CASEAPPLICATION 25
7.Whatisthedifferencebetweentheinternalandexternalenvironment')Providefiveexamples
ofeach.^2
8.Whatisa competitiveadvantage?Howdoesmarketingcontributetothecreationofa competi-
tiveadvantage?
9.Discus~.thereasonsforstudyingmaiketing.
10.Giveexamplesofhowmarketingcommunicationdiffersfrompersonalcommunication.
Project
Survey 10 nonbusiness studentsandaskthemtoprovidea definitionofmarketing.Analyzethese
answerswithrespecttohowtheydifferandwhypeopledifferedintheirunderstandingofthistopic.
Writea five-pagereportexplaining.
CASEAPPLICATION
THEHOGISALIVEANDWELL
Aftermakinga remarkablecomebackinthe1980s,motorcyclemanufacturerHarley-Davidsonhad
two-year-longwaitinglistsalloverthecountry.Butthesuccessplacedthecompanyina familiar
quandary.ShouldHarleyexpandandriska marketdownturnorshouldit staythecourse,content
withitsgoodpusitionintheindustry?
"Toinvestornottoinvest,thatwasthequestion,"notesFrankCimermancic,Harley'sDirec-
torofBusinessPlanning."Dealerswerebeggingustobuildmoremotorcycles.Butyouhavetounder-
standourhistory.Oneofthethingsthatcausedpastproblemswaslackofquality,andthatwasthe
resultofa too-rigidexpansion.Wedidnotwanttorelivethatsituation.'
In 1989,thereputationofHarley-Davidsonwasexcellent.Harleyshipped30,000motorcycles
in1985;justfouryearslaterit shipped 44 ,000. Harley'smarketshareintheheavyweightbikecate-
gorywentfrom 27 %to 57 %duringthesametimeperiod. It wasregularlyturningaprofit-$53mil-
lionin 1989.
Atthesametime, however,themarketforhe avyweightbikeswasshrinking.Harley-Davidson
neededtoknowwhetheritsgrowthcouldcontinue."Weweredoingfine,butlookatthemarket,"
saidCirnermancic."Maybe, wethought,wecouldreversethesetrendsandbecomeanindustryleader,
somethingwehadn'tbeenforyears."
Anewkindofcustomerseemedtoholdthekeytomarketgrowth. White-collarmotorcycle
enthusiasts,or"Rubbies"(richurbanbikers),startedtoshoreupHarleysalesinthemid-1980s,adding
tothecompany'ssuccessandimage.Butwhetherthesepeoplewerereliable,long-termcustomers
wasanotherquestion.Harleyalsoneededtoknowif it shouldmarketitsproductdifferentlytodif-
ferentaudiences.A coreclienteleoftraditional"bikers"hadkeptHarleyafloatdUl1ngitsleanestyears,
andtheycouldnotbealienated.
Fromtheirresearch,Harleyidentifiedsevencorecustomertypes:theAdventure-LovingTra-
ditionalist,theSensitivePragmatist,theStylishStatus-Seeker,theLaid-BackCamper,theClassyCap-
italist, theCool-HeadedLoner. andtheCockyMisfit.AllofthemappreciatedHarley-Davidsonfor
thesamereasons:independence,freedom,andpowerconstitutedtheuniversalHarleyappeal.Also,
ownerswereveryloyal.
Loyaltymeantthecompanycouldbuildandsellmoremotorcycleswithouthavingtooverex-
tenditself.In 1990, Harleyexpandedtobuild 62 ,800bikes;in2000,it builtmorethan180,000.Based
onresearchandthestill-expandingwaitinglists,Harleyexpectsitsphenomenalgrowthtocontinue.
Inaddition,Harleyisexpandingitsproductline.Inearly2000,thecompanyintroduceda $4,400
bikecalledtheBlast,aimedatfirst-timeridersandwomen.
