Brand Marketing For Leapfrog

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Leapfrog Brand Marketing Plan

Leapfrog Brand Marketing Plan

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  • 1. Team Brands R Us LeapFrog Marketing Plan Team Brand R Us Tapan Kamdar (tapan_kamdar@mba.berkeley.edu) Sandeep Shenoy (shenoy@mba.berkeley.edu) Word Count: 2994
  • 2. Team Brands R Us LEAPFROG MARKETING PLAN EXECUTIVE SUMMARY The worldwide market for toys for kids is estimated to be $78B with the top ten markets contributing to 65% of the sales1. Consumer demands have changed drastically in the past five years. Kids are interested in electronic toys and video games, and parents are interested in making sure kids learn and grow at a faster pace. The recession has changed consumer behavior for ever – consumers have tried cheaper products and like them, and are not likely to return to purchasing expensive products2. LeapFrog has a great opportunity to capitalize on selling learning toys worldwide. By building multi-lingual toys, focusing on software and entering emerging markets, we expect LeapFrog to become profitable by 2012 generating revenues of $628M in 2013, a 37% improvement over 2008. By building toys which provide learning feedback to parents, LeapFrog can build brand loyalty and command price. To successfully enter new markets and increase market share in existing markets, LeapFrog will need to increase marketing spend to 9% of its revenue to $46M in 2011. We recommend spending advertising dollars on targeted TV spots, social and online marketing, and social responsibility programs. 1 “Toy Markets in the world”, NPD Group, June 2009 2 “How the recession has changed US consumer behavior”, McKinsey Quarterly, December 2009, https://www.mckinseyquarterly.com/Retail_Consumer_Goods/Strategy_Analysis/How_the_recession_has_change d_US_consumer_behavior_2477 1
  • 3. Team Brands R Us MARKTING ENVIRONMENT Toy business is highly seasonal with significant portion of our revenues occurring in the second half of the year. The global economic crisis, which began impacting consumer spending in Q3’2008, led to a severe sales decline in Q4’2008. As retailers reacted to sharply declining consumer spending, sales in 2009 were significantly lower and generated unusually high retail inventory levels. The market has been influenced by changing consumer trends on the types of toys demanded by consumers, the development of 'age compression3' whereby children outgrow toys at a younger age than the target age and continued demand for safe, electronic and interactive toys4. The video game industry and social online communities are redefining ways in which children learn and interact. Toy manufacturers operate in a highly regulated environment which can have a negative impact on their business, financial condition and results of operations. Leapfrog products have been subject to involuntary recalls by the Consumer Product Safety Commission5. The Consumer Product Safety Improvement Act of 2008 requires retailers to remove any sale products that do not meet the new federal standards for lead and other substances. With 90% of US toy imports from China6, and an increasing number of Chinese toy recalls, the public sentiment against buying toys manufactured in China is increasing7. 3 “Age Compression Challenges Action Figure Sales”, TDMonthly, May 2005, Terri Hughes-Lazzell, http://www.toydirectory.com/monthly/article.asp?id=1306 4 Exhibit 2 and 3 in Appendix 5 “LeapFrog Recalls Electronic Plush Toys Due to Choking Hazard”, U.S. Consumer Product Safety Commission, July 2009, http://www.cpsc.gov/CPSCPUB/PREREL/prhtml09/09286.html 6 “Toy, Doll & Game Manufacturing in the US”, IBISWorld Industry Report, May 2009 7 “Toys Recall: Is China the Problem”, University of Manitoba, October 2008, http://umanitoba.ca/news/images/toys_recalls_report.pdf 2
