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Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

Business Plan
May-2005
Prepared by: 1'B' !chneider 2 "ntonio *urco-3i4as 5' Contact Information:
Phone6 +mail6 789): ;<8-0<)= >b%$&olino'com atrn%$&olino'com

"ddress6 ?00 West Cummin(s Par& !uite 5=50 Woburn, M" 0)90)

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*he information contained in this document is hi(hly confidential' +,ce$t if stated herein, none of the material may be co$ied, re$roduced, distributed, re$ublished, do-nloaded, dis$layed, $osted or transmitted in any form or by any means, includin(, but not limited to, electronic, mechanical, $hotoco$yin(, recordin(, or other-ise, -ithout the $rior -ritten authori.ation from P/&olino, 00C'

Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

1 MISSIO

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1
Pkolino will develop innovative playroom furniture designed for the child to improve play

Mission Statement
FP/&olino is a $roduct de4elo$ment and mar&etin( com$any' @ur (oal is to im$ro4e $lay at home by de4elo$in( and mar&etin( inno4ati4e $layroom furniture desi(ned for the child' @ur $roducts -ill (ro- and ada$t to the child/s sta(e of de4elo$ment and inte(rate -ith toys and acti4ities to encoura(e and enhance $layG'

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Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

Industry O5er5ie6
2$1 &nderstandin7 t8e Playroom Mar9et

#our million children are born in the nited !tates each year )' *hus, at any (i4en time, there are =0 million children a(es 9 or youn(er' *his lar(e base fuels the H=9 billion children/s toy and furniture mar&et, currently (ro-in( at )=I $er year 7accordin( to the industry trade $ublication FPlaythin(sG:' *he $layroom mar&et 7meanin( the area of the house set aside for children/s recreation and $lay: is $art of this $ie, and includes elements of both the furniture and the toy industry' P/&olino -ill com$ete in the children/s $layroom +,hibit 2-" furniture s$ace, estimated to be a H)'2 billion *he Playroom Mar&et 7 !H Billions: mar&et, (ro-in( at 8I annually for the ne,t fi4e H)'2 years 7accordin( to mar&etresearch'com:' Bo-e4er, a $layroom is not a $layroom -ithout toys' #or this reason, P/&olino -ill de4elo$ furniture $roducts and accessories desi(ned to inte(rate -ith toys and acti4ities to com$lete the $layroom offerin( and enhance their $lay 4alue'
H=9

Childrens playroom furniture market is estimated at $1.2 illion! growing at "# annually for the ne$t five years

*he dynamics of the $layroom mar&et are influenced by both the furniture and toy industry' "n o4er4ie- of each of these industries follo-s'

*oy L #urniture Mar&et Playroom #urniture

2$2

:urniture Industry ,i78li78ts

Bouseholds in the ! s$end o4er H2; billion a year on furniture and this fi(ure is e,$ected to (ro- at 2I $er year accordin( to the "merican #urniture Manufacturer "ssociation 7"#M":' *he industry has traditionally been hi(hly se(mented, but because of lo-er mar(ins fueled by intense com$etition from im$orts, it has started to consolidate' 0ast year, for e,am$le, $roducts manufactured and im$orted from other countries 7es$ecially China: re$resented ;5I2 of total $urchases' Com$anies com$etin( in this mar&et are6 #urniture Brands International, the lar(est ma&er of residential furniture and o-ner of brands li&e Benredon, Dre,el, and Maitland-!mith 7the com$any has o4er H2'= billion in re4enues=:' 0ay J Boy 7H)'< billion in re4enues:' "shley #urniture 7H)'8 billion in re4enues: and othersK li&e +than "llen and local $layers'
) 2

!ource6 '!' Census Bureau ---'census'(o4 !ource6 ! De$artment of Commerce ---'commerce'(o4 = !ource6 Boo4ers @nline ---'hoo4ers'com #or more information $lease contact us at info%$&olino'com -Pa(e = -

Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

*hese com$anies distribute $roducts throu(h a net-or& of furniture centers, inde$endent dealers 7s$ecialty retailers:, national and local chains, and de$artment stores' "ccordin( to the "#M", children/s furniture (enerated H; billion in 200=, <0I related to children/s bedroom furniture sales 7cribs, chan(in( tables, etc': and the remainin( )0I or H;00 million to children/s tables, chairs, stora(e and toys' 5iche $layers ha4e dominated this se(ment of the industry, and accordin( to the "merican Bome #urnishin(s "lliance 7annual $ublication: it is the fastest (ro-in( se(ment 79I in 200=:' We belie4e the #urniture Industry -ill continue to face stron( com$etition from forei(n manufacturers 7sellin( at lo-er $rices:' 0ocal manufacturers -ill ha4e to in4est in technolo(y and com$ete on Muality and s$eed' In the children/s furniture mar&et, the lar(e com$anies ha4e been traditionally focused on bedroom furniture' 5iche $layers ha4e been ta&in( o4er the more s$eciali.ed $roducts - those reMuirin( e,$ertise in other areas - li&e child de4elo$ment 7i'e' the $layroom furniture:'
+,hibit 2-B #urniture Industry 7 !H Billions:

Childrens furniture is the fastest growing segment in the %urniture &ndustry with '# growth in 2(()
*merican +ome %urnishing *lliance

H='? H2; H;

H0';

#urniture Industry

Childrens Bedroom

Childrens Playroom

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Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

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Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

2$+

!oy Industry ,i78li78ts

*he *oy Industry accounted for H=; billion in 200= ;' @n both the manufacturin( and retailin( side it is a hi(hly concentrated industry' #or the $ast fe- years it has been (ro-in( at 5-<I $er year, -ith almost ?0I of the $roducts bein( im$orted from other countries5' "ccordin( to FPlaythin(s annual re$ortG the *oy industry is hi(hly seasonal -ith almost 80I of all toy $urchases occurrin( durin( the Boliday season 7Christmas:'
+,hibit 2-C

,Parents have ecome more aware of the importance of play and education in the early years- educational toys sales are up .# per year
Playthings

*he FPlaythin(s annual re$ortG for 200= also *he *oy Industry stated the main forces dri4in( the industry as 7 !H Billions: follo-s6 F+ducational toysG6 after many u$s and do-ns, it seems li&e "merican $arents ha4e H=8 become more a-are of the im$ortance of H=; H=; H=2 $lay and education in the early years' *his has resulted in sales (ro-th of <I $er year' 200) 2002 200= 2008 FWord of mouth and BrandG6 $ro4en -ays to build sales in this industry' F*echnolo(y is &in(G6 almost =<I all of toys sales 7in terms of !H: are 4ideo (ames or -hat they li&e to call Ftechnolo(y related $roductsG' FMerchant $o-erG6 Mass merchandisersK in $articular Wal-Mart 7sells 25I of the toys sold e4ery year in "merica:, ha4e ta&en the industry by storm, lo-erin( $rices to consumer but also lo-erin( mar(ins to manufacturer' FChinaG6 manufacturin( has (one o4erseas 3etail sales of toys and (ames are e,$ected to (ro- ;'= $ercent $er year to total H=8'9 billion in 2008 ?' 5e- 4ideo (ame technolo(ies and the introduction of ne,t (eneration systems are e,$ected to be the main dri4er of (ro-th' With res$ect to toys the leaders in the industry are Mattel 87H;'< billion in sales:, Basbro 7H=') billion:, 0e(o 7H)'? billion:, and 0ea$ #ro( 7H?00 million:' !ony ta&es the lead in 4ideo (ames' 3e(ardin( the $layroom furniture mar&et, some com$anies li&e 3ubbermaid 7usin( the 0ittle *y&es brand: ha4e de4elo$edK role-$lay toys, ride-on toys, sandbo,es, acti4ity (yms and climbers, and $lastic >u4enile furniture' *hese $roducts are sold in toy stores 7not furniture stores: and ha4e been tar(etin( the $rice sensiti4e consumer' @ur research indicates that these ty$es of $roducts carry 4ery lo- mar(ins 7a4era(e 5I $rofit mar(ins 9:' *o com$ete,

; 5 ?

!ource6 Industry trade $ublication FPlaythin(sG !ource6 Industry trade $ublication FPlaythin(sG !ource6 Mar&etreseach'com 8 !ource6 re4enues for *oy industry leaders from Boo4ers @nline 9 !ources6 "ccordin( to )0D fillin(s for the !+C andNor $ublic financial statements from6 Araco, 3ubbermaid, Brio and others' #or more information $lease contact us at info%$&olino'com -Pa(e ? -

Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

$'(( million in playroom furniture products are sold each year y /oy &ndustry related companies

com$anies li&e Brio, another stron( $layer in this niche, sells lo- $rice train tables to encoura(e $arents to buy their hi(her mar(ins trains 7they lose money on the furniture to sell the toy:' "ccordin( to the Mar&etresearch'com industry re$ort, of the H=; billion, H? billion accounts for furniture $roducts' Bo-e4er, this number includes car seats, $lay $ens, strollers, etc' #or $layroom furniture, our research < indicates that a$$ro,imately H900 million is sold each year'
+,hibit 2-D *oy Industry 7 !H Billions:

$800M

@ur research concluded that lar(e toy com$anies dominate the $ricesensiti4e se(ment of the $layroom furniture mar&et' Bo-e4er for mid and
<

Based on Mar&etresearch'com Industry 3e$ort and !ales of to$ ten manufactures of $layroom furniture $roducts #or more information $lease contact us at info%$&olino'com -Pa(e 8 -

Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

hi(h-end $lay furniture $roducts, niche manufacturers and retailers li&e Pottery Barn Dids and 0and of 5od ha4e ta&en the lead'

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Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

2$.

