Competitive Cost Analysis Cost Modeling Techniques Case Study Solution & Analysis
NASCAR (National Association for Stock Automobile Car Racing) is an organization conducting series of Stock Car racing in United States and acting as a sanctioning body for driving the rules for Stock Automobile Racing. 2) Stock Cars And Truck Racing by NASCAR is the 2nd biggest viewer sport, with highest number of sponsors. 1) The other sources of revenue for Competitive Cost Analysis Cost Modeling Techniques Case Study Help includes; 10% of the total profits from television rights, sanctioning fees i.e. $1-2 million per race, and licencing NASCAR brand name to business.
NASCAR has a closed corporate culture with the non-interventionist technique. This non collaborative method brings tensions in the sport. The building of Cars and truck of Tomorrow by Competitive Cost Analysis Cost Modeling Techniques Case Study Help, with an intention of security for the chauffeurs, brought various tensions among the stakeholders of the sport.
The interaction audit, performed in 2010, revealed that in spite of the truth that the business highly rely on the interactions between its stakeholders, there was no recognizable business interaction strategy. (
The audit pointed out numerous doing not have of NASCAR in terms of lack of internal integration, absence of fan management strategy and absence of social and digital media of marketing.
Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis audiences was extremely faithful to the sport and the brands associated with the NASCAR, making it appealing for sponsors and business marketers.
The business is currently facing the issue of declining rates of attendance at racing tracks and rates of television audiences. This can put a considerable effect on its revenues from sponsors, media rights, and from other sources of revenue.
The company was quite successful till 2005 with its traditional marketing techniques, however soon after 2005 the company begins dealing with different problems consisting of decline of its fan base. Numerous external as well as internal elements are responsible for the decrease. Internal factors consist of; insufficient financial investment in social networks and other digital medias of.
Fan base of NASCAR comprised of married males with a typical age of 47, which passes their fandom to their children and create generational commitment. The family system in America was changing resulting in decrease of impact of married male fan base over their children. In addition to it understandings about cars and truck was likewise changing with perceiving car a vehicle to reach at point B from point A, instead of as a fun project. Other obstacles for Competitive Cost Analysis Cost Modeling Techniques Case Study Solution includes the shift of its fans to other sports as they were enhancing their fan's experience enabling access to their broadcasts out of the houses through jumbo turns, Wi-Fi access, etc. These all difficulties were tending the business to modify its marketing techniques.
NASCAR core proficiencies includes it has rights of determining rules as sanctioning body. Rules and regulations relating to expert stock automobile racing are determined by NASCAR like if any team with required abilities and resources can get in into races by following guidelines and regulations determined by NASCAR. All the events of NASCAR are sponsored by corporates due to the fact that of greatest brand loyalty of fans towards brands promoted by Competitive Cost Analysis Cost Modeling Techniques Case Study Solution.
Weaknesses in SWOT Analysis are thought about as external elements. Weaknesses consists of the aspects that stops business to perform at needed level of performance. Weak points of NASCAR includes its close culture which is non collective. They have non-interventionist approach. They normally utilized to form rules and other required processes without intervention of others which results in bad partnership. For instance NASCAR develops Automobile of Tomorrow without partnership so result is that chauffeurs did not like that idea. As this is racing sport so covering of sports by media is likewise hard. It was also discovered that NASCAR had no reliable method for organisation communication. If it took place off track, they don't understand how to deal with problem. Ineffective company communication results in that they don't have clear direction for their long term objectives. They do not know that where they wish to see this sport in future.
NASCAR generally utilized to rely on conventional media sources like regional newspaper for promotion of its sports. NASCAR also came to understand from these conventional media outlets that sport was hard to cover. When sports fans were asked concerning popular celebrities and stars then NASCAR motorist was not discovered even in top twenty actions.
Economic down turn was experienced in late 2000 which can be hazard for NASCAR since if there is economic down turn then individuals would be having less return on investment. Economic down turn likewise results in boost fuel costs which likewise affected NASCAR. Now if NASCAR make significant financial investments in brand-new segments which are based on new customers then it might face negative remarks from its core fan base.
Porter's 5 Forces Analysis
Porter's 5 forces is a design that is used to analyse industry in which business is working. It assists in determining what are strengths and weak point of any specific market. It recommend that every market is various from one another. Due to the fact that NASCAR's bottom line i.e. net revenue is greatly depends on this, it is crucial to comprehend industry in which company is working. There are 5 forces that are utilized to identify success, intensity and beauty of Competitive Cost Analysis Cost Modeling Techniques Case Study Solution service.
