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 Cars and truck racing in United States and acting as an approving body for driving the guidelines for Stock Cars and truck Racing. 2) Stock Car Racing by NASCAR is the 2nd biggest spectator sport, with greatest number of sponsors. 1) The other sources of revenue for Competitive Cost Analysis Cost Modeling Techniques Case Study Help consists of; 10% of the overall earnings from tv 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 method. The building of Vehicle of Tomorrow by NASCAR, with an intention of security for the motorists, brought different stress amongst the stakeholders of the sport.
The communication audit, carried out in 2010, revealed that regardless of the reality that business extremely count on the communications between its stakeholders, there was no recognizable company communication technique. The industry's target customers, direction and objectives were all unidentified.
The audit pointed out different lacking of NASCAR in terms of lack of internal combination, absence of fan management technique and absence of social and digital media of marketing.
Competitive Cost Analysis Cost Modeling Techniques Case Study Help audiences was extremely loyal to the sport and the brands related to the NASCAR, making it appealing for sponsors and business marketers.
The company is currently dealing with the issue of decreasing rates of presence at racing tracks and rates of tv audiences. This can put a considerable effect on its earnings from sponsors, media rights, and from other sources of earnings.
Although the business was quite successful till 2005 with its standard marketing strategies, but soon after 2005 the business begins facing different problems including decline of its fan base. Numerous external in addition to internal aspects are responsible for the decline. Internal aspects consist of; insufficient investment in social media 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 youngsters and create generational loyalty. However the household system in America was altering leading to decrease of influence of married male fan base over their youngsters. Together with it perceptions about vehicle was also altering with viewing cars and truck a vehicle to reach at point B from point A, instead of as a fun project. Other difficulties for Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis includes the shift of its fans to other sports as they were enhancing their fan's experience permitting access to their broadcasts out of the houses through jumbo turns, Wi-Fi access, etc. These all challenges were tending the company to revise its marketing strategies.
In SWOT analysis, strengths defined as company's qualities which are various from its rivals. These are business's core proficiencies on which company efficiency or company success based on. Competitive Cost Analysis Cost Modeling Techniques Case Study Help core proficiencies includes it has rights of dictating rules as approving body. Guidelines and guidelines relating to professional stock cars and truck racing are dictated by NASCAR like if any team with required abilities and resources can participate in races by following guidelines and policies determined by NASCAR. So NASCAR has monopoly it this element. Its strengths likewise consists of that it has title of second biggest viewer sport in the United States with having more fortune 500 sponsors based in United States. Its races were utilized to broadcast in more than 150 nations all over the world with more than $56 million earnings. The main sources of their revenues come from tv rights, approving charges, sponsorship and licensing. It has longest season of 10 months and having ownership of 3 nationwide series i.e. Camping World Truck Series, the Sprint Cup Series and the Nationwide Series. It has also big resource of fans and corporate sponsors. All the occasions of NASCAR are sponsored by corporates due to the fact that of biggest brand commitment of fans toward brand names marketed by Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis. (See Appendix A).
Weak points of NASCAR includes its close culture which is non collective. Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis establishes Vehicle of Tomorrow without collaboration so result is that chauffeurs did not like that idea. It was also found that NASCAR had no efficient strategy for service communication.
NASCAR normally used to rely on conventional media sources like regional newspaper for publicity of its sports. NASCAR likewise came to know from these standard media outlets that sport was tough to cover. When sports fans were asked relating to popular celebs and stars then NASCAR motorist was not discovered even in leading twenty responses.
Economic down turn was experienced in late 2000 which can be risk for NASCAR due to the fact that if there is financial down turn then people would be having less return on investment. Economic down turn likewise results in increase fuel rates which likewise impacted NASCAR. Now if NASCAR make substantial investments in new sectors which are based on new clients then it might deal with unfavorable remarks from its core fan base.
Porter's Five Forces Analysis
Porter's 5 forces is a design that is used to analyse market in which company is working. It assists in determining what are strengths and weakness of any specific market. It suggest that every market is different from one another. Due to the fact that NASCAR's bottom line i.e. net profit is greatly depends on this, it is important to comprehend industry in which business is working. There are 5 forces that are utilized to identify profitability, strength and attractiveness 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 audiences enjoy other race vehicles and drivers more than NASCAR then viewers can move to those other intriguing cars and trucks and chauffeurs. NASCAR could be having danger from its 2 direct competitors that is Solution 1 and Moto GP.
