Professional Documents
Culture Documents
MBA - Consumer Behavior
MBA - Consumer Behavior
%QPUWOGT $GJCXKQWT
$XWKRU
3URI8WWDP.XPDU6LQJK
6HI)LQDQFHG8QLYHUVLW\XQGHU6HFIRI8*&$FWDQG$FFUHGLWHGE\1$$&
$GYLVRU\&RPPLWWHH
3URI5DP5DWWDQ3UR3UHVLGHQW-(&5&8QLYHUVLW\
3URI:LGKL'XEH\'LUHFWRU''(
3URI$YLUHQL6ULQLYDVXOX'LUHFWRU$FDGHPLFV''(
3URI5DMHHY-DLQ'HDQ)DFXOW\RI0DQDJHPHQW
3URI'HHSDN'HPEOD+R')DFXOW\RI,7 &$
¤ #NNTKIJVUTGUGTXGF0QRCTVQHVJKUDQQMOC[DGTGRTQFWEGFUVQTGFKPCTGVTKGXCNU[UVGOQT
EQRKGF KP CP[ HQTO QT D[ CP[ OGCPU GNGEVTQPKE OGEJCPKECN RJQVQITCRJKE QT QVJGTYKUG
YKVJQWV VJG RTKQT YTKVVGP RGTOKUUKQP QH VJG CWVJQT CPF VJG RWDNKUJGT
6/05HYLHZ&RPPLWWHH
3XEOLVKHG 3ULQWHG%\
36TXDUH6ROXWLRQV+,QGXVWULDO$UHD6LWH%1HDU+3&/'HSRW%DUDUL0DWKXUD
0DWKXUD83(PDLOTXHU\#SUDJ\DRQOLQHFRP
)RU-(&5(8QLYHUVLW\'LUHFWRUDWHRI'LVWDQFH(GXFDWLRQ
'LVFODLPHU ± 3XEOLVKHU RI WKLV SULQWLQJ PDWHULDO LV QRW UHVSRQVLEOH IRU DQ\ HUURUV RU GLVSXWHV IURP FRQWHQWV RI WKLV FRXUVH
PDWHULDO WKLV PDWHULDO FRPSOHWHO\ GHSHQGV RQ $87+25¶6 0$186&5,37
6\OODEXV
8QLW,
&RQVXPHU%HKDYLRU,WV2ULJLQVDQG6WUDWHJLF$SSOLFDWLRQV,QWURGXFWLRQ'HYHORSPHQWRIWKH0DUNHWLQJFRQFHSW
DQGWKH'LVFLSOLQHRIFRQVXPHU%HKDYLRU7KH0DUNHWLQJ&RQFHSW7KH0DUNHWLQJ0L[&XVWRPHUYDOXH6DWLVIDFWLRQ
DQG 5HWHQWLRQ 7KH LPSDFW RI GLJLWDO WHFKQRORJLHV RQ PDUNHWLQJ VWUDWHJLHV 0DUNHWLQJ (WKLFV DQG 6RFLDO
5HVSRQVLELOLW\&RQVXPHU%HKDYLRUDQG'HFLVLRQ0DNLQJ$UH,QWHUGLVFLSOLQDU\$6LPSOLILHG0RGHORI&RQVXPHU
'HFLVLRQ0DNLQJ&RQVXPHU5HVHDUFK3DUDJLJPV7KH&RQVXPHU5HVHDUFK3URFHVV(WKLFVLQ&RQVXPHU5HVHDUFK
8QLW,,
*URXS,QWURGXFWLRQ:KDWLVD*URXS"8QGHUVWDQGLQJWKH3RZHURI5HIHUHQFH*URXSV6HOHFWHG&RQVXPHU
UHODWHG5HIHUHQFH*URXSV9LUWXDO*URXSVRU&RPPXQLWLHV&HOHEULW\DQGRWKHU5HIHUHQFH*URXS$SSHDOV7KH
IDPLO\LVD&RQFHSWLQ)OX[6RFLDOL]DWLRQRI)DPLO\0HPEHUV2WKHU)XQFWLRQVRIWKH)DPLO\)DPLO\'HFLVLRQ
0DNLQJDQG&RQVXPSWLRQ5HODWHG5ROHV7KH)DPLO\/LIH&\FOH&DVH
8QLW,,,
6RFLDO&ODVV,QWURGXFWLRQ:KDWLV6RFLDO&ODVV"7KH0HDVXUHPHQWRI6RFLDO&ODVV/LIHVW\OH3URILOHVRI7KH
6RFLDO&ODVVHV6RFLDO&ODVV0RELOLW\*HRGHPRJUDSKLF&OXVWHULQJ7KH$IIOXHQW&RQVXPHU0LGGOHFODVV&RQVXPHUV
7KH :RUNLQJ&ODVV$QG 2WKHU 1RQDIIOXHQW &RQVXPHUV 5HFRJQL]LQJ7KH ³7HFKQRFODVV´ 6HOHFWHG &RQVXPHU
%HKDYLRU$SSOLFDWLRQVRI6RFLDO&ODVV:KDW,V&XOWXUH"7KH,QYLVLEOH+DQGRI&XOWXUH&XOWXUH6DWLVILHV1HHGV
&XOWXUHLV/HDUQHG&XOWXUHLV'\QDPLF7KH0HDVXUHPHQWRI&XOWXUH$PHULFDQ&RUH9DOXHV7RZDUG$6KRSSLQJ
&XOWXUH
8QLW,9
6XEFXOWXUH,QWURGXFWLRQ:KDW,V6XEFXOWXUH"1DWLRQDOLW\6XEFXOWXUHV5HOLJLRXV6XEFXOWXUHV*HRJUDSKLF$QG
5HJLRQDO6XEFXOWXUHV5DFLDO6XEFXOWXUHV$JH6XEFXOWXUHV6H[DVD6XEFXOWXUH6XEFXOWXUDO,QWHUDFWLRQ&URVV
FXOWXUDO3V\FKRJUDSKLF6HJPHQWDWLRQ&DVH
8QLW9
9LVXDO 0HUFKDQGLVLQJ ,QWURGXFWLRQ &RPSRQHQWV RI 9LVXDO 0HUFKDQGLVLQJ ,PSRUWDQFH RI D *RRG 5HWDLO
(QYLURQPHQW6WRUH(QYLURQPHQW0RGHOVRI&RQVXPHUV)RXU9LHZVRI&RQVXPHU'HFLVLRQ0DNLQJ$0RGHORI
&RQVXPHU'HFLVLRQ0DNLQJ2XWSXW&RQVXPHU*LIWLQJ%HKDYLRU%H\RQG7KH'HFLVLRQ&RQVXPLQJDQG3RVVHVVLQJ
&DVH
7$%/(2)&217(176
&RQVXPHU%HKDYLRU,WV2ULJLQVDQG6WUDWHJLF$SSOLFDWLRQV
*URXS
6RFLDO&ODVV
6XEFXOWXUH
9LVXDO0HUFKDQGLVLQJ
&RQVXPHU%HKDYLRU
&RQVXPHU%HKDYLRU ,WV2ULJLQVDQG
6WUDWHJLF$SSOLFDWLRQV
,WV2ULJLQVDQG6WUDWHJLF 127(6
$SSOLFDWLRQV
7KH&KDSWHU&RYHUV
,QWURGXFWLRQ
'HYHORSPHQW RI WKH 0DUNHWLQJ FRQFHSW DQG WKH 'LVFLSOLQH
RIFRQVXPHU%HKDYLRU
7KH0DUNHWLQJ&RQFHSW
7KH0DUNHWLQJ0L[
&XVWRPHUYDOXH6DWLVIDFWLRQDQG5HWHQWLRQ
7KHLPSDFWRIGLJLWDOWHFKQRORJLHVRQPDUNHWLQJVWUDWHJLHV
0DUNHWLQJ(WKLFVDQG6RFLDO5HVSRQVLELOLW\
&RQVXPHU%HKDYLRUDQG'HFLVLRQ0DNLQJ$UH,QWHUGLVFLSOLQDU\
$6LPSOLILHG0RGHORI&RQVXPHU'HFLVLRQ0DNLQJ
&RQVXPHU5HVHDUFK3DUDJLJPV
7KH&RQVXPHU5HVHDUFK3URFHVV
(WKLFVLQ&RQVXPHU5HVHDUFK
/HDUQLQJ2EMHFWLYHV
$IWHUJRLQJWKURXJKWKLVFKDSWHU\RXVKRXOGEHDEOHWR
x 8QGHUVWDQGWKHLPSDFWRIWKHGLJLWDOUHYROXWLRQRQJHQHUDOFRQVXPHU
EHKDYLRU
x 'HILQHFRQVXPHUEHKDYLRU
x ([SODLQWKHWZRPDMRUDSSURDFKHVWRWKHVWXG\RIFRQVXPHUEHKDYLRU
x 'LVFXVVWKHUROHRIHWKLFVLQPDUNHWLQJ
&RQVXPHU%HKDYLRU ,1752'8&7,21
&RQVXPHUEHKDYLRUKDVFKDQJHGGUDPDWLFDOO\LQWKHSDVWGHFDGH
127(6 )RUH[DPSOHWKHXVHRIWKH,QWHUQHWKDVDOORZHGFRQVXPHUVWRRUGHURQOLQHUHFHLYH
LQIRUPDWLRQZLWKRXWOHDYLQJWKHLUKRPHVDQGVHOOSURGXFWVZLWKRXWDGYHUWLVLQJLQWKH
ORFDOQHZVSDSHU
$OORIWKHVHQHZZD\VRIVHOOLQJSURGXFWVDQGVHUYLFHVEHFDPHDYDLODEOHWRFRQVXPHUV
GXULQJWKHSDVWILIWHHQ\HDUVDQGDUHWKHUHVXOWRIGLJLWDOWHFKQRORJLHV7KH\H[LVW
WRGD\EHFDXVHWKH\UHIOHFWDQXQGHUVWDQGLQJRIFRQVXPHUQHHGVDQGFRQVXPHU
EHKDYLRU
&RQVXPHUEHKDYLRULVGHILQHGDVWKHEHKDYLRUWKDWFRQVXPHUVGLVSOD\LQVHDUFKLQJ
IRUSXUFKDVLQJXVLQJHYDOXDWLQJDQGGLVSRVLQJRISURGXFWVDQGVHUYLFHVWKDWWKH\
H[SHFWZLOOVDWLVI\WKHLUQHHGV
&RQVXPHUEHKDYLRUIRFXVHVRQKRZLQGLYLGXDOVPDNHGHFLVLRQVWRVSHQGWKHLUDYDLODEOH
UHVRXUFHVRQFRQVXPSWLRQUHODWHGLWHPV
$VFRQVXPHUVZHSOD\DYLWDOUROHLQWKHKHDOWKRIWKHHFRQRP\²ORFDOQDWLRQDO
DQGLQWHUQDWLRQDO
0DUNHWHUVQHHGWRNQRZHYHU\WKLQJWKH\FDQDERXWFRQVXPHUV
0DUNHWHUVQHHGWRXQGHUVWDQGWKHSHUVRQDODQGJURXSLQIOXHQFHVWKDWDIIHFWFRQVXPHU
GHFLVLRQVDQGKRZWKHVHGHFLVLRQVDUHPDGH
0DUNHWHUVQHHGWRQRWRQO\LGHQWLI\WKHLUWDUJHWDXGLHQFHVEXWWKH\QHHGWRNQRZ
ZKHUHDQGKRZWRUHDFKWKHP
7KHSHUVRQDOFRQVXPHUEX\VJRRGVDQGVHUYLFHVIRUKLVRUKHURZQXVHIRUWKH
XVHRIWKHKRXVHKROGRUDVDJLIWIRUDIULHQG
3URGXFWVDUHERXJKWIRUILQDOXVHE\LQGLYLGXDOVUHIHUUHGWRDVHQGXVHUV
RUXOWLPDWHFRQVXPHUV
D (QGXVHFRQVXPSWLRQLVSHUKDSVWKHPRVWSHUYDVLYHRIDOOW\SHVRIFRQVXPHU
EHKDYLRU
'(9(/230(17 2) 7+( 0$5.(7,1* &21&(37 $1' 7+( &RQVXPHU%HKDYLRU
',6&,3/,1(2)&21680(5%(+$9,25 ,WV2ULJLQVDQG
6WUDWHJLF$SSOLFDWLRQV
7KHILHOGRIFRQVXPHUEHKDYLRULVURRWHGLQWKHPDUNHWLQJFRQFHSWDEXVLQHVV
RULHQWDWLRQWKDWHYROYHGLQWKHVWKURXJKVHYHUDODOWHUQDWLYHDSSURDFKHVWRZDUG 127(6
GRLQJEXVLQHVVUHIHUUHGWRUHVSHFWLYHO\DVWKHSURGXFWLRQFRQFHSWWKHSURGXFW
FRQFHSWDQGWKHVHOOLQJFRQFHSW
7KHSURGXFWLRQFRQFHSWLVFKDUDFWHUL]HGDVWKHFRQFHSWXVHGE\+HQU\)RUGLQWKH
HDUO\V
D )RUGSURGXFHGDFDUIRULQDQHUDZKHQRQO\WKHZHDOWK\FRXOG
DIIRUGDFDU
E 7KHDVVHPEO\OLQHFRQFHSWDOORZHGKLPWRUHGXFHWKHSULFHWR
F %HFDXVHRI)RUG¶VSURGXFWV$PHULFDQVGHYHORSHGWKHQDWLRQ¶VH[WHQVLYH
KLJKZD\V\VWHPDQGHYHQWXDOO\VXEXUEVDQGWKHLUDGMDFHQWVKRSSLQJPDOOV
G 7KHSURGXFWLRQFRQFHSWDVVXPHVWKDWFRQVXPHUVDUHPRVWO\LQWHUHVWHGLQ
SURGXFWDYDLODELOLW\DWORZSULFHV
L ,PSOLFLWPDUNHWLQJREMHFWLYHVDUHFKHDSHIILFLHQWSURGXFWLRQDQG
LQWHQVLYHGLVWULEXWLRQV\VWHPV
LL 7KLVFRQFHSWPDNHVVHQVHZKHQFRQVXPHUVDUHPRUHLQWHUHVWHGLQ
REWDLQLQJWKHSURGXFWWKDQWKH\DUHLQVSHFLILFIHDWXUHV
7KHSURGXFWFRQFHSWDVVXPHVWKDWFRQVXPHUVZLOOEX\WKHSURGXFWWKDWRIIHUVWKHP
WKHKLJKHVWTXDOLW\WKHEHVWSHUIRUPDQFHDQGWKHPRVWIHDWXUHV
D $SURGXFWRULHQWDWLRQOHDGVWKHFRPSDQ\WRVWULYHFRQVWDQWO\WRLPSURYH
WKHTXDOLW\RILWVSURGXFWDQGWRDGGQHZIHDWXUHVWKDWDUHWHFKQLFDOO\
IHDVLEOHZLWKRXWILQGLQJRXWILUVWZKHWKHURUQRWFRQVXPHUVUHDOO\ZDQW
WKHVHIHDWXUHVE7KLVFRQFHSWOHDGVWR³PDUNHWLQJP\RSLD´WKDWLVDIRFXV
RQWKHSURGXFWUDWKHUWKDQRQWKHFRQVXPHUQHHGVLWSUHVXPHVWRVDWLVI\
LLL 5DLOURDGVDUHRIWHQXVHGDVDQH[DPSOHRIPDUNHWLQJP\RSLD
LY $PRUHPRGHUQH[DPSOHRIPDUNHWLQJP\RSLDPLJKWEHWKH3'$
7KHVHOOLQJFRQFHSWLVDQDWXUDOH[WHQVLRQRIWKHSURGXFWLRQDQGSURGXFWFRQFHSWV
,QWKLVFRQFHSWPDUNHWLQJ¶VSULPDU\IRFXVLVVHOOLQJWKHSURGXFWVWKDWLWKDV
XQLODWHUDOO\GHFLGHGWRSURGXFH
H $KDUGVHOODSSURDFKLVRIWHQXVHGWRSHUVXDGHFRQVXPHUVWREX\VRPHWKLQJ
HYHQLIWKH\GRQRWUHDOO\ZDQWLW
I $QHJDWLYHRIWKLVFRQFHSWLVWKDWFRQVXPHUVPD\QRWUHWXUQIRUUHSHDW
VDOHVEHFDXVHWKH\PD\QRWKDYHZDQWHGWKHSURGXFWWREHJLQZLWK
&RQVXPHU%HKDYLRU J 7KLVDSSURDFKLVW\SLFDOO\XVHGE\WKHPDUNHWHUVRIXQVRXJKWJRRGVVXFK
DVOLIHLQVXUDQFH
,QVWHDG RI WU\LQJ WR SHUVXDGH FXVWRPHUV WR EX\ ZKDW WKH ILUPKDG DOUHDG\
SURGXFHGPDUNHWLQJRULHQWHGILUPVIRXQGWKDWLWZDVDORWHDVLHUWRSURGXFH
RQO\SURGXFWVWKH\KDGILUVWFRQILUPHGWKURXJKUHVHDUFKWKDWFRQVXPHUVZDQWHG
D 7KLVFRQVXPHURULHQWHGFRQFHSWFDPHWREHNQRZQDVWKHPDUNHWLQJ
FRQFHSW
E &RQVXPHUQHHGVDQGZDQWVEHFDPHWKHILUP¶VSULPDU\IRFXV7KHNH\
DVVXPSWLRQ
F 7REHVXFFHVVIXODFRPSDQ\PXVWGHWHUPLQHWKHQHHGVDQGZDQWVRI
VSHFLILFWDUJHWPDUNHWVDQGGHOLYHUWKHGHVLUHGVDWLVIDFWLRQVEHWWHUWKDQWKH
FRPSHWLWLRQ
7KHPDUNHWLQJFRQFHSWLVEDVHGRQWKHSUHPLVHWKDWDPDUNHWHUVKRXOGPDNHZKDW
LWFDQVHOOLQVWHDGRIWU\LQJWRVHOOZKDWLWKDVPDGH
D 7KHROGHUVHOOLQJFRQFHSWIRFXVHGRQWKHQHHGVRIWKHVHOOHU
E 7KHPDUNHWLQJFRQFHSWIRFXVHVRQWKHQHHGVRIWKHEX\HU
,PSOHPHQWLQJWKH0DUNHWLQJ&RQFHSW
7KHZLGHVSUHDGDGRSWLRQRIWKHPDUNHWLQJFRQFHSWE\$PHULFDQEXVLQHVVIHG
WKHQHHGWRVWXG\FRQVXPHUEHKDYLRU
7KH\GLVFRYHUHGWKDWFRQVXPHUVZHUHKLJKO\FRPSOH[LQGLYLGXDOVVXEMHFWWRD
YDULHW\RISV\FKRORJLFDODQGVRFLDOQHHGVTXLWHDSDUWIURPWKHLUVXUYLYDOQHHGV
D 7KHQHHGVDQGSULRULWLHVRIGLIIHUHQWFRQVXPHUVHJPHQWVGLIIHUHGGUDPDWLFDOO\
DQGLQRUGHUWRGHVLJQQHZSURGXFWVDQGPDUNHWLQJVWUDWHJLHVWKDWZRXOG
IXOILOOFRQVXPHUQHHGVWKH\KDGWRVWXG\FRQVXPHUVDQGWKHLUFRQVXPSWLRQ
EHKDYLRULQGHSWK
7KHWHUPFRQVXPHUUHVHDUFKUHSUHVHQWVWKHSURFHVVDQGWRROVXVHGWRVWXG\
FRQVXPHUEHKDYLRU
6HJPHQWDWLRQ7DUJHWLQJDQG3RVLWLRQLQJ
7KHIRFXVRIWKHPDUNHWLQJFRQFHSWLVFRQVXPHUQHHGV
7KHPDUNHWHUPXVWDGDSWWKHLPDJHRILWVSURGXFWVRWKDWHDFKPDUNHWVHJPHQW &RQVXPHU%HKDYLRU
SHUFHLYHVWKHSURGXFWDVEHWWHUIXOILOOLQJLWVVSHFLILFQHHGVWKDQFRPSHWLWLYH ,WV2ULJLQVDQG
6WUDWHJLF$SSOLFDWLRQV
SURGXFWV
D 7KHWKUHHHOHPHQWVRIWKLVVWUDWHJLFIUDPHZRUNDUHPDUNHWVHJPHQWDWLRQ 127(6
WDUJHWLQJDQGSRVLWLRQLQJ
0DUNHW6HJPHQWDWLRQLVWKHSURFHVVRIGLYLGLQJDPDUNHWLQWRVXEVHWVRI
FRQVXPHUVZLWKFRPPRQQHHGVRUFKDUDFWHULVWLFV
0DUNHW7DUJHWLQJLVWKHVHOHFWLRQRIRQHRUPRUHRIWKHVHJPHQWVLGHQWLILHG
IRUWKHFRPSDQ\WRSXUVXH
3RVLWLRQLQJUHIHUVWRWKHGHYHORSPHQWRIDGLVWLQFWLPDJHIRUWKHSURGXFWRU
VHUYLFHLQWKHPLQGRIWKHFRQVXPHUDQLPDJHWKDWZLOOGLIIHUHQWLDWHWKHRIIHULQJ
IURPFRPSHWLQJRQHVDQGVTXDUHO\FRPPXQLFDWHWRWKHWDUJHWDXGLHQFHWKDWWKH
SDUWLFXODUSURGXFWRUVHUYLFHZLOOIXOILOOWKHLUQHHGVEHWWHUWKDQFRPSHWLQJEUDQGV
D 6XFFHVVIXOSRVLWLRQLQJFHQWHUVDURXQGWZRNH\SULQFLSOHV
L 7KHILUVWSULQFLSOHVD\VWKDWWKHPDUNHWHUVKRXOGFRPPXQLFDWHWKH
EHQHILWVWKDWWKHSURGXFWZLOOSURYLGHUDWKHUWKDQWKHSURGXFW¶VIHDWXUHV
LL 7KH VHFRQG SULQFLSOH VWDWHV WKDW EHFDXVH WKHUH DUH PDQ\ VLPLODU
SURGXFWVLQDOPRVWDQ\PDUNHWSODFHDQHIIHFWLYHSRVLWLRQLQJVWUDWHJ\
PXVWGHYHORSDQGFRPPXQLFDWHD³XQLTXHVHOOLQJ3URSRVLWLRQ´²D
GLVWLQFWEHQHILWRUSRLQWRIGLIIHUHQFH²IRUWKHSURGXFWRUVHUYLFH
D 7KH3URGXFW²IHDWXUHVGHVLJQVEUDQGVSDFNDJLQJHWF
E 7KH3ULFH²OLVWSULFH LQFOXGLQJGLVFRXQWVDOORZDQFHVDQGSD\PHQW
PHWKRGV
F 7KH3ODFH²GLVWULEXWLRQRIWKHSURGXFWRUVHUYLFH &KHFN<RXU3URJUHVV
:KDWLVFRQVXPHU
G 3URPRWLRQ²DGYHUWLVLQJVDOHVSURPRWLRQSXEOLFUHODWLRQVDQGVDOHVHIIRUWV EHKDYLRU"
GHVLJQHGWREXLOGDZDUHQHVVRIDQGGHPDQGIRUWKHSURGXFWRUVHUYLFH +RZPDQ\W\SHV
RIFRQVXPHUDUH
&86720(59$/8(6$7,6)$&7,21$1'5(7(17,21 WKHUH"
6LQFHWKHVPDQ\FRPSDQLHVKDYHVXFFHVVIXOO\DGRSWHGWKHPDUNHWLQJ
FRQFHSW
&RQVXPHU%HKDYLRU 7KHPDUNHWSODFHLVQRZLQFUHDVLQJO\FRPSHWLWLYH
6DYY\PDUNHWHUVWRGD\UHDOL]HWKDWLQRUGHUWRRXWSHUIRUPFRPSHWLWRUVWKH\PXVW
DFKLHYHIXOOSURILWSRWHQWLDOIURPHDFKDQGHYHU\FRQVXPHU
127(6
D $QH[FKDQJHZLWKDFRQVXPHULVSDUWRIDFXVWRPHUUHODWLRQVKLSQRWMXVW
DWUDQVDFWLRQ
7KUHHGULYHUVRIVXFFHVVIXOUHODWLRQVKLSVEHWZHHQPDUNHWHUVDQGFRQVXPHUVDUH
D &XVWRPHUYDOXH
E +LJKOHYHOVRIFXVWRPHUVDWLVIDFWLRQ
F %XLOGLQJDVWUXFWXUHRIFXVWRPHUUHWHQWLRQ
3URYLGLQJ&XVWRPHU9DOXH
&XVWRPHUYDOXHLVGHILQHGDVWKHUDWLREHWZHHQWKHFXVWRPHU¶VSHUFHLYHG
EHQHILWVHFRQRPLFIXQFWLRQDODQGSV\FKRORJLFDODQGWKHUHVRXUFHVPRQHWDU\
WLPHHIIRUWSV\FKRORJLFDOXVHGWRREWDLQWKRVHEHQHILWV
D 3HUFHLYHGYDOXHLVUHODWLYHDQGVXEMHFWLYH
E 'HYHORSLQJDYDOXHSURSRVLWLRQLVWKHFRUHRIVXFFHVVIXOSRVLWLRQLQJ
&XVWRPHU6DWLVIDFWLRQ
&XVWRPHU6DWLVIDFWLRQLVWKHLQGLYLGXDO¶VSHUFHSWLRQRIWKHSHUIRUPDQFHRIWKH
SURGXFWRUVHUYLFHLQUHODWLRQWRKLVRUKHUH[SHFWDWLRQV
7KHFRQFHSWRIFXVWRPHUVDWLVIDFWLRQLVDIXQFWLRQRIFXVWRPHUH[SHFWDWLRQV
:LWKUHVSHFWWRFXVWRPHUVDWLVIDFWLRQWKHUHPLJKWEHVHYHUDOW\SHVRIFXVWRPHUV
D /R\DOLVWV²FRPSOHWHO\VDWLVILHGFXVWRPHUVZKRNHHSSXUFKDVLQJ
E $SRVWOHV²WKRVHZKRVHH[SHULHQFHVH[FHHGWKHLUH[SHFWDWLRQVDQGZKR
SURYLGHYHU\SRVLWLYHZRUGRIPRXWKDERXWWKHFRPSDQ\WRRWKHUV
F 'HIHFWRUV²WKRVHZKRIHHOQHXWUDORUPHUHO\VDWLVILHGDQGDUHOLNHO\WR
VWRSGRLQJEXVLQHVVZLWKWKHFRPSDQ\
G 7HUURULVWV²WKRVHZKRKDYHKDGQHJDWLYHH[SHULHQFHVZLWKWKHFRPSDQ\
DQGZKRVSUHDGQHJDWLYHZRUGRIPRXWK
H +RVWDJHV²XQKDSS\FXVWRPHUVZKRVWD\ZLWKWKHFRPSDQ\EHFDXVHRI
QRFKRLFHRURWKHUUHDVRQV
I 0HUFHQDULHV²YHU\VDWLVILHGFXVWRPHUVEXWZKRKDYHQRUHDOOR\DOW\WR
WKHFRPSDQ\DQGPD\GHIHFW
&XVWRPHU5HWHQWLRQ &RQVXPHU%HKDYLRU
,WV2ULJLQVDQG
7KHRYHUDOOREMHFWLYHRISURYLGLQJYDOXHWRFXVWRPHUVFRQWLQXRXVO\DQGPRUH 6WUDWHJLF$SSOLFDWLRQV
HIIHFWLYHO\WKDQWKHFRPSHWLWLRQLVWRKDYHDQGWRUHWDLQKLJKO\VDWLVILHGFXVWRPHUV
127(6
7KLVVWUDWHJ\RIFXVWRPHUUHWHQWLRQPDNHVLWLQWKHEHVWLQWHUHVWRIFXVWRPHUVWR
VWD\ZLWKWKHFRPSDQ\UDWKHUWKDQVZLWFKWRDQRWKHUILUP
,QDOPRVWDOOEXVLQHVVVLWXDWLRQVLWLVPRUHH[SHQVLYHWRZLQQHZFXVWRPHUVWKDQ
WRNHHSH[LVWLQJRQHV
6WXGLHVKDYHVKRZQWKDWVPDOOUHGXFWLRQVLQFXVWRPHUGHIHFWLRQVSURGXFHVLJQLILFDQW
LQFUHDVHVLQSURILWVEHFDXVH
D /R\DOFXVWRPHUVEX\PRUHSURGXFWV
E /R\DO FXVWRPHUV DUH OHVV SULFH VHQVLWLYH DQG SD\ OHVV DWWHQWLRQ WR
FRPSHWLWRUV¶DGYHUWLVLQJ
F 6HUYLFLQJH[LVWLQJFXVWRPHUVZKRDUHIDPLOLDUZLWKWKHILUP¶VRIIHULQJV
DQGSURFHVVHVLVFKHDSHU
6RSKLVWLFDWHGPDUNHWHUVEXLOGVHOHFWLYHUHODWLRQVKLSVZLWKFXVWRPHUVEDVHG
RQZKHUHFXVWRPHUVUDQNLQWHUPVRISURILWDELOLW\UDWKHUWKDQPHUHO\VWULYHWR³WR
UHWDLQFXVWRPHUV´
7+(,03$&72)',*,7$/7(&+12/2*,(621
0$5.(7,1*675$7(*,(6
'LJLWDO7HFKQRORJLHVDOORZPXFKJUHDWHUFXVWRPL]DWLRQRISURGXFWVVHUYLFHV
DQGSURPRWLRQDOPHVVDJHVWKDQROGHUPDUNHWLQJWRROV
7KH\HQDEOHPDUNHWHUVWRDGDSWWKHHOHPHQWVRIWKHPDUNHWLQJPL[WRFRQVXPHU¶V
QHHGVPRUHTXLFNO\DQGHIILFLHQWO\DQGWREXLOGDQGPDLQWDLQUHODWLRQVKLSVZLWK
FXVWRPHUVRQDPXFKJUHDWHUVFDOH
2QOLQHFRPPXQLFDWLRQDQGHPHUJLQJGLJLWDOWHFKQRORJLHVKDYHLQWURGXFHGVHYHUDO
GUDVWLFFKDQJHVLQWRWKHEXVLQHVVHQYLURQPHQW
D &RQVXPHUVKDYHPRUHSRZHUWKDQHYHUEHIRUH
&RQVXPHU%HKDYLRU E &RQVXPHUVKDYHDFFHVVWRPRUHLQIRUPDWLRQWKHQHYHUEHIRUH
F 0DUNHWHUVFDQRIIHUPRUHVHUYLFHVDQGSURGXFWVWKDQHYHUEHIRUH
127(6 G 7KHH[FKDQJHEHWZHHQPDUNHWHUVDQGFXVWRPHUVLVLQFUHDVLQJO\LQWHUDFWLYH
DQGLQVWDQWDQHRXV
H 0DUNHWHUVFDQJDWKHUPRUHLQIRUPDWLRQDERXWFRQVXPHUVPRUHTXLFNO\
DQGHDVLO\
I ,PSDFWUHDFKHVEH\RQGWKH3&EDVHGFRQQHFWLRQWRWKH:HE
7KHGLJLWDOUHYROXWLRQLQWKHPDUNHWSODFHDQGLWVLPSDFWRQFRQVXPHUEHKDYLRU
SUHVHQWVPDQ\FKDOOHQJHVIRUWRGD\¶VPDUNHWHUV
6RPHVXJJHVWWKDWEHFDXVHYLUWXDOFRPSHWLWLRQHOLPLQDWHVGLVWDQFHDQGORFDWLRQ
EDVHGEHQHILWVRQOLQHVHOOHUVZLOOFRPSHWHDOPRVWH[FOXVLYHO\RQWKHEDVLVRI
SULFHIRUEUDQGHGPHUFKDQGLVH7KLVVWDWHPHQWOHDGVWRWKHTXHVWLRQ³'RHVWKLV
PHDQWKDWFRPSHWLWLYHGLIIHUHQWLDWLRQZLOOEHFRPHPHDQLQJOHVVLQWKHYLUWXDO
PDUNHWSODFH"´
0$5.(7,1*(7+,&6$1'62&,$/5(63216,%,/,7<
7KHVRFLHWDOPDUNHWLQJFRQFHSWUHTXLUHVWKDWDOOPDUNHWHUVDGKHUHWRSULQFLSOHV
RIVRFLDOUHVSRQVLELOLW\LQWKHPDUNHWLQJRIWKHLUJRRGVDQGVHUYLFHV
$UHVWUXFWXUHGGHILQLWLRQRIWKHPDUNHWLQJFRQFHSWWRUHIOHFWVRFLDOUHVSRQVLELOLW\
ZRXOGEHWRIXOILOOWKHQHHGVRIWKHWDUJHWDXGLHQFHLQZD\VWKDWLPSURYHVRFLHW\
DVDZKROHZKLOHIXOILOOLQJWKHREMHFWLYHVRIWKHRUJDQL]DWLRQ
7KHSULPDU\SXUSRVHIRUVWXG\LQJFRQVXPHUEHKDYLRUDVSDUWRIDPDUNHWLQJ
FXUULFXOXPLVWRXQGHUVWDQGZK\DQGKRZFRQVXPHUVPDNHWKHLUSXUFKDVH
GHFLVLRQV
7KHVHLQVLJKWVHQDEOHPDUNHWHUVWRGHVLJQPRUHHIIHFWLYHPDUNHWLQJVWUDWHJLHV
HVSHFLDOO\WRGD\ZKHQDGYDQFHGWHFKQRORJLHVHQDEOHPDUNHWHUVWRFROOHFWPRUH
GDWDDERXWFRQVXPHUVDQGWDUJHWWKHPPRUHSUHFLVHO\
7RDYRLGH[SORLWLQJFRQVXPHUVPDUNHWHUVVKRXOGGHYHORSDFRGHRIHWKLFV² &RQVXPHU%HKDYLRU
PDQ\KDYHDFFRPSOLVKHGWKLVWDVN ,WV2ULJLQVDQG
6WUDWHJLF$SSOLFDWLRQV
,WLVEHWWHUWRVHOIUHJXODWHWKDQWREHUHJXODWHGE\JRYHUQPHQW
127(6
0DUNHWLQJHWKLFVDQGVRFLDO UHVSRQVLELOLW\DUHLPSRUWDQW FRPSRQHQWVRI
RUJDQL]DWLRQDOHIIHFWLYHQHVV
&RQVXPHU%HKDYLRUDQG'HFLVLRQ0DNLQJ$UH,QWHUGLVFLSOLQDU\
&RQVXPHUEHKDYLRUZDVDUHODWLYHO\QHZILHOGRIVWXG\LQWKHPLGWRODWHV
0DUNHWLQJWKHRULVWVERUURZHGKHDYLO\IURPFRQFHSWVGHYHORSHGLQRWKHUVFLHQWLILF
GLVFLSOLQHV
D 3V\FKRORJ\²WKHVWXG\RIWKHLQGLYLGXDO
E 6RFLRORJ\²WKHVWXG\RIJURXSV
F 6RFLDOSV\FKRORJ\²WKHVWXG\RIKRZDQLQGLYLGXDORSHUDWHVLQJURXSV
G $QWKURSRORJ\²WKHLQIOXHQFHRIVRFLHW\RQWKHLQGLYLGXDO
H (FRQRPLFV²WRIRUPWKHEDVLVRIWKLVQHZPDUNHWLQJGLVFLSOLQH
0DQ\HDUO\WKHRULHVFRQFHUQLQJFRQVXPHUEHKDYLRUZHUHEDVHGRQHFRQRPLF
WKHRU\ WKH LGHD WKDW LQGLYLGXDOV DFW UDWLRQDOO\ WR PD[LPL]H WKHLU EHQHILWV
VDWLVIDFWLRQVLQWKHSXUFKDVHRIJRRGVDQGVHUYLFHV
/DWHU UHVHDUFK GLVFRYHUHG WKDW FRQVXPHUV DUH MXVW DV OLNHO\ WR SXUFKDVH
LPSXOVLYHO\DQGWREHLQIOXHQFHGQRWRQO\E\IDPLO\IULHQGVDGYHUWLVHUVDQGUROH
PRGHOVEXWE\PRRGVLWXDWLRQDQGHPRWLRQ
7KHLQSXWVWDJHLQIOXHQFHVWKHFRQVXPHU¶VUHFRJQLWLRQRIDSURGXFWQHHGDQG
FRQVLVWVRIWZRPDMRUVRXUFHVRILQIRUPDWLRQ
D 7KHILUP¶VPDUNHWLQJHIIRUWVWKHSURGXFWLWVHOILWVSULFHSURPRWLRQDQG
ZKHUHLWLVVROG
E 7KHH[WHUQDOVRFLRORJLFDOLQIOXHQFHVRQWKHFRQVXPHUIDPLO\IULHQGV
QHLJKERUVRWKHULQIRUPDODQGQRQFRPPHUFLDOVRXUFHVVRFLDOFODVVFXOWXUDO
DQGVXEFXOWXUDOPHPEHUVKLSV
7KHSURFHVVVWDJHIRFXVHVRQKRZFRQVXPHUVPDNHGHFLVLRQV
&RQVXPHU%HKDYLRU D 7KHSV\FKRORJLFDOIDFWRUVLQKHUHQWLQHDFKLQGLYLGXDOPRWLYDWLRQSHUFHSWLRQ
OHDUQLQJSHUVRQDOLW\DWWLWXGHDIIHFWKRZWKHH[WHUQDOLQSXWVLQIOXHQFHWKH
FRQVXPHU¶VUHFRJQLWLRQRIDQHHGSUHSXUFKDVHVHDUFKIRULQIRUPDWLRQDQG
HYDOXDWLRQRIDOWHUQDWLYHV
127(6
E 7KHH[SHULHQFHJDLQHGWKURXJKHYDOXDWLRQRIDOWHUQDWLYHVLQWXUQDIIHFWV
WKHFRQVXPHU¶VH[LVWLQJSV\FKRORJLFDODWWULEXWHV
7KHRXWSXWVWDJHRIWKHFRQVXPHUGHFLVLRQPDNLQJPRGHOFRQVLVWVRIWZR
FORVHO\UHODWHGSRVWGHFLVLRQDFWLYLWLHV
D 3XUFKDVHEHKDYLRUZKLFKFDQEHDWULDOSXUFKDVHRUDUHSHDWSXUFKDVH
E 7KH SRVW SXUFKDVH HYDOXDWLRQ RI WKH SURGXFW IHHGV GLUHFWO\ LQWR WKH
FRQVXPHU¶VH[SHULHQFHLQWKHSURFHVVVWDJHRIWKHPRGHO
&21680(55(6($5&+3$5$',*06
7KHHDUO\FRQVXPHUUHVHDUFKHUVJDYHOLWWOHWKRXJKWWRWKHLPSDFWRIPRRG
HPRWLRQRUVLWXDWLRQRQFRQVXPHUGHFLVLRQV7KH\EHOLHYHGWKDWPDUNHWLQJZDV
VLPSO\DSSOLHGHFRQRPLFV
(DUO\RQUHVHDUFKHUVWKRXJKWWKDWFRQVXPHUVZHUHORJLFDOSUREOHPVROYHUVZKR
REMHFWLYHO\HYDOXDWHGWKHJRRGVDQGVHUYLFHVDYDLODEOHWRWKHPDQGVHOHFWHG
WKRVHWKDWJDYHWKHPWKHKLJKHVWXWLOLW\DWWKHORZHVWFRVW6RRQWKH\UHDOL]HGWKDW
FRQVXPHUVZHUHQRWDOZD\VFRQVFLRXVO\DZDUHRIZK\WKH\PDGHWKHGHFLVLRQV
WKH\GLG
,QD9LHQQHVHSV\FKRDQDO\VWQDPHG(UQHVW'LFKWHUEHJDQWRXVH)UHXGLDQ
SV\FKRDQDO\WLFWHFKQLTXHVWRXQFRYHUWKHKLGGHQPRWLYDWLRQVRIFRQVXPHUV
%\WKHODWHVKLVUHVHDUFKPHWKRGRORJ\FDOOHGPRWLYDWLRQDOUHVHDUFK
ZKLFKZDVHVVHQWLDOO\TXDOLWDWLYHLQDSSURDFKZDVZLGHO\DGRSWHGE\FRQVXPHU
UHVHDUFKHUV
$VDUHVXOWRI'LFKWHU¶VZRUNDQGVXEVHTXHQWUHVHDUFKGHVLJQHGWRVHDUFKGHHS
ZLWKLQWKHFRQVXPHU¶VSV\FKHFRQVXPHUUHVHDUFKHUVWRGD\XVHWZRGLIIHUHQW
W\SHVRIUHVHDUFKPHWKRGRORJ\WRVWXG\FRQVXPHUEHKDYLRU²TXDQWLWDWLYH
UHVHDUFKDQGTXDOLWDWLYHUHVHDUFK
4XDQWLWDWLYH5HVHDUFK
4XDQWLWDWLYHUHVHDUFKLVGHVFULSWLYHLQQDWXUHDQGLVXVHGE\UHVHDUFKHUVWR
XQGHUVWDQGWKHHIIHFWVRIYDULRXVSURPRWLRQDOLQSXWVRQWKHFRQVXPHUWKXV
HQDEOLQJPDUNHWHUVWR³SUHGLFW´FRQVXPHUEHKDYLRU