,o6 it all Comes !o7et8er <:urniture = !oy Industry>

#urniture meets toys in the $layroomK both Industries con4er(e and influence the H)'2 billion mar&et'
+,hibit 2-+ *he Playroom #urniture Mar&et 7 !H Billions:
:urniture Industry ;2.billion !oy Industry ;+.billion

Industry !i.e
/he %urniture and /oy industry converge in the furniture playroom market

Portion considered childrenOs furniture

;.billion

;2billion

Portion considered childrenOs $layroom furniture

;$.billion

;$4billion

Playroom :urniture Mar9et ;1$2b

*he Playroom furniture mar&et 7-here P/&olino -ill com$ete: has inherited many of the com$etiti4e dynamics of its $arent industries6 Is (ro-in( at an a4era(e of 8I annually)0 Is hi(hly seasonal 7almost 80I of sales durin( the Boliday season: "lmost ?0I of the $roducts are manufactured abroad )) #or hi(hly $rice sensiti4e consumers the mar&et is hi(hly concentrated, but at mid and hi(h-end income le4els niche $layers dominate Word of mouth and brand are the main dri4ers of sales '

)0 ))

!ource6 Mar&etresearch'com Industry 3e$ort Based on the Mana(ement calculations, su$$orted by "#M" information on #urniture Im$orts #or more information $lease contact us at info%$&olino'com -Pa(e < -

Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

2$5

!rends Influencin7 t8e Playroom Mar9et

More c8ildren are bein7 born: "ccordin( to the latest statistics from the 5ational Center for Bealth !tatistics, -omen in the nited !tates are ha4in( more children no- than at any time in almost =0 years' Durin( most of the )<80s and )<90s, the a4era(e birthrate -as fe-er than t-o children $er -oman, today that a4era(e has increased to 2') children' "s a result of this trend, the $o$ulation of children a(e 5 and under is e,$ected to (ro- in 200;, and to e,$erience (radually increasin( annual $ercenta(e (ains throu(h 20)0' Mom?s 6it8 more income and spendin7 more: More -omen are ha4in( babies later in life, -hen their income tends to be hi(her and more stable' *he birth rates for -omen in their =0s and older are at their hi(hest le4el in three decades, u$ 2I-=I since )<<0 for -omen in their =0s, and u$ more than 8I for -omen in their ;0s')2 "s a result many of them are comin( into the toy and furniture mar&ets -ith hi(her dis$osable income than -as $re4iously the case' 0randparents are spendin7 more: "ccordin( to the '!' Census Bureau, (reater lon(e4ity and hi(her dis$osable income of a (ro-in( '!' $o$ulation of (rand$arents is also boostin( a4era(e $er ca$ita s$endin( on home furnishin(s and toys for youn( children' *here are about 80 million (rand$arents in the nited !tates today' "s a result of di4orces and remarria(es, many "merican children ha4e si, to ei(ht adults in the F(rand$arentG role' "ccordin( to the 3esearch #irm Intere$, 7su$$orted by !immons database: (rand$arents are s$endin( o4er H?0 billion on (randchildren each year' More a6are@educated parents: Parents these days are bein( bombarded by ad4ice from e,$erts about de4elo$in( children/s mental, $hysical, and social s&ills' Parents understand the 4alue $lay has on this de4elo$ment and loo& for $roducts to encoura(e it' In an inter4ie- -ith the trade $ublication Playthin(s 7May 2002:, !usan @li4er, e,ecuti4e director of the non-$rofit or(ani.ation Playin( for Dee$s, e,$lains6 FParents with dollars to spend! typically those who have greater amounts of education! are increasingly aware of the connection etween play and healthy development. /here has een a lot of media coverage a out rain development! with an emphasis on the critical role of a stimulating environment during the first three years of a childs life. *s long as the market approach is toward kids learning more at a younger age! consumers will pay to get on the higher rung of the educational ladder

.''0ore a ies! more disposa le income and more spending in childrens furniture are also driving the playroom market

)2

!ource6

'!' Census Bureau ---'census'(o4 #or more information $lease contact us at info%$&olino'com -Pa(e )0 -

Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

e6 la6s: 5e- safety le(islation has $ro$elled safer $roduct desi(ns as the industry and the media -arn consumers not to use older $roducts that do not meet current safety standards)=' ,ome remodelin76 With ne- *E sho-s encoura(in( ma&eo4ers of home s$aces, "mericans are li&ely to s$end more on home furnishin( in 2005' !8e Po6er of Play Campai7n: Children a$$ear to be (ro-in( u$ much fasterK they loo& more mature and they &no- more about the -orld at youn(er and youn(er a(es' Child de4elo$ment e,$erts stress that des$ite a$$earances, a child is still a child' *his messa(e is a ma>or focus of P*he Po-er of PlayP $ro(ram, -hich continues to reach literally millions of $eo$le throu(hout our nation as a result of the second $hase of broadcast and $rint $ublic ser4ice announcements s$onsored by the *oy Manufacturer "ssociation' *he im$ortance of this messa(e -as disco4ered as a result of a national sur4ey conducted in )<<< on behalf of the "merican *oy Institute, the industryOs charitable and educational foundation, recently renamed the *oy Industry #oundation' 5inety-one $ercent of the sur4ey $artici$ants, made u$ of $arents, teachers and child e,$erts, stated that $lay has a $ositi4e effect on childrenOs o4erall -ell-bein( and -as instrumental in the de4elo$ment of a childOs ima(ination, self-confidence, self-esteem, creati4ity, $roblemsol4in( and coo$eration' !oys Marc8 &p-mar9et: " recent article in the Wall !treet 1ournal 7$lease refer to "$$endi, ))'): e,$lained the $rofit &illin( $rice -ar landsca$e for toy-ma&in( and retailin( in the mass mar&et, and hi(hli(hted ho- $remium $riced toys a$$ear to be out(ro-in( the sim$ler less e,$ensi4e 4ersions' Da4id !ha-, the ne- o-ner of the #"@ !ch-ar. retail stores stated Fthe admittedly small niche is a 4ibrant mar&et$lace full of customers loo&in( for somethin( different from -hat/s a4ailable at mass retail storesQ is a niche that small retailers and catalo(s dominateG' " customer commented as she 4isited one small s$ecialty retailer in 5eCor& City Fthese toys aren/t chea$Q but they are really (ood-MualityQI &no- my &ids -ill lo4e themG'

-/he Power of Play program! continues to reach literally millions of people-play has a positive effect on children1s overall well2 eing is instrumental in the childs development

)=

!ource6 *he '!' Public Interest 3esearch Arou$ #or more information $lease contact us at info%$&olino'com -Pa(e )) -

Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

2$2

Playroom :urniture Mar9et Structure and Competition

*he Playroom #urniture Mar&et has three main se(ments6 mass 7H900 million:, mid 7H=00 million: and hi(h-end 7H5) million:' *hese se(ments are deri4ed from a mar&et se(mentation based on $roduct Muality, $rice, distribution channel and ty$e of customer' ,i78-end se7ment: P/&olino -ill enter the $layroom furniture mar&et in this se(ment' *his se(ment refers to e,clusi4e $roducts sold $rimarily throu(h catalo(s, interior-desi(ner de$ots, trade e4ents, s$ecialty small retailers and direct from the desi(nerNmanufacturer' *hese $roducts are e,$ensi4e and branded -ith the desi(ner/s name' Most of these $roducts are usually desi(ned in Italy, Aermany, !$ain, 5etherlands, amon( others +uro$ean countries' Buyers are loo&in( for somethin( uniMue and beautiful' Interior desi(ners are the main $romoters in this se(mentK ho-e4er, some s$ecialty furniture boutiMues ha4e also be(un to carry $remium furniture for $lay' #urniture usually ta&es ? to 9 -ee&s for deli4ery'
+,hibit 2-# Playroom #urniture Mar&et 7 !H MM:

Pkolino market entry strategy will e to target the +igh2end segment! a small ut profita le spot

H5) H=00

H900
Mass Mid Bi(h

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Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

