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21 Dec 2011, 21:54 (Ref:3002924) | #1 | ||
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Automotive Marketing and Sportscar Racing. Any opinions?
Hello good folk of ten-tenths.
In my head, I wrote a long article about the marketing of sportscar racing (actually, about a year ago I did, but it was on a computer that was stolen). As the point of racing in emerging markets is raised in several threads, most recently in the “Are British fans losing out?” topic, I thought I'd note down these thoughts again, in case anyone was interested. If you're not, no offence taken, and even if you are you'll be doing well to read to the end of this rather poorly written draft which I haven't yet re-read. OK, let's begin... Intro We have to remember that marketing is a lot more complex than simply racing in a country to sell the car the next day; the 'win on Sunday to sell on Monday' concept simply no longer exists in today's world of media and information sources aplenty. It's my belief that sportscar racing is greatly misunderstood in many a boardroom; one where its purpose is not entirely understood and taken on board due to the rather unique position it occupies even among other forms of motor racing. These days, you have to look at all number of things and in sportscar racing that falls into three main categories. Category 1 - Marketing upon technology OK, this isn't huge and until now it's such a false dawn for marketing that there's no proven experience of this approach. This is the "aren't we green!" approach that's taken from everyone between car manufacturers and shampoo brands. The number of people who's purchasing decisions are actually based on a 'green' agenda are few and far between and I don't see it as any great coincidence that the ALMS has failed as it's desperately tried to promote itself in this manner. It's a corporate image boost but with few tangible benefits compared to factors such as desire and price. In this context, desire is the one we are chasing. That's not to say this has no relevance at all. Although 'green' programmes might not be as influential as bandwagoning marketeers initially believed, the exposure gained as a result of them further emphasises any success that they have. Media outlets looking for a story will give preference to technology leaders such as these and the small section that is influenced by this area of media is both a powerful and influential one. Category 2 - Marketing based on exclusivity This approach should not be underestimated. For a brand, any brand but luxury ones in particular, creating tangible benefits for those who have bought in is crucial for two reasons. Firstly, you keep those who have bought in loyal and, secondly, you create a higher perception of status to those outside. Corvette Racing is the best current example of this, and the legions of fans that flock to the circuit in the way football supporters follow their team are a key part of retaining a brand's appeal. The perceived exclusivity and creating the feel that buying into that brand will allow you to join a 'members club' enhance the value attached to it. Methods such as these are how BMW keeps it's perceived exclusivity as higher than other volume saloon manufacturers and its successful racing programmes have always played a part in that. In fact, BMW have openly stated in the past that this is a main reason for programmes such as the WTCC, to act as a reward or participation scheme not just for customers but for employees and dealerships. Other examples are brand magazines that the automotive companies send to their customers. Alfa Romeo's is a fine example, full of subsidised adverts from other luxury brands and items that create an atmosphere within which the member of the 'club' can associate their membership with that of other exclusive goods. Category 3 – Marketing based on brand building This is split into two different sections again: future markets and future generations. Sportscar racing excels in these although very little value is actually placed upon it as it's the most difficult form of promotion to measure. The best example of this in modern times is the video game market. I know people that have never watched a sportscar race in their lives and couldn't place Le Mans on a map to within 300 miles say to me “oh, is that where the Toyota GT-One races” and cars such as the early 2000s BMW GT2s, JGTC cars and IMSA GT Nissans have been mainstays in mass-market console games for the last decade. There's no instant desire or means to go and purchase the cars of the game but each car that the user finds desirable helps create a definition and value to each brand that can play a part in decision in years to come. Sportscar racing's main benefit in this market is its distinctive and attractive cars. The immediate impact of ALMS campaigns may not create the ROI that return-happy boardrooms are looking for, but the long-term benefits are potentially endless. For instance, cars such as the Jaguars of the '50s and '80s, the Fords of the '60s, the Ferraris of the '50s and '60s and the Porsches of the '70s and '80s have created icons for those marques that their history is built upon. OK, I had a point and here it is. The second part of this marketing concept is the future markets. The argument has been raised that China's car sales do not justify spending huge in racing within these specific markets but that is not the point at all. Developing markets are crucial for exactly that reason, they're developing. So they may not be able to buy a car this year, or next year, but if you race in front of a growing audience then those five years of building a brand in a country can reap huge rewards when that colossal market reaches the point