These motorists can go against NASCAR if they got much better chance in terms of prizes and television direct exposure. If viewers delight in other race vehicles and drivers more than NASCAR then audiences can move to those other intriguing cars and trucks and motorists. NASCAR could be having danger from its 2 direct rivals that is Formula 1 and Moto GP.
If company shifts from one supplier to another, the supplier power indicates the number of providers are readily available in market and what is the expense associated with provider. In this market there is supply monopoly due to the fact that chauffeurs with needed resources and abilities are limited.
This force is concerning to clients that is it simple for clients to shift to other products. Then customers are less most likely to switch, if there is more changing cost is associated. In the case of NASCAR clients are its viewers. Viewers can change to other competitors quickly since viewers will having low switching expense.
Hazard of Substitution
Alternatives are referred as alternatives. The substitutes in this case can be other entertainment implies like viewers can move to other sports. There are large range of replacements are available in this scenario which suggests that hazard of substitute is high.
Risk of New Entry
It is specified as how it is simple for any company to go into in that particular market. In the case of Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis threat of new entry is low. Because if any business needs to go into in this organisation than they have to make heavy financial investments. They need to build cars and trucks and racing tracks and likewise needs to pay hefty amount to drivers for switching.
It can not be concluded from case research study that there would be change in resource allocations. NASCAR had got gain from lower taxation policies which results in increasing in earnings. So they made heavy investments in the research and development. As NASCAR is operating in various markets so it needs to face various guidelines. It is likewise noted that Competitive Cost Analysis Cost Modeling Techniques Case Study Help has dealt with increased examination regarding regulative. Every federal government has different priority so NASCAR needs to be prepared for it as concern can be moved to other sector.
Economic factors consists of tax rate, exchange rate, financial performance of that specific company, conditions of labour market, inflation rate and so on. Fortunes of the NASCAR and its competitors can be impacted if there is government intervention in the marketing and sales sector. NASCAR can utilize capabilities of employees to develop brand-new opportunities and improve existing opportunities.
Each has different social worths and norms. It assists in comprehending regarding society and choice of consumers.
Innovation has impact on nearly every service. It includes development in business method. In this case of Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis it can be noted that companies are greatly investing for research and advancement. NASCAR needs to likewise work on its media rights policy with Turner Broadcasting System.
Legal plays an important function in every country since every country has different legal terms and conditions. Competitive Cost Analysis Cost Modeling Techniques Case Study Solution needs to be make sure that they protect their legal rights in every county so any company does not damage to its legal rights.
Ecological factors are likewise crucial for every service. NASCAR needs to make sure that its cars are not generating pollution more than appropriate level.
7 P's of Marketing
The items of Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis in its product portfolio are; racing events tickets, racing tracks, sponsor's marketing, media rights, licencing NASCAR brand name, sanctioning guidelines for races and ad-space to corporate marketers during broadcast of NASCAR races. (Hanlon, 2018).
Rates method of NASCAR for its race events tickets is based upon the venue and importance of the racing occasions. Together with race events tickets, NASCAR likewise charge various service charge to its stakeholders and earns income. It charged sanctioning charges of $1-2 million per race on average in 2005.
Marketing technique of Competitive Cost Analysis Cost Modeling Techniques Case Study Help is highly based upon its fan base. A strong fan base share its fandom with others and increase the number of audiences for NASCAR races. The company is not totally relied upon its fan base for its promo and promote through local radio stations too. The business has also adopted the retailing media of promotion, in which the company sells merchandises with its logo.
NASCAR have its racing tracks in various cities in United States. The most essential tracks of NASCAR consists of Atlanta Motor Speedway in Georgia, Automobile Club Speedway in California and Darlington Raceway in South Carolina. It attempts to conduct its races in most of the cities in United States to comprehend across the country popularity.
Nestle individuals method is comprised of providing much better experience to its audiences, its fan base and to all of its stakeholders. People are an essential element of Competitive Cost Analysis Cost Modeling Techniques Case Study Help A marketing method as its occasions are the source of home entertainment for crowd. Its individuals technique consists of efforts to offer much better experience to its Fans, Race Drivers, Crew, Event Organizers and so on, all of which come under individuals method of NASCAR.
Numerous service processes are required to conduct racing events in an efficient method. These procedures consist of; appropriate schedule of time, plan for spectators, offering tickets, plan of area for sponsors, handling logistics etc. These all procedures contribute I constructing NASCAR image, enhancing viewers experience and increasing fan base.
Crucial physical evidences for the NASCAR includes the existence of its racing tracks, stock vehicles and racing events. Together with it, its merchandising brand names including t-shirts, caps, goodies and so on, likewise act as a physical proof for NASCAR.
