LeapFrog 2015 Annual Report Download - page 13

$35.9 million and $36.6 million for the year ended March 31, 2015, the three months ended March 31, 2014,
and the years ended December 31, 2013 and 2012, respectively.
•Multimedia Learning Platform and Learning Toy Development: We believe that investment in
R&D is a critical factor in strengthening our product portfolio. We have assembled a team of
specialists with backgrounds in a wide variety of fields, including education, child development,
hardware engineering, software development, content development, video games and toys. We have
internally developed each of our current multimedia learning platforms using licensed technology, if
warranted. For example, we use a version of Macromedia’s Flash player in our LeapPad and
Leapster multimedia learning platforms. We also use optical pattern recognition hardware and
software from Anoto AB in our LeapReader line of products. We have internally developed the
majority of our learning toys.
•Content Development: Our content production department oversees development of our
interactive books, educational games, and stand-alone products, applying a pedagogical approach,
which is based on established educational standards. Much of our content uses licensed characters,
such as Paw Patrol, Sofia the First, the Disney Princesses, Jake and the Neverland Pirates, Dora the
Explorer, and Team UmiZoomi, as well as characters from Transformers and My Little Pony. Most
of our concept designs are created by our in-house content production department, many members of
which have prior experience in the education, entertainment and educational content or video game
industries.
•Development of Online Services: Our online-connected products provide accessibility to the
Learning Path and the App Center, both of which are key competitive differentiators. Our online
capabilities, such as our Learning Path and the App Center, 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 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
•Direct consumers who purchase our apps via our App Center.
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