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August 21, 2002 HPI would like to explain to everyone our decision regarding the upcoming RCHTA (Radio Control Hobby Trade Association) hobby show in Chicago on September 5-8, 2002. Several companies, including HPI, have decided not to have a display at the show. Since some of you make plans to come and visit our booth at the show, we would like to let you know why we won't be an exhibitor this year, and what we're doing to promote the R/C hobby in other ways. Last year the grumbling among the R/C car companies was that the RCHTA show was "dead", public attendance was down, excitement was down, we needed more "real" customers to attend. Many R/C car companies suggested to the RCHTA staff that we would like to see the show moved back to the October show date, and maybe move the show to a different location around the country each year to hopefully attract people who couldn't travel to Chicago every year. Unfortunately RCHTA was not able to make those changes. Last year we only gave away about 2,000 catalogs at the Chicago show, which was less than half of what we had given away in previous years. This year RCHTA has decided to cut the public days in half, so we would probably give away around 1,000 catalogs. That's not very many customers, especially when a large percentage of those catalogs are given to the groups of Boy Scouts that are invited to the show. The Boy Scouts are great, but most of them are about 5 years away from a real R/C purchase. Trade shows are extremely expensive, there are giant shipping charges, union labor (they charge us to plug in a power cord!), expensive floor space, hotel rooms, airfare, meals, overtime wages for a large staff of people that we need for a 4 day show, "giveaway" items like catalogs/hats/shirts/decals, and the actual cost of constructing our booth. It's easy to spend a budget of $50,000 for a 4 day trade show like RCHTA. For that amount of promotional dollars we need to have a good crowd of customers to justify the expense. When RCHTA decided to limit the public to one day (Sunday) it was the last straw for us. After weighing all of the factors, our staff decided that HPI would not have a display at the RCHTA show this year so that we could try some different ways to promote R/C cars to the public. Here are some of the ways we are going to promote R/C cars: 1. We will display R/C cars at exciting real car shows like the "International Auto Salon", those events draw the perfect age group for R/C cars, and a typical show brings in 20,000 potential customers. Using part of our RCHTA budget we can afford to go to at least 5 events this year, with a potential exposure of 100,000 people. We will also use part of the budget to display R/C cars at events like NASCAR events and any other promotional event that has the potential to draw large crowds. The more people that see R/C cars, the better the chances that we will continue to attract new customers to the hobby. 2. We will attend alternative trade show events around the country: Hobbytown Expo, NRHSA show, R/C Expo show put on by Car Action. One of our goals with our trade show schedule is to spread out around the country, something that the Chicago wasn't willing to change. Another goal is to exhibit at shows that focus more on the R/C car segment of the industry. 3. Increased internet presence. The internet is quickly replacing trade shows as the way that new products are released to the public. Trade shows for all industries are struggling with that issue. It's simply quicker and less expensive to use the internet for product introductions. 4. More "personal attention" to our distributors and hobby shops. Part of the trade show budget will be used to visit our customers around the country for face-to-face feedback. At a trade show it is common to be rushed during meetings, sometimes we can only spend a few minutes with our customers. 5. Continue the successful HPI Challenge series in high-visibility locations around the country, sending the best US racers to our annual HPI Challenge World Finals at the end of every season. Hopefully everyone understands our reasons for not exhibiting at RCHTA this year. RCHTA won't allow us into the show on Thursday, Friday, or Saturday, but our staff will be visiting the show on Sunday, September 8 to see how the event goes. We are keeping an open mind, if attendance goes up and there is excitement back at the RCHTA show, HPI will consider exhibiting next year. In the meantime we are doing everything we can to promote R/C cars to the public so that our great hobby continues to grow. Kent Clausen |