You are on page 1of 20

NASCAR: Success in Branding

Chris Peters
MAR 5125 – Spring 2011
March 7, 2011
Case Summary
Fast cars speeding along the beaches of Daytona Beach, FL in the ‘40s represented the

foundation for the formation of the National Association for Stock Car Auto Racing

(NASCAR) in 1948 by William Henry France, Sr.. France met with key stakeholders to

discuss the transformation of stock car racing from hobby to professional sport by

soliciting promotion, sponsorship, venues and the development of rules. Daytona Beach

became the mecca of NASCAR racing as France opened the first 2.5 mile paved oval

track: Daytona International Speedway in 1959, and followed that 10 years later with the

construction and completion of Talladega Superspeedway in Alabama (2.7 mile oval; the

largest oval track in the world). Although the sport’s roots were in the south, tracks

began popping up in the Midwest, east coast and in California. France’s vision had

begun an upwelling of national demand by drivers, track owners and fans.

Such demand required financial investments beyond the means of those within the sport,

and thus the advent of corporate sponsorships was born. The 1950’s represented the start

of a partnership that has spanned six decades. This symbiotic relationship between

NASCAR and “The Big 3” automakers (Ford, GM and Chrysler) provided necessary

funding for NASCAR teams and tracks, while providing the automakers with increasing

visibility and sales. The thought was if your model wins on Sunday(s), you’re going to

sell more cars.

Since its inception, the sport of stock car racing, and its governing body, NASCAR has

steadily grown in popularity and profitability. The sport is comprised of three national

series: the NASCAR Sprint Cup Series, the NASCAR Camping World Cup Series and

the NASCAR Nationwide Series, along with regional and international races supported

The information age has been a significant catalyst for the success of NASCAR.

Extensive media coverage has helped to move stock car racing from regional obscurity to

a mainstream sport. Drivers like Jeff Gordon, Jimmie Johnson, Tony Stewart and Junior

have become national icons and heroes of the auto racing industry and to millions of fans.

Like the PGA, auto racing experienced a renaissance of competitive rivalries between the

likes of Cale Yarborough & Bobby Allison; Dale “The Intimidator” Earnhardt & Jeff

Gordon and now drivers like Kyle Busch, Tony Stewart and 5-time defending Sprint Cup

champion, Jimmie Johnson battle it out on Sundays. NASCAR has experienced

unprecedented growth since it’s beginning on the beachfront course in Daytona. This

sport experienced attendance and viewership growth in the 70s, 80s & 90s that catapulted

the sport to the No.1 motorsport in America and the second highest television ratings for

regular season sports.

NASCAR has not been without its challenges. The France family (Brian France

(grandson of founder; CEO since 2003) has retained the majority control over NASCAR

operations which has garnered scrutiny in terms of leadership and business savvy.

Although, commonly referred to as a “benevolent dictatorship”i, the Frances have been

the driving force for NASCAR’s sustainable success for 60 years.

Safety remains a hot topic for NASCAR and its stakeholders. Following the tragic death

of Dale Earnhardt in 2001, NASCAR implemented the use of HANS (head-and-neck-

support) devices, seat-belt restraint system and fire suppressant system/equipment.

Adjustments have also been made to the tracks themselves, by installing foam and steel
tubing to provide safer barriers that effectively mitigate much of the destruction caused

by collisions with the wall. The COT or Car of Tomorrow was also introduced 3 years

ago as an additional safety and “green” advancement. The environmental lobby has sped

up NASCAR’s phase out of the use of leaded gasoline, which was still widespread until


Like many American sports, NASCAR has roots tied to a certain culture. For NASCAR,

it’s white Southerners. This has presented challenges for minority entrants into the driver

ranks, which has had limiting effects on the growth of minority fan bases. According to

an ESPN Sports pole of fans 18 years of age and older, fan demographics reveal that 41%

of NASCAR fans are women, 9.0% are Hispanic/Latino and 7.8% are African American.

