The Same Hummer for Less

The Same Hummer for Less

GM used many variables while segmenting the SUV market. The major focus for segmenting the SUV market was through demographic variables, specifically; age, income, occupation, and generation. GM also used a few variables in the psychographic and behavioral segments; lifestyle and occasions respectively. The use of each of these variables can be seen when comparing the target markets chosen by GM, for the H2, and AM General, for the original Hummer.

AM General’s target market selection was so small and specific they were essentially marketing to two niche markets. This became evident when the cost of the product was in excess of $100,000 and that the product had a very specific use. The original Hummer only targeted the benefits and personality variables of market segmentation, thus causing the two niche markets. The customer either wanted the best off-road vehicle on the market or they wanted to flaunt their successful life.

GM was more open-minded in the selection of their target market, however, the reduction in the price, by more than half that of the Hummer, allowed the H2 to be affordable to a larger segment of the market. GM selected a target market by using more demographic variables than AM General had for the Hummer. GM had a large specific group of people they wanted target, unlike AM General’s small target. GM was targeting the baby-boomer generation, specifically the wealthy baby-boomers that had influential jobs. Moreover, GM also marketed the H2 to women as opposed to only men, which essentially doubles the target market.

Once GM had selected their target market, they attempted to position the H2 in the luxury SUV market. GM attempted to do this by not focusing on the H2’s off-road ability, but to show their customers in a different light. They began airing advertisements using women drivers and a child building a soap-box Hummer. In conclusion, it became apparent GM was attempting to take the H2’s image away from the rugged off-road driver, of the original Hummer, and try to show a more luxurious side of the H2 by showing the customers who they though should purchase a H2.

The positioning of the H2 in the market also encouraged people to purchase a H2, even though they would probably never take the vehicle on an off-road adventure. The success of the H2 shows GM successfully changed the position of the Hummer brand name in the market.