What Said Harley-Davidson’s Chief Marketing Officer Mark-Hans Richer

HD3“I’m going to go heretical on you, and say that youth does not own cool. Youth does not own growth. Youth does not own innovation or disruption. Brands must not neglect the growth market of older consumers to focus solely on youthful audiences” said Mark-Hans Richer, Harley’s Chief Marketing Officer, at the Association of National Advertisers’ 2015 Masters of Marketing Conference in Orlando, Florida.

Building on this argument, Richer cited a recent study which pegged Millennials at a $200 billion buying power in America. “Contrast that, with the $3.2 trillion buying power of people aged 50-plus. The market potential in front of you today is 111 million 50+ adults. Ten years from now, it’ll be another 17 million. And ten years from then, it will be another 32 million and on and on and on” added Richer.

HD2The numbers he cited are correct, except that when getting older, baby boomers spend less and less on motorcycles and more on other things and other leisure activities. And Harley can’t expect that today’s millennials who never rode can be convinced to ride for the st time when they reach 50…

During the last few years Harley-Davidson has aimed to expand its customer base with an emphasis on reaching a more diverse group of younger consumers, female and minorities. I agree that it doesn’t mean ignoring those reaching 50 who already ride. They will represent for a long time a growth market for all motorcycle manufacturers. But not the only one. Harley should recognize its competition on the 2 target categories of Millennials ((born between 1980 and 2000) and Boomers.

HD1The Milwaukee manufacturer was over confident regarding the future sales guidance during  its second-quarter announcement and ended up disappointing with its 3rd quarter results. Although Harley still owns more than half of the above 600 cc+ bikes in the US, truth is that this exceptional market share is on a downward trajectory, smaller by 4% this year compared to last. Polaris motorcycle sales are a small percentage of Harley sales but the Indian Chief and Scout have been well received by the market. And foreign competition from Triumph, Royal Enfield & Ducati intends to be extremely aggressive in all markets where Harley is present, with upgraded models at more affordable/discounted prices.

Harley just reduced its dealer shipment guidance from a range of 276,000 to 281,000 motorcycles this year to 265,000 to 270,000 motorcycles. It may still be optimistic. Harley blames the competition for its woes, saying the promotional environment is reducing the attractiveness of its bikes as it tries to maintain its premium image. Will Harley be obliged to take price cutting initiatives both at the production and retail levels before 2015 ends and through 2016?

17 Responses to “What Said Harley-Davidson’s Chief Marketing Officer Mark-Hans Richer”

  1. 1 richards Oct 31st, 2015 at 10:10 am

    Harley will continue to sell great motorcycles to expanded market segments. New competition will result in reduced their market share but they will continue to be leaders in motorcycle sales. New competition will continue to make them and their competition better. It’s good for all of us!

  2. 2 zipper Nov 1st, 2015 at 8:59 am

    Good for all of us that we have another choice in American motorcycles. ..Z

  3. 3 Milke Dalgaard Nov 1st, 2015 at 11:32 am

    I would love to be a fly on the wall during upper management meetings over the next year. Strikes me that Harley is just now waking up to all its troubles and woes which were swept under the rug by the Keith Wandell era!

  4. 4 Pop Nov 1st, 2015 at 5:41 pm

    The numbers may not lie but the omissions in the theory reek of pure marketing BS.

    The 50+ bracket includes a higher percentage of the infirm and the dying so many of those new members are short term. The honest projection would be possible years of motorcycle purchasing by generation, not possible buyers who have big piggy banks per generation. You can always get money. Time… not so much.

    The generational populations entering the 50+ brackets have zero brand commitment to the moco and the black and orange is not synonymous with cool to them any way nearly as much as it was to us. So even increased numbers still results in a diminished market. This isn’t improved by offshore marketing either. There is no aging Euro or Asian population chafing at the bit to buy hawgs.

    If the moco is not savvy enough to find a formula to get teens and twenties onto their product in big numbers, they are not going to be around to see the second hundredth anniversary.

  5. 5 Cris Sommer Simmons Nov 2nd, 2015 at 12:28 am

    I think the older woman market is hot right now… just sayin’ lol

  6. 6 Badams Nov 2nd, 2015 at 12:41 am

    Livewire may nail down millineals

  7. 7 Coma Nov 2nd, 2015 at 3:04 am

    Just have a good hard look at what BMW, Triumph and Ducati are doing. If you haven’t got a better idea. copy them.

  8. 8 Taco Nov 2nd, 2015 at 9:00 am

    Hey Mark Hans, who made you an authority on cool? oh wait, H-D gave you a bike and you learned how to ride…so you’re cool.

  9. 9 john p Nov 2nd, 2015 at 9:02 am

    Bring back models like the fxrt, and don’t throw a different paint job on a fatboy and call it a new model! We want a completely new model!
    Also there is no need to bolt every crappy trinket from the accessory catalog and call it the screaming eagle and tack 20 grand onto a bike that already cost 23grand that you’ll have a hard time getting 15 grand for it in 5 years.

  10. 10 Sugar Bear Nov 2nd, 2015 at 10:50 am

    Mark Hans was let go on Friday

  11. 11 Kroeter Nov 2nd, 2015 at 11:09 am

    Bottom line: 250 people are losing their jobs so the MoCo can figure out how, and to whom, to market their product.

  12. 12 Bruno Kempf Nov 2nd, 2015 at 11:23 am

    Ha, ha. His words must have come back to the HQ.

  13. 13 P. Hamilton Nov 2nd, 2015 at 11:30 am

    Just found out the following. Mark Hans Richer , sold 10,000 shares on Aug 17, 2015. The Insider selling transaction was disclosed on Aug 18, 2015 to the Securities and Exchange Commission. The shares were sold at $59.32 per share for a total value of $593,199.00.

    He was not too confident about Harley future… But it was good timing, before the big drop in HD shares value in October.

  14. 14 Roberto Nov 2nd, 2015 at 3:20 pm

    I still can’t believe there is no Softail Standard,the customizable HD in recent history. And no,the wideglide comes no where near…..

  15. 15 Blackmax Nov 2nd, 2015 at 6:50 pm

    I think Cyril told us about that sale when it happened?
    i’m sure I heard about this somewhere
    But, yes, you just keep on counting on us Baby Boomers
    as we get older & can’t hold up a 800 lb+ Ultra/Road/Electra Glide
    & you can keep watching your market share get smaller & smaller
    A previous statement:
    But in the end the facts remain, us Baby Boomers are not getting any younger
    & whether it’s due to age or death, the core market for all those Glides is shrinking
    If H-D does not heed the warning signs, they will be gone with us, dust & a distant memory

  16. 16 John Nov 3rd, 2015 at 3:43 am

    I like what he said, and it took some balls to say it. All the medias butt kissing of youth is irritating to me. The guys at HD aren’t stupid , they can see what Triumph just did with the Bonneville, more hp, liquid cooled but still looks like it’s air cooled. Then Victory coming out with a street version of the Pikes Peak bike. HD won’t just sit on their hands and do nothing. Now is probably the beginning of some really great bikes coming from all the American companies including Motus.

  17. 17 Zenaldo Nov 4th, 2015 at 1:50 pm

    I like the twin cam FXR idea..some guys are already converting them anyway..might as well just make it a little easier..is the Dyna really that in demand ?

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Cyril Huze