Item Life Process Assessment.
The racing events by Competitive Cost Analysis Cost Modeling Techniques Case Study Solution was presented on June 19, 1949. The very first race was held at Charlotte Speedway in North Carolina. There had to do with 13000 fans present in the race. At the very first phase competition for NASCAR was low, as the competitors drove the automobiles comparable to the cars driven by ordinary people.
After conducting its very first race effectively the business moved towards developing its own tracks. The very first Competitive Cost Analysis Cost Modeling Techniques Case Study Solution based track, particularly the Darlington Raceway track, was started in 1950 in South Carolina. It was followed by facility of more raceways consisting of Daytona International Speedway, which was opened in 1959. After the growth of racing tracks the company moved towards broadcasting its races on television in 1979. The first event broadcasted on tv was flag-to-flag protection of Daytona.
In 1972, William France Jr., became the president of NASCAR and n about 3 years, he transformed NASCAR from a local Sport popular organization into one with international fan base. He started a brand-new age of financially rewarding sponsorships and tv contracts for NASCAR.
The maturity duration for NASCAR started with the efforts of William France Jr., with the company having large range of earnings sources. The company has about 500 sponsors with transmitting its occasions in about 150 nations. The business has a great deal of tracks in most of the cities of United States.
The decline in the company's offerings began after 2005 with average attendance rate per race decreased by 22% from 2005 to 2010 and tv viewership rate declined by 30% from 2005 to 2010. The significant reasons for decrease include the monetary crisis of 2008, which increased the cost of reaching tracks for audiences due to increasing fuel rates, and the moving of its fan base towards other sports.
The market division of Competitive Cost Analysis Cost Modeling Techniques Case Study Help can be divided into 4 sectors; Geographic, Demographic, Psychographic and Behavioural. (Dutta, 2018).
The geographical segmentation of Competitive Cost Analysis Cost Modeling Techniques Case Solution is based upon the geographical presence of its tracks in various states and cities in United States, and the tv broadcasting of its occasions in different countries. The company has 23 tracks in about 20 states of America and has tv broadcast through numerous Medias i.e. TNT, ESPN, ABC and Fox, in about 150 countries.This large geographical division supplies the company local along with worldwide fan base.
The group segmentation of Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis is also highlydiverse based upon the gender, earnings and age of the consumer. To increase the market sector of its market NASCAR need to revise its marketing strategies to draw in more age groups and lower its prices to go into in the market section with a low typical income.
The mental qualities of the majority of the fans are quite similar. NASCAR has a fan base with a commitment. NASCAR fans view it compulsive to purchase tickets and see the races as soon as in a week. 71% of them prefer to acquire products with a NASCAR trademark name. They are quite extrovert and are willing to join other fans while racing. They desire quality racing with low rate at convenient area. NASCAR has actually attempted to increase the quality of its racing by presenting stage racing, they likewise have actually attempted to lower prices and make the event more hassle-free by presenting live racing.
Behavioural segmentation of Competitive Cost Analysis Cost Modeling Techniques Case Study Solution is based upon the behaviour of fans in terms of viewing the race reside on the tv or by going in the occasions. Presently, the fans choice is towards enjoying the race at home on television rather than going, as the client experience at NASCAR tracks is not favourable along with pricey. This choice makes the rates for attendance lower than the rates for television viewers. NASCAR has to alter the behaviour of its fan base by introducing qualitative services at its tracks.
One of the possible target market of NASCAR was Hispanics; the young and growing population of United States. The market sector has terrific potential for NASCAR as the population was growing at a greater rate and it was anticipated to become thrice after forty years and the sector has increasing wealth rate with about $1 trillion of wealth in 2014.
Kids are also among the possible target audience section for NASCAR, as they are more connected socially than other groups. Developing fan base amongst kids can supply a potential increase in the variety of fans for racing due to their connectivity. Kids spend the majority of their times in utilizing smart devices and playing computer game. Automobile racing video games developed by Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis can be a potential source of acquiring attention of kids towards NASCAR track racing. Nevertheless, NASCAR's digital functions related to kids are not capable of getting the attention. NASCAR needs more attention towards personalizing and enhancing its digital functions to draw in the kids target audience.
This huge expenditure makes the section capacity for NASCAR marketing strategy of increasing its fan base. The market section thinks about NASCAR as a company lacking in developing a multiculturalism atmosphere. NASCAR needs to take different actions to improve the experience of Generation Y consumers in its occasions.
5 C's of Marketing
5 C's of marketing assists in taking choices relating to marketing. These 5 C's needs to be evaluated properly for taking any marketing decision. These 5 C's represent Climate, Company, Collaborators, Rivals and customers.