NASCAR has thus implemented a program referred to as “Drive for Diversity” to

proactively seek, attract and develop minority talent. The switch from IRL to NASCAR

by Columbian-born Juan Pablo Montoya looks to spark the interest of Latino fans and

prospective drivers. A developmental series has now been started in Mexico, catering to

this demographic in the hopes of catapulting the next great Latino drivers into the

spotlight of the NASCAR Sprint Cup Series. The series has seen a few African-

American drivers hit the scene, but unfortunately have underperformed by NASCAR

standards and have lacked the funding and support to be self0-sustaining. Brad

Daugherty, an African-American broadcaster, team owner and former UNC/NBA

basketball star adds an additional boost to the face of African-America in the sport of

stock car racing, but diversity growth is slow.ii

The recession has had significant ramifications on the entire NASCAR business model.

The Big 3 automakers experienced significant financial setbacks over the last 4 years
which impacted the nearly $150 million investment made annually by these sponsors.

Other corporate sponsors have too been affected by the economic downturn, and

companies like Kodak and Domino’s have ceased widespread support of NASCAR.

When business is good, advertise! When business is not so good, you can’t afford NOT

to advertise! While a number of companies have pulled out completely, others are

remaining loyal to their partnership with NASCAR, and still others, like Camping World

and AFLAC are increasing support. Chrysler is no longer a major player, but in addition

to Chevy (GM), Ford & Dodge, Toyota has become a major player on the NASCAR


NASCAR’s significant challenges today are in decreased attendance and viewership of a

sport that touts some of the most loyal fans in the country.

NASCAR has enjoyed a long history of partnering and co-branding with other

companies. These efforts are evident on driver jumpsuits, cars and around the tracks on

race day. These brand alliances have helped to shape what makes NASCAR, NASCAR.

Televised events provided a new medium in the 70s for increasing the reach of the

NASCAR brand. Contracts were transactional for many years, but in 2001, NASCAR by

signing a contract that provided for the televising of ALL NASCAR races that season and

beyond, and by providing global broadcasting to 167 countries.

Recognizing the value of co-branding relationships and the sponsorships that follow,

Brian France now orchestrates seminars to help sponsors to get the most out of their

investment. This attention to the process of relationship management and the

unparalleled awareness the general consumer has of NASCAR should provide a level of
sponsorship sustainability. While some believe the quantity of sponsorships to be

pushing the upper limits, they remain the lifeblood of NASCAR’s business model.

NASCAR is as much about racing, as it is about creating and capitalizing on the

experience. NASCAR seeks to create a family-friendly environment where everyone is

welcome to be part of the risk and reward, living on the edge excitement of race day. It is

immersed with drivers who are easily related to by fans, based on their accessibility,

ordinary backgrounds and the fact that most, work their way to the top based on the

merits of their driving. These ties to the fans are supported by connections with media

outlets like networks and cable media (ESPN) as well as Hollywood.

The Chase for the Cup playoff system was introduced in response to waning attendance.

So successful, The Chase was mimicked by the PGA Tour with their FedEx Cup playoff

format, and provided a framework to compete with other American sports. NASCAR has

also endeavored to enter into innovative co-branding relationships with musical artists

and The Cartoon Network to attract the female and youth demographic.

NASCAR’s brand equity, that is, “the value that is added to a product or service by

having the NASCAR brand attached to the offering”iii is one of the strongest in sports.

However, this brand equity is at risk as the traditional NASCAR fan’s median income

below the national average and appears to be more volatile with respect to recessionary

implications. NASCAR has sought to decrease ticket prices, concession prices and

negotiate more competitive prices for lodging near race venues.