  • 4. Team Brands R Us INDUSTRY TRENDS The Toy industry is in a mature life cycle phase. Demand for toys has been driven by consumers wanting toys with a 'wow' factor. Industry performance has also been affected by the impact of cheaper imports from Asia which has created intense competition within the local market. Increased merger and acquisition activity within the industry has also lead to the demise of numerous smaller operators. The toy industry has seen an average annual growth of 2% in revenues and 8% in domestic demand until 2008. Due to the global macroeconomic conditions, the 2009 industry revenues have fallen by 2.5%8 and demand has shrunk by 1%. Consumer trends in the past 5 years have changed drastically (figure 1). Age compression has shifted traditional demand to electronic and interactive toys. Core educational toys are favorably influencing sales of educational toys in the very broadest sense but parents mindful of child development will make sure that kids have the right “pleasure toys” and educational toys for play. Toy Cateogries 100% 90% 2.6 3.2 3.2 3.2 80% Infant 70% 60% Video games 10 9.9 10.5 12.5 50% Plush 40% Learning 30% 2 1.4 1.4 1.3 Games/Puzzles 20% 0.5 0.5 0.9 1.1 10% 2.4 2.7 2.5 2.4 Action figures 0% 1.2 1.2 1.4 1.2 2003 2004 2005 2006 FIGURE 1: TOY CATEGORY TRENDS 8 “Toy, Doll & Game Manufacturing in the US”, IBISWorld Industry Report, May 2009 3
  • 5. Team Brands R Us Leapfrog has taken advantage of this shift in consumer preferences and has built a strong market position in toys marketed as electronic learning aids: 20 LeapFrog toys are present on Amazon’s Top 100 Toys list9 and are on the top 10 Christmas Toys list10. The demands for toys will continue to be driven by trends in disposable income, changes in consumer sentiment index, and demand from toy and hobby stores. The decrease in average family size11, affects the toy industry growth. This has been offset by the increased life expectancy of the parents and grandparents who are living longer12, spending more on toys and becoming more accepting of complex electronic toys for their kids. COMPETITION LeapFrog competes with major toy manufacturers like Mattel and Hasbro as well as niche learning toy manufacturers like VTech and Compass Learning. Mattel commands a 40% market share and distributes brands like Barbie, Fisher Price, Hot Wheels, Matchbox and Disney classic toys13. With a 30% market share, Hasbro sells Playskool, Transformers, Little Einstein, Explore and Grow and 40 other brands of toys14. Nintendo, Sony and Apple’s offerings in handheld games and entertainment also compete with LeapFrog. International and emerging markets provide the next frontier of competition to toy manufacturers. Localized toys address local needs, customs, and languages providing additional value to toy purchases. 9 Best seller toys, Amazon.com, http://www.amazon.com/gp/bestsellers/toys-and-games?pg=1 10 Best selling toys, 2008, http://www.best-selling-toys.com/top-christmas-toys-for-toddlers-and-preschoolers 11 “Number of People in a family”, The Physics Factbook, Stacey Johnson, 2006, http://hypertextbook.com/facts/2006/StaceyJohnson.shtml 12 Exhibit 6 in Appendix 13 Mattel, http://shop.mattel.com/brand/index.jsp?categoryId=3768131 14 Hasbro, http://www.hasbro.com/shop/brandlist.cfm 4
  • 6. Team Brands R Us FIGURE 2: TOP 10 TOY MARKETS 15 BRAND MARKETING STRATEGIES Our recommendations for LeapFrog based on our observations in figure 3 are as follows: Build multi-lingual and multi-cultural toys which can be sold globally Increase focus on high margin items such as software titles and games Increase marketing spend from 7% to 9% Invest in incorporating Learning Path into all of their products Acquire innovative learning toy companies such as Melissa & Doug 15 “Toy Markets in the world”, NPD Group, June 2009 5
