. Richer totally gets it.  H-D has a multi-generational and multicultural customer strategy with a need to get potential customers more engaged in the brand.

You do that through social media.  But, part of the problem for the motor company is its audience knows too many people, who connect with each other online.  Once consumers start talking to each other not only do they spread the word about the so-called “motorcycle lifestyle,” but they also let each other know which products are good and which ones are bad.  Suddenly, the dealers can no longer jam any old product down the motorcycle riding public’s throat.  It’s bad enough when new products leak in advance and are dead on arrival due to bad word of mouth, but even those that make it to the release date intact are not guaranteed sales.  Because by the end of the week, the target audience knows whether the product is worth owning via references from friends.

It all comes down to who you know.

But, the reason I’m writing this is because of the job market.  Unemployment.  It’s steady at 10.5% here in Oregon.  About a point above the national average and has remained there most of the past year.  Just this past week the Oregonian reported another 300 layoffs by 3 different companies closing down operations.  And if that wasn’t enough did you happen to catch Federal Reserve Chairman Ben Bernanke last night on 60 Minutes?  He painted a grim picture.  Stating that the U.S. recovery is still not self-sustaining while defended his $600B bond purchase to help keep interest rates low.  Heady stuff.

Oregon and U.S. Unemployment - Dec 2010

I hate to frighten you, but all your partying and drunken pictures are going to work against you in the job market. Inebriation is not a criterion for employment, not even at Miller Brewing.  You see you’re building your resume every day online.  And whether you can get a job or not is based on this resume and who you know.  People always complain how they can’t get a job in this industry or that industry because they aren’t connected.  Hate to tell you, but it just got worse!  No one’s going to hire anyone without a history, who can’t be recommended by someone.  The days of placing a blind ad and taking on all comers is history.  That doesn’t even work on Craigslist, and have you seen the type of jobs on that site lately?

If you want to succeed in the future, you’ve got to know people.  Who can vouch for you.  Ever get called for a reference?  You never lie if you know the caller, it’s your reputation on the line.   And now that we’re all networked through social media, there’s always someone who knows you, who if they won’t say something negative, certainly won’t say something positive.

And you thought you were just playing online?  You see we all live in a social media world.  Scary huh?!  And as if to help prove my point the CEO of Facebook, Mark Zuckerberg, was also interviewed and talked about changes coming in a redesign.  For example, instead of a single profile picture, people who visit your page will soon see a row of photos you’ve been recently tagged in.

It might be time to start making deposits in the persona-curating bank account…

Photo courtesy of Harley-Davidson, SocialSprouts and Google.

All Rights Reserved © Northwest Harley Blog

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Halloween Motorcycle Ghosts

As Halloween approaches, I decided to ponder: What strikes fear into the hearts of Harley-Davidson executives all over the land?

To answer that question, I peeked into a crystal ball, reviewed the Christine O’Donnell ad on “witches” and met with a couple carneys on voo-doo to peer into the subconscious of the motorcycle company’s most powerful execs and see what goes bump in their night.

To be clear: Some of these nightmares clearly stretch the bounds of reality, but some have a level of plausibility. They range from trivial worries to scenarios that could bring down an entire company. Read on to find out about Harley-Davidson executives’ nightmares:

CEO Starts Shooting Black-and-White Commercials: An attempt by Keith E. Wandell (CEO) to humanize the company, explain its brand value and reverse the damage which was done by the glaring hole in his garage when he admitted after being hired in 2009 that he didn’t ride a Harley-Davidson or even have a motorcycle endorsement — he has since rushed out and bought one, placed a yellow one on display in his office, obtained a “Rode Mine to Sturgis” patch and rumors are he’s ordered a 2011 model.  The CEO as pitchman in commercials is not exactly a new concept.  Just look at Sprint who seemingly cornered the market with classy, black-and-white appearances and what it did for them.

H-D Factory Employees Ride BMW: The nightmare manufacturing scenario is this: Matthew S. Levatich (President and COO) calls an all-hands meeting and scores of manufacturing personnel show up riding BMW’s new K1600. Not only would it be a rebuke of the company’s own philosophy, but it would be another sign that H-D’s bet on union workers in WI., was at a dead-end.