NASCAR has also tapped into the emotional component of their brand through an

emphasis on “Community”. Word-of-mouth advertising, as a successful and trusted form

of advertising is evident as fans share on discussion boards and with friends and

colleagues the intricacies and excitement of NASCAR fanhood. The strong bond

between NASCAR and its fans is founded in the emotional connection to community that

NASCAR has effectively branded through advertising, online content and venue

atmosphere. In fact, 72% of NASCAR fans say they consciously choose product of

NASCAR sponsors over those of non-sponsors.iv

This branding philosophy is not simply the placards and decals that adorn cars, jumpsuits

and tracks, but rather the personality of NASCAR. Not built solely on features and

benefits, NASCAR has embraced the emotional connection needed to attract and grow

the fan base. By creating a closed loop encompassing the effective tying together the

venue, the drivers, the customers, and the atmosphere. This commitment of focus has

helped to create a sustainable thriving brand.

Case Update

Like many corporations, NASCAR has met with significant financial impediments as a

result of the recession. All major sports, with the exception of the NFL, have seen

similar decreases in attendance and viewership indicative of decreased consumer

confidence and less discretionary income.

While the France family still monopolizes control of NASCAR, corporate decision

making has evolved to more appropriately encompass the wants and needs of key

stakeholders, specifically race teams and fans. Efforts have been made to create a safer

and more exciting race experience. NASCAR is currently working to bring ticket prices

in line with a fair market value to attract new and existing fans to the track. NASCAR is
banking on an economic recovery that will spawn increased discretionary spending on

events like auto racing.

One key component to the perception of NASCAR’s declining popularity is a product of

their own success. First, like the housing boom over the last decade and the associated

surplus inventory present today, construction of additional grandstands at virtually every

major venue to meet the demand of fans has subsided, and venues are left with thousands

of empty seats at each race. This has been amplified by the extensive media coverage

that vividly depicts the lack of fan participation for all to see. The demand evident 8-10

years ago was not sustainable, and will necessitate time to recoup.

There appears to be a life-cycle component to the NASCAR brand. From 1990-1995,

attendance at NASCAR events grew by nearly 60%, outpacing every other major sport.

The last 15 years have seen this trend level off. However, NASCAR still dwarfs the

NBA, MLB and PGA Tour in terms of viewership and attendance. Although attendance

figures have decreased significantly from a decade ago, the weekly Sunday attendance

averages 100,000+fans week in and week out.

NASCAR is currently doing its best to stem the tide of sponsor withdrawal; supported by

the loyalty of key partners and new entrants into sponsorship, intent on co-branding their

products and services with that of NASCAR. While this tends to bring some level of

balance on the financial side of the house, the fans and their connection with the drivers,

venues and with NASCAR will be the foundation for sustainability into the foreseeable

future. The level of brand loyalty is founded in the seemingly patriotic traditions of

NASCAR…the fact that the majority of drivers drive American cars. Drivers are
accessible and are receptive to NASCARs efforts to encourage each of them to resist the

arrogance and elitism indicative of other professional athletes thus making them more

accessible in the minds of fans. Although the case has been made that some flaw in the

brand and/or its delivery is to blame for the significant declines in attendance and TV

viewers, the NASCAR brand has a sustainable foothold with fans. This foundation will

best built upon through patience in market conditions and a commitment to responding to

NASCARs multiple demographic target markets, particularly traditional race fans.


NASCAR continues to boast the largest live spectator attendance of any sport in the

United States; and remains 2nd behind the NFL for TV viewership. NASCAR offers a

broad range of racing series that are seen on multiple networks in more than 150

countries. Financial investment from corporate supporters seeking to advertise as event

or team sponsors represent over $3 billion dollars annually, and as such, is an integral

piece of financial viability for NASCAR. As mentioned, NASCAR has evolved over the

decades from rich traditions and heritage in the south that has solidified a solid core fan

base of blue-collar white males that have become some of the most intensely brand loyal

fans. This loyalty extends from not just the driver, or the NASCAR experience, but to

the event/team sponsors and their products and services as well. The often patriotic,

American-made mantra that surrounds NASCAR is built on its long-standing symbiotic

relationship with each of the major US auto manufacturers. Market penetration at its

best, NASCAR has locked-in this demographic which continues its relative loyalty in its

attendance, buying patterns and overall support of the sport, its personalities, products

and events.

