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Who Does What: Home Improvement Retailers

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IEG SPONSORSHIP REPORT October 3, 2011 800/834-4850 | www.IEGSR.com WHO DOES WHAT Who Does What: Home Improvement Retailers Home improvement chains continue to use sponsorship as a key element of their marketing mix; NASCAR remains the primary battleground. Like many other categories, home improvement retailers have had their ups and downs over the past few years. But while The Home Depot, Inc. and Lowe’s Cos have dropped a handful of high-profile ties in the recent past, they and other DIY chains continue to use sponsorship as a key element in their marketing mix. As in years past, motorsports and soccer remain high on their priority list. Among new deals, Lowe’s in March kicked off a multiyear title Home Improvement Retailer Sponsorships of the NASCAR Sprint Cup Series race at the Las Vegas Motor By Number Of Deals Speedway on behalf of its Kobalt tool line. The company also Government 2% is negotiating a separate tie with track owner Int’l Speedway Associations 2% Corp. that would replace Home Depot beginning with the 2012 Entertainment 8% season, sources said. Festivals 9% In the soccer space, Home Depot this year came on board as the official home improvement sponsor of the CONCACAF Gold Cup tournament. Sports 61% Causes 18% Home improvement retailers largely use sponsorship to accomplish three primary marketing objectives: Gain platforms for retail promotions; reach niche audiences and demonstrate corporate citizenship. © 2011, IEG, LLC. Source: IEG Research Like other types of retailers, home improvement chains frequently try to offset rights fees by bringing in vendors that sell through their stores. © 2011 IEG, LLC. All rights reserved. 1 IEG SPONSORSHIP REPORT Ace Hardware Ace Hardware Corp. 2200 Kensington Ct. Oak Brook, IL 60523 John Surane, vice president, merchandising, advertising & marketing 630/990-6600 Sponsorship/Activation Strategy: The country’s largest hardware cooperative focuses on its long-running partnership with Children’s Miracle Network, around which stores raise money for local CMN hospitals. Ace and its stores have raised more than $46 million for the nonprofit over the 20-year-old partnership. Ace dealer-owners operate more than 4,400 Ace Hardware stores in all 50 states. The company previously sponsored Little League Baseball; Ace activated the tie by refurbishing Little League ballparks and acknowledging local heroes. Current Deals: Children’s Miracle Network; MLB Detroit Tigers; Mount Prospect Park District; Tennessee Aquarium. Additional Comments: Sponsors CMN out of Ace Foundation. Ranks highest in customer satisfaction among home improvement retailers for the fifth consecutive year, according to J.D. Power And Associates. Accepts proposals through www. AceHardware.com. The Home Depot The Home Depot, Inc. 2455 Paces Ferry Rd., NW Atlanta, GA 30339 Trish Mueller, chief marketing officer 770/433-8211 Sponsorship/Activation Strategy: The country’s largest home improvement retailer uses its title of Joey Logano’s Joe Gibbs Racing NASCAR Sprint Cup Series team to maintain top-of-mind awareness and gain promotional platforms to drive retail traffic. The company is reportedly revaluating its NASCAR program as a result of the success of Jimmie Johnson, a Lowe’s endorser and the only driver in NASCAR history to win five consecutive championships. Home Depot is reportedly mulling a possible replacement for Logano and may opt out of its Int’l Speedway Corp. partnership after the 2011 season, sources said. Like other home improvement chains, Home Depot is increasingly using sponsorship to reach Hispanics. Case in point: The company this year signed a new partnership with the CONCACAF Gold Cup. Typically sponsors local and regional events out of regional marketing budgets. For example, Home Depot sponsors the San Antonio Stock Show & Rodeo at the behest of a regional marketing manager. The company operates more than 2,200 stores in North America, Puerto Rico and China. Current Deals: Title: Home Depot Center, Carson, Calif.; Joe Gibbs Racing NASCAR Sprint Cup Series team. Cosponsor: Atlanta Journal Constitution Peachtree Road Race; Aquarium of Niagara; Autism Speaks; Auto Club Speedway; Bank of America Atlanta Football Classic; Chicagoland Speedway; Chik-Fil-A Bowl; CONCACAF Gold Cup; Darlington Raceway; Daytona Int’l Raceway; ESPN College Gameday Built by Home Depot; Georgia Aquarium; Greater Gulf State Fair; Kansas Speedway; MCAS Miramar AirShow; Michigan Int’l Speedway; MLB Atlanta Braves; MLS; MLS Red Bull New York, Chivas USA, Los Angeles Galaxy and Seattle Sounders; National Cherry Blossom Festival, Washington, D.C.; NBA Atlanta Hawks; NFL Atlanta Falcons; NHL Atlanta Thrashers; San Antonio Stock Show & Rodeo; Richmond Int’l Raceway; Stagecoach: California’s Country Music Festival powered by Toyota; State Fair of Texas; Talladega Superspeedway, Ala.; Watkins Glen Int’l.; Working Women’s Survival Show, St. Louis. © 2011 IEG, LLC. All rights reserved. 