Vtech 2002 Annual Report Download - page 17

Annual Report 2002 15
Vtech Management team
Smarty‘s Workshop TM
0-2
3-5
6-9
10+
Entertainment Education
Age
Soft
Sensation
Smart
Start
Voyager
Play
Smart
Ready,
Set, School
Adventure
In
Learning
XL Series
ELPs Positioning Schematic
At the education end of the spectrum, the XL Series caters to
children aged 5–11 years old. It uses powerful handheld and
notebook devices with a sleek design to teach children key
skills needed at school, while at the same time offering music
and animation creativity. The devices also allow them to play
games, which can be played interactively with other users by
using infrared technology. These devices can be connected to
personal computers, making them a mobile extension of PCs.
At the entertainment end, the Learning Adventures Series
disguises learning through non-keyboard based units that
teach children aged three years old and up by using
interactive characters in role-playing situations such as
workshops. This series applies a unique recognition
technology that customizes the learning experience through a
series of questions and character reactions.
In the middle of the spectrum, the exceptionally well-received
Voyager Adventure Series for children aged 4–7 years old marks
VTech’s move back into a product that combines a housing
with changeable content. The portable unit with its color
touch screen lets children explore topics through a variety of
adventures. As the adventures develop, the software
responds and adapts to the user’s choices providing a
personalized experience. Interchangeable software
Adventure Packs, sold separately, allow children to use
Voyager over and over without getting bored, as they face
new challenges in each new adventure.
All of these were achieved in the highly contracted time frame
of 12 months and while at the same time streamlining the
operation. We made substantial savings in costs through the
consolidation of our operations and the introduction of more
efficient working practices. We also tightened control of
inventory and receivables, improving our working capital
position.
Outlook
Our goal now is to raise revenues and profits substantially
for the 2003 financial year. The operation is very lean and
efficient. The new product range has won an exceptional level
of acceptance in Europe and North America as measured by
both listings and shelf-space. The attractiveness of the
products and the positive market research we were able to
give to customers were important factors in this outcome.
As important was the retailers’ acknowledgement of VTech’s
commitment to re-establishing our brand as the undisputed
leader in the ELP market. The concrete expression of this
commitment in the 2002 financial year was the new corporate
identity launch. New packaging, promotions, advertising and
public relations supported this initiative. In the financial year
2003, VTech has committed to increase the amount of money
to be spent on marketing to the consumer. This will support a
much more innovative, consistent and aggressive marketing
campaign designed by the WPP Group.
This building of a new foundation for the business is the first
step in a strategy that will greatly expand the scope of our
products and move us back into a leadership position. Where
traditionally VTech’s ELPs have focused on addressing overt
learning through a keyboard type unit, we plan to develop
products that go beyond the traditional curriculum to include
other developmental areas that are of interest to parents.
These products will be previewed later this year.
Geographically we are also examining ways to extend our
market reach. Our marketing success in Europe will be the
benchmark as we move forward in regions such as Asia and
Latin America. These extensions will be enhanced by the
development of additional initiatives in mainland China, our
manufacturing base. A team headed by the Group Chairman
is now exploring how best to extend our market reach.
retail presence with new packaging
Review of Operations