Competitive Cost Analysis Cost Modeling Techniques Case Study Solution & Analysis
NASCAR (National Association for Stock Cars And Truck Vehicle Racing) is an organization conducting series of Stock Automobile racing in United States and acting as a sanctioning body for driving the guidelines for Stock Car Racing. 2) Stock Car Racing by NASCAR is the 2nd biggest viewer sport, with highest number of sponsors. 1) The other sources of profits for Competitive Cost Analysis Cost Modeling Techniques Case Study Help consists of; 10% of the overall income from television rights, sanctioning fees i.e. $1-2 million per race, and licencing NASCAR brand name to business.
NASCAR has a closed business culture with the non-interventionist approach. This non collective approach brings tensions in the sport. The building of Automobile of Tomorrow by Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis, with an intent of security for the motorists, brought numerous tensions among the stakeholders of the sport.
The interaction audit, performed in 2010, exposed that in spite of the truth that the organisation extremely rely on the communications in between its stakeholders, there was no recognizable business communication strategy. (
The audit pointed out numerous doing not have of NASCAR in terms of lack of internal combination, lack of fan management strategy and absence of digital and social media of marketing.
Competitive Cost Analysis Cost Modeling Techniques Case Study Help audiences was extremely devoted to the sport and the brand names connected with the NASCAR, making it appealing for sponsors and business marketers.
The business is currently facing the problem of declining rates of participation at racing tracks and rates of tv audiences. This can put a significant impact on its revenues from sponsors, media rights, and from other sources of earnings.
The business was rather effective till 2005 with its conventional marketing methods, but quickly after 2005 the business starts dealing with various issues consisting of decrease of its fan base. Numerous external as well as internal factors are responsible for the decline. Internal aspects consist of; insufficient financial investment in social media and other digital medias of.
Fan base of NASCAR comprised of married males with an average age of 47, which passes their fandom to their youngsters and create generational commitment. But the household system in America was changing resulting in reduction of impact of married male fan base over their youngsters. Along with it understandings about automobile was also altering with perceiving vehicle a vehicle to reach at point B from point A, instead of as a fun project. Other challenges for Competitive Cost Analysis Cost Modeling Techniques Case Study Solution includes the shift of its fans to other sports as they were improving their fan's experience enabling access to their broadcasts out of the houses through jumbo turns, Wi-Fi gain access to, and so on. These all obstacles were tending the business to modify its marketing strategies.
In SWOT analysis, strengths defined as company's qualities which are different from its rivals. These are company's core proficiencies on which business performance or company success based upon. Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis core proficiencies includes it has rights of determining rules as sanctioning body. Guidelines and guidelines relating to expert stock cars and truck racing are determined by NASCAR like if any team with needed skills and resources can participate in races by following guidelines and regulations determined by NASCAR. NASCAR has monopoly it this aspect. Its strengths likewise consists of that it has title of second biggest spectator sport in the United States with having more fortune 500 sponsors based in United States. Its races were used to relay in more than 150 countries all over the world with more than $56 million profits. The main sources of their incomes come from television rights, approving fees, sponsorship and licensing. It has longest season of 10 months and having ownership of three nationwide series i.e. Outdoor camping World Truck Series, the Sprint Cup Series and the Nationwide Series. It has also big resource of fans and corporate sponsors. Because of greatest brand loyalty of fans towards brands promoted by NASCAR, all the events of NASCAR are sponsored by corporates. (See Appendix A).
Weak Points in SWOT Analysis are thought about as external aspects. Weak points includes the factors that stops business to perform at required level of efficiency. Weaknesses of NASCAR includes its close culture which is non collaborative. They have non-interventionist approach. They typically used to form guidelines and other needed processes without intervention of others which leads to poor collaboration. For example NASCAR establishes Automobile of Tomorrow without cooperation so result is that motorists did not like that concept. As this is racing sport so covering of sports by media is likewise difficult. It was also discovered that NASCAR had no reliable method for company interaction. They don't understand how to handle issue if it took place off track. Inefficient organisation interaction results in that they do not have clear direction for their long term goals. They don't know that where they want to see this sport in future.