at which it is able to invest in your marketplace. There's a huge gap in the Chinese, Indian and Brazilian markets to be filled should they become as prosperous as they are on track to be and beginning to develop a brand only when the market is ready would be economic suicide if your competitors have been there doing so for years preceding it. This is also true of the series' themselves. Just because F1 is huge around the rest of the globe doesn't mean that the WTCC, SuperGT or WEC can't target this huge local market to develop its own fanbase. This might sound far fetched at the moment, but think back to the days of the 1930s and Auto Union and Mercedes racing in Grand Prix all over the world. At the time the marketplace was not able to afford their wares, or even access them, but those brands are still established within those markets 80 years later, along with the Maseratis, Bugattis and Ferraris that they raced against, and all have benefitted from being an established name and image long before the populace was able to buy into the brands. Conclusion This is not to say that sportscar racing is without its negatives. I'll save that discussion for a future ramble, but for now I'll leave it by saying that all marketing in developing markets is as much art as science and there is no definitive way to tell what is most beneficial. In fact, in ten years time, there won't necessarily the means to be able to say exactly which programmes left the biggest legacy on the countries in question. This isn't to say that I'm agreeing with FIA/ACO policies of late and, in particular, the taking of current markets for granted, but it gives some logic to each part of the calendars the global series are producing I hope. End If you're still reading, go take a break and sit down for a while! Well done, this needs much revision before I should have posted it, but there's my second draft...... By the way, if anyone's interested in my similar piece about the key media and market differences between sportscars and other motorsport, let me know and I'll tidy it up a little. |
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21 Dec 2011, 23:01 (Ref:3002944) | #2 | |||
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22 Dec 2011, 00:56 (Ref:3002981) | #3 | ||
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Look at the way the Big 3 uses NASCAR in advertising. Do they claim that racing makes their products better? No. Instead, they link the driving personalities to their products the same way they use stick-and-ball sports stars and musical pop stars in their advertising. From what I've seen of Asian advertisements, the use of personalities to sell products may be even more pronounced than it is in the West. On top of that, there is your Category 2. There's no doubt that there is some power there and we've seen it through BMW clubs, Corvette clubs, and even Jeep off-road clubs in a non-racing sense. In order for those situations to occur, it seems there has to be some relevance to the product people can buy on the roads. This is certainly true of grass roots racing with Civics, Integras, Miatas, Mustangs, and so forth. There is some truth to it with professional GT and touring car racing. What about prototypes though? Is there a sufficient link to the track product and the dealership product? Also, 1950s analogies about racing and car buying don't really work today. The people who buy cars are different and what they are looking for are different. Women buyers were probably a severe minority after the World Wars, but they may be the majority today. I believe they are in the US and probably are elsewhere around the world as well. Even if they aren't the buyer, they certainly have a great influence over what is brought. Women (and the great number of men who aren't car guys) look for certain things in cars. Racing informs those buyers very little about the actual products. The 3rd world gets technology and they love it just as much (or more) than the West. Even the poor are using technology. Technology (non-driving related technology) is where auto makers are focusing a lot of attention in terms of development and marketing. Is racing helping any way in this regard? Also, look at the luxury car makers. Speed isn't what is selling and keeping luxury car makers afloat. SUVs and large sedans are selling. I was reading an article last week about the Chinese market and the Big 3 German luxury companies are really focusing on SUVs. Again, it's probably a "woman buyer" (hate to be stereotypical, a lot of men think the same way) type situation and I'm not really sure how racing informs buyers in any way in that regard aside from the personality situation. Performance is somewhat taken for granted now and buyers are looking at other factors. Finally, countries like China may not react well to international (and by international, I mean European) racing. It's a big country with it's own culture and all of that. Foreign car companies may have to find and support a type of racing that the Chinese want to see. Maybe that way they can groom domestic star drivers who can become big personalities. So, long story short, can racing be used as a marketing vehicle? Yes, but it is contingent on certain points being fulfilled. Also, racing campaigns have to be part of a larger marketing campaign. If not, racing will just continue to speak to a small (and perhaps shrinking) gearhead community. Even then, those fans may rather follow grass roots participatory style racing over professional BoPed Silent Sams with Big Honkin' Ugliness racing at the most sterile concrete canyons. |
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22 Dec 2011, 03:03 (Ref:3003003) | #4 | ||
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Interesting.
