Key points:
1. Minnesota-based Victory Motorcycles leverages its parent company’s expertise in small engines to break into the motorcycle market.
2. But it doesn’t shy away from the fight: The company focus on high-end touring and custom bikes boldly puts it up against Harley-Davidson.
3. Victory has a fighting chance, but its growth will remain stunted unless it defines more clearly what it stands for, rather than focusing on Harley.
I am not a motorcycle guy.
That’s not a negative statement. Nor is it a positive statement. I just have no real experience with motorcycles of any kind.
But despite that, an ad at the Blaine, Minnesota Green Mill caught my eye. The basic ad copy read: If you were interested in an American-made bike, and if you cared about performance and reliability over “just a brand name,” then you should ride a Victory Motorcycle.
The ad mentioned a few specific performance and reliability measures but made no specific mention of the “other” American-made motorcycle in question. But for a branding guy, there was no question to which brand Victory was referring. Of course, Harley-Davidson.
As soon as I realized the comparison, it became brilliantly clear the uphill challenge Victory faced. From a branding perspective, the upstart fights against (perhaps) the best-regarded American vehicle brand for the last 30 years—a symbol of rebellion, style, and guts. It’s as American as apple pie, and more “American” than Chevrolet.
My first thought was “good luck.” Victory has no chance. The fight against the Harley brand was a money pit and ultimately doomed to fail.
But I was not sure my first impression was correct. It nagged at me. So I decided to do some homework. I learned something; and perhaps I can shed light on Victory’s (not so “pie in the sky”) chances against the rugged industry giant.
Born in 1998, Victory Motorcycles is part of Medina, Minnesota-based Polaris Industries. Yep, the same guys who bring you snowmobiles (snow machines?) during the winter months and ATVs for trail riding. That was news to me and made my continued search even more interesting. This was a Minnesota company taking on the Harley marketing machine.
(It also jogged my memory on the now defunct Excelsior-Henderson Motorcycle Company, also hailing from Minnesota, and the innumerable problems that brought down that promising company.)
From the Polaris perspective, motorcycles make sense. Snowmobiles are a great market, but they are limited geographically and they are limited to the winter season. ATVs help break out of geographic and seasonal limitations, but they are off-road and specialty use only. Polaris knows a thing or two about building a solid small displacement engine, so motorcycles are a natural extension.
Beyond the manufacturing efficiencies and expertise, here’s where the market dynamics get interesting.
Motorcycles, as a market, can be sliced up into four major sub-markets:
• “Standard” bikes—utilitarian, but not scooters—from $2,700 to $4,000 and 50cc to 250cc
• “Performance” bikes—or “crotch rockets”—from $5,000 to $6,000 and 251cc to 1200cc and up
• “Touring” bikes—the cross-country models, built for comfort—from $10,000 to $18,000 and 251cc to 1200cc and up
• “Custom” bikes—Harley’s main playground—from $12,000 to $25,000 and 251cc to 1200cc and up
Victory does not compete in every market, just the most profitable ones—upper-end touring and custom motorcycles. Right up against Harley-Davidson. Without fear.
That upper-end market is a perfect choice for Victory as a small manufacturer and also proves to be a market with lots of room for cannibalization (even in a rough motorcycle economy).
Okay. So Victory chose the correct segment. But will anyone buy the bikes?
To help answer that question, we need to look at the changing demographics of the motorcycle buyer. In 1985, the median age of a motorcycle buyer was 27.1. He was male (almost 100 percent of the buyers). He was unlikely to have attended college and, if he did, he did not complete any sort of degree. His average income (adjusted for inflation) was $25,600.
Fast forward 20 years. The median age is now 40.1. But it is not just that the average buyer got older—the whole segment grew. One in 10 owners is female. One in 10 owners has a master’s or doctorate degree. The average income has more than doubled to $55,850.
Wow.
Think they can’t afford high-end bikes? Think again.
So, let’s quickly summarize.
Smart move number one: Victory has the guts to go head-to-head with Harley-Davidson (and to a lesser extent, BMW and Honda) in its most profitable segment. Smart move number two: Victory has the buyer-psychology understanding to put an emphasis on performance and reliability, using its manufacturing expertise to bolster its position. Smart move number three: Victory has the pulse on the new demographic, understanding the importance of style to attract a new type of buyer.
Despite that, Victory has a small (albeit devoted) community of owners.
What is holding it back? The Victory brand position could use some work.
To come full circle to the ad I described earlier, Victory described more clearly what it is not (a Harley), much more clearly than what it is. A comparison is an interesting ad strategy and certainly highlights points of difference, but even when you are smart enough not to mention your competitor directly, your advertising simply serves to remind your buyer of its more-popular option.
It is time for Victory to step up. It has to define what “Victory” stands for. Not what a Victory motorcycle is better than, but what it means to ride one.
And I think the current recession is a perfect opportunity. Buyers are scrutinizing and rethinking their purchases. If there is any chink in the Harley armor, it is its own success. Harley has become what its brand initially rebelled against. Harley is popular. Almost commonplace. Certainly a bit watered down.
There is always a place in the market for the new rebel. The new symbol of counter-culture on the roads. A new symbol for status and style.
That strategy may not get Victory to 25 percent of the market, like Harley enjoys, but it’s a start.
Nothing against Harley, but I’m rooting for “victory” for the home team.
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