SBJ/June 18 - 24, 2001/This Weeks Issue

Looney Tunes go to the races

It's been a good few months for Action Performance Cos. CEO Fred Wagenhals. His company's stock, after a year in the tank, has rebounded from $2.50 a share to more than $20 a share. And now, he has unveiled a promotional program that he figures will sell more than $20 million worth of NASCAR-themed toy cars and
T-shirts.

"This is going to be the big one — the biggest single program in the history of the sport," said Wagenhals, a salesman in full bloom. "It's got tremendous potential because it's got so much range and so many companies putting weight behind it."

The program brings together Chevrolet and Warner Bros., two companies that first worked in tandem in 1998, to slap Looney Tunes characters on seven cars that will run Sept. 8 in the Chevy Monte Carlo 400 at Richmond, Va.

Seven cars means seven drivers selling the program and seven sponsors — along with Chevy, Warner Bros. and NASCAR — promoting it. Drivers Jeff Gordon, Terry Labonte and Kevin Harvick, the wunderkind who has taken over Dale Earnhardt's Goodwrench ride, figure to give the promotion legs with collectors and fans.

All seven sponsors — DuPont, Goodwrench, Pennzoil, America Online, Kellogg's, Lowe's Home Improvement and Square D — will activate the promotion through sweepstakes and use it in their advertising, Wagenhals said.

"Everybody here will do a special program," Wagenhals said. "They all have the rights to put those characters in a promotion. You better believe they're going to use them."

It took two years for Chevy, Warner Bros. and Action to nail down the details of the promotion, which grew out of the initial thought of having Dale Earnhardt drive a Taz car and Gordon drive a Bugs Bunny car. Earnhardt met with all three parties at his Dale Earnhardt Inc. offices in January, but died after crashing at the Daytona 500 a month later.

The companies considered including Dale Earnhardt Jr. in the promotion but couldn't because his sponsor is Budweiser, which wasn't considered a good fit for the Looney Tunes characters.

The paint schemes differ from most one-race promotions in that the regular primary sponsors of the respective cars share real estate with Warner Bros., rather than ceding it to them. That means Pennzoil still will have its logo on a yellow car on which Sylvester stalks Tweety.

Chevrolet also will throw support behind the program.

"We're not going at any of this halfway," said Don Parkinson, brand manager for Monte Carlo, who plans to back the promotion with TV ads and billboards in the region. "We're running all of the marketing elements two or three weeks ahead of the race. When we get done, we'll see huge lifts in sales that we can attribute to this program."

On a standard race weekend, even without a promotion that carries the scope of the Warner Bros. program, Chevrolet sees a sales increase of 30 percent to 35 percent in a region when it activates its NASCAR sponsorship in conjunction with a Winston Cup race, Parkinson said.

"Believe me," Parkinson said, "the ROI [return on investment] is there."

Action Performance is expecting record returns, Wagenhals said. The largest one-race seller to date came from the Coca-Cola promotion that featured Dale Earnhardt and Dale Earnhardt Jr., who raced each other for the first time in a postseason exhibition in Japan after the 1998 season. That promotion yielded $20 million in sales.

Based on advance orders from shopping channel QVC and other merchandise outlets, the Looney Tunes program is "already far beyond that," Wagenhals said.

Action Performance announced another program with an entertainment icon last week when it unveiled a paint scheme featuring Indiana native James Dean that Johnny Benson will drive Aug. 5 at the Brickyard 400 in Indianapolis.

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