This paper addresses two related business ethics and strategy questions. The first examines the ethical and practical obligations a company faces when a dangerous product defect is discovered, covering proactive disclosure to executives, coordination with the Consumer Product Safety Commission, and crisis communication modeled on effective recall management. The second analyzes Harley-Davidson's challenge of attracting younger and more diverse customers, and how its Rider's Edge program fits within Porter's Value Chain as both a marketing technique and a service component designed to build a safer, more inclusive brand image.
When a dangerous product defect is discovered, disclosure to the CEO and other relevant members of upper-level management who are able to pull the dangerous chip from the market until the needed alterations are made is imperative. PR and marketing must also be consulted about the best way to address this negative development publicly. This must be done before actual injuries occur. A recent study found that "reactive recalls — recalls due to an incident, injury, or death — were more likely than preventive recalls to result in exchanges, which dramatically reduced the recall time" as well as reduced injury ("What companies must do to recover from a product recall," 2014). If the company is forthcoming, effective damage control is possible, but only if it acts proactively. Relevant government safety personnel must also be consulted at the Consumer Product Safety Commission so that information about recalling the product can be properly issued.
It is essential that the company takes control of the information being released to the press by being honest and upfront — much like Tylenol was when it was revealed that a disturbed person was slipping poison into its capsules — and makes a full disclosure of the risk, while being careful to note its relative rarity and the fact that the company rigorously safety-tests its products. Transparency in crisis management is a well-established best practice that protects both consumers and long-term brand equity.
"Recalls undermine trust in a specific brand and it can take the company a long time to recover from the damage to its reputation, but it doesn't have to take a long time if the company uses good crisis management tactics. Reducing the time it takes to recall a product will have a positive effect on consumers' willingness to purchase other products from the same company and, if the recall is handled well, the stock price may recover to the same level as before the incident" ("What companies must do to recover from a product recall," 2014).
For a company to remain relevant in the 21st century, it must continue to generate new customers, given that existing customers will gradually age out of the product. For Harley-Davidson, this is especially critical, since even the most dedicated riders will at some point have to hang up their helmets as they age. As one analyst observed, "Harley-Davidson is a brand whose sales depend disproportionately — almost exclusively, in fact — on middle-aged Caucasian males. Riders younger than 40 generally lack the time, interest, or the bankroll to buy a Harley. But by the time they get into their 60s or older, the noise and joint pain have begun to make riding lose its allure. You might still ride in your 60s, but you're doing it less frequently and you probably aren't buying a new bike" (Sizemore, 2013).
Harley-Davidson's new program to create a safer and more welcoming image is a way to attract new customers who might otherwise be intimidated by the company's tough brand identity and by the generally unsafe reputation of motorcycle riding.
"Rider's Edge as marketing and service strategy"
Always verify citation format against your institution’s current style guide requirements.