Pricing Strategy And The Net Case Study Solution & Analysis
Introduction
NASCAR (National Association for Stock Automobile Auto Racing) is an organization performing series of Stock Automobile racing in United States and acting as an approving body for driving the rules for Stock Cars and truck Racing. 2) Stock Vehicle Racing by NASCAR is the second largest spectator sport, with greatest number of sponsors. 1) The other sources of income for Pricing Strategy And The Net Case Study Help includes; 10% of the overall profits from television rights, sanctioning charges i.e. $1-2 million per race, and licencing NASCAR brand name to companies.
NASCAR has a closed business culture with the non-interventionist technique. The building of Vehicle of Tomorrow by NASCAR, with an intention of safety for the drivers, brought different stress amongst 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 communications between its stakeholders, there was no recognizable service interaction method. The market's target consumers, direction and objectives were all unidentified.
The audit explained numerous doing not have of NASCAR in regards to lack of internal combination, absence of fan management strategy and lack of digital and social media of marketing. The business has complex environment with independent tracks, groups and chauffeurs. This structure with closed corporate culture bring numerous obstacles in accelerating a change. Other partners in ecosystem consists of the media networks i.e. television and radio, and corporate marketers.
Pricing Strategy And The Net Case Study Solution viewers was highly devoted to the sport and the brand names related to the NASCAR, making it appealing for sponsors and corporate marketers.
Issue Declaration.
The company is currently dealing with the problem of decreasing 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 profits.
Situational Analysis.
Although the company was quite effective till 2005 with its traditional marketing methods, however right after 2005 the company starts facing numerous issues including decline of its fan base. A number of external in addition to internal elements are accountable for the decline. Internal factors consist of; insufficient investment in social media and other digital medias of.
Fan base of NASCAR made up of married males with a typical age of 47, which passes their fandom to their youngsters and develop generational commitment. Other challenges for NASCAR consists of the shift of its fans to other sports as they were improving their fan's experience enabling access to their broadcasts out of the homes through jumbo turns, Wi-Fi access, etc.
SWOT Analysis.
Strengths.
In SWOT analysis, strengths defined as business's qualities which are different from its competitors. These are business's core proficiencies on which company efficiency or company success based on. Pricing Strategy And The Net Case Study Help core proficiencies includes it has rights of determining rules as sanctioning body. Regulations and rules relating to professional stock cars and truck racing are dictated by NASCAR like if any group with needed skills and resources can participate in races by following rules and policies dictated by NASCAR. So NASCAR has monopoly it this element. Its strengths likewise includes 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 used to relay in more than 150 nations around the globe with more than $56 million earnings. The primary sources of their earnings come from television rights, sanctioning fees, sponsorship and licensing. It has longest season of 10 months and having ownership of three national series i.e. Outdoor camping World Truck Series, the Sprint Cup Series and the Nationwide Series. It has likewise large resource of fans and corporate sponsors. All the occasions of NASCAR are sponsored by corporates because of biggest brand commitment of fans toward brands advertised by Pricing Strategy And The Net Case Study Analysis. (See Appendix A).
Weak points.
Weak points of NASCAR includes its close culture which is non collective. Pricing Strategy And The Net Case Study Analysis develops Car of Tomorrow without collaboration so result is that drivers did not like that principle. It was likewise discovered that NASCAR had no efficient method for organisation interaction.
Opportunities.
NASCAR usually utilized to rely on standard media sources like regional newspaper for publicity of its sports. NASCAR likewise came to understand from these traditional media outlets that sport was difficult to cover. When sports fans were asked regarding popular celebrities and stars then NASCAR motorist was not found even in leading twenty responses.
Threats
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 financial investment. Economic down turn likewise results in increase fuel costs which likewise impacted NASCAR. Now if NASCAR make substantial investments in new segments which are based on new consumers then it may deal with unfavorable comments from its core fan base.
Porter's Five Forces Analysis
It is important to comprehend market in which business is working since NASCAR's bottom line i.e. net profit is heavily depends on this. There are 5 forces that are used to determine success, intensity and beauty of NASCAR business.
Competitive Rivalry
These chauffeurs can go against NASCAR if they got much better opportunity in terms of rewards and television direct exposure. If viewers enjoy other race vehicles and drivers more than NASCAR then viewers can move to those other interesting vehicles and chauffeurs. NASCAR could be having danger from its two direct competitors that is Solution 1 and Moto GP.
