iRobot 2008 Annual Report Download - page 60

Our government products are sold by a team of government sales specialists with significant experience in
selling to government and defense agencies. All of these individuals have years of experience selling military
products to government procurement offices, both in the United States and internationally. We maintain a direct
sales and support presence in Europe.
Customer Service and Support
We also invest in our ongoing customer service and support. Consumer customer service representatives, the
majority of whom are employees of outsourced service organizations, are extensively trained on the technical
intricacies of our consumer products. Government and industrial customer representatives are usually former
military personnel who are experienced in logistical and technical support requirements for military operations.
Marketing and Brand
We market our home robots in the United States to end-user customers directly through our sales and product
management team. We also market our consumer products in the United States through our retail network of more
than 30 retailers and internationally through in-country distributors and our international sales team. We market our
government and industrial products directly through our team of government sales specialists to end users and
indirectly through prime contractors. We also market our product offerings through the iRobot website. Our
marketing strategy is to increase our brand awareness and associate the iRobot brand with innovation, reliability,
safety and value. Our sales and marketing expenses represented 15.2%, 18.0% and 18.0% of our total revenue in
2008 2007 and 2006, respectively.
We believe that we have built a trusted, recognized brand by providing high-quality robots. We believe that
customer word-of-mouth has been a significant driver of our brand’s success to date, which can work very well for
products that inspire a high level of user loyalty because users are likely to share their positive experiences. Our
grass-roots marketing efforts focus on feeding this word-of-mouth momentum and we use public relations as well as
advertising to promote our products.
Our innovative robots and public relations campaigns have generated extensive press coverage. In addition,
iRobot and our consumer robots have won several awards and our inclusion among the first-tier partners on the FCS
program has greatly enhanced our brand and awareness among government and industrial customers. Through these
efforts, we have been able to build our brand, and we expect that our reputation for innovative products and
customer support will continue to play a significant role in our growth and success.
We expect to invest in national advertising, consumer and industry trade shows, direct marketing and public
relations to further build brand awareness. We believe that our significant in-house experience designing direct
marketing campaigns and promotional materials, combined with our media-targeting expertise, gives us a
significant competitive advantage.
Our website is also playing an increasing role in supporting brand awareness, addressing customer questions and
serving as a showcase for our products. Our home robots and accessories are also sold domestically and internationally
through our on-line store. In 2008, the on-line store was the single largest outlet of our home robots division products.
Manufacturing
Our core competencies are the design, development and marketing of robots. Our manufacturing strategy is to
outsource non-core activities, such as the production of our robots, to third-party entities skilled in manufacturing.
By relying on the outsourced manufacture of both our consumer and military robots, we can focus our engineering
expertise on the design of robots.
Using our engineering team, we believe that we can rapidly prototype design concepts and products to achieve
optimal value, produce products at lower cost points and optimize our designs for manufacturing requirements, size
and functionality.
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