Lexmark 2007 Annual Report Download - page 10

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• Continue to develop Lexmark’s brand awareness and brand positioning. Management believes that
its product and market segment initiatives will be aided by improving its brand awareness and brand
image with the objective of reaching higher-usage customers that drive supplies sales. To drive
these improvements, Lexmark launched a new advertising campaign in 2006 that has continued
through 2007. The core message of the campaign highlights the Company’s deep and proven
experience helping some of the world’s leading companies to be more productive. In 2007, the
campaign also highlighted the industry-leading recognition and awards for its laser product line.
Lexmark believes that this campaign will continue to build brand image and awareness, and in the
long term will support the execution of its strategic initiatives.
In addition to investments in the Lexmark brand, the successful execution of this strategy involves
increased investments in both the Company’s sales force and product and solution development. The
Company increased its research and development spending by 9% in 2007, by 10% in 2006 and by 8% in
2005. This investment has led to new products and solutions aimed at targeted growth segments as well as
a pipeline of future products.
Because of Lexmark’s exclusive focus on printing solutions, the Company has formed alliances and OEM
arrangements to pursue incremental business opportunities through its alliance partners.
The Company’s strategy for dot matrix printers is to continue to offer high-quality products while managing
cost to maximize cash flow and profit.
Products
Laser Products
Lexmark offers a wide range of monochrome and color laser printers and MFPs in addition to customized
solutions and services designed to help businesses move beyond printing to optimizing their printing
environment and improve associated workflow and business processes.
In the monochrome category, the Company offers the Lexmark E series, which includes the Lexmark
E120, the Lexmark E250, Lexmark E350 and Lexmark E450 printers. The E250, E350 and E450 combine
new printhead technology, an instant warm-up fuser and two-sided printing standard on every model.
The Company continues to offer the Lexmark T640 series, which includes three models designed to
support small, medium and large workgroups. All three models have optional paper input and output
features, including a stapler and offset stacker. The Company’s monochrome laser printer line extends into
the wide format sector of the market with the Lexmark W840, which supports an array of paper handling
and finishing options.
In 2007, the Company announced the new Lexmark C780 series and the Lexmark C935dn in the color
laser printer category, which serve medium to large workgroups. Lexmark continues to offer the Lexmark
C500n and the Lexmark C530 series for small and medium workgroups.
Lexmark’s range of monochrome MFPs begins in the small workgroup category with the Lexmark X340
series and extends to the Lexmark X640 series, which is geared to medium to large workgroups. The
Company also offers the Lexmark X850e series of monochrome MFPs that support large departments
with wide format printing, finishing, and feature the same color eTask touch screen interface found on the
Lexmark X644e and Lexmark X646e models.
In 2007, Lexmark introduced an entire new line of color laser MFPs, featuring five new products. The
Lexmark X500n and Lexmark X502n are designed for small businesses and desktop users. The Lexmark
X782e, Lexmark X940e and Lexmark X945e are designed for business workgroups and print on a wide
variety of documents, including difficult media like heavy card stock and vinyl labels and specialty papers
like weather- and fade-resistant outdoor media and oversized banners. All three feature Lexmark’s eTask
color touch screen interface, which can be customized to simplify complicated processes to the touch of an
icon. This interface drives Lexmark’s industry-specific workflow solutions, which are designed to help
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