  • 7. Team Brands R Us FIGURE 3: STRATEGIC LEVERAGE INTERNATIONAL STRATEGY In the US, top three retailers (Walmart, ToysRUs, and Target) accounted for 60% of gross sales in 200816 at 40% margin. The international segment represented 23% of net sales at a 36% margin. Seasonality of sales in the toy industry accounts for 45% of the sales in Q4. Figure 2 indicates similar US spending patterns in mature markets like Japan, UK, France, Germany and Italy. Emerging markets like China, Brazil, India and Mexico would provide volume support to sales where as mature markets would provide premium margins. LeapFrog should leverage their R&D to build toys which can be sold in most markets by modifying packaging and language to local preferences. This would increase international sales and improve respective margins. In addition, LeapFrog should sell toy-specific language discs for a premium in local markets (e.g. Chinese and Korean discs available in addition to default English/Spanish in US). 16 LeapFrog, 2008 10-K 6
  • 8. Team Brands R Us Doing so would allow parents to expose their children to native and local languages, thereby fostering language development and auditory interaction. We recommend entering Japan and China in 2010 and entering India, Italy and Brazil in 2012. Based on our revenue projections17, we estimate net international profits becoming positive in 2010 leading to an overall profitability in 2012, with international revenues contributing 46% in 2013 (figure 4). Increased software sales18 will help LeapFrog improve their margins dramatically. The increase in marketing spending from 7%19 to 9% will thereby only marginally improve LeapFrog’s overall margins in the short run, but will be a tremendous long term improvement. 2006 2007 2008 2009E 2010E 2011E 2012E 2013E US 387.70 338.90 363.40 278.39 292.31 306.92 322.27 338.38 Net i18n 114.52 103.50 95.03 73.13 131.30 191.77 239.65 289.81 Net 502.22 442.40 458.43 351.52 423.61 498.69 561.92 628.19 i18n % 22.80% 23.39% 20.73% 20.80% 31.00% 38.45% 42.65% 46.13% US Profits Margins 30% 40% 40% 40% 40% 40% 40% 40% Op. Ex. 232.4 234.9 202.8 192.7 183.0 173.9 165.2 156.9 Profit (Loss) (116.09) (99.34) (57.44) (81.30) (66.10) (51.11) (36.27) (21.57) International Profits Margins 26% 37% 36% 32% 34% 32% 33% 34% Op. Ex. 39.3 39.6 38.8 36.86 35.02 33.27 31.60 30.02 Profit (Loss) (9.52) (1.31) (4.59) (13.46) 9.63 28.10 47.48 68.51 Net Profits (125.61) (100.65) (62.03) (94.76) (56.48) (23.01) 11.21 46.94 FIGURE 4: LEAPFROG PROFITABILITY 17 Exhibit 1 in Appendix 18 Exhibit 7 in Appendix 19 LeapFrog, 2008 10-K 7
  • 9. Team Brands R Us LEARNING PATH & LEARNING SYSTEM LeapFrog’s position (figure 5) can be defined as follows: To parents of children 0-14 years, Leapfrog is the brand of interactive and engaging toys that promises fun and learning, based on award winning toys designed to teach growth skills with measurable progress. FIGURE 5: LEAPFROG BRAND ONION Based on children’s research, LeapFrog focuses on different toys which assist a child’s growth dependent on their age for their cognitive, emotional, motor, auditory, and language skills. For a 8
  • 10. Team Brands R Us lifelong learning experience, LeapFrog offers phonics based toys for preschoolers and kindergarten, learning systems for grade school kids and entertainment handhelds for middle and high school kids. By leveraging their “Learning Path” technology20 and building web connected toys, LeapFrog can increase their repeat purchase rates21 and increase brand loyalty. ACQUISITIONS In the learning toys category, LeapFrog faces direct competition from VTech and Melissa & Doug. Melissa and Doug toys are famous for pretend toys which allow kids to learn from observing daily events in life e.g. food sets (fruits, pizza cutting, baking), appliances (stove, fridge) etc. Exhibits 5 and 6 show an increasing number of parents purchasing these toys. Melissa and Doug’s22 brand essence shows a strong alignment with LeapFrog and fills a gap in LeapFrog’s current product offering. By acquiring Melissa & Doug, LeapFrog can cement its position in the Learning Toys category. TACTICAL MARKETING In the US, we recommend a two-tiered approach - a consumer focus on the latest toy trends through consumer advertising and improvement of retail sales through better placement of Leapfrog’s signature racks at retailers. In Europe, Leapfrog can pursue a similar retail strategy by partnering with top retailers as Toys R Us and Game Group, while spending bulk of their advertising budget to increase brand and product awareness23. In emerging countries, by using a pull marketing strategy, Leapfrog can increase awareness and position it as a premium brand. 