LeapFrog 2012 Annual Report Download - page 14

Thomas the Tank Engine, as well as characters from Brave, 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 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 and design. 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, and fun educational entertainment for children and 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.
We take an integrated approach to reach both parents and children using a mix of advertising vehicles,
including television, online, social media outlets such as Facebook and Twitter, and
direct-to-consumer programs.
We have well-established retailer relationships and also communicate our messages and offerings through
in-store advertisements and point-of-purchase displays and signage. 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.
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.
Distribution
Our customers generally fit into one of the following categories:
•Retailers that resell our products to consumers, through their retail stores and their own online
channels, in the U.S. and some international regions;
•Distributors that purchase our products for resale to retailers, generally internationally, and also to
U.S. schools and school districts as education market resellers; and
•Direct consumers who purchase our products via our website, leapfrog.com, and our LeapFrog
App Center.
Retailers and distributors purchase our products in advance, for pickup from our manufacturers in Asia, or
through orders placed to our regional warehouses where we maintain inventories to meet expected short-term
demand. Products are generally shipped through free-on-board terms. Customers pay through pre-established
letters of credit or upon payment terms, which are usually based on the date of shipment. Generally, we do
not provide rights of return or extended payment terms to our customers, except for industry standard terms
surrounding the return of defective merchandise.
Intellectual Property and Licenses
We rely on a combination of patent, trademark, copyright and trade secret laws in the U.S. and other
jurisdictions as well as confidentiality procedures and contractual provisions to protect our brand, characters,
and proprietary technology and information.
We maintain an active program to protect our investment in technology and brands by attempting to secure
patent rights, trademark registrations and other intellectual property registrations. We have filed and obtained a
number of patents in the U.S. and abroad. We believe that the duration of the applicable patents we are
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