LeapFrog 2002 Annual Report Download - page 11

strengthen these relationships by continuing to work closely with retailers to identify ways to increase their sales
and profitability from increased sales of our products. An important part of this strategy is the development by us
and acceptance by key retail stores of our Learning Center shelf displays that effectively display our LeapFrog
and Quantum Leap branded products in one dedicated area. We implemented this program at many Toys “R” Us
stores and implemented versions of the displays at other select national and regional mass-market retailers in
2002. In 2002, for the fourth consecutive year, we were named a Vendor of the Year by Toys “R” Us. Also in
2002, we were named Supplier of the Year by Wal-Mart and Vendor of the Year by Fred Meyer.
We Have a Large and Seasoned Management Team with Extensive Industry-Related Experience
Our 22 senior management team members have an average of over 15 years of experience across the toy,
education, electronics, retail, manufacturing, interactive entertainment and publishing industries. We believe the
depth and breadth of our team of senior executives, many of who have significant experience managing public
companies, is significant given our size and the length of our operating history. In addition, our management
team’s understanding of the design process, retailing and manufacturing relationships, warehousing strategies
and other operating systems will help us to scale our operations and facilitate our growth.
Business Strategy
Our goal is to become the leading provider of technology-based educational products and content in the U.S.
consumer and school supplemental material markets and in international markets by:
Establishing Our Learning Center Shelf Displays at Key Retail Outlets as an Education Destination
In 2002, we installed versions of our Learning Center shelf displays in many Toys “R” Us, Wal-Mart,
Target and Kmart stores and expanded shelf displays in selected national and regional mass-market retail stores.
Our Learning Center shelf displays are designed to showcase our family of LeapFrog and Quantum Leap branded
platforms, related content and stand-alone products in one dedicated area within the store. The most
comprehensive version of our Learning Centers at select Toys “R” Us stores has signage that clearly identifies
product groups for each stage of learning, which makes selecting age, skill and interest-appropriate purchases
quick and easy. We believe that our Learning Centers will become the destination for parents seeking
technology-based educational products and, as a result, will help these key retailers increase their sales of our
products.
Expanding Our Content Library to Increase Follow-On Sales
Our platforms are designed specifically to accept additional content, which allows the platforms to evolve
with the child’s interests and abilities over time. For example, simply by changing the LeapPad interactive book
and related audio cartridge, the LeapPad platform can transform from teaching phonemic awareness to providing
an introduction to classical music. In 2002, we expanded significantly our library of interactive books available at
retail that are compatible with our Imagination Desk, My First LeapPad, LeapPad and Quantum Pad platforms to
over 80 books. In 2002, we sold our content products in over 12 countries. In these countries, we introduced U.S.
versions of over 20 of our LeapPad and Quantum Pad books, and localized versions of over five of our LeapPad
and Quantum Pad books. In 2002, we increased the cartridges available at retail for our Turbo Twist handhelds to
nine and introduced six cartridges for our iQuest handhelds. As we expand our content offerings for our
platforms, we expect to realize significant growth in the sales of our products.
Increasing Our Product Offerings to a Broader Target Market
We plan to continue to design and develop new platforms and content and to continue to launch new stand-
alone products in the infant and toddler category, preschool category and electronic learning aids category.
Consistent with our goal of becoming the primary destination for parents seeking quality technology-based
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