Case Study Analysis
Introduction, Key Problems:
Despite growing to be a multi-billion dollar industry, and the second largest sport in the United States, NASCAR has experienced enormous difficulty in maintaining its initial success. Race attendance peaked in 2005 but declined 22% by 2010 and TV viewership declined 30% (Anderson, Kilibarda, page 1). Those numbers are hard to ignore and make it abundantly evident that there are major deficiencies in NASCAR’s business model, as well as substantial shortcomings in the organization’s ability to maintain consumer engagement. NASCAR faces a daunting need for modifications, as there are a plethora of fundamental problems contributing to the steady and rapid downfall of the organization.
The organization’s tendency for having a closed culture is likely a major turnoff to stakeholders. Interaction with consumers is a quintessential aspect of operating an esteemed business in today’s world and perhaps NASCAR would have maintained more consumer loyalty, had they been more involved with their fans and other stakeholders. The organization’s poor collaboration and listening skills caught up to them when they opted not to collaborate with the industry during the development of the Car of Tomorrow. This subsequently frustrated many of their stakeholders and ultimately wound up bruising their brand image when Kyle Busch went so far as to say that the car “sucked” on live television (Anderson, Kilibarda, page 3). It would have been in the best interest of everyone for NASCAR to do proper preliminary research, speaking with drivers about what attributes they hoped for the car to offer.
Another issue that is detrimental to NASCAR’s brand is their reliance on traditional media outlets, such as newspapers. Their marketing strategy is completely outdated. It is imperative for NASCAR to alter their media landscape, moving into the ever-growing digital media world— a trend that NASCAR cannot ignore. NASCAR is accustomed to counting things as a measure of success, yet media traffic is a major indicator of success, which should be incorporated into their assessments. Nearly half of the NASCAR executives agreed that capital investments should be made in digital technologies and social media, illustrating the fact that the organization has greatly underinvested in those areas (Anderson, Kilibarda, page 10).
Unfortunately, NASCAR’s digital rights belong to Turner Sports. Consequently, NASCAR must attain Turner’s approval for tasks as primitive as creating a mobile application, Facebook page, or Twitter handle. Turner even possesses exclusive rights to any videos shot during race weekends. The Turner partnership disrupts NASCAR’s endeavors to enter the digital world and it is the cause of an insufficient user experience on their website, which discourages the online exploration of NASCAR, even further distancing the organization from the digital world. In relation, the lack of web presence hurts fan engagement. Fan engagement is perhaps the most fundamental asset to a company’s success and NASCAR’s driver star power is less than impressive. NASCAR drivers simply do not possess the celebrity attention that NFL and NBA players have.
The United States’ rapidly changing population demographics pose a colossal challenge for NASCAR, as their fan base consists primarily of white, married middle-aged men. The increasing rate of single-parent homes withers NASCAR’s fan-base. In 2010, one in four children were raised without an adult male at home, eliminating many chances for fathers to pass the NASCAR tradition down to their children (Anderson, Kilibarda, page 8). The U.S. Hispanic population is swelling rapidly, yet many Hispanics do not feel welcome to NASCAR. Additionally, there is enormous potential for expansion in attaining child fans, as children are connected to one another via social media, providing them with easy access to influence each other. Alas, children, Hispanics, and other non-NASCAR-fan market segments tend to fancy alternative sports, leaving NASCAR with the challenge of engaging to those audiences.
Perhaps those audiences appreciate the amenities that other sports stadiums offer, such as new venues, wifi-access, and smart-phone interaction. The race-day experience is a disappointment to many race attendees, who described the facilities as insufficient and run-down, with unclean bathrooms, no wifi, and uncomfortable seating.
Decisions, Alternatives, and Research Methods:
Inadequate facilities and the rest of NASCAR’s shortcomings exist because of the organization’s neglect for digital marketing and its inability to keep up with fluctuating consumer trends. NASCAR needs to make some major fundamental changes in order to survive in the otherwise booming sports industry. A few debatable issues must be decided upon, in order for NASCAR to move forward as a mended organization. The major issues at hand all have pros and cons that encourage or discourage NASCAR from electing alternatives.
NASCAR must decide whether to repossess their own digital rights, or continue leaving that responsibility to Turner. On one hand, all of NASCAR’s stakeholders benefit from financial payments from Turner. However, stakeholders are quite dissatisfied with the organization’s digital performance. NASCAR should approach this situation by distributing a survey, which dives into the user experience and inquires about the overall quality and appeal of their website and social media presence. Respondents could be queried about the website’s ease of use, as well as questioned about if the site provides sufficient information for their inquiries about NASCAR. The organization must also uncover whether users consider their website to be sufficiently organized, which is another topic that should be included in the survey. In addition, practicing an indirect form of qualitative research would provide NASCAR with valuable information about the respondents’ underlying motivations and attitudes towards the website and brand image. NASCAR would benefit greatly from observing users while they navigate their website, to discover exactly which aspects need improvement and why.