If business shifts from one provider to another, the supplier power shows the number of providers are available in market and what is the expense associated with supplier. In this market there is supply monopoly due to the fact that motorists with required resources and abilities are restricted.
This force is regarding to clients that is it simple for clients to shift to other products. Then customers are less likely to change, if there is more switching expense is associated. When it comes to NASCAR consumers are its viewers. Due to the fact that audiences will having low changing cost, audiences can change to other competitors quickly.
Threat of Alternative
Alternatives are referred as options. The replacements in this case can be other home entertainment implies like audiences can shift to other sports. There are broad variety of substitutes are offered in this scenario which recommends that danger of replacement is high.
Risk of New Entry
In the case of NASCAR risk of new entry is low. They need to build vehicles and racing tracks and likewise requires to pay significant quantity to drivers for changing.
As NASCAR is working in different markets so it needs to deal with different guidelines. It is also kept in mind that NASCAR has actually faced increased analysis regarding regulative. Every federal government has different top priority so NASCAR has actually to be prepared for it as priority can be shifted to other sector.
Economic elements includes tax rate, exchange rate, financial performance of that particular company, conditions of labour market, inflation rate and so on. If there is government intervention in the marketing and sales sector, fortunes of the NASCAR and its rivals can be impacted. NASCAR can take advantage of abilities of staff members to create new chances and enhance existing opportunities.
Each has different social values and standards. It assists in understanding concerning society and preference of consumers.
In this case of NASCAR it can be kept in mind that business are heavily spending for research and advancement. NASCAR must also work on its media rights policy with Turner Broadcasting System.
Since every country has different legal terms and conditions, Legal plays an important role in every country. Competitive Cost Analysis Cost Modeling Techniques Case Study Help needs to be make sure that they protect their legal rights in every county so any company does not harm to its legal rights.
Environmental elements are likewise essential for every single organisation. Since normally governments do not enable those business which can harm to environment. These environmental factors includes laws relating to contamination, environment modification, safe garbage disposal, policies relating to insurance etc. NASCAR needs to ensure that its cars are not creating pollution more than acceptable level.
7 P's of Marketing
The items of Competitive Cost Analysis Cost Modeling Techniques Case Study Help in its item portfolio are; racing occasions tickets, racing tracks, sponsor's marketing, media rights, licencing NASCAR brand, approving guidelines for races and ad-space to business online marketers throughout broadcast of NASCAR races. (Hanlon, 2018).
Pricing strategy of NASCAR for its race events tickets is based upon the venue and significance of the racing events. Together with race events tickets, NASCAR also charge various service charge to its stakeholders and earns earnings. For example it charged sanctioning costs of $1-2 million per race typically in 2005.
Marketing strategy of NASCAR is extremely based upon its fan base. A strong fan base share its fandom with others and increase the number of audiences for NASCAR races.
NASCAR have its racing tracks in numerous 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 attempts to perform its races in the majority of the cities in United States to understand across the country popularity.
Nestle people technique is comprised of offering much better experience to its audiences, its fan base and to all of its stakeholders. People are a crucial aspect of Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis A marketing technique as its occasions are the source of home entertainment for crowd. Its people method consists of efforts to provide better experience to its Fans, Race Drivers, Crew, Occasion Organizers etc., all of which come under individuals method of NASCAR.
Several service procedures are needed to perform racing occasions in an effective way. These processes consist of; correct schedule of time, arrangement for viewers, selling tickets, plan of area for sponsors, managing logistics and so on. These all procedures contribute I developing NASCAR image, enhancing viewers experience and increasing fan base.
Most important physical evidences for the NASCAR includes the presence of its racing tracks, stock cars and trucks and racing occasions. Along with it, its retailing brand names consisting of tee shirts, caps, goodies and so on, also serve as a physical proof for NASCAR.
Item Life Process Evaluation.
The racing events by Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis was introduced 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 first phase competitors for NASCAR was low, as the rivals drove the automobiles comparable to the cars and trucks driven by normal people.
