- The Washington Times - Tuesday, May 19, 2009

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.”

The BrandIndex was taken from January to April by the London-based market research firm YouGov, which interviews thousands of consumers online daily on key elements of brand “health” including value, quality, impression, reputation, satisfaction and willingness to recommend on a daily basis.

Ted Marzilli, global managing director for BrandIndex, said his company’s survey does not ask people to rank brands from top to bottom, but rather asks that participants rate the brand as positive, negative or neutral, on a variety of qualities related to the product. They are also rated in the context of competing brands, with the same questions asked of each sector of product - from electronics to fashion.

He thinks the History and Discovery channels came out on top against 48 other broadcast and cable networks because people think the channels offer high-value programming at minimal cost.

“People tend to rank them higher even though they may not be watched as much as other high-watched shows like ‘CSI’ or something else that is popular,” Mr. Marzilli said of their ranking. “There is also this halo effect. People view those channels as almost like medicine. They are good for you.”

Brands such as Craftsman, Rubbermaid and Whirlpool score high because of their longevity, he said.

“They aren’t flashy, but they are viewed as very dependable and good value for the money in challenging economic times. Those brands that have endured and have a good reputation … really float to the top of the list.”

Ron Geskey, CEO of 2020 Marketing Communications, said consumers see “value” as a price-and-quality relationship, and the Brandindex rankings reflect that what people “have to pay now takes on more of a role than it did a year ago, as more people are out of work.”

“If you look at the brands on the top of the list, they are primarily free or low-priced or cheaper brands. At the lower end of the spectrum, you have brands that require premium price,” he said.

While loyalists defend their pricey lattes, a $4 or $5 beverage is a habit harder to defend in penny-pinching times. Starbucks is facing such emerging competitors as McDonald’s and Dunkin’ Donuts, which have cut into the coffee market by offering drinks at half of Starbucks’ prices, Mr. Vollmer said.

“Brands like Starbucks need to make sure that they have offerings that can compete at some of the entry points that some of the other guys are pursuing,” he said. Indeed, Starbucks has begun to shave prices on its popular drinks, including pegging its “grande” iced coffee at less than $2, while raising the price of its more-exotic beverages.

The online market research arena has made companies take faster notice of brand perception and consumer attitudes, Mr. Vollmer added.

When Tropicana changed its packaging to look more modern, loyal juice fans reacted with a cyber-quick “thumbs down,” prompting the company to change gears and return to its original look, he said.

“With digital media in particular, there are many more conversations occurring in real time with consumers and brands,” he said. Marketers “can get a sense of what bloggers, people using Twitter and Facebook and so on are saying about their brand. I think they are paying more attention to what is happening in real time and making quick decisions based on reactions they are getting from the marketplace that sometimes are counter to their own traditional market research and focus groups.”

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