Needless to say, NASCAR needs to improve fan engagement. Building individual drivers’ star power would likely lead to enormous consumer interest growth, as demonstrated by other sports. The star factor possessed by NASCAR drivers hardly compares to that of NFL or NBA players. The debate lies in who is responsible for building star appeal. NASCAR must determine whether it is the responsibility of the individual driver, or the responsibility of the organization to generate celebrity branding. The drivers do not necessarily have the means to create star power for themselves, as they lack know-how and are already occupied with their grueling schedules. Yet, NASCAR is paying the drivers for a reason so perhaps part of the drivers’ responsibility includes branding themselves. The even bigger issue at hand is how NASCAR should go about creating stars out of their drivers in the first place. The organization should facilitate focus groups, consisting of sports fans, geared towards inquiring what the fans’ favorite things are about the sports stars that they love. It is imperative for NASCAR to discover what the appeal is with popular NFL and NBA stars. Focus groups would be extremely beneficial to this topic, as they proved to be insightful during Project REVOLVE.
Another issue relating to fan engagement is the ever-changing United States’ population demographics. NASCAR needs to appeal to new groups of individuals, such as Hispanics and children, in order to stay afloat. The organization must decide whether to aim their advertising efforts at new market segments or at their existing target market of white, middle-aged males. The benefit of targeting new groups is that it could result in more fans. Inversely, it could also tarnish NASCAR’s relationship with existing fans if they realize that NASCAR is honing in on new groups. To investigate this debate, NASCAR could draft a mini advertising campaign that is aimed at Hispanics. This campaign could be shown to both non-NASCAR-fan Hispanics and existing NASCAR fans. The organization would interview individuals, inquiring whether or not the campaign appealed to them, making sure to ask the existing fans if they noticed any differences in relation to NASCAR’s usual advertisements.
It is simply imperative for NASCAR to enhance their social media efforts in a big way. Nowadays, social media is a vital aspect of social culture and an essential marketing tool, which NASCAR should take advantage of. Breaking free of Turner would help this cause. After conducting a survey about the website user experience, NASCAR would likely find that the digital variables in their organization require major improvements. It is imperative for NASCAR to become independent from Turner in order to connect digitally and socially with their fan base. The burden of attaining Turner’s approval hurts NASCAR’s efforts to expand digitally. Facebook, Twitter, and other social mediums are too important for NASCAR to ignore. These mediums can be most productively taken advantage of without Turner.
Another essential task that NASCAR must accomplish is appealing to the 21st century fan. Not only should this be done online, but it also must be done in the NASCAR facilities. Attending races should be more of an interactive experience with some form of digital or smart phone fan involvement. To keep up with the other sports, NASCAR needs to improve their facilities, have cleaner bathrooms, and offer wifi at races. As a bonus, offering wifi will result in free word-of-mouth advertising when fans are able to post pictures and videos to social media platforms.
To further engage the 21st century fan, NASCAR must encourage their drivers to brand themselves and become involved with social media to connect with fans. Possessing and capitalizing on social media platforms will allow the drivers to brand themselves in a way that makes them appear relatable. Full fan engagement hinges on the stars of the sport and it is crucial for fans to identify with and root for the drivers.
To combat changing demographics, NASCAR must unearth ways to charm new groups of consumers. Educating these consumers about NASCAR is a great first step in sparking their interest, as many segments of consumers are entirely unfamiliar with NASCAR. The organization should make efforts to entice new segments of consumers, while also continuing to keep steadfast fans enthralled. Perhaps a dual marketing campaign, targeting new and existing segments, would be an ample solution to optimize NASCAR’s fan base
Captivating new fans, while maintaining the engagement of existing fans is the fundamental goal, which NASCAR must fulfill in order to thrive. An extreme digital makeover, coupled with independence from Turner will allow NASCAR to reach their fans via entirely new mediums, while marketing their brand in innovative ways. Recuperating the track facilities will aid NASCAR in rivaling the stadiums of substitute sports, further encouraging fans to remain devoted to NASCAR. Those changes, along with enhanced driver star power and new fan segments, will likely take NASCAR back to the thriving place they once were.
CASE STUDY by Eric T. Anderson and Vasilia Kilibarda