Customers in this se(ment are resortin( to custom desi(ned $layroom solutions usin( interior desi(nersK some of them e4en s$eciali.ed on childs$aces' Customers are also buyin( from $roduct boutiMues that sell furniture as -ell as other children $roducts 7e'(' clothin(, toys, and accessories:' !mall inde$endents desi(n firms 7e'(' *ruc& "rchitecture: (enerally desi(n the $roducts sold in these stores' *hese desi(n sho$s are usually niche $layers, -ho s$eciali.e in $roducts such as hand $ainted furniture, or re$lications of classic styles' *heir 4alue to the boutiMue is the uniMueness of the $roductK you cannot find them at the mid or mass mar&et stores' *o summari.e, our main com$etitors in this mar&et are the interior desi(ners 7custom made: and the niche $roduct desi(ners' *hey are often small in si.e -ith limited reach and resources' "ccordin( to our research this se(ment is (ro-in( at <I $er year -ith stron( mar(ins of 55I (rossN20I net); ' Due to the distincti4e characteristics of the Bi(h-end se(ment it is difficult to $in$oint a sin(le mar&et or list of the most $rominent com$etitors' Bo-e4er, -e -ill $ro4ide e,am$les of the ty$e of com$etition P/&olino -ill face as it enters the hi(h-end se(ment6 !ruc9 "rc8itecture: is a (ood e,am$le of a desi(n firm' With offices in 5e- Cor& City and a team of = desi(ners the com$any has de4elo$ed hi(h-end $layroom furniture $roducts -ith a 4ery contem$orary style' *ruc& has been in business since 2000, and sells its $roducts throu(h s$ecialty retail stores, online retailers and in an affiliate -eb-based store 7@ffi:' *ruc& founders 1ennifer Car$enter, 1onathan Mar4el and 3ob 3o(ers ha4e been successful -ith P3, and ha4e mana(ed to sho-case its $roducts in hi(h 4isibility $laces li&e the Museum of Modern "rts 7MoM": !tores in !an #rancisco and 5e- Cor&' Casa9ids A 'oberto 0il: Born in Buenos "ires, "r(entina and educated at Bar4ard ni4ersity, 3oberto Ail trained as an architect before del4in( into furniture desi(n' AilOs lines of children/s furniture are 4ery sim$le in terms of desi(n and confi(uration' Bis $roducts ha4e been sold most recently at the Au((enheim Museum !tore, BarneyOs 5e- Cor&K the Whitney MuseumOs !tore 5e,t Door, #"@ !ch-ar., !# MoM", and *he 0and of 5od' /id/raftB Inc: @ri(inally formed in )<?9 as a manufacturer and su$$lier to the early-childhood sector, DidDraft be(an com$etin( in

);

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the >u4enile retail mar&et in )<<?' *oday, DidDraft creates a -ide array of room furnishin(s, (ifts and toys, includin( licensed >u4enile $roducts' DidDraft 7headMuarter in Dallas, *e,as: com$etes in other se(ments of the mar&et as -ell' Its most recent line of $roducts, hand-$ainted furniture $ieces, is $ositioned at hi(h-end $rice $oints' DidDraft has a stron( distribution channel infrastructure for mid and mass mar&et $roducts, and is tryin( to le4era(e those channels to enter the hi(h-end se(ment'

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/he mid segment is the sweet spot for Pkolino! with reasona le volume! high margins and less price sensitive customers-is driven y 3uality and looks! not price.

Mid-Se7ment: 3etailers li&e Pottery Barn Dids, Bellini, Bombay Dids, 0and of 5od and s$ecialty catalo(s ha4e become the leaders in this se(ment' *hese com$anies are mainly furniture retail chains -ith $roducts desi(ned -ith a more conser4ati4e classic loo& and -ith better materials' *he ma>ority of the $ieces are made from -ood, normally tar(etin( the family room and the child/s bedroom' !ome of the $roducts are multi$ur$ose 7e'(' coffee table that is also a train table:' Com$etition in this se(ment is considered Fhi(hG because of the limited number of $layers' Pottery-Barn, the mar&et leader, is also the style setter for this se(ment' In contrast to the ta&e-home a$$roach of mass merchandisers, deli4ery of the $roduct to the end customer usually ta&es u$ to ; -ee&s' Most of the $roducts are sold by catalo(, althou(h Pottery-barn, Bellini and Bombay ha4e all o$ened $hysical stores to sho-case their children/s $roduct line' Customers in this se(ment are loo&in( for more e,clusi4e desi(ns and -ill trust com$anies li&e Pottery-Barn Dids, *he 0and of 5od, and Bellini because of their established re$utations for hi(h Muality and 4isually a$$ealin( $roducts' *he lar(est threats for these com$anies are the co$ycats 7e'(', I&ea and *ar(et: as they manufacture 4ery similar $roducts $riced =0-;0I less' Co$y cats successful because the brand definin( $roduct attribute - beauty - is easily re$licated' "ccordin( to our research, succeedin( in this se(ment reMuires a stron( brand' @ur strate(ic differentiation in this mar&et -ill be to offer com$ellin(, customer dri4en attributes, le4era(in( the functionality of our $roducts, a (ro---ith-your-child $ro$osition and furniture inte(ration -ith toysNacti4ities' #or P/&olino the mid-se(ment is the s-eet s$ot 7(ood mar(ins and healthy 4olume:' "ccordin( to "#M" the mid-se(ment is (ro-in( at 9I $er year and has been en>oyin( healthy mar(ins of ;9I (ross and);I net' Dey com$etitors in the Mid-!e(ment6 Pottery Barn /ids <PB/>: " subsidiary of Williams-!onoma, Inc' is the lar(est $layer in this se(ment -ith o4er 98 stores, an online store-front and ; to 5 catalo( issues $er year' "ccordin( to )0& re$orts re4enues are s$lit 50N50 bet-een $hysical stores and direct channels' PBD com$etes -ith Muality, desi(n and brand and had re4enues o4er H=00 million last year' *hey entered the $layroom furniture mar&et -ith a number of $roducts tar(etin( the bedroom and family room s$aces, as -ell as some toy li&e furniture $ieces 7e'(', &itchen $lay sets:'

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In a recent article in the Wall !treet 1ournal)5 - FWilliams-!onoma6 !eein( a !tron( Bi(h-+nd Consumer,G it -as re$orted that6 %urniture sales have increased to a out 24# of total company sales from a out 1"# a year earlier! said 5aura *l er! head of the Pottery 6arn rand. ,&t1s really a key strategic focus!, *l er said. ,%urniture seems to e a strong area of growth and one where we1re very focused on driving profita ility., Bellini: " manufacturer and s$ecialty retail boutiMue chain that has been around for more than )5 years' *hey sell hi(h-end +uro$ean desi(ned childrenOs furniture and accessories' Bellini tar(ets the bi( s$enders -ith solid--ood >u4enile furniture' *he com$any franchises its retail conce$t and has stores nation-ide' !ome of its $roducts could be considered hi(h-end, but de$endin( on the franchisee tar(et, the store -ould more li&ely than not carry $roducts at $rices closer to the mid-se(ment' *hey ha4e embraced the (ro---ith-your-child conce$t for bedroom furniture, but they are still 4ery classic and basic in terms of their $layroom offerin(' 1and of od: *he runner-u$ in terms of $layroom furniture in this se(ment' *he online-catalo( based >u4enile furniture store -as recently acMuired by Crate and Barrel' *hey are no- in the $rocess of o$enin( stores follo-in( the PBD successK ho-e4er, their business model is different' *hey sell $roducts desi(ned and manufactured by others' *hey are com$etin( head to head -ith PBD in terms of desi(n attributes, style and $rices'

/he mass segment is highly concentrated! suffers low margins and uses mainstream toy distri ution channels

Mass-Se7ment: In this se(ment, furniture mar&et characteristics more resemble those of toys than in the other se(ments' *o(ether Brio, Ima(inarium, 0ittle *y&es and #isher Price hold u$ to 59I )? of the mar&et share' !mall inde$endents that manufacture furniture $roducts under licensed brands such as Dora the +,$lorer, Barnie, Barbie, Disney, etc, also hold a solid 20I mar&et share)8' *his se(ment can be considered hi(hly concentrated 7fe- $layers: and $rice sensiti4e' Customers in this se(ment are buyin( $layroom furniture the -ay they buy toys6 at lar(e discount stores 785I: li&e Wal-Mart, *ar(et, Dmart or lar(e s$eciali.ed retailers li&e *oys 3 s' Products li&e $lay tables and chairs are sold for less than H200' *hey are made of $lastic or com$osite materials and in many cases branded -ith cartoon characters' *he ma>ority of the $roducts are not desi(ned to inte(rate -ith the toy or acti4ity 7toyNfurniture inte(ration: and com$etition

)5 )?

Wednesday "u(ust 25-200;, W!1 !ource6 Deri4ed from indi4idual sales from com$anies financial statements )8 !ource6 FPlaythin(sG "nnual 3e$ort #or more information $lease contact us at info%$&olino'com -Pa(e )? -

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seems to be based on $rice and brand, not on Muality or loo&s' *he noticeable e,ce$tions are the train tables and some 0e(o tables' Brio for e,am$le, sells its train table almost at cost, but then ma&es a $rofit sellin( the trains' Distribution and com$etiti4e dynamics in this se(ment mimic those of the toy industry in terms of le4els of concentration 7fe- $layers -ith lar(e mar&et shares:, business cycle 780I of sales occurs durin( the holidays: )9 and barriers of entry 74ery lo- mar(ins com$etition based on 4olume:' Most of the $artici$ants in this mar&et ha4e been losin( money lately' @n a4era(e, the mass se(ment mar(ins ha4e been =8I (ross, and 5I $rofit' )< !ome Dey Com$etitors in the Mass-!e(ment6
Pkolino will enter the mass2 segment once it has penetrated the high and mid segments of the market and developed a strong rand