H-D Restarts Side-Car Manufacturing and No One Buys Them (Again): John A. Olin (CFO) doubles down on the H-D investment as the marketing efforts were not enough to sell a sidecar-challenged public the first time around, but this time side-cars will have a renaissance comeback.  Or the company hopes so.

H-D Brand Falls Off Top 100 List: Mark-Hans Richer’s (CMO) continued branding efforts to market motorcycles that boasts history over flash results in Harley dropping from the Top 100 Global Brands.  In 2010, H-D went from #73 to #98 — a 24% drop in popularity and brand value. Finding another Malcolm Forbes or Jesse James out there who can provide their personal endorsement will help improve the motorcycle brand value and might keep it on the top 100 list?  In the mean time more advertising is in the pipeline that will lead the public to think that if you own this product you too will be cool.

Fed’s Apply GM Like Pressure On H-D To Be Green(er): Jon Flickinger, (President & COO of Buell) says that H-D being a “tree-hugger” is not the first thing that comes to mind. But, just as President Obama has told our CEO during their lunch meetings, the greenhouse standards will become tougher and H-D will need to aggressively adopt new ‘green’ codes for its factory and dealer network inorder to meet the U.S. Green Building Council’s L.E.E.D. certification.  In addition they will add a new electric motorcycle to their product line, based on the Sportster Family.  Lastly and for good noise measure the company will implement California’s, SB 435 law early — on all 2011 models — which requires all street motorcycles built after 2012 to have EPA-labeled exhausts.

Secret Motorcycle Design Found At Museum Teambuilding Scavenger Hunt: Willie G. (Chief Designer) celebrates his design team accomplishments in an elegant 1920’s style glam and glitter – “the new beginning of the motorcycle” – party with everyone’s family in attendance that was hosted by the H-D Museum.  Some H-D employees dressed in the era of 1920’s to 1930’ in their caps, knee socks and knickers to remind people what it was like during the ‘roaring’ yesteryear. The feeling was eerie and mysteriously exciting all at the same time.  The employee’s children participated in a pencil and paper design contest of which an 8th grader defined the motorcycle shape that will be used to create all future motorcycle styles.

Merger Madness: Joanne Bishmann (VP Communications) is weaving a compelling story and spinning the news how Harley-Davidson is pressured into a merger in order to save the company from further manufacturing cuts and/or collapse.  H-D sells 49% of its shares to Daewoo Corporation in exchange for a much needed influx of capital and to pay off the $6B in debt.  Hyosung Motorcycle director, Mr. Ji Jas Ryong (pronounced “jus wrong”) says “We do not expect to change anything with the famous look of the H-D product, other than the logo, in fact we consider it an honor to include it along side Hyosung premium sport bike line.”

What are your thoughts?  Are there other H-D nightmares out there?

Photo courtesy of Sony Pictures (Ghost Rider) This blog post is satire and entirely fictitious.

All Rights Reserved © Northwest Harley Blog

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Interbrands Ranking of the Best Global Brands

Brand impact.  That’s what H-D desires.

Trust and customer loyalty are the words that matter most in today’s economic market place.

Let’s recap the various statements made by CEO, Keith Wandell on the Harley-Davidson brand.  I found it interesting and thought you might too:

October 2009 — “As our announcement regarding Buell and MV Agusta indicates, we are moving with the speed and decisiveness required to bring our business strategy to life,” said Wandell.  “The fact is we must focus both our effort and our investment on the Harley-Davidson brand, as we believe this provides an optimal path to sustained, meaningful, long-term growth.”

January 2010 — “Focusing our investment behind the uniquely strong Harley-Davidson brand provides the most attractive path to sustained, long-term growth,” Wandell said. “We also expect to achieve substantial gains in the efficiency of our operations through continuous improvement.”

April 2010 — “Throughout the past 16 months we have taken a number of actions to address the immediate challenges and establish a bold, clear direction that will maximize our opportunities going forward,” said Wandell. “We have come a long way in a short amount of time, and I could not feel better about the progress we have made and where we are headed.”