A few comments. Yes, establishing reputation and brand image in a market in the early stages of development is very important to any product. The question is does Sports and GT racing achieve that end? It certainly helps for high status products to have a "membership" or "socio economic "status" identity. I tend to think that "almost road cars" may achieve this in a market like China or India because it can be more easily identified with local success stories. "Race on Sunday, Sell on Monday" may have passed its use by date in developed economies but certainly offers sales rewards to dealers and manufacturers in developing markets. It also has the huge advantage of developing participation, involvement and local acceptance of the sport as locals can see the actual car that they can aspire to being raced. Race importance and acceptance grew through those categories most places in the world. Where all motor sport is most effective is in influencing the influential. Any work, social or family group has within it people that most of the others recognise as having knowledge in a particular field. They are recognised because the have enthusiasm for it, and can talk with (apparent) knowledge on that subject be it movies, music or motor cars. Motor sport is the ideal way to develop brand and product awareness among that group, and have the talk to and influence their circle about your automotive product or service. The influence of Women in selecting a vehicle to buy is of course critical in developed markets, but it just doesn't happen yet in most of the developing markets. In fact in many of them there are few women drivers. The long term benefits of sports car success are demonstrable, perhaps even more so than F1 which is usually seen as being divorced from the everyday product to a greater degree. D types are still selling Jaguars. Finally the most important thing about developing markets is the need to grow enthusiastic and skilled dealer and service networks. Any form of motorsport helps in this, but sedan and GT racing offer the opportunity to get dealers and their staff involved and identified. Not sure about LMP, and certainly doesn't happen in F1. And all of this ignores Brazil where motor racing comes a close second to football in terms of recognition. Unlike China or India awareness of motor sport brands seems to exist in very poor and remote places. |
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22 Dec 2011, 03:22 (Ref:3003004) | #5 | |||||
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Well, maybe it is just an Italian thing and these Chinese millionaire women are just buying cars to go with their designer handbags. But, anyway, in areas with a lot of "new" money, it may make sense that women are enjoying bigger shares of the success. Maybe. Obviously, things would be different in Saudi Arabia and stuff like that. Quote:
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22 Dec 2011, 03:46 (Ref:3003005) | #6 | ||
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Interesting about the Chinese womens influence on up market cars. My experience would indicate that this was city centric probably to Shanghai.
Women certainly don't seem to feature in India. In spite of having had a female Prime Minister, more about family connection than gender, women do not seem to be very visible in business. And of course other than Malaysia, and nowadays Indonesia, predominantly Muslim countries do not have much female involvement with motoring in my experience. Brazil is interesting. Senna was God. But upcountry there are a lot of blokes with considerable self learned mechanical knowledge that keep the place running. Also it is easy to misjudge just how strong the hi-tech and aviation industries are there. South America in general already has strong race programs for tin tops, mostly closely related to what is available in the showrooms. My feeling is that is the sort of racing manufacturer dollars should be going to in developing markets. |
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22 Dec 2011, 10:31 (Ref:3003103) | #7 | ||
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An interesting thread Mr Davies and one that will develop as we have time to spend on it over the next couple of weeks.
