Marketing a War Machine: The History of the Hummer
|Vehicles by Hummer are among the most prominent and most commonly satirized gas-guzzlers. (Photo credit: Wikipedia)|
Designed for War
In 1979, the United States military open bidding for a series of massive contracts to obtain a high-mobility multipurpose wheeled vehicle and American Motors answered the call with gusto. Production began on the HMMWV “Humvee” and AM Motors soon looked to cash in on a civilian market for the vehicle. By 1992, American soldiers returning from the Gulf War wanted to own what had quickly become the jeep of late 20th century and with a boost from Arnold Schwarzenegger (who glimpsed military models while shooting Kindergarten Cop) the status of the Humvee as a icon in American history was assured. Today, the AM Motors Hummer is no longer sold, but General Motors produced the H1 based upon the military technology and the H2 and H3 Hummers based upon GM platforms up until 2010.
Initially, the military Humvee was developed to meet the demands of military budget decision makers. This included rigorous physical specifications and largely removed the need for AM Motors to invest in market research for geographic or demographic qualities (though perhaps marketing for psychographic and behavioral descriptors may have influenced those decision-makers’ personal preferences for the vehicle over the 3 other bids).
A Soldier Comes Home
|Robby Gordon riding a Hummer H3 |
on Dakar 2006 (Photo credit: Wikipedia)
From a geographic standpoint, the Humvee was not only produced in the United States, but as a tool used by the US military and featured in many news broadcasts, was a tailored made symbol of United States military superiority. The Humvee enjoyed a great reputation in the United States because of this and especially in the midwest and the southwest where even to this day generational poverty as a result of the industrial revolution has created communities that are largely reliant upon the military as a source of jobs and education for successive generations of young adults. When in the late 2000’s, a Chinese manufacturer tentatively announced a plan to purchase and produce the Humvee product line from GM, the response was less than positive. Americans familiar with the product had seen the Humvee as an American product of American innovation and the patriotic geographics roots of this were quite strong.
The End of an Era
Hummer’s demise was in many ways the result of a failure to target a demographic segment with sufficient buying power. While Hummer’s strongest customer base was found in the former military community, which is quite large, this demographic is not known for its high earning potential. Military members and workers often come from places where the opportunities for work and secondary education are poor. Even though they work hard upon reentering the workforce, many move back near their families in the same opportunity poor environments in which they grew up. Due to it’s 1992 debut pricing of over $40,000.00 (over $67,000.00 today), many of the consumers who would most wanted to have owned a Humvee were priced out of the market. For comparison, a 4 bedroom brick home in Huntsville, Alabama (a major recruiting region) costs just $51,000.00. Fortunately for the Hummer line, limousine companies, rappers, and celebrities picked up on the Hummer craze in the mid to late 90’s and these vehicles sold extensively to those individuals which may be why the Hummvee lasted as long as it did. Hummer made concerted efforts to court the ex-military military aficionado crowds with ads that spotlighted the vehicles’ many military inspired rugged features, but these marketing dollars might have been better spent on demographics who could afford to purchase the vehicle and as the gas crises of the 2000’s piled up, those who could afford to fill the Hummer’s gas tank.
Marketing of the Hummer to those psychographically inclined to make a purchase is not in question: AM Motors and subsequently GMC marketed the vehicle line to first militarily inclined citizens and later as a status symbol to celebrities. The vehicles appealed quite well to those in the military who had seen its worth first hand in service, to those who preferred military themed products because of an inclination towards outdoor and adventure activities, and to celebrities who wanted to turn heads at the red carpet. Behaviorally, these individuals participated in the activities As mentioned previously, the lack of buying power in the first 2 segments, and the lack of size of the third segment are more to blame for the Hummer’s eventual demise than any psychographic marketing shortcoming.
It is important to understand that the marketing of the Hummer was not wrong, simply ineffective. Specifically, the Hummer was marketed successfully to two demographic segments with a predisposition to appreciate the vehicle either for its military stylings or uniqueness. While it is certainly possible to market the Hummer as an upscale luxury SUV for 2 income households with families which could afford the vehicle on the basis of qualities like safety and luggage capacity, it might be more effective to keep existing Hummer marketing and simply find ways to reduce the cost of the vehicle’s production. Purchasers of Hummer H3’s and H3T’s were not buying Humvee technology, but instead a GMT355 pickup kitted out with a Hummer-look chassis (the same underpinnings produced the Chevy Colorado and GMC Canyon). Sibling-product Chevrolet Colorado sold the same underpinnings with a pickup-truck chassis for just $17,475 base price in 2012, while the 2010 H3T started in the mid-$20,000’s. The savvy GM executive who wished to save the Hummer line might have kept making H3’s and H3T’s, switched some steel body elements out for plastic to drop the price, and come up with a robust customer financing program to push at Hummer dealerships.
From a business perspective, the demise of the Hummer may be what GM intended all along. Companies do not produce products, even when they are able to, for below a certain profit margin because their time resource is better expended in producing higher profit margin goods. Railroad companies will leave old track lying in a ditch abandoned because even though the cost of recovery is profitable, other business ventures generate higher profits in the same time. This is another possible interpretation of why GM allowed the Hummer to die a slow death rather than shift marketing focus or adjust production costs.
- 2010 HUMMER H3T Truck. (n.d.). AutoTrader. Retrieved January 28, 2014, from http://www.autotrader.com/research/car-models/2010-HUMMER-H3T/19224/4WD-4dr~ratings.jsp
- Largest Share of Army Recruits Come from Rural/Exurban America | Daily Yonder | Keep It Rural. (n.d.). Daily Yonder. Retrieved January 28, 2014, from http://www.dailyyonder.com/largest-share-army-recruits-come-ruralexurban-america/2009/03/02/1962
- Williams III, G. C. (n.d.). Hummer is the ultimate off-road vehicle. Maritime Hummer. Retrieved January 28, 2014, from http://www.maritimehummer.com/200.html
At ChristopherLotito.Org, subscribers will find all the information they need to educate themselves and their families about the issues that effect their lives. A Drew University graduate, Christopher Lotito is a 10 year veteran volunteer within his municipal government in Pequannock, New Jersey. Lotito is also an accomplished local author and possesses a great depth of knowledge in both New Jersey history and flood control issues which he puts to use as an independent researcher.