LeapFrog 2003 Annual Report Download - page 16

the LeapPad platform, the LeapDesk workstation, the LeapMat learning surface, and the Imagination
Desk learning system, to create a multisensory, hands-on learning experience. This program has been
adopted by the Texas State Board of Education.
International
Our international strategy includes the creation of LeapFrog products in foreign languages as well as
marketing English-language products as tools for learning English as a foreign language. As of December 31,
2003, our products had been marketed and sold in five languages and more than 20 countries, including the
United Kingdom, Canada, France, Spain, Mexico, Japan, Australia and Korea. We currently sell our My First
LeapPad and LeapPad platforms in countries where we have created content for our platforms in the local
language. We have created British English content for the U.K. market and have developed a variety of our
content in other languages, including French, Japanese, Korean and Spanish. We sell our LeapPad platform to the
consumer market in Japan under the CoCoPad brand name through our relationship with Sega Toys. In addition,
Benesse Corporation, a supplemental educational materials company, is currently distributing a co-branded
CoCoPad version of our LeapPad platform to preschool to third grade level subscribers of its educational
program. We market and sell local language versions of some of our stand-alone products, including French and
Spanish versions of the Discovery Ball, Learning Drum and Learning Table. These stand-alone products, with
their limited set of content, are typically easier to localize than our platform and content suites. Finally, we sell
our English language content internationally through consumer retail and educational channels and believe that
significant opportunities exist to market our products as tools to learn English as a foreign language.
Advertising and Marketing
Our advertising and marketing strategy is designed to establish LeapFrog as the leading provider of
engaging, effective and affordable learning solutions for the infant through high school audience and as a brand
that parents and educators will seek to supplement a child’s educational needs. We use a variety of advertising
and marketing tools to implement our strategy, including network and national cable television advertisements
and national print advertisements that feature our LeapFrog brand and our “Learn Something New Every Day”
campaign that highlights the educational nature and extended life of our products. We are able to feature our
products through cooperative print advertisements in local newspapers with key retail chains. These
advertisements, run by our retail partners such as Toys “R” Us, Wal-Mart, Kmart and Target, highlight the
availability of particular LeapFrog products at these retail outlets.
In key retail stores, we feature our products via our Learning Center shelf displays, which are designed to
highlight our LeapFrog brand as the “one stop” solution for technology-based educational products. We have
received additional brand exposure through television appearances by senior management and other television
spots showcasing our products, often during the key holiday season.
Sales and Distribution
U.S. Consumer
We market and sell our products primarily through national and regional mass-market retail stores as well as
specialty toy stores. In 2003, sales of our products to Toys “R” Us, Wal-Mart (including Sam’s Club) and Target
accounted for over 79% of net sales in our U.S. Consumer segment. Our remaining U.S. Consumer retail sales
came from sales of our products to specialty toy stores and, to a lesser extent, to book, electronics and office
supply stores and other retailers.
Our sales team works in conjunction with store buyers from our key retailers to forecast demand for our
products, develop the store floor footprint, secure retail shelf space for our products and agree upon pricing
components, including cooperative advertising allowances. The large retail chains generally provide us with a
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