Pitney Bowes 2010 Annual Report Download - page 23

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Support Services
We maintain extensive field service organizations to provide servicing for customers’ equipment, usually in the form of annual
maintenance contracts.
Marketing
We market our products and services through our sales force, direct mailings, outbound telemarketing and independent distributors
and dealers. We sell to a variety of business, governmental, institutional and other organizations. We have a broad base of customers,
and we are not dependent upon any one customer or type of customer for a significant part of our revenue. We do not have significant
backlog or seasonality relating to our businesses.
Credit Policies
We establish credit approval limits and procedures based on the credit quality of the customer and the type of product or service
provided to control risk in extending credit to customers. In addition, we utilize an automatic approval program for certain leases
within our internal financing operations. This program is designed to facilitate low dollar transactions by utilizing historical payment
patterns and losses realized for customers with common credit characteristics. The program defines the criteria under which we will
accept a customer without performing a more detailed credit investigation, such as maximum equipment cost, a customer’s time in
business and payment experience.
We closely monitor the portfolio by analyzing industry sectors and delinquency trends by product line, industry and customer to
ensure reserve levels and credit policies reflect current trends. Management continues to closely monitor credit lines, collection
resources, and revise credit policies as necessary to be more selective in managing the portfolio.
Competition
We are a leading supplier of products and services in the large majority of our business segments. Our meter base and our continued
ability to place and finance meters in key markets is a significant contributor to our current and future revenue and profitability.
However, all of our segments face competition from a number of companies. In particular, we face competition from products and
services offered as alternative means of message communications and for new placements of mailing equipment from other postage
meter and mailing machine suppliers, and all of our mailing products, services and software face competition. As we expand our
activities in managing and integrating physical and digital communications we will face competition from other companies looking to
digitize mail, as well as those providing on-line payment services. Leasing companies, commercial finance companies, commercial
banks and other financial institutions compete, in varying degrees, in the markets in which our finance operations do business. Our
competitors range from very large, diversified financial institutions to many small, specialized firms. We offer a complete line of
products and services as well as a variety of finance and payment offerings to our customers. We finance the majority of our products
through our captive financing business and we are a major provider of business services to the corporate, financial services,
professional services and government markets, competing against national, regional and local firms specializing in facilities and
document management throughout the world.
We believe that our long experience and reputation for product quality, and our sales and support service organizations are important
factors in influencing customer choices with respect to our products and services.
Research, Development and Intellectual Property
We make significant investments in research and development operations. We have many research and development programs that
are directed toward developing new products and service offerings. As a result of our research and development efforts, we have been
awarded a number of patents with respect to several of our existing and planned products. We do not believe our businesses are
materially dependent on any one patent or any group of related patents or on any one license or any group of related licenses. Our
expenditures for research and development were $156 million, $182 million and $206 million in 2010, 2009 and 2008, respectively.
Material Suppliers
We depend on third-party suppliers for a variety of services, components, supplies and a large portion of our product manufacturing.
We believe we have adequate sources for our purchases of materials, components, services and supplies for products that we
manufacture or assemble.