Hasbro 2014 Annual Report Download - page 18

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brand, a line of action performance products marketed to girls. In 2014, we launched DOH VINCI, a new line of
arts and crafts products, in the second quarter and re-launched our LITTLEST PET SHOP brand in the fourth
quarter. Additionally, in September 2014, the Company’s strategic merchandising relationship with The Walt
Disney Company expanded to include additional future product offerings, specifically small and fashion dolls,
based on the DISNEY PRINCESS and FROZEN brands, commencing in 2016 and products based on the
DISNEY DESCENDANTS brand beginning in 2015.
Our preschool category encompasses a range of products for infants and preschoolers in various stages of
development. In the preschool category, we are focused on our franchise brands and story-led initiatives where
we believe we can differentiate our offerings and deliver higher profitability. Franchise brand offerings in the
preschool category include PLAY-DOH and TRANSFORMERS. PLAY-DOH products include modeling
compound and playsets. Other major preschool brands include PLAYSKOOL as well as products based on the
MARVEL, STAR WARS and SESAME STREET portfolios of characters. MARVEL, STAR WARS and
TRANSFORMERS RESCUE BOTS action figures and playsets included in the preschool category are marketed
under the brand name PLAYSKOOL HEROES and are supported by television programming and theatrical
entertainment. Our PLAYSKOOL brand also includes well-known core products such as MR. POTATO HEAD,
SIT ‘N SPIN and GLOWORM, along with a line of infant toys including STEP START WALK’ N RIDE and
ELEFUN BUSY BALL POPPER. In 2015, the Company plans to introduce a line of MY LITTLE PONY
preschool products.
Segments
Organizationally, our three principal segments are U.S. and Canada, International and Entertainment and
Licensing. The U.S. and Canada and International segments engage in the marketing and selling of various toy
and game products described above. Our toy and game products are primarily developed by cross-functional
teams, including members of our global development and global marketing groups, which also establish brand
direction and assist the segments in establishing certain local marketing programs. The costs of these groups are
allocated to the principal segments. Our U.S. and Canada segment covers the United States and Canada while the
International segment primarily includes Europe, the Asia Pacific region and Latin and South America. The
Entertainment and Licensing segment engages in the out-licensing of our trademarks, characters and other brand
and intellectual property rights to third parties for non-competing products and also conducts our movie,
television and digital gaming entertainment operations, including the operations of Hasbro Studios and Backflip.
Our Global Operations segment is responsible for arranging product manufacturing and sourcing for the U.S. and
Canada and International segments. Financial information with respect to our segments and geographic areas is
included in note 18 to our consolidated financial statements, which are included in Item 8 of this Form 10-K.
The Company’s strategy focuses on re-imagining, re-inventing, and re-igniting its existing brands, and
imagining, inventing, and igniting new brands, globally through the development and marketing of innovative
toy and game products, providing immersive entertainment experiences for our consumers, and expansion of our
brands into other consumer products through broad licensing programs, including digital media and lifestyle
products, all supported by storytelling and consumer insights. The following is a discussion of each segment.
U.S. and Canada
This segment engages in the marketing and sale of our product categories in the United States and
Canada. The U.S. and Canada segment’s strategy is based on promoting our brands through innovation and
reinvention of toys and games. This is accomplished through introducing new products and initiatives driven by
consumer and marketplace insights and leveraging opportunistic toy and game lines and licenses. This strategy
leverages efforts to increase consumer awareness of the Company’s brands through entertainment experiences,
including motion pictures and television programming.
International
The International segment engages in the marketing and sale of our product categories to retailers and
wholesalers in most countries in Europe, Latin and South America, and the Asia Pacific region and through
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