Harley Davidson 2014 Annual Report Download - page 6

parties. The Company diligently protects its intellectual property, including patents and trade secrets, and its rights to
innovative and proprietary technology and designs. This protection, including enforcement, is important as the Company moves
forward with investments in new products, designs and technologies. While the Company believes patents are important to its
business operations and in the aggregate constitute a valuable asset, the success of the business is not dependent on any one
patent or group of patents. The Company’s active patent portfolio has an average age for patents of approximately seven and a
half years. A patent review committee, which is comprised of a number of key executives, manages the patent strategy and
portfolio of the Company.
Trademarks are important to the Company’s motorcycle business and licensing activities. The Company has a vigorous
worldwide program of trademark registration and enforcement to maintain and strengthen the value of the trademarks and
prevent the unauthorized use of those trademarks. The HARLEY-DAVIDSON trademark and the Bar and Shield trademark are
each highly recognizable to the public and are very valuable assets. Additionally, the Company uses numerous other
trademarks, trade names and logos which are registered worldwide. The following are among the Company’s trademarks:
HARLEY-DAVIDSON, H-D, HARLEY, the Bar€& Shield Logo, MOTORCLOTHES, the MotorClothes Logo, HARLEY
OWNERS GROUP, H.O.G., the H.O.G. Logo, SOFTAIL, SPORTSTER and V-ROD. The HARLEY-DAVIDSON trademark
has been used since 1903 and the Bar and Shield trademark since at least 1910. Substantially all of the Company’s trademarks
are owned by H-D U.S.A., LLC, a subsidiary of the Company, which also manages the Company’s trademark strategy and
portfolio.
Marketing – The Company is executing a multi-generational and multi-cultural, global marketing strategy. The Company
measures the success of this strategy by monitoring market shares (where available) across its various customer definitions, as
well as monitoring brand health in various markets.
U.S. retail purchasers of new Harley-Davidson motorcycles include both core and outreach customers and are diverse in
terms of age, gender and ethnicity. The Company defines its U.S. core customer base as Caucasian men over the age of 35 and
its U.S. outreach customers as women (Caucasian, age 35+), young adults (ages 18-34), African-American adults (age 35+),
and Latino adults (age 35+). In 2013 (which is the most recent data available), for the sixth straight year the Company was the
market share leader in U.S. new motorcycle registrations (all cc's) within the core-customer segment and in each outreach
customer segment. (Source: R. L. Polk€& Co. 2013 motorcycle registration data from IHS Automotive)
In 2014, the average U.S. retail purchaser of a new Harley-Davidson motorcycle had a median household income of
approximately $92,800.€More than three-quarters of the U.S. retail sales of new Harley-Davidson motorcycles were to
purchasers with at least one year of education beyond high school, and 34% of the buyers had college/graduate degrees.
(Sources: 2014 Company Studies)
Outside of the U.S., the Company's definition of core and outreach customers varies depending on the profile of its
customers in each market. In general, the Company defines it core customers outside the U.S. as men over the age of 35 and its
outreach customers outside the U.S. as women and young adults.
The Company’s products are marketed to retail customers worldwide primarily through advertising and promotional
activities via various broadcast, print and electronic channels. Additionally, local marketing efforts are accomplished through a
cooperative program with the Company’s independent dealers.
Customer experiences have traditionally been at the center of much of the Company’s marketing. To attract customers
and achieve its goals, the Company participates in motorcycle rallies around the world and also in major motorcycle consumer
shows, racing activities, music festivals, mixed martial arts activities and other special promotional events.
The Company promotes its Harley-Davidson products and the related lifestyle through the Harley Owners Group
(H.O.G.®), which has approximately 1€million members worldwide and the Company believes is the industry’s largest
company-sponsored motorcycle enthusiast organization. H.O.G.® also sponsors many motorcycle events, including rallies and
rides for Harley-Davidson motorcycle enthusiasts throughout the world.
The Company's Harley-DavidsonTM Riding Academy offers a series of rider education experiences that provide both new
and experienced riders with deeper engagement in the sport of motorcycling by teaching basic and advanced motorcycling
skills and knowledge. Since its inception, the program has trained more than 400,000 riders. The courses are conducted by a
network of select Harley-Davidson dealerships throughout the U.S., South Africa, China and Mexico, enabling students to
experience the Harley-Davidson lifestyle, environment, people, and products as they learn.
The Company offers Harley-Davidson riders the opportunity to experience riding opportunities worldwide through its
global Harley-Davidson Authorized Tours Program. Riders can also rent Harley-Davidson motorcycles worldwide from
participating dealers through the Company’s Authorized Rentals Program.
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