Brio6 Based in !-eden, but -ith o$erations in +uro$e, "sia and the !' With H)'?B in sales 20 the com$any has com$lemented its toy offerin( -ith some $layroom furniture $ieces 7es$ecially train tables: no- re$resentin( about )N= of total sales' *he com$any has a stron( $resence in the 5ordic countries and has made an effort to $enetrate the ! mar&et -ith $roducts $riced a little abo4e the mar&et a4era(e' !$ecialty stores and mass merchandisers ha4e been carryin( Brio $roducts in small Muantities because of its $rice $oint' Brio re$resents the Ftraditional -ood basedG $roducts in this se(ment' Bi(h Muality $roducts and a re$utation for deli4erin( on educational $lay su$$ort its stron( brand' 1ittle !y9es6 !ubsidiary of 5e-ell 3ubbermaid, 0ittle *y&es is the lar(est manufacturer of $lastic based tables and chairs for this se(ment' With o$erations all o4er the -orld, 0ittle *y&es has $ositioned its $roducts as safe, durable and lo- $rice $layroom furniture' Its $roducts are sold in mass merchandise stores and accordin( to the $arent com$any/s financial statements the di4ision has been stru((lin( to maintain $rofitability because of hi(her ramaterial $rices 7oil based:' In 1uly 200;, the com$any sold its 0ittle *y&es Commercial Play !ystems 70*CP!: unit to PlayPo-er' 0ittle *y&es had 29I (ross and -2I $rofit mar(ins in 200='2) Ima7inarium: *his !$ain based com$any and *oys 3 s affiliate since 200) is the second lar(est manufacturer of $lay tables for this mar&et se(ment' *he relationshi$ -ith *oys 3 s (uarantees shelf s$ace in the stores to dis$lay its $roducts and has e4en created barriers of entry to other manufacturers in that channel' *he com$any has $ositioned its $roducts similar to Brio but -ith a lo-er $rice ta( and Muality' *he com$any has had a disa$$ointin( year in

)9 )<

!ource6 *oy Industry "ssociation "nnual 3e$ort !ource6 Boo4ers @nline, !+C filin(s and "nnual 3e$orts from Mattel, Basbro, 0e(o and 0ea$#ro( 20 !ource6 Brio "nnual #inancial !tatements 2) !ource6 5e-ell 3ubbermaid "nnual 3e$ort, !+C #illin(, Boo4ers @nline #or more information $lease contact us at info%$&olino'com -Pa(e )8 -

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the '!' accordin( to the Wall !treet 1ournal, but remains a com$etitor -ith a stron( distribution channel and -orld-class $roduct de4elo$ment ca$abilities' *he follo-in( summari.es the si.e and structure of the Playroom #urniture Mar&et6
+,hibit 2-A *he Playroom #urniture Mar&et !ummary of Mar&et !e(ments and Com$etiti4e Dynamics

!8e :urniture Playroom Mar9et

Mar&et Characteristics
,i78-end se7ment
<entry>

Mar&et Dynamics
R &n9no6n number of competitors <many> R )ery di5erse distribution c8annels <t8ere is no predominant c8annel in t8is se7ment> R o identifiable mar9et leader R ,i78 mar7insB lo6 5olumes R Competition is based on access to customers and loo9s

WhatS s dri4in( the customer

R Brand @ Benefits R *ord of Mout8 R Interior %esi7ner

SiCe:;51MM @ 0ro6in7: -D
Main %istribution C8annels: R :"O Sc86arCB R !oy@ furniture BoutiEues R Interior %esi7ners <custom made> R %irect <internet>

Mid se7ment
<s6eet spot>

SiCe:;+00MM@ 0ro6in7: 4D
Main %istribution C8annels: R Pottery-barn /idsB R 1and of ods R Specialty stores F Catalo7s R %irect <internet>

R 1imited number of competitors R %ominated by fe6companies <catalo7s F brand stores> R Pottery-barn is t8e mar9et leader R 0ood mar7insB 7ood 5olumes RCompetition is based on Brand and loo9s

R Brand @ Benefits R *ord of Mout8 R Store %isplay @ Catalo7

SiCe:;400MM@ 0ro6in7: 3D Mass se7ment

<eHpansion>
Main %istribution C8annels: R Mass 'etailers <*al-Mart B!ar7et G > R !oys ' &s R Specialty stores F Catalo7s R %irect <internet>

R 1imited number of competitors R %ominated by fe6 companies < *al-martB !ar7et and !oys ' &s> R BrioB Ima7inariumB and little ti9es are amon7 t8e mar9et leaders R 1o6 mar7insB ,i78 5olumes R Competition is based on price

R Brand @ licensin7 c8aracters R "d5ertisin7 R %iscount prices

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Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

!8e Opportunity
Play is a child/s -or& and educationK it is ho- they learn and (ro-' Parents are more -illin( to $ay for $roducts that encoura(e or facilitate $lay as they become more educated about child de4elo$ment and the im$ortance of $lay' +4idence of this trend is the (ro-in( s$endin( on educational toys 7(ro-in( at <I for the last three years: 22, and $layroom furnishin(s 7(ro-in( at 8I $er year2=:' P/&olino has identified a $o-erful o$$ortunity that le4era(es this trend' *hrou(h our research -e disco4ered that the basis for $lay - the $lay s$ace and its furniture - is in need of im$ro4ement' We identified four &ey areas for im$ro4ement6

7illingness to pay for products that encourage child development is on the rise.

/he asis for play 2 the play space and its furniture 8 is in need of improvement

Parents want to know the right toy to uy

+,istin( $layroom furniture com$romises $lay because it is desi(ned for miniature adults and not children' Playroom furniture loses its 4alue fast because children Muic&ly out(roit' @ne si.e fits all in $layroom furniture sim$ly doesn/t -or&' *he child loses interest in the $layroom furniture Muic&ly because it has fe- a$$lications' 0astly, and $robably most ob4iously, $lay s$aces are cluttered and unor(ani.ed'

We also disco4ered that $arents are feelin( the $ressure of -antin( to &nothe ri(ht toy to buy, at the ri(ht time to effecti4ely su$$ort the de4elo$ment of their children'

Company and Product %escription

.$1 Company and %escription:

P/&olino, 00C is based in Woburn, M" and is a $roduct desi(n and mar&etin( com$any' We belie4e $lay is an inte(ral $art of a child/s healthy de4elo$ment and that current $lay furniture com$romises $lay' It is our (oal to im$ro4e the $lay e,$erience at home' P/&olino currently has ; $roduct conce$ts under de4elo$ment throu(h a $artnershi$ -ith the 3hode Island !chool of Desi(n 73I!D:' IP?9olinoB impro5in7 play at 8ome$J

22 2=

"ccordin( to Parents Ma(a.ine and 0ea$#ro( !+C fillin(s

*ccording to marketresearch.com
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.$2

!8e P?9olino Concept

P/&olino -ill address the o$$ortunity in the $lay s$ace by desi(nin( truly inno4ati4e $lay furniture and child de4elo$ment sta(e s$ecific toy &its' *hese solutions -ill ha4e the follo-in( characteristics6
Pkolinos playroom furniture is designed for the child and functional for the parent. &t grows and adapt to the childs stage of development and integrate with toys9activities to encourage and enhance play

)' We are ma&in( $lay more $roducti4e by desi(nin( $layroom furniture for the ones -ho use it, the children' :unctional$ 2' We are increasin( the useful life of the furniture by desi(nin( it to (ro-ith the child throu(h &ey sta(es of de4elo$ment' Multi-purpose$ =' We are maintainin( interest in the furniture by increasin( its uses' *he furniture is desi(ned to be a toy and to transform to different acti4ities' *his transformation is made $ossible by add-on toy &its that chan(e the P/&olino table from acti4ity to acti4ity 7for e,am$le6 from a 0e(o table to a $aintin( table to a train table and so on:' Multi-purpose$ ;' We are or(ani.in( the $lay s$ace by desi(nin( the toy &its to sim$ly fold-u$ and store a-ay in a child friendly stora(e unit' :unctional$ In addition to these &ey differentiators P/&olino/s $roducts -ill be safe, beautiful and fun, as these are necessary attributes to succeed' *hese solutions also address the challen(es $arents ha4e of selectin( the ri(ht toys for the ri(ht sta(e because our toy &its -ill be $ac&a(ed for s$ecific sta(es of child de4elo$ment' *he F(ro- -ith the childG ca$abilities of our $roducts -ill reduce our customers/ total costs of o-nershi$ and $ro4ide us -ith o$$ortunities for follo--on sales' #ollo--on $roducts -ill be in the form of de4elo$mentally a$$ro$riate toy &its, u$(rade $ac&a(es and accessories'

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.$+

Product %escription

P/&olino/s first $roduct line -ill include t-o different table desi(ns, a stora(e unit, and toy &its' Constant $roduct inno4ation is $art of our strate(y, and it -ill be su$$orted -ith a $roduct de4elo$ment effort in order to e,$and our current offerin( and include accessories and ne- $roducts e4ery year' Initial Product line *able " sho-s a 4ery contem$orary, style dri4en conce$t, -ith $lenty of multifunctional 7i'e', (ro- -ith the child: ca$abilities resultin( from its uniMue modular desi(n' It is com$rised of 8 se$arate $ieces and desi(ned to accommodate at least four sta(es of the child/s de4elo$ment' *his $roduct -ill be the hub for the toy &its and the foundation of our $layroom offerin(' *he $roduct is made of -ood, hi(h-density foam and fabric' Note: the following are pictures of prototypes of the /a le *: the actual product may e different. /hey are presented here for the purpose of illustrating the concept .