7KLVUHVHDUFKDSSURDFKLVNQRZQDVSRVLWLYLVPDQGFRQVXPHUUHVHDUFKHUV
SULPDULO\FRQFHUQHGZLWKSUHGLFWLQJFRQVXPHUEHKDYLRUDUHNQRZQDVSRVLWLYLVWV
7KHUHVHDUFKPHWKRGVXVHGLQSRVLWLYLVWUHVHDUFKDUHERUURZHGSULPDULO\IURP &RQVXPHU%HKDYLRU
WKH QDWXUDO VFLHQFHV DQG FRQVLVW RI H[SHULPHQWV VXUYH\ WHFKQLTXHV DQG ,WV2ULJLQVDQG
6WUDWHJLF$SSOLFDWLRQV
REVHUYDWLRQ
7KH ILQGLQJV DUH GHVFULSWLYH HPSLULFDO DQG LI FROOHFWHG UDQGRPO\ FDQ EH 127(6
JHQHUDOL]HGWRODUJHUSRSXODWLRQV
4XDOLWDWLYH5HVHDUFK
4XDOLWDWLYHUHVHDUFKPHWKRGVFRQVLVWRIGHSWKLQWHUYLHZVIRFXVJURXSVPHWDSKRU
DQDO\VLVFROODJHUHVHDUFKDQGSURMHFWLYHWHFKQLTXHV
7KHVHWHFKQLTXHVDUHDGPLQLVWHUHGE\DKLJKO\WUDLQHGLQWHUYLHZHUDQDO\VWZKR
DOVRDQDO\]HVWKHILQGLQJV²WKXVWKH\WHQGWREHVRPHZKDWVXEMHFWLYH
%HFDXVHVDPSOHVL]HVDUHQHFHVVDULO\VPDOOILQGLQJVFDQQRWEHJHQHUDOL]HGWR
ODUJHUSRSXODWLRQV
$QXPEHURIDFDGHPLFLDQVYLHZFRQVXPHUEHKDYLRUDVDVXEVHWRIKXPDQ
EHKDYLRU
,QWHUHVW LQ XQGHUVWDQGLQJ FRQVXPHU H[SHULHQFHV KDV OHG WR WKH WHUP
LQWHUSUHWLYLVP WKH UHVHDUFKHUV ZKR DGRSW WKLV SDUDGLJP DUH NQRZQ DV
LQWHUSUHWLYLVWV
D ,QWHUSUHWLYLVWVHQJDJHLQTXDOLWDWLYHUHVHDUFK
E %URDGO\VSHDNLQJWKHILQGLQJVRITXDOLWDWLYHUHVHDUFKFDQQRWEHJHQHUDOL]HG
WRODUJHSRSXODWLRQV7KLVIRUPRIUHVHDUFKKRZHYHULVVWLOOPHDQLQJIXO
&RPELQLQJ4XDOLWDWLYHDQG4XDQWLWDWLYH5HVHDUFK)LQGLQJV
6RPHPDUNHWHUVXVHDFRPELQDWLRQRITXDQWLWDWLYHDQGTXDOLWDWLYHUHVHDUFK
7KH\XVHTXDOLWDWLYHUHVHDUFKILQGLQJVWRGLVFRYHUQHZLGHDVDQGWRGHYHORS
SURPRWLRQDOVWUDWHJ\DQGTXDQWLWDWLYHUHVHDUFKILQGLQJVWRSUHGLFWFRQVXPHU
UHDFWLRQVWRYDULRXVSURPRWLRQDOLQSXWV
6RPHWLPHVLGHDVVWHPPLQJIURPTXDOLWDWLYHUHVHDUFKDUHWHVWHGHPSLULFDOO\
0DUNHWHUVKDYHGLVFRYHUHGWKDWUDWKHUWKDQFRQIOLFWLQJWKHVHWZRUHVHDUFK
SDUDGLJPVDUHUHDOO\FRPSOHPHQWDU\LQQDWXUH
7+(&21680(55(6($5&+352&(66
7KHPDMRUVWHSVLQWKHFRQVXPHUUHVHDUFKSURFHVVDUH
D 'HILQLQJWKHREMHFWLYHVRIWKHUHVHDUFK
E &ROOHFWLQJDQGHYDOXDWLQJVHFRQGDU\GDWD
&RQVXPHU%HKDYLRU F 'HVLJQLQJDSULPDU\UHVHDUFKVWXG\
G &ROOHFWLQJSULPDU\GDWD
127(6 H $QDO\]LQJWKHGDWD
I 3UHSDULQJDUHSRUWRQWKHILQGLQJV
7KHILUVWVWHSLQWKHFRQVXPHUUHVHDUFKSURFHVVLVWRFDUHIXOO\GHILQHWKHREMHFWLYHV
RIWKHVWXG\
,WLVLPSRUWDQWIRUWKHPDUNHWLQJPDQDJHUDQGWKHUHVHDUFKHUWRDJUHHDWWKH
RXWVHWRQWKHSXUSRVHVDQGREMHFWLYHVRIWKHVWXG\WRHQVXUHWKDWWKHUHVHDUFK
GHVLJQLVDSSURSULDWH
$FDUHIXOO\WKRXJKWRXWVWDWHPHQWRIREMHFWLYHVKHOSVWRGHILQHWKHW\SHDQGOHYHORI
LQIRUPDWLRQQHHGHG
,I WKH SXUSRVH RI WKH VWXG\ LV WR FRPH XS ZLWK QHZ LGHDV IRU SURGXFWV RU
SURPRWLRQDOFDPSDLJQVWKHQDTXDOLWDWLYHVWXG\LVXVXDOO\XQGHUWDNHQ
4XDOLWDWLYHVWXGLHVHQWDLOWKHLQWHUYLHZLQJRIVPDOOQXPEHUVRIUHVSRQGHQWVE\
WUDLQHGSURIHVVLRQDOVZKRDOVRGRWKHDQDO\VLV
%HFDXVHRIWKHVPDOOQXPEHURIUHVSRQGHQWVWKHILQGLQJVRIWKHUHVHDUFKDUHQRW
XVXDOO\SURMHFWDEOHWRWKHPDUNHWSODFH
4XDQWLWDWLYHVWXGLHVDUHXVHGWRILQGRXWKRZPDQ\SHRSOHLQWKHSRSXODWLRQ
ZKDWSHUFHQWDJHXVHFHUWDLQSURGXFWVDQGKRZIUHTXHQWO\WKH\XVHWKHP
D $QH[SORUDWRU\VWXG\PD\EHXVHGWRLGHQWLI\WKHFULWLFDOLVVXHVWRLQFOXGH
LQWKHGDWDFROOHFWLRQLQVWUXPHQWHJTXHVWLRQQDLUH
&ROOHFWLQJ6HFRQGDU\'DWD
$VHDUFKIRUVHFRQGDU\GDWDJHQHUDOO\IROORZVWKHVWDWHPHQWRIREMHFWLYHV
6HFRQGDU\LQIRUPDWLRQLVDQ\GDWDRULJLQDOO\JHQHUDWHGIRUVRPHSXUSRVHRWKHU
WKDQWKHSUHVHQWUHVHDUFKREMHFWLYHV
2ULJLQDOGDWDSHUIRUPHGE\LQGLYLGXDOUHVHDUFKHUVRURUJDQL]DWLRQVWRPHHWVSHFLILF
REMHFWLYHVLVFDOOHGSULPDU\GDWD
6HFRQGDU\GDWDLQFOXGHVERWKLQWHUQDODQGH[WHUQDOGDWD
D ,QWHUQDOVHFRQGDU\GDWDFRQVLVWVRIVXFKLQIRUPDWLRQDVGDWDJHQHUDWHGLQ
KRXVHIRUHDUOLHUVWXGLHVDVZHOODVDQDO\VLVRIFXVWRPHUILOHV
E ,QFUHDVLQJO\FRPSDQLHVXVHLQWHUQDOVHFRQGDU\GDWDWRFRPSXWHFXVWRPHU &RQVXPHU%HKDYLRU
OLIHWLPHYDOXHSURILOHVIRUYDULRXVFXVWRPHUVHJPHQWV ,WV2ULJLQVDQG
6WUDWHJLF$SSOLFDWLRQV
F ([WHUQDOVHFRQGDU\GDWDFRQVLVWVRIDQ\GDWDFROOHFWHGE\DQRXWVLGH
RUJDQL]DWLRQ 127(6
G 6HFRQGDU\UHVHDUFKPD\SURYLGHVXIILFLHQWLQVLJKWVRWKDWSULPDU\UHVHDUFK
LVQRWQHFHVVDU\
H 7KHUHDUHQXPHURXVVRXUFHVRIVHFRQGDU\GDWDJRYHUQPHQWDJHQFLHV
SULYDWHSRSXODWLRQGDWDILUPVVXFKDV$&1LHOVHQPDUNHWLQJUHVHDUFK
FRPSDQLHVDQGDGYHUWLVLQJDJHQFLHV
I &RPPHUFLDOGDWDLVDYDLODEOHIURPPDUNHWLQJUHVHDUFKFRPSDQLHVWKDW
URXWLQHO\PRQLWRUVSHFLILFDVSHFWVRIFRQVXPHUEHKDYLRUDQGVHOOWKHGDWD
WRPDUNHWHUV
K 2EWDLQLQJVHFRQGDU\GDWDEHIRUHHQJDJLQJLQSULPDU\UHVHDUFKRIIHUVVHYHUDO
DGYDQWDJHVLQFOXGLQJSURYLGLQJDVROXWLRQZLWKRXWUHTXLULQJSULPDU\GDWD
DQGKHOSLQJWRFODULI\DQGUHGHILQHWKHREMHFWLYHVRIWKHSULPDU\VWXG\DQG
SURYLGHLGHDVIRUWKHPHWKRGVWREHXVHGDQGWKHGLIILFXOWLHVWKDWDUHOLNHO\
WRRFFXUGXULQJWKHIXOOVFDOHVWXG\
L 6HFRQGDU\GDWDFDQDOVRKDYHOLPLWDWLRQVVXFKDVWKHLQIRUPDWLRQPD\EH
FDWHJRUL]HGLQXQLWVWKDWDUHGLIIHUHQWIURPWKRVHWKDWWKHUHVHDUFKHUVHHNV
WKHGDWDPD\QRWEHDFFXUDWHWKHGDWDPLJKWEHRXWGDWHG
'HVLJQLQJ3ULPDU\5HVHDUFK
7KHGHVLJQRIDUHVHDUFKVWXG\LVEDVHGRQWKHSXUSRVHVRIWKHVWXG\
,IGHVFULSWLYHLQIRUPDWLRQLVQHHGHGWKHQDTXDQWLWDWLYHVWXG\LVOLNHO\WREH
XQGHUWDNHQ LI WKH SXUSRVH LV WR JHW QHZ LGHDV WKHQ D TXDOLWDWLYH VWXG\ LV
XQGHUWDNHQ
(DFKDSSURDFKLVOLNHO\WRGLIIHULQWHUPVRIWKHPHWKRGRIGDWDFROOHFWLRQ
VDPSOHGHVLJQDQGW\SHRIGDWDFROOHFWLRQLQVWUXPHQWXVHG
7KUHHEDVLFGHVLJQVDUHXVHGLQTXDQWLWDWLYHUHVHDUFKREVHUYDWLRQH[SHULPHQWDWLRQ
RUVXUYH\
&RQVXPHU%HKDYLRU
2EVHUYDWLRQDO5HVHDUFK
2EVHUYDWLRQDO5HVHDUFK²FRQVXPHUVDUHZDWFKHGGXULQJWKHSURFHVVRIEX\LQJ
127(6 DQGXVLQJSURGXFWV
D 0HFKDQLFDOREVHUYDWLRQLVXVLQJDPHFKDQLFDORUHOHFWURQLFGHYLFHWR
UHFRUGFXVWRPHUEHKDYLRURUUHVSRQVHWRDSDUWLFXODUPDUNHWLQJVWLPXOXV
E 2EVHUYDWLRQVDUHLQFUHDVLQJE\FRPSDQLHVEHFDXVHRIWKHQHFHVVLW\RI
FROOHFWLQJGDWDRQFXVWRPHUV3ULYDF\LVDOZD\VDQLVVXH
([SHULPHQWDWLRQ
,WLVSRVVLEOHWRWHVWWKHUHODWLYHVDOHVDSSHDORIPDQ\W\SHVRIYDULDEOHVVXFK
DVSDFNDJHGHVLJQVSULFHVSURPRWLRQDORIIHUVRUFRS\
F ([SHULPHQWVDUHDOVRFRQGXFWHGLQODERUDWRULHVZLWKWKHXVHRIVSHFLDO
LQVWUXPHQWDWLRQVXFKDVH\HFDPHUDVWKDWVWXG\WKHH\HPRYHPHQWRI
VXEMHFWVDVWKH\YLHZFRPSHWLWLYHDGYHUWLVHPHQWV
G $PDMRUDSSOLFDWLRQRIFDXVDOUHVHDUFKLVWHVWPDUNHWLQJLQZKLFKSULRU
WRODXQFKLQJDQHZSURGXFWHOHPHQWVVXFKDVSDFNDJHSULFHDQGSURPRWLRQ
DUHPDQLSXODWHGLQDFRQWUROOHGVHWWLQJLQRUGHUWRSUHGLFWVDOHVRUJDXJH
WKHSRVVLEOHUHVSRQVHVWRWKHSURGXFW
6XUYH\V &RQVXPHU%HKDYLRU
,WV2ULJLQVDQG
6XUYH\VDVNFRQVXPHUVDERXWWKHLUSXUFKDVHSUHIHUHQFHVLQSHUVRQE\PDLOE\ 6WUDWHJLF$SSOLFDWLRQV
WHOHSKRQHRURQOLQH
127(6
D 3HUVRQDOLQWHUYLHZVXUYH\VPRVWRIWHQWDNHSODFHLQWKHKRPHRULQUHWDLO
VKRSSLQJDUHDV2QHRIWKHFRPPRQIRUPVWRGD\LVWKHPDOOLQWHUFHSW
E 7HOHSKRQH VXUYH\V DUH DOVR XVHG WR FROOHFW FRQVXPHU GDWD KRZHYHU
HYHQLQJVDQGZHHNHQGVDUHRIWHQWKHRQO\WLPHVWRUHDFKWKHZRUNLQJ
KRPHPDNHUZKRWHQGVWREHOHVVUHVSRQVLYHWRFDOOVWKDWLQWHUUXSWGLQQHU
WHOHYLVLRQYLHZLQJRUJHQHUDOUHOD[DWLRQ
F 0DLOVXUYH\VDUHFRQGXFWHGE\VHQGLQJTXHVWLRQQDLUHVGLUHFWO\WRLQGLYLGXDOV
DWWKHLUKRPHV
G 2QOLQHVXUYH\VDUHVRPHWLPHVFRQGXFWHGRQWKH,QWHUQHW5HVSRQGHQWVDUH
GLUHFWHGWRWKHPDUNHWHU¶VRUWKHUHVHDUFKHU¶V:HEVLWHVE\FRPSXWHU
DGVRUKRPHSDJHVWKXVWKHVDPSOHVWHQGWREHVHOIVHOHFWHGDQGWKHUHIRUH
WKHUHVXOWVFDQQRWEHSURMHFWHGWRWKHODUJHUSRSXODWLRQTXHVWLRQV
H 5HVHDUFKHUVZKRFRQGXFWFRPSXWHUSROOLQJEHOLHYHWKDWWKHDQRQ\PLW\RI
WKH,QWHUQHWHQFRXUDJHVUHVSRQGHQWVWREHPRUHIRUWKULJKWDQGKRQHVWWKDQ
WKH\ZRXOGEHLIDVNHGWKHVDPHTXHVWLRQVLQSHUVRQRUE\PDLO
4XDQWLWDWLYH5HVHDUFK'DWD&ROOHFWLRQ,QVWUXPHQWV
'DWDFROOHFWLRQLQVWUXPHQWVDUHGHYHORSHGDVSDUWRIDVWXG\¶VWRWDOUHVHDUFK
GHVLJQWRV\VWHPDWL]HWKHFROOHFWLRQRIGDWDDQGWRHQVXUHWKDWDOOUHVSRQGHQWV
DUHDVNHGWKHVDPHTXHVWLRQVLQWKHVDPHRUGHU
'DWDFROOHFWLRQLQVWUXPHQWVLQFOXGHTXHVWLRQQDLUHVSHUVRQDOLQYHQWRULHVDWWLWXGH
VFDOHVDQGIRUTXDOLWDWLYHGDWDGLVFXVVLRQJXLGHV
'DWDFROOHFWLRQLQVWUXPHQWVDUHXVXDOO\SUHWHVWHGDQG³GHEXJJHG´WRDVVXUH
YDOLGLW\DQGUHOLDELOLW\RIWKHUHVHDUFKVWXG\
$VWXG\LVVDLGWRKDYHYDOLGLW\LILWGRHVLQIDFWFROOHFWWKHDSSURSULDWHGDWD
QHHGHGWRDQVZHUWKHTXHVWLRQVRUREMHFWLYHVVWDWHGLQWKHILUVWREMHFWLYHV
VWDJHRIWKHUHVHDUFKSURFHVV
$VWXG\LVVDLGWRKDYHUHOLDELOLW\LIWKHVDPHTXHVWLRQVDVNHGRIDVLPLODU
VDPSOHSURGXFHWKHVDPHILQGLQJV
D 2IWHQDVDPSOHLVV\VWHPDWLFDOO\GLYLGHGLQWZRDQGHDFKKDOILVJLYHQWKH
VDPHTXHVWLRQQDLUHWRFRPSOHWH,IWKHUHVXOWVIURPHDFKKDOIDUHVLPLODU
WKHTXHVWLRQQDLUHLVVDLGWRKDYHVSOLWKDOIUHOLDELOLW\
&RQVXPHU%HKDYLRU 4XHVWLRQQDLUHV²IRUTXDQWLWDWLYHUHVHDUFKWKHSULPDU\GDWDFROOHFWLRQLQVWUXPHQW
LVWKHTXHVWLRQQDLUHZKLFKFDQEHVHQWWKURXJKWKHPDLOWRVHOHFWHGUHVSRQGHQWV
IRUVHOIDGPLQLVWUDWLRQRUFDQEHDGPLQLVWHUHGE\ILHOGUHSUHVHQWDWLYHVLQSHUVRQ
RUE\WHOHSKRQH
127(6
D 7KHTXHVWLRQQDLUHLWVHOIFDQEHGLVJXLVHGRUXQGLVJXLVHGDVWRLWVWUXH
SXUSRVH
E 2SHQHQGHGTXHVWLRQVUHTXLUHDQVZHUVWREHLQWKHUHVSRQGHQW¶VRZQ
ZRUGV2SHQHQGHGTXHVWLRQV\LHOGPRUHLQVLJKWIXOLQIRUPDWLRQEXWDUH
PRUHGLIILFXOWWRFRGHDQGDQDO\]H
F &ORVHGHQGHGTXHVWLRQVUHTXLUHWKDWWKHUHVSRQGHQWPHUHO\FKHFNWKH
DSSURSULDWHDQVZHUIURPDOLVWRIRSWLRQV&ORVHGHQGTXHVWLRQVDUHUHODWLYHO\
VLPSOHWRWDEXODWHDQGDQDO\]HEXWWKHDQVZHUVDUHOLPLWHGWRWKHDOWHUQDWLYH
UHVSRQVHVSURYLGHG
G *UHDW FDUH PXVW EH JLYHQ WR ZRUGLQJ TXHVWLRQV WR DYRLG ELDVLQJ WKH
UHVSRQVHV
H 7KHVHTXHQFHRITXHVWLRQVLVDOVRLPSRUWDQW
I 7KHIRUPDWRIWKHTXHVWLRQQDLUHDQGWKHZRUGLQJDQGVHTXHQFHRIWKH
TXHVWLRQV DIIHFW WKH YDOLGLW\ RI UHVSRQVHV DQG LQ WKH FDVH RI PDLO
TXHVWLRQQDLUHVWKHQXPEHUUDWHRIUHVSRQVHVUHFHLYHG
$WWLWXGHVFDOHV²UHVHDUFKHUVRIWHQSUHVHQWUHVSRQGHQWVZLWKDOLVWRISURGXFWV
RUSURGXFWDWWULEXWHVIRUZKLFKWKH\DUHDVNHGWRLQGLFDWHWKHLUUHODWLYHIHHOLQJV
RUHYDOXDWLRQV
D 7KHLQVWUXPHQWVPRVWIUHTXHQWO\XVHGWRFDSWXUHWKLVHYDOXDWLYHGDWDDUH
FDOOHGDWWLWXGHVFDOHV
E 7KHPRVWIUHTXHQWO\XVHGDWWLWXGHVFDOHVDUH/LNHUWVFDOHVVHPDQWLFGLIIHUHQWLDO
VFDOHVEHKDYLRULQWHQWLRQVFDOHVDQGUDQNRUGHUVFDOHV
F /LNHUW VFDOHV DVN WKH UHVSRQGHQW WR FKHFN RU ZULWH WKH QXPEHU
FRUUHVSRQGLQJWRWKHLUOHYHORI³DJUHHPHQW´RU³GLVDJUHHPHQW´WRVWDWHPHQWV
G 6HPDQWLFGLIIHUHQWLDOVFDOHVDVNWKHUHVSRQGHQWWRHYDOXDWHDFRQFHSW
HWFRQWKHEDVLVRIHDFKDWWULEXWHE\FKHFNLQJWKHSRLQWRQWKHFRQWLQXXP
WKDWEHVWUHIOHFWVWKHLUIHHOLQJV
H %HKDYLRULQWHQWLRQVFDOHVPHDVXUHWKHOLNHOLKRRGWKDWFRQVXPHUVZLOODFW
LQ D FHUWDLQ ZD\ LQ WKH IXWXUH VXFK DV EX\LQJ WKH SURGXFW DJDLQ RU
UHFRPPHQGLQJLWWRDIULHQG
I 5DQNRUGHUVFDOHVDVNWKHUHVSRQGHQWWRUDQNLWHPVLQRUGHURISUHIHUHQFH &RQVXPHU%HKDYLRU
LQWHUPVRIVRPHFULWHULRQVXFKDVTXDOLW\RUYDOXHIRUWKHPRQH\ ,WV2ULJLQVDQG
6WUDWHJLF$SSOLFDWLRQV
&XVWRPHU6DWLVIDFWLRQ0HDVXUHPHQW
127(6
*DXJLQJWKHOHYHORIFXVWRPHUVDWLVIDFWLRQDQGLWVGHWHUPLQDWHVLVFULWLFDOIRU
HYHU\FRPSDQ\
&XVWRPHUVDWLVIDFWLRQPDQDJHPHQWLQFOXGHVTXDQWLWDWLYHDQGTXDOLWDWLYH
PHDVXUHVDVZHOODVDYDULHW\RIFRQWDFWPHWKRGVZLWKFXVWRPHUV
&XVWRPHUVDWLVIDFWLRQVXUYH\VPHDVXUHKRZVDWLVILHGWKHFXVWRPHUVDUHZLWK
UHOHYDQWDWWULEXWHVRIWKHSURGXFWRUVHUYLFHDQGWKHUHODWLYHLPSRUWDQFHRIWKHVH
DWWULEXWHV
0\VWHU\VKRSSHUVDUHSURIHVVLRQDOREVHUYHUVZKRSRVHDVFXVWRPHUVLQRUGHU
WRLQWHUDFWZLWKDQGSURYLGHXQELDVHGHYDOXDWLRQVRIWKHFRPSDQ\¶VVHUYLFH
SHUVRQQHOLQRUGHUWRLGHQWLI\RSSRUWXQLWLHVIRULPSURYLQJSURGXFWLYLW\DQG
HIILFLHQF\
$QDO\]LQJFXVWRPHUFRPSODLQWVLVFUXFLDOIRULPSURYLQJSURGXFWVDQGFXVWRPHU
VHUYLFH
D $JRRGFRPSODLQWDQDO\VLVV\VWHPVKRXOGHQFRXUDJHFXVWRPHUVWRFRPSODLQ
DERXW DQ XQVDWLVIDFWRU\ SURGXFW RU VHUYLFH SURYLGH VXJJHVWLRQV IRU
LPSURYHPHQWVE\KDYLQJDGHTXDWHIRUPVDQGPHFKDQLVPVEH\RQGWKH
URXWLQH³KRZZDVHYHU\WKLQJ"´TXHVWLRQVHVWDEOLVK³OLVWHQLQJSRVWV´VXFK
DVKRWOLQHVZKHUHVSHFLDOO\GHVLJQDWHGHPSOR\HHVFDQOLVWHQWRFXVWRPHUV¶
FRPPHQWVRUDFWLYHO\VROLFLWLQSXWIURPWKHP
$QDO\]LQJFXVWRPHUGHIHFWLRQVFRQVLVWVRIILQGLQJRXWZK\FXVWRPHUVOHDYHWKH
FRPSDQ\
&XVWRPHUOR\DOW\UDWHVDUHLPSRUWDQWEHFDXVHLWLVJHQHUDOO\PXFKFKHDSHUWR
UHWDLQFXVWRPHUVWKDQWRJHWQHZRQHV
6DPSOLQJDQG'DWD&ROOHFWLRQ
$QLQWHJUDOFRPSRQHQWRIDUHVHDUFKGHVLJQLVWKHVDPSOLQJSODQ
$VDPSOHLVDVXEVHWRIWKHSRSXODWLRQWKDWLVXVHGWRHVWLPDWHWKHFKDUDFWHULVWLFV
RIWKHHQWLUHSRSXODWLRQ
7KHVDPSOHPXVWEHUHSUHVHQWDWLYHRIWKHXQLYHUVHXQGHUVWXG\
7KHVDPSOLQJSODQDGGUHVVHVWKUHHTXHVWLRQV
D :KRPWRVXUYH\WKHVDPSOLQJXQLW
&RQVXPHU%HKDYLRU E +RZPDQ\WRVXUYH\WKHVDPSOHVL]H
F +RZWRVHOHFWWKHVDPSOLQJSURFHGXUH
,QWHUYLHZLQJWKHFRUUHFWWDUJHWPDUNHWRUSRWHQWLDOWDUJHWPDUNHWLVEDVLFWRWKH
127(6
YDOLGLW\RIWKHVWXG\
7KHVL]HRIWKHVDPSOHLVGHSHQGHQWERWKRQWKHVL]HRIWKHEXGJHWDQGRQWKH
GHJUHHRIFRQILGHQFHWKDWWKHPDUNHWHUZDQWVWRSODFHLQWKHILQGLQJV
,QDSUREDELOLW\VDPSOHUHVSRQGHQWVDUHVHOHFWHGLQVXFKDZD\WKDWHYHU\
PHPEHURIWKHSRSXODWLRQVWXGLHGKDVDNQRZQQRQ]HURFKDQFHRIEHLQJVHOHFWHG
,QDQRQSUREDELOLW\VDPSOHVSHFLILFHOHPHQWVIURPWKHSRSXODWLRQXQGHUVWXG\
KDYHEHHQSUHGHWHUPLQHGLQDQRQUDQGRPIDVKLRQRQWKHEDVLVRIWKHUHVHDUFKHU¶V
MXGJPHQWRUGHFLVLRQWRVHOHFWDJLYHQQXPEHURIUHVSRQGHQWVIURPDSDUWLFXODU
JURXS
'DWD$QDO\VLVDQG5HSRUWLQJ5HVHDUFK)LQGLQJV
,QTXDOLWDWLYHUHVHDUFKWKHPRGHUDWRURUWHVWDGPLQLVWUDWRUXVXDOO\DQDO\]HVWKH
UHVSRQVHVUHFHLYHG
,QTXDQWLWDWLYHUHVHDUFKWKHUHVHDUFKHUVXSHUYLVHVWKHDQDO\VLV
2SHQHQGHG UHVSRQVHV DUH ILUVW FRGHG DQG TXDQWLILHG LH FRQYHUWHG LQWR
QXPHULFDOVFRUHV$OORIWKHUHVSRQVHVDUHWKHQWDEXODWHGDQGDQDO\]HG
,QERWKTXDOLWDWLYHDQGTXDQWLWDWLYHUHVHDUFKWKHUHVHDUFKUHSRUWLQFOXGHVDEULHI
H[HFXWLYHVXPPDU\RIWKHILQGLQJV
'HSHQGLQJRQWKHDVVLJQPHQWIURPPDUNHWLQJPDQDJHPHQWWKHUHVHDUFKUHSRUW
PD\RUPD\QRWLQFOXGHUHFRPPHQGDWLRQVIRUPDUNHWLQJDFWLRQ
7KHERG\RIWKHUHSRUWLQFOXGHVDIXOOGHVFULSWLRQRIWKHPHWKRGRORJ\XVHGDQG
IRUTXDQWLWDWLYHUHVHDUFKDOVRLQFOXGHVWDEOHVDQGJUDSKLFVWRVXSSRUWWKHILQGLQJV
D $VDPSOHRIWKHTXHVWLRQQDLUHLVXVXDOO\LQFOXGHGLQWKHDSSHQGL[WRHQDEOH
PDQDJHPHQWWRHYDOXDWHWKHREMHFWLYLW\RIWKHILQGLQJV
&RQGXFWLQJD5HVHDUFK6WXG\
,QGHVLJQLQJDUHVHDUFKVWXG\UHVHDUFKHUVDGDSWWKHUHVHDUFKSURFHVVGHVFULEHG
LQWKHSUHYLRXVVHFWLRQVWRWKHVSHFLDOQHHGVRIWKHVWXG\
&RQVLGHUWKHIROORZLQJH[DPSOHDQRQOLQHGDWLQJVHUYLFH
D )LUVWWDVN²FROOHFWVHFRQGDU\GDWD
E 7RJHWKHUZLWKWKHPDUNHWLQJPDQDJHUWKHUHVHDUFKHUZRXOGWKHQVSHFLI\
WKHSDUDPHWHUVLHGHILQHWKHVDPSOLQJXQLWRIWKHSRSXODWLRQWREH
VWXGLHG
F $TXDOLWDWLYHVWXG\HJIRFXVJURXSVPLJKWEHXQGHUWDNHQILUVWWRJDWKHU &RQVXPHU%HKDYLRU
LQIRUPDWLRQDERXWWKHWDUJHWSRSXODWLRQ¶VDWWLWXGHVDQGFRQFHUQVDERXW ,WV2ULJLQVDQG
6WUDWHJLF$SSOLFDWLRQV
PHHWLQJSHRSOHRQOLQHWKHLUVSHFLDOLQWHUHVWVDQGWKHVSHFLILFVHUYLFHVDQG
SUHFDXWLRQVWKH\ZRXOGOLNHDQRQOLQHGDWLQJVHUYLFHWRSURYLGH
127(6
G 7KLVSKDVHRIWKHUHVHDUFKVKRXOGUHVXOWLQWHQWDWLYHJHQHUDOL]DWLRQVDERXW
WKHVSHFLILFDJHJURXSVWRWDUJHWDQGWKHVHUYLFHVWRRIIHU
H 7KHPDUNHWLQJPDQDJHUWKHQPLJKWLQVWUXFWWKHUHVHDUFKHUWRFRQGXFWD
TXDQWLWDWLYHVWXG\WRFRQILUPDQGDWWDFK³KDUG´QXPEHUVSHUFHQWDJHVWR
WKHILQGLQJVWKDWHPHUJHGIURPWKHIRFXVJURXSV
I 7KHILUVWSKDVHVWXG\VKRXOGKDYHSURYLGHGVXIILFLHQWLQVLJKWVWRGHYHORSD
UHVHDUFKGHVLJQDQGWRODXQFKGLUHFWO\LQWRDODUJHVFDOHVXUYH\
J ,IKRZHYHUWKHUHLVVWLOOGRXEWDERXWDQ\HOHPHQWRIWKHUHVHDUFKGHVLJQ
VXFKDVTXHVWLRQZRUGLQJRUIRUPDWWKH\PLJKWGHFLGHILUVWWRGRDVPDOO
VFDOHH[SORUDWRU\VWXG\
K $IWHUUHILQLQJWKHTXHVWLRQQDLUHDQGDQ\RWKHUQHHGHGHOHPHQWVRIWKH
UHVHDUFKGHVLJQWKH\ZRXOGODXQFKDIXOOVFDOHTXDQWLWDWLYHVXUYH\XVLQJD
SUREDELOLW\VDPSOHWKDWZRXOGDOORZWKHPWRSURMHFWWKHILQGLQJVWRWKHWRWDO
SRSXODWLRQRIVLQJOHVDVRULJLQDOO\GHILQHG
L 7KHDQDO\VLVVKRXOGFOXVWHUSURVSHFWLYHFRQVXPHUVLQWRVHJPHQWVEDVHGRQ
UHOHYDQWVRFLRFXOWXUDORUOLIHVW\OHFKDUDFWHULVWLFVDQGRQPHGLDKDELWV
DWWLWXGHVSHUFHSWLRQVDQGJHRGHPRJUDSKLFFKDUDFWHULVWLFV
(WKLFV,Q&RQVXPHU5HVHDUFK
&RQVXPHUUHVHDUFKHUVPXVWHQVXUHWKDWVWXGLHVDUHREMHFWLYHDQGIUHHRIELDV
D 6RPHVWXGLHVDUHFRPPLVVLRQHGE\RUJDQL]DWLRQVVHHNLQJWRMXVWLI\D
SDUWLFXODUSRVLWLRQ
E 5HVHDUFKHUVVHHNLQJWRVXSSRUWDSUHGHWHUPLQHGFRQFOXVLRQRIWHQGRVR
E\XVLQJELDVHGVDPSOHVELDVHGTXHVWLRQVPDQLSXODWLQJVWDWLVWLFDODQDO\VLV
RULJQRULQJUHOHYDQWLQIRUPDWLRQ
&KHFN<RXU3URJUHVV
0LVWUHDWLQJUHVSRQGHQWVLVDQRWKHUHWKLFDOSUREOHP 4XDQWLWDWLYH
UHVHDUFKLV
/HYHOVRI&RQVXPHU 'HFLVLRQ0DNLQJ BBBBBBBBBBBB
LQQDWXUH
7KHUHDUHWKUHHOHYHOVRIFRQVXPHUGHFLVLRQPDNLQJ 'HSWKLQWHUYLHZV
DUHDSDUWRI
([WHQVLYH SUREOHP VROYLQJ OLPLWHG SUREOHP VROYLQJDQGURXWLQL]HGUHVSRQVH BBBBBBBBBBBBBB
EHKDYLRU
&RQVXPHU%HKDYLRU ([WHQVLYHSUREOHPVROYLQJ
:KHQFRQVXPHUVKDYHQRHVWDEOLVKHGFULWHULDIRUHYDOXDWLQJDSURGXFWFDWHJRU\RU
VSHFLILFEUDQGVLQWKDWFDWHJRU\RUKDYHQRWQDUURZHGWKHQXPEHURIEUDQGVWKH\
127(6 ZLOOFRQVLGHUWRDVPDOOPDQDJHDEOHVXEVHWWKHLUGHFLVLRQPDNLQJHIIRUWVFDQEH
FODVVLILHGDVH[WHQVLYHSUREOHPVROYLQJ+HUHWKHFRQVXPHUQHHGVDJUHDWGHDORI
LQIRUPDWLRQWRHVWDEOLVKDVHWRIFULWHULDRQZKLFKWRMXGJHVSHFLILFEUDQGVDQGD
FRUUHVSRQGLQJO\ODUJHDPRXQWRILQIRUPDWLRQFRQFHUQLQJHDFKRIWKHEUDQGVWREH
FRQVLGHUHG
/LPLWHGSUREOHPVROYLQJ
+HUHWKHFRQVXPHUVKDYHDOUHDG\HVWDEOLVKHGWKHEDVLFFULWHULDIRUHYDOXDWLQJWKH
SURGXFW FDWHJRU\ DQG WKH YDULRXV EUDQGV LQ WKH FDWHJRU\7KH\ KDYH QRW IXOO\
HVWDEOLVKHGSUHIHUHQFHVFRQFHUQLQJDVHOHFWJURXSRIEUDQGV7KHVHDUFKIRUDGGLWLRQDO
LQIRUPDWLRQLVPRUHOLNH³ILQHWXQLQJ´WKH\PXVWJDWKHUDGGLWLRQDOEUDQGLQIRUPDWLRQ
WRGLVFULPLQDWHDPRQJWKHYDULRXVEUDQGV
5RXWLQL]HGUHVSRQVHEHKDYLRU
+HUHFRQVXPHUVKDYHH[SHULHQFHZLWKWKHSURGXFWFDWHJRU\DQGDZHOOHVWDEOLVKHG
VHWRIFULWHULDZLWKZKLFKWRHYDOXDWHWKHEUDQGVWKH\DUHFRQVLGHULQJ,QVRPH
VLWXDWLRQVWKH\PD\VHDUFKIRUDVPDOODPRXQWRIDGGLWLRQDOLQIRUPDWLRQLQRWKHUV
WKH\VLPSO\UHYLHZZKDWWKH\DOUHDG\NQRZ,QH[WHQVLYHSUREOHPVROYLQJFXVWRPHU
VHHNIRUPRUHLQIRUPDWLRQWRPDNHDFKRLFHZKHUHDVLQURXWLQL]HGUHVSRQVHEHKDYLRU
FXVWRPHUVQHHGRQO\OLWWOHDGGLWLRQDOLQIRUPDWLRQ
&DVH
$FPH6WHHOKDVHPSOR\HG\RXDVDVWDWLVWLFDODQDO\VWIRUDOPRVWWHQ\HDUV,Q\RXU
MRE\RXWUDFNHGVWHHOSULFHVFUHDWHGFXVWRPHUSURILOHVPDLQWDLQHGGDWDRQFRQWUDFW
QHJRWLDWLRQVSURYLGHGGDWDQHFHVVDU\IRUODERUQHJRWLDWLRQVUHVHDUFKHGLQIRUPDWLRQ
RQQHZPDUNHWVDQGMRLQWYHQWXUHVDQGGHYHORSHGDXQLTXHV\VWHPIRUFDWDORJLQJ
FRPSHWLWRUV¶VWUHQJWKVDQGZHDNQHVVHV<RXUVNLOOLQREWDLQLQJSULPDU\DQGVHFRQGDU\
UHVHDUFKLVQRWRQO\NQRZQLQ$FPHEXWLQWKHVWHHOLQGXVWU\DVDZKROH7KH86
VWHHOLQGXVWU\KRZHYHULVQRWGRLQJZHOOLQWKHKLJKO\FRPSHWLWLYHJOREDOPDUNHWSODFH
$*HUPDQVWHHOILUPLVH[SDQGLQJLQWRWKH8QLWHG6WDWHVDQGLVFXUUHQWO\QHJRWLDWLQJ
WREX\%HWKOHKHP6WHHO$UHFUXLWLQJILUPKDVFRQWDFWHG\RXZLWKDYHU\DWWUDFWLYH
RIIHU²WKH*HUPDQILUPZDQWV\RX6LPSO\SXW\RXFRXOGGRXEOH\RXUVDODU\
UHFHLYHDVHFXUHUHWLUHPHQWDQGVWRFNRSWLRQSDFNDJHDQGKDYHDVXEVWDQWLDOSRVLWLRQ
ZLWKDJOREDOLQGXVWU\OHDGHUWKDWKDVQRWKDGDOD\RIILQWHQ\HDUV7KHRIIHUVRXQGV
YHU\DWWUDFWLYHZKHQ\RXFRQVLGHUWKHVLWXDWLRQDW\RXURZQFRPSDQ\DQGLQWKH
86PDUNHWLQJHQHUDO7KHUHLVRQHFDWFKKRZHYHU<RXPXVWEHZLOOLQJWREULQJ
DOO\RXUNQRZOHGJHRI$FPHDQGLWVSURFHVVHVWR\RXUQHZILUP7KRXJKEULQJLQJ
DFWXDOGDWDZRXOGEHLUUHVSRQVLEOHSUREDEO\LOOHJDODQGYHU\GLIILFXOW\RXUQHZILUP
GRHVH[SHFW\RXWREULQJ\RXUPRGHOVDELOLW\WRDQDO\]HGDWDDQGNQRZOHGJHRI
$FPHFXVWRPHUVODERUVLWXDWLRQVDQGFRPSDQ\ZHDNQHVVHVZLWK\RX$FPHZRXOG &RQVXPHU%HKDYLRU
PRVWFHUWDLQO\DVN\RXWRVLJQDQRQGLVFORVXUHGRFXPHQWKRZHYHUWKLVZRXOGEH ,WV2ULJLQVDQG
6WUDWHJLF$SSOLFDWLRQV
GLIILFXOWLIQRWLPSRVVLEOHWRHQIRUFH+RZVKRXOG\RXPHHW\RXURSSRUWXQLW\"
7KHILHOGRIFRQVXPHUUHVHDUFKGHYHORSHGDVDQH[WHQVLRQRIWKHILHOGRIPDUNHWLQJ
UHVHDUFKWRHQDEOHPDUNHWHUVWRSUHGLFWKRZFRQVXPHUVZRXOGUHDFWLQWKHPDUNHWSODFH
DQGWRXQGHUVWDQGWKHUHDVRQVWKH\PDGHWKHSXUFKDVHGHFLVLRQVWKH\GLG&RQVXPHU
UHVHDUFKXQGHUWDNHQIURPDPDQDJHULDOSHUVSHFWLYHWRLPSURYHVWUDWHJLFPDUNHWLQJ
