Rosetta Stone 2014 Annual Report Download - page 7

Table of Contents
Our Global Enterprise & Education learning programs come with a set of administrator tools to measure and track learner progress.
Administrators can use these tools to access real-time dynamic reports and identify areas where learners may require additional attention.
 Professional services provide our customers with access to experienced implementation and training resources. Our
implementation services teams work directly with our customers and guide them in defining, developing, and delivering learning solutions for their
organizations. Our training services teams help customers develop an education program to meet their specific needs.
Rosetta Stone offers tailored solutions to help organizations maximize the success of their learning programs. Our current custom
solutions include curriculum development, global collaboration programs that combine language education with business culture training, and language
courses for mission-critical government programs.

Our offering portfolio is a result of significant investment in software development. Our software development efforts include the design and build of
software solutions across a variety of devices, pedagogy and curriculum development, and the creation of learning content. Our development team builds
new solutions and enhances or maintains existing solutions. We have specific expertise in speech recognition technology, iterative and customer-focused
software development, instructional design and language acquisition.
Our research and development expenses were $33.2 million, $34.0 million, and $23.5 million for the years ended December 31, 2014, 2013 and 2012,
respectively.
We continue to evaluate changes to our solutions to strengthen our brand and improve the relevance of our offering portfolio. We are developing our
learning solutions for children, including several mobile applications that were recently released. In addition, we are enhancing our offering for educational
organizations to expand our Global Enterprise & Education business. We intend to make our solutions more modular, flexible and mobile.

:
Our global consumer distribution channel comprises a mix of our call centers, websites, third party e-commerce websites, home shopping networks,
consignment distributors, select retail resellers, and daily deal partners. We believe these channels complement each other, as consumers who have seen our
direct-to-consumer advertising may purchase at our retailers, and vice versa.
 Sales generated through either our call centers and on our website at www.rosettastone.com.
Sales generated through arrangements with third-party e-commerce websites such as Digital River and Apple App Store, home
shopping networks such as GS Home Shopping in Korea, and consignment distributors such as Wynit Distribution and Software Packaging Associates.
 Our retailers enable us to provide additional points of contact to educate consumers about our solutions, expand our presence beyond our
own websites, and further strengthen and enhance our brand image. Our retail relationships include Amazon.com, Barnes & Noble, Target, Best Buy, Books-
a-Million, Sam's Club, Costco, Staples, and others in and outside of the U.S. We also partner with daily deal resellers such as Groupon.
 We promote interest in the language-learning market through advertising in publications focused on home schooling, attending local
trade shows, seminars and direct mailings.
 On April 4, 2013, we announced the closure of our entire kiosk sales channel in the U.S. and the United Kingdom. As of
December 31, 2014, all retail kiosks were closed.
:
Our Global Enterprise & Education language-learning distribution channel is focused on targeted sales activity primarily through a direct sales force in
five markets: K-12 schools, colleges and universities, federal government agencies, not-for-profit organizations, and corporations. Our Global Enterprise &
Education language-learning customers include the following:
 These customers include primary and secondary schools and colleges and universities.
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