The first NASCAR based track, particularly the Darlington Raceway track, was started in 1950 in South Carolina. After the development of racing tracks the business moved towards broadcasting its races on tv in 1979.
In 1972, William France Jr., became the president of NASCAR and n about 3 years, he transformed NASCAR from a regional Sport popular company into one with international fan base. He initiated a new period of profitable sponsorships and tv agreements for NASCAR.
The maturity period for NASCAR started with the efforts of William France Jr., with the company having wide range of income sources. The business has about 500 sponsors with relaying its events in about 150 countries. The business has a great deal of tracks in the majority of the cities of United States.
The decline in the company's offerings began after 2005 with average participation rate per race decreased by 22% from 2005 to 2010 and tv viewership rate declined by 30% from 2005 to 2010. The major causes of decline include the monetary crisis of 2008, which increased the cost of arriving at tracks for audiences due to increasing fuel prices, and the moving of its fan base towards other sports.
The marketplace segmentation of Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis can be divided into 4 sections; 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 different states and cities in United States, and the tv broadcasting of its events in different countries. 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 vast geographical division offers the company local in addition to global fan base.
The market segmentation of Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis is also highlydiverse based upon the gender, income and age of the consumer. To increase the demographic sector of its market NASCAR must revise its marketing strategies to attract more age groups and lower its rates to enter in the market segment with a low typical earnings.
The mental characteristics of the majority of the fans are quite comparable. NASCAR has a fan base with a loyalty. NASCAR fans view it compulsive to acquire tickets and see the races once in a week. 71% of them choose to acquire items with a NASCAR trademark name. They are quite extrovert and are willing to join other fans while racing. They desire quality racing with low cost at hassle-free area. Although Competitive Cost Analysis Cost Modeling Techniques Case Study Solution has attempted to increase the quality of its racing by presenting phase racing, they also have tried to lower rates and make the event more convenient 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 seeing the race live on the tv or by entering the events. Currently, the fans preference is towards watching the race in the house on television instead of going, as the client experience at NASCAR tracks is not beneficial as well as costly. This preference makes the rates for attendance lower than the rates for tv audiences. NASCAR has to change the behaviour of its fan base by presenting qualitative services at its tracks.
One of the potential target market of Competitive Cost Analysis Cost Modeling Techniques Case Study Solution was Hispanics; the young and growing population of United States. The market section has excellent prospective for NASCAR as the population was growing at a greater rate and it was expected to end up being thrice after forty years and the segment has increasing wealth rate with about $1 trillion of wealth in 2014. The sector reveals affinity with vehicle culture, however need a more concentrated marketing towards welcoming the sector towards racing.
Kids are also one of the possible target market sector for NASCAR, as they are more connected socially than other groups. Car racing games established by Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis can be a prospective source of getting attention of kids towards NASCAR track racing. NASCAR needs more attention towards customizing and enhancing its digital features to bring in the kids target market.
This big expense makes the sector potential for NASCAR marketing strategy of increasing its fan base. The market sector considers NASCAR as an organization doing not have in producing a multiculturalism environment. NASCAR must take different actions to improve the experience of Generation Y consumers in its occasions.
5 C's of Marketing
5 C's of marketing helps in taking decisions relating to marketing.
It requires to make PESTLE analysis in order to understand environment or context in which NASCAR is working. PESTLE stands for political, financial, social, technical, legal and ecological and is mentioned above.
Competitive Cost Analysis Cost Modeling Techniques Case Study Help is a car racing company with having USP of high quality vehicle racing with a worldwide structure. Its sector is sports team and occasions.
Collaborations consists of suppliers, suppliers and alliances of Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis. It is collaborated with various racing teams which are taking part in racing. It also collaborated with Turners Sport for digital rights. NASCAR used to make money check of around $15 million each year from Turner Sports. There are variety of cons behind this offer. NASCAR had to get approval from Turner Sport if it want to produce its Facebook page, twitter account or even mobile application. Turner Sport also had rights of each and every single video which is shoot during race at track.
The customer of Competitive Cost Analysis Cost Modeling Techniques Case Study Help are its viewers. They target consumers with having age of 15-60 years. Fan base of NASCAR consisted of married males with a typical age of 47, which passes their fandom to their children and produce generational loyalty.