GHFLVLRQVLVNQRZQDVSRVLWLYLVP3RVLWLYLVWUHVHDUFKLVTXDQWLWDWLYHDQGHPSLULFDO
DQGWULHVWRLGHQWLI\FDXVHDQGHIIHFWUHODWLRQVKLSVLQEX\LQJVLWXDWLRQV,WLVRIWHQ
VXSSOHPHQWHGZLWKTXDOLWDWLYHUHVHDUFK
4XDOLWDWLYHUHVHDUFKLVPRUHFRQFHUQHGZLWKSURELQJGHHSZLWKLQWKHFRQVXPHU¶V
SV\FKHWRXQGHUVWDQGWKHPRWLYDWLRQVIHHOLQJVDQGHPRWLRQVWKDWGULYHFRQVXPHU
EHKDYLRU4XDOLWDWLYHUHVHDUFKILQGLQJVFDQQRWEHSURMHFWHGWRODUJHUSRSXODWLRQV
EXWDUHXVHGSULPDULO\WRSURYLGHQHZLGHDVDQGLQVLJKWVIRUWKHGHYHORSPHQWRI
SRVLWLRQLQJVWUDWHJLHV,QWHUSUHWLYLVPDTXDOLWDWLYHUHVHDUFKSHUVSHFWLYHLVJHQHUDOO\
PRUHFRQFHUQHGZLWKXQGHUVWDQGLQJWKHDFWRIFRQVXPLQJLWVHOIUDWKHUWKDQWKHDFW
RIEX\LQJLHFRQVXPHUGHFLVLRQPDNLQJ,QWHUSUHWLYLVWVYLHZFRQVXPHUEHKDYLRU
DVDVXEVHWRIKXPDQEHKDYLRUDQGLQFUHDVHGXQGHUVWDQGLQJDVDNH\WRHOLPLQDWLQJ
VRPHRIWKHLOOVDVVRFLDWHGZLWKGHVWUXFWLYHFRQVXPHUEHKDYLRU
(DFKWKHRUHWLFDOUHVHDUFKSHUVSHFWLYHLVEDVHGRQLWVRZQVSHFLILFDVVXPSWLRQVDQG
XVHVLWVRZQUHVHDUFKPHWKRGRORJLHV3RVLWLYLVWVJHQHUDOO\XVHSUREDELOLW\VWXGLHV
WKDWFDQEHJHQHUDOL]HGWRODUJHUSRSXODWLRQV,QWHUSUHWLYLVWVWHQGWRYLHZFRQVXPSWLRQ
H[SHULHQFHVDVXQLTXHVLWXDWLRQVWKDWRFFXUDWVSHFLILFPRPHQWVLQWLPHWKHUHIRUH
WKH\FDQQRWEHJHQHUDOL]HGWRODUJHUSRSXODWLRQV7KHWZRWKHRUHWLFDOUHVHDUFK
RULHQWDWLRQVDUHKLJKO\FRPSOHPHQWDU\DQGXVHGWRJHWKHUSURYLGHDGHHSHUDQGPRUH
LQVLJKWIXOXQGHUVWDQGLQJRIFRQVXPHUEHKDYLRUWKDQHLWKHUDSSURDFKXVHGDORQH
7KHFRQVXPHUUHVHDUFKSURFHVV²ZKHWKHUTXDQWLWDWLYHRUTXDOLWDWLYHLQDSSURDFK²
JHQHUDOO\FRQVLVWVRIVL[VWHSVGHILQLQJREMHFWLYHVFROOHFWLQJVHFRQGDU\GDWD
GHYHORSLQJDUHVHDUFKGHVLJQFROOHFWLQJSULPDU\GDWDDQDO\]LQJWKHGDWDDQGSUHSDULQJ
DUHSRUWRIWKHILQGLQJV7KHUHVHDUFKHUPXVWPDNHHYHU\HIIRUWWRHQVXUHWKDWWKH
UHVHDUFKILQGLQJVDUHUHOLDEOHWKDWDUHSOLFDWLRQRIWKHVWXG\ZRXOGSURYLGHWKHVDPH
UHVXOWVDQGYDOLGWKDWWKH\DQVZHUWKHVSHFLILFTXHVWLRQVIRUZKLFKWKHVWXG\ZDV
RULJLQDOO\XQGHUWDNHQ
'HVFULSWLYH
127(6 4XDOLWDWLYHUHVHDUFK
7HVW <RXUVHOI
1HXWURJHQDLVDPDQXIDFWXUHURISHUVRQDOFDUHSURGXFWVIRU\RXQJDGXOWV7KH
FRPSDQ\ZRXOGOLNHWRH[WHQGLWVIDFLDOFOHDQVHUVSURGXFWOLQH'HVLJQDD
TXDOLWDWLYHDQGETXDQWLWDWLYHUHVHDUFKGHVLJQIRUWKHFRPSDQ\IRFXVHGRQWKLV
REMHFWLYH
([SODLQWKHHVVHQFHRI&RQVXPHU%HKDYLRU6WXGLHV
:KDWLVWKHUHOHYDQFHRI3URGXFW&RQFHSW"
([SODLQYDULRXVIDFWRUVRIGHYHORSLQJUHVHDUFKREMHFWLYHV
'LIIHUHQWLDWH(36/3655%
)XUWKHU5HDGLQJ
x &RQVXPHU%HKDYLRUE\'RQDOG
&RQVXPHU%HKDYLRU
*URXS ,WV2ULJLQVDQG
6WUDWHJLF$SSOLFDWLRQV
127(6
7KH&KDSWHU&RYHUV
,QWURGXFWLRQ
:KDWLVD*URXS"
8QGHUVWDQGLQJWKH3RZHURI5HIHUHQFH*URXSV
6HOHFWHG&RQVXPHUUHODWHG5HIHUHQFH*URXSV
9LUWXDO*URXSVRU&RPPXQLWLHV
&HOHEULW\DQGRWKHU5HIHUHQFH*URXS$SSHDOV
7KHIDPLO\LVD&RQFHSWLQ)OX[
6RFLDOL]DWLRQRI)DPLO\0HPEHUV
2WKHU)XQFWLRQVRIWKH)DPLO\
)DPLO\'HFLVLRQ0DNLQJDQG&RQVXPSWLRQ5HODWHG5ROHV
7KH)DPLO\/LIH&\FOH
&DVH
/HDUQLQJ2EMHFWLYHV
$IWHUJRLQJWKURXJKWKLVFKDSWHU\RXVKRXOGEHDEOHWR
x 'HILQHDJURXS
x 8QGHUVWDQGWKHSRZHURIUHIHUHQFHJURXSVRQFRQVXPHUEHKDYLRU
x ([SODLQWKHPDMRUIRUPVRIUHIHUHQFHJURXSDSSHDOV
x 'LVFXVVKRZWKHIDPLO\KDVFKDQJHG
&RQVXPHU%HKDYLRU ,1752'8&7,21
$OPRVWDOOLQGLYLGXDOVUHJXODUO\LQWHUDFWZLWKRWKHUSHRSOHZKRGLUHFWO\RULQGLUHFWO\
LQIOXHQFHWKHLUSXUFKDVHGHFLVLRQV7KXVWKHVWXG\RIJURXSVDQGWKHLULPSDFWRQWKH
127(6 LQGLYLGXDOVLVRIJUHDWLPSRUWDQFHWRPDUNHWHUVFRQFHUQHGZLWKLQIOXHQFLQJFRQVXPHU
EHKDYLRU
&RQVXPHUUHIHUHQFHJURXSVDUHJURXSVWKDWVHUYHDVIUDPHVRIUHIHUHQFHIRULQGLYLGXDOV
LQWKHLUSXUFKDVHGHFLVLRQV([DPSOHVRIUHIHUHQFHJURXSVLQFOXGHIULHQGVKLS
JURXSVVKRSSLQJJURXSVZRUNJURXSVYLUWXDOJURXSVRUFRPPXQLWLHV
DQGFRQVXPHUDFWLRQJURXSV5HIHUHQFHJURXSVWKDWLQIOXHQFHJHQHUDOYDOXHVRU
EHKDYLRUDUHFDOOHGQRUPDWLYHUHIHUHQFHJURXSVWKRVHWKDWLQIOXHQFHVSHFLILFDWWLWXGHV
DUHFDOOHGFRPSDUDWLYHUHIHUHQFHJURXSV7KHFRQFHSWRIFRQVXPHUUHIHUHQFHJURXSV
KDVEHHQEURDGHQHGWRLQFOXGHJURXSVZLWKZKLFKFRQVXPHUVKDYHQRGLUHFWIDFH
WRIDFHFRQWDFWVXFKDVFHOHEULWLHVSROLWLFDOILJXUHVDQGVRFLDOFODVVHV
7KHFUHGLELOLW\DWWUDFWLYHQHVVDQGSRZHURIWKHUHIHUHQFHJURXSDIIHFWWKHGHJUHH
RILQIOXHQFHLWKDV5HIHUHQFHJURXSDSSHDOVDUHXVHGYHU\HIIHFWLYHO\E\VRPH
DGYHUWLVHUVLQSURPRWLQJWKHLUJRRGVDQGVHUYLFHVEHFDXVHWKH\VXEWO\LQGXFHWKH
SURVSHFWLYHFRQVXPHUWRLGHQWLI\ZLWKWKHSLFWXUHGXVHURIWKHSURGXFW
:+$7,6$*5283"
$*URXSLVWZRRUPRUHSHRSOHZKRLQWHUDFWWRDFFRPSOLVKHLWKHULQGLYLGXDORU
PXWXDOJRDOV
D 7KLVEURDGGHILQLWLRQFRYHUVHYHU\WKLQJIURPLQWLPDWHJURXSVWRIRUPDO
ZRUNJURXSV
E ,QFOXGHGLQWKLVGHILQLWLRQWRRLVDNLQGRI³RQHVLGHGJURXSLQJ´LQZKLFK
DQLQGLYLGXDOFRQVXPHUREVHUYHVWKHDSSHDUDQFHRUDFWLRQVRIRWKHUVZKR
XQNQRZLQJO\VHUYHDVFRQVXPSWLRQUHODWHGUROHPRGHOV
6RPHWLPHVJURXSVDUHFODVVLILHGE\PHPEHUVKLSVWDWXV
D $JURXSWRZKLFKDSHUVRQHLWKHUEHORQJVRUZRXOGTXDOLI\IRUPHPEHUVKLS
LVFDOOHGD0HPEHUVKLS*URXS
7KHUHDUHDOVRJURXSVLQZKLFKDQLQGLYLGXDOLVQRWOLNHO\WRUHFHLYHPHPEHUVKLS
GHVSLWHDFWLQJOLNHDPHPEHUE\DGRSWLQJWKHJURXS¶VYDOXHVDWWLWXGHVDQG
EHKDYLRU²WKLVLVFRQVLGHUHGWREHV\PEROLFJURXSV
81'(567$1',1*7+(32:(52)5()(5(1&(*52836
$UHIHUHQFHJURXSLVDQ\SHUVRQRUJURXSWKDWVHUYHVDVDSRLQWRIFRPSDULVRQ
RUUHIHUHQFHIRUDQLQGLYLGXDOLQIRUPLQJHLWKHUJHQHUDORUVSHFLILFYDOXHV
DWWLWXGHVRUDVSHFLILFJXLGHIRUEHKDYLRU
D 7KH\KHOSXVXQGHUVWDQGWKHLPSDFWRIRWKHUSHRSOHRQDQLQGLYLGXDO¶V
FRQVXPSWLRQEHOLHIVDWWLWXGHVDQGEHKDYLRU
E ,WKHOSVPDUNHWHUVFKRRVHWKHLUPHWKRGRORJ\WRDIIHFWGHVLUHGFKDQJHVLQ &RQVXPHU%HKDYLRU
FRQVXPHUEHKDYLRU ,WV2ULJLQVDQG
6WUDWHJLF$SSOLFDWLRQV
)URPDPDUNHWLQJSHUVSHFWLYH5HIHUHQFHJURXSVDUHJURXSVWKDWVHUYHDV
IUDPHVRIUHIHUHQFHIRULQGLYLGXDOVLQWKHLUSXUFKDVHRUFRQVXPSWLRQGHFLVLRQV 127(6
5HIHUHQFHJURXSVWKDWLQIOXHQFHJHQHUDORUEURDGO\GHILQHGYDOXHVRUEHKDYLRU
DUHFDOOHG1RUPDWLYHUHIHUHQFHJURXSV
5HIHUHQFHJURXSVWKDWVHUYHDVEHQFKPDUNVIRUVSHFLILFRUQDUURZO\GHILQHG
DWWLWXGHVRUEHKDYLRUDUHFDOOHG&RPSDUDWLYH5HIHUHQFH*URXSV
D $FRPSDUDWLYHUHIHUHQFHJURXSPLJKWEHDQHLJKERULQJIDPLO\ZKRVHOLIHVW\OH
DSSHDUVWREHDGPLUDEOHDQGZRUWK\RILPLWDWLRQ
1RUPDWLYHUHIHUHQFHJURXSVLQIOXHQFHWKHGHYHORSPHQWRIDEDVLFFRGHRI
EHKDYLRU
&RPSDUDWLYHUHIHUHQFHJURXSVLQIOXHQFHWKHH[SUHVVLRQRIVSHFLILFFRQVXPHU
DWWLWXGHVDQGEHKDYLRU
$%URDGHQHG3HUVSHFWLYHRQ5HIHUHQFH*URXSV
7KHPHDQLQJRI³UHIHUHQFHJURXS´KDVFKDQJHGRYHUWKH\HDUV
D 2ULJLQDOO\UHIHUHQFHJURXSVZHUHQDUURZO\GHILQHGWRLQFOXGHRQO\WKRVH
JURXSVZLWKZKLFKDSHUVRQLQWHUDFWHGRQDGLUHFWEDVLV
E 7KHFRQFHSWJUDGXDOO\KDVEURDGHQHGWRLQFOXGHERWKGLUHFWDQGLQGLUHFW
LQGLYLGXDORUJURXSLQIOXHQFHV
,QGLUHFWUHIHUHQFHJURXSVFRQVLVWRIWKRVHLQGLYLGXDOVRUJURXSVZLWKZKRP
DSHUVRQGRHVQRWKDYHGLUHFWIDFHWRIDFHFRQWDFWVXFKDVPRYLHVWDUVVSRUWV
KHURHVSROLWLFDOOHDGHUV79SHUVRQDOLWLHVRUHYHQDZHOOGUHVVHGDQGLQWHUHVWLQJ
ORRNLQJSHUVRQRQDVWUHHWFRUQHU
5HIHUHQFHVDSHUVRQPLJKWXVHLQHYDOXDWLQJKLVRUKHURZQJHQHUDORUVSHFLILF
DWWLWXGHVRUEHKDYLRUYDU\
)DFWRUV7KDW$IIHFW5HIHUHQFH*URXS,QIOXHQFH
7KHGHJUHHRILQIOXHQFHWKDWDUHIHUHQFHJURXSH[HUWVRQDQLQGLYLGXDO¶VEHKDYLRU
XVXDOO\GHSHQGVRQWKHQDWXUHRIWKHLQGLYLGXDODQGWKHSURGXFWDQGRQVSHFLILF
VRFLDOIDFWRUV &KHFN<RXU3URJUHVV
:KDWLVDJURXS"
,QIRUPDWLRQ DQG ([SHULHQFH
'HILQH UHIHUHQFH
$QLQGLYLGXDOZKRKDVILUVWKDQGH[SHULHQFHZLWKDSURGXFWRUVHUYLFHRUFDQ JURXS
HDVLO\REWDLQIXOOLQIRUPDWLRQDERXWLWLVOHVVOLNHO\WREHLQIOXHQFHGE\WKHDGYLFH
RUH[DPSOHRIRWKHUV
&RQVXPHU%HKDYLRU D $SHUVRQZKRKDVOLWWOHRUQRH[SHULHQFHZLWKDSURGXFWRUVHUYLFHDQG
GRHVQRWH[SHFWWRKDYHDFFHVVWRREMHFWLYHLQIRUPDWLRQDERXWLWHJD
SHUVRQ ZKR EHOLHYHV WKDW UHOHYDQW DGYHUWLVLQJ PD\ EH PLVOHDGLQJ RU
GHFHSWLYHLVPRUHOLNHO\WRVHHNRXWWKHDGYLFHRUH[DPSOHRIRWKHUV
127(6
&UHGLELOLW\ $WWUDFWLYHQHVV DQG 3RZHU RI WKH 5HIHUHQFH *URXS
$UHIHUHQFHJURXSWKDWLVSHUFHLYHGDVFUHGLEOHDWWUDFWLYHRUSRZHUIXOFDQ
LQGXFHFRQVXPHUDWWLWXGHDQGEHKDYLRUFKDQJH
:KHQSULPDULO\FRQFHUQHGZLWKWKHDFFHSWDQFHRUDSSURYDORIRWKHUVWKH\OLNH
ZLWKZKRPWKH\LGHQWLI\RUZKRRIIHUWKHPVWDWXVRURWKHUEHQHILWVFRQVXPHUV
DUHOLNHO\WRDGRSWWKHLUSURGXFWEUDQGRURWKHUEHKDYLRUDOFKDUDFWHULVWLFV
:KHQFRQVXPHUVDUHSULPDULO\FRQFHUQHGZLWKWKHSRZHUWKDWDSHUVRQRU
JURXSFDQH[HUWRYHUWKHPWKH\PLJKWFKRRVHSURGXFWVRUVHUYLFHVWKDWFRQIRUP
WRWKHQRUPVRIWKDWSHUVRQRUJURXSLQRUGHUWRDYRLGULGLFXOHRUSXQLVKPHQW
8QOLNHRWKHUUHIHUHQFHJURXSVKRZHYHU3RZHU*URXSVDUHQRWDVOLNHO\WR
FDXVHDWWLWXGHFKDQJH
D ,QGLYLGXDOVPD\FRQIRUPWRWKHEHKDYLRURIDSRZHUIXOSHUVRQRUJURXS
EXWDUHQRWDVOLNHO\WRH[SHULHQFHDFKDQJHLQWKHLURZQDWWLWXGHV
'LIIHUHQWUHIHUHQFHJURXSVPD\LQIOXHQFHWKHEHOLHIVDWWLWXGHVDQGEHKDYLRURI
DQLQGLYLGXDODWGLIIHUHQWSRLQWVLQWLPHRUXQGHUGLIIHUHQWFLUFXPVWDQFHV
$YLVXDOO\FRQVSLFXRXVSURGXFWLVRQHWKDWZLOOVWDQGRXWDQGEHQRWLFHG
$YHUEDOO\FRQVSLFXRXVSURGXFWPD\EHKLJKO\LQWHUHVWLQJRULWPD\EHHDVLO\
GHVFULEHGWRRWKHUV
3URGXFWVWKDWDUHHVSHFLDOO\FRQVSLFXRXVDQGVWDWXVUHYHDOLQJDQHZDXWRPRELOH
IDVKLRQFORWKLQJVOHHNODSWRSFRPSXWHURUKRPHIXUQLWXUHDUHPRVWOLNHO\WREH
SXUFKDVHGZLWKDQH\HWRWKHUHDFWLRQVRIUHOHYDQWRWKHUV
0DUNHWHUVPD\KDYHGLYHUJHQWJRDOVZLWKUHJDUGWRFRQVXPHUFRQIRUPLW\
7KHDELOLW\RIUHIHUHQFHJURXSVWRFKDQJHFRQVXPHUDWWLWXGHVDQGEHKDYLRUE\
HQFRXUDJLQJFRQIRUPLW\LVVXEMHFWWRWKHJURXS¶VDELOLW\WR
D ,QIRUPRUPDNHWKHLQGLYLGXDODZDUHRIDVSHFLILFSURGXFWRUEUDQG
E 3URYLGHWKHLQGLYLGXDOZLWKWKHRSSRUWXQLW\WRFRPSDUHKLVRUKHURZQ
WKLQNLQJZLWKWKHDWWLWXGHVDQGEHKDYLRURIWKHJURXS
F ,QIOXHQFHWKHLQGLYLGXDOWRDGRSWDWWLWXGHVDQGEHKDYLRUWKDWDUHFRQVLVWHQW &RQVXPHU%HKDYLRU
ZLWKWKHQRUPVRIWKHJURXS ,WV2ULJLQVDQG
6WUDWHJLF$SSOLFDWLRQV
G /HJLWLPL]HWKHGHFLVLRQWRXVHWKHVDPHSURGXFWVDVWKHJURXS
127(6
$QRQFRQIRUPLW\DSSHDOLVDOVRSRVVLEOHEXWUHTXLUHVDVKLIWLQDWWLWXGHVRU
EHKDYLRU
6(/(&7('&21680(55(/$7('5()(5(1&(*52836
)LYHVSHFLILFUHIHUHQFHJURXSVDUHFRQVLGHUHGEHFDXVHWKH\JLYHXVDNLQGRI
FURVVVHFWLRQRIWKHW\SHVRIJURXSVWKDWLQIOXHQFHFRQVXPHUV¶DWWLWXGHVDQG
EHKDYLRU7KH\DUH
D )ULHQGVKLSJURXSV
E 6KRSSLQJJURXSV
F :RUNJURXSV
G 9LUWXDOJURXSVRUFRPPXQLWLHV
H &RQVXPHUDFWLRQJURXSV
)ULHQGVKLS*URXSV
)ULHQGVKLSJURXSVDUHFODVVLILHGDVLQIRUPDOJURXSVEHFDXVHWKH\DUHXVXDOO\
XQVWUXFWXUHGDQGODFNVSHFLILFDXWKRULW\OHYHOV
6HHNLQJDQGPDLQWDLQLQJIULHQGVKLSVLVDEDVLFGULYHRIPRVWSHRSOH
7KHRSLQLRQVDQGSUHIHUHQFHVRIIULHQGVDUHDQLPSRUWDQWLQIOXHQFHLQGHWHUPLQLQJ
WKHSURGXFWVRUEUDQGVDFRQVXPHUXOWLPDWHO\VHOHFWV
6KRSSLQJ*URXSV
7ZRRUPRUHSHRSOHZKRVKRSWRJHWKHUFDQEHFDOOHGDVKRSSLQJJURXS
D 7KHPRWLYDWLRQVUDQJHIURPSULPDULO\VRFLDOWRUHGXFLQJULVN
E $VSHFLDOIRUPRIDVKRSSLQJJURXSLVWKHLQKRPHVKRSSLQJSDUW\
L (DUO\SXUFKDVHUVWHQGWRFUHDWHDEDQGZDJRQHIIHFW
LL 8QGHFLGHGJXHVWVRIWHQRYHUFRPHDUHOXFWDQFHWREX\ZKHQWKH\VHH
WKHLUIULHQGVPDNHSRVLWLYHSXUFKDVHGHFLVLRQV
LLL )XUWKHUPRUHVRPHRIWKHJXHVWVPD\IHHOREOLJHGWREX\EHFDXVH
WKH\DUHLQWKHKRPHRIWKHVSRQVRULQJKRVWRUKRVWHVV
%RWKWKHIRUPDOZRUNJURXSDQGWKHLQIRUPDOIULHQGVKLSZRUNJURXSKDYHSRWHQWLDO
IRULQIOXHQFLQJFRQVXPHUEHKDYLRU
&RQVXPHU%HKDYLRU 7KHIRUPDOZRUNJURXSFRQVLVWVRILQGLYLGXDOVZKRZRUNWRJHWKHUDVSDUWRI
DWHDPDQGWKXVKDYHWKHRSSRUWXQLW\WRLQIOXHQFHHDFKRWKHU¶VFRQVXPSWLRQ
UHODWHGDWWLWXGHVDQGDFWLRQV
127(6 0HPEHUVRILQIRUPDOZRUNJURXSVPD\LQIOXHQFHWKHFRQVXPSWLRQEHKDYLRURI
RWKHUPHPEHUVGXULQJFRIIHHRUOXQFKEUHDNVRUDIWHUKRXUVPHHWLQJV
5HFRJQL]LQJWKDWZRUNJURXSVLQIOXHQFHFRQVXPHUV¶EUDQGFKRLFHVDQGWKDWPRVW
ZRPHQQRZZRUNRXWVLGHWKHKRPHILUPVDUHUHGLUHFWLQJWKHLUVDOHVHIIRUWVWR
WKHZRUNSODFHUDWKHUWKDQWKHKRPH
:KLOHILIW\\HDUVDJRWKHGHILQLWLRQRIDFRPPXQLW\VWUHVVHGWKHQRWLRQRI
JHRJUDSKLFSUR[LPLW\DQGIDFHWRIDFHUHODWLRQVKLSVWRGD\¶VFRPPXQLWLHVDUH
PXFKPRUHEURDGO\GHILQHGDVVHWVRI³VRFLDOUHODWLRQVDPRQJSHRSOH´
D 7KHVHFRPPXQLWLHVSURYLGHWKHLUPHPEHUVZLWKDFFHVVWRDQH[WHQVLYH
DPRXQWRILQIRUPDWLRQDQGRUIHOORZVKLSDQGVRFLDOLQWHUDFWLRQFRYHULQJDQ
H[WUHPHO\ZLGHUDQJHRIWRSLFVDQGLVVXHV
7KHDQRQ\PLW\RIWKH,QWHUQHWJLYHVLWVXVHUVWKHIUHHGRPWRH[SUHVVZKDWHYHU
YLHZVWKH\ZLVKDQGWRDOVREHQHILWIURPVDYRULQJWKHYLHZVRIRWKHUV
D %HFDXVHRIWKLVDQRQ\PLW\,QWHUQHWXVHUVFDQVD\WKLQJVWRRWKHUVWKDWWKH\
ZRXOGQRWVD\LQIDFHWRIDFHLQWHUDFWLRQV
&RPPXQLFDWLQJRYHUWKH,QWHUQHWSHUPLWVSHRSOHWRH[SORUHWKHERXQGDULHVRI
WKHLUSHUVRQDOLWLHV
6RPHUHVHDUFKHUVKDYHFRPHWRWKHFRQFOXVLRQWKDWWKH,QWHUQHWIRUPDQ\
$PHULFDQVKDVEHFRPH³LQGLVSHQVDEOH´DQGWKDWLWLVRIWHQWKHVPDOOWKLQJVWKDW
WKH,QWHUQHWLVXVHGIRURQDGDLO\EDVLVWKDWPDNHVLWVXFKDQLQWHJUDOSDUWRI
SHRSOH¶VOLYHV
%UDQG &RPPXQLWLHV
7KHQH[WVWHSLQWKHHYROXWLRQRIFRPPXQLWLHVZLOOEHEUDQGFRPPXQLWLHV
$QLOOXVWUDWLRQZRXOGEH-HHSRZQHUV
0DUNHWHUVVRPHWLPHVGHVLJQDVSHFLILFSURGXFWRUVHUYLFHWRFUHDWHDVHQVHRI
FRPPXQLW\RUWDNHDGYDQWDJHRIDSUHH[LVWLQJUHODWLRQVKLS
&RQVXPHU$FWLRQ*URXSV
7KHRYHUULGLQJREMHFWLYHRIPDQ\FRQVXPHUDFWLRQJURXSVLVWREULQJVXIILFLHQW
SUHVVXUHWREHDURQVHOHFWHGPHPEHUVRIWKHEXVLQHVVFRPPXQLW\WRPDNHWKHP
FRUUHFWSHUFHLYHGFRQVXPHUDEXVHV
&(/(%5,7<$1'27+(55()(5(1&(*5283$33($/6
$SSHDOVE\FHOHEULWLHVDQGRWKHUVLPLODUUHIHUHQFHJURXSVDUHXVHGYHU\HIIHFWLYHO\
E\DGYHUWLVHUVWRFRPPXQLFDWHZLWKWKHLUPDUNHWV
&HOHEULWLHVFDQEHDSRZHUIXOIRUFHLQFUHDWLQJLQWHUHVWRUDFWLRQVZLWKUHJDUG
WRSXUFKDVLQJRUXVLQJVHOHFWHGJRRGVDQGVHUYLFHV
7KLVLGHQWLILFDWLRQPD\EHEDVHGRQDGPLUDWLRQRQDVSLUDWLRQRQHPSDWK\RU
RQUHFRJQLWLRQ
&HOHEULWLHV
&HOHEULWLHVSDUWLFXODUO\PRYLHVWDUV79SHUVRQDOLWLHVSRSXODUHQWHUWDLQHUVDQG
VSRUWVLFRQVSURYLGHDYHU\FRPPRQW\SHRIUHIHUHQFHJURXSDSSHDO
$ILUPWKDWGHFLGHVWRHPSOR\DFHOHEULW\WRSURPRWHLWVSURGXFWRUVHUYLFHKDV
WKHFKRLFHRIXVLQJWKHFHOHEULW\WRJLYHDWHVWLPRQLDORUDQHQGRUVHPHQWDVDQ
DFWRULQDFRPPHUFLDORUDVDFRPSDQ\VSRNHVSHUVRQ
7KHLPSRUWDQFHRIFHUWDLQFHOHEULW\FKDUDFWHULVWLFVYDULHVGHSHQGLQJRQZKHWKHU
WKHSURGXFWEHLQJSURPRWHGLVWHFKQLFDORUQRQWHFKQLFDOLQQDWXUH
2IDOOWKHEHQHILWVWKDWDFHOHEULW\PLJKWFRQWULEXWHWRDILUP¶VDGYHUWLVLQJSURJUDP
FHOHEULW\FUHGLELOLW\ZLWKWKHFRQVXPHUDXGLHQFHLVWKHPRVWLPSRUWDQW
&HOHEULW\FUHGLELOLW\PHDQVWKHDXGLHQFH¶VSHUFHSWLRQRIERWKWKHFHOHEULW\¶V
H[SHUWLVHDQGWUXVWZRUWKLQHVV
1RWDOOFRPSDQLHVIHHOWKDWXVLQJFHOHEULW\HQGRUVHUVLVWKHEHVWZD\WRDGYHUWLVH
7KH([SHUW
$W\SHRIUHIHUHQFHJURXSDSSHDOXVHGE\PDUNHWHUVLVWKHH[SHUW²DSHUVRQ
ZKREHFDXVHRIKLVRUKHURFFXSDWLRQWUDLQLQJRUH[SHULHQFHFDQKHOSWKH
FRQVXPHUHYDOXDWHWKHSURGXFWEHLQJSURPRWHG
&RQVXPHU%HKDYLRU 7KH³&RPPRQ0DQ´
$UHIHUHQFHJURXSDSSHDOEDVHGRQWHVWLPRQLDOVRIVDWLVILHGFXVWRPHUVLVFDOOHG
WKHFRPPRQPDQDSSURDFK
127(6
D ,WGHPRQVWUDWHVWKDWVRPHRQHMXVWOLNHWKHFXVWRPHULVVDWLVILHGZLWKWKH
SURGXFWRUVHUYLFH
E 7KHVHFRPPHUFLDOVDUHRIGHVFULEHGDVEHLQJVOLFHRIOLIHFRPPHUFLDOV
L )DPLOLHVDUHRIWHQGHSLFWHGLQ³UHDOOLIH´VLWXDWLRQVLQFRPPHUFLDOV
7KH([HFXWLYHDQG(PSOR\HH6SRNHVSHUVRQ
7KLVIRUPRIDGYHUWLVLQJKDVJURZQPRUHSRSXODURYHUWKHODVWWZHQW\\HDUVDQG
LVWKHUHVXOWRIWKHVXFFHVVRIKLJKO\LQQRYDWLYHH[HFXWLYHVSRNHVSHUVRQV
/LNHWKHFHOHEULW\WKHH[HFXWLYHVSRNHVSHUVRQLVDGPLUHGE\WKHJHQHUDOSRSXODWLRQ
EHFDXVHRIKLVKHUDFKLHYHPHQWVDQGWKHVWDWXVLPSOLFLWO\FRQIHUUHGRQEXVLQHVV
OHDGHUVLQWKH8QLWHG6WDWHV
7RDSSO\DPRUHJUDVVURRWVDSSURDFKWRVXFKSURPRWLRQDOSURJUDPVVRPH
FRPSDQLHVIHDWXUHHPSOR\HHVUDWKHUWKDQWRSH[HFXWLYHVLQVHOHFWHGDGYHUWLVLQJ
FDPSDLJQV
7UDGHRU6SRNHV&KDUDFWHUV
7KHWUDGHRUVSRNHVFKDUDFWHUDQGWKHFDUWRRQFKDUDFWHUVHUYHDVTXDVLFHOHEULW\
HQGRUVHUV
7KLVSHUVRQUHSUHVHQWVWKHLGHDOL]HGLPDJHDQGGLVSHQVHVLPSRUWDQWSURGXFW
LQIRUPDWLRQ
7KLVFDWHJRU\RI³SHUVRQ´LVODUJHO\H[FOXVLYHWRDVSHFLILFSURGXFWRUVHUYLFH
2WKHU5HIHUHQFH*URXS$SSHDOV
7KHUHDUHRWKHUIRUPVRIUHIHUHQFHJURXSDSSHDOVVXFKDVWKHUHVSHFWHGUHWDLOHU
RUWKHHGLWRULDOFRQWHQWRIVSHFLDOLQWHUHVWPDJD]LQHV
6HDOVRIDSSURYDODQGREMHFWLYHSURGXFWUDWLQJVFDQDOVRVHUYHDVSRWHQWLDO
HQGRUVHPHQWV
7+()$0,/<,6$&21&(37,1)/8;
7KHIDPLO\LVDEDVLFFRQFHSWLQVRFLHW\EXWLVQRWHDV\WRGHILQHEHFDXVHIDPLO\
FRPSRVLWLRQDQGVWUXFWXUHDVZHOODVWKHUROHVSOD\HGE\IDPLO\PHPEHUVDUH
DOPRVWDOZD\VLQWUDQVLWLRQ
7UDGLWLRQDOO\WKHIDPLO\LVGHILQHGDVWZRRUPRUHSHUVRQVUHODWHGE\EORRG
PDUULDJHRUDGRSWLRQZKRUHVLGHWRJHWKHU
D $ERXWSHUFHQWRIWKHMXVWRYHUPLOOLRQKRXVHKROGVDUHIDPLOLHV
$OWKRXJKIDPLOLHVVRPHWLPHVDUHUHIHUUHGWRDVKRXVHKROGVQRWDOOKRXVHKROGV &RQVXPHU%HKDYLRU
DUHIDPLOLHV ,WV2ULJLQVDQG
6WUDWHJLF$SSOLFDWLRQV
+RZHYHUZLWKLQWKHFRQWH[WRIFRQVXPHUEHKDYLRUKRXVHKROGVDQGIDPLOLHV
XVXDOO\DUHWUHDWHGDVV\QRQ\PRXV 127(6
$FFRUGLQJWRPDQ\VRXUFHVWKHIDPLO\UHPDLQVWKHFHQWUDORUGRPLQDQWLQVWLWXWLRQ
LQSURYLGLQJIRUWKHZHOIDUHRILWVPHPEHUVDQGLVWKHPDMRUKRXVHKROGFRQVXPHU
DQGFRQVXPLQJXQLW
,QPRVW:HVWHUQVRFLHWLHVWKUHHW\SHVRIIDPLOLHVGRPLQDWHWKHPDUULHGFRXSOH
WKHQXFOHDUIDPLO\DQGWKHH[WHQGHGIDPLO\7\SHVLQFOXGH
D 7KHPDUULHGFRXSOH²DKXVEDQGDQGZLIHLVWKHVLPSOHVWVWUXFWXUH
E 7KHQXFOHDUIDPLO\²DKXVEDQGDQGZLIHDQGRQHRUPRUHFKLOGUHQ7KLV
LVVWLOOFRPPRQSODFH
F 7KHH[WHQGHGIDPLO\²DKXVEDQGZLIHRQHRUPRUHFKLOGUHQDQGDW
OHDVWRQHJUDQGSDUHQW$WRQHWLPHWKLVZDVWKHQRUPEXWJHRJUDSKLF
PRELOLW\KDVUHGXFHGLWVSUHVHQFH
G $IRXUWKIRUPWKHVLQJOHSDUHQWIDPLO\²RQHSDUHQWDQGDWOHDVWRQH
FKLOG²LVJURZLQJGXHWRGLYRUFHVHSDUDWLRQDQGRXWRIZHGORFNELUWKV
7KHSUHGRPLQDQWIRUPRIWKHIDPLO\LVODUJHO\LQIOXHQFHGE\WKHFXOWXUHZLWKLQ
ZKLFKWKHIDPLOLHVH[LVW
7KH&KDQJLQJ86)DPLO\
,PSRUWDQWGHPRJUDSKLFFKDQJHVUHIOHFWWKHG\QDPLFQDWXUHRIWKHIDPLO\
5HVHDUFKUHVXOWVLQGLFDWHWKDWWKHUHLVOLWWOHWRQRGLIIHUHQFHEHWZHHQZRUNLQJDQG
QRQZRUNLQJZLYHVZLWKUHVSHFWWRWKHSXUFKDVHVRIWLPHVDYLQJGXUDEOHV
$KXVEDQGV¶EHKDYLRUZLWKUHVSHFWWRKRXVHKROGFKRUHVUHPDLQHGWKHVDPH
ZKHWKHUWKHZLIHZDVRUZDVQRWHPSOR\HGDQGWKHXOWLPDWHUHVSRQVLELOLW\IRU
KRXVHKROGPDQDJHPHQWVWLOOEHORQJHGWRWKHZLIH
7KHUHLVQRGRXEWWKDWWKH³W\SLFDO´RU³WUDGLWLRQDO´IDPLO\KRXVHKROGKDVFKDQJHG
$WWLWXGHVZLWKUHVSHFWWRFKLOGUHQDQGFKLOGUHDULQJKDYHDOVREHHQFKDQJLQJ
(YHU&KDQJLQJ+RXVHKROG6SHQGLQJ3DWWHUQ
7KHSDVW\HDUVKDYHZLWQHVVHGVRPHGUDPDWLFFKDQJHVLQKRZIDPLOLHVVSHQG
WKHLULQFRPHV
7KHDYHUDJH$PHULFDQIDPLO\¶VVSHQGLQJRQIRRGZDVGRZQIURPVSHQWRXW
RIHYHU\GROODULQWRLQ
&RQVXPHU%HKDYLRU 62&,$/,=$7,212))$0,/<0(0%(56
7KHVRFLDOL]DWLRQRIIDPLO\PHPEHUVLVDFHQWUDOIDPLO\IXQFWLRQ
,QWKHFDVHRI\RXQJFKLOGUHQWKLVSURFHVVLQFOXGHVLPSDUWLQJWRFKLOGUHQWKH
127(6
EDVLFYDOXHVDQGPRGHVRIEHKDYLRUFRQVLVWHQWZLWKWKHFXOWXUH
D 7KHVHJHQHUDOO\LQFOXGHPRUDODQGUHOLJLRXVSULQFLSOHVLQWHUSHUVRQDOVNLOOV
GUHVVDQGJURRPLQJVWDQGDUGVDSSURSULDWHPDQQHUVDQGVSHHFKDQGWKH
VHOHFWLRQRIVXLWDEOHHGXFDWLRQDODQGRFFXSDWLRQDORUFDUHHUJRDOV
3DUHQWDOVRFLDOL]DWLRQUHVSRQVLELOLW\VHHPVWREHFRQVWDQWO\H[SDQGLQJ
$VLJQRISDUHQWV¶FRQVWDQWSUHVVXUHWRKHOSWKHLU\RXQJFKLOGUHQVHFXUHDQ
³DGYDQWDJH´RU³NHHSDKHDG´DUHWKHGHPDQGLQJGDLO\VFKHGXOHVWKDWUXOHWKH
OLYHVRIPDQ\FKLOGUHQ
0DUNHWHUVIUHTXHQWO\WDUJHWSDUHQWVZKRDUHORRNLQJIRUDVVLVWDQFHLQWKHWDVN
RIVRFLDOL]LQJWKHLUFKLOGUHQ
D 7RWKLVHQGPDUNHWHUVDUHVHQVLWLYHWRWKHIDFWWKDWWKHVRFLDOL]DWLRQRI
\RXQJFKLOGUHQSURYLGHVDQRSSRUWXQLW\WRHVWDEOLVKDIRXQGDWLRQRQZKLFK
ODWHUH[SHULHQFHVFRQWLQXHWREXLOGWKURXJKRXWOLIH
&RQVXPHU6RFLDOL]DWLRQRI&KLOGUHQ
7KHDVSHFWRIFKLOGKRRGVRFLDOL]DWLRQWKDWLVSDUWLFXODUO\UHOHYDQWWRWKHVWXG\RI
FRQVXPHUEHKDYLRULVFRQVXPHUVRFLDOL]DWLRQZKLFKLVGHILQHGDVWKHSURFHVV
E\ZKLFKFKLOGUHQDFTXLUHWKHVNLOOVNQRZOHGJHDQGDWWLWXGHVQHFHVVDU\WR
IXQFWLRQDVFRQVXPHUV
$YDULHW\RIVWXGLHVKDYHIRFXVHGRQKRZFKLOGUHQGHYHORSFRQVXPSWLRQVNLOOV
D 0DQ\SUHDGROHVFHQWFKLOGUHQDFTXLUHWKHLUFRQVXPHUEHKDYLRUQRUPV
WKURXJKREVHUYDWLRQRIWKHLUSDUHQWVDQGROGHUVLEOLQJVZKRIXQFWLRQDVUROH