Recognizing the value of the total experience, NASCAR has created a richly entertaining

encounter for fans; from the 60” flat screen in the living room to the towering

grandstands of Daytona, Talladega or the Brickyard. Opportunities to walk on the track,

meet drivers, see cars up close and interact with sponsors are just a few of the many to

dos for fans on race day. Fans are frequently given greater access to the elite drivers for

which they cheer than in any other spectator sport. The “Chase for the Cup” was

introduced as a way to meet the customer demand for an exciting conclusion to the racing

season; where the best of the best would battle it out for the championship over the final
ten meetings.


NASCAR continues to be plagued by a lack of driver diversity. White male drivers

dominate the sport, which has limited the support of diverse fan demographics and

corporations. While women have broken into the ranks of ownership and driver in small

numbers, and one marquis Hispanic (Juan Pablo Montoya) driver has made a splash,

minorities continue to represent an unrealized boon for NASCAR.

The singular nature of NASCAR’s governing body – The France family, stifles creativity

and, though, sound decision-making has been a hallmark, there exists a level of distrust

within the racing community. Diversification and loosening of the reigns, so to speak,

would greatly help the future of NASCAR.

NASCAR introduced the COT (Car of Tomorrow) with the promise that this new

innovation would provide a safer, greener and more parody-generating alternative to

previous models. Jimmie Johnson has since taken the last ‘5’ Sprint Cup Championships.

Driver dominance has created a negative connotation for NASCAR among fans that each

has a favorite driver, with whom their loyalties lie. The lack of changes like restrictor

plates and the COT, to produce more varied appearances in Victory Lane drags on the

sport’s popularity.

For most of us, time is our most important resource, and often our scarcest. The length of

some races, particularly the 500-milers are prohibitive for many, based simply on the

time investment required to attend and/or to watch on television. While this is simply a

product of the design of auto racing, it remains a hindrance to attracting new

demographics not yet familiar with NASCAR, and may be detrimentally affecting the

core fan base.

The fan represents the core customer in the NASCAR business model. Providing the fan

with an incredibly entertaining and family friendly environment regardless of venue is

designed to attract and establish long-standing relationships between the sport and each

fan. Fan viewership has seen significant declines in recent years, which has been cause

for great concern for NASCAR purists. Auto racing has consistently experienced

exponential gains in viewership and accompanying revenue growth since NASCAR’s

inception. However, tracks are now blocking off seats that are unsellable (following

significant track expansions early this decade), concessions and merchandise sales are

down because of the fallout of fewer fans attending the race on Sunday.

Pinpoint accuracy and focus are required of these drivers on race day. Drivers must

understand car adjustments, react to changes in track conditions and drive through 5

o’clock traffic at 200 mph. Such talent is not easily found, and NASCAR continues to

struggle with a clearly structured driver development path that assists drivers in climbing

the ladder to the Sprint Cup Series and providing them with outlets for financial

assistance as they make their ‘run’ towards the top.


Market Development represents the broadest and most potential in terms of profitability

and sustainability. NASCAR has until now, failed to significantly draw a sizeable

contingent of fans and/or drivers who represent the Hispanic, African-American or

female contingent. Broadening these key demographics through market development

would have profound effects on the sport as a whole. This impact would provide both the

leverage and draw for corporations to increase sponsorship and advertising dollars spent

to capture these mutually beneficial target demographics. NASCAR would, in turn,

realize greater market penetration at all levels of its customer relationship management

framework, which would trickle down through the sport, each track, driver and pit crew.

New car manufacturers involvement also represents a further opportunity for NASCAR

to broaden its competitive edge over other motorsports. The introduction of makers like

Ferrari, BMW, Volkswagen, etc. would bring much needed ‘new’ money into the sport.

Courting companies like Honda whose competitive drive to race and beat the likes of

Toyota (now fielding multiple cars in the Sprint Cup) is high, may help to spawn further

rivalries that NASCAR may need to survive.


