New-Product Process for NASCAR

With all forms of entertainment, it is clear that there needs to be change in order to be successful in business. In the sports industry, there has been declining numbers in attendance at live sporting events as well as viewership on television. The sports are always trying new ways to get more fans and to keep their fanbase. In this post, I will look at the new-product process for NASCAR. This process includes 7 steps which include; new-product strategy development, idea generation, screening and evaluation, business analysis, development, market testing, and commercialization. (Marketing the Core, Kerin & Hartley)

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The first step in the new-product process is a new-product strategy development. For NASCAR, over the past 10 years, there has been a decline in both the fanbase and the viewership. They needed to find a better way to be innovative, but not too innovative that they lose their fans. Since they are mostly a service industry, it is hard to tell what will work and what will not.

The second step is idea generation. NASCAR uses two groups for most of their ideas which are the Driver’s Council and the NASCAR Fan Council. Over the past couple of years, these groups have allowed for a lot of change in NASCAR. The Driver’s Council has made the biggest impact in the past 2 years as they have introduced stage racing and the new points system. To go along with this, NASCAR has decided to change to digital dashboards and allow fans to access the data from the cars. This makes the sport a lot more fan friendly and allows fans to be more invested in the sport.

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The third step is screening and evaluation. NASCAR mostly uses internal screening because fans do not necessarily know what they want. Internally, the drivers usually know what to do in order to make the racing better. For stage racing, it definitely helps with the racing throughout the race as drivers would just ride around until the end because there was no incentive to race throughout. Now, they get bonus points and stage points throughout the race. The fans also have a say externally. They can use surveys to tell NASCAR what they want and this also led to the new points system and stage racing.

The fourth step is business analysis and what market strategy is needed to make their ideas successful. Within this process, they have to try to get the fans to understand what they are trying to get across. They were able to do this through news conferences where reporters could ask questions about what they were trying to do. This was important because the reporters could put NASCAR’s words into easier language to understand.

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The fifth step is development. An example of a product in the development phase in NASCAR would be the digital dashboard. Last year, they were testing the abilities of the dash to see what it could do. They were able to work out the bugs in the system and offer the fans the best product possible to the fans. NASCAR was able to monitor all the digital dashboards and they figured that it would be beneficial to have the fans have access to it.

The sixth test is market testing. An example of this would be in last year’s All Star Race. During the All Star Race, they tried new things. The biggest experiment was the tires. They had a softer tire compound which meant that the tire would be faster during a short run and very slow on the long run versus a harder tire which would do the opposite. They tried this and found out that it did not really create much difference in the racing and the fans did not really enjoy it, so it was an unsuccessful prototype.

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The final step is commercialization. This can be seen when NASCAR released its new points system and stage racing. Not many fans were very excited about it to start, but it has grown on many of them. The stages have definitely made for better racing throughout the race and has led to more action on the track. The points system has definitely made a huge impact as there has been a lot of drama with it. The drama leads to a lot of fans choosing sides with drivers and makes them come back for the next race to see if anything will happen.

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Market Segmentation of NASCAR

Market segmentation aggregates prospective buyers into groups that have common needs and will respond similarly to a marketing action (Marketing the Core, Kerin & Hartley). NASCAR is very difficult to understand in regards to market segmentation. With NASCAR being a nationwide sport, there are many different groups that the marketing team of NASCAR must reach in order to have the sport be successful.

There are four main bases of segmentation; geographic, demographic, psychographic, and behavioral. Geographic segmentation is based on where prospective customers live or work. Demographic segmentation is based on some objective physical, measurable, or other classification attribute of prospective buyers. Psychographic segmentation is based on some subjective mental or emotional attributes, aspirations, or needs of prospective customers. Finally, behavioral segmentation is based on some observable actions or attitudes by prospective customers. (Marketing the Core, Kerin & Hartley)

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First off for NASCAR, they must look at the geographic segmentation of their customers whether it be for ticket sales or people who watch on television. This is a very difficult segment because NASCAR is spread throughout the country with 23 tracks in 20 states ranging from the West Coast of California to the Northeast in New Hampshire. As the sport began, it was mostly a southern sport because that is where it was founded, but over the years, it has expanded greatly. This means NASCAR must market to people who are close to the tracks for ticket sales and to the whole country for those who want to watch on television.

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The demographics of NASCAR is a wide range as well. Fans may differ from North to South, but they are all passionate about the sport. The fanbase is primarily men (67%) with much of the population being aged from around 18-54. Their income is usually lower around the $30,000-$50,000 range with some above and below. One key stat is that one in every five NASCAR fans is a minority.
(http://www.brentsherman.com/PDFS/NASCAR.pdf)

The mentality and emotional attributes of NASCAR fans are pretty similar. Diehard NASCAR fans are usually very compulsive when buying tickets or making sure they see the races every week. They are usually very extroverted and love to communicate with other fans when they are at or watching a race. Lastly, they have the needs of wanting quality racing, low prices, and convenience. NASCAR has tried to increase the quality of racing through stage racing, they have been lowering prices so more people can afford to go to races, and they have tried to make it more convenient to shop at the track and watch the races live.

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Finally, NASCAR must look at the behavior of their fans. It is usually a little expensive to attend a NASCAR race so many of the fans are turning to just watching it on television instead of going to the race in person. This means that the usage rate for television is much greater than that of attending races at the track. NASCAR fans are aware of the product, but are never sure of it when something changes. This is when they need to be educated about the changes and it may take awhile for them to accept them. The customers of NASCAR are usually regular fans and the additions to the fanbase are usually through current NASCAR fans bringing them to the track to watch a race.

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It is clear that NASCAR has to do much analysis about the segmentation market in order to be successful. Looking at the geographic, demographic, psychographic, and behavioral segments, it is seen that the population is different from north to south. The one thing that NASCAR fans all have in common is that they are passionate about the sport they love to watch and attend.