NASCAR Marketing Plan: New York2008Dr. LuSES 5334/22/08Andy HavensBlake Riznerrightcenter<br /> Table of Contents<br />
Target Market Growth
Implementation / Controls
Executive Summary<br />Over the past few years NASCAR has been trying to develop a race track on Staten Island in New York City. Many concerns about traffic issues and budget concerns have drawn controversy, but now building a track on Staten Island has become more realistic. Surveys have been conducted and reveal more acceptances to NASCAR from the local community. Here at the Staten Island Race Management Team we are dedicated to bring the NASCAR experience to the great state of New York. Located on the borough of Staten Island, our company will bring out the very best of the community and help to further create an even greater city. Our slogan is “the race is on” assuring people that NASCAR is here and is here to stay, so get ready for a great experience. We hope to provide a great and memorable experience for the fans while providing revenue for the local community. <br />Background<br />
“The NASCAR community is built on a shared passion for a sport unlike any other. With over 75 million fans, we want our sport to look like America and attract the best talent and the most dedicated fans in the world."
“To provide customers with the best entertainment experience racing has to offer and be the leader and innovator in the sport and entertainment industry.”
The product offered is actually the physical location of the Staten Island Race Track and sounding attractions. The purpose of the race track is to bring s new experience to the city while generating more profit and revenues for the locals and the sport. Extensions of the product would include memorabilia such as shirts, hats, race day giveaways, and NASCAR posters.
NASCAR lies within the competitive environment that contains leisure and entertainment products or services that are both sport and non-sport related. Competition for consumer’s discretionary income is fierce and has only increased due to the current less favorable economic conditions. Within the segment of sport entertainment NASCAR is not only in direct competition with other racing events, such as the open-wheeled Indie car series, but with other sport entities such as the NFL, MLB and the NHL. To compete in this category sport organizations are continually trying to enhance their product offerings to appeal to a larger population and enhance the total product and experience.
Target Markets<br />
The U.S. Census Bureau conducts a nationwide census every 10 years. The last census was conducted in the year 2000. From 1990 to 2000 the population of the United States increased by a record breaking 32.7 million people. Of that 32.7 million New York accounted for 684,000. This 684,000 increase represented a 26.7% rise in New York’s total population bringing it to 18,976,457. This puts New York in the top three most populated states along with California and Texas respectively. When considering metropolitan areas with a total population of 5,000,000 or more, New York-Northern New Jersey-Long Island, NY-NJ-CT-PA ranks first holding 29.9% share of the total population of metropolitan areas. This means that New York and the surrounding areas have a large, as well as dense population making it an attractive environment to offer products or services.<br />Age<br />The median age of the New York population was 35.9 years old. Of the ten largest cities New York has the highest median age. However, 75.3% of the population is 18 and older while only 12.9% of the population is 65 and older. This means that although New York has a large population it is on average an older population when compared nationally.<br />Gender<br />In New York, 48.2% of the population is male and 51.8% is female. When compared nationally male’s make up slightly less and female’s make up slightly more of the population in New York. However, when looking at the percent change in gender from 1990 to 2000 the male population increased by 6% while the female population increased just slightly less with 5%. This means that while the female population is slightly higher when compared to other states, the male population is growing and slowly catching up to national averages.<br />Race<br />New York’s population is predominantly White accounting for 61%. The next largest group is black or African American which makes up 14% and is followed closely by Hispanics who account for 13% of the population. In places with populations of 100,000 or more, New York had the largest White population with over 3.8 million. <br />Education<br />When looking at the level of education we consider those who are 25 years of age or older. In New York 84.1% of the population has obtained a high school degree or higher. The State ranks tenth in the nation for individuals who have obtained a Bachelor’s degree at 31% of the population. This means that the population is on average a higher educated population.<br />Income<br />The median household income for New York is $51,384 per year, which ranks 14th in the nation. The median family income is $61,138 per year. The percentage if individuals living below the poverty line in New York currently stands at 14.2%, which is slightly higher than the national average of 13.3%.<br />Median Household Income by County: New York<br />Employment<br />As of March 2008 the unemployment rate for the state of New York was 4.8% reported by the Bureau of Labor Statistics. This is below the national rate of 5.1% posted during the same period. This unemployment rate has stayed below 5% in New York for the last three years. This means that New York has a stable economy and is resilient in the face of macro economic conditions.<br />Marital Status<br />As of 2000 53.3% of males and 47.1% of females were married in the state of New York. These numbers fall below national averages by 8.4%. This means that New York’s population is comprised of more single people than average. <br />Language<br />Of the population in New York, 28% speak a language other than English at home. This is much higher than the 17.8% national average. Of all foreign languages spoken at home Spanish is the most popular in the Northeast with 4.5 million people speaking the language.<br />
