The Hess Report

Tuesday, April 26, 2005


It's always amazed me when people voluntarily paid more for an often-lesser-quality product simply because it had a certain it had a certain logo or name attached to it. The processes behind it are pretty simple and obvious, but being a hardcore pragmatist, it's still foreign to me on a gut level.

On the radio this morning I was listening to guy who was ripping on the price of Harley-Davidson motorcycles, claiming that it was out of control American labor unions that has the price of Harleys at almost double that of similar competing foreign bikes.

Not so, I think. Harley-Davidson is able to charge an almost 100% premium for their bikes because they have been able to Martha Stewart a huge number of people. We've all (probably) known Harley people: they only wear official HD clothing, their kids wear HD shirts, they have HD decals on their trucks, HD coffee mugs, etc. Basically, if there is a mundane product that is available in HD form, they will proudly pay more for the HD form. And of course, they ride Harley-Davidson motorcycles. Which, I've been told by a mechanic who owns one, are mechanically inferior to similar bikes of Asian manufacture. You have to do a lot of work to maintain them, relative to other brands. They are not really in acceptable riding condition out of the factory. But you see, the geniuses at HD corporate have convinced these HD fanatics that that is all part of the charm.

Now, I'm not saying this to badmouth HD corporate. Not in the slightest. They've brilliantly carved themselves a sizable niche based solely on the strength of their marketing. Faced with a strictly pragmatic decision, divorced completely from marketing and brand name, no one would buy a Harley-Davidson motorcycle at twice the price of the competition. It would be crazy. And yet, they do it.

So here's an idea for HD corporate: Given that you have identified a section of the population who will blindly look to you for purchasing and style advice, and given that you have not yet covered certain horizontal sections of the merchandising market with the HD brand, you need to partner with someone who uses the same tactics and who can broaden your coverage. Enter: Martha Stewart. Where the Harley brand merchandising leaves off, her products will pick up. Home decor - toiletries - cooking - event planning - and can fragrances be far behind? The millions of Harley owners will now have a brand guide for the other half of their lives that was not already ruled by HD!

The new company, Harley-Davidson-Stewart will be positioned as the premier lifestyle brand: tough when it counts, yet refined when the rubber is not upon the road. Linen sheets with the HDS shield tastefully embroidered in the corner. A Roadster in Sage with Off-White enameled pipes. HDS picnics featuring pate rings instead of buckets of fried chicken.

And maybe the current Martha crowd can be brought into the HD family, as well. It will open up a whole new market for the bike manufacturer! Middle-aged women with way too much time on their hands will now have something new to save their cash for. And maybe they'll start watching Orange County Choppers, or, in it's new incarnation Orange County Choppers Living, in which the mechanics give lifestyle and fashion tips as they customize someone's ride.

All I know is that as soon as HDS stock is available, I'm buying.

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