2 IEG SPONSORSHIP REPORT Additional Comments: Suzy Deering, the former executive director of media, engagements & integration at Verizon Wireless, joined Home Depot this summer in a senior marketing position. Activates MLS with Community MVP contest that identifies MLS fans who are passionate about making a difference in their community. Dropped USOC, NASCAR, NFL and NHL In Canada in 2008 and 2009. Estimated 2010 sponsorship spend: $50 million to $55 million. Lowe’s Lowe’s Cos. 1000 Lowe’s Blvd. Mooresville, NC 28117 Tom Lamb, senior vice president of marketing and advertising 704/758-1000 Sponsorship/Activation Strategy: While the country’s second-largest home improvement retailer has trimmed its portfolio over the past several years, Lowe’s remains an active sponsor with a portfolio spanning NASCAR to the NCAA and college athletics. The company credits its long-running partnership with NASCAR Sprint Cup Series champion Jimmie Johnson to building a consumer database and generating incremental credit card transactions. Lowe’s is placing more focus on activating NASCAR on behalf of its Kobalt private-label tool line. Kobalt will serve as primary sponsor of Johnson’s NASCAR Sprint Cup Series team for more than 10 races in 2011, while the tool brand this year kicked off a multiyear title of a NASCAR Sprint Cup Series race at Las Vegas Motor Speedway. Lowe’s this year inked two-year title of The Manchester Cup, a college soccer showcase in Rock Hill, S.C. The company operates more than 1,700 stores in 50 states. Current Deals: Kobalt Tools: Title: NASCAR Sprint Cup Series races, Las Vegas Motor Speedway and Phoenix Int’l Raceway. Lowe’s: Title: Hendrick Motorsports NASCAR Sprint Cup Series team; Lowe’s Manchester Cup soccer tournament, Rock Hill, S.C. Presenting: Merlefest, Wilkesboro, N.C. Cosponsor: American Cancer Society making Strides Against Breast Cancer; Boys & Girls Clubs of America; Fiesta LatinoAmerica!, Dallas; Las Vegas Motor Speedway; MLS Chicago Fire; Muscular Dystrophy Assn.; NASCAR Hall of Fame; National Trust For Historic Preservation; Nature Conservancy; NCAA; NFL Carolina Panthers; Phoenix Int’l Raceway; The Principal Charity Classic presented by Wells Fargo tour stop, West Des Moines, Iowa; Susan G. Komen for the Cure; University of Maryland Athletics; University of North Carolina at Chapel Hill Athletics; University of Southern California Athletics; University of Texas Athletics. Additional Comments: Sponsors National Park Foundation, SkillsUSA and other nonprofits out of the Lowe’s Charitable and Educational Foundation. Dropped title of Lowe’s Motor Speedway at the end of 2009. Estimated 2010 sponsorship spend: $40 million to $45 million. Menards Menard, Inc. 4777 Menard Dr. Eau Claire, WI 54703 John Leonauskas, marketing manager 715/876-5911 Sponsorship/Activation Strategy: Third-largest home improvement chain largely focuses its sponsorship activity on NASCAR driver Paul Menard, son of company founder John Menard, Jr. The privately-held company titles Menard’s Richard Childress Racing NASCAR Sprint Cup Series team as well as a Kevin Harvick Inc. NASCAR Nationwide Series team. Typically © 2011 IEG, LLC. All rights reserved. 3 IEG SPONSORSHIP REPORT offsets deals by bringing in retail partners. For example, the company has cosponsored its RCR NASCAR Sprint Cup Series team with Midwest Manufacturing’s Mastercraft Doors. Menards operates more than 250 stores in the Midwest and Western U.S. Current Deals: Title: Kevin Harvick Racing NASCAR Nationwide Series team, Menards 200 ARCA race, Toledo, Ohio; Richard Childress Racing NASCAR Sprint Cup Series team. Presenting: ARCA Racing Series. Cosponsor: Road America, Elkhart Lake, Wisc.; Robby Gordon Motorsports NASCAR Sprint Cup Series team. Additional Comments: Menards this year renewed title of the Mendards 200 ARCA race in Toledo Speedway; the company activated the tie by selling advance discount tickets at local stores. Frequently touts weekly flier on property Web sites. Co- Pilott Motorsports Marketing & Management helps execute ties. © 2011 IEG, LLC. All rights reserved. 4 IEG SPONSORSHIP REPORT October 3, 2011 800/834-4850 | www.IEGSR.com CATEGORY UPDATE A Hot Category Gets Hotter: Group Dental Practices Group dental practices place more emphasis on sponsorship as a platform to build visibility and credibility. As predicted by IEG SR (“Dental Practices Also Brush Up On Sponsorship,” 2/14/11), sponsorship activity on behalf of group dental practices shows no sign of slowing down. The latest entrant: Pacific Dental Services, Inc. The company this year has signed a handful of deals
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