Designed at

risd

for P/&olino, 00C

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Prototy$es desi(ned at risd for P/&olino

Pac&a(in( Mode

*oddler Mode

Infant Mode

*-o table Mode

*oddler Mode

*oddler ) Mode
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Children Interactin( -ith *able F"G

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*able B sho-s a more $layful desi(n, -ith an almost endless array of confi(urations' *his si,-$iece conce$t is desi(ned around the belief that children can also $lay -ith the furniture itself' Most of the $ieces are 4ery li(ht to facilitate child interaction and unit reconfi(uration' *his unit is intended for the more so$histicated $arent, one that is -illin( to $ay more for an e,ce$tional $roduct' *his table is made of -ood, hi(h-density foam and fabric' Note: the following are pictures of prototypes of /a le 6: the actual product may e different. /hey are presented here for the purpose of illustrating the concept

Designed at

risd

for P/&olino, 00C

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Prototy$es desi(ned at risd for P/&olino

Pac&a(in( Mode

*able Mode

*able Mode

Play(round Mode

Play(round Mode

*able Mode
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Children Interactin( -ith *able FBG

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!8e !oy 9its: *hese $ieces are the lin& bet-een the furniture and the toy' *hey are stora(e com$artments that unfold on to$ of *able " to chan(e the table to$ into an acti4ity or toy N$lay enhancer' *he inside of the toy &it -ill be desi(ned to accommodate the reMuirements of a s$ecific acti4ity and child sta(e of de4elo$ment' #or e,am$le6 if -e -anted to con4ert the table into a toddler F0e(oG table, the interior of the toy &it -ill ha4e sta(e a$$ro$riate 0e(o $lates attachedK the unit itself -ill also hold the 0e(o bloc&s' When unfolded, it loc&s on to$ of *able ", transformin( it into a toddler 0e(o table' When done, sim$ly fold it u$ and store it in our stora(e unit' Note; the following are pictures of prototypes of the /oy kits: the actual product may e different. /hey are presented here for the purpose of illustrating the concept

!tora(e mode

nfoldin( mode )

Designed at

risd

for P/&olino, 00C

nfoldin( mode 2

Play mode

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!8e Stora7e &nit6 this unit -ill hold u$ to )0 toy &its and is desi(ned to fit the desi(n style of *able "' It allo-s for ease of use and accommodates a child/s hei(ht and stren(th' *he unit is made out of -ood, but the dra-ers -ill be li(ht enou(h so that children can o$en them' Note; the following are pictures of prototypes of the storage unit: the actual product may e different. /hey are presented here for the purpose of illustrating the concept
With ca$abilities of holdin( *oy &its on to$ of the $iece or in the dra-ers

!tora(e nit

Designed at

risd

for P/&olino, 00C

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Prototy$es desi(ned at risd for P/&olino

7!ee more $ictures at the "$$endi,':

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.$.

<ur key differentiating enefits will e the increased functionality! the improved educational value and the multi2purpose nature of our products

Competiti5e "d5anta7e

P/&olino $roduct attributes can be summed u$ as follo-s6 Multi-purpose: modifies for +,hibit ;-" chan(es in acti4ity and (ro-s Dey Product "ttributes -ith children throu(h their multista(es of de4elo$ment, $ur$ose :unctional: desi(ned to better fit ho- children use the $roduct 7i'e' not miniature adult furniture:, functional #ducational, :un, Safe and Beautiful: 4isually a$$ealin(' beautiful safe

b s

educational

fun

7Please refer to "$$endi, )2'2 for details on the $roduct attributes:' !afety, beauty and fun are absolute necessities in this mar&et' *hey are the attributes that most com$etitors ha4e and ones that -e -ill build our differentiatin( attributes on' @ur &ey differentiatin( benefits -ill be the increased functionality, the im$ro4ed educational 4alue and the multi$ur$ose nature of our $roducts' By focusin( our $roduct de4elo$ment on these &ey attributes -e -ill ha4e a clear com$etiti4e ad4anta(e'
+,hibit ;-B "ttribute Com$arison Chart P/&olino/s "ssessment 7ran&in(s6 ) is best in the cate(ory, )0 is the -orst:
Competitors P9olino Brio #ischer Price Ima(inarium 0ittle *y&es Pottery Barn Dids 0and of 5od *ruc& Casa Dids Eidel M9t$ Se7ment ,i78 @ Mid Mass Mass Mass Mass Mid Mid Bi(h Bi(h Bi(h #ducational 2 = ) ; 5 9 8 < )0 ? Safe + 5 2 ; ) 9 8 )0 < ? Multipurpose 1 2 = ; ? 5 8 9 < )0 :un 2 = ) ; 5 ? 8 )0 < 9 :unctional 1 8 ? ; 2 5 = 9 < )0 Beautiful + 8 9 < )0 ) 2 5 ? ;

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.$5

Our Strate7y

Pkolino targets the high2 end segment ecause customers are market influencers! they value rand over price and offers etter margins. Pkolino will later e$pand to the mid segment

@ur strate(y is desi(ned to accom$lish four &ey ob>ecti4es6 )' De4elo$ a stron( brand T Fo-nin( the $lay-s$ace at homeG 2' De4elo$ a solid customer base T F loyalty and recurrin( re4enueG =' "chie4e $redictable and sustainable (ro-th T F(ood mar(ins and re$eat $urchasesG ;' De4elo$ a culture of inno4ation T Fca$ability of (eneratin( cham$ion $roductsG O5er5ie66 *o $enetrate the children/s $lay mar&et -e -ill need to tar(et influential customers and de4elo$ a stron( brand' #rom this $osition -e -ill e,$and our $roduct line and e,tend into ne- mar&ets e,$andin( our customer base' We -ill maintain lon( relationshi$s -ith our customers by offerin( them de4elo$ment sta(e a$$ro$riate u$(rades, toy &its and accessories' *his -ill $ro4ide us -ith recurrin( and $redictable re4enue' Mar9et #ntry6 P/&olino -ill first tar(et the hi(h-end $layroom mar&et because of its fa4orable characteristics6 U it 4alues inno4ation and brand o4er $rice, U its consumers are mar&et influencers, and U it offers the hi(hest mar(ins' We -ill focus on establishin( and buildin( a re$utation for hi(h Muality $roducts and tar(et consumers that -ant the best for their children' *hrou(h a mi, of $ublic relations and (rassroots mar&etin( -e -ill establish our $roducts in the hi(h-end mar&et' Concurrently, -e -ill de4elo$ toy-&its and accessories that inte(rate and com$lement the furniture to deli4er a com$lete $lay e,$erience' 0ro6t8 Strate7y6 Aro-th in the hi(h-end mar&et is limited due to its si.e' In order to increase our customer base for sales of additional P/&olino $roducts -e -ill need to e,$and into the lar(er mid-mar&et se(ment' *o do this -e -ill le4era(e our hi(h-end brand re$utation and introduce lo-er cost tables and stora(e -ith similar attributes into the lar(er mid-mar&et' We e,$ect to e,ecute this e,$ansion in our third year of o$eration'

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+,hibit ;-C Mar&et Penetration !trate(y

0oP3IC+ Bi(h
PS &olino 7):

PS &olino 72:

Custom made BoutiMues !mall Desi(ners 7*ruc&: Eibel 0S achitecte Pottery-Barn Dids

Many

"**3IB *+!
#isher Price Bombay

0and of 5ods Bellini

#e-

Brio 0ittle ti&es 0icensed 7standard:

Ima(inarium

Bi(h

Mid

Mass

PS &olino !trate(y

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Aro-th -ill also be achie4ed by maintainin( lon( term relationshi$s -ith our customers to $romote re$eat $urchases of u$(rades, accessories and toy &its' Ai4en the tar(eted a(e ran(e 70-5 years: of our $roducts and the a4era(e of o4er 2 children $er household, a sin(le customer relationshi$ could last o4er 9 years -ith multi$le sales $er year' *his -ill (i4e us a recurrin( and $redictable re4enue stream' "s -e increase our customer base and $roduct line the re4enue from these re$eat sales -ill increase dramatically'
+,hibit ;-D 5umber of units sold $er ty$e of $roduct
20000 )9000 )?000 );000 )2000 )0000 9000 ?000 ;000 2000 0 Dits !tora(e *ables nits Cear ) )=)= 229 ?<0 Cear 2 =95) ;88 );;5 Cear = ;9); 92; 255) Cear ; 8?)9 ))?< =?=; Cear 5 ))028 )5== ;855

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Ai4en the difficulties of the mass mar&et, -hich include troubled distribution channels, intense $rice com$etition, and $rice sensiti4e customers, it is not currently $art of our mar&et e,tension $lan' Bo-e4er, -e -ill continue to e4aluate it' !hould conditions become more fa4orable, -e may consider mo4in( to this se(ment' Continued $roduct inno4ation is a &ey to this mar&et $enetration and e,$ansion strate(y' *o achie4e this -e -ill focus internally on creatin( a culture of inno4ation throu(h U Pro4en $roduct research and de4elo$ment methodolo(ies, U Creati4e -or& en4ironments and em$loyment arran(ements, and U Birin( $ro4en talent that fits our dynamic, inno4atin( culture'

Mar9etin7 Plan
O5er5ie6: We -ill brin( this $roduct to the mar&et by tar(etin( customers in the hi(h-end mar&et se(ment that -ant the best for their child' We -ill reach this audience throu(h $ublic relations, (rassroots mar&etin(, direct mar&etin( and strate(ic distribution channels'