NASCAR usually utilized to rely on standard media sources like local paper for publicity of its sports. NASCAR likewise came to know from these traditional media outlets that sport was hard to cover. When sports fans were asked regarding popular celebrities and stars then NASCAR chauffeur was not found even in leading twenty responses.
Risks in SWOT analysis are specified as external factors that can risk to business's success. Economic down turn was experienced in late 2000 which can be danger for NASCAR since if there is economic down turn then people would be having less return on investment. Earning of individuals would be effected and they would be more mindful in spending their money. Economic down turn also results in boost fuel prices which likewise affected NASCAR. Because fans of NASCAR used to attend its occasion from cross countries. NESCAR had a guideline of 65/25/10 for revenue distribution. 65 percent incomes from media rights would be dispersed to race tracks, 25 percent profits would be dispersed to competing group and remaining 10 percent would be maintained by NESCAR which is approving body. Competing group wished to increase their part of profits from 25 percent because of boost in running expense of a race team and also there is decrease in the number of full-season sponsorship. NESCAR also faces dangers from other sponsors because they are making huge financial investments to improve experience of fans. Which consists of upgrading existing avenues, developing brand-new opportunities, offering Wi-Fi facility and likewise providing other interactive mediums to connect sports on smart devices. Fan base of NASCAR consisted of married males with a typical age of 47, which passes their fandom to their youngsters and create generational commitment. So the obstacle is that the household system in America was changing leading to decrease of impact of married male fan base over their youngsters. Together with it understandings about cars and truck was likewise changing with perceiving vehicle an automobile to reach at point B from point A, instead of as a fun task. If NASCAR make substantial investments in brand-new segments which are based on brand-new clients then it might face negative comments from its core fan base, now.
Porter's 5 Forces Analysis
It is essential to comprehend industry in which business is working due to the fact that NASCAR's bottom line i.e. net profit is heavily depends on this. There are 5 forces that are utilized to identify profitability, intensity and beauty of NASCAR company.
This force suggests capability of rivals. Teams typically represents sponsors in NASCAR and the medium of advertising is motorists. For that reason it can be said that chauffeurs and race cars and trucks are rivals. If they got better chance in terms of prizes and tv direct exposure, these drivers can go versus Competitive Cost Analysis Cost Modeling Techniques Case Study Solution. Then audiences can move to those other intriguing cars and motorists, if viewers enjoy other race cars and drivers more than NASCAR. NASCAR could be having risk from its two direct competitors that is Formula 1 and Moto GP. They need to produce competitive benefits for chauffeurs so they do not shift to other competitors.
The provider power indicates the number of suppliers are offered in industry and what is the expense associated with supplier if business shifts from one supplier to another. In this market there is supply monopoly since motorists with required resources and skills are limited.
In the case of NASCAR customers are its audiences. Audiences can change to other rivals quickly because viewers will having low switching cost.
Hazard of Substitution
Replacements are referred as options. The replacements in this case can be other home entertainment means like audiences can move to other sports. So there are wide variety of substitutes are readily available in this scenario which suggests that threat of replacement is high.
Hazard of New Entry
In the case of NASCAR hazard of new entry is low. They need to build vehicles and racing tracks and also needs to pay hefty amount to drivers for changing.
It can not be concluded from case study that there would be change in resource allocations. NASCAR had actually got gain from lower tax policies which results in increasing in earnings. They made heavy financial investments in the research and development. As NASCAR is working in different markets so it needs to face various policies. It is likewise noted that Competitive Cost Analysis Cost Modeling Techniques Case Study Solution has dealt with increased scrutiny regarding regulatory. Every government has different concern so NASCAR has to be prepared for it as priority can be shifted to other sector.