Supplier Power
The supplier power shows the variety of suppliers are readily available in market and what is the expense connected with supplier if business shifts from one provider to another. In this market there is supply monopoly due to the fact that drivers with needed resources and skills are limited.
Purchaser Power
This force is concerning to customers that is it simple for consumers to move to other products. Then clients are less most likely to switch, if there is more changing expense is associated. When it comes to NASCAR customers are its audiences. Since viewers will having low changing expense, audiences can switch to other competitors easily.
Danger of Substitution
Substitutes are referred as options. The alternatives in this case can be other entertainment indicates like viewers can shift to other sports. There are broad range of substitutes are available in this circumstance which suggests that hazard of alternative is high.
Hazard of New Entry
In the case of NASCAR hazard of new entry is low. They require to develop vehicles and racing tracks and likewise requires to pay substantial quantity to drivers for switching.
PESTEL Analysis
Political
As NASCAR is working in various markets so it requires to face different policies. It is also kept in mind that NASCAR has faced increased scrutiny concerning regulative. Every federal government has various priority so NASCAR has actually to be prepared for it as concern can be shifted to other sector.
Economical
Financial factors includes tax rate, currency exchange rate, economic efficiency of that particular company, conditions of labour market, inflation rate and so on. Fortunes of the NASCAR and its competitors can be affected if there is federal government intervention in the marketing and sales sector. NASCAR can utilize abilities of workers to develop brand-new chances and enhance existing chances.
Social
Each has different social values and standards. It assists in comprehending relating to society and preference of consumers.
Technical
In this case of NASCAR it can be kept in mind that business are greatly spending for research study and advancement. NASCAR needs to likewise work on its media rights policy with Turner Broadcasting System.
Legal
Legal plays an essential function in every nation since every nation has different legal conditions. Pricing Strategy And The Net Case Study Analysis requires to be ensure that they safeguard their legal rights in every county so any company does not harm to its legal rights.
Environmental
Environmental aspects are likewise important for every service. Since generally federal governments don't permit those company which can hurt to environment. These ecological aspects consists of laws concerning pollution, environment change, safe garbage disposal, policies relating to insurance and so on. NASCAR requires to ensure that its cars are not creating contamination more than acceptable level.
7 P's of Marketing
Product
The items of Pricing Strategy And The Net Case Study Analysis in its item portfolio are; racing events tickets, racing tracks, sponsor's marketing, media rights, licencing NASCAR brand, approving rules for races and ad-space to business online marketers during broadcast of NASCAR races. (Hanlon, 2018).
Cost.
Pricing technique of NASCAR for its race events tickets is based upon the location and importance of the racing occasions. Along with race occasions tickets, NASCAR likewise charge different service fees to its stakeholders and makes income. It charged sanctioning charges of $1-2 million per race on average in 2005.
Promotion.
Promotional method of NASCAR is extremely based upon its fan base. A strong fan base share its fandom with others and increase the number of viewers for NASCAR races.
Location.
NASCAR have its racing tracks in various cities in United States. The most important 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 comprehend nationwide appeal.
People.
Nestle individuals method is comprised of offering better experience to its audiences, its fan base and to all of its stakeholders. Individuals are an important aspect of Pricing Strategy And The Net Case Study Help A marketing strategy as its events are the source of home entertainment for crowd. Its individuals method consists of efforts to supply better experience to its Fans, Race Drivers, Crew, Event Organizers etc., all of which come under people technique of NASCAR.
Processes.
Numerous organisation procedures are needed to perform racing events in an effective way. These processes consist of; proper schedule of time, arrangement for viewers, offering tickets, arrangement of area for sponsors, handling logistics and so on. These all procedures contribute I constructing NASCAR image, enhancing viewers experience and increasing fan base.
Physical Proof.
Most important physical proofs for the NASCAR includes the presence of its racing tracks, stock vehicles and racing occasions. In addition to it, its merchandising brands including t-shirts, caps, goodies and so on, likewise function as a physical evidence for NASCAR.
Product Life Cycle Assessment.
