NASCAR racing industry and competitive dynamics

NASCAR

The National Association for Stock Car Auto Racing is one of America's favorite past times, but predominantly synonymous as such with areas of the Midwest, South and Southeast. NASCAR has only recently begun its uproar into the homes and new raceways of other areas of the country as its popularity is beginning to spread to areas that only several years before held very little recognition for the sport. With this growing popularity, the NASCAR division in every respect has been forced to adapt to an ever demanding change in order to accommodate much of the diversity which accompanies such growth.

As of just this last month, the fourth name change for NASCAR's top division in 60 years has recently been implemented. This name started as the Grand National Division and later became the Winston Cup in 1972, then it was modified to the Nextel Cup in 2004 (Guthrie, the Detroit News, 2007). This most recent change was agreed upon by contract for 10 years and stipulated an allowance for one name change. Many in the sport expect the continuum of these changes as the sport continues to grow - some unhappily expecting. In any instance, the growth has meant more spectatorship for the sport, which in-turn means more money and incurs a greater level of interested sponsorship with advertising revenues. Bigger name companies are buying out the old; previously uninterested corporations are looking to take their stab at putting their name on a hopeful, race-winning car/driver. The sponsorships for particular racing events, such as the Daytona Cup, are being replaced by new sponsors. With the example of Daytona, which has been sponsored by Pepsi for the last 50 years, it is now being replaced by Coca-Cola.

In consideration of all this flurry of altering times for NASCAR, the branding and advertising has changed its image and positioning and expanded its target markets. This change in their target market characteristics has required a collaborative perception to the branding and advertising types and methods. The connection between the branding and advertising is directly related to the overall interest of the majority of the NASCAR spectatorship, with focus included to accommodate the interests of the new and growing spectatorship reform coming into the interest of the sport. As newer mediums of spectatorships arrive, the products/brands to which will most apparently and successfully appeal to their interests is taken into full consideration. Previously, branding was targeted at the social, professional, hobbyist, and leisurely interests of groups making up the spectatorship in the predominant areas where NASCAR was formerly confined by its expanse of popularity. Brands such as Budweiser, Caterpillar, NAPA, DeWalt, Smith & Wesson, and Hardee's - a fast food chain found only in certain Southern states - were directly marketable to the interests and availability of the particular individual types that made up the spectatorship of previous years. The four interactions of branding and advertising are mass marketing, relevance over differentiation, growing revenue and not market share, and associating people as part of the brand (Croston, 2007). It is important to identify branding needs before advertising because the scope of a targeted audience is the only way to determine the potential for branding appeal. An advertisement for a company that solely operates and distributes in Antarctica is not going to have any use advertising in an area where the audience will not utilize the product or service. It is under this concept that the commonality of previous sponsors and advertisers, such as DeWalt or Hardee's, were directly relevant with their branding because the audience/spectatorship was entirely more susceptible to their market or industry either as a result of location or product/service demand. The spectators predominantly making up the genre of who buys heavy machinery, tools, or other such products are found common in the areas where NASCAR is most popular.

A brand can be determined directly by its advertising in terms of its entire scope because the type and distribution of advertising can dictate the products salability and consumer base. For example; one may conclude that Egg-Nog is a holiday brand simply because it is only advertised during a certain time of year. Budweiser is synonymously known for its Super Bowl commercials, which in-effect has given it an association as a 'mans-beer' or a commonality of such conglomerations components.

Sponsorship for a product helps to create demand for that product in several influential ways. In terms of NASCAR, sponsors are most interested in selecting a car and driver that is much more likely to be a winning car/driver. This is not only because of the further exposure that will be achieved in such sponsorship, but it will also derive a psychological and social correlation of the sponsors product or service in the fact that there is a positive association when an advertisement is displayed with a high profile, well-recognized, or popularly winning entity such as a driver or car. The same is seen in any competitive organization that accommodates sponsorship - golf, football, baseball, weightlifting, etc.

In the instance of AAA sponsoring the Nextel Cup Series, the insurance company has developed a special and customized paint scheme, which is anticipated to help spectators associate the quality of their service as a result of the impression of the paint scheme (Calcagni, Rossi, 2006). These are intricate and complex marketing concepts that have come through the wake of heavy and rigorous research and understanding. When consumers make the association of a product, either subliminally or consciously, their decisions for purchasing the product or service is highly influenced and creates the overall demand for that product over its competitors.