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Harley Davidson at Morocco's Market

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Harley-Davidson is a United States-based motorcycle manufacturer established in 1903 by collaboration among William Harley and Arthur Davidson.

Their innovation and vision for what was reasonable on two wheels sparked a transportation change and a motorcycle culture that would make Harley-Davidson one of the most known brands in the world.

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The company also deals with the line of motorcycle pieces and accessories. The supplies of motorcycles from Harley-Davidson were identified based on their unique design as well as massive customization.The company recognized as the world’s leading creator of motorcycles including heavyweight, traveling as well as performance motorcycle, they are trying to grow up their international business to 50% by 2027.The brand image of a company based on raw power built a significant part of its unique selling position; this made the company center on differentiation strategy targeting more special products within various segments in the business.

According to the drop of customers within this segment, the company makes a new strategy in the year 2010 to re-organize their marketing efforts, and, at the same time to focus on multigenerational and multi-cultural marketing plans, this strategy focused on different age groups, multi backgrounds, and also being gender-sensitive.The impact of new and emerging technologies on transport and its applications is currently evident. Advancement in technology has taken a very sharp dimension and on the upper dimension within the market. Such technologies are identified to incorporate improvements in automobiles, accessories, and computer production. An increase in the number of motors having superior web abilities as well as new image technologies is on the growing drift.

All these attributes help Harley to stand as the strongest brand in motorcycle manufacturing in the USA and the world. It is no surprise that Harley always seek new markets to expand its business there, all new markets means a new opportunity to the company. However, entering a new market must be done after analyzing the company and the new market, external and internal environment, in order to avoid loss and failure.

Harley-Davison’s Strategies

Harley-Davidson’s marketing strategies focus on giving a personalized experience to its consumers to allow them to attach with the brand.

  •  Customization: Allowing Harley customers to adjust or customize their vehicles is one of the rare characteristics that the company allows. Only a few significant automakers allow customization of motorbikes to this area, be it four-wheelers or two-wheelers. It includes a choice of colors, wheels, seats, racks, and backrests, windshields, and exhausts.
  • Large dealership network: Currently, Harley-Davidson has nearly 1,435 dealerships internationally. Most of these dealerships placed in the US, Europe, and Canada. Recently, the organization has been focusing on developing its dealerships in the Asia-Pacific market.
  •  “Learn to Ride” program: Harley-Davidson runs a “Learn to Ride” program with the help of Harley-Davidson Riding Academy. Under this program, many courses are offered to new Harley bikers. These programs provide new riders with specialist guidance from Harley-Davidson approved coaches at elite Harley-Davidson dealers. Customers can also choose to join in the Harley-Davidson Jumpstart business, where they can encounter riding a real Harley-Davidson motorcycle at a uniquely designed, stationary guide stand.
  •  Targeting a variety of customers: According to the company, the focus customers are defined as men over the age of thirty-five. To improve the experience of riding a Harley motorcycle, the company offers a mixture of gears and apparel to its consumers. The company is also making attempts to connect with outreach clients, including young adults and women. For this reason, the company also markets Harley-Davidson marked gear and apparel specially designed for women through its website.
  • Events for Harley owners: As explained earlier in the report, Harley-Davidson has an established group for Harley motorbike fans called Harley Owners Group (or HOG). To keep the spirit active for Harley bikers, the company plans various events for HOG members.

 

New Market: Morocco

Motorcycles are widely used in Morocco because of their affordability and adaptability. Compared to cars, motorbikes are usually more affordable as they are simpler to manufacture and spend less gasoline. For a developing country like Morocco, where most people can hardly buy a used car, motorcycles appear to be an excellent alternative. Also, bikes present customers with much more flexibility in terms of parking and avoiding traffic. Although motorbikes are usually used for particular purposes, it can also work as a freight transport for delivering mail and light boxes. A significant problem that motorcycle riders suffer is the poor road conditions in Morocco. The population in morocco is 36,910,560 people there in 2020, and it is highly increased over the last four years. The male population in Morocco is 49% in 2020. The GDP per capita in Morocco is $3,345 in 2018. The unemployment rate in Morocco was 9.03 in 2019. The motor vehicle sales for Morocco were 165.916 units in 2019. The ease of doing business for Morocco was 54.00 score in 2020. Consumer Spending in Morocco increased to 636065 MAD Million Billion in 2018. Fuel 95 price per liter is 1.18$ in 2019.