The racing events by NASCAR was introduced on June 19, 1949. At the very first phase competition for NASCAR was low, as the competitors drove the automobiles comparable to the cars driven by ordinary individuals.
Growth.
After conducting its very first race successfully the business moved towards developing its own tracks. The very first Pricing Strategy And The Net Case Study Help based track, namely the Darlington Raceway track, was initiated 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 development of racing tracks the company moved towards relaying its races on television in 1979. The very first event transmitted on tv was flag-to-flag protection of Daytona.
In 1972, William France Jr., ended up being 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 brand-new era of rewarding sponsorships and tv contracts for NASCAR.
Maturity.
The maturity duration for NASCAR started with the efforts of William France Jr., with the business having wide range of revenue sources. The business has about 500 sponsors with transmitting its events in about 150 nations. The business has large number of tracks in most of the cities of United States.
Decline.
The significant causes of decline include the financial crisis of 2008, which increased the expense of getting here at tracks for viewers due to increasing fuel prices, and the moving of its fan base towards other sports.
Market Segmentation.
The marketplace segmentation of Pricing Strategy And The Net Case Study Help can be divided into 4 segments; Geographic, Demographic, Psychographic and Behavioural. (Dutta, 2018).
Geographical.
The geographical division of Pricing Strategy And The Net Case Solution 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 different countries. The business has 23 tracks in about 20 states of America and has television broadcast through different Medias i.e. TNT, ESPN, ABC and Fox, in about 150 countries.This large geographical division offers the business regional in addition to global fan base.
Group.
The group division of Pricing Strategy And The Net Case Study Help is likewise highlydiverse based upon the gender, income and age of the consumer. To increase the demographic segment of its market NASCAR should modify its marketing techniques to bring in more age groups and lower its rates to go into in the market section with a low average earnings.
Psychographic.
NASCAR has a fan base with a commitment. NASCAR fans view it compulsive to buy tickets and see the races when in a week. NASCAR has actually attempted to increase the quality of its racing by introducing phase racing, they also have actually tried to lower costs and make the event more practical by introducing live racing.
Behavioural.
Behavioural segmentation of Pricing Strategy And The Net Case Study Analysis is based upon the behaviour of fans in terms of enjoying the race survive on the tv or by entering the occasions. Presently, the fans preference is towards enjoying the race in your home on tv instead of going, as the client experience at NASCAR tracks is not beneficial as well as pricey. This choice makes the rates for participation lower than the rates for television viewers. NASCAR has to alter the behaviour of its fan base by presenting qualitative services at its tracks.
Target Market.
Hispanics.
One of the potential target market of Pricing Strategy And The Net Case Study Solution was Hispanics; the young and growing population of United States. The market segment has great possible for NASCAR as the population was growing at a higher rate and it was expected to end up being thrice after forty years and the sector has increasing wealth rate with about $1 trillion of wealth in 2014. Although, the segment reveals affinity with car culture, however need a more concentrated marketing towards inviting the segment towards racing.
Kids.
Kids are also one of the possible target audience section for NASCAR, as they are more connected socially than other groups. Creating fan base amongst kids can offer a possible boost in the variety of fans for racing due to their connection. Kids invest most of their times in playing and using smartphones video games. Automobile racing games developed by Pricing Strategy And The Net Case Study Analysis can be a possible source of getting attention of kids towards NASCAR track racing. Nevertheless, NASCAR's digital features related to kids are not efficient in acquiring the attention. NASCAR requires 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 technique of increasing its fan base. The market section thinks about NASCAR as a company doing not have in creating a multiculturalism environment. NASCAR must take numerous actions to improve the experience of Generation Y customers in its events.
5 C's of Marketing
5 C's of marketing helps in taking choices regarding marketing. These 5 C's needs to be evaluated appropriately for taking any marketing decision. These 5 C's stands for Climate, Company, Collaborators, Rivals and consumers.
Climate/Context.
It needs to make PESTLE analysis in order to understand climate or context in which NASCAR is working. PESTLE represents political, financial, social, technical, legal and environmental and is stated above.
Company.
NASCAR is an auto racing business with having USP of high quality vehicle racing with a worldwide structure. Its sector is sports team and occasions. Its target audience is males in the age of 15-60 years. Business has actually closed corporate culture and having non-interventionist technique.
Cooperations.