PRGHOVDQGVRXUFHVRIFXHVIRUEDVLFFRQVXPSWLRQOHDUQLQJ
E ,QFRQWUDVWDGROHVFHQWVDQGWHHQDJHUVDUHOLNHO\WRORRNWRWKHLUIULHQGVIRU
PRGHOVRIDFFHSWDEOHFRQVXPSWLRQEHKDYLRU
6KDUHGVKRSSLQJH[SHULHQFHVLHFRVKRSSLQJLVZKHQPRWKHUDQGFKLOGVKRS
WRJHWKHUDOVRJLYHVFKLOGUHQWKHRSSRUWXQLW\WRDFTXLUHLQVWRUHVKRSSLQJVNLOOV
D &RVKRSSLQJLVDZD\RIVSHQGLQJWLPHZLWKRQH¶VFKLOGUHQZKLOHDWWKH
VDPHWLPHDFFRPSOLVKLQJDQHFHVVDU\WDVN
&RQVXPHUVRFLDOL]DWLRQDOVRVHUYHVDVDWRROE\ZKLFKSDUHQWVLQIOXHQFHRWKHU
DVSHFWVRIWKHVRFLDOL]DWLRQSURFHVV
D )RULQVWDQFHSDUHQWVIUHTXHQWO\XVHWKHSURPLVHRUUHZDUGRIPDWHULDO
JRRGVDVDGHYLFHWRPRGLI\RUFRQWURODFKLOG¶VEHKDYLRU
E $FFRUGLQJWRUHVHDUFKDGROHVFHQWVUHSRUWHGWKDWWKHLUSDUHQWVIUHTXHQWO\ &RQVXPHU%HKDYLRU
XVHGWKHSURPLVHRIFKRFRODWHFDQG\DVDPHDQVRIFRQWUROOLQJWKHLUEHKDYLRU ,WV2ULJLQVDQG
6WUDWHJLF$SSOLFDWLRQV
HJJHWWLQJWKHPWRFRPSOHWHKRPHZRUNRUWRFOHDQWKHLUURRPV
&RQVXPHUVRFLDOL]DWLRQRIFKLOGUHQGRHVQRWIXQFWLRQLGHQWLFDOO\LQDOOFXOWXUHV 127(6
7KHUHLVUHVHDUFKHYLGHQFHWRVXJJHVWWKDWDFKLOG¶VDJHDQGVH[IDPLO\VL]H
VRFLDOFODVVDQGUDFHDUHLPSRUWDQWIDFWRUVLQWKHFRQVXPHUVRFLDOL]DWLRQSURFHVV
$GXOW&RQVXPHU6RFLDOL]DWLRQ
6RFLDOL]DWLRQEHJLQVLQHDUO\FKLOGKRRGDQGH[WHQGVWKURXJKRXWDSHUVRQ¶VHQWLUH
OLIH
,QWHUJHQHUDWLRQDO6RFLDOL]DWLRQ
,WLVFRPPRQIRUSURGXFWRUEUDQGOR\DOW\RUSUHIHUHQFHWREHSDVVHGIURPRQH
JHQHUDWLRQWRDQRWKHUVRPHWLPHVXSWRWKUHHRUIRXUJHQHUDWLRQV
27+(5)81&7,2162)7+()$0,/<
2WKHUEDVLFIXQFWLRQVLQFOXGHHFRQRPLFZHOOEHLQJHPRWLRQDOVXSSRUWDQGVXLWDEOH
IDPLO\OLIHVW\OHV
(FRQRPLF:HOO%HLQJ
3URYLGLQJILQDQFLDOPHDQVWRLWVGHSHQGHQWVLVXQTXHVWLRQDEO\DEDVLFIDPLO\
IXQFWLRQ
+RZWKHIDPLO\GLYLGHVLWVUHVSRQVLELOLWLHVIRUSURYLGLQJHFRQRPLFZHOOEHLQJKDV
FKDQJHGFRQVLGHUDEO\GXULQJWKHSDVW\HDUV
D 1RORQJHUDUHWKHWUDGLWLRQDOUROHVRIKXVEDQGDVHFRQRPLFSURYLGHUDQG
ZLIHDVKRPHPDNHUDQGFKLOGUHDUHUVWLOOYDOLG
E ,WLVYHU\FRPPRQIRUPDUULHGZRPHQZLWKFKLOGUHQLQWKH8QLWHG6WDWHVDQG
RWKHULQGXVWULDOFRXQWULHVWREHHPSOR\HGRXWVLGHWKHKRPHDQGIRUWKHLU
KXVEDQGVWRVKDUHKRXVHKROGUHVSRQVLELOLWLHV
F 0RUHWKDQSHUFHQWRIZRPHQLQ8QLWHG6WDWHVZKRDUHRYHUWKHDJHRI
FODLPWKDWLWLVPRUHGLIILFXOWWREHDPRWKHUQRZWKDQLWZDVRU
\HDUVDJR
7KHHFRQRPLFUROHRIFKLOGUHQDOVRKDVFKDQJHG
D 7RGD\DOWKRXJKPDQ\WHHQDJHFKLOGUHQZRUNWKH\UDUHO\DVVLVWWKHIDPLO\
ILQDQFLDOO\
E 7HHQDJHUVDUHH[SHFWHGWRSD\IRUWKHLURZQDPXVHPHQWVRWKHUVFRQWULEXWH
WRWKHFRVWVRIWKHLUIRUPDOHGXFDWLRQDQGSUHSDUHWKHPVHOYHVWREHILQDQFLDOO\
LQGHSHQGHQW
&RQVXPHU%HKDYLRU (PRWLRQDO6XSSRUW
7KHSURYLVLRQRIHPRWLRQDOQRXULVKPHQWLQFOXGLQJORYHDIIHFWLRQDQGLQWLPDF\
WRLWVPHPEHUVLVDQLPSRUWDQWFRUHIXQFWLRQRIWKHFRQWHPSRUDU\IDPLO\
127(6
7KHIDPLO\SURYLGHVVXSSRUWDQGHQFRXUDJHPHQWDQGDVVLVWVLWVPHPEHUVLQ
FRSLQJZLWKGHFLVLRQPDNLQJDQGSHUVRQDORUVRFLDOSUREOHPV
,IWKHIDPLO\FDQQRWSURYLGHDGHTXDWHDVVLVWDQFHZKHQLWLVQHHGHGLWPD\WXUQ
WRDFRXQVHORUSV\FKRORJLVWRURWKHUKHOSLQJSURIHVVLRQDODVDQDOWHUQDWLYH
6XLWDEOH)DPLO\/LIHVW\OHV
$QRWKHU LPSRUWDQW IDPLO\ IXQFWLRQ LQ WHUPV RI FRQVXPHU EHKDYLRU LV WKH
HVWDEOLVKPHQWRIDVXLWDEOHOLIHVW\OHIRUWKHIDPLO\
8SEULQJLQJH[SHULHQFHDQGWKHSHUVRQDODQGMRLQWO\KHOGJRDOVRIWKHVSRXVHV
GHWHUPLQHWKHLPSRUWDQFHSODFHGRQHGXFDWLRQRUFDUHHURQUHDGLQJWHOHYLVLRQ
YLHZLQJWKHOHDUQLQJRIFRPSXWHUVNLOOVWKHIUHTXHQF\DQGTXDOLW\RIGLQLQJRXW
DQGRQWKHVHOHFWLRQRIRWKHUHQWHUWDLQPHQWDQGUHFUHDWLRQDODFWLYLWLHV
)DPLO\OLIHVW\OHFRPPLWPHQWVLQFOXGLQJWKHDOORFDWLRQRIWLPHLVJUHDWO\LQIOXHQFLQJ
FRQVXPSWLRQSDWWHUQV
)$0,/<'(&,6,210$.,1*$1'&2168037,215(/$7('52/(6
0DUNHWHUVPRVWIUHTXHQWO\H[DPLQHWKHDWWLWXGHVDQGEHKDYLRURIWKHRQHIDPLO\
PHPEHUZKRPWKH\EHOLHYHWREHWKHPDMRUGHFLVLRQPDNHU
6RPHWLPHVWKH\DOVRH[DPLQHWKHDWWLWXGHVDQGEHKDYLRURIWKHSHUVRQPRVW
OLNHO\WREHWKHSULPDU\XVHURIWKHSURGXFWRUVHUYLFH
.H\)DPLO\&RQVXPSWLRQ5ROHV
)RUDIDPLO\WRIXQFWLRQDVDFRKHVLYHXQLWYDULRXVWDVNVPXVWEHFDUULHGRXW
E\RQHRUPRUHIDPLO\PHPEHUV
,QDG\QDPLFVRFLHW\IDPLO\UHODWHGGXWLHVDUHFRQVWDQWO\FKDQJLQJ
D :HFDQLGHQWLI\HLJKWGLVWLQFWUROHVLQWKHIDPLO\GHFLVLRQPDNLQJSURFHVV
KRZHYHU
E 7KHQXPEHUDQGLGHQWLW\RIWKHIDPLO\PHPEHUVZKRILOOWKHVHUROHVYDU\
IURPIDPLO\WRIDPLO\DQGIURPSURGXFWWRSURGXFW
7KHHLJKWUROHVLQWKHIDPLO\GHFLVLRQPDNLQJSURFHVVLQFOXGH
D ,QIOXHQFHUV²IDPLO\PHPEHUVZKRSURYLGHLQIRUPDWLRQWRRWKHUPHPEHUV
DERXWDSURGXFWRUVHUYLFH
E *DWHNHHSHUV²IDPLO\PHPEHUVZKRFRQWUROWKHIORZRILQIRUPDWLRQDERXW &RQVXPHU%HKDYLRU
DSURGXFWRUVHUYLFHLQWRWKHIDPLO\ ,WV2ULJLQVDQG
6WUDWHJLF$SSOLFDWLRQV
F 'HFLGHUV²IDPLO\PHPEHUVZLWKWKHSRZHUWRGHWHUPLQHXQLODWHUDOO\RU
MRLQWO\ZKHWKHUWRVKRSIRUSXUFKDVHXVHFRQVXPHRUGLVSRVHRIDVSHFLILF 127(6
SURGXFWRUVHUYLFH
G %X\HUV²IDPLO\PHPEHUVZKRPDNHWKHDFWXDOSXUFKDVHRIDSDUWLFXODU
SURGXFWRUVHUYLFH
H 3UHSDUHUV²IDPLO\PHPEHUVZKRWUDQVIRUPWKHSURGXFWLQWRDIRUPVXLWDEOH
IRUFRQVXPSWLRQE\RWKHUIDPLO\PHPEHUV
I 8VHUV²IDPLO\PHPEHUVZKRXVHRUFRQVXPHDSDUWLFXODUSURGXFWRU
VHUYLFH
J 0DLQWDLQHUV²IDPLO\PHPEHUVZKRVHUYLFHRUUHSDLUWKHSURGXFWVRWKDW
LWZLOOSURYLGHFRQWLQXHGVDWLVIDFWLRQ
K 'LVSRVHUV²IDPLO\PHPEHUVZKRLQLWLDWHRUFDUU\RXWWKHGLVSRVDORU
GLVFRQWLQXDWLRQRIDSDUWLFXODUSURGXFWRUVHUYLFH
'\QDPLFVRI+XVEDQG:LIH'HFLVLRQ0DNLQJ
0DUNHWHUVDUHLQWHUHVWHGLQWKHUHODWLYHDPRXQWRILQIOXHQFHWKDWDKXVEDQGDQG
DZLIHKDYHZKHQLWFRPHVWRIDPLO\FRQVXPSWLRQFKRLFHV
)DPLO\FRQVXPSWLRQGHFLVLRQVFDQEHFODVVLILHGDV
D +XVEDQGGRPLQDWHG
E :LIHGRPLQDWHG
F -RLQW²HTXDORUV\QFUDWLF
G $XWRQRPLF²VROLWDU\RUXQLODWHUDO
7KHUHODWLYHLQIOXHQFHRIDKXVEDQGDQGZLIHRQDSDUWLFXODUFRQVXPHUGHFLVLRQ
GHSHQGVLQSDUWRQWKHSURGXFWDQGVHUYLFHFDWHJRU\
D 7KHUHODWLYHLQIOXHQFHKDVFKDQJHGRYHUWLPH
+XVEDQGZLIHGHFLVLRQPDNLQJDOVRDSSHDUVWREHUHODWHGWRFXOWXUDOLQIOXHQFH
D ,QWKH3HRSOH¶V5HSXEOLFRI&KLQDWKHUHZHUHVXEVWDQWLDOO\IHZHU³MRLQW´
GHFLVLRQVDQGPRUH³KXVEDQGGRPLQDWHG´GHFLVLRQVIRUPDQ\KRXVHKROG
SXUFKDVHVWKDQDPRQJ&KLQHVHLQWKH8QLWHG6WDWHV
E ,QDQRWKHUUHFHQWFURVVFXOWXUDOVWXG\KXVEDQGZLIHGHFLVLRQPDNLQJZDV
VWXGLHGDPRQJWKUHHJURXSV$VLDQ,QGLDQVOLYLQJLQ,QGLD$VLDQ,QGLDQV
OLYLQJLQWKH8QLWHG6WDWHVDQG$PHULFDQQDWLRQDOV
&RQVXPHU%HKDYLRU L 5HVXOWVVKRZDGHFUHDVHLQKXVEDQGGRPLQDWHGGHFLVLRQVDQGDQLQFUHDVH
LQZLIHGRPLQDWHGGHFLVLRQVJRLQJIURP$VLDQ,QGLDQVLQ,QGLDWR$VLDQ
,QGLDQVLQWKH8QLWHG6WDWHVWR$PHULFDQQDWLRQDOV
127(6 7KH([SDQGLQJ5ROHRI&KLOGUHQLQ)DPLO\'HFLVLRQ0DNLQJ
2YHUWKHSDVWVHYHUDOGHFDGHVWKHUHKDVEHHQDWUHQGWRZDUGFKLOGUHQSOD\LQJ
DPRUHDFWLYHUROHLQZKDWWKHIDPLO\EX\VDVZHOODVLQWKHIDPLO\GHFLVLRQ
PDNLQJSURFHVV
7KLVVKLIWLQLQIOXHQFHKDVRFFXUUHGDVDUHVXOWRIIDPLOLHVKDYLQJIHZHUFKLOGUHQ
PRUHGXDOLQFRPHFRXSOHVZKRFDQDIIRUGWRSHUPLWWKHLUFKLOGUHQWRPDNHD
JUHDWHUQXPEHURIWKHFKRLFHVDQGWKHHQFRXUDJHRIWKHPHGLDWRDOORZFKLOGUHQ
WR³H[SUHVVWKHPVHOYHV´
5HVHDUFKUHYHDOVWKDWFKLOGUHQKDYHFRQVLGHUDEOHLQIOXHQFHRQIDPLO\GHFLVLRQ
PDNLQJZLWKUHVSHFWWRHDWLQJ
5HVHDUFKHYLGHQFHVXSSRUWVWKHQRWLRQWKDWWKHH[WHQWWRZKLFKFKLOGUHQLQIOXHQFH
DIDPLO\¶VSXUFKDVHVLVUHODWHGWRIDPLO\FRPPXQLFDWLRQVSDWWHUQV
&KLOGUHQ¶VLQIOXHQFHKDVEHHQIRXQGWREHKLJKHVWLQIDPLOLHVZKHUHWKHSDUHQWV
DUHSOXUDOLVWLFSDUHQWVLHSDUHQWVZKRHQFRXUDJHFKLOGUHQWRVSHDNXSDQG
H[SUHVVWKHLULQGLYLGXDOSUHIHUHQFHVRQSXUFKDVHDQGFRQVHQVXDOSDUHQWVLH
SDUHQWVZKRHQFRXUDJHFKLOGUHQWRVHHNKDUPRQ\EXWDUHQHYHUWKHOHVVRSHQWR
WKHFKLOGUHQ¶VYLHZSRLQWRQSXUFKDVHVEHFDXVHVXFKSDUHQWVDOORZWKHLUFKLOGUHQ
DVLJQLILFDQWO\JUHDWHUDPRXQWRILQIOXHQFHWKDWGRSURWHFWLYHSDUHQWVLH
SDUHQWVZKRVWUHVVWKDWFKLOGUHQVKRXOGQRWVWUHVVWKHLURZQSUHIHUHQFHVEXW
UDWKHUJRDORQJZLWKWKHSDUHQWVMXGJPHQWRQZKDWLVWREHSXUFKDVHG
5HVHDUFKKDVH[SORUHGWKHQRWLRQRIWKHWHHQ,QWHUQHWPDYHQ²WHHQDJHUVZKR
VSHQGFRQVLGHUDEOHWLPHRQWKH,QWHUQHWDQGNQRZKRZWRVHDUFKIRUDQGILQG
LQIRUPDWLRQDQGUHVSRQGWRUHTXHVWVIURPRWKHUVWRSURYLGHLQIRUPDWLRQ
$GYHUWLVHUVKDYHORQJUHFRJQL]HGWKHLPSRUWDQFHRIFKLOGUHQ¶V³SHVWHUSRZHU´
DQGWKHUHIRUHHQFRXUDJHFKLOGUHQWR³SHVWHU´WKHLUSDUHQWVWRSXUFKDVHZKDWWKH\
VHHLQDGV
7KHVWUDWHJLHVXVHGE\FKLOGUHQWRLQIOXHQFHWKHLUSDUHQWV¶IRRGSXUFKDVLQJGHFLVLRQV
LQFOXGHGVXFKSHUVXDVLYHVWUDWHJLHVDVVWDWLQJWKHLUSUHIHUHQFHVRUEHJJLQJDQG
HPRWLRQDOVWUDWHJLHVVXFKDVDVNLQJUHSHWLWLYHO\IRUDSURGXFWLQDZD\WKDW
LUULWDWHVWKHSDUHQWV
$QDGGLWLRQDOSRLQWPXVWEHPDGHDERXWFKLOGUHQDQG79YLHZLQJ²QHWZRUNV
WRGD\WU\WRSURPRWHWKHEUDQGLQJSURFHVVEHFDXVHLWFDQFKDQJHDFKLOGIURP
DYLHZHULQWRDFRQVXPHUOLNHO\WRSXUFKDVHWKHDGYHUWLVHGSURGXFW
7+()$0,/</,)(&<&/( &RQVXPHU%HKDYLRU
,WV2ULJLQVDQG
6RFLRORJLVWVDQGFRQVXPHUUHVHDUFKHUVKDYHORQJEHHQDWWUDFWHGWRWKHFRQFHSW 6WUDWHJLF$SSOLFDWLRQV
RIWKHIDPLO\OLIHF\FOH)/&DVDPHDQVRIGHSLFWLQJZKDWZDVRQFHDUDWKHU
VWHDG\DQGSUHGLFWDEOHVHULHVRIVWDJHVWKDWPRVWIDPLOLHVSURJUHVVHGWKURXJK 127(6
7KHFXUUHQWGHFOLQHLQWKHSHUFHQWDJHRIIDPLOLHVWKDWSURJUHVVWKURXJKDWUDGLWLRQDO
)/&WREHH[SORUHGVKRUWO\VHHPVWREHFDXVHGE\DKRVWRIVRFLHWDOIDFWRUV
LQFOXGLQJ
D ,QFUHDVLQJGLYRUFHUDWH
E 7KHH[SORVLYHQXPEHURIRXWRIZHGORFNELUWKV
F 7KH\HDUGHFOLQHLQWKHQXPEHURIH[WHQGHGIDPLOLHVDVPDQ\\RXQJ
IDPLOLHVPRYHGWRDGYDQFHWKHLUMREDQGFDUHHURSSRUWXQLWLHV
)/&DQDO\VLVHQDEOHVPDUNHWHUVWRVHJPHQWIDPLOLHVLQWHUPVRIDVHULHVRI
VWDJHVVSDQQLQJWKHOLIHFRXUVHRIDIDPLO\XQLW
7KH)/&LVDFRPSRVLWHYDULDEOHFUHDWHGE\V\VWHPDWLFDOO\FRPELQLQJVXFK
FRPPRQO\XVHGGHPRJUDSKLFYDULDEOHVDVPDULWDOVWDWXVVL]HRIIDPLO\DJHRI
IDPLO\PHPEHUVIRFXVLQJRQWKHDJHRIWKHROGHVWRU\RXQJHVWFKLOGDQG
HPSOR\PHQWVWDWXVRIWKHKHDGRIKRXVHKROG
7KHDJHVRIWKHSDUHQWVDQGWKHUHODWLYHDPRXQWRIGLVSRVDEOHLQFRPHXVXDOO\
DUHLQIHUUHGIURPWKHVWDJHLQWKHIDPLO\OLIHF\FOH
7KHWH[WGLYLGHVWKHWUHDWPHQWRIWKH)/&FRQFHSWLQWRWZRVHFWLRQV
D 7KHILUVWVHFWLRQFRQVLGHUVWKHWUDGLWLRQDO)/&VFKHPD
E 7KHDOWHUQDWLYH)/&VWDJHVLQFOXGLQJLQFUHDVLQJO\LPSRUWDQWQRQWUDGLWLRQDO
IDPLO\VWUXFWXUHVDUHFRQVLGHUHGVHSDUDWHO\
7UDGLWLRQDO)DPLO\/LIH&\FOH
7UDGLWLRQDOIDPLO\OLIHF\FOHPRGHOVKDYHILYHEDVLFVWDJHV
D 6WDJH,²%DFKHORUKRRG<RXQJVLQJOHDGXOWOLYLQJDSDUWIURPSDUHQWV
E 6WDJH,,²+RQH\PRRQHUV<RXQJPDUULHGFRXSOH
F 6WDJH,,,²3DUHQWKRRG0DUULHGFRXSOHZLWKDWOHDVWRQHFKLOGOLYLQJDW
KRPH
G 6WDJH,9²3RVWSDUHQWKRRG$QROGHUPDUULHGFRXSOHZLWKQRFKLOGUHQ
OLYLQJDWKRPH
H 6WDJH9²'LVVROXWLRQ2QHVXUYLYLQJVSRXVH
&RQVXPHU%HKDYLRU 6WDJH,²%DFKHORUKRRG
7KHILUVW)/&VWDJHFRQVLVWVRI\RXQJVLQJOHPHQDQGZRPHQZKRKDYHHVWDEOLVKHG
KRXVHKROGVDSDUWIURPWKHLUSDUHQWV
127(6
0RVWPHPEHUVRIWKLV)/&VWDJHDUHIXOO\HPSOR\HGPDQ\DUHFROOHJHRU
JUDGXDWHVWXGHQWVZKRKDYHOHIWWKHLUSDUHQWV¶KRPHV
<RXQJVLQJOHDGXOWVDUHDSWWRVSHQGWKHLULQFRPHVRQUHQWEDVLFKRPHIXUQLVKLQJV
WKHSXUFKDVHDQGPDLQWHQDQFHRIDXWRPRELOHVWUDYHODQGHQWHUWDLQPHQWDQG
FORWKLQJDQGDFFHVVRULHV
0HPEHUVRIWKHEDFKHORUKRRGVWDJHIUHTXHQWO\KDYHVXIILFLHQWGLVSRVDEOHLQFRPH
WRLQGXOJHWKHPVHOYHV
0DUNHWHUVWDUJHWVLQJOHVIRUDZLGHYDULHW\RISURGXFWVDQGVHUYLFHV
0DUULDJHPDUNVWKHWUDQVLWLRQIURPWKHEDFKHORUKRRGVWDJHWRWKHKRQH\PRRQHU
VWDJH
6WDJH,,²+RQH\PRRQHUV
7KHKRQH\PRRQVWDJHVWDUWVLPPHGLDWHO\DIWHUWKHPDUULDJHYRZVDUHWDNHQDQG
JHQHUDOO\FRQWLQXHVXQWLOWKHDUULYDORIWKHFRXSOH¶VILUVWFKLOG
7KLV)/&VWDJHVHUYHVDVDSHULRGRIDGMXVWPHQWWRPDUULHGOLIH
7KHVHFRXSOHVRIWHQKDYHDYDLODEOHDFRPELQHGLQFRPHWKDWRIWHQSHUPLWVD
OLIHVW\OHWKDWSURYLGHVWKHPZLWKWKHRSSRUWXQLWLHVRIPRUHLQGXOJHQWSXUFKDVLQJ
RISRVVHVVLRQVRUDOORZVWKHPWRVDYHRULQYHVWWKHLUH[WUDLQFRPH
+RQH\PRRQHUVKDYHFRQVLGHUDEOHVWDUWXSH[SHQVHVZKHQHVWDEOLVKLQJDQHZ
KRPHPDMRUDQGPLQRUDSSOLDQFHVEHGURRPDQGOLYLQJURRPIXUQLWXUHFDUSHWLQJ
GUDSHVGLVKHVDQGDKRVWRIXWHQVLOVDQGDFFHVVRU\LWHPV
'XULQJWKLVVWDJHWKHDGYLFHDQGH[SHULHQFHRIRWKHUPDUULHGFRXSOHVDUHOLNHO\
WREHLPSRUWDQWWRQHZO\ZHGV
D $OVRLPSRUWDQWDVVRXUFHVRIQHZSURGXFWLQIRUPDWLRQDUHWKHVRFDOOHG
VKHOWHUPDJD]LQHVVXFKDV%HWWHU+RPHVDQG*DUGHQVDQG0HWURSROLWDQ
+RPH
6WDJH,,,²3DUHQWKRRG
:KHQDFRXSOHKDVLWVILUVWFKLOGWKHKRQH\PRRQLVFRQVLGHUHGRYHU
D %HFDXVHRILWVORQJGXUDWLRQWKLVVWDJHFDQEHGLYLGHGLQWRVKRUWHUSKDVHV
L 3UHVFKRROSKDVH
LL (OHPHQWDU\VFKRROSKDVH &RQVXPHU%HKDYLRU
,WV2ULJLQVDQG
LLL +LJKVFKRROSKDVH 6WUDWHJLF$SSOLFDWLRQV
LY &ROOHJHSKDVH
127(6
7KURXJKRXWWKHVHSDUHQWKRRGSKDVHVWKHLQWHUUHODWLRQVKLSVRIIDPLO\PHPEHUV
DQGWKHVWUXFWXUHRIWKHIDPLO\JUDGXDOO\FKDQJHDQGWKHILQDQFLDOUHVRXUFHVRI
WKHIDPLO\FKDQJHVLJQLILFDQWO\
0DQ\PDJD]LQHVFDWHUWRWKHLQIRUPDWLRQDQGHQWHUWDLQPHQWQHHGVRISDUHQWV
DQGFKLOGUHQ
6WDJH,9²3RVWSDUHQWKRRG
3RVWSDUHQWKRRGZKHQDOOWKHFKLOGUHQKDYHOHIWKRPHLVWUDXPDWLFIRUVRPH
SDUHQWVDQGOLEHUDWLQJIRURWKHUV
7KLVVRFDOOHGHPSW\QHVWVWDJHVLJQLILHVIRUPDQ\SDUHQWVDOPRVWD³UHELUWK´D
WLPHIRUGRLQJDOOWKHWKLQJVWKH\FRXOGQRWGRZKLOHWKHFKLOGUHQZHUHDWKRPH
DQGWKH\KDGWRZRUU\DERXWVRDULQJHGXFDWLRQDOH[SHQVHV
)RUWKHPRWKHULWLVDWLPHWRIXUWKHUKHUHGXFDWLRQWRHQWHURUUHHQWHUWKHMRE
PDUNHWWRVHHNQHZLQWHUHVWV
)RUWKHIDWKHULWLVDWLPHWRLQGXOJHLQQHZKREELHV
)RUERWKLWLVWKHWLPHWRWUDYHOWRHQWHUWDLQSHUKDSVWRUHIXUQLVKWKHLUKRPH
RUWRVHOOLWLQIDYRURIDQHZKRPHRUFRQGRPLQLXP
0DUULHGFRXSOHVWHQGWREHPRVWFRPIRUWDEOHILQDQFLDOO\
0DQ\HPSW\QHVWHUVUHWLUHDOWKRXJKWKH\DUHVWLOOLQJRRGKHDOWK
2OGHUFRQVXPHUVWHQGWRXVHWHOHYLVLRQDVDQLPSRUWDQWVRXUFHRILQIRUPDWLRQ
DQGHQWHUWDLQPHQW
D 7KH\IDYRUSURJUDPVWKDWSURYLGHWKHRSSRUWXQLW\WR³NHHSXSZLWKZKDW¶V
KDSSHQLQJ´HVSHFLDOO\QHZVDQGSXEOLFDIIDLUVSURJUDPV
6WDJH9²'LVVROXWLRQ
'LVVROXWLRQRIWKHEDVLFIDPLO\XQLWRFFXUVZLWKWKHGHDWKRIRQHVSRXVH7KH &KHFN<RXU3URJUHVV
VXUYLYLQJVSRXVHXVXDOO\WKHZLIHRIWHQWHQGVWRIROORZDPRUHHFRQRPLFDO )ULHQGVKLSJURXSV
OLIHVW\OH0DQ\VXUYLYLQJVSRXVHVVHHNHDFKRWKHURXWIRUFRPSDQLRQVKLSRWKHUV DUH
BBBBBBBBBBBB
HQWHULQWRVHFRQGRUWKLUGDQGHYHQIRXUWKPDUULDJHV
+RZPDQ\VWDJHV
0DUNHWLQJDQGWKH7UDGLWLRQDO)/& DUHWKHUHLQ
IDPLO\OLIHF\FOH"
,WLVSRVVLEOHWRWUDFHKRZWKH)/&FRQFHSWLPSDFWVDVLQJOHSURGXFWRUVHUYLFH
RYHUWLPH
&RQVXPHU%HKDYLRU 0RGLILFDWLRQV²WKH1RQWUDGLWLRQDO)/&
7KHWUDGLWLRQDO)/&PRGHOKDVORVWVRPHRILWVDELOLW\WRUHSUHVHQWWKHFXUUHQW
VWDJHVDIDPLO\SDVVHVWKURXJK
127(6
7KHXQGHUO\LQJVRFLRGHPRJUDSKLFIRUFHVWKDWGULYHWKLVH[SDQGHG)/&PRGHO
LQFOXGHGLYRUFHDQGODWHUPDUULDJHVZLWKDQGZLWKRXWWKHSUHVHQFHRIFKLOGUHQ
$OWKRXJKVRPHZKDWJUHDWHUUHDOLW\LVSURYLGHGE\WKLVPRGLILHG)/&PRGHOLW
RQO\UHFRJQL]HVIDPLOLHVWKDWVWDUWHGLQPDUULDJHLJQRULQJVXFKVLQJOHSDUHQW
KRXVHKROGVDVXQZHGPRWKHUVDQGVLQJOHSHUVRQVZKRDGRSWDFKLOG
1RQWUDGLWLRQDO)/&6WDJHV
1RQWUDGLWLRQDO)/&VWDJHVDUHGHULYHGIURPWKHG\QDPLFVRFLRGHPRJUDSKLF
IRUFHVRSHUDWLQJGXULQJWKHSDVWRUVR\HDUV
7KHVHQRQWUDGLWLRQDOVWDJHVLQFOXGHQRWRQO\IDPLO\KRXVHKROGVEXWDOVRQRQIDPLO\
KRXVHKROGVWKRVHFRQVLVWLQJRIDVLQJOHLQGLYLGXDODQGWKRVHFRQVLVWLQJRIWZR
RUPRUHXQUHODWHGLQGLYLGXDOV
1HDUO\SHUFHQWRIDOOKRXVHKROGVDUHFXUUHQWO\QRQIDPLO\KRXVHKROGVLH
PHQRUZRPHQOLYLQJDORQHRUZLWKDQRWKHUSHUVRQDVDQXQPDUULHGFRXSOH
&RQVXPSWLRQLQ1RQWUDGLWLRQDO)DPLOLHV
:KHQKRXVHKROGVXQGHUJRVWDWXVFKDQJHVWKH\EHFRPHDWWUDFWLYHWDUJHWVIRU
PDQ\PDUNHWHUV
,QDQRWKHUVSKHUHWKHVXEVWDQWLDOLQFUHDVHLQGXDOLQFRPHKRXVHKROGVLHZRUNLQJ
ZLYHVDQGWKHVXEVHWRIZRUNLQJPRWKHUVKDVDOVRWHQGHGWRPXGG\WKHOLIHVW\OH
DVVXPSWLRQVLPSOLFLWLQWKHWUDGLWLRQDO)/&
7KHVLGHE\VLGHH[LVWHQFHRIWUDGLWLRQDODQGQRQWUDGLWLRQDO)/&VWDJHVLVDQRWKHU
H[DPSOHRIRXUUHFXUULQJREVHUYDWLRQWKDWWKHFRQWHPSRUDU\PDUNHWSODFHLV
FRPSOH[LQLWVGLYHUVLW\DQGLWLVDFKDOOHQJHWRVHJPHQWDQGVHUYH
&$6(
&+$37(5 6800$5<
)RUPDQ\FRQVXPHUVWKHLUIDPLO\LVWKHSULPDU\UHIHUHQFHJURXSIRUPDQ\DWWLWXGHV
DQGEHKDYLRUV7KHIDPLO\LVWKHSULPHWDUJHWPDUNHWIRUPRVWSURGXFWVDQGSURGXFW
FDWHJRULHV$VWKHPRVWEDVLFPHPEHUVKLSJURXSIDPLOLHVDUHGHILQHGDVWZRRU
PRUHSHUVRQVUHODWHGE\EORRGPDUULDJHRUDGRSWLRQWKDWUHVLGHWRJHWKHU7KHUH
DUHWKUHHW\SHVRIIDPLOLHVPDUULHGFRXSOHVQXFOHDUIDPLOLHVDQGH[WHQGHGIDPLOLHV
6RFLDOL]DWLRQLVDFRUHIXQFWLRQRIWKHIDPLO\2WKHUIXQFWLRQVRIWKHIDPLO\DUHWKH
SURYLVLRQRIHFRQRPLFDQGHPRWLRQDOVXSSRUWDQGWKHSXUVXLWRIDVXLWDEOHOLIHVW\OH
IRULWVPHPEHUV
7KHPHPEHUVRIDIDPLO\DVVXPHVSHFLILFUROHVLQWKHLUHYHU\GD\IXQFWLRQLQJVXFK
UROHVRUWDVNVH[WHQGWRWKHUHDOPRIFRQVXPHUSXUFKDVHGHFLVLRQV.H\FRQVXPHU
UHODWHGUROHVRIIDPLO\PHPEHUVLQFOXGHLQIOXHQFHUVJDWHNHHSHUVGHFLGHUVEX\HUV
SUHSDUHUVXVHUVPDLQWDLQHUVDQGGLVSRVHUV$IDPLO\¶VGHFLVLRQPDNLQJVW\OHRIWHQ
LVLQIOXHQFHGE\LWVOLIHVW\OHUROHVDQGFXOWXUDOIDFWRUV
7KHPDMRULW\RIFRQVXPHUVWXGLHVFODVVLI\IDPLO\FRQVXPSWLRQGHFLVLRQVDVKXVEDQG
GRPLQDWHGZLIHGRPLQDWHGMRLQWRUDXWRQRPLFGHFLVLRQV7KHH[WHQWDQGQDWXUHRI
KXVEDQGZLIHLQIOXHQFHLQIDPLO\GHFLVLRQVGHSHQGVLQSDUWRQWKHVSHFLILFSURGXFW
RUVHUYLFHDQGVHOHFWHGFXOWXUDOLQIOXHQFHV
$16:(5672&+(&.<285352*5(66
$*URXSLVWZRRUPRUHSHRSOHZKRLQWHUDFWWRDFFRPSOLVKHLWKHULQGLYLGXDO
RUPXWXDOJRDOV
$ 5HIHUHQFH *URXS LV DQ\ SHUVRQ RU JURXS WKDW VHUYHV DV D SRLQW RI
FRPSDULVRQRUUHIHUHQFHIRUDQLQGLYLGXDOLQIRUPLQJHLWKHUJHQHUDORU
VSHFLILFYDOXHVDWWLWXGHVRUDVSHFLILFJXLGHIRUEHKDYLRU
&RQVXPHU%HKDYLRU ,QIRUPDO
127(6 7HVW\RXUVHOI
'HILQHWKHUHOHYDQFHRIJURXSV
:KDWDUHWKHSRZHUVRIUHIHUHQFHJURXSV"
([SODLQWKHLPSRUWDQFHRIIDPLO\LQWKHEX\LQJGHFLVLRQSURFHVV
7KURZVRPHOLJKWRQWKH)DPLO\F\FOH
([SODLQWKHH[SDQGLQJUROHRIFKLOGUHQLQIDPLO\GHFLVLRQPDNLQJ
)XUWKHUUHDGLQJ
x &RQVXPHU%HKDYLRUE\'DYLG
6RFLDO&ODVV
6RFLDO&ODVV
127(6
7KH&KDSWHU&RYHUV
,QWURGXFWLRQ
:KDWLV6RFLDO&ODVV"
7KH0HDVXUHPHQWRI6RFLDO&ODVV
/LIHVW\OH3URILOHVRI7KH6RFLDO&ODVVHV
6RFLDO&ODVV0RELOLW\
*HRGHPRJUDSKLF&OXVWHULQJ
7KH$IIOXHQW&RQVXPHU
0LGGOHFODVV&RQVXPHUV
7KH:RUNLQJ&ODVV$QG2WKHU1RQDIIOXHQW&RQVXPHUV
5HFRJQL]LQJ7KH´7HFKQRFODVVµ
6HOHFWHG&RQVXPHU%HKDYLRU$SSOLFDWLRQVRI6RFLDO&ODVV
:KDW,V&XOWXUH"
7KH,QYLVLEOH+DQGRI&XOWXUH
&XOWXUH6DWLVILHV1HHGV
&XOWXUHLV/HDUQHG
&XOWXUHLV'\QDPLF
7KH0HDVXUHPHQWRI&XOWXUH
$PHULFDQ&RUH9DOXHV
7RZDUG$6KRSSLQJ&XOWXUH
/HDUQLQJ2EMHFWLYHV
$IWHUJRLQJWKURXJKWKLVFKDSWHU\RXVKRXOGEHDEOHWR
x 'LVWLQJXLVKEHWZHHQDQGGHILQHVRFLDOFODVVDQGVRFLDOVWDWXV
x ([SODLQWKHWKUHHEURDGPHDVXUHVRIVRFLDOFODVV
x 'LVFXVVWKHXVHRIFRPSRVLWHYDULDEOHLQGH[HVWRPHDVXUHVRFLDOFODVV
x 8QGHUVWDQGVHYHUDOVSHFLILFDSSOLFDWLRQVRIVRFLDOFODVVLQIRUPDWLRQWR
FRQVXPHUEHKDYLRU
&RQVXPHU%HKDYLRU ,1752'8&7,21
6RPHIRUPRIFODVVVWUXFWXUHRUVRFLDOVWUDWLILFDWLRQKDVH[LVWHGLQDOOVRFLHWLHV
WKURXJKRXWWKHKLVWRU\RIKXPDQH[LVWHQFH
127(6
,QFRQWHPSRUDU\VRFLHWLHVDQLQGLFDWLRQRIWKHSUHVHQFHRIVRFLDOFODVVHVLVWKH
FRPPRQUHDOLW\WKDWSHRSOHZKRDUHEHWWHUHGXFDWHGRUKDYHPRUHSUHVWLJLRXV
RFFXSDWLRQVOLNHSK\VLFLDQVDQGODZ\HUVRIWHQDUHPRUHKLJKO\YDOXHGWKDQWKRVH
ZKRDUHWUXFNGULYHUVDQGIDUPKDQGV
D 7KLVLVVRHYHQWKRXJKDOOIRXURFFXSDWLRQVDUHQHFHVVDU\IRUDVRFLHW\¶V
ZHOOEHLQJ
E 0RUHRYHUDZLGHUDQJHRIGLIIHUHQFHVLQYDOXHVDWWLWXGHVDQGEHKDYLRU
H[LVWVDPRQJPHPEHUVRIGLIIHUHQWVRFLDOFODVVHV
:+$7,662&,$/&/$66"
$OWKRXJKVRFLDOFODVVFDQEHWKRXJKWRIDVDFRQWLQXXPUDQJHRIVRFLDOSRVLWLRQV
RQZKLFKHDFKPHPEHURIVRFLHW\FDQEHSODFHGUHVHDUFKHUVKDYHSUHIHUUHGWR
GLYLGHWKHFRQWLQXXPLQWRDVPDOOQXPEHURIVSHFLILFVRFLDOFODVVHVRUVWUDWD
6RFLDOFODVVLVGHILQHGDVWKHGLYLVLRQRIPHPEHUVRIDVRFLHW\LQWRDKLHUDUFK\
RIGLVWLQFWVWDWXVFODVVHVVRWKDWPHPEHUVRIHDFKFODVVKDYHUHODWLYHO\WKHVDPH
VWDWXVDQGPHPEHUVRIDOORWKHUFODVVHVKDYHHLWKHUPRUHRUOHVVVWDWXV
6RFLDO&ODVVDQG6RFLDO6WDWXV
D 5HODWLYHZHDOWK²DPRXQWRIHFRQRPLFDVVHWV
E 3RZHU²GHJUHHRISHUVRQDOFKRLFH
F 3UHVWLJH²WKHGHJUHHRIUHFRJQLWLRQUHFHLYHGIURPRWKHUV
7RVHFXUHDQXQGHUVWDQGLQJRIKRZVWDWXVRSHUDWHVZLWKLQWKHPLQGVRIFRQVXPHUV
UHVHDUFKHUVKDYHH[SORUHGWKHLGHDRIVRFLDOFRPSDULVRQWKHRU\