 Political factors:

Rabat, Morocco – Delegations from the United States and Morocco met in Rabat on July 16, 2019, in the sixth conference of the Joint Committee that manages the implementation of the U.S.-Morocco Free Trade Agreement (FTA), which came into force in 2006. During the meeting, U.S. and Moroccan leaders studied a wide range of problems currently or possibly preventing the expansion of mutual trade and investment. The United States renewed Morocco on the Trump Administration’s trade policy. Morocco increased its potential as a regional hub, especially involving trade with Sub-Saharan Africa and its importance in attracting more U.S. business associates.

The United States goods trade surplus with Morocco was $1.4 billion in 2018, a 39.8 percent rise ($393 million) over 2017. The United States goods shipping to Morocco was $2.9 billion, up 32.7 percent ($725 million) from the previous year. Morocco was the United States’ 54th most extensive goods exportation market in 2018. The United States imports from Morocco in 2018 were $1.6 billion, up 27.0 percent. The United States exports of services to Morocco were an estimated $634 million in 2017 (latest data available), and the United States imports were $832 million.

Economic factors:

In Morocco, the gross monthly salary per capita was $ 240 in 2018. The total disposable earnings, while increased by 4.2% between 2016 and 2017, increasing to $ 72.17 billion this year. The GDP per capita PPP has grown from $ 5,497 in 2007 to $ 8,217 in 2017. That same year, the purchasing power of families increased by 2.3 points in the circumstances of economic slowdown and inflation, according to the HCP. However, most of the total volume of using expenditure is made by the wealthiest half of the population, and five out of twelve countries contribute to 74% of total consumption.

Social factors:

March Moto Madness is a group of women riding motorcycles, held in the same month as International Women’s Day, which sees some 1,000 riders take to the streets in support of women’s rights. Large motorbikes remain a luxury few can afford in Morocco; however, women own less than 1%. March Moto Madness is being held in Marrakech rather than Casablanca because the city has a fascinating history of women riding bicycles. Since the 1960s, the city is known for its free spirit and powerful culture of female liberation. It is also targeting the upper middle class.

Technological factors:

Morocco’s push for renewables has been inspired by its dependence on energy imports to fuel power plants, with more than 90% of its energy sources originating from outside the country. The kingdom has also been at the lead of improving the independent power producer (IPP) model for large-scale utility plants in North Africa. In tandem with its energetic power generation objectives, Rabat is also trying to develop energy efficiency throughout the supply and demand sides to make sure it maximizes returns from its clean-energy program.

Environmental factors:

The Government of Morocco declared the Moroccan Solar Plan in November 2009, targeting 2000MW of extra solar electricity production capacity by 2020 and created the Moroccan Agency for Solar Energy to help mobilize investments. The World Bank continue assisting the Government of Morocco’s attempts to improve solar energy as a primary part of its electricity supply and a global contribution to a low carbon economy.

Legal factors:

The Law No. 23-13 amending and supplementing Law No. 17-97 on the Protection of Industrial Property entered into force on December 18, 2014. It brings significant amendments, which include the following: reform of the patent, trademark and industrial design system regarding the introduction of substantive examination proceedings and the filing of divisional applications; validation of the European patent applications and patents in Morocco; and strengthening of the enforcement of industrial property rights to combat counterfeiting and piracy.

PORTER 5 FORCES ANALYSIS:

• Competitive rivalry (High):

Keeping a negative trend with near 10k units wasted each year, in 2018, the entire two-wheeler sold has been about 120.000. Near 90.000 units are in the 50cc segment, governed by low-cost Chinese moped. Near 25.000 units are in the range among the 51 ccs and the 350 cc, while high displacement motorcycles are about 5.000. Harley-Davidson competes with a large number of firms, including small ones in local markets. Moreover, the company faces adequate substitutes, such as unique cars and public transportation. The excellent variety of firms drives to significant competition, as customers value product features and uniqueness. Based on the external factors in this part of the Five Forces Analysis, Harley-Davidson needs to maintain competitiveness, particularly in terms of product quality, to guard its market against other firms.

• Bargaining Power of Customers (High):

An easy path to substitutes requires a strong force against Harley-Davidson. In connection, the external factor of average switching costs allows consumers to move away from Harley-Davidson and use alternatives and other products alternatively. Further, companies in the motorcycle industry and the automotive industry now afford high-quality data to consumers to allow them to make more immeasurable purchase decisions. In this part of the Five Forces Analysis, it is shown that customers are a vital force in Harley-Davidson’s industry environment.

• Bargaining Power Suppliers (Low):

Harley-Davidson’s suppliers are weak because they have a minimum forward combination. This means that the suppliers have inadequate control over the distribution and sale of their goods to corporations like Harley-Davidson. Furthermore, because of the high stability of supply, individual suppliers have little leverage in forcing their demands on Harley-Davidson. Only the average size of some suppliers enables them to have a collective impact on the business. Based on the external factors in this part of the Five Forces Analysis, Harley-Davidson can safely assign a low priority to the bargaining power of suppliers.

