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Home arrow Articles arrow 2008 : Market or Banquet Strategy?
2008 : Market or Banquet Strategy?
This autumn, the annual motorcycle shows in Paris, Tokyo, and Milan revealed a litany of new hardware designed to excite and enthrall the motorcycle masses.  Nearly every manufacturer in the world reported increased sales in the past two years, and as such responded by launching new models in every direction.

Some did this by widening their catalogues with extensions of popular lines, as BMW did with the addition of a middle-weight, 800 cc GS adventure-tourer, or Suzuki’s fully-faired GSX-F Bandit.  Others replaced existing pillars in their brand lineup, like Ducati with the new Monster, or Yamaha and the R6.

But the vast majority of OEM’s concentrated their resources on expanding into new sectors successfully occupied by others, stretching their brands to fill every gap and void in the marketplace.  Never before, or certainly not in many many years have we been so inundated with choice.  With the new Stelvio, laid-back Moto Guzzi now offer an adventure-tourer like BMW.  Aprilia, the pervayor of exclusive road scalpels for so many years, is now in the large capacity supermotard class with its Dorsoduro.  KTM has finally released its’ long awaited RC8 Superbike in production trim. And so on.  Nearly every major European OEM has ventured into the vast expanse of the scooter market, some, like Benelli, doing so by inventing interesting machines (Benelli is currently owned by Qianjiang of China, makers of the Keeway brand), most others by just re-branding products from genuine scooter OEMs, often of Asian origin.  Several notable examples such as Generic and Aprilia / Piaggio, accomplish this cross-pollination of vehicles across different brands successfully, because the products of these marriages have been gifted with new, original bodywork, marking them out from their donor siblings.  In most other cases, sadly, they have not. 

The scramble for market share seems to be the pervading message of this year’s show circuit.  Nearly every design professional and product strategist I spoke to at Paris and Milan talked of “finding the missing link” in their respective brand linup.  The smaller OEM’s were in a mad dash to behave like the Japanese did in the hay days of the 1970’s, offering all things to all people.  The Kymco stand was proud to display, alongside the impressive 700 cc twin cylinder Myroad, portable gas generators. Sachs, a motorcycle brand with over one hundred years of history, was pimping Chinese made commuter scooters of questionable quality next to high priced niche products like the Madass and XTC 125 sport model.  Cagiva, a respected Italian brand once famous for devastatingly beautiful motorcycles, presented a trio of low-rent Asian scooters, one of which could be seen in the same form sold under more than ten other brands on stands across the show.  What is the cost in terms of prestige and brand strength, to have these sad products occupying the same space as the universally admired C595 John Kosinski Grand Prix machine? 

OEMs need to make money, and the two principal methods of doing so are increasing sales or margins.  Selling large volumes of units in lower cost sectors of the motorcycle universe seems to be a quick way to achieve both higher net sales, while increasing brand presence, hopefully to entice consumers to higher priced and higher margin vehicles in the catalogue.  While both up and down-scaling brand image is possible and can be highly effective, it must always be done with care.  If done too hastily, or with too little attention to existing brand values, the consumers brand expectations are stretched beyond the boundaries of credibility with often catastrophic consequences.  Product design history is rife with examples of brand strategy disasters of this kind, from Renault’s abortive attempts to steal buyers away from the executive luxury car market with the Avantime and VelSatis; to McDonald’s flirtation with pizza in Canada in the mid 1990’s (McPizza); British Airway’s attack on the low cost flight market with Go Fly.  All of these were market failures because they failed to resonate with the existing brand’s values, customers or open a new segment.

The motorcycle industry has seen this before, but seems reluctant to learn from this history.  Derbi is still offering the Mulhacén 650, despite the fact that production is stopped.  While an excellent design (credited with MDA accolades) and a technically competent machine, the bike’s price / value ratio simply does not mesh with that of Derbi, even in its’ home market of Spain where the brand enjoys obvious benefits.

It appears that the current beneath the feet of the manufacturers is to fill every gap and void in the market, colonising unclaimed territory or dispute ones that still seem uncertain like European Empires of the 17th century.  Does every make need a 1 liter supermotard like Ducati’s Hypermotard?  Should a small niche manufacturer of street bikes take on BMW’s venerable GS with their own adventure bike?  Aprilia and Moto Morini seem to think so, contesting these very segments with their Dorsoduro and Granpasso 1200 respectively.  While no doubt clever, and perhaps mathematically superior to the aforementioned leaders, what empathic advantage do they offer?  How much of the Hypermotard or GS success are due to the Ducati and BMW brand strength, and the consistency that they communicate those brand values within those concepts?

It is not enough to make the best machine in a sector.  The best selling bike in any segment is rarely the best performing, cheapest, or even logical.  Witness the 8 year reign of the Yamaha T-Max as one of the best selling maxi scooters in the European market (long ago surpassed as the biggest, fastest, or best handling), to name just one example.  A designer or product strategist must always be completely aware of their brand’s value in the eyes of the consumer, and not confuse this with the brand’s own, self-imposed image of itself.  The T-Max works because it is of course, a highly competent machine (it is taken for granted that product quality is key), but mostly because it looks and feels like a Yamaha should, to them.  Those people are buying into what they perceive as Yamaha qualities.

Just because a brand can build something, doesn’t mean that it should.  Madly devouring every market niche otherwise becomes a case of appetites larger than stomachs.  The disturbing trends of the past shows, combined with the spiraling costs of fuel, materials, and the general economic slow down all point to a future full of OEM indigestion.

 

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- Michael Uhlarik is Principal of Type U Motorcycle Design S.r.l www.type-u.com

 
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