Teams normally represents sponsors in NASCAR and the medium of marketing is drivers. These motorists can go against NASCAR if they got much better chance in terms of prizes and tv exposure.
1. Keeping and developing Facebook Page.
Among the prospective target audience sectors for NASCAR is Hispanics which is the growing population segment of USA but regrettably NASCAR had actually been unable to draw in the this targeted section. In order to attract the young growing generation the NASCAR ought to market by using social networks like Facebook. It must establish a Facebook page including the info regarding the races and the places of tracks to make the consumer helpful about the core operations of Competitive Cost Analysis Cost Modeling Techniques Case Study Help. It needs to also update its Facebook page on everyday basis to supply details about its upcoming occasions. This would make the target audience segment more informative about business and would result in attracting large fans base.
2. Establishing and Updating Accounts of Secret Drivers.
NASCAR motorists has a low star power as compare to players of other sports. Its ranks 7th in regards to star power (see Case Exhibit). The major factor behind it is that, the racers primarily play in teams and are not able to develop a crucial account and maintain a close contact with fans. The bad contacts with fans result in less tourist attraction of viewers towards the racers and a low star power. Star power is an essential element for attracting viewers towards tracks and towards television. The star power for the chauffeurs at NASCARA could be enhanced by producing and upgrading accounts of essential drivers by NASCARA itself. This would remove the requirement of requiring drivers to maintain their accounts and would lead to increasing fans attention towards NASCARA chauffeurs.
3. Developing New Games and enhancing current games for kids.
Kids invested most of their time on playing games and utilizing smart devices. But unfortunately, kids playing NASCARA have a worst experience of playing its games. As a result, they are less attracted towards the sport. In order to draw in these kids, NASCARA should enhance its present racing video games by presenting personalization in the automobiles i.e. changing colours, choice of speed, introducing group racing in the game, utilizing better graphics connected to the racing tracks and presenting different levels in the game. All these modifications in the present video game would supply better experience to kids.
In addition to it, NASCAR needs to likewise develop brand-new video games connected to racing like kids racing with kids characters as chauffeurs, cartoon racing with racing in between numerous animation characters with a choice of selecting the favourite animation character for the kids. These methods would make it possible for the company to draw in one of its possible target sectors.
4. Introducing multiculturalism at events.
Competitive Cost Analysis Cost Modeling Techniques Case Study Help events are consisted of fans with very few multiculturalism, due to cost of arrival in events, making it unattractive for the consumers perceiving sport events as get-togethers i.e. Generation Y consumers. As the Generation Y customers are a potential target audience for NASCAR, for that reason the business needs to take particular procedures to attract this prospective target market. It must adopt strategies to attract the consumers far from the tracks area with different culture. The method to do so might be providing special discount rates on tickets or complimentary tickets to audiences coming from a specific range or from another state. It would increase multiculturalism of the fans and would make Generation Y clients more satisfied.
5. Improving Consumer Experience at Tracks.
NASCAR needs to work on infrastructure and features at tracks due to the fact that on the race day audiences got dissatisfied. Audiences have numerous expectations from Competitive Cost Analysis Cost Modeling Techniques Case Study Solution due to the fact that in same industry other companies are providing much better services than NASCAR. IF NASCAR don't work on this issue then its fans might shifted to its competitors.
Marketing Spending plan
Marketing budget made on the basis of the above methods for the period of 5 years from 2011 to 2015, reveals the cost associated data for the marketing techniques. It can be seen that method 5 of enhancing client experience at tracks would need greatest preliminary financial investment and expense and technique 4 of introducing multiculturalism will require lowest initial investment with most affordable further per year cost.
NOTE: The worths about cost are assumed on reasonable basis due the lack of figures and realities associated with cost in the case research study. Inflation rate of United States is presumed to be 10%.
On the basis of deep analysis of the internal and external aspects of Competitive Cost Analysis Cost Modeling Techniques Case Study Solution causing the decline of tv viewership rate and participation rate at tracks, the above marketing strategies are recommended to NASCAR to increase its fan base in long run. These strategies would handle internal factors like poor consumer experience at tracks, inadequate social networks marketing, incapable digital medias like video games, lack of culturalisms at tracks and so on, in addition to with external elements like moving of fans towards other sports, demographical changes in America and altering domesticity styles.