D 7KHLGHDLVWKDWLQGLYLGXDOVTXLWHQRUPDOO\FRPSDUHWKHLURZQPDWHULDO
SRVVHVVLRQVZLWKWKRVHRZQHGE\RWKHUVLQRUGHUWRGHWHUPLQHWKHLUUHODWLYH
VRFLDOVWDQGLQJ
E 6WDWXVLVRIWHQGHILQHGLQWHUPVRISXUFKDVLQJSRZHU
7KH'\QDPLFVRI6WDWXV&RQVXPSWLRQ 6RFLDO&ODVV
$UHODWHGFRQFHSWLVVWDWXVFRQVXPSWLRQ²WKHSURFHVVE\ZKLFKFRQVXPHUV
HQGHDYRUWRLQFUHDVHWKHLUVRFLDOVWDQGLQJWKURXJKFRQVSLFXRXVFRQVXPSWLRQRU
SRVVHVVLRQV 127(6
2WKHUWKHRULHVDVLGHVWDWXVLVRIWHQGHILQHGLQWHUPVRIFRQYHQLHQWGHPRJUDSKLF
YDULDEOHV
D )DPLO\LQFRPH
E 2FFXSDWLRQDOVWDWXVRUSUHVWLJH
F (GXFDWLRQDODWWDLQPHQW
6RFLDO&ODVVLV+LHUDUFKLFDODQGD)RUPRI6HJPHQWDWLRQ
6RFLDOFODVVFDWHJRULHVDUHXVXDOO\UDQNHGLQDKLHUDUFK\UDQJLQJIURPORZWRKLJK
VWDWXV
D 7KXVPHPEHUVRIDVSHFLILFVRFLDOFODVVSHUFHLYHPHPEHUVRIRWKHUVRFLDO
FODVVHVDVKDYLQJHLWKHUPRUHRUOHVVVWDWXVWKDQWKH\GR
E :LWKLQWKLVFRQWH[WVRFLDOFODVVPHPEHUVKLSVHUYHVFRQVXPHUVDVDIUDPH
RIUHIHUHQFHLHDUHIHUHQFHJURXSIRUWKHGHYHORSPHQWRIWKHLUDWWLWXGHV
DQGEHKDYLRU
7KHKLHUDUFKLFDODVSHFWRIVRFLDOFODVVLVLPSRUWDQWWRPDUNHWHUV
&RQVXPHUVPD\SXUFKDVHFHUWDLQSURGXFWVEHFDXVHWKHVHSURGXFWVDUHIDYRUHG
E\PHPEHUVRIWKHLURZQRUDKLJKHUVRFLDOFODVVHJDILQH)UHQFK&KDPSDJQH
DQGFRQVXPHUVPD\DYRLGRWKHUSURGXFWVEHFDXVHWKH\SHUFHLYHWKHSURGXFWV
WR EH ³ORZHUFODVV´ SURGXFWV HJ DGLJLWDO UHDGRXWZULVWZDWFK DVD GUHVV
ZDWFK
7KHFODVVLILFDWLRQRIVRFLHW\¶VPHPEHUVLQWRDVPDOOQXPEHURIVRFLDOFODVVHVKDV
DOVRHQDEOHGUHVHDUFKHUVWRQRWHWKHH[LVWHQFHRIVKDUHGYDOXHVDWWLWXGHVDQG
EHKDYLRUDOSDWWHUQVDPRQJPHPEHUVZLWKLQHDFKVRFLDOFODVVDQGGLIIHULQJYDOXHV
DWWLWXGHVDQGEHKDYLRUEHWZHHQVRFLDOFODVVHV
G <RXQHHGWRILQGZD\VWRPLQLPL]H\RXUWD[HV
LL $OWKRXJKLQFRPHLVDSRSXODUHVWLPDWHRIVRFLDOFODVVVWDQGLQJQRWDOO
127(6
FRQVXPHUUHVHDUFKHUVDJUHHWKDWLWLVDQDSSURSULDWHLQGH[RIVRFLDO
FODVV
LLL 6RPHDUJXHWKDWDEOXHFROODUDXWRPRELOHPHFKDQLFDQGDZKLWH
FROODUDVVLVWDQWEDQNPDQDJHUPD\ERWKHDUQD\HDU\HW
EHFDXVHRIRUDVDUHIOHFWLRQRIVRFLDOFODVVGLIIHUHQFHVHDFKZLOO
VSHQGWKDWLQFRPHLQDGLIIHUHQWZD\
LY )XUWKHUVXEVWDQWLDWLQJWKHLPSRUWDQFHRIFRQVXPHUV¶SHUVRQDOYDOXHV
UDWKHUWKDQDPRXQWRILQFRPHLVWKHREVHUYDWLRQWKDWDIIOXHQFHPD\EH
PRUHDIXQFWLRQRIDWWLWXGHRUEHKDYLRUWKDQRILQFRPHOHYHO
G 2WKHU9DULDEOHV²TXDOLW\RIQHLJKERUKRRGDQGGROODUYDOXHRIUHVLGHQFH
DUHUDUHO\XVHGDVVROHPHDVXUHVRIVRFLDOFODVV
L 7KH\DUHKRZHYHUXVHGLQIRUPDOO\WRVXSSRUWRUYHULI\VRFLDOFODVV
PHPEHUVKLSDVVLJQHGRQWKHEDVLVRIRFFXSDWLRQDOVWDWXVRULQFRPH
LL )LQDOO\SRVVHVVLRQVKDYHEHHQXVHGE\VRFLRORJLVWVDVDQLQGH[RI
VRFLDOFODVV
D 7KHEHVWNQRZQDQGPRVWHODERUDWHUDWLQJVFKHPHIRUHYDOXDWLQJ
SRVVHVVLRQVLV&KDSLQ¶V6RFLDO6WDWXV6FDOHZKLFKIRFXVHV
RQWKHSUHVHQFHRIFHUWDLQLWHPVRIIXUQLWXUHDQGDFFHVVRULHV
LQWKHOLYLQJURRPDQGWKHFRQGLWLRQRIWKHURRP
&RPSRVLWH9DULDEOH,QGH[HV
&RPSRVLWHLQGH[HVV\VWHPDWLFDOO\FRPELQHDQXPEHURIVRFLRHFRQRPLFYDULDEOHV
WRIRUPRQHRYHUDOOPHDVXUHRIVRFLDOFODVVVWDQGLQJ
D 7KH\VHHPWREHWWHUUHIOHFWVRFLDOFODVVFRPSOH[LW\WKDQVLQJOHHOHPHQW
LQGLFDWRUV
7ZRRIWKHPRUHLPSRUWDQWFRPSRVLWHLQGH[HVDUH
&RQVXPHUUHVHDUFKKDVIRXQGHYLGHQFHWKDWZLWKLQHDFKRIWKHVRFLDOFODVVHV
WKHUHLVDFRQVWHOODWLRQRIVSHFLILFOLIHVW\OHIDFWRUVVKDUHGEHOLHIVDWWLWXGHV
DFWLYLWLHVDQGEHKDYLRUVWKDWGLVWLQJXLVKPHPEHUVRIDVRFLDOFODVVIURPPHPEHUV 127(6
RIRWKHUVRFLDOFODVVHV
3HRSOHLQDQ\FODVVPD\SRVVHVVYDOXHVDWWLWXGHVDQGEHKDYLRUDOSDWWHUQVWKDW
DUHDK\EULGRIWZRRUPRUHFODVVHV
&KLQD3XUVXLQJD0LGGOH&ODVV/LIHVW\OH
,QUHFHQW\HDUVHVWDEOLVKHGPDUNHWHUVIURPDOORYHUWKHZRUOGKDYHVLQJOHGRXW
&KLQDDVDKLJKO\GHVLUDEOHJURZWKPDUNHWIRUWKHLUEUDQGV
7KHZHDOWKLHVWSHUFHQWRIXUEDQ&KLQHVHKRXVHKROGVDERXWPLOOLRQ
FRQVWLWXWHVDKLJKO\DWWUDFWLYHPDUNHW
D 7KH³OLWWOHULFK´LQFOXGHWKRVHZLWKDERXWLQLQFRPH
E 7KH³\XSSLHV´LQFOXGHWKRVHZLWKDERXWLQLQFRPH
F $WILUVWJODQFHWKHVHLQFRPHVGRQRWVHHPOLNHPXFKEXWWKLVFRQFOXVLRQ
FDQEHDUHDOHUURU
L 7KH ³VHFUHW´ LV WKDW D IDLUO\ ODUJH DPRXQW RI IDPLO\ LQFRPH LV
GLVFUHWLRQDU\LQFRPH
62&,$/&/$6602%,/,7<
,QGLYLGXDOVFDQPRYHHLWKHUXSRUGRZQLQVRFLDOFODVVVWDQGLQJIURPWKHFODVV
SRVLWLRQKHOGE\WKHLUSDUHQWV
0RVW$PHULFDQVWKLQNRIXSZDUGPRELOLW\
D 7KLVUHVXOWVLQWKHXSSHUFODVVHVEHLQJWKHUHIHUHQFHJURXSIRUPDQ\DPELWLRXV
PHQDQGZRPHQLQ$PHULFD
E 5HFRJQL]LQJWKHVHDVSLUDWLRQVPDUNHWHUVIUHTXHQWO\LQFRUSRUDWHKLJKHU
FODVVV\PEROVLQWRWKHLUDGYHUWLVLQJ
6RFLDOFODVVPRELOLW\DOVRFRQWULEXWHVWRSURGXFWVDQGVHUYLFHVILOWHULQJGRZQ
IURPDKLJKHUOHYHOWRDORZHURQH
6RPH6LJQVRI'RZQZDUG0RELOLW\
7KHUHDUHVLJQVRIVRPHGRZQZDUGPRELOLW\
6RPH\RXQJDGXOWVZLOOILQGLWYHU\GLIILFXOWWR³GREHWWHU´WKDQWKHLUSDUHQWVDQG
PD\QRWGRDVZHOODVWKHLUPRWKHUVDQGIDWKHUV
&RQVXPHU%HKDYLRU ,V+RUDWLR$OJHU'HDG"
7KHUHLVDJURZLQJERG\RIHYLGHQFHWKDWVRFLDOPRELOLW\LQ$PHULFDLVQRWZKDW
LWXVHGWREH
127(6
,WDSSHDUVWKDWZKLOHLWLVHDVLHUIRUDIHZKLJKDFKLHYHUVWRVFDOHWKHVXPPLWV
RIZHDOWKIRUPDQ\RWKHUVLWKDVEHFRPHKDUGHUWRPRYHXSIURPRQHHFRQRPLF
FODVVWRDQRWKHU
$PHULFDQVDUHDUJXDEO\PRUHOLNHO\WKDQWKH\ZHUH\HDUVDJRWRHQGXSLQ
WKHFODVVLQWRZKLFKWKH\ZHUHERUQ
*HRGHPRJUDSKLF&OXVWHULQJ
7UDGLWLRQDOVRFLDOFODVVPHDVXUHVKDYHEHHQHQKDQFHGE\WKHOLQNDJHRIJHRJUDSKLF
DQGVRFLRHFRQRPLFFRQVXPHUGDWDWRFUHDWHPRUHSRZHUIXOJHRGHPRJUDSKLF
FOXVWHUV
7KHXQGHUO\LQJUDWLRQDOHIRUJHRGHPRJUDSKLFFOXVWHULQJLVWKDW³ELUGVRIDIHDWKHU
IORFNWRJHWKHU´
2QHSRSXODUFOXVWHULQJVHUYLFHLV35,=0
D 7KLVVHUYLFHDVVLJQVHYHU\RQHRIWKH86PLFURQHLJKERUKRRGV]LS
DUHDVWRRQHRI35,=0FOXVWHUV
E 7KHVHDUHFROODSVHGLQWRJURXSV
F 0DUNHWHUVFDQVXSHULPSRVHWKHVHJHRGHPRJUDSKLFFOXVWHUVRQWRSURGXFW
DQGVHUYLFHXVDJHGDWDPHGLDH[SRVXUHGDWDDQGOLIHVW\OHGDWDWRFUHDWH
DVKDUSO\GHILQHGSLFWXUHRIWKHLUWDUJHWPDUNHWV
7KH$IIOXHQW&RQVXPHU
)RURYHU\HDUV0HQGHOVRKQ0HGLD5HVHDUFKKDVFRQGXFWHGDQDQQXDOVWXG\
RIWKHDIIOXHQWPDUNHW²FXUUHQWO\GHILQHGLQWHUPVRIWKUHHDIIOXHQWVHJPHQWV
D 7KRVHZLWK KRXVHKROGLQFRPHVRIWRSHU\HDU²WKH
³OHDVWDIIOXHQW´
E 7KRVHZLWKLQFRPHVRIWRSHU\HDU²WKH³PHGLXP
DIIOXHQW´
F 7KRVHZLWKLQFRPHVRIRUPRUHSHU\HDU²WKH³PRVWDIIOXHQW´
$OWKRXJKWKHDIIOXHQWPDUNHWFRQVLVWVRIRQO\SHUFHQWRIDOOKRXVHKROGVWKLV
XSVFDOHPDUNHWFRQVXPHVPRUHLQVHYHUDOFDWHJRULHVWKDQWKHQRQDIIOXHQWPDUNHW
7KHDYHUDJHKRXVHKROGLQFRPHIRUWKHVHFRQVXPHUVLVDQGSHUFHQW 6RFLDO&ODVV
DUHHPSOR\HGLQHLWKHUDSURIHVVLRQDORUPDQDJHULDOFDSDFLW\
6WLOOIXUWKHUDJURZLQJVXEFDWHJRU\RIWKHDIIOXHQWDUHPLOOLRQDLUHV
127(6
D $SSUR[LPDWHO\PLOOLRQLQGLYLGXDOVRUIDPLOLHVKDYHDQHWZRUWKRIPRUH
WKDQPLOOLRQ
7KH0HGLD([SRVXUHRIWKH$IIOXHQW&RQVXPHU
7KRVHKRPHVZLWKDQLQFRPHRIPRUHWKDQD\HDUYLHZOHVV79WKDQ
OHVVDIIOXHQWKRXVHKROGV
7KH\UHDGGLIIHUHQWSXEOLFDWLRQVOLVWHQWRKRXUVRIZHHNGD\UDGLRDQG
ZDWFKKRXUVRI79SHUZHHN
D SHUFHQWVXEVFULEHWRFDEOH79
6HJPHQWLQJWKH$IIOXHQW0DUNHW
7KHDIIOXHQWPDUNHWLVQRWRQHVLQJOHPDUNHW
D $IIOXHQWFRQVXPHUVGRQRWVKDUHWKHVDPHOLIHVW\OHV
,QDQHIIRUWWRLVRODWHGLVWLQFWVHJPHQWV0HGLDPDUN5HVHDUFK,QFKDVGHYHORSHG
WKHIROORZLQJDIIOXHQWPDUNHWVHJPHQWDWLRQVFKHPHIRUWKH8SSHU'HFNFRQVXPHUV
WKHWRSSHUFHQWRIKRXVHKROGVLQWHUPVRILQFRPHV
D :HOOIHDWKHUHGQHVWV²KRXVHKROGVWKDWKDYHDWOHDVWRQHKLJKLQFRPHHDUQHU
DQGFKLOGUHQSUHVHQWSHUFHQWRIWKH8SSHU'HFN
E 1RVWULQJVDWWDFKHG²KRXVHKROGVWKDWKDYHDWOHDVWRQHKLJKLQFRPHHDUQHU
DQGQRFKLOGUHQSHUFHQWRIWKH8SSHU'HFN
F 1DQQ\¶VLQFKDUJH²KRXVHKROGVWKDWKDYHWZRRUPRUHHDUQHUVQHLWKHU
HDUQLQJKLJKLQFRPHVDQGFKLOGUHQSUHVHQWSHUFHQWRIWKH8SSHU
'HFN
G 7ZRFDUHHUV²KRXVHKROGVWKDWKDYHWZRRUPRUHHDUQHUVQHLWKHUHDUQLQJ
KLJKLQFRPHVDQGQRFKLOGUHQSUHVHQWSHUFHQWRIWKH8SSHU'HFN
H 7KHJRRGOLIH²KRXVHKROGVWKDWKDYHDKLJKGHJUHHRIDIIOXHQFHZLWKQR
SHUVRQHPSOR\HGRUZLWKWKHKHDGRIKRXVHKROGQRWHPSOR\HG
SHUFHQWRIWKH8SSHU'HFN
0LGGOH&ODVV&RQVXPHUV
,WLVQRWHDV\WRGHILQHWKHERUGHUVRIZKDWLVPHDQWE\³PLGGOHFODVV´
2WKHU PHDVXUHV DUH SRVVLEOH VXFK DV WKRVH HDUQLQJ EHWZHHQ DQG
&RQVXPHU%HKDYLRU )RUPDQ\PDUNHWHUV³PLGGOHFODVV´FDQEHWKRXJKWRIDVLQFOXGLQJKRXVHKROGV
WKDWUDQJHIURPORZHUPLGGOHWRPLGGOHPLGGOHFODVV
7KHG\QDPLFQDWXUHRIVRFLDOFODVVLQWKH8QLWHG6WDWHVKDVEHHQZRUNLQJDJDLQVW
127(6 WKHPLGGOHFODVV
7KHUHLVPRXQWLQJHYLGHQFHWKDWWKH³PLGGOHFODVV´LVVKULQNLQJLQ$PHULFD
7KLVLVQRWWUXHLQRWKHUFRXQWULHVZKHUHWKHPLGGOHFODVVLVLQFUHDVLQJ
0RYLQJ8SWR0RUH³1HDU´/X[XULHV
$GGLQJWRWKHFKDOOHQJHRIGHILQLQJ³PLGGOHFODVV´LVWKHUHDOLW\WKDWOX[XU\DQG
WHFKQRORJLFDOSURGXFWVKDYHEHHQEHFRPLQJPRUHDIIRUGDEOHIRUPRVWFRQVXPHUV
DQGWKHUHIRUHPRUHPLGGOHFODVVFRQVXPHUVKDYHDFFHVVWRSURGXFWVDQGEUDQG
WKDWZHUHRQFHFRQVLGHUHGEH\RQGWKHLUUHDFK
$GGLWLRQDOO\WKHUHLVHYLGHQFHWRVXJJHVWWKDWVRPHPLGGOHFODVVFRQVXPHUVDUH
ZLOOLQJWRSLQFKSHQQLHVRQFHUWDLQSXUFKDVHVLQRUGHUWRVSOXUJHRQRWKHUV
6WLOOIXUWKHUZKLOHKLJKHQGUHWDLOHUVVWLOOFRQVLGHUWKHLUSULPDU\FXVWRPHUEDVHWR
EHWKHDIIOXHQWWKH\DUHUHDOL]LQJWKDWPLGGOHFODVVFXVWRPHUVKDYHEHHQSXUFKDVLQJ
PRUHKLJKVW\OHLWHPVRIWHQDWQRWVRKLJKSULFHV
D &RQVHTXHQWO\WUDGLWLRQDOPDUNHWHUVRIOX[XU\SURGXFWVKDYHEHHQH[SDQGLQJ
WKHLURIIHULQJVWRPRUHDIIRUGDEOHPHUFKDQGLVH
&RPSDQLHVRIIHULQJ³OX[XU\WRWKHPDVVHV´PXVWEHFDUHIXOKRZWKH\SRVLWLRQ
WKHLUSURGXFWV
D )LUPVUHDOL]HWKDWLIRQHRIWKHLUSURGXFWVVOLSVLQWRWKHPDVVPDUNHWWKH\
ZLOOQHHGDQHZSURGXFWWRWDNHLWVSODFHLQWKHOX[XU\PDUNHW
7+(:25.,1*&/$66$1'27+(5121$))/8(17&21680(56
$OWKRXJKPDQ\PDUNHWHUVJRDIWHUWKHDIIOXHQWWKHVL]HDQGLQFRPHRIWKH
ZRUNLQJFODVVRUEOXHFROODUJURXSPDNHWKHPDQLPSRUWDQWWDUJHWPDUNHW
/RZHULQFRPHRUGRZQVFDOHFRQVXPHUVDUHKRXVHKROGVHDUQLQJRU
OHVV
'RZQVFDOHFRQVXPHUVDUHPRUHEUDQGOR\DOWKDQZHDOWKLHUFRQVXPHUVEHFDXVH
WKH\FDQOHVVDIIRUGWRPDNHPLVWDNHVLQVZLWFKLQJWRXQIDPLOLDUEUDQGV
0DUNHWHUVQHHGWREHVHQVLWLYHWRWKHUHDOLW\WKDWGRZQVFDOHFRQVXPHUVRIWHQ
VSHQGDKLJKHUSHUFHQWDJHRIWKHLUDYDLODEOHLQFRPHVRQIRRGWKDQGRWKHLU
PLGGOHFODVVFRXQWHUSDUWV
5(&2*1,=,1*7+(³7(&+12&/$66´
7HFKQRLVDQHZEDVLVRIFODVVVWDQGLQJ
7KHGHJUHHRIOLWHUDF\IDPLOLDULW\DQGFRPSHWHQF\ZLWKWHFKQRORJ\HVSHFLDOO\ 6RFLDO&ODVV
FRPSXWHUVDQGWKH,QWHUQHWVHWVWKHVWDQGDUGIRUWKLVFODVV
7KRVHZKRDUHXQIDPLOLDURUODFNFRPSXWHUVNLOOVDUHEHLQJUHIHUUHGWRDV
³WHFKQRORJLFDOXQGHUFODVVHG´ 127(6
1RWZDQWLQJWRVHHWKHLUFKLOGUHQOHIWRXWRIWKH³VZHHSRIFRPSXWHUWHFKQRORJ\´
SDUHQWVLQDOOVRFLDOFODVVJURXSLQJVDUHVHHNLQJRXWHDUO\FRPSXWHUH[SRVXUHIRU
WKHLUFKLOGUHQ
&RQVXPHUVWKURXJKRXWWKHZRUOGKDYHFRPHWREHOLHYHWKDWLWLVFULWLFDOWR
DFTXLUHDIXQFWLRQDOXQGHUVWDQGLQJRIFRPSXWHUVLQRUGHUWRHQVXUHWKDWWKH\GR
QRWEHFRPHREVROHWHRUKLQGHUWKHPVHOYHVVRFLDOO\RUSURIHVVLRQDOO\
,WDSSHDUVWKDWWKRVHZLWKRXWQHFHVVDU\FRPSXWHUVNLOOVZLOOLQFUHDVLQJO\ILQG
WKHPVHOYHVWREH³XQGHUFODVVHG´DQG³GLVDGYDQWDJHG´
7KHLQFUHDVLQJO\SRVLWLYHLPDJHRIJHHNVKDVPDGHWKHPDQGWKHLUOLIHVW\OHVWKH
WDUJHWRIPDUNHWHUV¶PHVVDJHVGHVLJQHGWRDSSHDOWRWKHLUDSSHWLWHIRUQRYHO
WHFKQRORJLFDOSURGXFWV
6(/(&7('&21680(5%(+$9,25$33/,&$7,216
2)62&,$/&/$66
6RFLDOFODVVSURILOHVSURYLGHDEURDGSLFWXUHRIWKHYDOXHVDWWLWXGHVDQGEHKDYLRU
WKDWGLVWLQJXLVKWKHPHPEHUVRIYDULRXVVRFLDOFODVVHV
&ORWKLQJ)DVKLRQDQG6KRSSLQJ
0RVWSHRSOHGUHVVWRILWWKHLUVHOILPDJHVZKLFKLQFOXGHWKHLUSHUFHSWLRQVRI
WKHLURZQVRFLDOFODVVPHPEHUVKLS
0HPEHUVRIVSHFLILFVRFLDOFODVVHVGLIIHULQWHUPVRIZKDWWKH\FRQVLGHUIDVKLRQDEOH
RULQJRRGWDVWH
D /RZHUPLGGOHFODVVFRQVXPHUVKDYHDVWURQJSUHIHUHQFHIRU7VKLUWVFDSV
DQGRWKHUFORWKLQJWKDWRIIHUDQH[WHUQDOSRLQWRILGHQWLILFDWLRQ
E 8SSHUFODVVFRQVXPHUVDUHOLNHO\WREX\FORWKLQJWKDWLVIUHHIURPVXFK
VXSSRUWLQJDVVRFLDWLRQV
L 8SSHUFODVVFRQVXPHUVDOVRVHHNFORWKLQJZLWKDPRUHVXEWOHORRN
6RFLDOFODVVLVDOVRDQLPSRUWDQWYDULDEOHLQGHWHUPLQLQJZKHUHDFRQVXPHU
VKRSV
7KH3XUVXLWRI/HLVXUH
6RFLDOFODVVPHPEHUVKLSLVDOVRFORVHO\UHODWHGWRWKHFKRLFHRIUHFUHDWLRQDODQG
OHLVXUHWLPHDFWLYLWLHV
&RQVXPHU%HKDYLRU D 8SSHUFODVVFRQVXPHUVDUHOLNHO\WRDWWHQGWKHWKHDWHUDQGFRQFHUWVWR
SOD\EULGJHDQGWRDWWHQGFROOHJHIRRWEDOOJDPHV
E /RZHUFODVVFRQVXPHUVWHQGWREHDYLGWHOHYLVLRQZDWFKHUVDQGILVKLQJ
127(6 HQWKXVLDVWVDQGWKH\HQMR\GULYHLQPRYLHVDQGEDVHEDOOJDPHV
2YHUWKHSDVWGHFDGHRUVRKRZHYHUDQXPEHURIFKDQJHVDUHLQFUHDVLQJO\
EHLQJREVHUYHGWKDWSRLQWWRDIXUWKHUEOXUULQJRIVRFLDOFODVVOLQHVZLWKUHJDUG
WROHLVXUHLQWHUHVWV
6DYLQJ6SHQGLQJDQG&UHGLW
6DYLQJVSHQGLQJDQGFUHGLWFDUGXVDJHDOOVHHPWREHUHODWHGWRVRFLDOFODVV
VWDQGLQJ
8SSHUFODVVFRQVXPHUVDUHPRUHIXWXUHRULHQWHGDQGFRQILGHQWRIWKHLUILQDQFLDO
DFXPHQWKH\DUHPRUHZLOOLQJWRLQYHVWLQLQVXUDQFHVWRFNVDQGUHDOHVWDWH
6RFLDO&ODVVDQG&RPPXQLFDWLRQ
6RFLDOFODVVJURXSLQJVGLIIHULQWHUPVRIWKHLUPHGLDKDELWVDQGLQKRZWKH\
WUDQVPLWDQGUHFHLYHFRPPXQLFDWLRQV
:KHQLWFRPHVWRGHVFULELQJWKHLUZRUOGORZHUFODVVFRQVXPHUVWHQGWRSRUWUD\
LWLQUDWKHUSHUVRQDODQGFRQFUHWHWHUPVDOWKRXJKPLGGOHFODVVFRQVXPHUVDUH
DEOHWRGHVFULEHWKHLUH[SHULHQFHVIURPDQXPEHURIGLIIHUHQWSHUVSHFWLYHV
6XFKYDULDWLRQVLQUHVSRQVHLQGLFDWHWKDWPLGGOHFODVVFRQVXPHUVKDYHDEURDGHU
RUPRUHJHQHUDOYLHZRIWKHZRUOGDOWKRXJKORZHUFODVVFRQVXPHUVWHQGWRKDYH
DQDUURZRUSHUVRQDOYLHZVHHLQJWKHZRUOGWKURXJKWKHLURZQLPPHGLDWH
H[SHULHQFHV
5HJLRQDOGLIIHUHQFHVLQWHUPLQRORJ\FKRLFHRIZRUGVDQGSKUDVHVDQGSDWWHUQV
RIXVDJHDOVRWHQGWRLQFUHDVHDVZHPRYHGRZQWKHVRFLDOFODVVODGGHU
6HOHFWLYHH[SRVXUHWRYDULRXVW\SHVRIPDVVPHGLDGLIIHUVE\VRFLDOFODVV
D +LJKHUVRFLDOFODVVPHPEHUVWHQGWRSUHIHUFXUUHQWHYHQWVDQGGUDPD
DOWKRXJKORZHUFODVVLQGLYLGXDOVWHQGWRSUHIHUVRDSRSHUDVTXL]VKRZV
DQGVLWXDWLRQFRPHGLHV
E +LJKHUFODVVFRQVXPHUVWHQGWRKDYHJUHDWHUH[SRVXUHWRPDJD]LQHVDQG
QHZVSDSHUVWKDQGRWKHLUORZHUFODVVFRXQWHUSDUWV
F /RZHUFODVVFRQVXPHUVDUHOLNHO\WRKDYHJUHDWHUH[SRVXUHWRSXEOLFDWLRQV
WKDWGUDPDWL]HURPDQFHDQGWKHOLIHVW\OHVRIPRYLHDQGWHOHYLVLRQFHOHEULWLHV
:+$7,6&8/785(" 6RFLDO&ODVV
*LYHQWKHEURDGDQGSHUYDVLYHQDWXUHRIFXOWXUHLWVVWXG\JHQHUDOO\UHTXLUHVD
GHWDLOHGH[DPLQDWLRQRIWKHFKDUDFWHURIWKHWRWDOVRFLHW\LQFOXGLQJVXFKIDFWRUV
DVODQJXDJHNQRZOHGJHODZVUHOLJLRQVIRRGFXVWRPVPXVLFDUWWHFKQRORJ\ 127(6
ZRUNSDWWHUQVSURGXFWVDQGRWKHUDUWLIDFWVWKDWJLYHDVRFLHW\LWVGLVWLQFWLYH
IODYRU
,QDVHQVHFXOWXUHLVDVRFLHW\¶VSHUVRQDOLW\)RUWKLVUHDVRQLWLVQRWHDV\WR
GHILQHLWVERXQGDULHV
&XOWXUHLVWKHVXPWRWDORIOHDUQHGEHOLHIVYDOXHVDQGFXVWRPVWKDWVHUYHWR
GLUHFWWKHFRQVXPHUEHKDYLRURIPHPEHUVRIDSDUWLFXODUVRFLHW\
%HOLHIVFRQVLVWRIWKHYHU\ODUJHQXPEHURIPHQWDORUYHUEDOVWDWHPHQWVWKDW
UHIOHFWDSHUVRQ¶VSDUWLFXODUNQRZOHGJHDQGDVVHVVPHQWRIVRPHWKLQJ
9DOXHVDOVRDUHEHOLHIVKRZHYHUYDOXHVGLIIHUIURPRWKHUEHOLHIVEHFDXVHWKH\
PXVWPHHWWKHIROORZLQJFULWHULD
D 7KH\DUHUHODWLYHO\IHZLQQXPEHU
E 7KH\VHUYHDVDJXLGHIRUFXOWXUDOO\DSSURSULDWHEHKDYLRU
F 7KH\DUHHQGXULQJRUGLIILFXOWWRFKDQJH
G 7KH\DUHQRWWLHGWRVSHFLILFREMHFWVRUVLWXDWLRQV
H 7KH\DUHZLGHO\DFFHSWHGE\WKHPHPEHUVRIDVRFLHW\
,QDEURDGVHQVHERWKYDOXHVDQGEHOLHIVDUHPHQWDOLPDJHVWKDWDIIHFWDZLGH
UDQJHRIVSHFLILFDWWLWXGHVWKDWLQWXUQLQIOXHQFHWKHZD\DSHUVRQLVOLNHO\WR
UHVSRQGLQDVSHFLILFVLWXDWLRQ
&XVWRPVDUHRYHUWPRGHVRIEHKDYLRUWKDWFRQVWLWXWHFXOWXUDOO\DSSURYHGRU
DFFHSWDEOHZD\VRIEHKDYLQJLQVSHFLILFVLWXDWLRQV
D &XVWRPVFRQVLVWRIHYHU\GD\RUURXWLQHEHKDYLRU
E $OWKRXJKEHOLHIVDQGYDOXHVDUHJXLGHVIRUEHKDYLRUFXVWRPVDUHXVXDODQG
DFFHSWDEOHZD\VRIEHKDYLQJ
7+(,19,6,%/(+$1'2)&8/785(
7KHLPSDFWRIFXOWXUHLVVRQDWXUDODQGDXWRPDWLFWKDWLWVLQIOXHQFHRQEHKDYLRU
LVXVXDOO\WDNHQIRUJUDQWHG
2IWHQLWLVRQO\ZKHQZHDUHH[SRVHGWRSHRSOHZLWKGLIIHUHQWFXOWXUDOYDOXHV
RUFXVWRPVWKDWZHEHFRPHDZDUHRIKRZFXOWXUHKDVPROGHGRXURZQEHKDYLRU
&RQVXPHUVERWKYLHZWKHPVHOYHVLQWKHFRQWH[WRIWKHLUFXOWXUHDQGUHDFWWRWKHLU
HQYLURQPHQWEDVHGXSRQWKHFXOWXUDOIUDPHZRUNWKDWWKH\EULQJWRWKDWH[SHULHQFH
(DFKLQGLYLGXDOSHUFHLYHVWKHZRUOGWKURXJKKLVRUKHURZQFXOWXUDOOHQV
&RQVXPHU%HKDYLRU &8/785(6$7,6),(61(('6
&XOWXUHH[LVWVWRVDWLVI\WKHQHHGVRISHRSOHZLWKLQDVRFLHW\
127(6 D ,WRIIHUVRUGHUGLUHFWLRQDQGJXLGDQFHLQDOOSKDVHVRIKXPDQSUREOHP
VROYLQJE\SURYLGLQJWULHGDQGWUXHPHWKRGVRIVDWLVI\LQJSK\VLRORJLFDO
SHUVRQDODQGVRFLDOQHHGV
E 6LPLODUO\FXOWXUHDOVRSURYLGHVLQVLJKWVDVWRVXLWDEOHGUHVVIRUVSHFLILF
RFFDVLRQVHJZKDWWRZHDUDURXQGWKHKRXVHZKDWWRZHDUWRVFKRRO
ZKDWWRZHDUWRZRUNZKDWWRZHDUWRFKXUFKZKDWWRZHDUDWDIDVWIRRG
UHVWDXUDQWRUDPRYLHWKHDWHU
&XOWXUDOEHOLHIVYDOXHVDQGFXVWRPVFRQWLQXHWREHIROORZHGDVORQJDVWKH\
\LHOGVDWLVIDFWLRQ
,QDFXOWXUDOFRQWH[WZKHQDSURGXFWLVQRORQJHUDFFHSWDEOHEHFDXVHLW¶VUHODWHG
YDOXHRUFXVWRPGRHVQRWDGHTXDWHO\VDWLVI\KXPDQQHHGVLWPXVWEHPRGLILHG
&8/785(,6/($51('
$WDQHDUO\DJHZHEHJLQWRDFTXLUHIURPRXUVRFLDOHQYLURQPHQWDVHWRIEHOLHIV
YDOXHVDQGFXVWRPVWKDWPDNHXSRXUFXOWXUH
)RUFKLOGUHQWKHOHDUQLQJRIWKHVHDFFHSWDEOHFXOWXUDOYDOXHVDQGFXVWRPVLV
UHLQIRUFHGE\WKHSURFHVVRISOD\LQJZLWKWKHLUWR\V
D $VFKLOGUHQSOD\WKH\DFWRXWDQGUHKHDUVHLPSRUWDQWFXOWXUDOOHVVRQVDQG
VLWXDWLRQV
+RZ&XOWXUH,V/HDUQHG
7KHUHDUHWKUHHGLVWLQFWIRUPVRIOHDUQLQJ
D )RUPDOOHDUQLQJ²DGXOWVDQGROGHUVLEOLQJVWHDFKD\RXQJIDPLO\PHPEHU
³KRZWREHKDYH´
E ,QIRUPDOOHDUQLQJ²DFKLOGOHDUQVSULPDULO\E\LPLWDWLQJWKHEHKDYLRURI
VHOHFWHGRWKHUV
,WVHHPVWKDWDGYHUWLVLQJFDQLQIOXHQFHDOOWKUHHIRUPVRIOHDUQLQJ
D ,WPRVWLQIOXHQFHVLQIRUPDOOHDUQLQJE\SURYLGLQJPRGHOV
7KHUHSHWLWLRQRIDGYHUWLVLQJPHVVDJHVFUHDWHVDQGUHLQIRUFHVFXOWXUDOEHOLHIVDQG
YDOXHV
&XOWXUDOPHDQLQJPRYHVIURPWKHFXOWXUDOO\FRQVWLWXWHGZRUOGWRFRQVXPHUJRRGV 6RFLDO&ODVV
DQGIURPWKHUHWRWKHLQGLYLGXDOFRQVXPHUE\PHDQVRIYDULRXVFRQVXPSWLRQ
UHODWHGYHKLFOHVHJDGYHUWLVLQJRUREVHUYLQJRULPLWDWLQJRWKHUV¶EHKDYLRU
(QFXOWXUDWLRQDQG$FFXOWXUDWLRQ 127(6
7KHOHDUQLQJRIRQH¶VRZQFXOWXUHLVNQRZQDVHQFXOWXUDWLRQ
7KHOHDUQLQJRIDQHZRUIRUHLJQFXOWXUHLVNQRZQDVDFFXOWXUDWLRQ
/DQJXDJHDQG6\PEROV
7R DFTXLUH D FRPPRQ FXOWXUH WKH PHPEHUV RI D VRFLHW\ PXVW EH DEOH WR
FRPPXQLFDWHZLWKHDFKRWKHUWKURXJKDFRPPRQODQJXDJH
D :LWKRXWDFRPPRQODQJXDJHVKDUHGPHDQLQJFRXOGQRWH[LVWDQGWUXH
FRPPXQLFDWLRQZRXOGQRWWDNHSODFH
%DVLFDOO\WKHV\PEROLFQDWXUHRIKXPDQODQJXDJHVHWVLWDSDUWIURPDOORWKHU
DQLPDOFRPPXQLFDWLRQ
$V\PEROLVDQ\WKLQJWKDWVWDQGVIRUVRPHWKLQJHOVH
D 6\PEROVFDQEHYHUEDORUQRQYHUEDO
E 6\PEROVPD\KDYHVHYHUDOHYHQFRQWUDGLFWRU\PHDQLQJV
F 0DUNHWHUVXVHV\PEROVWRFRQYH\GHVLUHGSURGXFWLPDJHVRUFKDUDFWHULVWLFV
3ULFHDQGFKDQQHOVRIGLVWULEXWLRQDUHDOVRVLJQLILFDQWV\PEROVRIWKHPDUNHWHU
DQGWKHPDUNHWHU¶VSURGXFW
D 7KHW\SHRIVWRUHZKHUHWKHSURGXFWLVVROGLVDOVRDQLPSRUWDQWV\PERO
RITXDOLW\
5LWXDO
$ULWXDOLVDW\SHRIV\PEROLFDFWLYLW\FRQVLVWLQJRIDVHULHVRIVWHSVRFFXUULQJ
LQDIL[HGVHTXHQFHDQGUHSHDWHGRYHUWLPH
5LWXDOVH[WHQGRYHUWKHKXPDQOLIHF\FOHIURPELUWKWRGHDWK
D 7KH\FDQEHSXEOLFRUSULYDWH
E ,WLVRIWHQIRUPDODQGVFULSWHG²LHSURSHUFRQGXFWLVSUHVFULEHG
,PSRUWDQWWRPDUNHWHUVULWXDOVWHQGWREHUHSOHWHZLWKULWXDODUWLIDFWVSURGXFWV
WKDWDUHDVVRFLDWHGZLWKRUVRPHKRZHQKDQFHSHUIRUPDQFHRIWKHULWXDO
5LWXDOLVWLFEHKDYLRULVDQ\EHKDYLRUWKDWLVPDGHLQWRDULWXDO
&RQVXPHU%HKDYLRU &XOWXUH,V6KDUHG
7REHFRQVLGHUHGDFXOWXUDOFKDUDFWHULVWLFDSDUWLFXODUEHOLHIYDOXHRUSUDFWLFH
PXVWEHVKDUHGE\DVLJQLILFDQWSRUWLRQRIWKHVRFLHW\
127(6
&XOWXUHLVRIWHQYLHZHGDVJURXSFXVWRPV
9DULRXVVRFLDOLQVWLWXWLRQVWUDQVPLWWKHHOHPHQWVRIFXOWXUHDQGPDNHVKDULQJRI
FXOWXUHDUHDOLW\
D )DPLO\²WKHSULPDU\DJHQWIRUHQFXOWXUDWLRQWHDFKHVFRQVXPHUUHODWHG
YDOXHVDQGVNLOOV
E (GXFDWLRQDOLQVWLWXWLRQV²FKDUJHGZLWKLPSDUWLQJEDVLFOHDUQLQJVNLOOV
KLVWRU\SDWULRWLVPFLWL]HQVKLSDQGWKHWHFKQLFDOWUDLQLQJQHHGHGWRSUHSDUH
SHRSOHIRUVLJQLILFDQWUROHVZLWKLQVRFLHW\
F +RXVHVRIZRUVKLS²SURYLGHUHOLJLRXVFRQVFLRXVQHVVVSLULWXDOJXLGDQFH
DQGPRUDOWUDLQLQJ
G 0DVVPHGLD²LVDIRXUWKDQGRIWHQRYHUORRNHGWUDQVPLWWHURIFXOWXUH
L ,WGLVVHPLQDWHVLQIRUPDWLRQDERXWSURGXFWVLGHDVDQGFDXVHV