Just a couple of thoughts: Firstly the long term image thing is so very true, one only has to think of the D type as Old Tony has said. For years the reality of Jaguar road cars was unreliability and poor residual value but they still have a brand position born of racing so many years ago. Similarly Porsche have remained true to the racing theme and benefit enormously, I am told that a new 911 derivative is due in the spring and orders have been placed without anyone seeing an actual car, no discount is available from the dealers such is the demand for an iconic and impractical car, the same can be said of Ferrari and others. As to Brazil and their love of racing you only have to mention F1 to a group of Brazilians to find that they know all about it, obviously to a varying degree, but as someone who has travelled widely on business nowhere else have I found this degree of interest, but it is interest in F1, not motor racing in general. I do sincerely believe that the influence of motor racing on purchasing decisions is almost subliminal and for that reason I also believe the media interest in sports and GT racing needs to be developed to increase the awareness in boardrooms. If you are trying to sell a concept to the board, be it for investment as a manufacturer or as a sponsor it does not help if you have to explain what the series is. If there is the title "World Championship" you are more likely to get their attention than if the title is, say, "FIA GT Championship" because then you have to explain what FIA is. Another thought is that front line sales staff for marques that do well in motor sport need to be aware just what is involved and why success is significant. At the time of the DFV and the rallying Escorts the sales manager of a large Ford dealer, as it happens Mr Davies, it was the one on Maningham Lane in Bradford, said to me that nobody bought a Ford because of motor sport. I suggested he said that to his Chairman. Last edited by old man; 22 Dec 2011 at 10:39. |
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22 Dec 2011, 11:11 (Ref:3003130) | #8 | ||
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DFV gave a shine to the Ford name, Escort-BDAs sold Escorts.
Slightly different imaging, I suspect. But, I also do tend to agree with the Sales Geezer. You cannot say you sold 10 Escort 1.3L because Hannu Mikkola was in town last week... Though of course Roger Clark traded on his rallying history! |
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22 Dec 2011, 17:05 (Ref:3003262) | #9 | |||
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We should not narrow this discussion however to one make, my firm belief is that the value of competition success is well worth the investment and can be measured in market penetration. When the Mclaren road car is available there will be no shortage of buyers at very high prices because of the image and a belief in the quality of the vehicle. True, the road car is an incidental in this case as the "raison d'etre" of McLaren is F1 but non of us expect it to be a sales flop. |
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23 Dec 2011, 01:23 (Ref:3003423) | #10 | ||
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As for McLaren, well, you're talking about the ultimate gearhead brand. They might make Porsche buyers look like grandmas. That is certainly an extreme example. Plus, people who buy McLarens probably buy one of everything that is sporty! Racing does influence buying behavior for some, but the key thing is to not get carried away about the influence. I feel that the influence is decreasing now as buyers continue to look for things in cars they purchase beyond just performance. I think performance is almost taken for granted these days, but things like interior quality and quality of the in-car electronics are areas in which buyers are being picky. Also, at least in the US, some of the companies pushing new powertrain technology are ones not involved in using those technologies in racing. Ford, GM, and Hyundai are really pushing things like direct injection, turbo small engines, hybrids, DSG gearboxes, etc., but those aren't really featured in their racing programs (in the case of Hyundai, they don't even have racing programs). I guess GM will have a turbo IRL engine next year and Ford kind of sort of has a turbo P2 engine that nobody is using, but I doubt those are large parts of their advertising campaigns. Obviously not or they would not have chosen the IRL and P2! I remember reading or watching something in which one of GM's people (not Fehan I don't think) said that Corvette Racing does not sell regular cars and SUVs, but it does have influence elsewhere. I don't remember where the article was, but maybe someone else remembers it. It wasn't from all that long ago. I think it was at Petit. Anyway, here's another question: can racing have a negative influence on sales? Say a company races a total dud like the AMR-One. Does that drive away sales? What about if a company hires a driver that has a rebel attitude or crashes a lot? Is that a negative influence? What if someone dies or gets injured in a company's race car? |
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23 Dec 2011, 02:58 (Ref:3003437) | #11 | ||
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In developed markets race participation does not successfully sell a particular model car. But it certainly has a significant effect on brand image and reputation. Don't know about the problems Ford was having in the US at the time of their sport involvement but it certainly changed their image here in Australia from cheap and nasty to technically interesting and a bit sporty. That was the only period when Ford really pushed GM here since WW2.