5$1

&nderstandin7 t8e Customer

@ur $rimary customers -ill be $arents -ho -ant the best for their children, and are -illin( and able to $ay a $remium for a better $roduct'
<ur primary customers will e parents who want the est for their children! and are willing and a le to pay a premium for a etter product

"ccordin( to our research, our initial customers -ill be educated consumers -ho $ossess a stron( desire to $ro4ide the best en4ironment $ossible for their children to $lay at home' *hey are li&ely to s$end a considerable amount of time researchin( the -eb for o$tions, and ha4e a stron( bias to-ard friend and family recommendations 7-ord-of-mouth:' We also see se4eral &ey influencers in this $urchasin( decision, they are6 U F"uthoritiesG +,$erts in the field of child rearin(Nde4elo$ment' 7e'(', *eachers, Care-(i4ers, Publications:' U Children U Arand$arents U Peers @ther $arents

In addition to bein( influencers Arand$arents are also secondary customers' Arand$arents are often richer than $arents, more in4ol4ed and

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buy lar(e (ifts for their (randchildren' *he $ercenta(e of buyers of rele4ant children/s $roducts that are (rand$arents2;6 U Aames and toys 2?I U InfantsO furniture 2)I U ChildrenOs furniture )?I *here are nearly ?0 million (rand$arents in the '!' at $resent and they s$end an estimated H=0 billion $er year on their (randchildren 25' "lthou(h (rand$arents e,ercise si(nificant $urchasin( $o-er, they are li&ely to as& for $arent consent before they buy our $roductsK ma&in( the $arent our core customer'

5$2

!ar7et Customer Profile

!8e demo7rap8ics of our primary tar7et customer are: U Bouse Bold Income H)50DL V U "t least one child 0-5 years old' U #emale V U Colle(e educatedV 7or hi(her: U 0i4e in the 5ortheastV V*hese demo(ra$hics ha4e the hi(hest inde,es for infant, toddler and $reschool $urchases'2? "dditionally t8ese consumers are: U 5ot $rice sensiti4e' U More influenced by the $roduct benefits' U *he FconcernedG $arent, those -ho (enuinely -ant the best for their child' U EisionariesK they see the benefits and are (oin( to set the trend for others in this se(ment to follo*hese $arents are in $arentin( (rou$s such as Mothers #orums and Play Arou$s, and enroll children in early de4elo$mental classes 7e'(', Creati4e Mo4ements:' *hey subscribe to $arentin( ma(a.ines, read $arentin( boo&s or consult -ith Child De4elo$mentNParentin( +,$erts' "s a result, they are influenced by F"uthoritiesG either throu(h readin( they ha4e done themsel4es or by first hand interaction -ith teachers and care-(i4ers' @ther customers se(ments in this mar&et are the Fcom$etiti4eG and Fcom$ensatin(G $arents' *hey ha4e the same demo(ra$hic $rofile but ha4e different interests' *hey are the follo-ers' *he FconcernedG educated $arent sets the bar and these others follo-'

Source: Simmons data cited by Interep Source: Simmons data cited by Interep 26 Source: Simmons Market Research Bureau, Fall 2002 Study of Media and Markets; acka!ed Facts
2; 25

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"s -e mo4e do-n mar&et to the mid-mar&et, the $rimary customer demo(ra$hics and beha4iors are the same e,ce$t for the follo-in(' U Bouse Bold Income dro$s to H)00DL U *hey are influenced by the $remium mar&et U Due to increased $rice sensiti4ity they are more $ra(matic in their $urchasin( decisions' U *hey are more li&ely to do their o-n research 7more sho$$in( around, tal&in( to their friends:' Word-of-mouth is 4ery influential in this mar&et'

5$+

Pricin7 Strate7y

0arket =ntry 8 +igh2end pricing strategy will e market2demand pricing

Mar&et +ntry Bi(h-end $ricin( strate(y -ill be mar&et-demand $ricin( to ma,imi.e $er sale $rofit' We antici$ate the follo-in( $rice ran(es $er $roduct6 *able " W H?50 *able B W H)200 !tora(e nit W H;50 *oy Dit W H50 7a4era(e: Pro4idin( contribution mar(ins bet-een 50-?0I

+,$ansion to the mid mar&et -ill reMuire a different $ricin( strate(y' 0o-er table $rices 7around H=50: for better mar&et $enetration -ill increase the userNinstalled base and $ro4ide a lar(er mar&etin( base for the toy &its and accessories'

5$.

%istribution Strate7y

Pkolinos distri ution goal is to have over '4# of sales revenue come from channels direct to the customer

P/&olino/s distribution (oal is to ha4e o4er 95I 28 of sales come from direct to the customer channels -ithin fi4e years' We e,$ect that -e -ill ha4e to start -ith a distribution mi, of a$$ro,imately ?5I of our sales throu(h retail' 3etail channels -ill enable customer e,$osure to, and interaction -ith, the $roducts' "s the understandin( of our $roducts (ro-s and the brand de4elo$s -e -ill shift the distribution mi, to direct channels' 'etail Stores: 3etailers -ill be chosen based on their clientele' We -ill tar(et non-traditional retailers that (i4e P/&olino a Fsho-roomG for its desi(ns' #or e,am$le, -e -ill tar(et *he Museum of Modern "rts 7MoM":

28

@ther furniture merchants ha4e $ro4en success in direct channels' 0and of 5od estimated at nearly )00I sales are directK throu(h catalo( and -eb' Pottery Barn Dids direct sales W 82I of its H=<2 million in re4enue' "s stated in the ))N)9N0; Wall !treet 1ournal FWilliam !onoma/s, inc *hird Xuarter 200; results'G #or more information $lease contact us at info%$&olino'com -Pa(e =? -

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store -hich features uniMuely desi(ned and educationally beneficial $roducts as one of our first outlets' *his strate(y -ill hel$ us reach the ri(ht customer and (enerate some e,$osure for our $roducts' *o encoura(e customer interaction -ith us -e -ill offer a free *oy Dit to those -ho ha4e $urchased a table or stora(e unit throu(h a retail channel' *he customer -ill redeem the free &it throu(h a direct channel 7-eb or mail: so that -e may ca$ture rele4ant customer data' *his customer data is critical to our direct mar&etin( to su$$ort our mi(ration of customers to the direct sales channels as -ell as to encoura(e future $urchases' %irect to t8e Customer6 *he (oal is to ha4e 95I of our re4enue come throu(h direct channels 7-eb, mail and $hone:' Based on the $ro4en success of other furniture merchants in direct channels 70and of 5od estimated at nearly )00I sales from direct channels li&e catalo(s and the -eb29, and Pottery Barn Dids direct sales eMual 82I of its H=<2MM in re4enue2<: -e belie4e this is achie4able' *he $rimary direct channel -ill be throu(h the internet as 80I of our tar(et customers ha4e hi(h-s$eed internet access' We -ill also offer mail and $hone orders' We -ill build a -ebsite that $ro4ides consumers -ith an easy $roduct re4ie-, selection and $urchasin( e,$erience' Proliferation of hi(h-s$eed internet access enables us to sho- the many benefits of our $roducts throu(h the latest multi-media tools 7streamin( 4ideo demonstrations of our $roducts in the form of infomercials throu(h the -eb:'

5$5

Communication Strate7y A (ear 1

O5er5ie6: In the first year our communications strate(y -ill focus on tar(eted mar&etin( that can be directly attributed to sales' We -ill try many different tactics to determine -hat (enerates the best dollar s$ent to sales ratio' "dditionally, -e -ill build the brand throu(h lo- cost, (uerilla mar&etin( efforts such as $ubic relations and (rassroots mar&etin('

29 2<

@ur estimate based on 0and of 5ods business model of direct sales and no retail store to date' "s stated in the ))N)9N0; W!1/s FWilliam !onoma/s, inc *hird Xuarter 200; results'

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+,hibit 5-" Mar&etin( Communications !trate(y

+stimated +stimated +stimated +stimated *otal Mar&etin( Cost *able !ales !tora(e *oy Dit nits CostN!ale !ales !ales !old Public 3elations H5,000 =0 )0 58 <? H52 Arass3oots H5,000 90 2? )5) 258 H)< Word-of-Mouth H5,000 50 )8 <; )?) H=) @nline H25,000 90 2? )5) 258 H<8 "d4ertisin( H)5,000 50 )8 <; )?) H<= Direct Mar&etin( H20,000 80 2= )=2 225 H9< 3etail Mar&etin( +,$' H?,000 ==0 )0< ?22 )0?) H? *otal H 9),000 ?<0 229 )=00 22)9 H=8 Mar&etin( Initiati4e