LL :HKDYHGDLO\H[SRVXUHWRDGYHUWLVLQJDQGWKURXJKWKRVHDGVUHFHLYH
FXOWXUDOLQIRUPDWLRQ
&8/785(,6'<1$0,&
&XOWXUHFRQWLQXDOO\HYROYHVWKHUHIRUHWKHPDUNHWHUPXVWFDUHIXOO\PRQLWRUWKH
VRFLRFXOWXUDOHQYLURQPHQWLQRUGHUWRPDUNHWDQH[LVWLQJSURGXFWPRUHHIIHFWLYHO\
RUWRGHYHORSSURPLVLQJQHZSURGXFWV
D 7KLVLVQRWHDV\EHFDXVHPDQ\IDFWRUVDUHOLNHO\WRSURGXFHFXOWXUDOFKDQJHV
ZLWKLQDJLYHQVRFLHW\
7KHFKDQJLQJ QDWXUHRI FXOWXUHPHDQVWKDW PDUNHWHUVKDYH WRFRQVLVWHQWO\
UHFRQVLGHU
D :K\FRQVXPHUVDUHQRZGRLQJZKDWWKH\GR"
E :KRDUHWKHSXUFKDVHUVDQGWKHXVHUVRIWKHLUSURGXFWV"
F :KHQWKH\GRWKHLUVKRSSLQJ"
G +RZDQGZKHUHWKH\FDQEHUHDFKHGE\WKHPHGLD"
H :KDWQHZSURGXFWDQGVHUYLFHQHHGVDUHHPHUJLQJ"
7+(0($685(0(172)&8/785(
7KHUHDUHDYDULHW\RIPHDVXUHVRIFXOWXUHSURMHFWLYHWHVWVDWWLWXGHPHDVXUHPHQW
WHFKQLTXHVFRQWHQWDQDO\VLVFRQVXPHUILHOGZRUNDQGYDOXHPHDVXUHPHQW
LQVWUXPHQWV
&RQWHQW$QDO\VLV 6RFLDO&ODVV
&RQWHQW DQDO\VLV IRFXVHV RQ WKH FRQWHQW RI YHUEDO ZULWWHQ DQG SLFWRULDO
FRPPXQLFDWLRQV
127(6
D ,WLVDUHODWLYHO\REMHFWLYHPHDQVIRUGHWHUPLQLQJVRFLDODQGFXOWXUDOFKDQJHV
ZLWKLQDVSHFLILFVRFLHW\
E ,WLVXVHIXOWRPDUNHWHUVDQGSXEOLFSROLF\PDNHUVLQWHUHVWHGLQFRPSDULQJ
DGYHUWLVLQJFODLPVRIFRPSHWLWRUVZLWKLQDVSHFLILFLQGXVWU\
&RQVXPHU)LHOGZRUN
:KHQH[DPLQLQJDVSHFLILFVRFLHW\DQWKURSRORJLVWVIUHTXHQWO\LPPHUVHWKHPVHOYHV
LQWKHHQYLURQPHQWXQGHUVWXG\WKURXJKFRQVXPHUILHOGZRUN
5HVHDUFKHUVDUHOLNHO\WRVHOHFWDVPDOOVDPSOHRISHRSOHIURPDSDUWLFXODU
VRFLHW\DQGFDUHIXOO\REVHUYHWKHLUEHKDYLRU
%DVHGRQWKHLUREVHUYDWLRQVUHVHDUFKHUVGUDZFRQFOXVLRQVDERXWWKHYDOXHV
EHOLHIVDQGFXVWRPVRIWKHVRFLHW\XQGHULQYHVWLJDWLRQ
)LHOGREVHUYDWLRQKDVDQXPEHURIGLVWLQFWFKDUDFWHULVWLFV
D ,WWDNHVSODFHZLWKLQDQDWXUDOHQYLURQPHQW
E ,WLVSHUIRUPHGVRPHWLPHVZLWKRXWWKHVXEMHFWV¶DZDUHQHVV
F ,WIRFXVHVRQREVHUYDWLRQRIEHKDYLRU
,QVWHDGRIMXVWREVHUYLQJEHKDYLRUUHVHDUFKHUVVRPHWLPHVEHFRPHSDUWLFLSDQW
REVHUYHUV
D 7KH\EHFRPHDFWLYHPHPEHUVRIWKHHQYLURQPHQWWKH\DUHVWXG\LQJ
,QDGGLWLRQWRILHOGZRUNPHWKRGVGHSWKLQWHUYLHZVDQGIRFXVJURXSVHVVLRQVDUH
DOVRTXLWHRIWHQHPSOR\HGE\PDUNHWHUVWRJHWDILUVWORRNDWDQHPHUJLQJVRFLDO
RUFXOWXUDOFKDQJH
,QWKHUHODWLYHO\LQIRUPDODWPRVSKHUHRIIRFXVJURXSGLVFXVVLRQVFRQVXPHUVDUH
DSWWRUHYHDODWWLWXGHVRUEHKDYLRUWKDWPD\VLJQDODVKLIWLQYDOXHVWKDWLQWXUQ
PD\DIIHFWWKHORQJUXQPDUNHWDFFHSWDQFHRIDSURGXFWRUVHUYLFH
9DOXH0HDVXUHPHQW6XUYH\,QVWUXPHQWV
$QWKURSRORJLVWVKDYHWUDGLWLRQDOO\REVHUYHGEHKDYLRUDQGLQIHUUHGGRPLQDQWRU
XQGHUO\LQJYDOXHV
D 5HFHQWO\WKHUHKDVEHHQDJUDGXDOVKLIWWRGLUHFWO\PHDVXULQJYDOXHVE\
PHDQVRIVXUYH\UHVHDUFK
&RQVXPHU%HKDYLRU 9DOXHLQVWUXPHQWVDVNSHRSOHKRZWKH\IHHODERXWVXFKEDVLFSHUVRQDODQG
VRFLDOFRQFHSWVDVIUHHGRPFRPIRUWQDWLRQDOVHFXULW\DQGSHDFH
$YDULHW\RISRSXODUYDOXHLQVWUXPHQWVKDYHEHHQXVHGLQUHVHDUFK
127(6
D 7KH5RNHDFK9DOXH6XUYH\
E /LVWRI9DOXHV
F 9DOXHVDQG/LIHVW\OHV²9$/6
7KH5RNHDFK9DOXH6XUYH\LVDVHOIDGPLQLVWHUHGYDOXHLQYHQWRU\ZKLFKLV
GLYLGHGLQWRWZRSDUWV
D 3DUWRQHFRQVLVWVRIWHUPLQDOYDOXHLWHPVGHVLJQHGWRPHDVXUHWKH
UHODWLYHLPSRUWDQFHRIHQGVWDWHVRIH[LVWHQFHSHUVRQDOJRDOV
E 3DUWWZRFRQVLVWVRILQVWUXPHQWDOYDOXHLWHPVGHVLJQHGWRPHDVXUH
WKHEDVLFDSSURDFKHVDQLQGLYLGXDOPLJKWWDNHWRUHDFKHQGVWDWHYDOXHV
7KH/29LVDUHODWHGLQVWUXPHQW
D ,WVVFDOHDVNVFRQVXPHUVWRLGHQWLI\WKHLUWZRPRVWLPSRUWDQWYDOXHVIURP
DQLQHYDOXHOLVW
$0(5,&$1&25(9$/8(6
,GHQWLILFDWLRQRIFRUHYDOXHVLVDYHU\GLIILFXOWWDVNIRUVHYHUDOUHDVRQV
D 7KH8QLWHG6WDWHVLVDYHU\GLYHUVHFRXQWU\FRQVLVWLQJRIDYDULHW\RI
VXEFXOWXUHVHDFKRIZKLFKLQWHUSUHWVDQGUHVSRQGVWRVRFLHW\¶VEDVLF
EHOLHIVDQGYDOXHVLQLWVRZQVSHFLILFZD\
E $OVRUDSLGWHFKQRORJLFDOFKDQJHKDVRFFXUUHGLQWKH8QLWHG6WDWHVDQGLQ
LWVHOIPDNHVLWGLIILFXOWWRPRQLWRUFKDQJHVLQFXOWXUDOYDOXHV
F )LQDOO\WKHH[LVWHQFHRIFRQWUDGLFWRU\YDOXHVLQ$PHULFDQVRFLHW\LVVRPHZKDW
FRQIXVLQJ
:KHQVHOHFWLQJVSHFLILFFRUHYDOXHVUHVHDUFKHUVDUHJXLGHGE\WKUHHSULQFLSOHV
D 7KHYDOXHPXVWEHSHUYDVLYH²DFFHSWHGDQGXVHGE\DVLJQLILFDQWSRUWLRQ
RIWKH$PHULFDQSHRSOH
E 7KHYDOXHPXVWEHHQGXULQJ²LQIOXHQFLQJWKHDFWLRQVRI$PHULFDQVRYHUDQ
H[WHQGHGSHULRGRIWLPH
F 7KHYDOXHPXVWEHFRQVXPHUUHODWHG²SURYLGLQJLQVLJKWVWKDWKHOSPDUNHWLQJ
SHRSOHXQGHUVWDQGWKHFRQVXPSWLRQDFWLRQVRIWKH$PHULFDQSHRSOH
$FKLHYHPHQWDQG6XFFHVV 6RFLDO&ODVV
7KHVHYDOXHVKDYHKLVWRULFDOURRWVLQWKHWUDGLWLRQDO3URWHVWDQWZRUNHWKLFZKLFK
FRQVLGHUVZRUNWREHVSLULWXDOO\KHDOWK\
127(6
D )XUWKHUPRUH UHVHDUFK VKRZV WKH DFKLHYHPHQW RULHQWDWLRQ LV FORVHO\
DVVRFLDWHGZLWKWKHWHFKQLFDOGHYHORSPHQWDQGHFRQRPLFJURZWKRIWKH
$PHULFDQVRFLHW\
,QGLYLGXDOVZKRFRQVLGHUDVHQVHRIDFFRPSOLVKPHQWWREHDQLPSRUWDQWSHUVRQDO
YDOXHWHQGWREHDFKLHYHUVZKRVWULYHKDUGIRUVXFFHVV
D $OWKRXJKFORVHO\UHODWHGDFKLHYHPHQWDQGVXFFHVVDUHGLIIHUHQW
L $FKLHYHPHQWLVLWVRZQGLUHFWUHZDUG²LWLVVDWLVI\LQJWRWKHDFKLHYHU
LL 6XFFHVVLPSOLHVDQH[WULQVLFUHZDUG²ILQDQFLDORUVWDWXVLPSURYHPHQWV
LLL ,WLVWKHZLGHVSUHDGHPEUDFLQJRIDFKLHYHPHQWDQGVXFFHVVWKDWKDV
OHGWRWKHJUHDWVXFFHVVDQGSURJUHVVRIWKH8QLWHG6WDWHV
LY %RWKDFKLHYHPHQWDQGVXFFHVVLQIOXHQFHFRQVXPSWLRQ7KH\RIWHQ
VHUYHDVVRFLDODQGPRUDOMXVWLILFDWLRQIRUWKHDFTXLVLWLRQRIJRRGVDQG
VHUYLFHV
$FWLYLW\
$PHULFDQVIHHOLVLWLPSRUWDQWWREHDFWLYHRULQYROYHG
.HHSLQJEXV\LVZLGHO\DFFHSWHGDVDKHDOWK\DQGHYHQQHFHVVDU\SDUWRIWKH
$PHULFDQOLIHVW\OH
D 7KLVFDQKDYHERWKDSRVLWLYHDQGQHJDWLYHHIIHFWRQSURGXFWV
(IILFLHQF\DQG3UDFWLFDOLW\
,QWHUPVRIHIILFLHQF\$PHULFDQVDGPLUHDQ\WKLQJWKDWVDYHVWLPHDQGHIIRUW
,QWHUPVRISUDFWLFDOLW\$PHULFDQVDUHJHQHUDOO\UHFHSWLYHWRDQ\QHZSURGXFW
WKDWPDNHVWDVNVHDVLHUDQGFDQKHOSVROYHSUREOHPV
$PHULFDQVDOVRDWWDFKJUHDWLPSRUWDQFHWRWLPHDQGSXQFWXDOLW\
$PHULFDQVVHHPWREHFRQYLQFHGWKDW³WLPHZDLWVIRUQRRQH´ZKLFKLVUHIOHFWHG
LQWKHLUKDELWXDODWWHQWLRQWREHLQJSURPSW
$PHULFDQVSODFHDJUHDWGHDORILPSRUWDQFHRQJHWWLQJWKHUHILUVWRQWKHYDOXH
RIWLPHLWVHOIRQWKHQRWLRQWKDWWLPHLVPRQH\RQWKHLPSRUWDQFHRIQRWZDVWLQJ
WLPHDQGRQLGHQWLI\LQJ³PRUH´WLPH
&RQVXPHU%HKDYLRU 7KHIUHTXHQF\ZLWKZKLFK$PHULFDQVORRNDWWKHLUZDWFKHVDQGWKHLPSRUWDQFH
DWWDFKHGWRKDYLQJDQDFFXUDWHWLPHSLHFHWHQGWRVXSSRUWWKH$PHULFDQYDOXHRI
SXQFWXDOLW\
127(6 3URJUHVV
3URJUHVVLVOLQNHGWRWKHYDOXHVUHYLHZHGHDUOLHUDQGWKHFHQWUDOEHOLHIWKDW
SHRSOHFDQDOZD\VLPSURYHWKHPVHOYHV²WKDWWRPRUURZZLOOEHEHWWHUWKDQ
WRGD\
3URJUHVVRIWHQPHDQVWKHDFFHSWDQFHRIFKDQJH²QHZSURGXFWVGHVLJQHGWR
IXOILOOSUHYLRXVO\XQGHURUXQVDWLVILHGQHHGV
0DWHULDO&RPIRUW
7RPRVW$PHULFDQVPDWHULDOFRPIRUWVLJQLILHVWKHDWWDLQPHQWRIWKHJRRGOLIH
,WLVDUHODWLYHYLHZVDWLVIDFWLRQZLWKWKHDPRXQWRIPDWHULDOJRRGVFRPHVLQ
WHUPVRIKRZWKH\FRPSDUHWRRWKHUV
0DWHULDOFRPIRUWKDVRIWHQEHHQDVVRFLDWHGZLWK³ELJJHUTXDQWLWLHVRIWKLQJV´RU
³PRUHRIVRPHWKLQJ´
5HFHQWO\KRZHYHUWKHUHKDVEHHQDQRWLFHDEOHVKLIWDZD\IURPVXFKD³PRUH
LVEHWWHU´YLHZSRLQWWRD³EHWWHULVEHWWHU´YLVLRQ²RQHWKDWVWUHVVHVEHWWHUTXDOLW\
DQGEHWWHUGHVLJQ
,QGLYLGXDOLVP
$PHULFDQVZDQWWREHWKHPVHOYHV
D 6HOIUHOLDQFHVHOILQWHUHVWVHOIFRQILGHQFHVHOIHVWHHPDQGVHOIIXOILOOPHQW
DUHDOOH[SUHVVLRQVRILQGLYLGXDOLVP
6WULYLQJIRULQGLYLGXDOLVPVHHPVWREHOLQNHGWRWKHUHMHFWLRQRIGHSHQGHQF\WKDW
LVLWLVEHWWHUWRUHO\RQRQHVHOIWKDQRQRWKHUV
&RQVXPHUDSSHDOVIUHTXHQWO\WDNHWKHIRUPRIUHLQIRUFLQJWKHFRQVXPHUV¶VHQVH
RILGHQWLW\ZLWKSURGXFWVWKDWERWKUHIOHFWDQGHPSKDVL]HWKDWLGHQWLW\
)UHHGRP
7RWKHPDUNHWHUIUHHGRPRIFKRLFHPHDQVWKHRSSRUWXQLW\WRFKRRVHIURPD
ZLGHUDQJHRIDOWHUQDWLYHV
7KLVSUHIHUHQFHLVUHIOHFWHGLQWKHODUJHQXPEHURIFRPSHWLWLYHEUDQGVDQG
SURGXFWYDULDWLRQVWKDWFDQEHIRXQGRQWKHVKHOYHVRIWKHPRGHUQVXSHUPDUNHW
RUGHSDUWPHQWVWRUH
([WHUQDO&RQIRUPLW\
([WHUQDOFRQIRUPLW\LVDQHFHVVDU\SURFHVVE\ZKLFKWKHLQGLYLGXDODGDSWVWR
VRFLHW\
&RQIRUPLW\WDNHVWKHIRUPRIVWDQGDUGL]HGJRRGVDQGVHUYLFHV 6RFLDO&ODVV
7KHDYDLODELOLW\RIDZLGHFKRLFHRIVWDQGDUGL]HGSURGXFWVDOORZVWKHFRQVXPHU
WREH
127(6
D ,QGLYLGXDOLVWLF²VHOHFWLQJSURGXFWVWKDWFORVHIULHQGVGRQRWKDYH
E &RQIRUPLQJ²SXUFKDVLQJSURGXFWVVLPLODUWRWKRVHWKHLUIULHQGVGRKDYH
L 7KHUHLVDSLQJSRQJUHODWLRQVKLSEHWZHHQWKHVHWZRYDOXHV
+XPDQLWDULDQLVP
$PHULFDQVWHQGWREHFKDULWDEOHDQGZLOOLQJWRFRPHWRWKHDLGRISHRSOHOHVV
IRUWXQDWH
0DQ\FRPSDQLHVWU\WRDSSHDOWRFRQVXPHUVE\HPSKDVL]LQJWKHLUFRQFHUQIRU
HQYLURQPHQWDODQGVRFLDOLVVXHV
<RXWKIXOQHVV
$PHULFDQVWHQGWRSODFHDQDOPRVWVDFUHGYDOXHRQ\RXWKIXOQHVV
<RXWKIXOQHVVVKRXOGQRWEHFRQIXVHGZLWK\RXWKZKLFKGHVFULEHVDQDJHJURXSLQJ
D <RXWKIXOQHVVLVORRNLQJDQGDFWLQJ\RXQJUHJDUGOHVVRIFKURQRORJLFDODJH
LWLVDVWDWHRIPLQGDQGDVWDWHRIEHLQJ
$JUHDWGHDORIDGYHUWLVLQJLVGLUHFWHGWRFUHDWLQJDVHQVHRIXUJHQF\DERXW
UHWDLQLQJRQH¶V\RXWKDQGIHDULQJDJLQJ
)LWQHVVDQG+HDOWK
$PHULFDQV¶ SUHRFFXSDWLRQ ZLWK ILWQHVV DQG KHDOWK KDV HPHUJHG DV D FRUH
YDOXH
7KLVYDOXHKDVPDQLIHVWHGLWVHOILQDQXPEHURIZD\VLQFOXGLQJWHQQLVUDFTXHWEDOO
DQGMRJJLQJDQGWKHFRQWLQXHGLQFUHDVHVLQVDOHVRIYLWDPLQV
)LWQHVVDQGKHDOWKDUHEHFRPLQJOLIHVW\OHFKRLFHVIRUPDQ\FRQVXPHUV
$OWKRXJKWKHUHLVQRGHQ\LQJWKHILWQHVVDQGKHDOWK\OLYLQJWUHQGLQ$PHULFDQ
VRFLHW\WKHUHLVHYLGHQFHWKDWFRQVXPHUVILQGLWGLIILFXOW³WREHJRRG´LQWHUPV
RIWKHLUSHUVRQDOKHDOWK
0DQ\$PHULFDQVDUHXQZLOOLQJWRFRPSURPLVHRQIODYRUIRUKHDOWKEHQHILWVZLWK &KHFN<RXU3URJUHVV
WKHUHVXOWEHLQJDNLQGRIUHYHUVHWUHQGWRZDUGIXOOIODYRUHGULFKIRRGV :KDWLVIUHHGRP
RIFKRLFH"
&XOWXUDO9DOXHV$UH1RW2QO\$Q$PHULFDQ3KHQRPHQRQ 'HILQH0DWHULDO
FRPIRUW
&XOWXUDOYDOXHVDUHQRWDOOXQLTXHRURULJLQDOO\$PHULFDQ
D 6RPHZHUHERUURZHGSDUWLFXODUO\IURP(XURSHDQVRFLHW\
&RQVXPHU%HKDYLRU 72:$5'$6+233,1*&8/785(
,W DSSHDUV WKDW WKH UROH WKDW VKRSSLQJ SOD\V LQ WKH$PHULFDQOLIH KDV EHHQ
HOHYDWHGWRWKHSRLQWWKDWWKH$PHULFDQFXOWXUHKDVEHFRPHDVKRSSLQJFXOWXUH
127(6
2QHDXWKRULW\KDVHYHQQRWHGWKDWVKRSSLQJKDVUHPDGHRXUFXOWXUHDQGQRZ
GHILQHVWKHZD\ZHXQGHUVWDQGWKHZRUOGDURXQGXV²VKRSSLQJLVZKDWZHGR
WRFUHDWHYDOXHLQRXUOLYHV
0DNLQJWKLVSRVVLEOHLVWKHUHDOLW\WKDWJUHDWVKRSSLQJH[SHULHQFHVDUHQRORQJHU
MXVWIRUWKHULFKDVFRQVXPHUVIURPDOOZDONVRIOLIHFDQHQMR\WKHORZSULFHV
IRXQGLQGLVFRXQWVWRUHV
0XFKRIWKLV³VKRSµWLOO\RXGURS´PHQWDOLW\KDVSURSHOOHGVKRSSLQJWRWKH³$OO
$PHULFDQ´SDVWWLPH
7KLVREVHVVLRQLVGULYLQJLQFUHDVLQJQXPEHUVRI$PHULFDQVWREHLQFUHGLWFDUGGHEW
&DVH
,QFUHDVLQJO\RQHRIWKHZD\VIRUWKHWLPHFRQVFLRXVSDUHQWWRVDYHVKRSSLQJWLPH
LVWRXVHWKH,QWHUQHWIRUWR\SXUFKDVHVIRUWKHLUFKLOGUHQ7R\UHWDLOHUVKDYHIRXQG
WKDWDQXSWRGDWHDQGXVHUIULHQGO\:HEVLWHLVDQH[FHOOHQWZD\WRH[WHQGPDUNHWV
DQGRXWUHDFKWRFXVWRPHUV,QJHQHUDODWR\UHWDLOHU¶V:HEVLWHLVDVH[WHQVLYHDV
WKHLULQVWRUHRIIHULQJV1RWKLQJFDQTXLWHPDWFKWKHH[FLWHPHQWDQGDWPRVSKHUHRI
DQLQVWRUHVKRSSLQJYLVLWHVSHFLDOO\DW&KULVWPDVWLPHKRZHYHU7R\V58VVHH
ZZZWR\VUXVFRPDQG)$26FKZDUW]VHHZZZIDRFRPWDNHWZRGLVWLQFWO\
GLIIHUHQWDSSURDFKHVWR:HEPHUFKDQGLVLQJRIWKHLUSURGXFWV$VVXPLQJWKDW\RX
ZHUHWKHPHUFKDQGLVLQJPDQDJHUIRUDORFDOO\LQGHSHQGHQWWR\VWRUHLQGLFDWHZKDW
\RXZRXOGWDNHIURPERWKHLWKHURIWKHDERYHWR\VWRUH:HEVLWHVWREXLOGDQ
HIIHFWLYH:HEVLWHIRU\RXUVWRUHJLYHQWKDW\RXULQWHQWZDVWRUHDFKDQGPDUNHW
WRXSVFDOHFRQVXPHUVZKRZHUHZLOOLQJWRSD\DOLWWOHPRUHIRUDORWPRUHLQWKHZD\
RIWR\VDQGWR\VHUYLFHV:ULWHDVKRUWUHSRUWGHWDLOLQJ\RXU:HEVWUDWHJ\WRUHDFK
WKHVHFRQVXPHUV%HVXUHWRGHWDLOZKDWPLJKWPDNHWKHXSVFDOHWR\FRQVXPHU
GLIIHUHQWIURPWKRVHIRXQGLQRWKHUPDUNHWFDWHJRULHVDQGKRZ\RXU:HEVLWH
H[SHFWVWRPHHWWKRVHQHHGV
6XPPDU\
7KHVWXG\RIFXOWXUHLVWKHVWXG\RIDOODVSHFWVRIDVRFLHW\,WLVWKHODQJXDJH
NQRZOHGJHODZVDQGFXVWRPVWKDWJLYHVRFLHW\LWVGLVWLQFWLYHFKDUDFWHUDQGSHUVRQDOLW\
,QWKHFRQWH[WRIFRQVXPHUEHKDYLRUFXOWXUHLVGHILQHGDVWKHVXPWRWDORIOHDUQHG
EHOLHIVYDOXHVDQGFXVWRPVWKDWVHUYHWRUHJXODWHWKHFRQVXPHUEHKDYLRURIPHPEHUV
RIDSDUWLFXODUVRFLHW\%HOLHIVDQGYDOXHVDUHJXLGHVIRUFRQVXPHUEHKDYLRUFXVWRPV
DUHXQXVXDODQGDFFHSWHGZD\VRIEHKDYLQJ
7KHLPSDFWRIFXOWXUHLVVRQDWXUDODQGLQJUDLQHGWKDWLWVLQIOXHQFHRQEHKDYLRULV 6RFLDO&ODVV
UDUHO\QRWHG<HWFXOWXUHRIIHUVRUGHUGLUHFWLRQDQGJXLGDQFHWRPHPEHUVRIVRFLHW\
LQDOOSKDVHVRIKXPDQSUREOHPVROYLQJ&XOWXUHLVG\QDPLFDQGJUDGXDOO\DQG
FRQWLQXDOO\HYROYHVWRPHHWWKHQHHGVRIVRFLHW\ 127(6
&XOWXUHLVOHDUQHGDVSDUWRIVRFLDOH[SHULHQFH&KLOGUHQDFTXLUHIURPWKHLUHQYLURQPHQW
DVHWRIEHOLHIVYDOXHVDQGFXVWRPVWKDWFRQVWLWXWHFXOWXUHLHWKH\DUHHQFXOWXUHG
7KHVHDUHDFTXLUHGWKURXJKIRUPDOOHDUQLQJLQIRUPDOOHDUQLQJDQGWHFKQLFDOOHDUQLQJ
$GYHUWLVLQJHQKDQFHVIRUPDOOHDUQLQJE\UHLQIRUFLQJGHVLUHGPRGHVRIEHKDYLRUDQG
H[SHFWDWLRQVLWHQKDQFHVLQIRUPDOOHDUQLQJE\SURYLGLQJPRGHOVIRUEHKDYLRU
&XOWXUHLVFRPPXQLFDWHGWRPHPEHUVRIWKHVRFLHW\WKURXJKDFRPPRQODQJXDJHDQG
WKURXJKFRPPRQO\VKDUHGV\PEROV%HFDXVHWKHKXPDQPLQGKDVWKHDELOLW\WR
DEVRUEDQGSURFHVVV\PEROLFFRPPXQLFDWLRQPDUNHWHUVFDQVXFFHVVIXOO\SURPRWH
ERWKWDQJLEOHDQGLQWDQJLEOHSURGXFWVDQGSURGXFWFRQFHSWVWRFRQVXPHUVWKURXJK
PDVVPHGLD
$OOWKHHOHPHQWVRIWKHPDUNHWLQJPL[VHUYHWRFRPPXQLFDWHV\PEROLFDOO\ZLWKWKH
DXGLHQFH3URGXFWVSURMHFWDQLPDJHRIWKHLURZQVRGRHVSURPRWLRQ3ULFHDQG
UHWDLORXWOHWVV\PEROLFDOO\FRQYH\LPDJHVFRQFHUQLQJWKHTXDOLW\RIWKHSURGXFW
7KHHOHPHQWVRIFXOWXUHDUHWUDQVPLWWHGE\WKUHHSHUYDVLYHVRFLDOVLWXDWLRQVWKH
IDPLO\WKHFKXUFKDQGWKHVFKRRO$IRXUWKVRFLDOLQVWLWXWLRQWKDWSOD\VDPDMRUUROH
LQWKHWUDQVPLVVLRQRIFXOWXUHLVWKHPDVVPHGLDERWKWKURXJKHGLWRULDOFRQWHQWDQG
WKURXJKDGYHUWLVLQJ
$ZLGHUDQJHRIPHDVXUHPHQWWHFKQLTXHVDUHXVHGWRVWXG\FXOWXUH7KHUDQJH
LQFOXGHVSURMHFWLYHWHFKQLTXHVDWWLWXGHPHDVXUHPHQWPHWKRGVILHOGREVHUYDWLRQ
SDUWLFLSDQWREVHUYDWLRQFRQWHQWDQDO\VLVDQGYDOXHPHDVXUHPHQWVXUYH\WHFKQLTXHV
%HFDXVHHDFKRIWKHVHYDOXHVYDULHVLQLPSRUWDQFHWRWKHPHPEHUVRIRXUVRFLHW\
HDFKSURYLGHVDQHIIHFWLYHEDVLVIRUVHJPHQWLQJFRQVXPHUPDUNHWV
$16:(5672&+(&.<285352*5(66
6RFLDOFODVV LV GHILQHG DV WKH GLYLVLRQ RI PHPEHUV RI D VRFLHW\LQWR D
KLHUDUFK\RIGLVWLQFWVWDWXVFODVVHVVRWKDWPHPEHUVRIHDFKFODVVKDYH
UHODWLYHO\WKHVDPHVWDWXVDQGPHPEHUVRIDOORWKHUFODVVHVKDYHHLWKHUPRUH
RUOHVVVWDWXV
6WUDWD
&RQVXPHU%HKDYLRU )UHHGRPRIFKRLFHPHDQVWKHRSSRUWXQLW\WRFKRRVHIURPDZLGHUDQJHRI
DOWHUQDWLYHV
0DWHULDOFRPIRUWVLJQLILHVWKHDWWDLQPHQWRIWKHJRRGOLIH
127(6
7(67<2856(/)
([SODLQZKDWVRFLDOFODVVHVDUH
:KDWLVVRFLDOFODVVDQGVRFLDOVWDWXV"
:KDWGR\RXXQGHUVWDQGE\QRQDIIOXHQWFXVWRPHUV"
7KURZVRPHOLJKWRQWKHG\QDPLFVRIVRFLDOFRPSHWLWLRQ
+RZFXOWXUDOHOHPHQWVDUHPHDVXUHG"
)857+(55($',1*
x &RQVXPHU%HKDYLRUE\.DQXN
6XEFXOWXUH
6XEFXOWXUH
127(6
7KH&KDSWHU&RYHUV
,QWURGXFWLRQ
:KDW,V6XEFXOWXUH"
1DWLRQDOLW\6XEFXOWXUHV
5HOLJLRXV6XEFXOWXUHV
*HRJUDSKLF$QG5HJLRQDO6XEFXOWXUHV
5DFLDO6XEFXOWXUHV
$JH6XEFXOWXUHV
6H[DVD6XEFXOWXUH
6XEFXOWXUDO,QWHUDFWLRQ
&URVVFXOWXUDO3V\FKRJUDSKLF6HJPHQWDWLRQ
&DVH
/HDUQLQJ2EMHFWLYHV
$IWHUJRLQJWKURXJKWKLVFKDSWHU\RXVKRXOGEHDEOHWR
x 'HILQHVXEFXOWXUH
x 'LVFXVVWKHPHWKRGVXVHGIRUGHILQLQJDQGVHJPHQWLQJWKHYDULRXV
VXEFXOWXUHVLQ$PHULFD
x ([SODLQWKHLPSRUWDQFHRIWKHSURPLQHQWUHOLJLRXVVXEFXOWXUHV
x 8QGHUVWDQGKRZPDUNHWHUVVHJPHQWWKHZRUNLQJZRPDQPDUNHW
&RQVXPHU%HKDYLRU ,1752'8&7,21
&XOWXUHKDVDSRWHQWLQIOXHQFHRQDOOFRQVXPHUEHKDYLRU
,QGLYLGXDOVDUHEURXJKWXSWRIROORZWKHEHOLHIVYDOXHVDQGFXVWRPVRIWKHLUVRFLHW\
127(6
DQGWRDYRLGEHKDYLRUWKDWLVMXGJHG³XQDFFHSWDEOH´RUFRQVLGHUHGWDERR
D ,QDGGLWLRQWRVHJPHQWLQJLQWHUPVRIFXOWXUDOIDFWRUVPDUNHWHUVDOVRVHJPHQW
RYHUDOOVRFLHWLHVLQWRVPDOOHUVXEJURXSVVXEFXOWXUHVWKDWFRQVLVWRISHRSOH
ZKRDUHVLPLODULQWHUPVRIWKHLUHWKQLFRULJLQWKHLUFXVWRPVDQGRUWKH
ZD\VWKH\EHKDYH
E 7KHVHVXEFXOWXUHVSURYLGHLPSRUWDQWPDUNHWLQJRSSRUWXQLWLHVIRUDVWXWH
PDUNHWLQJVWUDWHJLVWV
7KHVXEFXOWXUDOGLYLVLRQVGLVFXVVHGDUHEDVHGRQDYDULHW\RIVRFLRFXOWXUDODQG
GHPRJUDSKLFYDULDEOHVVXFKDVQDWLRQDOLW\UHOLJLRQJHRJUDSKLFORFDOLW\UDFHDJH
VH[DQGHYHQZRUNLQJVWDWXV
:+$7,668%&8/785("
0HPEHUVRIVSHFLILFVXEFXOWXUHVSRVVHVVEHOLHIVYDOXHVDQGFXVWRPVWKDWVHW
WKHPDSDUWIURPRWKHUPHPEHUVRIWKHVDPHVRFLHW\
6XEFXOWXUHLVGHILQHGDVEHLQJDGLVWLQFWFXOWXUDOJURXSWKDWH[LVWVDVDQLGHQWLILDEOH
VHJPHQWZLWKLQDODUJHUPRUHFRPSOH[VRFLHW\
$FXOWXUDOSURILOHRIDVRFLHW\RUQDWLRQLVDFRPSRVLWHRIWZRHOHPHQWV
D 7KHXQLTXHEHOLHIVYDOXHVDQGFXVWRPVVXEVFULEHGWRE\LWVPHPEHUV
E 7KHFHQWUDORUFRUHFXOWXUDOWKHPHVVKDUHGE\WKHPDMRULW\RIWKHSRSXODWLRQ
UHJDUGOHVVRIVSHFLILFVXEFXOWXUDOPHPEHUVKLSV
(DFKVXEFXOWXUHKDVLWVRZQXQLTXHWUDLWV
6XEFXOWXUDODQDO\VLVHQDEOHVWKHPDUNHWLQJPDQDJHUWRIRFXVRQVL]DEOHDQG
QDWXUDOPDUNHWVHJPHQWV
D :KHQFDUU\LQJRXWVXFKDQDO\VHVWKHPDUNHWHUPXVWGHWHUPLQHZKHWKHU
WKHEHOLHIVYDOXHVDQGFXVWRPVVKDUHGE\PHPEHUVRIDVSHFLILFVXEJURXS
PDNHWKHPGHVLUDEOHFDQGLGDWHVIRUVSHFLDOPDUNHWLQJDWWHQWLRQ
1$7,21$/,7<68%&8/785(6
)RUPDQ\SHRSOHQDWLRQDOLW\LVDQLPSRUWDQWVXEFXOWXUDOUHIHUHQFHWKDWJXLGHV
ZKDWWKH\YDOXHDQGZKDWWKH\EX\
$OWKRXJKPRVW86FLWL]HQVDUHERUQLQWKH8QLWHG6WDWHVVRPHVWLOOUHWDLQSULGH
DQGLGHQWLILFDWLRQZLWKWKHODQJXDJHDQGFXVWRPVRIWKHLUDQFHVWRUV
D 7KLVLGHQWLILFDWLRQFDQPDQLIHVWLWVHOILQFRQVXPSWLRQEHKDYLRU
:KHQLWFRPHVWRFRQVXPHUEHKDYLRUDQFHVWUDOSULGHLVPDQLIHVWHGPRVWVWURQJO\ 6XEFXOWXUH
LQWKHFRQVXPSWLRQRIHWKQLFIRRGVLQWUDYHOWRWKHLU³KRPHODQG´DQGLQWKH
SXUFKDVHRIQXPHURXVFXOWXUDODUWLIDFWV
$JRRGLOOXVWUDWLRQRIWKHLPSRUWDQFHRIHWKQLFRULJLQDVDVXEFXOWXUDOPDUNHW 127(6
VHJPHQWLVWKH+LVSDQLF$PHULFDQVXEFXOWXUH
+LVSDQLF6XEFXOWXUHV
,Q-XO\+LVSDQLF$PHULFDQVUHSUHVHQWHGDSSUR[LPDWHO\SHUFHQWRIWKH
8QLWHG6WDWHVSRSXODWLRQPLOOLRQSHRSOHZLWKEX\LQJSRZHURIELOOLRQ
,Q-XO\RI+LVSDQLFVUHSODFHG$IULFDQ$PHULFDQVDVWKHODUJHVWPLQRULW\
JURXSLQWKH8QLWHG6WDWHV
7KHQXPEHURI+LVSDQLFVLVHVWLPDWHGWRUHDFKSHUFHQWRIWKHSRSXODWLRQE\
WKH\HDU
+LVSDQLF$PHULFDQVDUH\RXQJHUWKHPHGLDQDJHRI+LVSDQLFVLVDERXW\HDUV
\RXQJHUWKDQWKHPHGLDQDJHRIQRQ+LVSDQLFZKLWHVWKH\DUHPHPEHUVRI
ODUJHUIDPLOLHVDQGWKH\DUHPRUHOLNHO\WROLYHLQDQ³H[WHQGHGIDPLO\´KRXVHKROG²
FRQVLVWLQJRIVHYHUDOJHQHUDWLRQVRIIDPLO\PHPEHUV
D 1RWRQO\DUH+LVSDQLFKRXVHKROGVPRUHOLNHO\WKDQEODFNRUQRQ+LVSDQLF
ZKLWHIDPLOLHVWRFRQWDLQFKLOGUHQEXW+LVSDQLFVDOVRVSHQGPRUHWLPH
FDULQJIRUWKHLUFKLOGUHQ
7KHUHFHQW&HQVXVIRXQGWKDWSHUFHQWOLYHLQWKHVHYHQVWDWHVWKDWKDYH
+LVSDQLFSRSXODWLRQVRIRQHPLOOLRQRUPRUH
7KHUHDUH+LVSDQLFVXEJURXSVQRZLGHQWLILHGLQWKH8QLWHG6WDWHV
7KHWKUHHODUJHVW+LVSDQLFVXEFXOWXUDOJURXSVFRQVLVWRI0H[LFDQ$PHULFDQVDERXW
SHUFHQWRIWRWDO+LVSDQLF$PHULFDQV3XHUWR5LFDQVDSSUR[LPDWHO\SHUFHQW
RIWKHWRWDODQG&XEDQVDERXWSHUFHQWRIWKHWRWDO
E 7KHVHVXEFXOWXUHVDUHKHDYLO\FRQFHQWUDWHGJHRJUDSKLFDOO\ZLWKPRUHWKDQ
SHUFHQWRIWKHLUPHPEHUVUHVLGLQJLQ&DOLIRUQLD7H[DV1HZ<RUNDQG
)ORULGD/RV$QJHOHVDORQHLVKRPHWRRQHILIWKRIWKH+LVSDQLFSRSXODWLRQ
RIWKH8QLWHG6WDWHV
F $OWKRXJKPRUHWKDQSHUFHQWRIDOO0H[LFDQ$PHULFDQVWKHODUJHVW &KHFN<RXU3URJUHVV
+LVSDQLFJURXSZHUHERUQLQWKH8QLWHG6WDWHVSHUFHQWRI&XEDQ :KDWLVVXE
$PHULFDQVZHUHERUQLQ&XED FXOWXUH"
1DPHWKHLPSRU
8QGHUVWDQGLQJ+LVSDQLF&RQVXPHU%HKDYLRU
WDQWFRQVWLWXHQW
+LVSDQLFDQG$QJORFRQVXPHUVGLIIHULQWHUPVRIDYDULHW\RILPSRUWDQWEX\HU RIVXEFXOWXUH
EHKDYLRUYDULDEOHV
+LVSDQLFVXEFXOWXUHLVG\QDPLFDQGHYROYLQJ
&RQVXPHU%HKDYLRU D 0RUHDQGPRUH+LVSDQLFVDUHIRRGVKRSSLQJLQQRQ+LVSDQLFVXSHUPDUNHWV
IRUH[DPSOH
E 7KH\DSSHDUWREHLQWKHSURFHVVRIDFFXOWXUDWLRQ
127(6
'HILQLQJDQG6HJPHQWLQJWKH+LVSDQLF0DUNHW
0DUNHWHUVDUHFRQFHUQHGZLWKILQGLQJWKHEHVWZD\VWRGHILQHDQGVHJPHQWWKLV
RYHUDOOVXEFXOWXUH
³+LVSDQLF´KDVEHHQGHILQHGE\6SDQLVKVXUQDPHFRXQWU\RIRULJLQFRXQWU\RI
IDPLO\DQFHVWU\6SDQLVKVSRNHQDWKRPHDQGVHOILGHQWLILFDWLRQ
7KH+LVSDQLFPDUNHWLQDGGLWLRQWRXVLQJVHOILGHQWLILFDWLRQDQGGHJUHHRI
LGHQWLILFDWLRQVHJPHQWDWLRQPLJKWEHVHJPHQWHGE\XVLQJDFRPELQDWLRQRIWKH