According to Maslow’s Hierarchy of Needs, after physiological and safety needs are fulfilled, the third layer of human needs is social. This psychological aspect of Maslow's hierarchy involves emotionally-based relationships in general, such as friendship, intimacy, and family. Humans need to feel a sense of belonging and acceptance. This sense of belonging can come from a large social group or small social connections. NASCAR’s goal is to offer a product that fulfills the third most important human need by providing a large social group to which people can associate themselves with. Consumers will benefit from product usage in a number of ways including:
Satisfying these needs in a fun and exciting way at a reasonable price will provide customers with a tremendous value in fulfilling this need.<br />
The top six marketing trends that are and will affect NASCAR include:<br /> The Merging of Sports and Entertainment<br />With the advancement of sport marketing we have seen sport evolve from national pastimes to big business entertainment. Professional Sport has become an entertainment machine that competes head to head with all other forms of entertainment. The arena of competition has become the stage and the athletes have become the stars. An example of this can be found in the explosion of product extensions such as music, in-game entertainment, half time shows, dance/acrobatic teams, and many other forms of creative programming delivered to the audience to increase their level of entertainment.<br />Corporate Marketing<br />As shown in the graph below the business of advertising is seeing immense change in the industry. Corporations have shifted away from traditional methods of advertising and have begun to market their products or services through the use of sponsorship. Since we know that 66% of sponsorship dollars are allocated to sport, this has an increasing impact on sport business. Since NASCAR is one of the highest grossing sport entities in regards to sponsorship this is a trend they will have to monitor closely. One of their biggest challenges is to continue to increase sponsorship revenue without diluting the value.<br />Annual Growth of Advertising, Sales Promotion, and Sponsorship<br />Digital and Web Content<br />Keeping consumers engaged and connected is essential in moving consumers towards heavy users on the escalator of involvement and consumption. The increase use of digital and web content is essential in keeping consumers engaged and connected. As society transforms toward being more technological and information driven, NASCAR must satisfy that need by providing easily accessible information in multiple formats. With their partnership with Turner broadcast media, NASCAR has done a great job thus far on providing customers what they demand. However, it is important to stay proactive in an industry segment that changes at such a high pace.<br />Increased Number of Media Sources<br />As we move into the digital age consumers are becoming much more aware and creative about how they consume different forms of media. The number of media sources now available to the consuming public has grown from three or four to almost countless. Where people used to get their news and information from print, radio, and TV, they now get it from blogs, podcasts, YouTube, chat rooms, and many more. To ensure that consumers are receiving the correct information regarding NASCAR and its brand, special attention must be paid to emerging media sources.<br />People Brands<br />In the last decade the importance of branding has come to the forefront in the minds of marketers. A new phenomenon that has been unique to sport in the area of branding is the emergence of “People Brands.” Sports stars such as Michael Jordan, David Becham, and Tiger Woods have developed personalized brands unique to own likeness. This provides consumer not only a connection to a specific sport but a personality within that sport as well. It is in the best interest of NASCAR to develop personalities such as Dale Jarred, Dale Earnhardt Jr., Bobby LaBonte, as well as others to provide the customers the opportunity to associate and align themselves with their favorite personality.<br />Globalization<br />As the speed of information and travel increase we are seeing a shrinking effect of the globe. With an immense number of new markets and a growing number of consumers worldwide, the rewards for global expansion are immense. It is important for NASCAR to have the foresight to begin a relationship with consumers abroad. <br />Market Forecast<br />
It is important to ensure that product of NASCAR will continue to flourish in the New York area, now and in the future. To assure these desired results come to fruition, the organization needs to make sure that the market in which they wish to enter has the potential for growth.
