This is an academic exercise completed by Thomas Wilk and submitted in partial fulfillment of the requirements for MSPC 3450 Global Marketing and Advertising, Clark University – College of Professional and Continuing Education. May 3, 2010. Certain assumptions have been made by the author in order to complete the exercise. The entire work is the sole opinion of the author and is in no way endorsed by SPEED TV, News Corporation, NASCAR, ESPN, J Sports, Mobilityland, Toyota Racing Development, Hideo Fukuyama, Joe Gibbs Racing or any other entity named in this report.

Japan has been identified by SPEED as a culture of motorsports and performance automotive enthusiasts. SPEED believes that its love of racing and all-things automotive is boundless and will prove to be a great success in a culture with a similar affinities. This presentation will outline SPEED’s strategy to expand broadcasting, web and mobile content to Japan.

Product Type:
SPEED TV is a cable television network with a heavy online component that can be classified as both a product and a service. SPEED is a product in that it consists of programming and information that is the end result of a production process that serves as both a need and a want satisfier. SPEED is a content bundle specifically focused on delivering an enthusiast level and above entertainment architecture centered on various forms of motor sports. SPEED is also regarded as a service in that it is a conduit of information to be consumed and interacted with by the user to gain insight and develop knowledge regarding auto racing and the performance car-culture lifestyle.

Product Description:
SPEED TV is owned by News Corporation (NasdaqGS: NWSA) and headquartered in Charlotte, North Carolina. SPEED began broadcasting on January 1, 1996. “SPEED is the nation’s first and foremost cable television network dedicated to motorsports and the passion for everything automotive. From racing to restoration, motorcycles to movies, SPEED delivers quality programming from the track to the garage. Now available in more than 78 million homes in North America, SPEED is among the fastest-growing sports cable networks in the country and, the home to NASCAR on SPEED. SPEED is also an industry leader in the online world with a passionate audience of enthusiasts who consume and enjoy our content over a variety of emerging media platforms including SPEEDtv.com ‘The Online Motorsports Authority’, interactive TV, video on demand (both cable and online), mobile WAP deck and broadband video services.” (advertising.speedtv.com/audience.html)

Perceived Value:
The perceived value of SPEED TV rests in its dedication to being the absolute authority on all things regarding performance automotive activities. SPEED is the “go-to” media entity (both television and online) when users seek entertainment or information focused on NASCAR, Formula 1, MotoGP or the performance automotive culture. SPEED is an attractive marketplace for advertisers to reach the performance-auto enthusiast. SPEED expects to command premium advertising dollars to reach this market.

SPEED TV Value Chain:
­SPEED’s value chain consists of unmatched competencies in the arena of motorsports entertainment and information delivery.

SPEED TV SWOT Analysis:
This is the situational analysis concerned with finding a strategic fit between internal strengths and external opportunities while working around internal weaknesses and external threats. The strategic factors (strengths, weaknesses, opportunities and threats) for SPEED are listed below.

Expansion Target: JAPAN
Japan is located in Eastern Asia. The country is an island chain between the North Pacific Ocean and the Sea of Japan, east of the Korean Peninsula. worldmapnow.com




Population: 127,078,679 (July 2009 est. 10th worldwide)
GDP: $4.141 trillion (2009 est. 4th worldwide)
Median age total: 44.2 years
Sex ratio total population: 0.95 male(s)/female (2009 est.)
Ethnic groups: Japanese 98.5%, Koreans 0.5%, Chinese 0.4%, other 0.6% note: up to 230,000 Brazilians of Japanese origin migrated to Japan in the 1990s to work in industries; some have returned to Brazil (2004)
Languages: Japanese
Literacy: 99%
Area – comparative: Slightly smaller than California
Climate: Varies from tropical in south to cool temperate in north
Time difference: UTC+9 (14 hours ahead of Washington, DC during Standard Time)
Television stations: 211 (plus 7,341 repeaters)
Telephones – mobile cellular: 110.395 million (2008 7th worldwide)
Internet hosts: 47.249 million (2009 2nd worldwide)
Internet users: 90.91 million (2008 3rd worldwide)
Roadways total: 1,203,777 km (5th worldwide)
Race tracks: 16 over 1 mile/length (Super speedways)
Cultural similarities USA/Japan: “Both societies have a comparable high regard for such qualities as honesty, cleanliness, efficiency. Both enjoy a congenial technology and a delight in what is new. Both have a strong middle class, both value formal education, both are democracies with reasonably well informed and responsive electorate.” (Condon, 4)

Statistics: cia.gov, motoracing-japan.com/circuit/index.html

Target Market (Audience):
SPEED TV will target males 13-49 years of age (YOA) for its Japanese launch initiative. Assuming that the Japanese numbers are in line with the United States, NASCAR fans skewed male in 2008 (62.4%) (sportsbusinessdaily.com). For this exercise, we will substitute “NASCAR” with the more generic “motorsports.” SPEED will target male motorsports fans hoping they will adopt and bring along the female market segment. In Japan, 88.5% of respondents in the age range of 10-49 identified either television, mobile or web as the “most important” media to them. (Infinita, slide 12) SPEED has an impactful presence in these media groups with its television broadcasting and rich-mobile and web content.

