Pitney Bowes 2011 Annual Report Download - page 22

4
Marketing
We market our products and services through our sales force, direct mailings, outbound telemarketing, independent distributors and
the Internet. 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.
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 and our long experience, 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. All of our segments face competition from a number of companies. In particular, we face competition
from companies that offer products and services as alternative means of message communications, including from postage meter and
mailing machine suppliers for new placements of mailing equipment and from companies that offer alternatives to our mailing
products, services and software. 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. We finance
the majority of our equipment sales through our captive financing business. Our financing operations face competition, in varying
degrees, from leasing companies, commercial finance companies, commercial banks and other financial institutions. 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 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.
Research, Development and Intellectual Property
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 license or any group of related
patents or group of related licenses. Our expenditures for research and development were $149 million, $156 million and $182
million in 2011, 2010 and 2009, respectively.
Material Suppliers
We depend on third-party suppliers for a variety of services, components, supplies and a large portion of our product manufacturing.
In certain instances, we rely on single sourced or limited sourced suppliers around the world because the relationship is advantageous
due to quality, price, or there are no alternative sources. We have not historically experienced shortages in services, components or
products and believe that our available sources for materials, components, services and supplies are adequate.
Regulatory Matters
We are subject to the regulations of postal authorities worldwide related to product specifications and business practices involving our
postage meters. From time to time, we will work with these governing bodies to help in the enhancement and growth of mail and the
mail channel.
Employees and Employee Relations
At December 31, 2011, we employed approximately 20,100 persons in the U.S. and 8,600 persons outside the U.S. The large majority
of our employees are not represented by any labor union, and we believe that our current relations with employees are good.
Management follows the policy of keeping employees informed of decisions, and encourages and implements employee suggestions
whenever practicable.