Archive for November 2009

A simple thanks giving to the road gods

November 26, 2009

I posted this years ago on the old Journalspace site—but I’m as thankful for all these things as I was back then—and a couple more things I added at the end.

I give thanks for good roads that run straight through desert or field. For rolling roads that disappear over the horizon. For those that curve through canyon bottoms where golden aspens bend over fast-flowing streams. For roads that leap up mountains in sweepers and hairpins to carry me high above and far away from daily life.

I give thanks for the smooth roads and the cracked, the perfectly banked and the off-camber. For roads well-known and those new met and soon loved.

I am thankful for the simple 90-degree turn at a stop sign out in the middle of nowhere. The ones that say, “pause a moment, smell the moist green of growing things and the rich soil beneath them, and think about how good it is to be alive.”

I give thanks for the way the concrete sings beneath my tires, the crunch of gravel, the smell of rain on hot asphalt.

I give thanks for the way my leg feels as I swing it over the saddle, the supple strength of gloves sliding onto my hands, for my electric vest in the cold and jacket vents in the heat. The way the zipper slides up my jacket. The way it feels when I take off my helmet.

I give thanks for the dawn rides when the sun finds me on the road while the cars sit still and cold in driveways and their owners turn over in bed and hit the snooze alarm. The empty roads where the mist still clings to the low spots and I can smell the sun starting to warm the air.

I give thanks for the long rides that stretch from morning to late afternoon and into the evening. For the miles and curves that vanish beneath my tires, those hours when time loses all meaning. For those days when I ride so long my throttle hand is sore and I walk a bit bow-legged when I finally park the bike.

I give thanks for the evening rides when the sunlight lays like marmalade across the landscape. For those rides when the sun sinks past the horizon and the world fills up with shadows until all the shadows meet and melt together and bring the night.

I give thanks for night-time riding when the streets once again are empty and silent and I feel as if they are mine all mine, and that only another rider could know the joy I do.

I give thanks for the wind and its odd, irregular beat tapping on my visor. The feel of the wind against my body as I ride. The way it blows the stress, the pain, the uncertainties right out of me and blows hope and the belief that anything is possible into my heart in return. I give thanks for the freedom of the wind.

I give thanks for the lean, for that delicious, exhilarating sensation where I realize I am one with the great laws of physics. I give thanks that I feel the acceleration in every part of my body.

I give thanks for the machine beneath me, for the ability to be a modern-day centaur, for the power and throb of the engine between my legs, the way my hands feel on the grips, for the pull of the clutch and front brake levers. For the thunk of the shift pedal. For the delicious tension of the friction zone. For the way the geometry of the bike makes the algebra of the turns so sweet.

I am thankful for hazards recognized, for dangers avoided, for skills and broken-in brake pads and good tread on the tires. I give thanks for what my more experienced brothers and sisters of the road have taught me.

I give thanks that I ride and live and live to ride again.

I give thanks for wrenching: For that  moment when the oil filter loosens, the feeling when I dip my fingertip in fresh oil and slide it around the new gasket. For watching the black, filthy oil drain to the last drip. drip. drip.  For the pleasure of pouring in the clean, clear oil. I give thanks for the soul-satisfying act of adjusting the clutch just right and of tightening the last bolt on the frame. For that proper give in the belt and that tiny hiss of the tire pressure gauge. I give thanks that I can change my pipes or the suspension or whatever else I want to do to make my bike my own.

I give thanks for road grime and the joy of washing it away.  For the sensual way the soapy water washes over the tank and down the heads and slides off the fenders. For the way clean mirrors and windshield sparkle. For Simple Green and Mothers and Blue Magic, for scrub brushes and soft buffing cloths. I give thanks for that moment right after I’m done and I step back and look at my work. Damn, the bike still looks pretty good, doesn’t it?

I give thanks that I ride it enough to get it dirty again.

I give thanks for the gathering of riders, for being able to recognize friends’ bikes approaching by their sound, for seeing good companions slow and turn into the lot. For the uneven rows of proud machines leaned over on their kickstands, metallic soldiers at ease. For the glad hugs and laughter, the banter, the growing impatience to be out on the road again.

I give thanks for that good company as I see them ahead of me drift to the outside then dip into the curve, one-two-three-four, like seagulls banking and then straighten up, one-two-three-four, and fly on down the road. I give thanks that I have had the opportunity to ride side-by-side in the pack. For long lunches and short breakfasts. For cold bottles of water and more laughter at a stop along the road.

I give thanks for the camaraderie of riders–those parking lot friends who become such simply because I have a bike and so do they. The fellowship of the road, the sideways wave, the circling back and stopping to see if there is anything they can do. The riders who gather at any old bar or restaurant or eatery that welcomes us. I give thanks for those I come to know and care about over the months and years of riding the same roads to the same places. I am thankful for those who I love and who love me simply because we love the same thing–to ride on two wheels in the freedom of the wind.

I am thankful for the sound of a motorcycle–any motorcycle at all–as I sit so properly dressed, so professionally employed, so occupied with other things. It’s like hearing my favorite song drifting from a stranger’s window as I walk along the street. I stop what I’m doing and listen. Joy. Then the growl of the bike is gone, but the happiness remains.

I give thanks for the sense of being riding has given me, the freedom to be who I am no matter what others think. The sense of empowerment and control over myself and my life. I am thankful for the willingness to take on risk and fear and triumph in challenge and personal responsibility. To ride my own ride whether in that good company of bikers or by myself. I am thankful that I have found my voice in the wind.

I give thanks for good friends. For those who believed in me and kept believing in me and never stopped believing in me and stood by me when things were difficult. They are the ones who are truly good—good at heart and good in word and good in deed—and indeed.

Happy Thanksgiving.