20 LeapFrog, http://www.leapfrog.com/en/play/information_center.html 21 Exhibit 4 and 5 in Appendix 22 “Melissa and Doug”, Website, http://www.melissaanddoug.com/about.phtml 23 “Rankings and Profiles of Toys & Games Retailers in Europe”, 2007, http://www.retail- index.com/HomeSearch/RetailinEuropedatabaseEnglish/ToysGamesRetailersinEurope.aspx 9
  • 11. Team Brands R Us CREATIVE STRATEGIES To target US and global consumers and to maximize ROI, Leapfrog advertising should present a “glocalized” message in each country. By familiarizing local and cultural learning aspects, it can tailor the mix of products, messaging and Leapfrog.com experience for each country. For instance, parents in some Asian countries pay particular emphasis on learning physical sciences and mathematics. By co-branding with global brands as Disney, introducing theme based toys, and showcasing learning based entertainment, LeapFrog can build a premium appeal and improve product credibility in new markets. By positioning LeapFrog as an aspiration brand in emerging markets, LeapFrog can capture the consumer’s share of wallet and mind. Leapfrog is positioned to offer a unique online gaming experience on Leapfrog.com. By offering free and fee-based games based on LeapFrog characters and toys, LeapFrog can improve brand loyalty among kids. The stickiness of the site as a result of gaming will indirectly influence purchases of other products promoted on the site. Among children, online games can generate strong awareness for character toys like Leapfrog’s highly popular Scout and Violet toys. Mobile gaming apps are a relatively inexpensive way to increase brand awareness among adults with devices that can download mobile applications. Leapfrog mobile games should offer a scaled- down gaming experience of Didj gaming system and online games for Nintendo DS in Japan and on phones made by Apple24, Google and Blackberry worldwide. 24 “LeapFrog releases iPhone apps for kids”, Time Out New York, April 2009, http://www3.timeoutny.com/newyork/kids/blog/2009/04/15/leapfrog-releases-iphone-apps-for-kids/ 10
  • 12. Team Brands R Us FIGURE 6A: SCOUT & VIOLET FIGURE 6B: DIDJ GAMING MARKETING PROGRAMS Online social marketing will deliver on two goals – brand awareness and advocacy. Using social networking sites such as Facebook25 and Twitter26 and parent communities through Leapfrog.com, LeapFrog can receive feedback from users as well as provide advocates with a platform. By periodically sending information and upcoming toys to Parents, Toys and Gadget bloggers, LeapFrog can help build sales momentum through the influencers’ channel. Direct Mail catalogs masked as magazines can provide fun activities to kids and provide a glance of the latest toys to their parents27. Such catalogs would help generate additional households with repeat purchases. In addition, Leapfrog should selectively offer discounts based on local purchase cycles and trends. By incorporating specific coupons in the direct mailers, customers would be incentivized to seek and share the catalog, bringing in additional purchases. By participating in Amazon.com’s Frustration-Free packaging effort28, Leapfrog can promote safety and environment consciousness of its packaging. By promoting social responsibility programs which encourage and incentivize donating gently used Leapfrog toys for use by children from low 25 LeapFrog’s Facebook page, http://www.facebook.com/#/pages/LeapFrog/111946004581 26 LeapFrog Twitter feed, http://twitter.com/leapfrog 27 LEGO Magazine, http://club1.lego.com/en-US/legomagazine/default.aspx 28 “Amazon Debuts Frustration-Free Packaging”, Inhabitat.com, November 2008, http://www.inhabitat.com/2008/11/20/amazon-debuts-frustration-free-packaging/ 11