Public 'elations Public 3elations 7P3: -ill be at the center of our communications $lan' *he first $hase of this $lan is to utili.e the P3 $otential of coo$eration -ith Babson, the Y) entre$reneurshi$ $ro(ram in the country, and 3I!D, the Y) school of desi(n' We ha4e brou(ht to(ether these school/s P3 de$artments and ha4e a(reements to $romote the story at no cost to us' *o that end, -e are de4elo$in( a 4ideo documentary of the $roduct desi(n $rocess to be used as a P3 asset for the schools and P/&olino' #rom this P3 e,$osure -e intend to interest tar(et mar&et $ublications 7e'(' Parentin( Ma(a.ine: in P/&olino/s story' *he P3 effort -ill be a com$any $riority' Mana(ement -ill ma&e constant and $ersistent efforts to (et ne- and com$ellin( stories to the media' We -ill become a source of information for &ey media authorities and e4entually see& $roduct $lacement o$$ortunities' Mana(ement -ill also see& acti4e relationshi$s -ith &ey media $ersonalities to su$$ort our brand and $roducts' 0rassroots Mar9etin7 Arassroots Mar&etin( -ill be ho- -e (et the customers interactin( -ith the $roduct and start the -ord-of-mouth en(ine runnin(' We -ill start this
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(rassroots effort in Boston tar(etin( Mother/s #orums, Play Arou$s and Day Care Centers 7e'(', Bri(ht Bori.ons:' We -ill e,$and this effort strate(ically throu(h ma>or cities in the 5ortheast' *hese customers -ill be dri4en to the direct channels for $urchase' *ord-of-Mout8 "s noted, -ord-of-mouth is a $o-erful tool is this mar&et' We -ill encoura(e -ord-of-mouth by identifyin( &ey influencers in tar(et mar&ets and see&in( to ma&e them ad4ocates of P/&olino $roducts' "dditionally, -e -ill see& a child de4elo$ment e,$ert endorsement to add additional credibility' Word-of-mouth 74iral mar&etin(: tools such as referral benefits and e-mail for-ardin( -ill also be used' #mail and *eb *he Web 7---'$&olino'com: -ill be a $o-erful online catalo( and direct $urchase channel' "t $&olino'com -e -ill ha4e $roduct $ictures, descri$tions and 4ideo demonstrations to (i4e customers as near to a $hysical -orld sho$$in( e,$erience as $ossible' *he -eb -ill also be a means for us to (enerate a-areness throu(h tar(eted e-mail, &ey-ord search, banner ad4ertisin( and enhanced -eb ad4ertisin( tools 7such as rich media and dynamic banners:' 'etail Sales Mar9etin7 Materials Collateral materials such as brochures and $oint of $urchase dis$lays -ill be necessary to su$$ort our sales throu(h retailers' Initially -e -ill ha4e a brochure from the 3I!D $roduct de4elo$ment $rocess that -e can use for early discussions' We -ill also de4elo$ a hi(h Muality flyer for the t-o tables and the stora(e system 7!tora(e unit and Dit:' Bi(h-Muality brochures and catalo(s -ill be de4elo$ed for use by retailers and distributed throu(h mail and (rassroots mar&etin( cam$ai(ns' "d5ertisin7 @ur ad4ertisin( (oal -ill be to increase a-areness of P/&olino in the hi(hend mar&et' @ur ad4ertisin( efforts -ill focus on media that reach a hi(h concentration of our tar(et customer' *he ad4ertisin( -ill be $rimarily in $rint media because of its ability to sho- our $roduct for a relati4ely locost' *hese ads -ill dri4e customers bac& to $&olino'com for more information or $urchase' %irect Mail In the first year of o$eration and in $re$aration for the 2005 Christmas season -e -ill run a direct mail test' *his mailin( -ill tar(et hi(h-end customers in the 5ortheast to &ee$ resources and e,$enses to a minimum' " successful test -ould result in about )LI $urchase rate of from mailed brochures' !hould this test $ro4e successful -e -ill loo& to roll-out a lar(er direct cam$ai(n $rior to the Christmas season'

7ord2of2mouth is a powerful medium in this market.

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5$2

Sales Strate7y

*he founders -ill ser4e as the sales force ma&in( direct calls to strate(ically identified retailers' It -ill be our strate(y to focus on a select number of local retailers so the founders can mana(e these relationshi$ and still focus on other $riorities' When -e e,$and into the mid-mar&et 7in year =: -e -ill hire a dedicated sales mana(er'

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5$3

Sales and Mar9etin7 :orecast

We e,$ect that sales -ill start slo-ly as our (rassroots efforts and -ord-ofmouth cam$ai(n (ain momentum' In the first year -e e,$ect to (enerate re4enues of H?00D based on table unit sales of ?<0 units' Most of these sales -ill be achie4ed throu(h (rassroots mar&etin( efforts, -eb direct sales and t-o or three retailers in the 5ortheast' @n a4era(e the com$any -ill s$end H220 mar&etin( dollars $er each ne- customer, and each customer is e,$ected to (enerate an a4era(e of H998 in re4enues durin( the first year' @ur e,$ectation is that this number -ill dro$ to H;5) in a4era(e re4enue $er customer $er year as time $asses'
+,hibit 5-B Mar&etin( Dollars $er Customer
Customer Base e6 Customers Customer Base Customer Base Aro-th "4era(e !ales $NCustomer Mar&etin( H $N 5e- Customer Mar&etin( H $NCustomer (ear 1 2-0 ?<0 H998 H)8? H)8? (ear 2 1B..5 2,)=5 ;0<I H9=? H2;? H)?? (ear + 2B551 ;,?9? =)<I H?2; H2)< H))< (ear . +B2+. 9,22) 285I H508 H2=8 H)05 (ear 5 .B355 )2,95? 25?I H;5) H2;9 H<2

5$4

Communications Strate7y (ears 2-5

In Cear 2 P/&olino/s communications strate(y -ill be similar to Cear ) but -ith a (reater focus on mar&etin( tactics that -ill (i4e us a broader reach to e,$and our customer base' It -ill also differ in that it -ill introduce tactics to reach e,istin( customers for re$eat $urchases' We -ill6 Continue our Public 3elations efforts but tar(et more national $ublications' Continue our (rassroots e4ents and -ord-of-mouth efforts but e,$and their scale' 0oo& more to direct mar&etin(, ad4ertisin( and the -eb to increase brand a-areness and dri4e sales' Be(in relationshi$ mar&etin( and efforts to (ain re$eat sales from e,istin( customers' Cear 2 -ill ser4e as $re$aration and learnin( for e,$ansion into the midmar&et -here some of the (uerilla tactics may still a$$ly but our mar&etin( efforts -ill ha4e to (ro- to a ne- scale' In Cears =-5 -e -ill continue to shift our mar&etin( mi, to media that enable us to reach more customers' Bo-e4er, it -ill be critical to do so in an increasin(ly tar(eted manner' Direct mar&etin( 7mail and -eb: -ill be our $rimary medium because of its ability to tar(et $recise customer se(ments, (ather mar&etin( and $urchase beha4ior data and enable us to maintain

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one-to-one communications for an e,tended customer relationshi$' With this data -e can become increasin(ly efficient at acMuirin( and retainin( customers and thus reducin( our mar&etin( e,$ense $er sale' It -ill also be im$ortant for us to maintain some ad4ertisin( $resence to &ee$ brand a-areness hi(h in the (eneral mar&et' *his a-areness is necessary to hel$ the tar(eted mar&etin( brea& throu(h the clutter'

!8e !eam
"ntonio !urco-'i5as: co-founder and !ales 2 @$erations Mana(er is a Babson MB" 2005 and father of one' Be has successfully launched t-o technolo(y 4entures in 0atin "merica' "ntonio/s bac&(round also includes t-o years as a Cor$orate #inance consultant for Eene.uela/s most im$ortant In4estment Ban& and t-o years as a s$ecial assets Mana(er at the fifth lar(est 0atin "merican Ban& in the '!' "ntonio is a $ro4en entre$reneur, mana(er and sales $rofessional' K$B$ <Kosep8 B$> Sc8neider: co-founder and Mar&etin( 2 Product De4elo$ment Mana(er is a Babson MB" 2005 and father of three, -ith o4er )0 years of mar&etin( strate(y and communications e,$erience' 1'B' has been a $ro>ect mana(er and led &ey customer acMuisition and retention $ro(rams for se4eral #ortune 500 com$anies' Be has also been an inte(ral $art of entre$reneurial 4entures and their $roducts and mar&etin( de4elo$ment' '8ode Island Sc8ool of %esi7n <'IS%>: 3I!D/s #urniture De$artment is ran&ed Y) by the ! 5e-s 2 World 3e$ort as the best (raduate industrial desi(n $ro(ram in the -orld, and is reco(ni.ed for the creati4ity and Muality of its students' Currently )5 desi(ners and one #aculty member are acti4ely desi(nin( the first 4ersions of the P/&olino $roducts' "d5isors6 Indi4iduals for these roles are currently bein( e4aluated and -ill be filled at a later date' Child De4elo$ment +,$ert Manufacturin( +,$ert 1u4enile Product Mar&et +,$ert

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Operations
3$1 Operations Strate7y

P/&olino/s core functions 7desi(n and mar&etin( strate(y: -ill be the main o$erational acti4ities $erformed in-house' "ll other o$erational acti4ities li&e manufacturin(, $ac&a(in(, shi$$in( and some officeNadministrati4e and customer ser4ice functions -ill be outsourced'=0 #or manufacturin(, the com$any has identified se4eral manufacturers in the Bento Aoncal4es re(ion in Bra.il that are currently o$eratin( -ith underutili.ed 7e,cess: ca$acity and ha4e the technolo(y and e,$ertise to manufacture our $roducts' We ha4e $artnered -ith one of these com$anies to manufacture our first line of $roducts' "#+C@M, our first manufacturin( $artner, $roduces o4er );0,000 furniture $ieces $er year and is -ell &no-n in +uro$e and 0atin "merica' 0ate in the 2 nd year of o$erations, P/&olino -ill ree,amine this strate(y 7-hen 4olumes increase: and e4aluate alternati4e manufacturin( o$tions in "sia' P/&olino $roducts are built -ith -ood, hi(hdensity foam and fabrics' "#+C@M/s hi(h density foam manufacturin( technolo(y, finishin( Muality, s$eed, 4olume reMuirements and lo(istic costs are better and more accommodatin( to P/&olino durin( this first sta(e' *he economics of the manufacturin( $rocess -ill be determined by our ability to ne(otiate -ith $otential manufacturers' #or the $ur$ose of this document -e -ill use industry a4era(es =)' #or minimum orders of )50 units, the $ayment terms are 50I u$ front and 50I on shi$ment' #or the first year of o$erations -e $lan to com$lete t-o )50 table orders' Production time is ; -ee&s for $rototy$es and )0 -ee&s to manufacture and order shi$ment of the a$$ro4ed $rototy$es'=2
+,hibit 8-" @$erations Cycle
Mf7$ recei5es desi7ns Mf7$ de5elops prototype Production be7ins

Product ready for s8ipment

PL 9olino re5ie6s prototype )erst- 50I $ayment 7to Mf(': 2nd- 50I $ayment 7to Mf(':

!ime 0

*ee9 +

*ee9 .