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Harley’s lost generations: Failure to reinvent loses the After Boomers

November 19, 2009

The After Boomers—Gens X and the older Ys grew up with the Teenage Mutant Ninja Turtles and Knight Rider and Star Trek and X-Men on TV and Star Wars and Matrix in theaters. They began by playing Sonic the Hedgehog and ended by playing Grand Theft Auto, Gran Tourismo and Wii Sports. Athletes and Rock Stars were their heroes. While their parents listened to hard rock, they listen to rap. The Boomers had Easy Rider where the (extensively customized) Harley is ridden by the hero. The After Boomers had Biker Boyz where the Harleys are ridden by the villains and The Long Way Round where the heroes rode BMWs.

Same Themes

Rap and hip hop seems a world apart from heavy metal—but Buddy Holly rocked his generation—and Swing rocked that generation.

In current affairs, instead of JFK’s assassination, this group had 9/11. Instead of Vietnam, they have Iraq. Instead of the Cold War, they have terrorism and terrorists give the entertainment media the same class of “bad guys” as the old Soviet regime.

The way motorcycles are used in movies including the two mentioned above are not essentially different than the way their parents and grandparents saw motorcycles in movies: There’s still the lone hero fighting against a world organized against him in which s/he alone had to solve the problems and achieve glory. For example: the Mission Impossible movies (and MI II had that prolonged motorcycle chase/battle); the Matrix trilogy with its use of motorcycles;  and Laura Croft riding a motorcycle through her house fighting the bad guys. And it’s still about freedom and finding yourself and being comfortable being unlike others: Boomers had the ultimate road movie—Easy Rider. But The Long Way Round is a road movie as documentary with two young men taking that search globally with a lot more acceptance and a lot less drama.

Iow, it’s the old “the more things change, the more they remain the same”. The same kind of influences and forces that make motorcycling naturally attractive to a given percentage of people in each generation are still present today as it was in the past. This suggests that there is a substantial number of After Boomers that are primed to ride at some point in that life cycle discussed in the last entry.

But Different

But what did change changed everything: Instead of The Donna Reed Show and The Mary Tyler Moore Show, Wonder Woman and Supergirl culminating with the television series Charlie’s Angels, this time there was a plethora of women starting with Cagney and Lacey and women like Laura Croft and Xena and Trinity of Matrix fame—and Charlie’s Angels again. The After Boomers grew up with women—as well as men—being the lone hero.  African-Americans had plenty of highly visible role models who were the lone hero in pursuit of personal freedom as well—and some of them like—Kobe Bryant and Michael Jordan—rode motorcycles.

And while their parents suffered the loss of production jobs and outsourcing, these generations grew up in a service industry where globalization was the norm and their homes are filled with products with foreign brand names made overseas by multinational companies.

Fast, flexible, speed is valued—and expected: In other more essential ways when it comes to motorcycles, it’s a different—digital, wireless—age. Now communication is instantaneous and global—internet, cell phones, texting, wii—all these things emphasized speed, responsiveness, dexterity and flexibility. And that’s the same theme in both movies and television—and in business and current affairs.

And that underscored what they learned from video games—even ones like Sonic the Hedgehog and Mario Brothers as children: the prize goes to the aggressive, the one who can decide and act with speed and daring and take risks. Iow, the qualities Forbes associated with the Harley had spread to even childhood games.

Risk Perception: At the same time understanding of risk had changed in two polar opposite ways:

This is the bicycle helmet generation: Boomer parents were schooled to believe danger is everywhere and real or perceived risks were to be both avoided and protected against. After Boomers, as a general rule, been sheltered from risk and even discomfort. For example, they’re been strapped into infant seats, youth seats then seat belts from birth.[i] They’ve been  driven to school to avoid taking the bus; few play outside unsupervised and they’ve been taught to look at strangers with fear. And when it comes to educational and other achievements, failure is negated and everything is awarded.

On the other hand, video games teach them to take extraordinary risks to win—but the risks are unreal. They erase failure with a reset button and get ahead by finding shortcuts. And while the “risks” seem to be enormous—extreme violence and speed—there are no real consequences to them; they emerge unscathed no matter what they do.

As a general rule, then, After Boomers have been protected from the consequences of their choices and actions by their parents and the culture while being encouraged to take extraordinary risks that have no real consequences.

Primed to ride—but not Harleys

Iow, the stage is set for a future boom cycle in several essential ways while attitudes towards risk and consequence have changed in negative ways.[ii]

The only problem is that it wasn’t Harleys that were the iron stars in these movies or on television or video games. Instead it’s the sport bike that’s lionized—and it was men and women on sport bikes that these After Boomers saw doing courageous man-of-action things at speed.

Otoh, cruisers and street bikes were ridden by villains—and the one percenter image was still regularly employed. Or they were ridden by middle-aged (staid) (white) men—the most recent example being the oncologist on Brothers and Sisters who’s idea of risk is to date Sally Field’s much older character. Iow, Harley’s entertainment media presence is either the outlaw or the RUB.

Sport bikes, then, are associated with the young, lone hero out to change the world and the cruiser/street bike with the middle-aged, upper-income male—one who is almost always white.

Take a look at the Motorcycle Riding Celebrities list and the sea change in celebrity riding Harleys is overwhelming: Celebrities like Schwarzenegger, Axel Rose, Billy Ray Cyrus and David Hasselhoff do have H-Ds. But more high-profile celebs like George Clooney own an H-D but own one or more other marques.

However, more and more contemporary celebrities don’t own a Harley at all. Like Bono on a Ducati, Jessica Alba on a Kawasaki, Michael Jordan on a BMW, Sheryl Crowe on a KTM. Angelina Jolie, Brad Pitt and Ewan McGregor are like many younger celebrities and are multi-brand owners: M-V Augusta, BMW, Triumph, Honda, Suzuki or Ducati. The range of marques is quite impressive—as is the absence of Harleys for younger owners.

In fact, it’s startling how old most of the H-D celebrity owners on the list are—and it’s also surprising how many Harley celebs are now in the  “Huh, I thought they were dead” list or “People You Expect to See on Dancing With the Stars” list.

Whether H-D didn’t pursue a product placement strategy or whether it did and were turned down, the net result is that Harleys are associated with a kind of bike that the young associate with the old and irrelevant. Nor did Harley get hot young game designers to create an exciting video game. In no way did Harley engage young men—and women—in the ways that they found exciting and fresh.