  • 13. Team Brands R Us income families, LeapFrog can help under-privileged kids. Partnering with organizations like Childrenreach.org and CNN Heroes29, Leapfrog can generate goodwill and contribute to children learning worldwide. INTERNATIONAL MARKETING AND SALES STRATEGIES Leapfrog customers are parents with medium to high income levels, educated, computer-savvy, and interested in accelerate their kids learning. Rapid economic growth in emerging countries has lead to the growth of a middle-class with significant disposable incomes, higher education and aspirations for their children. Leapfrog would enter mature markets in Europe and Japan among existing competition. The marketing focus in the launch year should be towards creating strong awareness among the affluent parents by emphasizing their value proposition of learning with fun. The products should be retailed through upscale retail stores. Once LeapFrog establishes itself in a niche segment, it should seek to broaden its reach in the market through lower-price products and promotions to increase market share. As the products are introduced in newer markets in 2010/2011, the advertising efforts will build brand and product awareness, mainly through television and print media, complemented by investments in social marketing. In emerging economies, Leapfrog must position itself as highly-desired brand through careful placement and messaging. The products should first be retailed in select metropolitan locations to suggest exclusiveness and value. Over time Leapfrog can reach out to a larger base by expanding availability to more retail outlets and offering a wider range of products and prices. 29 CNN Heroes 2009, http://www.cnn.com/SPECIALS/cnn.heroes/archive09/efran.penaflorida.html 12
  • 14. Team Brands R Us MARKETING SPEND STRATEGY Out of the proposed 2010 advertising spend, we recommend a 52% marketing share for the US and the remainder for non-US markets30. Social marketing and online spend levels in different markets have been recommended based on local online involvement levels31. Advertising impressions32 generated by the media spend would help build and maintain the share of voice for LeapFrog. In the US, the advertising should focus to retain and build market share through existing retail channels supported by awareness through placements in spot TV, print, and through online and social marketing33. Spot TV advertisements will generate product awareness among parents and children in metropolitan areas and can be used to showcase the latest leapfrog toys on networks like Nickelodeon, Disney, Cartoon Network and PBS Children. Print media advertising will help increase reach to households that subscribe to parenting magazines. Continuous impressions in print will help in maintaining a high level of unaided awareness. American adults are spending just under 4 hours online every day, an 81% increase since 200634. Leapfrog’s online marketing efforts should be geared to reach the online audience through search engines and banner ads on popular sites like Google and Yahoo that redirect to Leapfrog.com. Retail channel represents the bulk of Leapfrog’s sales in the US. By investing in building attractive store shelves, call-to-action advertisements, and store catalogs, Leapfrog can improve sales volumes by a huge margin. Leapfrog catalogs advertising discounts and promotions would reach 8M households through direct mail in Q3 and Q4 of 2010 to increase holiday sales. 30 Exhibit 8 in Appendix 31 “Social Penetration 2009”, Global Web Index, December 2009, http://www.docstoc.com/docs/document- preview.aspx?doc_id=18486230 32 Exhibit 9 in Appendix 33 Exhibit 10 in Appendix for itemized media spend in 2010 in US 34 “Americans greatly increasing time spent online”, Kristina Knight, BizReport, June 26 2009, http://www.bizreport.com/2009/06/americans_greatly_increasing_time_spent_online_1.html 13