Economic factors includes taxation rate, currency exchange rate, economic efficiency of that specific business, conditions of labour market, inflation rate etc. Fortunes of the NASCAR and its rivals can be affected if there is government intervention in the marketing and sales sector. NASCAR can utilize abilities of staff members to produce new chances and improve existing opportunities.
Each has different social values and norms. It helps in understanding regarding society and choice of clients.
Technology has impact on almost every business. It includes development in organisation strategy. In this case of Competitive Cost Analysis Cost Modeling Techniques Case Study Help it can be noted that companies are greatly spending for research and development. NASCAR needs to also deal with its media rights policy with Turner Broadcasting System.
Due to the fact that every country has various legal terms and conditions, Legal plays an important role in every nation. Competitive Cost Analysis Cost Modeling Techniques Case Study Help needs to be ensure that they secure their legal rights in every county so any company does not damage to its legal rights.
Ecological aspects are likewise crucial for every single organisation. Due to the fact that generally governments do not enable those company which can hurt to environment. These ecological aspects includes laws regarding pollution, climate modification, safe waste disposal, policies concerning insurance coverage and so on. NASCAR needs to make certain that its cars and trucks are not creating contamination more than appropriate level.
7 P's of Marketing
The items of Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis in its item portfolio are; racing events tickets, racing tracks, sponsor's marketing, media rights, licencing NASCAR brand, sanctioning rules for races and ad-space to business online marketers throughout broadcast of NASCAR races. (Hanlon, 2018).
Rates strategy of NASCAR for its race events tickets is based upon the place and importance of the racing events. In addition to race events tickets, NASCAR also charge numerous service charge to its stakeholders and makes profits. It charged approving costs 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. Nevertheless, the company is not totally trusted its fan base for its promotion and promote through regional radio stations too. The company has likewise embraced the merchandising media of promotion, in which the business sells merchandises with its logo design.
NASCAR have its racing tracks in various cities in United States. The most essential tracks of NASCAR includes Atlanta Motor Speedway in Georgia, Automobile Club Speedway in California and Darlington Raceway in South Carolina. It tries to conduct its races in the majority of the cities in United States to comprehend nationwide appeal.
Nestle people strategy is comprised of supplying much better experience to its viewers, its fan base and to all of its stakeholders. Individuals are an essential aspect of Competitive Cost Analysis Cost Modeling Techniques Case Study Help A marketing strategy as its occasions are the source of entertainment for crowd. Its people technique consists of efforts to provide much better experience to its Fans, Race Drivers, Team, Occasion Organizers and so on, all of which come under people method of NASCAR.
A number of organisation processes are needed to conduct racing occasions in an effective method. These processes consist of; correct schedule of time, plan for viewers, selling tickets, arrangement of space for sponsors, handling logistics etc. These all procedures contribute I developing NASCAR image, enhancing viewers experience and increasing fan base.
Crucial physical proofs for the NASCAR consists of the existence of its racing tracks, stock automobiles and racing events. In addition to it, its merchandising brand names including tee shirts, caps, goodies and so on, likewise serve as a physical evidence for NASCAR.
Product Life Cycle Assessment.
The racing events by NASCAR was presented on June 19, 1949. At the very first stage competitors for NASCAR was low, as the competitors drove the vehicles comparable to the cars driven by regular individuals.
The first NASCAR based track, particularly the Darlington Raceway track, was started in 1950 in South Carolina. After the growth of racing tracks the company moved towards broadcasting its races on television in 1979.
In 1972, William France Jr., became the president of NASCAR and n about 3 years, he transformed NASCAR from a local Sport popular company into one with worldwide fan base. He started a new era of rewarding sponsorships and tv contracts for NASCAR.
The maturity duration for NASCAR started with the efforts of William France Jr., with the company having wide range of revenue sources. The business has about 500 sponsors with relaying its events in about 150 nations. The company has a great deal of tracks in the majority of the cities of United States.