To determine this potential we have looked to the Census Bureau and found predictions in population change for the Middle Atlantic region from 2000 to 2030. When we look at these projections we find that the market is predicted to grow but at a very small rate. The area with the greatest potential for growth is New Jersey with a 16.5% increase in population expected between 2000 and 2030. Because this is such a large market with a dense population there should not be much cause for concern about the minimal amount of projected growth. Yes, some other areas have much higher levels of projected growth; however these areas are not already densely populated like the Middle Atlantic Region.
Change in Population in the Middle Atlantic Region
As we know the target market for NASCAR consists of:
38% female/ 62% male
38% w/college degree
18% retired/unemployed; 10% part-time; 72% full time
Average age between 25-44 years old
When considering the graph below we find that the target age demographic for New York is projected to maintain a consistent level of around 2 million from now until 2030. While we see no major signs of growth in this area there are still a large number of potential customers in this target age range without any signs of shrinking.<br />
Potential customers in each market segment are expected to grow more so than the category of age. Signs of this can be found in the market analysis table.
Market Analysis of Potential CustomersCustomer Growth20102015202020252030Weekend Getaway Customers13%21,03222,14223,47624,93226,349Tourist9%10,98512,01412,83413,57314,111Local Community11%13,25113,94414,72215,53216,029Total33%
In conclusion we see that there is a sufficient amount of potential growth in this market to more than support the introduction of NASCAR events. If NASCAR was able to attract even only 2% of the current population of New York that would still give them and attendance of 380,000 people, far surpassing the 80,000 seat capacity of the proposed track in Staten Island.
The organizational strengths of NASCAR include:
Sound Business Practices
World Class Events
The organizational weaknesses of NASCAR include:
The industry opportunities for NASCAR include:
Increased Corporate Interest
Access to World Business Centers
Large / Dense Population of Potential Customers
Access to Large Hispanic and African American Populations
Tear Down Stereotypes
Development of Young Fans
The industry threats for NASCAR include:
Image / Lifestyle Clash
Area Constraints / Costs
In conducting a SWOT analysis for the Staten Island Project we are able to evaluate the potential benefit of moving into this unique market. As we know, NASCAR has proven to be a top performer in the industry with many strengths and few weaknesses. In the organizations current position they are poised to maintain an offensive position in the market using their strengths to go after opportunities while staving off threats. For example, in this new market of “Big Business” NASCAR can take advantage of this situation by using their strengths of having a great brand with one of the largest, most dedicated fan base in the world to develop new partnerships and business opportunities in one of the top economic centers in the world. NASCAR can also use its strength of professional personalities such as Juan Puablo Montoya to open up and expose that Hispanic market.
Marketing Strategy<br />
The main marketing objectives for this project include:
Create positive awareness of the NASCAR product in the NY market
Increase Fortune 500 Sponsorship by 1%-1.5% (22million)
Reach maximum attendance of 80,000 for each end every event in Staten Island
Increase sales of ancillary products 6%
Increase avidity levels in the male and female 18-24 age range
Obtain a 10% first year and a 2% increase share of the New York area market every subsequent year
The finical objectives for NASCAR in the New York Market include:
Increase revenues by 10% over the next 5 years
Obtain a 10% first year and 2% increase share of the New York area market every subsequent year
Increase profit margins by 5%
Stable earnings during periods of recession
Entering the New York market exposes NASCAR to may new situations never before encountered by the organization.
