As Nascar's fan base grows, so does drug's sales opportunity

Drug Store News, June 21, 2004 by Michael Johnsen

Although racing stripes and the Rx symbol may not seem to be a good fit to the casual observer, there is a great deal of commonality between a fast-growing, family-friendly Nascar fan base and the customer cruising drug store aisles--so much so that drug stores may want to get into the driver's seat in reaching out to the Nascar fan and his family.

More and more, the rainbow-colored Nascar logo is seeping into America's living room, as the motor sport entrenches itself as the No. 2 most-watched sport on television with more than 75 million fans. Indeed, Nascar averaged a bigger share of viewers in 2003 with its network partners Fox, FX, NBC and TNT than the NBA regular season and playoffs, the NCAA tournament, PGA golf, and the NHL regular season, playoffs and Stanley Cup finals.

Along with that national TV exposure, Nascar has been driving straight into the backyards of those markets already identified by chain drug as fertile pharmacy ground--Southern California, Phoenix, Las Vegas and Dallas for instance--for years. Since 1997, Nascar has moved four races into those markets from its one-time southeastern base, with the most recent Nextel Cup race being moved last month to the Texas Motor Speedway in Fort Worth, Texas. Nascar also set up shop near Chicago, at the Chicagoland Speedway in Joliet, Ill., in 2001.

"What's exciting that a lot of people overlook, too, is the fastest-growing segment of the sport is female fans," commented John Andrews, director of marketing at Implus. Women already make up 40 percent of the total fan base, and that makes the Nascar fan that much more alluring to the chain drug retailer.

Nascar also is gaining ground with minorities--the sport's African-American fan base has ballooned by 29 percent from 1999 through 2002, according to an ESPN Sports poll. And Hispanic fans grew 23 percent in that time frame.

Nascar fans are predominantly middle class, with 42 percent of all fans earning an annual salary greater than $50,000. And Nascar fans index higher than the general population in having children--making it a sport that appeals to families.

Even Nascar's premier sponsor this year has more of a family appeal. For the 33 years leading up to last year, Nascar's Cup series was sponsored by tobacco giant Winston, making it tough to market the races to kids.

"From an image stand-point, again looking at families, Nextel now is able to promote the sport where Winston was unable due to restrictions," noted Nascar spokesman Andrew Giangola. "There's been some great advertising and support from Nextel, and that helps the sport grow, as well."

But perhaps the greatest quality of a Nascar fan, at least as far as pharmacy operators are concerned, is the intense brand loyalty Nascar fans devote to Nascar sponsors. Indeed, of all the suppliers and Nascar experts Drug Store News talked to, brand loyalty was named as the most significant factor separating the Nascar fan from your average, every-day shopper. "The Nascar loyalty [quotient] is something that was, attractive to us when we first looked at the promotion vehicle, Andrews said. "Factors like brand switching: More than 50 percent of Nascar fans will switch from a leading brand to a sponsor brand, for example. That's pretty powerful."

The sport's 40 million hard core fans--fans who spend more than six hours every week tuned into Nascar programming--understand the motor sport's need for sponsorship. "The [brand] loyalty of Nascar fans is quite well known," commented Giangola. "According to our research, fans are three times more likely to purchase sponsor product versus non-sponsor product." In addition, 46 percent of Nascar fans would be willing to spend as much as 10 percent more for a Nascar sponsor product than for a competing non-sponsor product. That's in large part because of fan awareness surrounding the need for sponsorship, Giangola said. Our fans acknowledge that. They understand it. They embrace it.

And those Nascar fans are visiting their neighborhood pharmacy retailers to purchase sponsor products. Indeed, 2-out-of-every-3 monthly drug store shoppers are Nascar fans, according to the Simmons National Consumer Survey, which spaned from spring 2003 through fall 2003, as provided through Nascar's brand and consumer marketing division. Nascar women are actually more likely to shop the drug channel than the average consumer, with 81.1 percent reporting they had visited a drug store in the past month.

Nascar sponsorship cost of entry

Even with the number of fans Nascar is reaching today, sponsorship does not come cheap. Claiming the title sponsor of a car runs more than $10 million per year, placing a logo on the hood or the deck lid runs more than $1 million annually, quarterpanels cost close to $500,000 per year.

But is it worth it? Judging from the number of pharmaceutical and consumer packaged goods getting involved with Nascar sponsorships, not to mention retailer initiatives like Target's No. 41 Nextel Cup car or race sponsorships from Meijer's and Kroger s, the answer seems to be a resounding "yes."