Office Depot 2007 Annual Report Download - page 8

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6
Sales and Marketing
Our marketing programs are designed to attract new customers and to drive frequency of customer visits to our
stores and web sites and increase the “share of wallet” of our existing customers by capturing more of what they
spend in total on the products we sell. We regularly advertise in major newspapers in most of our North American
markets. These advertisements are combined with local and national radio, network and cable television advertising
campaigns, direct marketing efforts and sports sponsorships. We are a primary sponsor of the NASCAR® No. 99
Office Depot Ford Fusion and are currently designated NASCAR®’s official office products partner.
We also offer customer loyalty programs that provide customers with rewards that can be applied against future
Office Depot purchases or other incentives. These programs have provided us with valuable information enabling us
to market more effectively to our customers and drive incremental sales. During 2007, we announced enhancements
to our Worklife Rewards customer loyalty program in North America. These programs may change in popularity in
the future, and we may make alterations to them from time to time.
We perform periodic competitive pricing analyses to monitor each market, and prices are adjusted as necessary to
adhere to our pricing philosophy and further our competitive positioning. We generally expect our everyday prices
to be highly competitive with other resellers of office products.
We continuously acquire new customers by selectively mailing specially designed catalogs and by making on-
premises sales calls to prospective customers. We also make outbound sales calls using dedicated agents through our
telephone account management program. We are in the process of redesigning this program and have instituted new
hiring standards and revised the training program. We obtain the names of prospective customers in new and
existing markets through the purchase of selected lists from outside marketing information services and other
sources as well as through the use of a proprietary mailing list system. No single customer in any of our segments
accounts for more than 5% of our total sales.
We consider our business to be only somewhat seasonal, with sales generally trending lower in the second quarter,
following the “back-to-business” sales cycle in the first quarter and preceding the “back-to-school” sales cycle in the
third quarter and the holiday sales cycle in the fourth quarter. Certain working capital components may build and
recede during the year reflecting established selling cycles, but we do not consider our operations to be highly-
seasonal. Business cycles can and have also impacted our operations and financial position when compared to other
periods. See “Item 1A — Risk Factors” for additional discussion.
Catalogs
We use catalogs to market directly to both existing and prospective customers throughout our operations globally.
Each catalog is printed with pictures and narrative descriptions that emphasize key product benefits and features. We
have developed a distinctive style for our catalogs, most of which are produced in-house by our designers, writers
and production artists. We also produce a Green Book® catalog, which features products that are recyclable, energy
efficient, or otherwise have a reduced impact on the environment. We continually evaluate our catalog offerings for
efficiency and effectiveness at generating incremental revenues.
Our catalog offerings typically include a complete buyers’ guide containing all of our products at their regular
discount prices. This buyers’ guide, which is distributed to our active customers, varies in size among countries.
Prospecting catalogs with special offers designed to attract new customers are mailed frequently. In addition,
specialty and promotional catalogs may be delivered more frequently to selected customers.
Design, Print and Ship
Most of our North American retail stores contain a design, print and ship center offering graphic design, printing,
reproduction, mailing, shipping, and other services. We have launched the exclusive “Xerox Certified Print
Specialist” program, which certifies associates as experts in the area of digital imaging and printing. In addition to
the in-store locations, we operate ten regional print facilities, which support copy and print orders taken in our North
American Retail and North American Business Solutions Division.