Nautilus 2007 Annual Report Download - page 7

Table of Contents
We manage our own customer service call center in Vancouver, Washington. It operates 18 to 23 hours per day to receive and
process the vast majority of all infomercial-generated and customer service-related inquiries.
There are several national and regional industry trade shows, such as the International Health, Racquet and Sportsclub Association
and Club Industry, as well as certain regional events that showcase our programs and products. Trade shows provide opportunities to
meet face-to-face with our customers and the media to obtain valuable feedback by being able to test market messages, receive
customer input on product designs, and evaluate the competition.
We maintain a database that includes contacts at thousands of commercial facilities and enables us to monitor responses to direct
mail promotions. All direct mail promotions are supplemented by a telemarketing effort to maximize customer response. We
maintain a modest advertising presence in certain trade publications.
The main focus for marketing our retail products is two-fold: 1) fully support our network of customers, and 2) leverage our direct
marketing advertising programs to market brands and products through the retail sales channel that were previously only available to
consumers through the direct sales channel. Company sponsored marketing programs have been developed to ensure that our
Nautilus, Schwinn Fitness, Bowflex, and StairMaster brands remain prominent in the minds of customers and consumers and drive
consumers to their local retailers.
International Equipment Business
The International Equipment Business product line is marketed and sold through a diversified retail and commercial sales distribution channel
outside of the Americas through our own sales force and international distributors. The sales are predominately commercial with retail sales
comprising 21% of the total for the International Equipment Business. By offering a complete line of strength and cardio products, we now have
greater ability to compete in the international marketplace where many commercial customers prefer to buy from one supplier that can offer a
broad array of products at a competitive price. We believe our brand names have strong recognition in the international marketplace which has
allowed us to compete more effectively.
To allow us to effectively manage our international sales channels, we operate our own offices in our largest international markets which include
Switzerland, the United Kingdom, Germany, Italy, and China. Each office possesses a team of sales and service representatives that focus on
selling to fitness clubs, governments and hotels.
PRODUCT DESIGN AND INNOVATION
Innovation is a vital part of our business as we continue expansion and diversification of our product offerings in fitness products through
leveraging our advanced research and development capabilities and our strong brand
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• In the commercial channel, we market and sell our Nautilus, Schwinn Fitness, and StairMaster commercial fitness equipment
through an internal sales force and selected dealers and distributors to health clubs, government agencies, hotels, corporate fitness
centers, colleges, universities and assisted living facilities. Our commercial sales force is focused on expanding the market position
of our existing Nautilus, Schwinn Fitness, and StairMaster commercial product lines through joint marketing programs with clubs
thus making fitness inviting for guests, and utilizing our knowledge from the Nautilus Institute, a Company-sponsored fitness
advocacy initiative, to improve our product offerings.
•
In the
retail channel
, we market and sell a comprehensive line of consumer fitness equipment under the Nautilus, Schwinn Fitness,
StairMaster, and to a lesser extent Bowflex, brands through a network of more than 6,200 locations consisting of sporting goods,
warehouse clubs, department stores, governmental agencies, mass retailers, specialty retailers, and independent bike dealers. Over
time, the Company expects to present its products in fewer retail locations.