The decrease in the business's offerings began after 2005 with average presence rate per race declined by 22% from 2005 to 2010 and tv viewership rate decreased by 30% from 2005 to 2010. The significant causes of decline include the monetary crisis of 2008, which increased the cost of getting to tracks for viewers due to increasing fuel prices, and the shifting of its fan base towards other sports.
The marketplace segmentation of Competitive Cost Analysis Cost Modeling Techniques Case Study Solution can be divided into 4 sections; Geographic, Demographic, Psychographic and Behavioural. (Dutta, 2018).
The geographical division of Competitive Cost Analysis Cost Modeling Techniques Case Help is based upon the geographical existence of its tracks in different states and cities in United States, and the television broadcasting of its occasions in various nations. The company has 23 tracks in about 20 states of America and has television broadcast through various Medias i.e. TNT, ESPN, ABC and Fox, in about 150 countries.This large geographical segmentation offers the business regional in addition to global fan base.
The demographic segmentation of NASCAR is likewise highlydiverse based upon the gender, income and age of the consumer. Its existing fan base is majorly comprised of male married fans with a typical age of 47 years and an earnings around $30-50 thousands. Presently NASCAR is trying to increase its target market to the young growing population and kinds. To increase the group segment of its market NASCAR ought to revise its marketing techniques to attract more age and lower its rates to go into in the marketplace sector with a low typical earnings.( htt1).
The psychological characteristics of the majority of the fans are rather similar. NASCAR has a fan base with a loyalty. NASCAR fans perceive it compulsive to purchase tickets and see the races as soon as in a week. 71% of them choose to purchase products with a NASCAR trademark name. They are rather extrovert and are willing to join other fans while racing. They want quality racing with low cost at hassle-free location. Although Competitive Cost Analysis Cost Modeling Techniques Case Study Solution has tried to increase the quality of its racing by introducing stage racing, they also have actually tried to lower prices and make the event easier by introducing live racing.
Behavioural division of Competitive Cost Analysis Cost Modeling Techniques Case Study Solution is based upon the behaviour of fans in terms of viewing the race live on the tv or by entering the occasions. Currently, the fans preference is towards viewing the race at home on tv instead of going, as the consumer experience at NASCAR tracks is not favourable as well as pricey. This preference makes the rates for participation lower than the rates for tv viewers. NASCAR has to change the behaviour of its fan base by introducing qualitative services at its tracks.
Among the possible target audience of Competitive Cost Analysis Cost Modeling Techniques Case Study Help was Hispanics; the young and growing population of United States. The market section has fantastic possible for NASCAR as the population was growing at a greater rate and it was expected to become thrice after forty years and the section has increasing wealth rate with about $1 trillion of wealth in 2014. Although, the segment reveals affinity with cars and truck culture, however require a more concentrated marketing towards welcoming the section towards racing.
Kids are likewise one of the potential target market section for NASCAR, as they are more linked socially than other groups. Cars and truck racing games established by Competitive Cost Analysis Cost Modeling Techniques Case Study Help can be a potential source of acquiring attention of kids towards NASCAR track racing. NASCAR requires more attention towards tailoring and enhancing its digital functions to draw in the kids target market.
This substantial expense makes the section potential for NASCAR marketing strategy of increasing its fan base. The market segment thinks about NASCAR as an organization lacking in producing a multiculturalism environment. NASCAR needs to take different actions to improve the experience of Generation Y customers in its occasions.
5 C's of Marketing
5 C's of marketing assists in taking decisions regarding marketing. These 5 C's requirements to be evaluated correctly for taking any marketing choice. These 5 C's mean Environment, Business, Collaborators, Competitors and clients.
It needs to make PESTLE analysis in order to comprehend climate or context in which NASCAR is working. PESTLE represents political, economic, social, technical, legal and environmental and is mentioned above.
NASCAR is an auto racing company with having USP of high quality car racing with an international structure. Its sector is sports team and occasions. Its target audience is males in the age group of 15-60 years. Company has closed corporate culture and having non-interventionist approach.