  • 15. Team Brands R Us The media mix is localized to specific market conditions. In countries where e-commerce penetration is lower, reaching consumers through spot TV ads, print media, retail marketing, and direct mail will be more effective. PR budget allocated to each country should engage highly regarded celebrity moms for endorsements and advertising. MEASURING SUCCESS In the current digital age, the purchase funnels have been refined into consumption and creation35. Consumers go through the funnel of awareness, consideration, research and purchase. This funnel continues on the other side when users use, express and advocate products using the means of communication available today. Measuring success for Leapfrog’s marketing strategy consists of two metrics: ROMI for existing markets and market penetration and ROMI for newer markets. By leveraging social tools and surveys, we recommend Leapfrog understand the sentiments of its consumers36 and tailor their messaging accordingly. Figure 7 shows our recommendations to measuring marketing success in markets where LeapFrog currently does not have a presence. We recommend survey panels of 1500 parents and toy purchasers37, in which brand awareness and consideration are measured against marketing goals. After the launch year, we recommend using purchase data from point of sales, coupon usage, and online conversions38 to gauge success. Furthermore, usage of social 35 “Purchase Funnels 2.0”, Matthew Cronin, August 2007, http://webliquidgroup.com/knowledge/purchase- funnels-20/ 36 “Mining the Web for Feelings, Not Facts”, New York Times, August 2009, http://www.nytimes.com/2009/08/24/technology/internet/24emotion.html?_r=2 37 Similar to Exhibits 2-6 in Appendix 38 Google Trends, http://trends.google.com/websites?q=leapfrog.com&date=all&geo=all&ctab=0&sort=0&sa=N 14
  • 16. Team Brands R Us metrics to evaluate creation of loyal customers and advocates would help further the brand promise39. In existing markets, we recommend following launch +1 and +2 strategies in the next two years to evaluate the business metrics and social health of LeapFrog. FIGURE 7: BRAND MEASUREMENT 39 “Measuring brand awareness & sentiment in social media”, Dirk Shaw, May 2009, http://dirkshaw.blogspot.com/2009/05/measuring-brand-awareness-sentiment.html 15
  • 17. Team Brands R Us SUMMARY By building “glocal” toys and focusing on connected toys and software sales, LeapFrog can grow into a global brand of learning toys. Recommended media and retail marketing spend coupled with targeted spend on social marketing, mobile and online gaming can help LeapFrog can become profitable and achieve significant market penetration. By being fanatic about fun learning in kids, LeapFrog can continuously deliver on their brand promise, and in turn become the undisputed king of learning toys. 16
  • 18. Team Brands R Us APPENDIX EXHIBIT 1: LEAPFROG INTERNATIONAL REVENUE PROJECTIONS (IN MILLION US$) LF Market Share Revenue Projections Country Net Spending CAGR 2008 2009E 2010E 2011E 2012E 2013E 2008 2009E 2010E 2011E 2012E 2013E USA 17,310 0.80% 2.10% 1.60% 1.66% 1.73% 1.80% 1.88% 363.40 278.39 292.31 306.92 322.27 338.38 Japan 4,976 0.80% - - 0.50% 0.75% 1.00% 1.25% - - 25.28 38.23 51.38 64.73 China 4,546 3.30% - - 0.50% 0.75% 1.00% 1.25% - - 25.70 38.55 51.41 64.26 UK 3,584 3.80% 0.82% 0.64% 0.67% 0.71% 0.74% 0.78% 29.38 22.94 25.99 28.39 30.91 33.65 France 3,487 0.35% 0.84% 0.66% 0.69% 0.73% 0.76% 0.80% 29.38 22.94 24.21 25.50 26.88 28.34 Germany 2,542 1.70% 1.16% 0.90% 0.95% 1.00% 1.04% 1.10% 29.38 22.94 24.84 26.56 28.39 30.34 Brazil 