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1 MKT201 – Buyer Behavior Chapter 4 Supplementary Examples.

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1 1 MKT201 – Buyer Behavior Chapter 4 Supplementary Examples

2 2 Motivation and Values Motivation The motivation process: need, want, drive and goal Motivational strength – Explanations of motivation: Drive theory vs. Expectancy theory Motivational direction: Types of needs – Biogenic, Psychogenic, Utilitarian, Hedonic Motivational Conflicts – A-A, A-Av, Av-Av Classifying consumer needs – Murray’s need dimensions; Maslow’s hierarchy of needs Consumer Involvement – the motivation to process information 1.Level of Involvement: Inertia to passion; cult products 2.Many faces of Involvement: product, advertising, and purchase situation 3.Measuring Involvement: Involvement profiles and strategies to increase involvement

3 3 Motivation and Values Values – Values drive much of consumer behavior. Virtually all consumer research is ultimately related to the identification and measurement of values 1.Definitions – core values; value system 2.Measuring cultural values The Rokeach Value Survey LOV The Means-End Chain Model Syndicated Surveys 3.Materialism – The importance people attach to worldly possessions

4 4 Biological Needs Biological needs happen whether you want it to happen or not 1.Need for oxygen, water and food 2.Need for rest when tired 3.Need for being active when rested 4.Need for sleep when deprived of it for long 5.Need for regular elimination of waste production from the body 6.Need for having an even internal body temperature 7.Need for protection from the threat of physical environment like weather, natural calamities, wild animals

5 5 Discussion Devise separate promotional strategies for an article of clothing, each of which stresses one of the levels of Maslow’s hierarchy of needs: 1.Name-brand / designer-label 2.Warm & durable jackets or boots 3.Elegant dress or a tux 4.Protective equipment for amateur athletes (knee and elbow guards, helmets, goggles) 5.Anything you want to wear

6 6 Harley-Davidson at One Hundred: An American Story It's a classic American story. Boys get idea. Boys start company. Boys make lots of money. The Harley-Davidson Motorcycle Company turns one hundred this year (2002) and there are celebrations all around the World. Giant road tours snake from city to city bearing a portable Harley museum. Members of Harley Owners Group (HOG) Chapters stage their own special events. Harley-Davidson makes more than motorcycles. They also make Harley-Davidson logo merchandise. A lot of that merchandise is worn by the vast majority of people in the United States who don't even ride motorcycles.

7 7 Harley-Davidson at One Hundred: An American Story They may not ride, but they know the logo. The Harley- Davidson brand has recognition status rivaled only by the great multi-national brands like Coca-Cola. As if that weren't enough there is great financial performance. Since going public in 1986, Harley has increased earnings at an average annual rate of 37 percent. Only one other company that went public that year has done better. That other company is Microsoft. It's just about all a business could ask for. A brand that has achieved cult status and outstanding financial performance. That's what makes the story of Harley- Davidson so interesting. We want to know how they got there. And the answer is not in one story but in three.

8 8 Harley-Davidson at One Hundred: An American Story Beginnings and Survival The first story starts at the beginning. In 1903 William S. Harley (21) and Arthur Davidson (20) were acting out the story of inventor/entrepreneurs and tinkering in a 10 foot x 15 foot shed with a hand-lettered sign on the door that read, "The Harley-Davidson Motorcycle Company." They produced their first motorcycle right there. Arthur's brother, Walter, joined them in 1907. Soon the business was going so well that his brother William, who had a great job with the railroad, came on board, too. "Firsts" followed one after the other. The bar and shield logo was used for the first time in 1910. The first issue of Enthusiast magazine came out in 1916. It is now the longest continuously published motorcycle magazine in the world. 1917 brought World War I to the United States and Harley hardly skipped a beat. They sold twenty thousand motorcycles to the U. S. Army and emerged from the War even stronger.