Collaborations consists of distributors, suppliers and alliances of Competitive Cost Analysis Cost Modeling Techniques Case Study Solution. It is teamed up with various racing groups which are participating in racing. It also worked together with Turners Sport for digital rights. NASCAR utilized to get pay check of around $15 million each year from Turner Sports. There are number of cons behind this offer. For example NASCAR had to get approval from Turner Sport if it want to develop its Facebook page, twitter account or even mobile application. Turner Sport likewise had rights of every video which is shoot throughout race at track.
The customer of Competitive Cost Analysis Cost Modeling Techniques Case Study Solution are its viewers. 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 youngsters and create generational loyalty.
The direct competitors of NASCAR are Formula 1 and Moto GP. Groups normally represents sponsors in NASCAR and the medium of advertising is drivers. It can be stated that motorists and race vehicles are competitors. These drivers can break Competitive Cost Analysis Cost Modeling Techniques Case Study Help if they improved opportunity in regards to rewards and television direct exposure.
1. Preserving and establishing Facebook Page.
One of the prospective target markets sectors for NASCAR is Hispanics which is the growing population segment of U.S.A. but unfortunately NASCAR had been not able to bring in the this targeted sector. It ought to develop a Facebook page containing the information concerning the races and the areas of tracks to make the consumer useful about the core operations of NASCAR.
2. Establishing and Updating Accounts of Key Drivers.
Competitive Cost Analysis Cost Modeling Techniques Case Study Help drivers has a low star power as compare to players of other sports. The poor contacts with fans result in less destination of audiences towards the racers and a low star power. Star power is an important factor for drawing in viewers towards tracks and towards television.
3. Developing New Games and enhancing present video games for kids.
In order to draw in these kids, NASCARA ought to enhance its present racing video games by presenting customization in the automobiles i.e. altering colours, selection of speed, presenting group racing in the video game, utilizing much better graphics related to the racing tracks and presenting numerous levels in the video game. All these adjustments in the current video game would supply better experience to kids.
Together with it, NASCAR ought to also develop new games associated with racing like kids racing with kids characters as drivers, animation racing with racing between various animation characters with an option of picking the preferred animation character for the kids. These methods would make it possible for the business to draw in among its potential target sections.
4. Presenting multiculturalism at occasions.
NASCAR events are comprised of fans with extremely few cultural diversity, due to expense of arrival in occasions, making it unappealing for the consumers viewing sport occasions as social events i.e. Generation Y clients. As the Generation Y clients are a potential target market for NASCAR, therefore the company should take particular steps to attract this prospective target market.
5. Improving Customer Experience at Tracks.
NASCAR should work on facilities and features at tracks since on the race day viewers got dissatisfied. Viewers have numerous expectations from Competitive Cost Analysis Cost Modeling Techniques Case Study Solution since in same industry other business are supplying much better services than NASCAR. IF NASCAR do not work on this problem then its fans may shifted to its competitors.
Marketing Budget 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 techniques. (See Appendix B). It can be seen that technique 5 of improving client experience at tracks would require highest preliminary investment and cost and strategy 4 of introducing multiculturalism will require lowest initial financial investment with most affordable further annually cost. The business needs to focus on the resource allowance on these techniques on the basis of its available resources and the prospective advantages which the strategy would provide.
KEEP IN MIND: The worths about cost are presumed on logical basis due the lack of figures and truths related to cost in the event study. Inflation rate of United States is assumed to be 10%.
On the basis of deep analysis of the internal and external aspects of Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis causing the decrease of television viewership rate and attendance rate at tracks, the above marketing methods are recommended to NASCAR to increase its fan base in long term. These strategies would manage internal aspects like poor consumer experience at tracks, insufficient social networks marketing, incapable digital medias like video games, lack of culturalisms at tracks and so on, as well as with external factors like shifting of fans towards other sports, demographical modifications in America and altering family life designs.