LeapFrog 2013 Annual Report Download - page 14
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Learning Path and the App Center, both of which are key competitive differentiators. Our online
capabilities, such as our Learning Path, App Center and online store at leapfrog.com, are developed
through a combination of in-house team members and third-party resources. Many members of our
development and production team have prior experience in online engineering and design. Our
online services are based on a combination of internally-developed content, in-licensed content and
web applications hosted by third parties.
Advertising and Marketing
Our advertising and marketing strategy is designed to position LeapFrog as a leader in providing engaging,
effective, and fun educational entertainment for children and to establish us as one of the most trusted brands
that parents seek out as they look for ways to help their child reach their potential. We have recently
introduced new brand messaging: Pure Learning Fun, extolling the benefits of our educational entertainment
experiences as being created for learning, designed for fun and personalized for every child.
We take an integrated approach to reach both parents and children using a mix of advertising vehicles,
including television, paid search, rich online media, social media outlets such as Facebook and Twitter, and
direct-to-consumer programs.
We have well-established retailer relationships and also communicate our messages and offerings through
in-store advertisements and point-of-purchase displays and signage. Advertisements run by our retail partners,
such as Wal-Mart, Toys ‘‘R’’ Us, and Target, highlight promotional activities and the availability of particular
LeapFrog products at these retailers’ locations.
We leverage public relations globally as a strategy to gain additional recognition and momentum for our brand
and products through media outreach focused on garnering both product-specific and corporate media
coverage. Over the last three years we have established strong relationships with online industry experts and
websites as well as the most influential bloggers in the mom, parent and toy spaces.
Distribution
Our customers generally fit into one of the following categories:
•Retailers that resell our products to consumers, through their retail stores and their own online
channels, in the U.S. and some international regions;
•Distributors that purchase our products for resale to retailers, generally internationally, and also to
U.S. schools and school districts as education market resellers; and
•Direct consumers who purchase our products via our website, leapfrog.com, and our App Center.
Retailers and distributors purchase our products in advance, for pickup from our manufacturers in Asia, or
through orders placed to our U.S. or international warehouses where we maintain inventories to meet expected
short-term demand. Products are generally shipped through free-on-board terms, and their titles pass to
customer when they are loaded on board at the port of shipment. Customers pay through pre-established
letters of credit or upon payment terms, which are usually based on the date of shipment. Generally, we do
not provide rights of return or extended payment terms to our customers, except for industry standard terms
surrounding the return of defective merchandise.
Intellectual Property and Licenses
We rely on a combination of patent, trademark, copyright and trade secret laws in the U.S. and other
jurisdictions as well as confidentiality procedures and contractual provisions to protect our brand, characters,
and proprietary technology and information.
We maintain an active program to protect our investment in technology and brands by attempting to secure
patent rights, trademark registrations and other intellectual property registrations. We have filed and obtained a
number of patents in the U.S. and abroad. We believe that the duration of the applicable patents we are
granted is adequate relative to the expected lives of our products. While our patents are an important element
of the protection of our intellectual property, our business as a whole is not materially dependent on any
one patent.
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