Market Penetration

What is the outcome of a product over penetrating a market? Can you over pentrate a market?
Can you have your cake and eat it too? All companies want to build strong brands; however,
some companies want to build exclusive brands. Case in point Harley Davidson Motorcycles.
In the mid 90's it was cool to own a Harley. In fact, it was so cool that there were waiting lists to get your new Harley. Also, you could buy a Harley, ride it for a year or so, and then sell it for more than you paid for it. Harley Davidson had penetrated the American Motorcycle Market.
They had built this exlusive brand that people needed, wanted and were willing to pay top dollar and waite for it. So what went wrong. Well, first they increased production and the waiting list went away, which was a great thing for motorcycling enthusiast. However, now there were Harley Davidsons everywhere and everyone had one. People who didn't even ride motorcycles had a Harley because it was cool and a sign of status. Now, what happened? Motorcycle enthusiast wanted to be different, enter custom motorcycle manufacturers, like Big Dog, Indian, etc. Over exposure of the Harley Davidson brand made it lose its cache. Yes, they still have many customers and sales are strong, but they have changed the market place forever. They have opened up the market place to new competitors for the small segment of upper income motorcycle enthusiasts. Since Harley Davidson started to lose this segment, what have they done? Now they have their custom motorcycle division, which is taking back some of the segment. However, there will forever be those customers that feel HD has lost its cool.
The answer is you cannot have your cake and eat it too. Do you want to make alot of money and appeal to the masses or do you strive to be exclusive and live in that smaller market.