*ee9 5

*ee9 14

=0 =)

@utsourcin( cost for manufacturin(, $ac&a(in(, shi$$in( are included in the Cost of (oods sold, based on industry a4era(e 7"#M": !ources6 "#M" "merican #urniture Manufacturin( "ssociation =2 @$erations Cycle is a ); -ee& $rocess for e,istin( $roducts, and an )9 -ee& $rocess for ne- $roducts #or more information $lease contact us at info%$&olino'com -Pa(e ;= -

Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

3e(ardin( the $roduct de4elo$ment $rocess for P/&olino, it ta&es < to )2 months to de4elo$ a ne- $roduct 7from conce$t to customer ==:'
+,hibit 8-B P/&olino Product De4elo$ment Process
1earn @$$ortunity "ssessment L Plannin(

1oo9

Conce$t De4elo$ment

!ry

0e4el Desi(n

Detail Desi(n

*estin( and 3efinement

@$erations Cycle

Mission "$$ro4al

"s9

Conce$t L Prototy$e 3e4ie-

!$ec' 3e4ie-

Critical Desi(n 3e4ie-

Production "$$ro4al

%e5elopment process and or7aniCation Concept de5elopment Industrial desi7n %esi7n for manufacturin7 Prototypin7 Patents and intellectual property ProMect de5elopment #conomics Mana7in7 t8e proMect !ime-line @ Milestone c8ec9 2 months Sta7e I = months Sta7e II ) month Sta7e III 2 -ee&s Sta7e I) 2 -ee&s Sta7e ) 5 months Sta7e )I

==

Based on the current P/&olino $roduct de4elo$ment $rocess' #or more information $lease contact us at info%$&olino'com -Pa(e ;; -

Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

In de4elo$in( the first $roduct line, the com$any le4era(ed its relationshi$ -ith 3I!D' #or the second (eneration of $roducts P/&olino -ill ha4e to assemble a $roduct de4elo$ment team com$rised of both full-time em$loyees and collaborators' Mar&etin( and sales -ill also reMuire additional $ersonal, as -ill in-house administrati4e and customer ser4ice res$onsibilities' @ur staffin( $lan follo-s6 =;
+,hibit 8-C P/&olino !taffin( Plan
Staffin7 Plan C+@ (ear 1 (ear 2 ) H80,000 ) H80,000 ) H?<,?90 ) H5;,090 0 H?2,;00 0 H8?,<?0 ) H80,000 0 H5?,)?0 0 H?2,;00 0 H;?,900 ) H==,290 0 H=?,;00 ) H=),200 3 ;+-4B2.0 H5<,8=? ;.53B-32 (ear + ) H)20,000 ) H)20,000 ) H82,;?8 ) H5?,2;= ) H?;,9<? ) H90,0=9 ) H82,900 ) H59,;0? ) H?;,9<? ) H;9,?82 ) H=;,?)) ) H=8,95? ) H=2,;;9 (ear . ) H)50,000 ) H)=0,000 ) H85,=?? ) H59,;<= ) H?8,;<2 ) H9=,2;0 ) H85,8)2 2 H?0,8;= ) H?8,;<2 ) H50,?)< ) H=5,<<? ) H=<,=80 ) H==,8;? (ear 5 ) H220,000 ) H)=0,000 ) H89,=9) ) H?0,9== ) H80,)<2 ) H9?,580 ) H89,8;0 2 H?=,)82 ) H80,)<2 ) H52,?;; ) H=8,;=5 ) H;0,<;5 ) H=5,0<? ) H;0,000 C@@ ) H;0,000 Product De4elo$ment Mana(er 0 H?8,000 Product De4elo$ment !taff 0 H52,000 @$erations and 0o(istics Mana(er 0 H?0,000 Mar&etin( Mana(er 0 H8;,000 !ales Mana(er ) H=5,000 !ales and Mar&etin( !taff 0 H5;,000 Direct Channel !u$$ort 0 H?0,000 Customer !er4ice !taff 0 H;5,000 @ffice "dministration 0 H=2,000 "ccountin( 0 H=5,000 "d4isors ) H20,000 !otal ,eadcount !otal Salaries Benefits !otal Compensation . ;1+5B000 H20,250 ;155B250

1+ 1. 1. ;42+B++. ;-4-B010 ;1B043B+31 H)2<,500 H);9,=52 H)?=,)0? ;--2B4+5 ;1B1+3B+22 ;1B250B.32

=;

!alaries are based on Boston a4era(e salaries for the res$ecti4e $ositions accordin( to the Career 1ournal 7Wall !treet 1ournal online edition: salary search 7!alarye,$ert'com: #or more information $lease contact us at info%$&olino'com -Pa(e ;5 -

Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

Benefits are estimated as a $ercenta(e of salaries 7)5I:' +4entual hires are considered in the financial statements for the $roduct de4elo$ment, sales, and mar&etin( efforts'

#or more information $lease contact us at info%$&olino'com -Pa(e ;? -

Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

3$2
+,hibit 8-D P/&olino *imeline
Month/ Activity Hire child development expert as Advisor Secure Funding Launch RISD/BABSON R campaing roduction !"# ta$les % strogare % &its 'e$site development Develop Institutional sales (hannel Hire )ar&eting / *ech intern O++ice relocation Launch ,rassroot mar&eting camping *eam +ocuses on sales roduction !-# ta$les % storage % &its ./nd0 (ollection e++orts roduction 1 2## ta$les % storage % &its Hire roduct Development )anager Hire )ar&eting )anager 'e$site Improvements )ar&eting campaing roduction 1 "## ta$les % storage % &its *eam +ocuses on sales (ollection e++orts M1 M2 M3 M4

%e5elopment !imeline

M5

M6

M7

M8

M9

M10 M11 M12 M13 M14 M15 M16 M17 M18 M19 M20 M21 M22 M23

#or more information $lease contact us at info%$&olino'com -Pa(e ;8 -

Confidential Information Business Plan - Dated May-2005 Woburn, Massachusetts !"

Critical 'is9s

Bi(hly com$etiti4e mar&et "ll se(ments of this mar&et are hi(hly com$etiti4e, and this is $articularly true in the mid and mass se(ments' P/&olino -ill com$ete -ith a distincti4e $roduct and a different 4alue $ro$osition as a niche $layer' We -ill establish our brand in the hi(h-end se(ment and then mo4in( do-n to more com$etiti4e mar&ets' Bo-e4er, the $otential remains that com$etitor -ill identify our niche, before our brand has a foothold' We -ill rely on inno4ation and s$eed to com$ete if com$etitors attac& our niche' Co$ycats Intellectual $ro$erty $rotection can be circum4ented to $roduce com$etin( and $ossibly chea$er 4ersion of our $roducts' P/&olino -ill base its desi(ns not only on beauty, but on im$ro4ed usability to the end user 7the child:' Desi(nin( $roducts that are better suited for children to $lay -ith, -hile creatin( identifiable differences and definin( brand attributes that are more difficult to re$licate' 0a-suits "lthou(h -e -ill ta&e $recautions to ma&e our $roduct safe for children it is $ossible that a child may in>ure themsel4es -hile usin( one of our $roducts' We -ill carry $roduct liability insurance to $rotect us financially from such an e4ent but the $otential brand dama(e must be reco(ni.ed' Product defects andNor recall P/&olino -ill ta&e $recautions to de4elo$ durable, reliable and safe $roducts usin( materials that ha4e $ro4en to stand the test of time' Bo-e4er, it is $ossible (i4en the e,$ected useful life of these $roducts and the use of children that these $roducts could brea& creatin( ha.ards for children' !hould this occur and de$endin( on the situation P/&olino may be obli(ated or feel it necessary to issue a recall of the defecti4e $roduct' !ome manufacturers carry insurance in case the defect is caused by some error durin( the manufacturin( $rocess' We -ill further e,$lore this $ossibility' !ales lo-er than e,$ected In case this ha$$ens P/&olino -ill ha4e the ca$ability of ad>ustin( $roduction 4olume and shiftin( strate(y fairly Muic&ly because of our si.e and structure' We -ill also retain sufficient cash to su$$ort an increase in the number of in4entory days'

#or more information $lease contact us at info%$&olino'com -Pa(e ;9 -