Harley-Davidson Brand Strategy: B2B vs B2C Marketing

Introduction: Brand Community and Its Limits

The brand community and brand relationship strategy described in the Harley-Davidson case study cannot be applied to every product or service. The product to which a marketing campaign is applied needs to create, through its very own nature, a sense of affinity between the customer and the producer. The company example discussed below is relevant in this sense.

The company referenced here creates software products for a consultancy firm working with various major business clients. In this context, two distinct customer-producer relationships are formed. First, there is the relationship between the software company and the consulting company as the immediate recipient. Second, there is the relationship between the consulting company and the final recipients. However, in order to create the strongest possible relationship between the producer and the final consumer, the intermediary — the consulting group — is often bypassed so that final consumers are addressed directly.

Brand Relationship Strategy in a Software Context

Two important ideas represent the goals of the brand relationship strategy in this context: customization and differentiation. The main goal is to convince the final consumer that the software product they will be using has not only been tailored to suit their specific needs, but that it has, in effect, been created by the customer themselves.

In a way that is somewhat similar to the Harley Owners Group (H.O.G.), though of a different nature, the team of programmers organizes brainstorming sessions in which members of the final consumer firms collaborate directly with programmers to customize the software application to meet their company's exact needs. This may resemble a standard business meeting, but several distinctive rules apply.

The first and most important rule is that there are no rules. Everything is conducted as casually as possible: no suits, informal food, and the occasional game of pool. The purpose is to create an environment in which each personal idea can be freely communicated and shared within the working group. Every member of both teams is encouraged to say what they would like the application to contain, how they think it will improve the company's efficiency, and why a particular feature should be implemented.

While the idea was not entirely original, it was taken to an unusually open extreme. To evaluate the program's effectiveness, both the positive and negative changes it brought about were assessed. The evaluation found that the program had improved communication between the final recipient and the producer, and had led to an increase in profits for the receiving company due to higher returns on time spent in their particular line of activity. The costs of the software company were also reduced, because the number of modifications to the initial version was typically limited — the initial version was usually designed by the receivers themselves.

An additional discovery was that several elements of the promotional mix also benefited from this system. Publicity proved essential, and word-of-mouth worked remarkably well — the right references from the right people can go a long way. Many clients shared their positive experiences with potential clients, which proved to be an efficient channel for business development. Furthermore, each member of the programming team effectively became a salesperson, since their role involved selling application features and ideas directly to the client.

Advertising vs. Sales Promotions Across the Product Lifecycle

In the case of the software company described above, sales promotions are almost nonexistent, and the emphasis is placed firmly on publicity — including word-of-mouth, favorable articles in trade publications such as CIO and Computerworld, and reviews from industry analysts. The Harley-Davidson case, by contrast, is highly instructive in showing how advertising and sales promotions can complement each other throughout a product's life.

Referring to the four phases of the product lifecycle — introduction, growth, maturity, and decline — and considering net sales, volume, and price as key indicators, one can conclude that advertising is most likely to be dominant during the first two stages, while sales promotions become more effective in the final two phases.

Initially, when a new product is introduced to the market, the volume of sales is relatively small. The primary reasons are that consumers are unaware of the product or are accustomed to using alternatives. Price is not necessarily the most relevant factor at this stage; the first priority is visibility, achieved through extensive media advertising.

Once a product reaches the maturity and decline stages, however, sales promotions become essential in sustaining consumer interest. A company can seek to maintain volume levels through lower prices while preserving a certain level of net sales.

Conclusion

The Harley-Davidson case study, however, demonstrates how advertising and publicity can work together effectively through H.O.G. A larger community of people was brought together, and the company's core message — of being close to its customers and attentive to their needs — became clearer and reached a broader customer base. In this respect, the B2C and B2B approaches came closer together in the Harley-Davidson model, offering an instructive example of how the two can function in concert.