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Marketing
shifts into high gear as Nextel becomes NASCAR sponsor
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At Nextel, talk is cheap
by
Garry Kranz
Virginia
Business
November 2003
Wireless
carrier Nextel Communications is racing to become a
national brand – literally. The company takes over
as corporate title sponsor for the marquee auto-racing
series of the National Association for Stock Car Auto
Racing (NASCAR) in 2004. What has been known as the
Winston Cup racing series will become known as the Nextel
Cup.
By signing the 10-year marketing and promotion agreement
with NASCAR, Reston-based Nextel gets a foothold in
one of the fastest-growing professional sports. The
company gets unlimited use of the names and likenesses
of all NASCAR cars, drivers and racing teams in a variety
of advertising and promotional venues.
The
deal could be considered something of an upset in corporate
circles, considering the list of companies vying for
the high-profile sponsorship. Visa, Home Depot, McDonald’s,
Kodak and Coca-Cola all were said to be in the running.
But
NASCAR officials say Nextel was selected because it
had the goods to help NASCAR broaden its fan base and
diversify marketing. “There were a lot of variables
that went into the decision, including that we didn’t
want to cannibalize our existing revenue base. But the
biggest factor is that technology is an untapped growth
area for our sport, and Nextel is an acknowledged leader
in a booming technology sector,” says NASCAR spokesman
Terrence Burns.
NASCAR,
headquartered in Daytona Beach, Fla., is the sanctioning
body for stock car racing in North America. It had been
looking for a new sponsor since its long-time sponsor,
R.J. Reynolds, bowed out earlier this year, only one
year into a new five-year, $240 million agreement. Reynolds,
which began sponsoring Winston Cup in 1971, cited tobacco
lawsuits and shrinking market share.
Undoubtedly,
dropping tobacco and adding wireless phones will change
NASCAR’s image. “Let’s face it, Nextel’s
not going to be under the same constraints as a tobacco
company,” says Burns.
Nextel hopes to drive the turnaround by tapping into
an intensely loyal fan base. Street & Smith’s
Sports Business Journal says NASCAR ranks at or near
the top in several key areas of importance to corporate
sponsors: future growth potential, relationships with
fans, responsiveness to customers and the value provided
for money.
In
addition, NASCAR cites internal marketing that shows
its fans are three times more likely to purchase products
from NASCAR sponsors than from their competitors. That’s
the kind of incentive that convinced Nextel to pull
the trigger on the deal, reported to be worth $700 million.
The
NASCAR Nextel Cup series will include 36 championship-points
races at 23 tracks next year starting with the Daytona
500 in February. It makes its first stop in Virginia
in April at the Advance Auto Parts 500 at the Martinsville
Speedway. Nextel’s name, naturally, will be plastered
just about everywhere. The company has created a bold
yellow logo to replace the red-lettered Winston signs
that have become a fixture at NASCAR tracks. “But
this goes way beyond signage,” says Nextel spokesman
Sean Hughes. “We will also be able to develop creative
programs utilizing all media. Fans will be seeing more
of NASCAR and their favorite teams and drivers.”
This is one deal that will keep Nextel’s name in
the winner’s circle.
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