No dirt bike Since dirt biking as children and teens is one of the ways new riders enter into street riding either as young adults or as middle-aged people, marques that have dirt bikes built brand memory—and perhaps brand loyalty—in Gen X and Y. Harley did not develop a dirt bike and surrendered a rich branding opportunity. Perhaps it was twice-burned, quadruple shy after its lamentable efforts to expand into snowmobiles and lawnmowers, but it was a regrettable marketing mistake.

Harley is the motorcycle Oldsmobile A few years ago Oldsmobile found itself in the same position as H-D: the young avoided the make like the plague. In an attempt to counter that, Oldsmobile ran a series of commercials that bluntly said it “wasn’t your father’s car” anymore. And that’s the problem with Harleys: a great many After Boomers identify the marque with their parents. In urban areas, at least, it just ain’t cool for someone under 30 to ride a Harley.

Fashion forward rather than fashion backward Nor does the classic cruiser/street/custom style of motorcycle appeal to most After Boomers. Harley specializes in motorcycles that do not look significantly different than those of decades ago. Otoh, sport bikes are much closer stylistically to what’s contemporary in electronics. Harleys, otoh, are so last decade and of a piece with a camera that uses actual film, or phones with a corded handset, desktop computers and land lines.

The After Boomers’ image of Harley is neatly summed up in the South Park episode “The F Word”.

Where the word “fag” is redefined to stand for Harley riders: “Fag. n. 1. An extremely annoying, inconsiderate person most commonly associated with Harley riders. 2. A person who owns or frequently rides a Harley.”

And that’s really bad news for Harley’s short and long-term prospects. As I wrote about in a prior entry, brands have life cycles and unless brand managers can reinvent it for a new age, it suffers.[iii]

Harley thought the V-Rod and then the Street Rod was reinventing the brand—but the styling was still too much like Old Harley. Harley completely missed why even middle-aged women want to ride and how to attract them let alone offer a compelling image to younger women. And it failed to offer a way for other minorities to feel comfortable in what appeared to be a very white—and very exclusive—world of fellowship.

Research also indicates that brands do have generational baggage.[iv] As a Seeking Alpha entry said, “…in the U.S. the number of consumers will continue to grow until at least 2025 thanks to Generation Y…. We believe this supports our view that the U.S. economy is not ending, but changing. Companies that became fat and happy catering to Boomer demand from 1980 to 2000 need to understand that in many cases this demand is no longer there. Why? Because the generational landscape has changed and will continue to change between now and 2025.”

The writer went on to say, “We strongly suspect that those companies that are aware of this shift in demand, and are catering to it, will become the next “Stock Market Darlings.” As opposed to those whose executives are scratching their heads and wondering where their customers (the Boomers) have gone. Currently, for example, “Value” teenage retailers are enjoying the increasing demand of the price-conscious Generation Y, who are flocking to their stores, while car manufactures keep trying to design, or in most cases re-design, the perfect car for the disappearing Boomer.”

Substitute Harley for “car manufacturers” and perfect motorcycle for “perfect car” and that describes Harley for the past decade and in the future. And Seeking Alpha agreed:  “And among those which seem to be unaware of any generational shifting in the U.S. consumer base would have to include: General Motors Inc.,Harley Davidson Motorcycles Inc. (HOG), Wal Mart (WMT) and Wendys/Arby’s Group Inc. (WEN).”

Whether it was fear of losing the base or being unimaginative, Harley-Davidson has failed the challenge for the past decade by delivering basically the same bikes year after year while ignoring what was exciting and attracting After Boomers. It did not reinvent the brand—and unless it finds a way to do so, it has doomed itself to an increasingly shrinking market until someone in Milwaukee figures out how to do so—or years down the road, consumers find a way to reinvent this particular style of motorcycle.

Otoh, it did have Buell—while it had the negative of being “half a Harley” with its engine, it had innovative and cutting edge technology and styling. It is a sport bike and it had the right kind of styling—and as reported before—it was growing even as Harley shipments were shrinking. So Harley’s best chance of capturing After Boomers has been “discontinued” in one of the most blundering, short-sighted and idiotic management decisions in USA corporation history.

It is doubtful, then, given all the reasons above, that Harley will bounce back once the recession is over. While the Motor Company was already facing the difficulty of producing too expensive motorcycles when the majority of new riders would be in their cheap bike stage, the definitive H-D styling is unappealing as is the lifestyle of the H-D rider. In every way, then, the next 20 years of riders will not find Harley’s a natural choice in their natural riding life cycle. Unless Harley finds a way to reinvent itself and make the iconic brand speak in fresh exciting ways to these digital, wireless, social networking generations.


[i] And since they grew up with car seats, seat belts and bicycle helmets, motorcycle helmets don’t have the same meaning it does to the 40+ cruiser rider. It is likely that the future boom riders, like the current crop of sport/sport-tourer/adventure riders, will wear helmets. Which is not to say the death toll will rise any less precipitously nor as high next boom cycle.

 

[ii] Except Gen X and Yers, having been strapped in since birth and used to wearing helmets may be more likely to choose to wear motorcycle helmets.

[iii] Holt, Douglas B. How Brands Become Icons. Harvard Business School Press. Boston, MA. 2004.

[iv] “The Future of U.S. Consumer Spending: It’s a Generational Thing”, Seeking Alpha. Posted, October 22, 2009. http://seekingalpha.com/article/168342-the-future-of-u-s-consumer-spending-it-s-a-generational-thing?source=yahoo.

The Life Cycle of a (male) Motorcyclist

November 13, 2009

Before we return to Harley’s present and future woes, it’s good to review the natural life cycle of a motorcycle rider.  Be patient–there’s a method to the madness of reviewing what seems to be obvious:

Motorcyclists have always ridden dirt and off-road–after all, there were very few roads and almost all of them were unpaved for most of the past century. For most of that time, there was little to no difference between the motorcycles that rode off-road and on: there were just motorcycles. And a great many 40-pllife cycle of a riderus riders today began by riding small bikes around the yard or farm rather than their father hauling specifically dirt bike motorcycles to a special area set aside for special motorcycles made for the dirt.

