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Home » News » National

Tuesday, May 19, 2009

Consumers frugal in rating brands

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A sales lot in Benton, Ark., is filled with Hummers, as analysts say buyers are losing interest in gas-guzzling sport utility vehicles and trucks. General Motors Corp. is considering an overhaul or sale of its brand.

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By Andrea Billups

The Hummer has become a value bummer in the sagging economy, topping the list of big-name brands that are losing their consumer appeal.

The military-inspired Hummer was big with power types when General Motors Corp. first put it on the market in 1992. But the jumbo-sized vehicle has since become a symbol of American driving excess with its go-anywhere wide body and low gas mileage. It now ranks dead last in an online survey that asked 300,000 adult consumers to rate the value of 1,025 brands from 48 product sectors.

In the online BrandIndex survey, first reported in the marketing trade site BrandWeek.com, value-minded consumers also panned the cable video network MTV, java giant Starbucks and the energy drink Red Bull.

The two brands that offered the most perceived consumer value were "good for you" TV destinations: The History and Discovery channels ranked No. 1 and 2.

Sears' tool- and parts-maker Craftsman, retailers Target and Lowe's and sandwich shop Subway also made the "most value" list. Clothier Abercrombie & Fitch and financial giants Citibank and AIG were among the lowest-value scores.

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"It doesn't surprise me that some brands associated with extravagance or convenience would be potentially negatively impacted," said Christopher A.H. Vollmer, a partner at Booz & Co. and a marketing-trends assessor. "We noticed several months ago that consumer attitudes were shifting more toward frugality overall and that people are thinking carefully around how they would be spending and what they would be consuming regularly outside the home."

Hummer saw its retail sales fall 61 percent in April, and the brand is now on the chopping block as GM edges closer to a possible bankruptcy and to a major downsizing as part of the federal government's auto-bailout plans. GM is looking for a buyer but has said that if it doesn't find one, Hummer production will cease at the end of the year.

So while the Hummer brand is not technically dead yet, it definitely needs an image overhaul, said Mr. Vollmer, who notes that Hummer had its heyday in an era of relatively cheap gas.

"It certainly needs to go through a fairly significant repositioning if it hopes to reclaim a sales level where it was four or five years ago," he said. "It could be repositioned as something a lot more eco-friendly, perhaps the best vehicle associated with light materials ... and yet still cultivate that rugged, outdoorsy, take-me-anywhere image. But it fundamentally, in this economy, has to focus on fuel efficiency and come up with a story that is likened to that."

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