By the way motor sport programs significantly alter the image of a nations motor industry in export markets. The image lift for Ford in that era in Oz seemed to be confined to local and European designs. The US industry has developed an image as being makers of big, dull, sloppy handling and poorly finished cars. The only ones anyone wanted to import were Mustangs, Corvettes and Camaros because they were racing in modified form here at the time. US SUVs have beem mostly unsaleable. Japanese manufacturers supported a fair bit of racing here and gained a technical leadership and quality image in that period. The German industry of course rides on the back of Posche, BMW and Audi race reputations. I go back to my comment in a previous post that the advantage of a competition programe is its influnce on those who can influence group think. Sport gets them interested in, and talking about your brand. Very hard to analyse or quantify, but if you have ever done any focus group work you will know what I mean about how someone with a particular enthusiasm can influence the attitude within a group. And of course every social group or workplace is in fact a Focus Group. Back to developing markets I think that there is still potential in those markets to race on Sunday and Sell on Monday. Probably an almost street stock, or even a one make series could do the job. That of course doesn't help an international Sports/GT series. That is much more about long term brand awareness. We need a current marketing guru aboard this thread, Last edited by Oldtony; 23 Dec 2011 at 03:07. Reason: too many thumbs |
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23 Dec 2011, 10:13 (Ref:3003496) | #12 | ||
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I totally agree with how Ford's image was switched around in the 60s, and that was largely down to the HUGE motorsport programmes they had in the day. F1, Le Mans, rallying, you name it, Ford's were in there, and MOST importantly, being seen to do well, if not win. After all, you wouldn't expect a Cortina to beat a Dino, would you?
My earlier point was that kids WANTED an Escort, precisely because they'd seen RAC footage on TV. They were COOL cars. |
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28 Dec 2011, 15:08 (Ref:3004834) | #13 | ||
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So I see you agree with me Tim, competition sells cars and improves image, that is the general thrust of the the comments on here.
Interestingly over the Christmas break and speaking to some who would know I understand that McLaren road cars are having some problems with electronics and that the race version is over complicated on that front. For AM will the success in the GT1 World Championship cancel out the AMR One failure? |
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29 Dec 2011, 00:03 (Ref:3004987) | #14 | ||
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Anyway, I think the greater question is if AMR's success in LM GT1 and with the Lola-V12 can compensate for their embarrassing runs in P1 and GTE of late. Ok, nobody has really paid much attention to the GTE program (though that may change some with a new factory program), but the failure of the AMR-One has been visible. I guess the same question can be posed about Jaguar and the RSR program of futility. Their international failure may have been a blip on the radar, but it is more visible here in the US. The fact that the team is operated by a team/owner known in the US more for not paying drivers and their porn industry connections may not help either. When programs like the Vantage and RSR Jag manage to be total garbage despite very favorable BoP, well, how is that favorable to marketing? They make pre-BoP era crap cars look much more respectable. |
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29 Dec 2011, 12:01 (Ref:3005119) | #15 | ||
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I presume AGD, that your comments about not paying drivers and other, non motorsport activities refer to Jaguar rather than AM/Prodrive?
The factory GTE programme will be very interesting and I believe is a reaction to the lack of porgress they made on that front after the promise of the JMW effort the previous year. The GT1 success will be used in advertising that will be seen by many who know nothing of BoP and already Autosport carried a 2 page spread that was as much about Hexis as AM but the words "World Championship" carry prestige with many, particularly in emerging markets. Old Tony makes a very good point about group thinking. In any group there are those that are acknowledged to have specialist interest and therefore knowledge and so good results are spread down a chain even if many have not seen press or TV. I think that will be very true in emerging markets as well. |
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29 Dec 2011, 12:30 (Ref:3005125) | #16 | |||
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29 Dec 2011, 17:41 (Ref:3005211) | #17 | ||
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Marketing genius? I give you Audi. They have won Lemans countless times, including the latest with their R18. How do they market this? With a 30 second video set to music and no mention of what the car actually achieved.
http://www.youtube.com/watch?v=mPIENo6PCF4 |
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29 Dec 2011, 17:47 (Ref:3005213) | #18 | |
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29 Dec 2011, 17:55 (Ref:3005214) | #19 | ||
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29 Dec 2011, 19:35 (Ref:3005271) | #20 | ||
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John Q Public doesn't CARE about BoP, or not. All he sees is Aston WON. That is ALL he cares about.