Playing in the dirt as children: This however changed for these After Boomers. By Gen Y, there were even tiny dirt bikes and consequently, very young children can and do start riding mini dirt bikes when they are as young as four or five or riding along on an ATV.  For a vast number of people, dirt biking is generally a family affair–fathers take their children and whether or not Mom rides, Moms often go along. Extended families–brothers, uncles, grandfathers are often present as well. And people can and do continue to dirt bike into their senior years–though the age of riding retirement tends to be lower than with street riding due to the higher physical toll. The cost of entry into dirt biking can be lower than street riding–though it certainly can be expensive–which also tends to attract men in their family years. In fact, many men who give up street bike riding take up or return to dirt riding when they marry and have children as a safer, family-oriented choice when their children still live at home.

Another advantage to dirt biking is that children’s friends are often exposed to riding even if their own family members don’t participate.  Dirt biking then can be a linear experience–some start young and ride until they are old. But it also has natural points of entry at every point until later-middle age–if not as young children, then as teens or young adults or young family guys or as a middle-aged man: there’s no discernible disadvantage to starting later or advantage to starting younger in terms of skill or prowess.

Dirt biking is also less-lethal–though no safer from common injuries–than street motorcycling, which adds to its positive image.

Street entry is later: Otoh, as a general rule, the soonest someone can legally ride a street bike on their own is sixteen. Prior to that, and unlike dirt biking, though, they can be and often are, passengers. And when they’re passengers, they’re riding with either a parent or someone the parent trusts such as a close family friend or relative.

Historically, a great many riders enter motorcycling in their young adult years.  They tend to buy less expensive motorcycles at this period of time but, at least in the UK, buy a new motorcycle with some frequency.

As they reach their late twenties, many riders give up street motorcycling. Most cite family or career as the reason for leaving. Tight finances due to family are frequently cited. There are other reasons–most often relocation–that are also given. When family is the issue, the responsibility towards their children is most often cited (rather than their spouse’s personal dislike of the activity).

Historically, a great number of motorcyclists continue to ride through their family/growing career years.

The Mid-Life Rider: The mid-to-late forties is the next natural entry point for riders either as returning or as new participants. At this point, children are older and are leaving the home, finances begin to ease allowing the purchase of a motorcycle and all that entails. By the late forties and on, both men and women are hitting a plateau in their careers. For some, this is the peak of their career.They tend to buy more expensive motorcycles as an initial motorcycle purchase and as subsequent purchases. Multi-bike ownership is more common in this group.

Returning riders cite favorable early experience–riding on the back of a family friend or relative’s motorcycle, off-road experience or that they owned a small, cheap motorcycle in college–as a strong motivator to returning when change in their lives made that feasible.

Industry research indicates that riders buy their last (new) bike in their early sixties.

By seventy, more and more retire from motorcycling due to health/age or death.

All along the way–including the pre-sixteen years, of course, too-close-a-call or crashes, injuries or death also lead to attrition from both dirt biking and street motorcycling.

Why this is important: There’s a natural cycle of waxing and waning to participation in motorcycling. There’s a natural cohort of those 18-30 who enter into street riding and a natural cohort of those who enter (or re-enter) in their 40s.

Riders beget riders: It is particularly important because of one of the main drivers to bring new riders into motorcycling is a peer group.  German research found that “the most important mechanism initiating someone into the motorcycle world is to have contact with someone already in there…” but “a youngster won’t become “fascinated with the product, if the pool is composed primarily of people our potential convert cannot associate with.”[i]

They go on to find that, “as a higher proportion of the relevant peer group performing an activity makes it more attractive. Not only will [it] increase the number of potential entrants but also ensure that existing motorcyclists ride more.” The more riders there are, the more chances non-riders have to come into contact with one. We’ve seen this work very well in terms of the current Boomers.

Exposure to dirt biking as children and if they come into contact with street riders they admire—or, as we’ll see—are exposed to racing, increases the likelihood they will ride when they are legally old enough to do so—particularly if there is a big enough pool of motorcyclists already on the streets to inspire them.

Size matters: The size of generations, then, matters a great deal and, if the cohort is big enough, could produce a boom—or a bust—by itself. The Silent Generation (or The Lucky Few) was 42 million strong while Baby Boomers—are almost 80 million strong. Even if the same percentage of each generation had decided to ride street at the same point in theirlife a boom cycle was created simply because there are so many more Boomers entering motorcycling within a short period of time. And we see that Boomers were responsible for two boom cycles—one when they were young and then one when they were in mid-life.

Gen X, though is 51 million while the subsequent generation (Gen Y or Millennials or Echo Boomers) are 75 million.

The youngest of the Lucky Few are 64. The youngest of the Boomers are 45.

Gen Xs were born between 1965-1979 making the oldest in their early forties and the youngest 30. This smaller generation is, as a general rule, in the opt-out part of the street cycle—though they may be or about to begin dirt biking.

A generation that’s almost as large as the Boomers, Millennials or Echo Boomers were born in from 1980-2000 making the oldest 29 and the youngest is just nine.

So, if we compare generations to the life cycle of motorcycling, we see that few of the Lucky Few will be buying a new motorcycle and fewer still are still riding while the vast majority of the Boomers who are either going to return to riding or decide to start have either returned or started.

But Gen X, a much smaller generation, is in the midst of their family/career years and have opted out for now from riding or have turned to dirt biking. And when they return over the next ten years, the generation just isn’t big enough to make a boom of riders in their 40s and 50s on their own.

The Echo Boomers, though, are just coming into their own in terms of street—and this is the generation that grew up with dirt bikes far more than other generations.  Iow, a new boom cycle could begin very shortly instead of having an up to ten-year bust cycle as in the past.

