LeapFrog 2011 Annual Report Download - page 16

Research and Development
We design our multimedia learning platforms and related content, learning toys, and online services using a
combination of in-house research and development (‘‘R&D’’) resources and outside consultants. Generally,
once the design phase of the product is complete, the remaining development and manufacturing of the
products are outsourced to third parties. Our total R&D expense was $33.8 million, $33.4 million and
$33.8 million in 2011, 2010 and 2009, respectively.
•Multimedia Learning Platform and Toy Development: We believe that investment in R&D is a
critical factor in strengthening our product portfolio. We have assembled a team of specialists with
backgrounds in a wide variety of fields, including education, child development, hardware
engineering, content development, video games and toys. We have internally developed each of our
current multimedia learning platforms using licensed technology if warranted. For example, we use a
version of Macromedia’s Flash player in our Leapster and LeapPad multimedia learning platform.
We also use optical pattern recognition hardware and software from Anoto AB in our Tag and
Tag Junior products. We have internally developed the majority of our learning toys.
•Content Development: Our content production department oversees development of our
interactive books, educational games, and stand-alone products, applying a pedagogical approach,
which is based on established educational standards. Much of our content uses licensed characters,
such as the Disney Princesses, Dora the Explorer, Scooby-Doo, SpongeBob and Thomas the
Tank Engine, and characters from the movies Penguins of Madagascar, Cars 2, and Tangled. Most
of our concept designs are created by our in-house content production department, many members
of which have prior experience in the education, entertainment and educational content or video
game industries.
•Development of online services: Our online-connected products provide accessibility to the
Learning Path and the App Center, both of which are key competitive differentiators. Our online
capabilities, such as our Learning Path, App Center and online store at www.leapfrog.com, are
developed through a combination of in-house team members and third party resources. Many
members of our development and production team have prior experience in online engineering. Our
online services are based on a combination of internally developed content, in-licensed content and
web applications hosted by third parties.
Advertising and Marketing
Our advertising and marketing strategy is designed to position LeapFrog as a leader in providing engaging,
effective, technology-based learning solutions for children. Our strategy is designed to promote a strong brand
that parents seek out to teach children in a fun and engaging way with the goal of helping every child achieve
their potential.
In recent years, we have shifted our focus to more efficient forms of advertisement, such as direct-to-consumer
marketing programs via our Learning Path, and social media outlets such as Facebook and Twitter, with less
dependence on traditional marketing programs such as television advertising.
We have well-established retailer relationships and also communicate our messages and offerings through in-
store advertisements. Advertisements run by our retail partners, such as Target, Toys ‘‘R’’ Us, and Wal-Mart,
highlight promotional activities and the availability of particular LeapFrog products at these retailers’ outlets.
In key retail stores, we use in-store demonstration display units to highlight LeapFrog products and
demonstrate the features of our products through in-store user experience.
We leverage public relations globally as a strategy to gain additional recognition and momentum for our
brand and products through media outreach focused on garnering both product-specific and corporate
media coverage.
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