2,010 1.95% - - 0.50% 0.75% 1.00% - - - 10.65 16.29 22.14 India 1,807 3.30% - - 0.50% 0.75% 1.00% - - - 9.96 15.43 21.25 Mexico 1,728 0.80% 0.40% 0.25% 0.30% 0.35% 0.40% 0.50% 6.89 4.30 5.27 6.19 7.14 8.99 Italy 1,462 1.95% - - 0.50% 0.75% 1.00% - - - 7.74 11.84 16.10 References: 1. CAGR rates: Toys and Games in different markets, DataMonitor, September 2009 2. LeapFrog market share in revenue up to 2009: “Toy, Doll & Game Manufacturing in the US”, IBISWorld Industry Report, May 2009 3. Net spending per market: “Toy Markets in the world”, NPD Group, June 2009 4. Inflation assumption: 1-2% as defined by country trend and projections
  • 19. Team Brands R Us EXHIBIT 2: WHAT BUYERS WANT? EXHIBIT 3: WHAT DO BUYERS PREFE PREFER? 100% 100% 80% 80% Highest 60% 60% 40% Yes High 40% 20% Maybe Medium 20% 0% Dont care Low 0% Visual Sounds Interaction Lowest appeal (Shapes & Colors) EXHIBIT 4: WHAT BRANDS? EXHIBIT 5: REPEAT PURCHASE BRAN BRANDS Others, 17% Melissa & Others, Melissa & Mattel, 24% Doug, 8% 15% Mattel, 28% Doug, 8% Vtech, 15% Hasbro, 18% Vtech, 12% Hasbro, 17% Leapfrog, Leapfrog, 18% 20% ii
  • 20. Team Brands R Us EXHIBIT 6: WHO SELECTS THE TOY? EXHIBIT 7: SOFTWARE MARGINS V/S REVENUE 120% 100% 80% 60% Always 40% Most times 20% 0% Neutral Sometimes Never Reference: LeapFrog Analyst Report, Stifel Nicolaus, Dec 2009 EXHIBIT 8 LEAPFROG MEDIA SPEND IN 2010/2011 8: Country Spot TV Print Media Online and Social Retail Mkting LeapFrog.com Direct Mailers PR Country Budget USA 7,000,000 1,000,000 1,500,000 3,200,000 2,000,000 1,000,000 20,700,000 Japan 900,000 600,000 200,000 600,000 400,000 300,000 3,000,000 China 600,000 200,000 100,000 300,000 400,000 500,000 2,100,000 UK 900,000 600,000 200,000 600,000 400,000 300,000 3,000,000 France 900,000 600,000 200,000 600,000 400,000 300,000 3,000,000 5,000,000 Germany 900,000 600,000 200,000 600,000 400,000 500,000 3,200,000 Brazil 1,000,000 600,000 100,000 300,000 400,000 500,000 2,900,000 India 1,000,000 600,000 100,000 300,000 400,000 500,000 2,900,000 Mexico 1,000,000 600,000 100,000 300,000 400,000 500,000 2,900,000 Italy 900,000 600,000 200,000 300,000 400,000 500,000 2,900,000 Year 2010 37,900,000 Year 2011 46,600,000 iii
  • 21. Team Brands R Us EXHIBIT 9: IMPRESSIONS IN CPM Country Spot TV Print Media Online & Social Retail Mkting Direct Mail Total USA 155,556 13,333 75,000 32,000 8,000 283,889 Japan 66,667 26,667 33,333 20,000 5,333 152,000 China 133,333 26,667 50,000 30,000 16,000 256,000 UK 66,667 26,667 33,333 20,000 5,333 152,000 France 66,667 26,667 33,333 20,000 5,333 152,000 Germany 66,667 26,667 33,333 20,000 5,333 152,000 Brazil 222,222 80,000 50,000 30,000 16,000 398,222 India 222,222 80,000 50,000 30,000 16,000 398,222 Mexico 222,222 80,000 50,000 30,000 16,000 398,222 Italy 66,667 26,667 33,333 10,000 5,333 142,000 iv
  • 22. Team Brands R Us EXHIBIT 10: US MEDIA SPEND 2010 Cost Unit Cost Units Television Network Nick 2,000,000 25,000 80 Disney Channel 2,000,000 25,000 80 Cartoon Network 2,000,000 25,000 80 PBS Children 1,000,000 25,000 40 Print Media Parenting, Parents 250,000 50,000 5 Working Moms 250,000 50,000 5 Time 250,000 50,000 5 Family Fun 250,000 50,000 5 Online Marketing Search Engines 600,000 0.50 1,200,000 Banner Ads Yahoo 200,000 0.50 400,000 Facebook 50,000 0.50 100,000 Shopping.com 50,000 0.50 100,000 Social Marketing FaceBook 50,000 Twitter 50,000 Online Gaming 250,000 25,000 10 Mobile Gaming 250,000 25,000 10 LeapFrog.com Site content 3,500,000 3,500,000 1 Localization 1,500,000 1,000,000 1 Retail Marketing Walmart 1,000,000 5,000 200 Toysrus 1,000,000 5,000 200 Target 1,000,000 5,000 200 Other outlets 200,000 2,000 100 Direct Mailers 2,000,000 0.25 8,000,000 PR Celebrity Moms 300,000 100,000 3 Online & print articles 600,000 10,000 60 Bloggers 100,000 4,000 25 Global (not country specific) Production Budget 2,000,000 2,000,000 1 Social Programs 200,000 200,000 1 Total US Advertising Budget 2010 20,700,000