Most of us will never OWN an Aston, but likely spend a fortune on toys, and hats, and key rings... GT1 was sold as a BoP series, everyone knew it when it started. Quit complaining, FFS. |
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29 Dec 2011, 19:55 (Ref:3005281) | #21 | ||
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29 Dec 2011, 23:36 (Ref:3005356) | #22 | |
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Based on the popularity of the GT1WC, I would beg to differ. The same could be said about any BoParama or Specshow. Whether it's SRO, Grand-Am, IRL, Champ Car, touring car, World Challenge, A1GP, Superleague, whatever, people aren't watching spec/BoP racing for the most part. The ALMS is increasingly putting themselves on the list and even NASCAR dipped in popularity after the introduction of the CoT. If the fans don't see anything, how can they care about anything?
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30 Dec 2011, 00:39 (Ref:3005367) | #23 | |
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You can get too bogged down in what a hardcore sportscar fan thinks, if you take one step back to motorsport enthusiasts (who you would think are Autosport's target audience), the magazines yearly review covers the ILMC and FIA WC with two and a bit full pages apiece, the ALMS/LMS recieve a few paragraphs each.
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30 Dec 2011, 00:56 (Ref:3005370) | #24 | ||
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Some series could make the argument that their series suffers from not being well-known and that if people knew about it, they would be more popular. Perhaps something like the Continental Tire Series would be an example of that in the US. I don't know what would be an example of that in Europe. Maybe something like the Superstars series or VdeV. Anyway, there are series that do get a lot of media attention and are still ignored by the public. IRL, WTCC, GT1WC, and so forth fit in this category. These are historically strong series that are on the life support method of BoP or spec racing right now. They get in racing magazines. Heck, even in mainstream magazines. The IRL gets in Sports Illustrated and stuff from time to time. They have TV deals on visible networks (well, maybe not GT1WC, I don't know). Racing fans know these series exist. The manufacturers know these series exist. The other sponsors know these series exist. They still ignore them even though the entry cost to compete is low. That's the ultimate sign that your series sucks. If people know about your series and have access to watching it on TV or going to the track and they don't do so, you just need to push to eject button and come up with a totally different business plan. |
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30 Dec 2011, 01:55 (Ref:3005375) | #25 | ||
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When you look at a race series you need to stop and think about what it is marketing.
The first thing a successful series does is market ITSELF. They are in the entertainment market and need to make sure that they are putting bums on seats at the track or in front of TV. Examples F1, NASCAR and here in Australia V8SC. All of them tightly controlled specs but not quite BoP. They are selling the sizzle and then using that sizzle to market mostly non automotive products and services. Have a look at the sponsor list in those series. Very little by way of automotive, a lot of high end services etc in F1 ranging down to fast food and soft drink in F1 and the other series. Brand reinforcement stuff for bulk consumer goods. Using your product in a team program to establish an image for an auto manufacturer is a totally different excercise. You are trying to establish in the mind of those interested in motor sport a reputation for quality, durability, technical superiority and/or performance. The Audi ads in this thread are an example of building on that base. Both Toyota and Honda used simmilar ads in Australia around their F1 programs, which in spite of not having wins in the program, established a perception of technical leadership in the geberal public. That sort of thing can work without race success for a manufacturer with a broad range of products. It probably doesn't work if you don't have success for a niche market product like Aston or Jaguar. They are living on past performances. If your race program is backed by clever marketing it doesn't have to win much to be effective. If you can take a full page spread saying you have won the World (insert BoP Class here) Championship it certainly adds icing. I still go back to my thought that it is the group influence people you are after, and you want them to talk up your brand. Most of us only but a car every 3 or 4 years, but we can talk a lot of other people into looking at a particular brand in between hunting round the dealers ourselves. |
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