Businessweek

leges and universities; federal government agencies; corporations; and not-for-profit organizations. Regional sales managers are responsible for the sale of its solutions in their territories and supervise account managers who are responsible for maintaining its customer base. Educational Institutions: These customers include primary and secondary schools. Federal Government Agencies and Not-for-Profit: These customers include government agencies and organizations developing workforces to serve non-native speaking populations, offering literacy programs and preparing members for overseas missions. Corporations: The company promotes interest in this market with onsite visits, trade show and seminar attendance, speaking engagements and direct mailings. Strategy The company’s strategy is to maintain a flexible, diversified, and low-cost manufacturing base for its prepackaged products. Product Developments The company’s research and development expenses were $23.5 million for the year ended December 31, 2012. Seasonality The company’s business is affected by variations in seasonal trends. These variations are primarily related to increased sales of its products and services to consumers in the fourth quarter (year ending December 2012) during the holiday selling season, as well as higher sales to governmental and educational institutions in the second and third quarters. Intellectual Property The company has five U.S. patents, two foreign patents, and various U.S. and foreign patents pending. It has registered various trademarks, such as Rosetta Stone, Rosetta World, Rosetta, Rosetta Course, Rosetta Studio, Rosetta Stone Language-Learning Success & global design, Audio Companion, Dynamic Immersion, The Fastest Way to Learn a Language. Guaranteed., Adaptive Recall, Contextual Formation, Simbio, the Rosetta Stone blue stone logo and design, the Rosetta Stone blue stone logo and design/Language-Learning Success, Rosettastone.com, Rosetta Stone TOTALe, rWorld, SharedTalk, and TOTALe. The company is registering or has registered in the United States all editions of its Version 3 TOTALe languages and ReFLEX. It has a registered copyright for the refreshed Rosetta Stone blue stone logo design in the United States. Competition The company’s competitors include Berlitz International Inc.; Simon & Schuster, Inc. (Pimsleur); Random House Ventures LLC (Living Language); Disney Publishing Worldwide; and McGraw-Hill Education.