FRXQWU\RIRULJLQDQGJHRJUDSKLFFRQFHQWUDWLRQLQWKH8QLWHG6WDWHV
D 2IWKHVHYDULDEOHVWKHFRPELQDWLRQRIVHOILGHQWLILFDWLRQDQGGHJUHHRI
LGHQWLILFDWLRQDUHSDUWLFXODUO\DSSHDOLQJEHFDXVHWKH\SHUPLWFRQVXPHUVWR
GHILQHRUODEHOWKHPVHOYHV
6RPHPDUNHWHUVIHHOWKDWLWLVZRUWKZKLOHWRWDUJHWHDFK+LVSDQLF$PHULFDQ
PDUNHWVHSDUDWHO\
2WKHUPDUNHWHUVHVSHFLDOO\ODUJHUPDUNHWHUVKDYHEHHQWDUJHWLQJWKH+LVSDQLF
PDUNHWDVDVLQJOHPDUNHWXVLQJ6SDQLVKODQJXDJHPDVVPHGLD
/DQJXDJHSURYLGHVDQRWKHUEDVLVIRUVHJPHQWLQJWKH+LVSDQLF$PHULFDQPDUNHW
HYHQWKRXJKWKHUHDUHVLJQLILFDQWYDULDWLRQVUHJDUGLQJWKHLUODQJXDJHSUHIHUHQFHV
+LVSDQLFVVHHPWRSUHIHUPHGLDLQWKHILUVWODQJXDJHWKH\OHDUQHGWRVSHDN
5(/,*,28668%&8/785(6
7KH8QLWHG6WDWHVKDVPRUHWKDQGLIIHUHQWRUJDQL]HGUHOLJLRXVVXEFXOWXUHV
D 2IWKLVQXPEHU3URWHVWDQWGHQRPLQDWLRQV5RPDQ&DWKROLFLVPDQG-XGDLVP
DUHWKHSULQFLSOHRUJDQL]HGUHOLJLRXVIDLWKV
&RQVXPHUEHKDYLRULVFRPPRQO\GLUHFWO\DIIHFWHGE\UHOLJLRQLQWHUPVRISURGXFWV
WKDWDUHV\PEROLFDOO\DQGULWXDOLVWLFDOO\DVVRFLDWHGZLWKWKHFHOHEUDWLRQRI
YDULRXVUHOLJLRXVKROLGD\V
5HOLJLRXVUHTXLUHPHQWVRUSUDFWLFHVVRPHWLPHVWDNHRQDQH[SDQGHGPHDQLQJ
EH\RQGWKHLURULJLQDOSXUSRVH
7DUJHWLQJVSHFLILFUHOLJLRXVJURXSVZLWKVSHFLDOO\GHVLJQHGPDUNHWLQJSURJUDPV
FDQEHYHU\SURILWDEOH
*(2*5$3+,&$1'5(*,21$/68%&8/785(6
7KH8QLWHG6WDWHVLVDODUJHFRXQWU\RQHWKDWHQMR\VDZLGHUDQJHRIFOLPDWLF
DQGJHRJUDSKLFFRQGLWLRQV
,WLVRQO\QDWXUDOWKDWPDQ\$PHULFDQVKDYHDVHQVHRIUHJLRQDOLGHQWLILFDWLRQ 6XEFXOWXUH
DQGXVHWKLVLGHQWLILFDWLRQDVDZD\RIGHVFULELQJRWKHUVHJ³+HLVDWUXH1HZ
(QJODQGHU´
7KHUHDUHUHJLRQDOGLIIHUHQFHVLQFRQVXPSWLRQEHKDYLRUHVSHFLDOO\ZKHQLWFRPHV 127(6
WRIRRGDQGGULQN
D 5HJLRQDOGLIIHUHQFHVDOVRLQFOXGHEUDQGSUHIHUHQFHV
&RQVXPHUUHVHDUFKVWXGLHVGRFXPHQWUHJLRQDOGLIIHUHQFHVLQFRQVXPSWLRQSDWWHUQV
D 7KLVGLVWLQFWLRQKHOSVUHGHILQHORFDOPDUNHWVLQWHUPVRIVSHFLILFXUEDQ
OLIHVW\OH
5$&,$/68%&8/785(6
7KHPDMRUUDFLDOVXEFXOWXUHVLQWKH8QLWHG6WDWHVDUH&DXFDVLDQ$IULFDQ
$PHULFDQ$VLDQ$PHULFDQDQG$PHULFDQ,QGLDQ
D 7KHPDMRULW\RIUHVHDUFKKDVIRFXVHGRQWKHGLIIHUHQFHEHWZHHQ$IULFDQ
$PHULFDQDQG&DXFDVLDQFRQVXPHUVDQGRQO\UHFHQWO\WXUQHGWR$VLDQ
$PHULFDQV
7KH$IULFDQ$PHULFDQ&RQVXPHU
&RQVLVWLQJRIDERXWPLOOLRQSHRSOH$IULFDQ$PHULFDQFRQVXPHUVFXUUHQWO\
FRQVWLWXWHWKHODUJHVWUDFLDOPLQRULW\LQWKH8QLWHG6WDWHVDOPRVWSHUFHQWRI
WKHSRSXODWLRQ
:KLOHWKHRYHUDOO86SRSXODWLRQJUHZSHUFHQWEHWZHHQDQG
WKH$IULFDQ$PHULFDQSRSXODWLRQLQWKH86JUHZE\SHUFHQW
$IULFDQ$PHULFDQFRQVXPHUVFXUUHQWO\FRQVWLWXWHWKHVHFRQGODUJHVWPLQRULW\LQ
WKH8QLWHG6WDWHV
D 3XUFKDVLQJSRZHULVHVWLPDWHGWREHELOOLRQDQGWRJURZWR
ELOOLRQE\
E 0RUHWKDQKDOIRI$IULFDQ$PHULFDQFRQVXPHUVDUHOHVVWKDQ\HDUVRI
DJH
7KLV LPSRUWDQW VXEFXOWXUDO JURXSLQJ LV IUHTXHQWO\ SRUWUD\HG DV D VLQJOH
XQGLIIHUHQWLDWHG³$IULFDQ$PHULFDQPDUNHW´FRQVLVWLQJRIFRQVXPHUVZKRKDYH
DXQLIRUPVHWRIFRQVXPHUQHHGV
D ,Q UHDOLW\ LW FRQVLVWV RI QXPHURXV VXEJURXSV HDFK ZLWK GLVWLQFWLYH
EDFNJURXQGVQHHGVLQWHUHVWVDQGRSLQLRQV
&RQVXPHU%HKDYLRU&KDUDFWHULVWLFVRI$IULFDQ$PHULFDQ&RQVXPHUV
7KHUHDUHPHDQLQJIXOGLIIHUHQFHVLQWHUPVRISURGXFWSUHIHUHQFHVDQGEUDQG
SXUFKDVHSDWWHUQV
&RQVXPHU%HKDYLRU $IULFDQ$PHULFDQFRQVXPHUVWHQGWRSUHIHUSRSXODURUOHDGLQJEUDQGVDUH
EUDQGOR\DODQGDUHXQOLNHO\WRSXUFKDVHSULYDWHODEHODQGJHQHULFSURGXFWV
$OPRVWWZRWKLUGVRI$IULFDQ$PHULFDQVDUHZLOOLQJWRSD\PRUHWRJHW³WKH
127(6 EHVW´
6RPHPHDQLQJIXOGLIIHUHQFHVH[LVWDPRQJ$QJORZKLWH$IULFDQ$PHULFDQDQG
+LVSDQLF$PHULFDQFRQVXPHUVLQWKHSXUFKDVHRZQHUVKLSDQGXVHRIDGLYHUVH
JURXSRISURGXFWV
5HDFKLQJWKH$IULFDQ$PHULFDQ$XGLHQFH
7UDGLWLRQDOO\PDUNHWHUVKDYHVXEVFULEHGWRRQHRIWZRGLVWLQFWPDUNHWLQJVWUDWHJLHV
D 6RPHKDYHIROORZHGWKHSROLF\RIUXQQLQJDOOWKHLUDGYHUWLVLQJLQJHQHUDO
PDVVPHGLDLQWKHEHOLHIWKDW$IULFDQ$PHULFDQVKDYHWKHVDPHPHGLD
KDELWVDVZKLWHV
E 2WKHUVKDYHIROORZHGWKHSROLF\RIUXQQLQJDGGLWLRQDODGYHUWLVLQJLQVHOHFWHG
PHGLDGLUHFWHGH[FOXVLYHO\WR$IULFDQ$PHULFDQV
F %RWKVWUDWHJLHVPD\EHDSSURSULDWHLQVSHFLILFVLWXDWLRQVDQGIRUVSHFLILF
SURGXFWFDWHJRULHV
L )RUSURGXFWVRIYHU\EURDGDSSHDOHJDVSLULQRUWRRWKSDVWHLWLV
SRVVLEOHWKDWWKHPDVVPHGLDSULPDULO\WHOHYLVLRQPD\HIIHFWLYHO\
UHDFKDOOUHOHYDQWFRQVXPHUVLQFOXGLQJ$IULFDQ$PHULFDQVDQGZKLWHV
LL )RU RWKHU SURGXFWV HJ SHUVRQDO JURRPLQJ SURGXFWV RU IRRG
SURGXFWVPDUNHWHUVPD\ILQGWKDWPDVVPHGLDGRQRWFRPPXQLFDWH
HIIHFWLYHO\ZLWKWKH$IULFDQ$PHULFDQPDUNHW
$IULFDQ$PHULFDQVKDYHFXOWXUDOYDOXHVWKDWDUHVXEWO\GLIIHUHQWIURPWKH86
SRSXODWLRQDVDZKROH
0DQ\PDUNHWHUVVXSSOHPHQWWKHLUJHQHUDODGYHUWLVLQJZLWKDGYHUWLVHPHQWVLQ
PDJD]LQHV QHZVSDSHUV DQG RWKHU PHGLD GLUHFWHG VSHFLILFDOO\ WR$IULFDQ
$PHULFDQV
,QUHFHQW\HDUVPDMRUDGYHUWLVHUVWDUJHWLQJWKH$IULFDQ$PHULFDQPDUNHWKDYH
LQFUHDVLQJO\XVHGWKHVSHFLDOL]HGVHUYLFHVRI$IULFDQ$PHULFDQDGYHUWLVLQJDJHQFLHV
$VLDQ$PHULFDQ&RQVXPHUV
7KH$VLDQ$PHULFDQSRSXODWLRQSULPDULO\&KLQHVH)LOLSLQR-DSDQHVH$VLDQ
,QGLDQ.RUHDQDQG9LHWQDPHVHLVFXUUHQWO\DERXWPLOOLRQLQVL]HDQGLVWKH
IDVWHVWJURZLQJ$PHULFDQPLQRULW\RQDSHUFHQWDJHEDVLV
:KLOH$VLDQVDQG3DFLILF,VODQGHUVPDGHXSSHUFHQWRIWKH86SRSXODWLRQ
LQWKLVJURXSLVH[SHFWHGWRDFFRXQWIRUSHUFHQWRI$PHULFD¶VSRSXODWLRQ
LQ
6L[GLIIHUHQWHWKQLFLWLHVPDNHXSDERXWSHUFHQWRIWKH$VLDQ$PHULFDQ 6XEFXOWXUH
SRSXODWLRQ
%HFDXVH$VLDQ$PHULFDQVDUHODUJHO\IDPLO\RULHQWHGKLJKO\LQGXVWULRXVDQG
VWURQJO\GULYHQWRDFKLHYHDPLGGOHFODVVOLIHVW\OHWKH\DUHDQDWWUDFWLYHPDUNHW 127(6
IRULQFUHDVLQJQXPEHUVRIPDUNHWHUV
,QSHUFHQWRIDOO$VLDQDQG3DFLILF,VODQGHUIDPLOLHVKDGLQFRPHVRI
DWOHDVWFRPSDUHGZLWKSHUFHQWRIQRQ+LVSDQLF:KLWHIDPLOLHV
DQGDQDYHUDJHKRXVHKROGLQFRPHIRUWKLVJURXSDWLVSHUFHQW
PRUHWKDQWKH86DYHUDJH
$KLJKHUSURSRUWLRQRI$VLDQVDQG3DFLILF,VODQGHUVWKDQQRQ+LVSDQLF:KLWHV
ZHUHFRQFHQWUDWHGLQPDQDJHULDODQGSURIHVVLRQDOMREV
(GXFDWLRQDODWWDLQPHQWLVDQLPSRUWDQWJRDOIRUWKLVVHJPHQWRIWKHSRSXODWLRQ
:KHUH$UHWKH$VLDQ$PHULFDQV"
$VLDQ$PHULFDQVDUHODUJHO\XUEDQSHRSOHZKRDUHSUHVHQWO\FRQFHQWUDWHGLQ
DQGDURXQGDVPDOOQXPEHURIODUJH$PHULFDQFLWLHV
D $ERXWKDOIRI$VLDQ$PHULFDQVOLYHLQJUHDWHU/RV$QJHOHV6DQ)UDQFLVFR
DQG1HZ<RUN
0DUNHWHUVFDQEHPLVOHGE\WKHXUEDQQXPEHUVGLVSOD\HGE\WKLVVHJPHQW
0DQ\$VLDQ$PHULFDQVOLYHLQWKHVXEXUEV
8QGHUVWDQGLQJWKH$VLDQ$PHULFDQ&RQVXPHU
8QLWHG6WDWHV&HQVXV%XUHDXGDWDUHYHDOWKDWPRUH$VLDQ$PHULFDQVRQDSHU
FDSLWDEDVLVRZQWKHLURZQEXVLQHVVHVWKDQQRQ$VLDQ$PHULFDQPLQRULWLHV
D 7KRVHZKRGRQRWRZQWKHLURZQEXVLQHVVHVDUHODUJHO\LQSURIHVVLRQDO
WHFKQLFDORUPDQDJHULDORFFXSDWLRQV
E 7KH\DOVRWHQGWREHPRUHFRPSXWHUOLWHUDWHWKDQWKHJHQHUDOSRSXODWLRQ
F $GGLWLRQDOO\PDQ\$VLDQ$PHULFDQVDUH\RXQJDQGOLYHDJRRGSDUWRIWKHLU
OLYHVLQPXOWLLQFRPHKRXVHKROGV
G (QJOLVKVSHDNLQJ$VLDQ$PHULFDQVDUHPRUHOLNHO\WKDQRWKHU$PHULFDQVWR
JHWWKHLUQHZVDQGLQIRUPDWLRQRQOLQH
$VLDQ$PHULFDQVDV&RQVXPHUV
7KHEX\LQJSRZHURI$VLDQ$PHULFDQVDPRXQWVWRDERXWELOOLRQDQQXDOO\
D 7KH\YDOXHTXDOLW\DQGDUHZLOOLQJWRSD\IRULW
E 7KLVSRSXODWLRQVHJPHQWWHQGVWREHOR\DOFXVWRPHUV
F 7KHVHJPHQWLVIUHTXHQWO\PRUHPDOHRULHQWHGZKHQLWFRPHVWRFRQVXPSWLRQ
GHFLVLRQV
&RQVXPHU%HKDYLRU G 7KHVHJPHQWLVDWWUDFWHGWRUHWDLOHUVZKRPDNHLWNQRZQWKDWWKH\ZHOFRPH
$VLDQ$PHULFDQSDWURQDJH
,WLVLPSRUWDQWWRUHPHPEHUWKDW$VLDQ$PHULFDQVDUHUHDOO\GUDZQIURPGLYHUVH
127(6 FXOWXUDOEDFNJURXQGV
D 9LHWQDPHVH$PHULFDQVDUHPRUHOLNHO\WRIROORZWKHWUDGLWLRQDOPRGHO
ZKHUHLQWKHPDQPDNHVWKHGHFLVLRQIRUODUJHSXUFKDVHVZKHUHDV&KLQHVH
$PHULFDQKXVEDQGVDQGZLYHVDUHPRUHOLNHO\WRVKDUHLQWKHGHFLVLRQ
PDNLQJSURFHVV
7KHXVHRI$VLDQ$PHULFDQPRGHOVLQDGYHUWLVLQJLVHIIHFWLYHLQUHDFKLQJWKLV
PDUNHWVHJPHQW
$*(68%&8/785(6
)RXUDJHVXEFXOWXUHVHJPHQWVKDYHEHHQVLQJOHGRXWIRUGLVFXVVLRQ*HQHUDWLRQ
<*HQHUDWLRQ;EDE\ERRPHUVDQGVHQLRUVEHFDXVHWKHLUGLVWLQFWLYHOLIHVW\OHV
TXDOLI\WKHPIRUFRQVLGHUDWLRQDVVXEFXOWXUDOJURXSV
7KH*HQHUDWLRQ<0DUNHW
7KLVDJHFRKRUWDFRKRUWLVDJURXSRILQGLYLGXDOVERUQRYHUDUHODWLYHO\VKRUW
DQGFRQWLQXRXVSHULRGRIWLPHLQFOXGHVWKHDSSUR[LPDWHO\PLOOLRQ$PHULFDQV
ERUQEHWZHHQWKH\HDUVDQGLHWKHFKLOGUHQRIWKHEDE\ERRPHUV
D 7KLVFRKRUWLVDOVRNQRZQDVWKH³HFKRERRPHUV´RUWKH³PLOOHQQLXP
JHQHUDWLRQ´
E 7KLVJURXSFDQEHGLYLGHGLQWRWKUHHVXEVHJPHQWV*HQ<DGXOWVDJH
*HQ<WHHQVDJHDQG*HQ<NLGVRU³WZHHQV´DJH
$SSHDOLQJWR*HQHUDWLRQ<
7KHWHHQVHJPHQWRI*HQHUDWLRQ<VSHQGVRYHUELOOLRQDQQXDOO\DQGLQIOXHQFHV
SXUFKDVHVE\WKHLUSDUHQWVRIVHYHUDOWLPHVWKLVDPRXQW
7KH\KDYHJURZQXSLQDPHGLDVDWXUDWHGHQYLURQPHQWDQGWHQGWREHDZDUH
RI³PDUNHWLQJK\SH´
7KLVJURXSKDVVKLIWHGVRPHRILWV79YLHZLQJWLPHWRWKH,QWHUQHW
7ZHHQV
,QWKH86WKHPLOOLRQPHPEHURIWKH³WZHHQ´PDUNHWJHQHUDOO\FRQVLGHUHG
WRFRQVLVWRIWR\HDUROGVVSHQGVDQDYHUDJHRIHDFKIRUDWRWDO
RIELOOLRQ
D 7KHLUSDUHQWVZLOOVSHQGDOPRVWELOOLRQPRUHRQWKHP
,QKRXVHKROGVWKDWLQFOXGHDWZHHQIRRGSXUFKDVHVDFFRXQWIRUDOPRVW
SHUFHQWRIWRWDOKRXVHKROGVSHQGLQJ
7HHQDJHUVDOVRYLVLWVKRSSLQJPDOOVPRUHIUHTXHQWO\WKDQDQ\RWKHUDJHJURXS 6XEFXOWXUH
*HQ<DGXOWVDUHWKHODUJHVWXVHUVRIFHOOSKRQHWH[WPHVVDJLQJ
7ZL[WHUV
127(6
6SDQQLQJWKH*HQ<DQG*HQ;PDUNHWVLVDJURXSRIWR\HDUROGVZKR
FRQWLQXHWROLYHZLWKWKHLUSDUHQWV
2YHUKDOIRI7ZL[WHUVJUDGXDWHGFROOHJHPRUHWKDQLQGHEW
7KH\WHQGWRKDYHWUXVWLQWKHLUSDUHQWVDQGLQHVWDEOLVKHGLQVWLWXWLRQVDQGRIWHQ
GRQRWPDUU\EHIRUHWKH\UHDFKWKHLUELUWKGD\
7KH*HQHUDWLRQ;0DUNHW
7KLVJURXS;HUVEXVWHUVRUVODFNHUVFRQVLVWVRIDSSUR[LPDWHO\PLOOLRQ
WR\HDUROGVZKRVSHQWDERXWWULOOLRQLQ
7KH\GRQRWOLNHODEHOVDUHF\QLFDODQGGRQRWZDQWWREHVLQJOHGRXWDQG
PDUNHWHGWR
7KH\DUHLQQRUXVKWRPDUU\VWDUWDIDPLO\RUZRUNH[FHVVLYHKRXUVWRHDUQ
KLJKVDODULHV
D -REVDWLVIDFWLRQLVW\SLFDOO\PXFKPRUHLPSRUWDQWWKDQVDODU\
E ,WLVPRUHLPSRUWDQWWRHQMR\OLIHDQGWRKDYHDOLIHVW\OHWKDWSURYLGHV
IUHHGRPDQGIOH[LELOLW\
$SSHDOLQJWR*HQHUDWLRQ;
0HPEHUVRI*HQHUDWLRQ;RIWHQSULGHWKHPVHOYHVRQWKHLUVRSKLVWLFDWLRQ
1RWQHFHVVDULO\PDWHULDOLVWLF WKH\GRSXUFKDVHJRRGEUDQG QDPHVEXWQRW
QHFHVVDULO\GHVLJQHUODEHOV
7KH\ZDQWWREHUHFRJQL]HGE\PDUNHWHUVDVDJURXSLQWKHLURZQULJKW
2QHNH\IRUPDUNHWHUVDSSHDUVWREHVLQFHULW\
%DE\ERRPHUPHGLDGRHVQRWZRUNZLWK*HQHUDWLRQ;PHPEHUV
D ;HUVDUHWKH079JHQHUDWLRQ
E 7KH)R[QHWZRUNFODLPVWKDWSHUFHQWRILWVYLHZHUVDUHLQWKLVDJH
JURXS
7KH%DE\%RRPHU0DUNHW
7KH\DUHHVSHFLDOO\DWWUDFWLYHEHFDXVH
D 7KH\DUHODUJHVWDJHFDWHJRU\DOLYHWRGD\
E 7KH\PDNHLPSRUWDQWFRQVXPHUSXUFKDVHGHFLVLRQV
&RQVXPHU%HKDYLRU F 7KH\FRQWDLQDVPDOOVXEVHJPHQWRIWUHQGVHWWLQJFRQVXPHUV²<XSSLHV²
ZKRLQIOXHQFHWKHFRQVXPHUWDVWHVRIRWKHUDJHVHJPHQWVRIVRFLHW\
:KRDUHWKH%DE\%RRPHUV"
127(6
7KLVVHJPHQWZDVERUQEHWZHHQDQG
7KH\UHSUHVHQWSHUFHQWRIWKHDGXOWSRSXODWLRQDQGFRPSULVHSHUFHQWRI
DOOSHRSOHLQSURIHVVLRQDODQGPDQDJHULDORFFXSDWLRQVDQGPRUHWKDQRQHKDOIRI
WKRVHZLWKDWOHDVWDFROOHJHGHJUHH
$OWKRXJKHDFK\HDUPRUHEDE\ERRPHUVWXUQ\HDUVRIDJHWKH\GRQRW
QHFHVVDULO\OLNHWKHLGHD
D &RQVXPHUVDUHWU\LQJKDUGWRORRNDQGIHHO\RXQJ
&RQVXPHU&KDUDFWHULVWLFVRI%DE\%RRPHUV
%DE\ERRPHUVWHQGWREHPRWLYDWHGFRQVXPHUV
7KH\HQMR\EX\LQJIRUWKHPVHOYHVIRUWKHLUKRPHVRUDSDUWPHQWVDQGIRURWKHUV²
WKH\DUHFRQVXPSWLRQRULHQWHG
<XSSLHVDUHE\IDUWKHPRVWVRXJKWDIWHUVXEJURXSRIEDE\ERRPHUV
D $OWKRXJKRQO\SHUFHQWRIWKHSRSXODWLRQWKH\JHQHUDOO\DUHZHOORII
ILQDQFLDOO\ZHOOHGXFDWHGDQGLQHQYLDEOHSURIHVVLRQDORUPDQDJHULDOFDUHHUV
E 7KH\RIWHQDUHDVVRFLDWHGZLWKVWDWXVEUDQGQDPHV
7RGD\DVPDQ\\XSSLHVDUHPDWXULQJWKH\DUHVKLIWLQJWKHLUDWWHQWLRQDZD\IURP
H[SHQVLYHVWDWXVW\SHSRVVHVVLRQVWRWUDYHOSK\VLFDOILWQHVVSODQQLQJIRUVHFRQG
FDUHHUVRUVRPHRWKHUIRUPRIQHZOLIHGLUHFWLRQV
D 7KHUH KDV EHHQ D PRYH DZD\ IURP ZDQWLQJ SRVVHVVLRQV WR ZDQWLQJ
H[SHULHQFHV
E 5HFHQWDUWLFOHVKDYHQRWHGWKDWVRPHPHPEHUVRIWKLVJURXSDUHSODQQLQJ
WRNHHSZRUNLQJHLWKHUIXOOWLPHRUSDUWWLPHEH\RQGDJH
2OGHU&RQVXPHU
$PHULFDLVDJLQJWKHQXPEHURIHOGHUO\FRQVXPHUVLVJURZLQJWZLFHDVIDVWDV
WKHRYHUDOO86SRSXODWLRQ
,QWKHUHZHUHPRUHWKDQPLOOLRQSHRSOHLQWKLVFRXQWU\ZKRDUH
\HDUVRIDJHRUROGHUSHUFHQWRIWKHSRSXODWLRQ
D 3HRSOHRYHUWKHDJHFRPSULVHDERXWRQHWKLUGRIWKHDGXOW86PDUNHW
E ,WLVSURMHFWHGWKDWE\PLOOLRQ$PHULFDQVSHUFHQWRIWKHWRWDO
SRSXODWLRQZLOOEH\HDUVRIDJHRUROGHU
F /LIHH[SHFWDQF\LVULVLQJ
G /DWHUDGXOWKRRGLVWKHORQJHVWDGXOWOLIHVWDJHIRUPRVWFRQVXPHUV 6XEFXOWXUH
6RPHSHRSOHWKLQNRIROGHUFRQVXPHUVDV
D 3HRSOHZLWKRXWVXEVWDQWLDOILQDQFLDOUHVRXUFHV
127(6
E ,QJHQHUDOO\SRRUKHDOWK
F :LWKSOHQW\RIIUHHWLPHRQWKHLUKDQGV
,QUHDOLW\
D 0DQ\DUHHPSOR\HG
E 0DQ\DUHLQYROYHGLQWKHGDLO\FDUHRIDJUDQGFKLOGDQGGRYROXQWHHUZRUN
F 7KHDQQXDOGLVFUHWLRQDU\LQFRPHRIWKLVJURXSDPRXQWVWRSHUFHQWRI
WKHGLVFUHWLRQDU\LQFRPHRIWKH8QLWHG6WDWHV
G 2OGHUFRQVXPHUVDUHPDMRUSXUFKDVHUVRIOX[XU\SURGXFWVVXFKDVFDUV
DOFRKROYDFDWLRQVDQGILQDQFLDOSURGXFWV
H $PHULFDQVRYHUQRZFRQWUROSHUFHQWRIWKHQDWLRQ¶VZHDOWK
'HILQLQJ³2OGHU´LQ2OGHU&RQVXPHUV
'ULYLQJWKHJURZWKRIWKHHOGHUO\SRSXODWLRQDUHWKUHHIDFWRUV
D 7KHGHFOLQLQJELUWKUDWH
E 7KHDJLQJRIWKHKXJHEDE\ERRPHUVHJPHQW
F ,PSURYHGPHGLFDOGLDJQRVHVDQGWUHDWPHQW
,QWKH8QLWHG6WDWHV³ROGDJH´LVRIILFLDOO\DVVXPHGWREHJLQZLWKDSHUVRQ¶V
WKELUWKGD\LHZKHQWKHLQGLYLGXDOTXDOLILHVIRUIXOO6RFLDO6HFXULW\DQG
0HGLFDUH
D 3HRSOHZKRDUH\HDUVROGKRZHYHUWHQGWRYLHZWKHPVHOYHVDVEHLQJ
\HDUV\RXQJHUWKDQWKHLUFKURQRORJLFDODJH
5HVHDUFKFRQVLVWHQWO\VXJJHVWVWKDWSHRSOH¶VSHUFHSWLRQVRIWKHLUDJHVDUHPRUH
LPSRUWDQWLQGHWHUPLQLQJEHKDYLRUWKDQWKHLUFKURQRORJLFDODJHVLHWKHQXPEHU
RI\HDUVOLYHG
,QIDFWSHRSOHPD\DWWKHVDPHWLPHKDYHDQXPEHURIGLIIHUHQWSHUFHLYHGRU
FRJQLWLYH DJHV
D (OGHUO\ FRQVXPHUV SHUFHLYH WKHPVHOYHV WR EH \RXQJHU WKDQ WKHLU
FKURQRORJLFDODJHVRQIRXUSHUFHLYHGDJHGLPHQVLRQVIHHODJHKRZROG
WKH\IHHOORRNDJHKRZROGWKH\ORRNGRDJHKRZLQYROYHGWKH\DUH
LQDFWLYLWLHVIDYRUHGE\PHPEHUVRIDVSHFLILFDJHJURXSDQGLQWHUHVW
DJHKRZVLPLODUWKHLULQWHUHVWVDUHWRWKRVHRIPHPEHUVRIDVSHFLILFDJH
JURXS
&RQVXPHU%HKDYLRU )RUPDUNHWHUVWKHVHILQGLQJVXQGHUVFRUHWKHLPSRUWDQFHRIORRNLQJEH\RQG
FKURQRORJLFDODJHWRSHUFHLYHGRUFRJQLWLYHDJHZKHQDSSHDOLQJWRPDWXUH
FRQVXPHUVDQGWRWKHSRVVLELOLW\WKDWFRJQLWLYHDJHPLJKWEHXVHGWRVHJPHQWWKH
PDWXUHPDUNHW
127(6
6HJPHQWLQJWKH(OGHUO\0DUNHW
7KHHOGHUO\DUHQRWKRPRJHQHRXV
2QHFRQVXPHUJHURQWRORJLVWKDVVXJJHVWHGWKDWWKHHOGHUO\DUHPRUHGLYHUVHLQ
LQWHUHVWVRSLQLRQVDQGDFWLRQVWKDQRWKHUVHJPHQWVRIWKHDGXOWSRSXODWLRQ
2QHUHODWLYHO\VLPSOHVHJPHQWDWLRQVFKHPHSDUWLWLRQVWKHHOGHUO\LQWRWKUHH
FKURQRORJLFDODJHFDWHJRULHV
D 7KH\RXQJROGWR\HDUVRIDJH
E 7KHROGWKRVHWR
F 7KHROGROGWKRVH\HDUVRIDJHDQGROGHU
7KHHOGHUO\FDQDOVREHVHJPHQWHGLQWHUPVRIPRWLYDWLRQVDQGTXDOLW\RIOLIH
RULHQWDWLRQ
&\EHUVHQLRUV
2QHVKRXOGQRWVWHUHRW\SHVHQLRUVDVEHLQJWHFKQRORJLFDOO\GHILFLHQW
7KHUHDUHPRUH,QWHUQHWXVHUVRYHUWKHDJHRIWKDQXQGHUWKHDJHRI
7KHDWWUDFWLRQRIWKH,QWHUQHWWRVHQLRUVVHHPVWREHEDVHGRQLWVFRPPXQLFDWLRQ
DELOLW\
7KHUHDSSHDUVWREHDUHODWLRQVKLSEHWZHHQWKHDPRXQWRIWLPHDQROGHUDGXOW
VSHQGVRQWKH,QWHUQHWDQGKLVRUKHURXWRIKRPHPRELOLW\
0DUNHWLQJWRWKH2OGHU&RQVXPHU
2OGHUFRQVXPHUVGRZDQWWREHPDUNHWHGWREXWRQO\IRUWKH³ULJKW´NLQGVRI
SURGXFWVDQGVHUYLFHVDQGXVLQJWKH³ULJKW´DGYHUWLVLQJSUHVHQWDWLRQ
)RUVRPHSURGXFWVDQGVHUYLFHVVHQLRUVGRH[KLELWGLIIHUHQWVKRSSLQJKDELWV
WKDQ\RXQJHUFRQVXPHUV
6(;$6$68%&8/785(
%HFDXVHVH[UROHVKDYHDQLPSRUWDQWFXOWXUDOFRPSRQHQWLWLVTXLWHILWWLQJWRH[DPLQH
JHQGHUDVDVXEFXOWXUDOFDWHJRU\
6H[5ROHVDQG&RQVXPHU%HKDYLRU
,Q$PHULFDQVRFLHW\IRULQVWDQFHDJJUHVVLYHQHVVDQGFRPSHWLWLYHQHVVRIWHQ
ZHUHFRQVLGHUHGWUDGLWLRQDOPDVFXOLQHWUDLWVQHDWQHVVWDFWIXOQHVVJHQWOHQHVV
DQGWDONDWLYHQHVVZHUHFRQVLGHUHGWUDGLWLRQDOIHPLQLQHWUDLWV
,QWHUPVRIUROHGLIIHUHQFHVZRPHQKDYHKLVWRULFDOO\EHHQFDVWDVKRPHPDNHUV 6XEFXOWXUH
ZLWKUHVSRQVLELOLW\IRUFKLOGFDUHDQGPHQDVWKHSURYLGHUVRUEUHDGZLQQHUV
0DUNHWHUVDUHLQFUHDVLQJO\DSSHDOLQJWRFRQVXPHUV¶EURDGHUYLVLRQRIJHQGHU
UHODWHGUROHRSWLRQV 127(6
%HFDXVHVRPHWUDLWVDQGUROHVDUHQRORQJHUUHOHYDQWIRUPDQ\LQGLYLGXDOV
PDUNHWHUVDUHLQFUHDVLQJO\DSSHDOLQJWRFRQVXPHUV¶EURDGHUYLVLRQRIJHQGHU
UHODWHGUROHRSWLRQV
,WPD\EHEHVWZKHUHIHDVLEOHWRDGYHUWLVHGLIIHUHQWO\WRPHQDQGZRPHQ
&RQVXPHU3URGXFWVDQG6H[5ROHV
:LWKLQHYHU\VRFLHW\LWLVTXLWHFRPPRQWRILQGSURGXFWVWKDWDUHHLWKHUH[FOXVLYHO\
RUVWURQJO\DVVRFLDWHGZLWKWKHPHPEHUVRIRQHVH[
,QWKH8QLWHG6WDWHVIRUPRVWSURGXFWVWKHVH[UROHOLQNKDVHLWKHUGLPLQLVKHG
RUGLVDSSHDUHGIRURWKHUVWKHSURKLELWLRQVWLOOOLQJHUV
7KHDSSHDORIWKH,QWHUQHWVHHPVWRGLIIHUVRPHZKDWIRUPHQDQGZRPHQ
:RPHQDV'HSLFWHGLQ0HGLDDQG$GYHUWLVLQJ
0DQ\ZRPHQIHHOWKDWWKHPHGLDDQGDGYHUWLVLQJFUHDWHDQH[SHFWDWLRQRI
EHDXW\WKDWPRVWZRPHQFDQQHYHUDFKLHYH
&RQVHTXHQWO\WKH\ZDQWWKHGHILQLWLRQRI³EHDXW\´WRFKDQJH
7KH:RUNLQJ:RPDQ
0DUNHWHUV¶LQWHUHVWLQWKHZRUNLQJZRPDQLVLQFUHDVLQJ
0DUNHWHUVUHFRJQL]HWKLVLVEHFRPLQJDODUJHPDUNHW
)RUW\SHUFHQWRIDOOEXVLQHVVWUDYHOHUVWRGD\DUHZRPHQ
6HJPHQWLQJWKH:RUNLQJ:RPDQ0DUNHW
0DUNHWHUVKDYHGHYHORSHGFDWHJRULHVWKDWGLIIHUHQWLDWHWKHPRWLYDWLRQVRIZRUNLQJ
DQGQRQZRUNLQJZRPHQDQGKDYHGLYLGHGWKHIHPDOHSRSXODWLRQLQWRIRXU
VHJPHQWV
D 6WD\DWKRPHKRXVHZLYHV
E 3ODQWRZRUNKRXVHZLYHV
F -XVWDMREZRUNLQJZRPHQ
G &DUHHURULHQWHGZRUNLQJZRPHQ
7ZHQW\ILYHSHUFHQWRIDOOZRUNLQJZRPHQEULQJKRPHDSD\FKHFNWKDWLVODUJHU
WKDQWKHLUKXVEDQGV
D 7HQ\HDUVDJRLWZDVRQO\SHUFHQW
&RQVXPHU%HKDYLRU :RUNLQJZRPHQVSHQGOHVVWLPHVKRSSLQJWKDQQRQZRUNLQJZRPHQ
D 7KH\DFFRPSOLVKWKLV³WLPHHFRQRP\´E\VKRSSLQJOHVVRIWHQDQGE\EHLQJ
EUDQGDQGVWRUHOR\DO
127(6 E :RUNLQJZRPHQDOVRDUHOLNHO\WRVKRSGXULQJHYHQLQJKRXUVDQGRQWKH
ZHHNHQGDVZHOODVWREX\WKURXJKGLUHFWPDLOFDWDORJV
(DFK\HDUPRUHDQGPRUHSURGXFWVDQGUHWDLOHUVWDUJHWWRZRPHQ
68%&8/785$/,17(5$&7,21
$OOFRQVXPHUVDUHVLPXOWDQHRXVO\PHPEHUVRIPRUHWKDQRQHVXEFXOWXUDOVHJPHQW
WKLVFDQEHYLHZHGDVVXEFXOWXUDOLQWHUDFWLRQ
0DUNHWHUVVKRXOGVWULYHWRXQGHUVWDQGKRZPXOWLSOHVXEFXOWXUDOPHPEHUVKLSV
LQWHUDFWWRLQIOXHQFHWDUJHWFRQVXPHUV¶UHOHYDQWFRQVXPSWLRQEHKDYLRU
3URPRWLRQDOVWUDWHJ\VKRXOGQRWEHOLPLWHGWRDVLQJOHVXEFXOWXUDOPHPEHUVKLS
7KH,PSHUDWLYH7R%H0XOWLQDWLRQDO
7RGD\WKHLVVXHLVJHQHUDOO\QRWZKHWKHUWRPDUNHWDEUDQGLQRWKHUFRXQWULHV
EXWUDWKHUKRZWRGRLWHJWKHVDPHSURGXFWWKHVDPH³JOREDO´DGYHUWLVLQJ
FDPSDLJQRU³WDLORUHG´SURGXFWVDQGORFDOL]HGDGVIRUHDFKFRXQWU\
%HFDXVHRIWKLVHPSKDVLVRQRSHUDWLQJDVDPXOWLQDWLRQDOHQWLW\WKHYRFDEXODU\
RIPDUNHWLQJQRZLQFOXGHVWHUPVVXFKDVJORFDOZKLFKUHIHUVWRFRPSDQLHVWKDW
DUHERWK³JOREDO´DQG³ORFDO´WKDWLVWKH\LQFOXGHLQWKHLUPDUNHWLQJHIIRUWVD
EOHQGRIVWDQGDUGL]HGDQGORFDOHOHPHQWVLQRUGHUWRVHFXUHWKHEHQHILWVRIHDFK
VWUDWHJ\
7KLVFKDOOHQJHKDVEHHQJLYHQVSHFLDOPHDQLQJE\WKHHIIRUWVRIWKH(XURSHDQ
8QLRQ(8WRIRUPLQJDVLQJOHPDUNHW
D ,WLVXQFOHDUZKHWKHUWKLVGLYHUVHPDUNHWZLOOEHWUDQVIRUPHGLQWRDVLQJOH
PDUNHWRIKRPRJHQHRXV³(XURFRQVXPHUV´ZLWKWKHVDPHRUYHU\VLPLODU
ZDQWVDQGQHHGV
E 0DQ\SHRSOHKRSHWKDWWKHLQWURGXFWLRQRIWKH³HXUR´DVDFRPPRQFXUUHQF\
DPRQJDQXPEHURI(8PHPEHUVZLOOKHOSVKDSH(XURSHLQWRDKXJH
SRZHUIXOVLQJOHPDUNHW
7KH1RUWK$PHULFDQ)UHH7UDGH$JUHHPHQW1$)7$ZKLFKFXUUHQWO\
FRQVLVWVRIWKH8QLWHG6WDWHV&DQDGDDQG0H[LFRSURYLGHVIUHHPDUNHWDFFHVV
WRPLOOLRQFRQVXPHUV
7KHHPHUJLQJ$VVRFLDWLRQRI6RXWKHDVW$VLDQ1DWLRQV$6($1FRQVLVWLQJRI
,QGRQHVLD6LQJDSRUH7KDLODQGWKH3KLOLSSLQHV0DOD\VLD%UXQHLDQG9LHWQDP
LVDQRWKHULPSRUWDQWHFRQRPLFDOOLDQFHWKDWRIIHUVPDUNHWHUVQHZJOREDOPDUNHWV
D 7KHPHPEHUVRIWKLVJURXSKDYHIRUPHGWKH$6($1)UHH7UDGH$UHD
$)7$WRSURPRWHUHJLRQDOWUDGH
0DQ\ILUPVDUHGHYHORSLQJVWUDWHJLHVWRWDNHDGYDQWDJHRIWKHVHDQGRWKHU 6XEFXOWXUH
HPHUJLQJHFRQRPLFRSSRUWXQLWLHV
)LUPVDUHVHOOLQJWKHLUSURGXFWVZRUOGZLGHIRUDYDULHW\RIUHDVRQV
127(6