Simply by the numbers, the boom and bust cycles follow generational size more closely than economic bubbles and recessions. And that has extremely important implications for not just the next ten years—but for 20 years from now as well:

If Echo Boomers take to the streets, they replace the exiting Boomers in terms of numbers of riders to a large degree—though not quite to the degree that Boomers had. This does not account for any extra generational impetus to ride.  While the numbers are roughly equivalent, the Echos are entering at the young end of the street cycle while the Boomers are exiting, obviously, at the older end.

Gen Xers, otoh, replace the Lucky Few—they are entering the street as the mid-life riders as the Lucky Few are exiting. There are more Gen Xers, it’s true but over the next 20 years, there will be far less 40+ riders as the bulk of the Boomers enter their 70s.

Iow, Echo Boomes—if they decide to ride street—will actually echo the boomers and create two boom cycles. If Gen Z is smaller than the Echoes, a bust will result when Echoes opt out in their 30s-early 40s.

And who is replacing who, is critical because it will determine, to a great degree, the prosperity of the motorcycle industry:

Economic implications: The natural life cycle of the (male) motorcyclist is closely linked to purchasing power as industry statistics show. As a general rule, the Under-30 buy inexpensive motorcycles and 40+ riders buy more expensive ones.

Profit margins on smaller/inexpensive bikes are tight and manufacturers make far more on more expensive motorcycles, but to make money on inexpensive motorcycles, a far greater pool of participants is needed.  Northern North America is where the vast number of expensive motorcycles are sold while far, far more small, inexpensive motorcycles are sold worldwide.

But here’s the thing: once again, as a general rule, racing drives innovation and expensive motorcycles go a long way towards paying the costs of racing. Innovations then trickle down to the expensive motorcycles and then to the inexpensive, smaller motorcycles sold anywhere but in Northern North America.

Racing is also a primary means of marketing—it both incites (young) (men) to ride and  signals what’s desirable.  As Ambroz and Olaya found, “In countries where the motorcycle motor sport is both actively practiced and present in media channels, the likelihood that motorcycle riding is going to be attractive to new entrants is higher.”[ii] But as the German researchers point out, it’s a phenomenally expensive form of advertising that is paid for by and large the sale of more expensive motorcycling.

Expensive motorcycles, then, aren’t just a profit center—they are integral to both innovation and marketing. This, of course, does not apply to Harley either in terms of innovation nor marketing. However, it did apply to Buell in terms of racing (though not particularly expensive motorcycles).[iii]

What this means for high-end motorcycles: The huge generational bulge of the Lucky Few and Boomers resulted in a huge market for expensive motorcycles—and not just for Harley. But the Lucky Few are beyond that last new bike purchase and soon the bulk of Boomers will be as well.

Otoh, the huge Echo generation will gravitate towards less expensive motorcycling—and especially if economic recovery from the recession means this age group either is under-employed or under-paid.

If the model is correct and barring any untoward influences either pro or con motorcycling, the first implication of the life cycle of motorcycling is that expensive motorcycles are going to take an even larger hit than they have in 2008-2009:

The bulk of Gen X-ers are still a few years out from that decision to return/to learn to ride.  The market for expensive motorcycles then is likely to continue to shrink as Boomers pass the last new bike threshold and exit riding. Expensive motorcycle market is likely to begin to rebound in about five years as sufficient numbers of Gen Xers re-enter riding or find it for the first time. But because Gen X is so much smaller than the Boomers, the market for expensive motorcycles won’t be at the levels it has been in this last boom. That is, not  until the Echo Boomers return to riding or find it for the first time 15-20 years from now. And, even then, it won’t match this last Boomer boom.

Otoh, if Echo Boomers follow the pattern, the market will be very good for less expensive motorcycles for at least 10 years.

As a consequence, marques that offer both inexpensive models and expensive models are positioned to catch the young rider now and in the near future and, if there’s brand loyalty, then catch them again when they return as the older rider with more discretionary income.

Otoh, marques that specialize in high-end motorcycles are not as likely to do as well in the near future.

BMW, Harley-Davidson and Ducati are some of the marques that are most likely to suffer the most in the next five years—at the least—if they are not able to develop less-expensive entry models.

Harley’s subsidiary, Buell, as I reported in a prior entry, was the only division that was still experiencing growth as the market for expensive Harleys was shrinking. Buells were far less expensive than Harleys and attracted a much younger demographic. Buell also was visible in the racing world while Harley racing is most definitely a niche attraction. Harley’s decision, then, to discontinue the brand takes Harley even farther out of position to take advantage of the Echo Boomers who are getting ready to ride because of Harley’s singular entry in the less-expensive bike market—the several varieties of Sportster.

On the other hand, the Big Four, among others, that have extensive less expensive models are in the best position to capitalize on the huge Under-30 Echo Boomer potential market.

But what kind of motorcycle are Under-30s in the Echo (not to mention Generation Z or the New Silent Generation) likely to ride? That’s the subject of the next entry.


[i] Wanted: Easy Riders The Aging of the German Motorcycle Rider Population and its Implication on the Motorcycle Market by Kristjan Ambroz and Camilo Olaya, 2006.

 

[ii] Ibid.

[iii] This is not to justify how Harley strong-armed the AMA in recent years to change the rules to allow Buell’s participation.

When good icons go bad: Why Harley will struggle in the future

November 9, 2009

In the USA, motorcycles are only 3% of total road users—but 100% of the population would recognize the brand name Harley-Davidson. Not only that, most would assume that all street/cruisers are Harleys. So it’s no wonder that for well over a decade those in academia and the business br_258-67117c_harley_bar_and_shield_dvdworld are enthralled by how Harley did it and the fanatical customer loyalty the brand inspires. As many Harley aficionados love to brag, who else tattoos a company’s logo onto their skin?

The brand identity became a straitjacket: And that’s exactly the problem; the brand identity became a straitjacket the Motor Company has not been able to escape. Because Harley was unimaginative, fearful and too focused on quarterly results rather than long-term sustainable success, Harley may very well end up courting bankruptcy for the third time in the next decade. But it’s current and future woes will not be because of the choices consumers make as adults but what they experienced as children.