Competition in this region is very high due to the large amount of sport and non-sport entertainment options. These include but are not limited to:
Groups of individuals to whom the sport of NASCAR could be successfully promoted to include:
38% female/ 62% male
38% w/college degree
18% retired/unemployed; 10% part-time; 72% full time
Average age between 25-44 years old
Season ticket holders
Individual event ticket purchasers
Recreational sport consumers
The NASCAR product must be redesigned to capture a special place in the mind of our target consumer in the New York area. With so many forms of competition, NASCAR must differentiate their product and position it differently than its competitors.
In its nature the sport itself is unique in many aspects with regards to the traditional field and ball sports. However, with such deeply rooted historical and traditional ties to these long-established sports, NASCAR will have to fulfill the need for a unique sporting / entertainment experience.
To accomplish this NASCAR should position itself within the New York market in such a way that accomplishes differentiation. This unique positioning will be accomplished by customizing the elements of Product, Price, Place, Promotion, and Public Relations. These elements of the Marketing Mix are explained in detail in section VII of this marketing plan.
Strategy Pyramid<br />
Due to the size and the scope of both the market and this marketing plan, it will need to be implemented by a team a skilled marketing professionals. Here is our proposal:
The timeline for which we will use to ensure proper implementation of this plan is as follows:
To determine changes in this specific market over time our focus should be on conducting regular narrow studies. These studies should include:
To deliver a product the customer will love we need to know exactly what they desire. We will do our best to obtain this information through quantitative, qualitative, and CRM driven studies. To maintain a high level of awareness concerning the competitive environment we compete in we must obtain as much information as possible. We will achieve this through market surveys and market reports.<br />Marketing Mix<br />
The product offered is actually the physical location of the Staten Island Race Track and sounding attractions. The purpose of the race track is to bring s new experience to the city while generating more profit and revenues for the locals and the sport. Extensions of the product would include memorabilia such as shirts, hats, race day giveaways, and NASCAR posters. <br />
NASCAR will continue the tradition of pricing tickets according to race venue and prestige. Since Staten Island’s economy continues to grow and is a small borough with a big city feel, prices for the Staten Island Race will be slightly higher than other races prices. Pricing for admissions is based on three factors; the pricing of other races in similar markets, pricing of competing venues within the city, and what the race and bring and add to New York City. It is very important the value of the product relates closely to the value of the price, in other words our customers get their money’s worth<br />A Similar race such as UAW Dodge 400 in Las Vegas sells tickets ranging from S105 for basic tickets to $275 for higher end luxury sitting. This is the price range that the Staten Island Race would be looking to sell, due to the fact that New York City is a big vacation and tourist location just like Las Vegas. Below is a price chart for the 2009 UAW Dodge 400 Race<br />2009 UAW Dodge 400 NASCAR Tickets<br />UAW-DaimlerChrysler 400 Race · 3/01/09SectionRows 1-10RedRows 11-27White Rows 28-49Blue All Rows Section 1 or 3 $105$165$210-Section 2 $160$155$220-Section 4 --$115$165-Earnhardt Terrace---$275Petty Terrace---$275<br />New York City is well verse in the sports that it offers. Most sport fans view New York as accountable for producing some of the best sports teams in the world. This will be no different for the Staten Island NASCAR Race. With this in mind it is imperative that the race also prices its admissions by the same standards and reasoning as other teams found in New York do. All sports and teams located in New York City have their admissions priced relatively high compared to the average. This is due mainly to the prestige of many of the teams located in New York as well as the amenities the city has to offer. This is also something to consider when setting a final price for the Staten Island NASCAR Race<br />The race will also bring added value to the city. A new market will encompass the city and NASCAR fans will be eager to explore what New York City has to offer. With all of appropriate aspects examined and taking into consideration that it would be the first year of the race The Staten Island Race Management Team finds it suitable to have a price range from $100 to $ 300 dollars depending on the seats.<br />
The Staten Island Race Track is the largest sports facility proposed for New York City in recent years. The track would seat 80,000 fans, watching cars race around a track three-quarters of a mile long, near a new 620,000 square foot retail mall on a 675-acre site. The site is a former BATX oil tank farm located off the West Shore Expressway, south of the Goethals Bridge in Bloomfield, Staten Island. The location is the largest vacant industrial property in New York City. Building a track on this area would revitalize the west shore, but most importantly turn waste land into useful profitable land.<br />