While the cost of tickets for NASCAR events has risen over the years, it has done so

congruently with those of other professional sporting events. The global economic crisis,

housing collapse, etc. has drastically affected the discretionary incomes of both fans and

sponsors. NASCAR is right to be concerned about the ramifications of its pricing

structure, marketing and product delivery; and how each of these meets the needs of its

fan base. As NASCAR evaluates its product, price, place and promotion, it will continue

to be imperative that the customer (the fan) continues to represent the basis by which

revenue and growth emanate.

Diversity may also be a threat for NASCAR, as it may be unable to control or tap into the

minority markets discussed, based on its historical product positioning. Such a failure to
do so, combined with the popularity of other sports, particularly with minorities could

potentially harm NASCAR’s future success. Further demographic resistance is also a

speed bump for NASCAR. Highly educated professionals are a demographic that has

shunned the sport traditionally. Still others are quite resistant to the perception that the

sport is based on a confederate, redneck, or bigoted heritage that is not consistent with the

ever-increasing belief in ‘inclusionary acceptance’.

Fuel standards, safer cars & safer tracks are just the beginning. Increased intervention on

the part of regulatory agencies represents a threat to NASCAR. Tremendous economic

and noneconomic costs abound as further regulation to be a safe, environmentally

conscious and sustainable sport constricts the already constrained margins.


How does NASCAR most effectively endeavor upon a blue ocean approach to continued

growth and sustainability? What strategies can be undertaken to move NASCAR to the

next level in it evolution to maintain, or even increase its sponsor and fan base?

Alternative #1

Rather than continuing the red ocean strategy of trying to capture a greater share of its

existing fan demographic, NASCAR may explore efforts to broaden its fan base by

attracting current “non-users”, primarily minorities to its events, products and

sponsorship opportunities.

As previously stated, NASCAR’s heritage and primarily white male predominance

remains a limiting factor for growth. Though, not the only factor detrimental to
NASCAR’s future prospects, diversity offers a potential boon for NASCAR and its

stakeholders. Minority demographics (African American & Hispanic populations)

represent nearly 29% of the US population. This is representative of nearly 88 million

potential new fans to a sport void of any significant minority representation. Women

represent nearly 51% of the US population and like other minorities, are grossly

misrepresented in the driver ranks. In seeking to identify commonalities between the

current fan base and untapped nonfans, NASCAR will find that the greatest impact for

many fans fandom is the relatability that is created between fan and driver through

promotion, marketing and accessibility. This realization immediately puts a premium on

driver development through the ranks of the smaller NASCAR sponsored series and

programs designed to provide incentives for minority drivers.


• A market becomes stagnant and develops a growth problem as the number of

non-customers increases. By appealing to these individuals and determining what

they value, NASCAR can build upon the similarities of customers and create

additional value for their products.

• Looking outside its traditional target segments allows NASCAR to capitalize on

the opportunities presented in the size and scope of the African-American,

Hispanic and Female demographics.

• One of NASCAR’s core deliverables is to provide a family friendly experience.

As the family unit definition broadens, NASCAR’s ability to match its

deliverables with the wants and needs of an ever-increasingly diverse family

population will be key in further leveraging its brand loyalty.


• Reaching untapped potential demographics will be costly, particularly in light of

current economic conditions. Shifts will need to be made in promotion & driver

development to effectively pair the NASCAR brand with drivers that share the

same ethnic background and flavor as potential fans.

• There exists a level of uncertainty that current stereotypes indicative of the sport

and its participants may trump NASCAR’s efforts to broaden the demographic

fan base beyond the means of finances and driver development.

Alternative #2

NASCAR could seek to provide shifts in the customer value delivery model to stimulate

current fan base demand by shifting current pricing models. NASCAR is battling the

economic crisis like most corporations, which has spawned significant declines in

consumer discretionary incomes and spending. Ticket prices have risen significantly

over the past decade to a level that has exceeded NASCAR’s traditional fan base’s price

point. NASCAR could offer a reduced locked in ticket price for a particular period to

incentivize both existing and new fans to catch a race.