The product that SPEED TV offers will be accepted by the Japanese at a cultural level for several reasons. Using three of Geert Hofstede’s five dimensions of culture will demonstrate why the launch of SPEED will be successful. “Hofstede developed a model of five dimensions of national culture that help explain basic value differences. This model distinguishes cultures according to five dimensions: power distance, individualism/collectivism, masculinity/femininity, uncertainty avoidance, and long term orientation.” (De Mooij, 74)

Power Distance (PDI): “In large power distance cultures, everyone has his or her rightful place in a social hierarchy…The rightful-place concept implies that in high power distance culture, being the ‘number one’ brand is important. A brand that has entered markets early and is viewed as the number one brand will remain so more easily than it would in low power distance cultures.” (De Mooij, 75-76) Japan scored a moderately high 54 in the PDI dimension indicating that SPEED would be accepted under the number one brand notion, as it would be the first network in Japan completely dedicated to motorsports and the performance automotive culture. SPEED will demonstrate it is worthy of its status through the continuous output of high-caliber programming and the delivery of quality information.

Individualism/Collectivism (IDV-COL): “The contrast individualism/collectivism can be defined as people looking after themselves and their immediate family only, versus people belonging to in-groups that look after them in exchange for loyalty.” (De Mooij, 77) Japan scored a 46 in the IDV-COL dimension indicating that Japan is a collectivist culture. Several definitive attributes of collectivist cultures can be used to illustrate the potential for acceptance of SPEED TV in Japan. “Collectivist cultures are high-context cultures. Members of collectivist cultures emphasize goals, needs, and the views of the in-group over those of the individual” (De Mooij, 77) SPEED will offer a high-context platform of communication from broadcasting quality programming 24 hours a day on television to a rich-media web and mobile experience. In-depth information and analysis will be available to the user anytime they require it. SPEED will also deliver the most comprehensive coverage of automotive and motorcycle racing in Japan; emphasizing that racing is not a sport of individuals, but a team sport that takes a unified effort to win a race. From engineers, shop fabricators and technicians to race day crewmembers and drivers, each member of the team must do their job to the best of their abilities in order to propel their team to victory.

Masculinity/Femininity (MAS-FEM): “The dominant values in a masculine society are achievement and success; the dominant values in a feminine society are caring for others and quality of life.” (De Mooij, 79-80) Japan scored a 95 in the MAS-FEM dimension indicating that it is an overwhelmingly masculine culture. In masculine cultures: “Big and fast are beautiful [and] being a ‘winner’ is positive.” (De Mooij, 80) SPEED TV is dedicated to delivering the very best presentation of motorsports in Japan. The central theme of SPEEDs content is its namesake, speed. Motorsports are all about big, fast, loud cars and huge trophies at the finish line. The racing portrayed on SPEED is itself the definition of Hofstede’s MAS dimension.

SPEED TV SPELIT Matrix:
The SPELIT analysis methodology is used to “Systematically analyze the social, political, economic, legal, intercultural, and technological environments of an organization. SPELIT is a ‘leadership’ tool for market analysis or diagnosis prior to implementing a transition or planning an intervention.” (Reidy, 3-29-10) The SPELIT matrix for SPEED TV with consideration to the Japanese expansion initiative is listed below.

Market Potential:
The overall market opportunity for SPEED TV to be successful is great. Japan is a motorsports enthusiast culture. There are several popular forms of automotive and motorcycle racing in Japan: Super GT, Formula1, Formula Nippon, WRC-World Rally Championship, DTM, SBK-Superbike World Championship and Formula Drift (Formula Drift is the organized sanctioned form of the illegal Japanese street drift racing) (jsports.co.jp/tv/motor) Japan has 16 permanent racing facilities over 1 mile in length. (motoracing-japan.com) As a point of comparison, California has 3 and New England has only 1. Also popular in Japan is the do-it-yourself (DIY) “Tuner” culture where owners modify the engines, suspensions, transmissions and bodies of their small 4 cylinder cars to increase performance and handling presumably for street drag or drift racing, however it is often simply for show. SPEED TV aims to offer content to satisfy all of the performance automotive enthusiasts’ needs through race broadcasts and custom developed DIY content available on television, mobile and web.