Through a promotions campaign, The Staten Island Race Management Team will promote the tack and NASCAR heavily. A campaign will be focused on the phrase “the race is on” due mainly in part to New York Cities fast pace life style, and determination to be the best. An in-depth advertising campaign will launch the news of the Staten Island Race Track and get fans excited for opening day. Advertisements will be placed in the New York Times, the Daily News, and the New York Post. $100,000 for 6 mounts of advertisements would be allocated to pace half page ads in the sport sections of mostly the Daily News, New York Post, and the Gotham Gazette (Staten Island’s local paper). Research shows that those who are mostly likely to attend a NASCAR event are also more inclined to read the Daily news or the New York Post. Advertising in the New York Times will create national exposure.<br /> A majority of advisements will be launched via the web and television commercials. Another $100,000 would be given by NASCAR as well as collected from the Staten Island Race Management Team. This would cover 3 mounts of 30 second ads on television as well as web presence on ESPN.com, NASCAR.com, and sports illustrated .com. Publicity will be sought forth through promoting on city billboards and taxi cab, bus, and subway signage. $40,000 dollars will be spent advertising on the ground level, i.e. subways, busses, and billboards. A majority of advertisements and promotions will be targeted to fans of other sports. Yankees games and Knicks games are perfect opportunities to promote the race and hand out free promotions and media kits.<br />
Most of the public relations efforts will be focused on community involvement. Since the idea of building a track in Staten Island has steered up some negativity, it is important for The Staten Island Race Management Team as well as NASCAR to have a presence in the community. Appearances from NASCAR drivers as well as NASCAR executives throughout the City will increase awareness. Charity events and fund raisers for local schools and youth leagues will gain the much needed support from residents. NASCAR drivers will be scheduled to make local appearances once a month at other sporting events, parties, and museums. Community events such as park restorations, youth league fundraisers, marathons, parades, and city cleaning events will be held once a month until opening day.<br />Marketing Budget<br />
Our marketing budget is based on ours company’s goals and objectives the schedule we have set to meet these goals. Our research team has also examined the industry average of marketing dollars spent as a percent of sale for similar companies in the sports industry. Our proposed budget is realistic in comparison to other similar companies. Our marketing team has also estimated what our immediate competitor’s advertising and marketing budgets are we hope that this would allow us to become competitive and possibly gain more market share.
Marketing Budget: New YorkCategoryQuantityCost per Unit SubtotalAdvertisingBrochures5,000$0.15 $750.00 Mailings15,000$0.04 $600.00 postcards15,000$0.03 $450.00 Television90$1,100.00 $99,000.00 Radio25$200.00 $5,000.00 Newspapers20$5,000.00 $10,000.00 Billboards3$2,000.00 $6,000.00 Bus sides10$800.00 $8,000.00 Subway posters25$500.00 $12,500.00 Public RelationsCharity events10$500.00 $50,000.00 Driver Promotions10$500.00 $50,000.00 Sponsorships5$2,000.00 $10,000.00 PromotionsProduct giveaways100$8.00 $800.00 Product Discounts300$3.00 $900.00 Special offers200$2.50 $500.00 Totals35,798$12,613.72 $254,500.00 <br />Sales Forecast<br />
Six Year Forecast
Beginning in 2007, NASCAR has implemented an eight year, $4.48 billion television deal that will increase the organizations revenue by 40 % each year. NASCAR, which brings in $555 million a year in annual revenue for televised professional sports, is ranked behind the NFL, NBA, and MLB. The research on NASCAR tracks and revenue is limited but an estimate suggests that the average NASCAR race track makes about $500,000 a year, with about $300,000 being profit. This is what our team forecasts for the upcoming seasons. The first years will be spent trying to make back money spent on opening and establishing a new race track. It is estimated that in four years our race track will start seeing steady revenue. Within 6 years we hope to surpass the average revenue earning for a NASCAR race track.<br />Implementation / Controls<br />
Since we have taken considerable care in the preparation of this plan we will implement it according to plan. However, as the market changes our marketing mix can also be adjusted to accommodate for those changes. We are dedicated to fulfill our customers’ needs at all times. Consumer wants might change over time; this can easily be addressed by changing our advertising message. We plan to implement our marketing plan in confidence with all members of our organization on board and in line with our mission and vision.