Collaborations includes suppliers, providers and alliances of NASCAR. NASCAR used to get pay check of around $15 million every year from Turner Sports. NASCAR had to get approval from Turner Sport if it desire to develop its Facebook page, twitter account or even mobile application.
Customers.
The consumer of Pricing Strategy And The Net Case Study Help are its audiences. They target customers 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 youngsters and develop generational commitment.
Rivals.
The direct rivals of NASCAR are Formula 1 and Moto GP. Teams typically represents sponsors in NASCAR and the medium of marketing is motorists. It can be stated that motorists and race vehicles are competitors. If they got better chance in terms of rewards and television direct exposure, these drivers can go against NASCAR.
Marketing Methods.
1. Keeping and establishing Facebook Page.
One of the prospective target markets sections for NASCAR is Hispanics which is the growing population segment of U.S.A. but unfortunately NASCAR had been unable to attract the this targeted section. It needs to establish a Facebook page consisting of the info concerning the races and the places of tracks to make the consumer helpful about the core operations of NASCAR.
2. Establishing and Upgrading Accounts of Key Drivers.
NASCAR drivers has a low star power as compare to gamers of other sports. Its ranks 7th in regards to star power (see Case Exhibition). The significant reason behind it is that, the racers mainly play in groups and are not able to develop a key account and preserve a close contact with fans. The bad contacts with fans lead to less attraction of audiences towards the racers and a low star power. Star power is an essential aspect for drawing in viewers towards tracks and towards tv. The star power for the drivers at NASCARA could be improved by creating and upgrading accounts of key chauffeurs by NASCARA itself. This would eliminate the requirement of forcing chauffeurs to preserve their accounts and would lead to increasing fans attention towards NASCARA motorists.
3. Developing New Games and enhancing present video games for kids.
In order to bring in these kids, NASCARA ought to enhance its present racing games by presenting modification in the automobiles i.e. changing colours, choice of speed, introducing group racing in the video game, using much better graphics related to the racing tracks and introducing different levels in the game. All these modifications in the present video game would provide better experience to kids.
Together with it, NASCAR should also build brand-new video games connected to racing like kids racing with kids characters as motorists, cartoon racing with racing between different animation characters with an option of selecting the favourite animation character for the kids. These methods would enable the company to attract among its possible target sectors.
4. Presenting multiculturalism at events.
Pricing Strategy And The Net Case Study Analysis occasions are comprised of fans with very couple of multiculturalism, due to cost of arrival in events, making it unattractive for the consumers perceiving sport events as social occasions i.e. Generation Y clients. As the Generation Y consumers are a prospective target audience for NASCAR, therefore the business needs to take certain procedures to attract this prospective target audience. It ought to adopt strategies to bring in the consumers far from the tracks place with various culture. The technique to do so could be supplying unique discounts on tickets or free tickets to audiences originating from a specific range or from another state. It would increase multiculturalism of the fans and would make Generation Y customers more pleased.
5. Improving Consumer Experience at Tracks.
NASCAR ought to work on facilities and facilities at tracks because on the race day viewers got disappointed. Viewers have lots of expectations from Pricing Strategy And The Net Case Study Help since in same market other companies are offering better services than NASCAR. IF NASCAR don't work on this problem then its fans may shifted to its rivals.
Marketing Budget plan
Marketing spending plan made on the basis of the above techniques for the duration of 5 years from 2011 to 2015, reveals the expense associated information for the marketing methods. It can be seen that method 5 of improving customer experience at tracks would require greatest preliminary investment and cost and technique 4 of presenting multiculturalism will need least expensive preliminary financial investment with most affordable even more per year cost.
NOTE: The worths about cost are assumed on reasonable basis due the lack of realities and figures associated with cost in the event study. Inflation rate of United States is assumed to be 10%.
Suggestions.
On the basis of deep analysis of the internal and external factors of Pricing Strategy And The Net Case Study Solution triggering the decrease of tv viewership rate and presence rate at tracks, the above marketing strategies are suggested to NASCAR to increase its fan base in long term. These strategies would deal with internal elements like poor customer experience at tracks, insufficient social media marketing, incapable digital medias like video games, absence of culturalisms at tracks and so on, along with with external aspects like moving of fans towards other sports, demographical changes in America and changing family life styles.