• Threat of Substitutes (Moderate):

There are many substitutes for Harley-Davidson’s products. For example, cars and public transportation are available. This condition uses a powerful force on Harley-Davidson. Nevertheless, the overall threat of substitution against the company is only fair because consumers who are really into using motorcycles are less likely to shift from Harley-Davidson to substitutes readily. Additionally, the right substitute variety makes replacements have a vital but limited attractiveness. This part of the Five Forces Analysis shows that Harley-Davidson must add the moderate force of the threat of substitution as a real concern in strategic formulation.

• Threat of New Entrants (Low):

Companies like Harley-Davidson profit from moderate economies of scale. Only some new competitors can quickly reach the same benefit. Also, Harley-Davidson must consider fair switching costs, which means that it is pretty easy for consumers to shift to other brands or businesses. Nevertheless, the high price of brand growth prevents many new entrants from successfully competing against firms like Harley-Davidson. As shown in this part of the Five Forces Analysis, Harley-Davidson must address the threat of new entrants as an essential issue in the motorcycle industry environment.

SWOT ANALYSIS:

 STRENGHTHS:

  • HDFS “Harley Davidson financing services” (availability of financing through this criterion).
  • Brand loyalty and the strength of the brand image and reputation.
  • Quality is having the control over Harley Davidson bikes especially the customized ones.

 

WEAKNESSES:

  • Harley-Davidson’s narrow product mix is a weakness because it limits the company from striking more market segments. For example, the firm concentrates principally on chopper motorcycles.
  • North America generates most of its sales.
  • Harley-Davidson has a restricted supply chain that impedes potential development in the international motorcycle market.

 

OPPORTUNITIES:

  • Motorcycle sales in Marrakech equaled 30 percent of wholesales of motorcycles in the country, as Marrakech is known for its extensive usage of bikes.
  • Motorcycles are recognized as one of the most important centers of transportation in Marrakech, identified as ‘the capital of motorcycles.’
  • Young and older people, men and women, manual workers and professionals, and even homemakers (housewives) can be continuously seen on their motorcycles.

 

THREATS:

  • The fear of competitors and manufacturers (Honda, GM, Toyota, etc.).
  • Environmental protection laws.
  • The competitors of Harley Davidson have more financial and market diversification.

 

Entry method (direct foreign investment):

The advantages of opening a factory of Harley Davidson in Morocco:

  •  A legal framework and support very favorable to investors.
  • Moderately low labor cost
  •  A strategic position, between Europe and sub-Saharan Africa
  •  A growing and almost well-trained population
  • Political security encouraged by the popularity of the King, Mohammed VI.

 

The disadvantages of opening a factory of Harley Davidson in Morocco:

  •  A moderately small internal market.
  • A country still highly dependent on farming and therefore unsafe to natural disasters and the cost of hydrocarbons
  •  Regulatory burdens are slowing down, among other things, the startups of business activities
  •  An absence of clarity in public procurement.

 

Target Market of Harley Davidson in Morocco:

  • Men age between 25-35.
  • Middle to upper income.
  • Targeting women to increase the awareness of gender equalization.

 

Positioning:

The positioning of Harley Davidson is dominant in the mind of customers as a premium motorcycle brand, which is recognized for its superior technology and its design. Harley Davidson has reached this positioning by providing score after hitting of products, each of which is unique and loved for the customization it gives.

Marketing Mix:

Product:

  •  Solid product portfolio.
  • Personalization of product affects customers.
  • Leading technology product which inflames the desire for bikers.

 

Price:

  • Ultra-premium pricing for the motorcycle section.
  • The high price has provided immensely to award positioning in the minds of the consumers.

 

Place:

  •  Particular distribution.
  • Showrooms are found in added places only.

 

Promotion:

Promotion function has always been very strategically designed and intricately produced by Harley Davidson, which has preserved its class. Rather than working out and out in cycles of promotion, it has carried out its operations in a very subtle use by sensibly placing Harley bikes and promoting their muscle and honoring them in movies and television series.

Conclusion

Harley is one of the global companies that operate in more than one country in the world, and to expand its activities in the world is always working to search for new markets to enter. Morocco is one of the developing countries that Harley can take advantage of as a new market, as the Pestle analysis and Porter’s five forces have shown that Morocco has a business environment that guarantees Harley success in it. Harley must target the new market well, as continuing with the same marketing plan in general cannot guarantee its success, because each market has specific requirements. After studying the market and the factors that affect it, a marketing plan for Harley was suggested that could be developed over time. More market research can be suggested, targeting new markets and new customers too.  

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