To measure the progress and level of performance we will implement the use of a marketing scorecard. This scorecard will be used to reevaluate the performance of the plan as it relates to our objectives as well as customer satisfaction. This scorecard will be applied to the plan on a bi-monthly basis as well as immediately after each event.
XII.References<br />Allen Gregory (23 January). COLUMN: Will NASCAR return to its roots? McClatchy - Tribune Business News. Retrieved April 15, 2008, from ABI/INFORM Complete database. (Document ID: 1417093071).<br />Barry Janoff (2008, February). NASCAR's 50th Daytona 500 Offers Golden Opportunities. Brandweek, 49(5), 14. Retrieved April 3, 2008, from ABI/INFORM Complete database. (Document ID: 1429467201).<br />Bran Strickland (22 April). NASCAR: A numbers game. McClatchy - Tribune Business News. Retrieved April 3, 2008, from ABI/INFORM Complete database. (Document ID: 1466450611).<br />Bureau of Labor Statistics, Regional Resources; New York. Retrieved April 18, 2008, from: http://www.bls.gov/ro2/ro2_ny.htm<br />George O'Brien (2007, August). Marketing vehicles. BusinessWest, 24(6), 32. Retrieved April 5, 2008, from ABI/INFORM Complete database. (Document ID: 1324338201).<br />www. Staten Island NASCAR track.com. Retrieved April 20, 2008 from http://www.statenislandNASCARtrack.com/news/sticking_together_for_NASCAR_track_staten_island.htm<br />www.tickco.com Retrieved April 20, 2008 from http://www.tickco.com/NASCAR-las-vegas-uaw-dodge-400-tickets.htm<br />Lander, B., (2005) NASCAR, the largest proposed NYC sports stadium of all. Gotham Gazette Retrieved April 20th from http://www.gothamgazette.com/article/landuse/20050614/12/1442<br />Stewart, L., James, M. (2005) It's Pedal to Metal on New TV Deal: NASCAR announces a $4.48-billion pact with four networks that will rank it fourth in annual revenue for televised professional sports. USC Marshall Retrieved April 20 from http://www.marshall.usc.edu/execed/programs/sbi/sbipress/pedal-to-metal-on-new-tv-deal.htm<br />Tom Lowry (2004, February). The Prince Of NASCAR; Brian France, son of stock-car racing's founding family, has taken charge at a critical moment. Can he make the multibillion-dollar machine go even faster? Business Week,(3871), 90-98. Retrieved April 18, 2008, from ABI/INFORM Complete database. (Document ID: 547225381).<br />U.S. Census Bureau, Fact Sheet; New York. Retrieved April 18, 2008, from: http://factfinder.census.gov/servlet/ACSSAFFFacts?_event=ChangeGeoContext&geo_id=16000US3651000&_geoContext=&_street=&_county=New+York&_cityTown=New+York&_state=&_zip=&_lang=en&_sse=on&ActiveGeoDiv=&_useEV=&pctxt=fph&pgsl=010&_submenuId=factsheet_1&ds_name=ACS_2006_SAFF&_ci_nbr=null&qr_name=null®=null%3Anull&_keyword=&_industry=<br />