First Encounter of the bonding kind: Marketing consultant and psychoanalyst Clotaire Rapaille is “convinced that a person’s first encounter with an object or idea shaped his or her emotional relationship with it for life.  In large part, he believed, this explained American’s fascination with the SUV.[i] It also begins to explain why men 40 and older love Harleys.

Particularly because research also shows that both men and women who start riding as adults admired an extended family member or a neighbor who rode and rode on the back at least once. Generally, that someone was younger than the child’s parents and, in all cases, that person was admired as “cool”.

From Brand to Iconic Brand Douglas B. Holt in How Brands Become Icons[ii] describes how certain brands tell a “story” that are confluence points of socio-cultural forces–something about that brand sums up much greater and more complicated things such as Apple, Coca-Cola, Nike–and Harley.

Harley the brand became Harley the icon, he wrote because the negatives in the image of motorcycling and motorcyclists were transformed into positives by changing the “story” the brand told:

The positive image of motorcycling The negative image of motorcyclists is such a cliché it needs no discussion. But what Holt failed to note was that there was also a powerful set of positive images associated with motorcycling and their riders in the culture when the then_came_bronson-showcurrent middle-aged Harley rider was young. For example, there were shows like Then Came Bronson and CHiPs which had a powerful influence on young men’s imaginations.

As John G. Hanhardt points out, “In films which the motorcycle features predominately, the biker/hero manifests a desire to control his destiny and expresses his independence from the state, invoking heroic themes that have always been a part of the mythology of the American way of life…the lone rider…was both a fearless and a vulnerable explorer, an independent hero who was confronted with problems he has to solve by himself.”[iii]

It wasn’t just movies such as The Wild One or Easy Rider or Harley Davidson and the Marlboro Man but ones like The Great Escape. m1x00124_stevemcqueen

Films and TV, Hanhardt went on to write, showed the motorcyclist was “looking for himself within an increasingly industrialized and homogenized society. Although the motorcycle is occasionally demonized, it is overwhelmingly represented as the vehicle for romance with a youthful yearning for freedom.”

In many ways, that 50s-70s motorcyclist was the reinvention of the cowboy—something many have noted. Holt, though, particularly zeroes in on the gunfighter part of that myth that was later transformed by Reagan into “heroizing [sic] the rough-and-tumble gunfighters as men-of-action who can single handedly save the country.”

That kind of story would resonate with the men who grew up watching not just the bikers in those films and TV shows but westerns and WWII war films that also evoked those themes. Events in society such as the Cold War, JFK’s assassination and other factors also hit these same messages. At the same time, society was going through massive changes in the 60s and 70s. Regardless of whether one shared the political or social views espoused, the radical, the rebel, the one who boldly and publicly lived according to their point of view was lionized by the media. The man-of-action doing something rebellious was admirable—and cool—to the youth of America.

Three stages of Coming To Harley: That cohort grew up and some of them became the working class man in an age when production jobs were disappearing—and rice bikes were kicking up road debris in Harley’s face. The positive gunfighter image of the motorcyclist, Holt says, spoke to these men by giving them a positive “story” that was a counterpoint to what they saw happening in America.

Harley specifically fit that story: the last American made motorcycle was a symbol for these men holding on to American “frontier values against the alien ideals proposed by the middle-class people living on the coasts.” It was also the time of Easy Riders magazine and the rise of ABATE—and the last certainly fit the mold of the independent man fighting alien ideals. These were rebels with a cause.

But some of that age group that had been formed by those images grew up to be white collar professionals—a group that wasn’t affected by the loss of production jobs and so forth. The motorcycle didn’t resonate for them…yet. Things were good for them and then came the Reagan years and the recession.

The next step in the transformation began with Malcolm Forbes. According to Holt, Forbes “crafted the Harley gunfighter [rider] as a distinctly capitalistic figure. Harley riders were warriors championing capitalism and liberty in the face of socialist threats” who had the “virility to reinvigorate society with libertarian values…Being a man meant pursuing the life of a rugged individualist manager, as an entrepreneur willing to take death-defying risks bother professionally and personally.”

But, according to Holt, it was Reagan who, for his own purposes, utilized the American Frontier myth and the man-of-action gunfighter who could save the world—something very appealing to the middle-class (and business people). And, coincidentally saved Harley by instituting the infamous tariff. “Harley symbolized the revitalization of U.S. economic power that was possible….” And it worked—Harley was the embodiment of Forbes’ philosophy and Reaganomics. And the “story” the brand symbolized appealed to the upper-middle and upper class as well as the working and middle class: all men were Terminators, so to speak, astride a Harley. Between Forbes and Reagan, then the groundwork was laid for the Rich Urban Biker.

By the mid-1990s, then greater currents in American culture and the elevation of ideals that resonated with the image of the motorcyclist had created a perfect storm across all socio-economic classes of (white) Baby Boomer men who found that Harleys expressed something about who they were and what they believed in.

Co-Opted not Co-authored: But this transformed more socially acceptable image of the motorcyclist wasn’t the result of effort by the Motor Company. Holt (and many others) say the brand was “co-authored” by those who used it—that the consumer created the brand identity along with the company. It was a classic case of trickle up, however, where customers and culture were the creative ones who made Harleys relevant. Harley brilliantly recognized that and co-opted what consumers did and realized it was selling a dream, a lifestyle rather than just a product and cleverly marketed the dream during those years.

And here’s the thing: for many of the middle-aged riders, it really was the immaterial that they were purchasing—few of these Harley riders actually put many miles on the motorcycles they bought. It was what Harley stood for that they were buying, not the activity.

The very confluence of images and issues that made Harley so successful, however, assured that the brand would reach market saturation at this specific time in history and that  the seeds of future failure had been sown decades before.

The brand identity though was so strong and so set and so integrated with specific cultural forces and appealed so strongly to a specific narrow range of ages that it became inflexible and unable to adapt without the danger of alienating the customer base. Harley’s five-year task force in the mid-1990s recognized that and also identified another problem: the brand identity didn’t attract minorities, women or young men.