July 2010 — “Despite the decline in second-quarter retail motorcycle sales, we believe interest in the Harley-Davidson brand remains strong among riders of all generations. In fact, Harley-Davidson is the U.S. market share leader of on-road motorcycles among young adults. We will continue to focus our resources on expanding the global reach of the brand and developing new products that will reach even more riders going forward,” Wandell said. “I would like to thank our employees for their continued hard work and support of our strategy.”

How’s all that brand focus working out Mr. Wandell?  Check it out.  According to Interbrands 11th annual ranking of the “Best Global Brands,” Harley-Davidson (#98) saw a decline of 24% in brand value!! For the first time ever, it nearly fell OFF the top 100 list of global brands.

Quick to provide an “interpretation” and point out their view of the pitfalls of Interbrands ranking system – Harley-Davidson spokesman Bob Klien stated“Given the financial focus of the Interbrand rankings, the results aren’t really all that surprising,” and then went on to say “It’s to be expected given the economy and the effect it’s had on the motorcycle industry and Harley-Davidson.”

Not that surprising.  Huh?  If it’s a financial focus let’s contrast the H-D brand with the auto industry which has had a difficult time in this economy too.  Mercedes Benz (#12) and BMW (#15) were able to sustain and build their value through innovative design and a focus on delivering premium value vehicles with luxury features. Award-winning products like the Q5 helped Audi (#63) lead industry growth this year with a 9% increase in its brand value.  Even the media’s preoccupation with the Toyota (#11) recall which caused the brand to lose -16% of its brand value was handled in a way that it out performed H-D!

What about other luxury brands?  Even with the economic downturn, luxury brands Cartier (#77), Armani (#95), Louis Vuitton (#16), Gucci (#44), Tiffany & Co (#76) and Hermes (#69) all saw the value of their brands increase in 2010 by continuing to invest in their heritage and legendary status. Outstanding customer service and a focus on unique in-store and online experiences allowed them to stay strong, even while consumers cut back spending.

Interbrand publishes the ranking of the top 100 brands based on a unique methodology analyzing the many ways a brand touches and benefits an organization, from attracting top talent to delivering on customer expectations. Three key aspects contribute to a brand’s value; the financial performance of the branded products or services, the role of brand in the purchase decision process and the strength of the brand to continue to secure earnings for the company.

The Harley-Davidson brand investment does not seem to be working.  Now what?

Photo courtesy of Interbrands.

All Rights Reserved © Northwest Harley Blog

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Pastor Terry Jones - Dove World Outreach Center

Luxury brands certainly have teams of brand police within Marketing to ensure their products aren’t being “Brand Jacked” or improperly positioned, but H-D is missing in action when it comes to the racially charged “N” word debate by pastors Terry Jones and Wayne Sapp of Florida’s Dove World Outreach Center.

I’ll avoid getting into the debate over the ‘church’ content, but rather I want to point out that pastor Terry Jones is wearing a Harley-Davidson t-shirt and something like this can’t help the motor company or worse can potentially hurt the iconic brand.

Here’s my take…  H-D has nothing to do with the video, and their brand is being dragged through the “N” word debate to make a, Dr. Laura-esque point about racial double standards.  H-D hasn’t done anything to draw this unwanted attention.  Terry Jones and the Dove World Outreach Center have seen a rapid rise in notoriety for their pending “Burn a Koran Day” on 9/11.  It seems show business have outruled common sense.

H-D can’t control who buys their merchandise, but they damn well sure can respond with a “cease and desist” order on both YouTube/Google and the Dove World Outreach Center/Church.  They should demand an immediate pull down of the video and the CMO should have a “not on my watch” A’tude!  If it gets reposted, at minimum the t-shirt should be blurred out.

H-D as a corporation has diligently worked and spent tremendous amounts of money on their image and brand. Watching from the sideline with a blind-eye or having a “strategy of hope”… i.e. hoping that the dust will settle and there will be no negative impact on their brand would be negligent.  In fact, I’m a bit offended with having a collateral clothing association and checking my t-shirt inventory to trash any similar Mr. Jones attire.

Photo courtesy of YouTube.

All Rights Reserved © Northwest Harley Blog

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