It requires to make PESTLE analysis in order to comprehend environment or context in which NASCAR is working. PESTLE stands for political, financial, social, technical, environmental and legal and is mentioned above.
Competitive Cost Analysis Cost Modeling Techniques Case Study Help is a vehicle racing company with having USP of high quality vehicle racing with an international structure. Its sector is sports group and occasions.
Collaborations consists of suppliers, providers and alliances of NASCAR. NASCAR utilized to get pay check of around $15 million every year from Turner Sports. NASCAR had to get approval from Turner Sport if it want to develop its Facebook page, twitter account or even mobile application.
The client of Competitive Cost Analysis Cost Modeling Techniques Case Study Solution are its audiences. They target clients with having age of 15-60 years. Fan base of NASCAR comprised of married males with an average age of 47, which passes their fandom to their children and create generational loyalty.
Teams generally represents sponsors in NASCAR and the medium of advertising is drivers. These drivers can go versus NASCAR if they got much better opportunity in terms of prizes and television direct exposure.
1. Developing and Maintaining Facebook Page.
One of the potential target markets sectors for NASCAR is Hispanics which is the growing population segment of USA but sadly NASCAR had actually been unable to attract the this targeted section. It should develop a Facebook page consisting of the details regarding the races and the areas of tracks to make the customer helpful about the core operations of NASCAR.
2. Developing and Upgrading Accounts of Secret Drivers.
Competitive Cost Analysis Cost Modeling Techniques Case Study Help chauffeurs has a low star power as compare to gamers of other sports. The bad contacts with fans result in less tourist attraction of audiences towards the racers and a low star power. Star power is a crucial aspect for drawing in viewers towards tracks and towards tv.
3. Developing New Games and improving existing games for kids.
Kids invested the majority of their time on playing games and utilizing mobile phones. Unfortunately, kids playing NASCARA have a worst experience of playing its video games. As a result, they are less drawn in towards the sport. In order to attract these kids, NASCARA should improve its existing racing games by presenting customization in the cars i.e. altering colours, choice of speed, presenting group racing in the game, using better graphics associated with the racing tracks and presenting numerous levels in the game. All these modifications in the current video game would offer much better experience to kids.
Together with it, NASCAR should also build brand-new games associated with racing like kids racing with kids characters as drivers, cartoon racing with racing in between different cartoon characters with an option of picking the favourite cartoon character for the kids. These methods would make it possible for the business to attract among its possible target sections.
4. Presenting multiculturalism at events.
NASCAR occasions are made up of fans with extremely couple of cultural variety, due to cost of arrival in events, making it unsightly for the customers perceiving sport events as social events i.e. Generation Y clients. As the Generation Y clients are a prospective target market for NASCAR, for that reason the company must take certain procedures to attract this possible target market.
5. Improving Client Experience at Tracks.
Because on the race day viewers got dissatisfied, NASCAR ought to work on infrastructure and features at tracks. Viewers have numerous expectations from NASCAR due to the fact that in same industry other companies are supplying much better services than NASCAR. Then its fans may shifted to its rivals, if NASCAR don't work on this problem. According to fans there were not sufficient facilities were available as compare to other sports service providers. So NASCAR must make sure that it provide adequate facilities that consists of cleaned up restrooms, comfortable seating plan. They must also provide WIFI services and accessibility of charge card throughout that track. It needs to be also make certain that there are enough jumbo turns placed at all required places. There should be also food stalls that supply quality food to viewers. In this way viewers will be having pleasant experience at the day of event. (See Appendix B).
Marketing Spending plan.
Marketing spending plan made on the basis of the above strategies for the duration of 5 years from 2011 to 2015, reveals the expense related data for the marketing strategies. (See Appendix B). It can be seen that strategy 5 of improving consumer experience at tracks would require greatest initial investment and cost and method 4 of presenting multiculturalism will require most affordable initial investment with lowest even more per year expense. The business must prioritize the resource allocation on these techniques on the basis of its readily available resources and the potential advantages which the strategy would provide.
NOTE: The worths about cost are assumed on rational basis due the absence of figures and realities associated with cost in the event study. Inflation rate of United States is presumed to be 10%.
On the basis of deep analysis of the external and internal elements of Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis triggering the decline of television viewership rate and participation rate at tracks, the above marketing methods are suggested to NASCAR to increase its fan base in long run. These techniques would handle internal factors like bad customer experience at tracks, insufficient social media marketing, incapable digital medias like games, lack of culturalisms at tracks etc., along with with external factors like shifting of fans towards other sports, demographical modifications in America and changing domesticity styles.