Most individual consumers will view the product as a discretionary expense.
Expansion beyond niche markets may be problematic, given the maturity and operational efficiency of established automobile manufacturers.
3 Alternative Market Segments.
The products of AM General could potentially be focused on the following market segments.
Consumers.
Businesses with special vehicle needs.
Non-military government agencies.
US military.
Foreign militaries.
This section examines the pros and cons of each of these market segments for the Hummer and suggests methods for further expoitation of each market segment.
The Consumer Market.
For buyers in this market, the "Hummer- has a strong emotional appeal, providing a sense of ruggedness, toughness, and preparedness for all situations. It can also provide a sense of status, connection with military, and an out-of-doors, off-road, orientation. Most buyers in the consumer market will not require most the capabilities of the vehicle, but are instead will buy it as a discretionary purchase for self-actualization.
The pros of the consumer market are.
The product is image-based, and sales are susceptible to being highly influenced by well-placed advertising.
The similar history of the Jeep Wrangler, followed by its continuing success, suggests that the consumer market may prove to be a steady and enduring one.
The Hummer has a competitive advantage of the Jeep due to its current military use.
A fledgling market in this segment has already been established.
The cons of the consumer market are.
Price barriers limit the size of the current consumer market.
Notwithstanding the competitive advantage mentioned as a pro of the consumer market, there is likely to be strong competition from the Jeep Wrangler as a lower-cost alternative.
The current product has some notable disadvantages for on-road use, such as low gas mileage and difficulty parking, which may discourage some potential buyers.