Translate to a new time or die: According to Holt, brands must be able to translate the core “story” to meet the new times to continue to be successful. Brands that cannot do it lose market share. But that’s where Harley failed: the very rigidity of the iconic image meant it wouldn’t appeal to minorities, women or young men:

The number of women Harley owners did expand over the past decade to 12%.[iv] However, as Harley said for years, it’s hard to tell how many ride themselves and how many are the owner of record due to a the man in their life’s poor credit record. And, according to Harley’s own demographics, women’s ownership flat-lined in 2005 at 12% and had only risen 1% since 2003—iow, Harley had hit market saturation with women three years before it hit it with (white) men. In 2009, however, the MIC Owner survey found that women were 23% of the riding population in 2008. These women had the same cultural background as the men who grew up to choose Harley. However there was Women’s Lib that influenced these women and there was—and still is—an undeniably chauvinistic and sexist image to Harleys that the Motor Company did nothing to counter even while attempting to attract women riders. This Easyriders Magazine cover “uncovers” alot of that disdain women have towards the Harley lifestyle image. Easyriders_06_84_FC

Much more can be said on why women do not respond to Harleys—but that can wait until another entry.

When it comes to minorities, there has been an vibrant motorcycling culture in the African-American and Latino cultures since at least WWII and it continues to grow.[v] Throughout its history, Harley hasn’t discouraged racial minorities from buying Harleys—however, for most of its existence, it did nothing to encourage them either. And the public perception of a link between Harleys and Hells Angels, who did not allow African-Americans to join, gave an appearance of racism.

Minority participation whether on Harleys or sport-type bikes has been urban-based and segregated—though why that is lies beyond the scope of this essay. The net result is that little is known about non-white Harley riders and the public perception is that Harley owners are overwhelmingly white—which is, in fact, the reality.

img_about_bike_LTR While Harley claims it has worked to increase minority participation, that’s not evident on the official Harley site.  No matter what link one clicks on, there’s photos of white men well over 30 and some women—but there was only one place where there’s and Latino or African-American presence is in the Rider’s Edge section. While three (white) women are heard among the four video clips and the one young (white) man, and one middle-aged Latino, the African-American who is in the class doesn’t nor does the older African-American on the range, which is simply odd.

There’s also one tiny picture of a black couple in the 2008 Annual Report on page 11, and Harley’s official demographics gives five years of data on age, gender and income—but not race.

Harley also intensely pursued a policy of big-box dealerships that moved them away from urban areas and coincidentally to areas with a high population of white residents.

Nor has Harley made an effort to raise the public profile of such African-American Harley-riding clubs or individual riders to the mainstream public. Worse, yet, Harley has even less appeal for young minority riders—and minority young women—than it does for white young adults.

Once again, this is not to say Harley is racist. It just appears that only older white men ride Harleys. By all appearances, then, Harley is a brand only white aging men can love. As the bulk of the Baby Boomer generation is now well over 40, this does not bode well for future company growth.

Short selling the stockholders: Yet according to the US Census, females are just over 50%, Blacks are 12.8%, Hispanic/Latinos are 15.4%. of the population. That’s an awful lot of potential market to fail to reach. Analysts have given more and more attention to Harley’s age problem but have not even noticed how white–and male–the brand identity is nor discussed how both those will affect the Motor Company’s future growth. Nor do stockholders appear to be aware of how inept Harley has been in trying to expand its market–or how blazingly successful other motorcycle manufacturers are at attracting the young, women and minorities.

More critical to Harley’s success or failure in the immediate future and beyond is why it doesn’t attract young men and women. And that’s the subject of the next entry.


[i] Bradsher, Keith. High and Mighty: The Dangerous Rise of the SUV. Public Affairs Press. New York. 2002.

[ii] Holt, Douglas B. How Brands Become Icons. Harvard Business School Press. Boston, MA. 2004.

[iii] Hanhardt, John G.,“The Motorcycle on Screen”, Motorcycle Mania: The Biker Book. Guggenheim Museum. p.13. p. 99.

[iv] Various Harley documents give different numbers but most often one between 4-5% as women owners prior to 2003.

[v] See Black Motorcycle Clubs: http://www.blackmotorcycleclubs.net/ and the list of clubs available on a link there or list at http://www.blackrefer.com/black_motorcycle_clubs2.html but note that almost all of them are either all sports bikes or mixed and few (except those that are directly fostered by Harley) are strictly Harley clubs.

How the Harley blew it: 10 critical mistakes that will affect it both now and in the next boom cycle

November 4, 2009

Nothing, perhaps, illustrates the recklessness and incompetence that’s reigned at Harley-Davidson over the past several years than a glimpse at the operating income from last year at this point to this year at the same point for Harley-Davidson Financial Services (HDFS).

HDFS operating income YTD

As you see, in this particular area HDFS turned completely upside down to the profit it made in 2008 (which was lower than it was in 2005).

While this may appear to be the result of the recession, it’s not—and neither is the lower shipments:

H-D shipments YTD

While both the recession and tighter credit requirements affected sales for a year, growth had been slowing since 2003 and had peaked in 2006.[i] The boom, then, was over for Harley at the end of 2006.[ii] By 2007, Harley’s shipments had dropped by 2.7% at the same point in the year. In 2008 they had dropped by 9% and this year, shipments were down 17.5%.

Growth had slowed for the Big Four as well but the boom persisted for smaller marques. And it persisted for motorcycles that were neither cruisers, customs or tourers. Those weren’t the kind of bike Harley made. It was, however, the kind of bike Buell made. The tiny subsidiary enjoyed an erratic growth while its huge brother was beginning to slide; Buell had 10% increase in shipments in 2006 with a 7.6% drop in 2007 and almost a 14% increase in 2008.

This indicates the Harley line had hit market saturation before the recession hit, while Buell—though shipments were miniscule—was still growing.