Popular Forms of auto racing in japan:

Top row from left: Drifting (Formula Drift), Formula 1, Formula Nippon Bottom row from right: SBK – Superbike, Super GT, WRC (World Rally Championship)

Seasonality:
SPEED TV will overcome the seasonality of native forms of Japanese racing and NASCAR by supplementing programming with “classic” racing content as well as custom developed performance automotive themed game shows and technical and DIY programming.

Market Entry Strategy:
SPEED TV seeks to form an international strategic alliance with Mobilityland Corporation of Suzuka-shi, Mie, Japan. Mobilityland is a Japanese motorsports management company which owns two of the premier super speedways in Japan, Suzaka Circuit and Twin Ring Motegi. The Formula 1 Japanese Grand Prix is held at Mobilityland’s Suzaka Circuit and SPEED TV is the exclusive broadcaster of Formula 1 in North America, Mexico and Brazil. SPEED hopes to enter into a long-term lease agreement with Mobilityland to use the broadcast facilities at either Suzaka Circuit or Twin Ring Motegi as SPEED’s Japanese base of operations for all business functions.

“The key drivers for a strategic fit between alliance partners are the following:
- Partners must agree on fundamental values and have a shared vision about the potential for
joint value creation.
- Alliance strategy must be derived from business, corporate, and functional strategy.
- The alliance must be important to both partners, especially to top management.
- Partners must be mutually dependent for achieving clear and realistic objectives.
- Joint activities must have added value for customers and the partners.
- The alliance must be accepted by key stakeholders.
- Partners contribute key strengths but protect core competencies.”
(Wheelen/Hunger, 233)

SPEED TV is excited to have identified Mobilityland as a potential partner. SPEED believes the passion, joy and enthusiasm the two companies share for racing (Japanese: mobility), customer satisfaction and heightened user experiences align perfectly and provide an excellent foundation to develop a sustainable and prosperous business relationship. (mobilityland.com)

First Year Costs (in US Dollars 2010 Concept Level):
Non-Geostationary Orbit Satellite System
(Governmental broadcast licensing fee [fcc.gov]): $137,225
Japanese programming development (including production): $5,000,000
Mobilityland studio (Lease): $500,000
Full-time Japan-based staff: $1,500,000
Japanese voiceover talent for USA broadcasts (Hideo Fukuyama): $125,000
Conversion to SPEEDtv.jp: $500,000
Advertising/Marketing/PR: $2,500,000
Total estimated first year expenditure: $10,262,225.00

Ratings:
SPEED TV estimates first year viewership to be approximately 1.3 million viewers1 for “Flagship” events (The Budweiser Shootout-Daytona, Gatorade Duels: Daytona, Sprint Cup All-Star race: Charlotte, or normal Formula 1 scheduled events) equaling close to 1% of the Japanese population.

Internet Usage:
Estimates for first year unique visitors to SPEED.jp will be approximately 2.6 Million or double flagship viewers. This number is estimated base upon the pervasive mobile and internet culture
of Japan.

Sales Model:
SPEED TV will employ a direct sales force to sell commercial broadcast time as well as sponsorship opportunities and mobile and web advertising.

Pricing:
SPEED will use standard market-based advertising rates and offer discounts for commitments of one year or longer.

Advertising:
The SPEED TV first year advertising initiative will be built around a public relations campaign similar to Franzen’s Lesson form of advertising (Presenter, endorsement and testimonial, demonstration and comparison) (De Mooij, 252-260). The campaign strategy is to address the Japanese extremely high Uncertainty Avoidance (UAI) score of 92 in Hofstede’s Dimensions of Culture (discussed earlier). “UAI can be defined as the extent to which people feel threatened by uncertainty and ambiguity and try to avoid these situations.” (De Mooij, 82) SPEED understands that entering the Japanese market will require a process to educate the community as to the intentions and competencies of the company in order to recruit them to become active audience members.

SPEED has entered into a promotional agreement with two key figures to implement the public relations strategy: Hideo Fukuyama and Joe Gibbs.

Hideo Fukuyama was born August 13, 1955 and resides in Suzaka City, Japan. Fukuyama drove in various levels of NASCAR competition from 1998-2003 and won the GT class of the 24 Hours of Le Mans in 2000. He remains the only Japanese driver to ever compete in NASCAR’s top series: the Sprint Cup.