• Concessionary moves by NASCAR would help to fan the flames of the already

strong relational bonds between fans and the brand.

• Increased attendance (though lower ticket revenues) would equate to higher

ancillary revenues (concessions, merchandise).

• Fans historically resistant to NASCAR, may be willing to attend a race, and

chances are high that NASCAR’s delivery of a fun family-friendly and thrilling
experience will create new fans out of first time attenders.

• Grandstands have been overbuilt and are often partially full on race day. As

grandstands fill, corporate sponsors are incentivized to invest to gain the

necessary ‘face time’ with the loyal consumers of NASCAR and its sponsors’

goods and services.


• There is no guarantee that NASCAR will accurately identify a price point at

which fans are enthusiastic to return and/or meets the anticipated revenue goals.

• A drop in price is frequently accompanied by the perception of a drop in the

quality of the product or service.

• Economic conditions may fluctuate in such a way that NASCAR misses out on

increased demand at current or higher prices.

Alternative #3

NASCAR could potentially shift its product delivery model. Adjusting the length of

races, minimizing regulatory policies that detract from the overall racing experience, and

moving race times to TV networks and slots that can compete with other popular sports

or non-sports programming.


• Changes to these areas of the product itself may effectively meet the needs and

desires of current fans and non-fans alike by providing a more convenient and

exciting “in the moment” experience whether at the track or watching on


• A shift in the length of races would allow NASCAR greater flexibility for
broadcasting contracts as well as creating venues for NASCAR to exercise some

creative license with regard to variability in race design and promotion.

• Less regulatory constraint or rules levied by NASCAR would increase the

excitement and merit based racing fans are yearning for.


• Decreased race length also equates to less live and televised promotion of

corporate sponsors, which may equate to decreased financial support from


• Such a shift away from the norm may alienate core fans away from the sport.

• Any significant change that is not safety driven first may be cause for decreased

public perception, injury or loss of life.

Selected Alternative and Rationale

While each alternative appears to represent a viable direction for NASCAR to take,

Alternative #1 has the greatest synergy with a blue-ocean, forward thinking and goal

aligned methodology. This option allows NASCAR to focus on their strengths in live

and TV viewership and the Fan Experience. It also provides the general framework for

amplifying its diversity program (not just in the front office) by encouraging thru word

and deed, the promotion of women and minorities into positions of drivers, owners and

crews. Driver development represents a costly a logistically uncertain process for

NASCAR, but with such brand equity and auto racing dominance, they are positioned to

put a new, slightly altered face on NASCAR. The introduction of Juan Pablo

Montoya/Danica Patrick (Hispanic/Female), their subsequent successes, and the increase

in minority buzz and viewership is evidence of the impact one driver can have on a yet

not fully realized demographic. The sheer size of these non-customers is enough to

warrant this approach. New customers domestically and abroad will be the lifeblood of

NASCAR’s success moving forward. As the economy and media coverage broaden in

scope and speed of delivery, NASCAR’s continued role as portal to corporate advertising

dollars will be contingent on its ability to tap into new markets and demographics. Long-

term success in this regard will be built and sustained through the continued rise of

minority drivers on each of the NASCAR racing circuits that can build the relational

bond with fans as current drivers have done.

Alternative #2 provides a potential alternative that addresses the economics of customer

purchase and participation, but does not adequately address the causes of decreased TV


Alternative #3, while functional, represents a short-term reactionary response to a set of

complaints whose resolution would not be consistent with the tradition of the sport, nor

the vision of NASCAR.

O.C. Ferrell and Michael Hartline, Marketing Strategy (Mason, OH: South-
Western, Cengage Learning)
O.C. Ferrell and Michael Hartline, Marketing Strategy (Mason, OH: South-
Western, Cengage Learning)