Iow, the recession and newborn bust cycle exacerbated rather than caused Harley’s troubles now—and in the future. In fact, the bust and recession reveal the mismanagement of one of America’s most famous brands.

Ten mistakes Harley-Davidson made

Five of them were bad business decisions—and some of them were shared by many corporations over the past few years. Some were simply errors in judgment—something shared by many businesses large and small:

  • Subprime loan policy and dependency on securitization.
  • Locking itself into a too-rigid conception of the brand;
  • Buying MV Augusta too late then selling it as a temporary fix.
  • Too slow to recognize the boom cycle and too slow to take advantage of it.
  • Almost everything they did about Buell from first to last.

But five of them relate to a failure to understand motorcycling, which, after all is its core business:

  • Mismanaging the dealer relationship;
  • Misunderstanding how Harleys became Harleys;
  • Inability to translate the brand for a new generation;
  • Failure to produce an off-road bike;
  • Failure to understand the Buell brand and how to position it;

These problems boils down to one simple thing: they treated Harley as if it was a business like any other.

Over the next few entries, we’ll look more closely at where Harley went wrong—and what it can do to regain market share in the future.


[i] And that growth was inflated due to H-D’s channel-stuffing and winter-financing that inflated 4Q growth and, when the boom ended, had an increasingly severe effect in 1Q and then 2Q shipments.

 

[ii] And then only because H-D was still channel-stuffing and offering winter financing and free storage to dealers. This inflated the number of shipments and making it appear to investors and stockholders that H-D was doing better than it really was. The overflow shipments from the prior year then deflated shipments in the first quarters—and then in the second as demand slowed.

Is there a bad driving gene—and does it have motorcycling/rider ed implications?

November 2, 2009

According to a University of California, Irvine press release, bad drivers may have their genes to blame.

The press release summarizes a study published recently in the journal Cerebral Cortex led by UCI researchers found people with a certain gene variation performed more than 20% worse on a driving test than those without the gene and then did worse than other participants when they returned four days later to take the test again—and they also retained less of what they had learned.

The study had 29 people learn to navigate “tough-to-navigate curves and turns” on a simulator “track” designed by UCI researchers.Seven of the participants (24%) had the gene variant and 22 didn’t. The test involved driving 15 laps while “[r]esearchers recorded how well they stayed on the course over time.” All participants returned four days later to retake the test.

The study states that about 30% of Americans have the gene.

The study found that with that gene variation did worse learning and then they did worse recalling what they had learned according to the senior author, Dr. Steven Cramer, neurology associate professor at the University of California at Irvine.

“This gene variant limits the availability of a protein called brain-derived neurotrophic factor during activity. BDNF keeps memory strong by supporting communication among brain cells and keeping them functioning optimally. When a person is engaged in a particular task, BDNF is secreted in the brain area connected with that activity to help the body respond.”

Earlier research had found that those with the gene variant “a smaller portion of the brain is stimulated when doing a task than in those with a normal BDNF gene.”[i]

“Behavior derives from dozens and dozens of neurophysiologic events, so it’s somewhat surprising this exercise bore fruit,” Cramer said.

Clearly, it’s early days yet—more studies would have to be done and, as Cramer pointed out, it’s unknown if this translates to crashes or not.

Iow, up to 30% of American drivers may have the “bad driver” gene—a lesser ability to learn at least more complicated driving skills and perform them competently and a lesser ability to retain what they learned.

Though this study was done using car drivers, it could be that the results would translate to learning to operate a motorcycle and riding it in traffic.

For years now, rider educators have complained that student quality has deteriorated. Many claim a larger number of students do not learn as well and/or perform as well.[ii] But it could be that there is a “bad rider gene”—or rather, those who have the bad driver gene also make bad riders but the public perception of riding and the way training was done didn’t keep bad drivers off the roads but kept bad riders off of motorcycles:

In the past—when instructors claimed student quality was higher—riders had a negative public image as well as dangerous. Because of the dangerous reputation, it could be that it attracted those who were more skillful drivers—ones without the gene variation.

But two factors also may have kept those without the gene variant from finishing the course or, if they did, riding on the roads:

In the prior curriculum, students were almost always counseled to drop the course if they fell once whether any injury was sustained or not. Also, in the previous curriculum the course was almost always taught over two weekends or several days (or evenings in some places). Although retention wasn’t directly tested, it was indirectly revealed.

It could be that even though no one knew there really was a bad driver gene those with it revealed themselves by poor performance and retention and were counseled out before they continued on to an injury crash on the range or in real life. It could be then that fewer students with the bad driver gene took the course—and of those who did dropped out before graduating or going on to ride.

This latest boom changed the image of a riders—and the changes in the Motorcycle Safety Foundation’s curriculum set out to give the impression learning was both fun and easy. It may be that a greater percentage of those with the bad driver gene took the course.

But Motorcycle Safety Foundation also had changed the course in three important ways:

  • It was now generally taught in 2.5 days—and some places taught it even in less time than that. Needed retention was a matter of hours not days.
  • MSF also strongly encouraged instructors to allow students to continue on no matter how many falls they had until the student counseled themselves out.
  • The curriculum also was dumbed down, according to many rider educators including less repetitions of skills and less difficult corners, lower speeds, etc.

Yet the bad driver gene study showed that poor performance over repeated laps revealed the bad driver gene.

It could be, then, that the percentage of bad students hasn’t changed but that changes in how instructors are instructed to coach and changes in how students are taught allow more of those with the bad rider gene to progress both to the point of serious injury or to graduate and end up in crashes on the road.

Hopefully, more research will be done on drivers—and some research at all be done on riders.


[i] It also noted that people with the variant also don’t recover as well after a stroke However, when it comes to neurodegenerative diseases such as Parkinson’s, Huntington’s and multiple sclerosis, those with the gene variant keep their mental acuity longer.

 

[ii] Even though the reported deterioration was simultaneous with the change in curriculum to the Motorcycle Safety Foundation’s Basic RiderCourse and an increasing number of subpar ranges and an increasing number of instructors who were trained using the new instructor’s curricula