Hofstede’s cultural dimensions addressed: PDI, COL, MAS, UAI

Joe Gibbs was born November 25, 1940 in Mocksville, North Carolina. Gibbs is a 3 time Super Bowl winning coach with the Washington Redskins and a member of the National Football League Hall of Fame. He is also a 3-time NASCAR Sprint Cup championship team owner, winning once with Bobby Labonte (2000) and twice with Tony Stewart (2002, 2005). Last year Gibbs guided Kyle Busch to his first championship in NASCAR’s Nationwide Series. Since the 1970’s NASCAR had been a sport run solely by American auto manufacturers Ford, General Motors and Dodge. In 2007, Joe Gibbs was instrumental in bringing Toyota to NASCAR—the first Japanese manufacturer to run in the prestigious American series. SPEED TV has an active production partnership with Joe Gibbs Racing, delivering behind-the-scenes content in the run up to the 2010 Daytona 500. (joegibbsracing.com, toyotanation.com/forum/showthread.php?t=211279)

Hofstede’s cultural dimensions addressed: PDI, COL, MAS, UAI

Competition:
J Sports is currently the only television outlet in Japan that is totally dedicated to sports content. On December 2, 2009: “ESPN merged its sports network in Japan – Sports-iESPN – with J SPORTS Broadcasting Corporation to form four new sports channels, including J Sports ESPN. The four channels have the largest sports television audience reach in Japan, approximately 6,550,000 households.” (espnmediazone3.com/wpmu/asia_japan/) J Sports offers global sports content with a heavy focus on American Major League Baseball and FIFA World Cup Soccer. Although J Sports does cover some forms of motorsports, it lacks the dedication and passion which elevates the importance of the content to the consumer. SPEED’s strict adherence to its distinct competency of being “The Motorsports Authority” should meet little resistance in capturing whatever racing enthusiast audience J Sports has managed to develop.

J Sports SWOT Analysis:

Timeline:
May 3, 2010: International strategic alliance presentation to Mobilityland
August 1, 2010: Secure approval of strategic alliance from Mobilityland
October 1, 2010: Secure necessary licensing and satellite permits, begin developing SPEEDtv.jp
April 1, 2011-ongoing: Begin development of custom Japanese programming,
web and mobile content
September 1, 2011: Begin broadcasting, go live with website and mobile content
September 1, 2011-ongoing: Standard reviews of ratings and web analytics,
adjust programming and content strategies as needed.
May 1, 2012: Present plans to SPEED Board of Directors for expansion initiatives to Australia and Germany

Conclusion:
SPEED TV is confident in developing long-term prosperity in Japan. Through a strict adherence to the competencies of SPEED and sensitivity to the cultural values of Japan, there is no doubt that a mutually beneficial relationship can be cultivated. Japan is a racing enthusiast nation and SPEED will be dedicated to providing cutting-edge programming and valuable web and mobile entertainment and information to serve its audience’s collective desire for such content. SPEED’s diligence in planning strategic partnerships with the most influential local motorsports corporation, Mobilityland, and culturally transcendent sports icon, Joe Gibbs, will serve as a gesture to the Japanese people that SPEED has the sincerest of intentions to exist in harmony and become an integral part of the Japanese racing and performance automotive culture.

References:
-Condon, John C. (1984). With Respect to the Japanese. Boston, MA: Intercultural Press, Inc.
-De Mooij, M (2010). Global Marketing and Advertising: Understanding Cultural Paradoxes. 3rd Edition. Thousand Oaks, CA: SAGE Publications, Inc.
-Reidy, R. (March 29, 2010) Class lecture: SPELIT (MSPC 3450, Clark University)
-Wheelen, T. & Hunger, J. (2008). Concepts in Strategic Management and Business Policy. 11th Edition. Upper Saddle River, NJ: Pearson Prentic Hall.

advertising.speedtv.com/audience.html
car-wallpaper.info/wp-content/uploads/car/computer_Vehicles_Mazda_RX_7_Super_GT.jpg (photo)
cia.gov
cycloneinjapan.com/upload/files/1/subaru_impreza_wrc_rally_car_04.jpg (photo)
espnmediazone3.com/wpmu/asia_japan
finance.yahoo.com/q?s=NWSA
geert-hofstede.com
speedtv.com
hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-292888A5.pdf
ibelieveinadv.com/commons/sky_f1_monsters.jpg (photo)
imdb.com/title/tt0463985/ (photo)
joegibbsracing.com
jsports.co.jp/english/index.html
jsports.co.jp/tv/moto
mobilityland.com
motoracing-japan.com/circuit/index.html
nascar.speedtv.com/article/speed-scores-big-with-danica-arca-debut
racing-reference.info/driver?id=fukuyhi01
rfactorcentral.com/screenshots/lge/04-Sep-09-rFactorCentral-6209_GRAB_0023.JPG (photo)
slideshare.net/infinita/09-ymf2008-harnessing-mobile-marketing-to-connect-with-todays-youth-
how-youth-brands-in-japan-do-it-right-9
sportsbusinessdaily.com
team-bhp.com (photo)
toyotanation.com/forum/showthread.php?t=211279
worldmapnow.com/images/2009/11/JapanMap.jpg (photo)
worldsbk.com/en/photogallery/2010.html (photo)
z-linedesigns.com (photo)
zimbio.com/pictures/d_FIThRyCrI/NASCAR+Media+Tour/KC4SlL4DXQv (photo)