9 9 Harley-Davidson at One Hundred: An American Story By 1920 Harley-Davidson was the largest of more than one hundred motorcycle companies in the world. Sales peaked at 27,000 motorcycles a year. Then came the Depression. The Depression hit everybody hard but it devastated motorcycle companies. By the end of it there were only two companies, Harley- Davidson and Indian, manufacturing motorcycles in the United States. At the bottom of the Depression only six thousand motorcycles were sold in one year in the entire United States. But World War II revitalized Harley's fortunes. The company sold almost 100,000 of their WLA model to the US military. After the war ended it took Harley just two and a half months to resume civilian production. That's the first story. As the post-War economic boom began Harley was in good shape. They'd grown up, survived the depression, and they were ready to grow even more. In 1947 Harley-Davidson introduced the classic black motorcycle jacket. It was the start of the Wild One Era and Harley's second story.

10 10 Harley-Davidson at One Hundred: An American Story The Wild One Era That same year a gang of motorcyclists rode into the town of Hollister, California and simply took it over. The police lost control and the motorcyclists ran amok. During a three day binge the motorcyclists roared up and down the streets in various states of undress, rode their motorcycles into bars, and terrorized anyone they could find. In 1953 the Hollister incident was immortalized in the movie "The Wild One." It was Marlon Brando's first lead role. The incident and the movie established an "outlaw" view of motorcyclists in the popular mind. Even though Brando rode a Triumph in the movie lots of folks associate the film and the outlaw motorcycle culture with Harley- Davidson. That's been fueled by the fact that Harley has been the motorcycle of choice for real motorcycle gangs like the Hell's Angels. For years Harley did pretty well, linked in popular imagination to Brando, the Hell's Angels, and outlaws in general.

11 11 Harley-Davidson at One Hundred: An American Story When Honda began importing its motorcycles into the United States in 1962 they took the position that motorcycles in general, and their smaller motorcycles in particular, were for nice people, not outlaws. They told their story in one of the most effective advertising campaigns of all time, "You meet the nicest people on a Honda." As one advertising historian says, "This breakthrough advertising shattered the myth that motorcycles were only for tough guys and rebels. It reached out and made Honda and motorcycling appeal to everyone." Meanwhile, back on the economic front, conglomeration was the order of the day. Managers believed that they could manage any kind of company even without knowing much about the business. Harley bought a boat company. In 1969 a conglomerate named AMF bought Harley. That's where our third story begins.

12 12 Harley-Davidson at One Hundred: An American Story The Near Death Experience Things just seemed to keep getting worse. Competition was hurting sales. Harley quality was pretty awful. And being part of AMF seemed like less and less of a good idea to both parties. In 1981 thirteen senior executives of the Harley-Davidson Motorcycle Company signed a letter of intent to buy the company from AMF. It was all official by mid June. Changes started to happen almost at once. Production quality started to improve. The company worked to improve profitability. In 1982, they began a system called, "Materials As Needed" (MAN), a just-in-time inventory system, designed to reduce inventories dramatically. The company put in place an innovative system called "Circles of Management." They worked hard to bring both workers and dealers into the fold by gaining their participation in key decisions. Things began to look up.

13 13 Harley-Davidson at One Hundred: An American Story In 1983 Harley introduced the Harley Owners Group (HOG). There are now over six hundred thousand members of six hundred HOG chapters at Harley dealerships around the world. It costs members forty bucks a year, and gives them a readymade community to go with their Harley and their logo merchandise. In 1986 the company went public. In 1987, it made it to the New York Stock Exchange. Today, a hundred years after its founding and just about twenty years after it re-established its independence from AMF the Harley-Davidson Motorcycle Company has attained cult status in many areas.

14 14 Harley-Davidson at One Hundred: An American Story Harley has achieved cult status with customers. Their customers simply think it is not only the greatest motorcycle in the World but the greatest vehicle. They not only ride Harleys, they wear Harley clothes and use Harley gear of all kinds. Probably the only other physical product that inspires that kind of devotion is the Macintosh computer. Both are fine products, to be sure, but they are also lifestyle choices. Harley has achieved cult status among investors. That's based on more than that 37 percent annual increase in earnings since going public. It's also based on recent performance where Harley has been up when the entire market has been down.

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