D 2YHUVHDVPDUNHWVUHSUHVHQWWKHVLQJOHPRVWLPSRUWDQWRSSRUWXQLW\IRUIXWXUH
JURZWKDVKRPHPDUNHWVUHDFKPDWXULW\
E &RQVXPHUVDOORYHUWKHZRUOGDUHLQFUHDVLQJO\HDJHUWRWU\³IRUHLJQ´SURGXFWV
WKDWDUHSRSXODULQGLIIHUHQWDQGIDURIISODFHV
$FTXLULQJ([SRVXUHWR2WKHU&XOWXUHV
+RZFRQVXPHUVLQRQHFXOWXUHVHFXUHH[SRVXUHWRWKHJRRGVRIRWKHUSHRSOH
OLYLQJLQRWKHUFXOWXUHVLVDQLPSRUWDQWSDUWRIFRQVXPHUEHKDYLRU
$SRUWLRQRIFRQVXPHUV¶H[SRVXUHWRGLIIHUHQWFXOWXUHVWHQGVWRFRPHDERXW
WKURXJKFRQVXPHUV¶RZQLQLWLDWLYHV²WKHLUWUDYHOWKHLUOLYLQJDQGZRUNLQJLQIRUHLJQ
FRXQWULHVRUHYHQWKHLULPPLJUDWLRQWRDGLIIHUHQWFRXQWU\
&RQVXPHUVRIWHQREWDLQD³WDVWH´RIGLIIHUHQWFXOWXUHVIURPFRQWDFWZLWKIRUHLJQ
PRYLHVWKHDWHUDUWDQGDUWLIDFWDQGPRVWFHUWDLQO\H[SRVXUHWRXQIDPLOLDUDQG
GLIIHUHQWSURGXFWV
D :LWKLQWKLVFRQWH[WLQWHUQDWLRQDOPDUNHWLQJSURYLGHVDIRUPRI³FXOWXUH
WUDQVIHU´
&RXQWU\RI2ULJLQ(IIHFWV
5HVHDUFKHUVKDYHVKRZQWKDWFRQVXPHUVXVHWKHLUNQRZOHGJHRIZKHUHSURGXFWV
DUHPDGHLQWKHHYDOXDWLRQRIWKHLUSXUFKDVHRSWLRQV
6XFKDFRXQWU\RIRULJLQHIIHFWVHHPVWRFRPHDERXWEHFDXVHFRQVXPHUVDUH
RIWHQDZDUHWKDWDSDUWLFXODUILUPRUEUDQGQDPHLVDVVRFLDWHGZLWKDSDUWLFXODU
FRXQWU\
&RQVXPHUVWHQGWRKDYHDQHVWDEOLVKHGDWWLWXGHRUHYHQDSUHIHUHQFHZKHQLW
FRPHVWRDSDUWLFXODUSURGXFWEHLQJPDGHLQDSDUWLFXODUFRXQWU\
D 7KLVDWWLWXGHPLJKWEHSRVLWLYHQHJDWLYHRUQHXWUDO
E ,QDGGLWLRQVRPHUHVHDUFKHYLGHQFHVKRZVWKDWVRPHFRQVXPHUVPD\
UHIUDLQIURPSXUFKDVLQJSURGXFWVIURPSDUWLFXODUFRXQWULHVGXHWRDQLPRVLW\
:KDWLV1DWLRQDO,GHQWLW\"
1DWLRQDOLGHQWLW\FRQVLVWVRIIRXQGGLPHQVLRQEHOLHIVWUXFWXUHFXOWXUDOKRPRJHQHLW\
QDWLRQDOKHULWDJHDQGFRQVXPHUHWKQRFHQWULVP
*HQHUDOO\FRXQWULHVZLWKDZHDNVHQVHRIQDWLRQDOLGHQWLW\FRXSOHGZLWKORZ
HWKQRFHQWULFWHQGHQFLHVDUHVXLWDEOHIRUXVHDVSODFHVWRODXQFKQHZSURGXFWV
EHFDXVHIRUHLJQILUPVDUHQRWYLHZHGDVWKUHDWV
&RQVXPHU%HKDYLRU &URVV&XOWXUDO&RQVXPHU$QDO\VLV
&URVVFXOWXUDOFRQVXPHUDQDO\VLVLVGHILQHGDVWKHHIIRUWWRGHWHUPLQHWR
ZKDWH[WHQWWKHFRQVXPHUVRIWZRRUPRUHQDWLRQVDUHVLPLODURUGLIIHUHQW
127(6
6XFKDQDO\VLVFDQSURYLGHPDUNHWHUVZLWKDQXQGHUVWDQGLQJRIWKHSV\FKRORJLFDO
VRFLDODQGFXOWXUDOFKDUDFWHULVWLFVRIWKHIRUHLJQFRQVXPHUVWKH\ZLVKWRWDUJHW
VRWKDWWKH\FDQGHVLJQHIIHFWLYHPDUNHWLQJVWUDWHJLHVIRUWKHVSHFLILFQDWLRQDO
PDUNVLQYROYHG
D ,QDEURDGHUFRQWH[WLWPLJKWLQFOXGHDFRPSDULVRQRIVXEFXOWXUDOJURXSV
ZLWKLQDVLQJOHFRXQWU\
E 2XU WH[W ZLOO OLPLW GLVFXVVLRQ RI FURVVFXOWXUDO FRQVXPHU DQDO\VLV WR
FRPSDULVRQVRIFRQVXPHUVRIGLIIHUHQWFRXQWULHV
6LPLODULWLHVDQG'LIIHUHQFHV$PRQJ3HRSOH
$PDMRUREMHFWLYHRIFURVVFXOWXUDOFRQVXPHUDQDO\VLVLVWRGHWHUPLQHKRZ
FRQVXPHUVLQWZRRUPRUHVRFLHWLHVDUHVLPLODUDQGKRZWKH\DUHGLIIHUHQW
6XFKDQXQGHUVWDQGLQJRIWKHVLPLODULWLHVDQGGLIIHUHQFHVWKDWH[LVWEHWZHHQ
QDWLRQVLVFULWLFDOWRWKHPXOWLQDWLRQDOPDUNHWHUZKRPXVWGHYLVHDSSURSULDWH
VWUDWHJLHVWRUHDFKFRQVXPHUVLQVSHFLILFIRUHLJQPDUNHWV
7KHJUHDWHUWKHVLPLODULW\EHWZHHQQDWLRQVWKHPRUHIHDVLEOHLWLVWRXVHUHODWLYHO\
VLPLODUVWUDWHJLHVLQHDFKQDWLRQ
D 2QWKHRWKHUKDQGLIWKHFXOWXUDOEHOLHIVYDOXHVDQGFXVWRPVRIVSHFLILF
WDUJHWFRXQWULHVDUHIRXQGWRGLIIHUZLGHO\WKHQDKLJKO\LQGLYLGXDOL]HG
PDUNHWLQJVWUDWHJ\LVLQGLFDWHGIRUHDFKFRXQWU\
$ILUP¶VVXFFHVVLQPDUNHWLQJDSURGXFWRUVHUYLFHLQDQXPEHURIIRUHLJQ
FRXQWULHVLVOLNHO\WREHLQIOXHQFHGE\KRZVLPLODUWKHEHOLHIVYDOXHVDQGFXVWRPV
DUHWKDWJRYHUQWKHXVHRIWKHSURGXFWLQWKHYDULRXVFRXQWULHV
7KH*URZLQJ*OREDO0LGGOH&ODVV
7KHJURZLQJPLGGOHFODVVLQGHYHORSLQJFRXQWULHVLVDSKHQRPHQRQWKDWLVYHU\
DWWUDFWLYHWRJOREDOPDUNHWHUV
7KHQHZVPHGLDKDVJLYHQFRQVLGHUDEOHFRYHUDJHWRWKHLGHDWKDWWKHUDSLGO\
H[SDQGLQJPLGGOHFODVVLQFRXQWULHVRI$VLD6RXWK$PHULFDDQG(DVWHUQ(XURSH
LVEDVHGRQWKHUHDOLW\WKDWDOWKRXJKSHUFDSLWDLQFRPHPD\EHORZWKHUHLV
QHYHUWKHOHVVFRQVLGHUDEOHEX\LQJSRZHULQDFRXQWU\OLNH&KLQDZKHUH
RILQFRPHLVODUJHO\GLVFUHWLRQDU\LQFRPH
$OWKRXJKDJURZLQJPLGGOHFODVVPD\SURYLGHDPDUNHWIRUSURGXFWVOLNH%LJ
0DFVDQGIULHVLWVKRXOGDOZD\VEHUHPHPEHUHGWKDWWKHVDPHSURGXFWPLJKW
KDYHGLIIHUHQWPHDQLQJVLQGLIIHUHQWFRXQWULHV
D $ 86 FRQVXPHU ZDQWV KLV RU KHU ³IDVW IRRG´ WR EH IDVW D .RUHDQ 6XEFXOWXUH
FRQVXPHULVPRUHOLNHO\WRYLHZDPHDODVDVRFLDORUIDPLO\UHODWHG
H[SHULHQFH
5HJXODWLRQVLQGLIIHUHQWFRXQWULHVPD\SUHFOXGHWKHXVHRIVRPHRIWKHPDUNHWLQJ 127(6
SUDFWLFHVWKDWDILUPHPSOR\VLQWKH8QLWHG6WDWHV
0RUHFRQVXPHUJRRGVDUHVROGHDFK\HDUEHFDXVHRIWKHJURZWKRIWKHZRUOG¶V
PLGGOHFODVVSRSXODWLRQDQGDPDUNHWHUZRXOGGRZHOOWRIRFXVPRUHRQWKH
HPHUJLQJPLGGOHFODVVLQRWKHUQDWLRQVWKDQRQSHRSOHZKRFDQQRWDIIRUGWREX\
LWVSURGXFWVLQLWVKRPHPDUNHW
7KH *OREDO7HHQDJH 0DUNHW
7KHDIIOXHQWJOREDOWHHQDJHDQG\RXQJDGXOWPDUNHWLVJURZLQJ
7HHQDJHUVDSSHDUWRKDYHTXLWHVLPLODULQWHUHVWVGHVLUHVDQGFRQVXPSWLRQEHKDYLRU
QRPDWWHUZKHUHWKH\OLYH
&RQVXPHUUHVHDUFKHUVKDYHH[SORUHGWKHPDNHXSFRPSRVLWLRQDQGEHKDYLRU
RIWKLVVHJPHQWV
$FFXOWXUDWLRQ,VD1HHGHG0DUNHWLQJ9LHZSRLQW
0DQ\PDUNHWHUVPDNHDVWUDWHJLFHUURUZKHQFRQWHPSODWLQJDQLQWHUQDWLRQDO
H[SDQVLRQWKLQNLQJWKDWLIGRPHVWLFFRQVXPHUVOLNHLWLQWHUQDWLRQDOFRQVXPHUV
ZLOOOLNHLW
0DUNHWHUVQHHGWRJRWKURXJKDQDFFXOWXUDWLRQSURFHVVOHDUQLQJHYHU\WKLQJWKDW
LVUHOHYDQWWRWKHLUSURGXFWXVDJHLQWKHIRUHLJQFRXQWULHVLQZKLFKWKH\SODQWR
RSHUDWH
&URVVFXOWXUDODFFXOWXUDWLRQLVDGXDOSURFHVVIRUPDUNHWHUV
D )LUVWPDUNHWHUVPXVWWKRURXJKO\RULHQWWKHPVHOYHVWRWKHYDOXHVEHOLHIV
DQGFXVWRPVRIWKHQHZVRFLHW\
E 6HFRQGPDUNHWHUVPXVWSHUVXDGHWKHPHPEHUVRIWKDWVRFLHW\WREUHDN
ZLWKWKHLURZQWUDGLWLRQV
$VRFLDOPDUNHWLQJHIIRUWGHVLJQHGWRHQFRXUDJHFRQVXPHUVLQGHYHORSLQJQDWLRQV
WR VHFXUH SROLR YDFFLQDWLRQV IRU WKHLU FKLOGUHQ ZRXOG UHTXLUH D WZRVWHS
DFFXOWXUDWLRQSURFHVV
D )LUVWWKHPDUNHWHUPXVWREWDLQDQLQGHSWKSLFWXUHRIDVRFLHW\¶VSUHVHQW
DWWLWXGHVDQGFXVWRPVZLWKUHJDUGWRSUHYHQWLYHPHGLFLQHDQGUHODWHG
FRQFHSWV
E 7KHQWKHPDUNHWHUPXVWGHYLVHSURPRWLRQDOVWUDWHJLHVWKDWZLOOFRQYLQFH
WKHPHPEHUVRIDWDUJHWPDUNHWWRKDYHWKHLUFKLOGUHQYDFFLQDWHGHYHQLI
GRLQJVRUHTXLUHVDFKDQJHLQFXUUHQWDWWLWXGHV
&RQVXPHU%HKDYLRU 'LVWLQFWLYH&KDUDFWHULVWLFVRI&URVV&XOWXUDO$QDO\VLV
,WLVRIWHQGLIILFXOWIRUDFRPSDQ\SODQQLQJWRGREXVLQHVVLQIRUHLJQFRXQWULHVWR
XQGHUWDNHFURVVFXOWXUDOFRQVXPHUUHVHDUFK
127(6
,QPDQ\FRXQWULHVWKHUHLVDOLPLWHGDPRXQWRILQIRUPDWLRQUHJDUGLQJFRQVXPHU
DQGPDUNHWVWDWLVWLFV
$SSO\LQJ5HVHDUFK7HFKQLTXHV
$OWKRXJKGRPHVWLFUHVHDUFKPHWKRGVDUHXVHIXOLQIRUHLJQFRXQWULHVODQJXDJH
ZRUGXVDJHVFDOHVRIPHDVXUHPHQWDQGUHVHDUFKIDFLOLWLHVRIWHQGLIIHUIURP
QDWLRQWRQDWLRQFDXVLQJVRPHGLIILFXOWLHV
7RDYRLGUHVHDUFKPHDVXUHPHQWSUREOHPVFRQVXPHUUHVHDUFKHUVVKRXOGIDPLOLDUL]H
WKHPVHOYHVZLWKWKHUHVHDUFKVHUYLFHVLQWKHFRXQWULHVZKHUHWKH\DUHHYDOXDWLQJ
PDUNHWVDQGOHDUQWRGHVLJQPDUNHWLQJUHVHDUFKVWXGLHVWKDWZLOO\LHOGXVHIXOGDWD
$OWHUQDWLYH0XOWLQDWLRQDO6WUDWHJLHV*OREDO9HUVXV/RFDO
0DUNHWHUVDUHDUJXLQJIRURQHRIWZRDSSURDFKHV
D 7KHZRUOGPDUNHWVDUHEHFRPLQJPRUHVLPLODUDQGWKHUHIRUHVWDQGDUGL]HG
PDUNHWLQJVWUDWHJLHVLVDSSURSULDWH
E 7KHYDULDWLRQVDPRQJQDWLRQVDUHWRRJUHDWIRUDVWDQGDUGL]HGPDUNHWLQJ
VWUDWHJ\
7KH FKDOOHQJH LV GHFLGLQJ ZKHWKHU WR XVH VKDUHG QHHGV DQG YDOXHV DV D
VHJPHQWDWLRQVWUDWHJ\RUWRXVHQDWLRQDOERUGHUVDVDVHJPHQWDWLRQVWUDWHJ\
)DYRULQJD³:RUOG%UDQG´
:RUOG EUDQGV DUH WKRVH SURGXFWV WKDW DUH PDQXIDFWXUHG SDFNDJHG DQG
SRVLWLRQHGWKHVDPHZD\UHJDUGOHVVRIWKHFRXQWU\LQZKLFKWKH\DUHVROG
0DUNHWHUVRISURGXFWVZLWKDZLGHRUDOPRVWPDVVPDUNHWDSSHDOKDYHHPEUDFHG
DZRUOGEUDQGLQJVWUDWHJ\
D 6WLOORWKHUPDUNHWHUVVHOHFWLYHO\XVHDZRUOGEUDQGLQJVWUDWHJ\
$UH*OREDO%UDQGV'LIIHUHQW"
$FFRUGLQJWRDQDWLRQFRQVXPHUUHVHDUFKSURMHFWJOREDOEUDQGVDUHYLHZHG
GLIIHUHQWO\WKDQORFDOEUDQGVDQGFRQVXPHUVZRUOGZLGHDVVRFLDWHJOREDOEUDQGV
ZLWKWKUHHFKDUDFWHULVWLFVTXDOLW\VLJQDOJOREDOP\WKDQGVRFLDOUHVSRQVLELOLW\
:KLOHWKHUHZDVQRWPXFKYDULDWLRQDFURVVWKHQDWLRQVVWXGLHGWKHUHZHUH
LQWUDFRXQWU\GLIIHUHQFHVUHVXOWLQJLQWKHFRQFOXVLRQWKDWWKHUHZHUHIRXUPDMRU
VHJPHQWVLQHDFKFRXQWU\ZLWKUHVSHFWWRKRZLWVFLWL]HQVYLHZJOREDOEUDQGV
D *OREDOFLWL]HQV
E *OREDOGUHDPHUV
F $QWLJOREDOV 6XEFXOWXUH
G *OREDODJQRVWLFV
0XOWLQDWLRQDO5HDFWLRQVWR%UDQG([WHQVLRQV
127(6
-XVWEHFDXVHDEUDQGPD\EHJOREDOLQFKDUDFWHUGRHVQRWPHDQWKDWFRQVXPHUV
DURXQGWKHZRUOGZLOOQHFHVVDULO\UHVSRQGVLPLODUO\WRDEUDQGH[WHQVLRQ
$GDSWLYH*OREDO0DUNHWLQJ
6RPHILUPVHPEUDFHDVWUDWHJ\WKDWDGDSWVWKHLUDGYHUWLVLQJPHVVDJHVWRWKH
VSHFLILFYDOXHVRISDUWLFXODUFXOWXUHVEHFDXVHWKH\IHHOWKDWWKHZRUOGEUDQG
FRQFHSWPD\EHJRLQJWRRIDU
D ,QVRPHFDVHVWKHGLIIHUHQFHVDUHVXIILFLHQWWRPDNHORFDOL]HGDGYHUWLVLQJ
PRUHDSSURSULDWHWKDQDJOREDODSSURDFK
E 6RPHPDUNHWHUVIHHOWKDWWKHZRUOGEUDQGFRQFHSWJRHVWRRIDU
:KHQLWFRPHVWRWKHGHVLJQRIHFRPPHUFH:HEVLWHVDILYHQDWLRQUHVHDUFK
VWXG\VXJJHVWWKDWFRQVXPHUVUHDFWEHVWZKHQFRQWHQWLVDGDSWHGWRWKHLUORFDO
QHHGV
&RPELQLQJ*OREDODQG/RFDO0DUNHWLQJ6WUDWHJLHV
6RPHWLPHVPDUNHWHUVXVHDPL[HGRUFRPELQDWLRQVWUDWHJ\
,QWDNLQJVXFKDQDGDSWLYHDSSURDFKJOREDODGYHUWLVHUVZLWKNQRZOHGJHRI
FURVVFXOWXUDOGLIIHUHQFHVFDQWDLORUWKHLUVXSSOHPHQWDOPHVVDJHVPRUHHIIHFWLYHO\
WRVXLWLQGLYLGXDOORFDOPDUNHWV
,WLVDOVRLPSRUWDQWWRQRWHWKDWFRQVXPHUVLQGLIIHUHQWFRXQWULHVRIWKHZRUOG
KDYHYDVWO\GLIIHUHQWDPRXQWVRIH[SRVXUHWRDGYHUWLVHPHQWV
)UDPHZRUNVIRU$VVHVVLQJ0XOWLQDWLRQDO6WUDWHJLHV
0XOWLQDWLRQDOPDUNHWHUVIDFHWKHFKDOOHQJHRIFUHDWLQJPDUNHWLQJDQGDGYHUWLVLQJ
SURJUDPVFDSDEOHRIFRPPXQLFDWLQJZLWKDGLYHUVLW\RIWDUJHWPDUNHWV
D 7KHVHIUDPHZRUNVHQDEOHLQWHUQDWLRQDOPDUNHWHUVWRDVVHVVWKHSRVLWLRQV
WKHLUSURGXFWVHQMR\LQVSHFLILFIRUHLJQPDUNHWV
$ILUPPLJKWGHFLGHHLWKHUWRVWDQGDUGL]HRUORFDOL]HLWVSURGXFWDQGHLWKHU
VWDQGDUGL]HRUORFDOL]HLWVFRPPXQLFDWLRQVSURJUDP
7KHIRXUSRVVLELOLWLHVWKDWWKLVGHFLVLRQIUDPHZRUNFRQVLGHUVUDQJHIURPD
FRPSDQ\LQFRUSRUDWLQJDJOREDOVWUDWHJ\LHVWDQGDUGL]LQJERWKSURGXFWDQG
FRPPXQLFDWLRQVSURJUDPWRGHYHORSLQJDFRPSOHWHO\ORFDOVWUDWHJ\LH
FXVWRPL]LQJERWKWKHSURGXFWDQGFRPPXQLFDWLRQVSURJUDPIRUHDFKXQLTXH
PDUNHW
D ,QWKHPLGGOHWKHUHDUHWZRPL[HGVWUDWHJLHV
&RQVXPHU%HKDYLRU $QRWKHURULHQWDWLRQIRUDVVHVVLQJZKHWKHUWRXVHDJOREDOYHUVXVORFDOPDUNHWLQJ
VWUDWHJ\FRQFHQWUDWHVRQDKLJKWHFKWRKLJKWRXFKFRQWLQXXP
D 3URGXFW VWDQGDUGL]DWLRQ DSSHDUV WR EH PRVW VXFFHVVIXO IRU KLJK
127(6 LQYROYHPHQWSURGXFWVWKDWDSSURDFKHLWKHUHQGRIWKHKLJKWHFKKLJKWRXFK
FRQWLQXXP
E :KHQPDUNHWLQJKLJKWHFKSURGXFWVDEURDGLWLVLPSRUWDQWWRQRWHWKDW
PDQ\LQGXVWULDOL]HGQDWLRQVODJIDUEHKLQGWKH8QLWHG6WDWHVLQFRPSXWHU
XVDJH
F ,QFRQWUDVWORZLQYROYHPHQWSURGXFWVLQWKHPLGUDQJHRIWKHKLJKWHFK
KLJKWRXFKFRQWLQXXPDUHPRUHVXLWDEO\PDUNHWHGDVORFDOEUDQGVXVLQJ
PDUNHWE\PDUNHWH[HFXWLRQV
&5266&8/785$/36<&+2*5$3+,&6(*0(17$7,21
$OWKRXJKZRUOGZLGHFRQVXPHUVPD\EHVLPLODULQPDQ\ZD\VDQ\GLIIHUHQFHV
LQDWWLWXGHVRUEHKDYLRUFDQEHFUXFLDOLQGHWHUPLQLQJVDWLVIDFWLRQDQGPD\SURYLGH
DQRSSRUWXQLW\IRUVHJPHQWLQJFRQVXPHUVLQWHUPVRIFXOWXUDOGLIIHUHQFHV
D 7KLVSUREOHPKDVUHVXOWHGLQWKHQHHGIRUFURVVFXOWXUDOSV\FKRJUDSKLF
VHJPHQWDWLRQ
6RPHILUPVPLJKWDWWHPSWWRHVWDEOLVKDJOREDOEUDQGLQJVWUDWHJ\ZKHUHDVRWKHUV
ZRXOGGHVLJQDQLQGLYLGXDORUORFDOPDUNHWLQJVWUDWHJ\
D ³7KHRQO\XOWLPDWHWUXWKSRVVLEOHLVWKDWKXPDQVDUHERWKGHHSO\WKHVDPH
DQGREYLRXVO\GLIIHUHQW«´
,IZHEHOLHYHLQWDLORULQJPDUNHWLQJVWUDWHJLHVWRVSHFLILFVHJPHQWVRIWKH$PHULFDQ
PDUNHWLWIROORZVWKHQWKDWZHDOVREHOLHYHLQWDLORULQJPDUNHWLQJVWUDWHJLHVWRWKH
QHHGV²SV\FKRORJLFDOVRFLDOFXOWXUDODQGIXQFWLRQDO²RIVSHFLILFIRUHLJQVHJPHQWV
*OREDO SV\FKRJUDSKLF UHVHDUFK RIWHQ UHYHDOV FXOWXUDO GLIIHUHQFHV RI JUHDW
LPSRUWDQFHWRPDUNHWHUV
&$6(
$PRQJWKHIRUPHUO\&RPPXQLVWFRXQWULHV3RODQG¶VJURZLQJHFRQRP\SUREDEO\
UHSUHVHQWVWKHPRVWSURPLVLQJPDUNHWIRU:HVWHUQFRQVXPHUJRRGV7KH$PHULFDQ
FRPSDQ\PXVWWDNHQRWHRIWKHIROORZLQJIDFWRUVKRZHYHUWKDWUHSUHVHQWERWK
RSSRUWXQLWLHVDQGEDUULHUVIRUPDUNHWLQJFDQQHGVRXSVLQ3RODQG$OWKRXJK
3ROHVFRQVXPHDORWRIVRXSSHUFHQWRI3ROLVKVRXSVDUHKRPHPDGH7KXV
WKHFRPSDQ\PXVWLQWURGXFHYDULHWLHVWKDWUHVHPEOHKRPHPDGHVRXSVDQGFDUHIXOO\
SRVLWLRQWKHP$V3RODQG¶VHFRQRP\FRQWLQXHVWRJURZZRPHQZLOOFRQWLQXH
MRLQLQJWKHZRUNIRUFH7KXVDGYHUWLVLQJFDQQHGVRXSVWRZRUNLQJZRPHQORRNLQJ
IRUFRQYHQLHQFHUHSUHVHQWVDPDUNHWLQJRSSRUWXQLW\3ROLVKFRQVXPHUVRIWHQ
SXUFKDVHIRRGVLQVPDOOVWRUHVDQGWHQGWRUHO\RQWKHDGYLFHRIVWRUHNHHSHUV
7KXVWKHFRPSDQ\PXVWPDNHDVSHFLDOHIIRUWWRJDLQWKHVXSSRUWRIVKRS
RZQHUV VR WKDW WKHVH PHUFKDQWV ZLOO VWRFN WKH SURGXFW LQ WKHLU VWRUHV DQG 6XEFXOWXUH
UHFRPPHQGLWWRFRQVXPHUV0DQ\3ROHVVWLOODVVRFLDWHPDVVPHGLDZLWK
&RPPXQLVWSURSDJDQGD7KXVDKXJHDGYHUWLVLQJEOLW]RQ79LVXQOLNHO\WREH
HIIHFWLYH6RPH(QJOLVKRQWKHODEHODQGDQDGYHUWLVLQJWKHPHVWDWLQJWKDWWKH
127(6
SURGXFW LVVROG WKURXJKRXW WKHZRUOG DUH JRRGVWUDWHJLHV WR XVHLQ 3RODQG
EHFDXVHLWVFLWL]HQVDVSLUHWRGLVDVVRFLDWHWKHPVHOYHVIURP&RPPXQLVPDQGWKH
³(DVWHUQ(XURSHDQ´ODEHO3ROHVUHJDUGIUHHVDPSOHVZLWKVXVSLFLRQEHFDXVH
WKH\ILJXUHWKDWLIWKHSURGXFWLVIUHHVRPHWKLQJLVZURQJZLWKLW
6XPPDU\
:LWKVRPXFKGLYHUVLW\SUHVHQWDPRQJWKHPHPEHUVRIMXVWRQHQDWLRQDVLQWKH
8QLWHG6WDWHVLWLVHDV\WRDSSUHFLDWHWKDWQXPHURXVODUJHUGLIIHUHQFHVPD\H[LVW
EHWZHHQFLWL]HQVRIGLIIHUHQWQDWLRQVKDYLQJGLIIHUHQWFXOWXUHVYDOXHVEHOLHIVDQG
ODQJXDJHV,ILQWHUQDWLRQDOPDUNHWHUVDUHWRVDWLVI\WKHQHHGVRIFRQVXPHUVLQSRWHQWLDOO\
YHU\GLVWLQFWPDUNHWVHIIHFWLYHO\WKH\PXVWXQGHUVWDQGWKHUHOHYDQWVLPLODULWLHVDQG
GLIIHUHQFHVWKDWH[LVWEHWZHHQWKHSHRSOHVRIWKHFRXQWULHVWKH\GHFLGHWRWDUJHW
:KHQFRQVXPHUVPDNHSXUFKDVHGHFLVLRQVWKH\VHHPWRWDNHLQWRFRQVLGHUDWLRQWKH
FRXQWULHVRIRULJLQRIWKHEUDQGVWKDWWKH\DUHDVVHVVLQJ&RQVXPHUVIUHTXHQWO\KDYH
VSHFLILFDWWLWXGHVRUHYHQSUHIHUHQFHVIRUSURGXFWVPDGHLQSDUWLFXODUFRXQWULHV
7KHVHFRXQWU\RIRULJLQHIIHFWVLQIOXHQFHKRZFRQVXPHUVUDWHTXDOLW\DQGVRPHWLPHV
ZKLFKEUDQGVWKH\ZLOOXOWLPDWHO\VHOHFW
$VLQFUHDVLQJQXPEHUVRIFRQVXPHUVIURPDOORYHUWKHZRUOGFRPHLQFRQWDFWZLWK
WKHPDWHULDOJRRGVDQGOLIHVW\OHVRISHRSOHOLYLQJLQRWKHUFRXQWULHVDQGDVWKH
QXPEHURIPLGGOHFODVVFRQVXPHUVJURZVLQGHYHORSLQJFRXQWULHVPDUNHWHUVDUH
HDJHUWRORFDWHWKHVHQHZFXVWRPHUVDQGWRRIIHUWKHPWKHLUSURGXFWV7KHUDSLGO\
H[SDQGLQJPLGGOHFODVVLQFRXQWULHVRI$VLD6RXWK$PHULFDQDQG(DVWHUQ(XURSH
SRVVHVV UHODWLYHO\VXEVWDQWLDO EX\LQJSRZHU EHFDXVHWKHLU LQFRPHVDUH ODUJHO\
GLVFUHWLRQDU\IRUQHFHVVLWLHVOLNHKRXVLQJDQGPHGLFDOFDUHDUHRIWHQSURYLGHGE\
WKHVWDWHDWOLWWOHRUQRFRVW
)RUVRPHLQWHUQDWLRQDOPDUNHWHUVDFFXOWXUDWLRQLVDGXDOSURFHVV)LUVWWKH\PXVW
OHDUQHYHU\WKLQJWKDWLVUHOHYDQWWRWKHSURGXFWDQGSURGXFWFDWHJRU\LQWKHVRFLHW\
LQZKLFKWKH\SODQWRPDUNHWDQGWKHQWKH\PXVWSHUVXDGHWKHPHPEHUVRIWKDW
VRFLHW\WREUHDNZLWKWKHLUWUDGLWLRQDOZD\VRIGRLQJWKLQJVWRDGRSWWKHQHZSURGXFW
7KHPRUHVLPLODUDIRUHLJQWDUJHWPDUNHWLVWRDPDUNHWHU¶VKRPHPDUNHWWKHHDVLHU
&KHFN<RXU3URJUHVV
WKHSURFHVVRIDFFXOWXUDWLRQ&RQYHUVHO\WKHPRUHGLIIHUHQWDIRUHLJQWDUJHWPDUNHW
LVWKHPRUHGLIILFXOWWKHSURFHVVRIDFFXOWXUDWLRQ :KDWDUHZRUOG
EUDQGV"
6RPHRIWKHSUREOHPVLQYROYHGLQFURVVFXOWXUDODQDO\VLVLQFOXGHGLIIHUHQFHVLQ 7KHFKDOOHQJHIRU
ODQJXDJHFRQVXPSWLRQSDWWHUQVQHHGVSURGXFWXVDJHHFRQRPLFDQGVRFLDOFRQGLWLRQV PDUNHWHUVLVWR
PDUNHWLQJFRQGLWLRQVDQGPDUNHWUHVHDUFKRSSRUWXQLWLHV7KHUHLVDQXUJHQWQHHG BBBBBBBBB
IRUPRUHV\VWHPDWLFDQGFRQFHSWXDOFURVVFXOWXUDODQDO\VHVRIWKHSV\FKRORJLFDO
VRFLDODQGFXOWXUDOFKDUDFWHULVWLFVFRQFHUQLQJWKHFRQVXPSWLRQKDELWVRIIRUHLJQ
&RQVXPHU%HKDYLRU FRQVXPHUV6XFKDQDO\VHVZRXOGLGHQWLI\LQFUHDVHGPDUNHWLQJRSSRUWXQLWLHVWKDW
ZRXOGEHQHILWERWKLQWHUQDWLRQDOPDUNHWHUVDQGWKHLUWDUJHWHGFRQVXPHUV
$16:(5672&+(&.<285352*5(66
127(6
6XEFXOWXUHLVGHILQHGDVEHLQJDGLVWLQFWFXOWXUDOJURXSWKDWH[LVWVDVDQ
LGHQWLILDEOHVHJPHQWZLWKLQDODUJHUPRUHFRPSOH[VRFLHW\
1DWLRQDOLW\
:RUOGEUDQGVDUHWKRVHSURGXFWVWKDWDUHPDQXIDFWXUHGSDFNDJHGDQG
SRVLWLRQHGWKHVDPHZD\UHJDUGOHVVRIWKHFRXQWU\LQZKLFKWKH\DUHVROG
7RXQGHUVWDQGVKDUHGQHHGVDQGYDOXHVRIFXVWRPHUV
7(67<2856(/)
([SODLQWKHLPSRUWDQFHRIFXOWXUH
+RZVXEFXOWXUHSOD\VDQLPSRUWDQWUROHLQFRQVXPHUEX\LQJGHFLVLRQV"
:KDWDUHWKHUHDFWLRQVRI0XOWLQDWLRQDOFRPSDQLHVWREUDQGH[WHQVLRQV"
:KDWDUHWKHYDULRXVVWUDWHJLHVXVHGE\PXOWLQDWLRQDOSOD\HUVWRWDSFXVWRPHUV"
&RPPHQWRQWKHEX\LQJEHKDYLRURI$VLDQ±$PHULFDQV
)857+(55($',1*
x &RQVXPHU%HKDYLRUE\-XVWLQ
9LVXDO0HUFKDQGLVLQJ
9LVXDO0HUFKDQGLVLQJ
127(6
7KH&KDSWHU&RYHUV
,QWURGXFWLRQ
&RPSRQHQWVRI9LVXDO0HUFKDQGLVLQJ
,PSRUWDQFHRI$*RRG5HWDLO(QYLURQPHQW6WRUH(QYLURQ
PHQW
0RGHOVRI&RQVXPHUV)RXU9LHZVRI&RQVXPHU'HFLVLRQ
0DNLQJ
$0RGHORI&RQVXPHU'HFLVLRQ0DNLQJ
2XWSXW
&RQVXPHU*LIWLQJ%HKDYLRU
%H\RQG7KH'HFLVLRQ&RQVXPLQJ$QG3RVVHVVLQJ
&DVH
/HDUQLQJ2EMHFWLYHV
$IWHUJRLQJWKURXJKWKLVFKDSWHU\RXVKRXOGEHDEOHWR
x 'HVFULEHDGHFLVLRQ
x ([SODLQWKHIRXUPRGHOVRIFRQVXPHUGHFLVLRQPDNLQJGLVFXVVHGLQWKH
WH[W
x 'LVFXVVWKHWKUHHVWDJHVRIFRQVXPHUGHFLVLRQPDNLQJLQWKHSURFHVV
FRPSRQHQWRIWKHGHFLVLRQPDNLQJPRGHO
x 8QGHUVWDQGSXUFKDVHDQGSRVWSXUFKDVHEHKDYLRUDVSDUWRIWKHFRQVXPHU
GHFLVLRQSURFHVV
&RQVXPHU%HKDYLRU ,1752'8&7,21
9LVXDO0HUFKDQGLVLQJLVWKHDUWRIGLVSOD\LQJPHUFKDQGLVHLQDPDQQHUWKDWLVDSSHDOLQJ
WRWKHH\HVRIWKHFXVWRPHU,WVHWVWKHFRQWH[WRIWKHPHUFKDQGLVHLQDQDHVWKHWLFDOO\
127(6 SOHDVLQJIDVKLRQSUHVHQWLQJWKHPLQDZD\WKDWZRXOGFRQYHUWWKHZLQGRZVKRSSHUV
LQWRSURVSHFWVDQGXOWLPDWHO\EX\HUVRIWKHSURGXFW$FUHDWLYHDQGWDOHQWHGUHWDLOHU
FDQXVHWKLVXSFRPLQJDUWWREUHDWKHLQQHZOLIHLQWRKLVVWRUHSURGXFWV3DVVLRQIRU
GHVLJQDQGFUHDWLYLW\DUHHVVHQWLDOWREHDJRRGYLVXDOPHUFKDQGLVHU$SHUIHFWGHVLJQ
SURFHVVDQGWKHDELOLW\WRFUHDWHLGHDVWKDWDUHGLIIHUHQWDUHUHTXLUHG$ZDUHQHVVRI
KDSSHQLQJVLQIDVKLRQZRUOGLVQHHGHGVRDVWRNHHSXSWRGDWHZLWKWKHG\QDPLFV
RIWKHPDUNHWFRQVWDQWO\
9LVXDOPHUFKDQGLVLQJLQFOXGHVZLQGRZGLVSOD\VVLJQVLQWHULRUGLVSOD\VFRVPHWLF
SURPRWLRQVDQGDQ\RWKHUVSHFLDOVDOHVSURPRWLRQVWDNLQJSODFH
&20321(1762)9,68$/0(5&+$1',6,1*
7KHUHDUHFHUWDLQWKLQJVZKLFKDUHWDLOHUQHHGVWRWDNHFDUHZKLOHSURFHHGLQJ
ZLWKWKHSURFHVVRIGLVSOD\LQJKLVSURGXFWV7KHVHFRPSRQHQWVZKHQFRPELQHG
WRJHWKHULQDSURSHUUDWLRZLOOPDNHDVXFFHVVIXORXWFRPH
0DNHPHUFKDQGLVHWKHIRFDOSRLQW
7KH PDLQ JRDO RI GLVSOD\ LV WR VKRZFDVH WKH SURGXFWV ZLWKLQ WKH RYHUDOO
GLVSOD\DUHD&XVWRPHUVJLYHWKUHHWRILYHVHFRQGVRIWKHLUDWWHQWLRQWRZLQGRZ
GLVSOD\7KHUHWDLOHUVYLVXDOPHVVDJHVKRXOGEHFRQYH\HGWRWKHFXVWRPHULQWKDW
VKRUWSHULRGRIWLPH,WVKRXOGQRWEHOLNHDQXQVXFFHVVIXO79DGYHUWLVHPHQW
ZKHUH WKH SURGXFW LV IRUJRWWHQ DOWRJHWKHU DQG RQO\ WKH FRQFHSW RI WKH
FRPPHUFLDOUHPDLQVLQWKHPLQGRIWKHYLHZHU7KHDUUDQJHPHQWRIZLQGRZ
GLVSOD\VKRXOGJRZLWKWKHSURGXFWDQGVKRXOGQRWVXSSUHVVWKHPWRPDNH
LWGLVFHUQDEOHWRWKHH\H
5LJKWFKRLFHRIFRORUVLVYLWDO
&RORULVRQHRIWKHPRVWSRZHUIXOWRROVLQWKH9LVXDO0HUFKDQGLVLQJVHJPHQW,WLV
D YLVXDO SHUFHSWXDO SURSHUW\ &RORUV FDQ EH DVVRFLDWHG ZLWK HPRWLRQV VSHFLDO
RFFDVLRQVDQGJHQGHU,WDWWUDFWVDWWHQWLRQDQGSXOOVPRUHFXVWRPHUVLQWRWKHVWRUH
$UHWDLOHUKDVWRIRFXVRQWKHULJKWFKRLFHRIFRORUWKDWZRXOGPDWFKZLWKWKHWKHPH
RIGLVSOD\,WLVQRWSRVVLEOHWRVDWLVI\HYHU\RQHDOOWKHWLPHEXWLWLVSRVVLEOHWR
FXOWLYDWHWKHWDVWHRIFXVWRPHUVJUDGXDOO\DQGSXUSRVHIXOO\$ULJKWFKRLFHRIFRORUV
LQWKHGLVSOD\LWHPVFDQWXUQZDONHUVLQWRVWRSSHUVDQGVLJQLILFDQWO\FRQYHUWWKHPLQWR
FXVWRPHUV,WLVWKHUHIRUHPDQGDWRU\WRFKRRVHWKHULJKWFRORUIRUWKHULJKWWKHPH
RIGLVSOD\$+DOORZHHQGLVSOD\ZRXOGUHTXLUHEODFNFRORULQWKHGLVSOD\WKHPH
9DOHQWLQHVWKHPHVKRXOGEHUXOHGE\UHGFRORUVXSSOHPHQWHGZLWKSLQNDQGZKLWH
$GLVSOD\RIEDE\VDFFHVVRULHVVKRXOGUHIOHFWOLJKWVKDGHVRISLQNDQGEOXHFRORUV
$&KULVWPDVGLVSOD\VKRXOGFRQWDLQFRORUVRIUHGJUHHQJROGDQGVLOYHU
'LVSOD\WKHPHVWRDSSURSULDWHO\VXSSRUWWKHSURGXFW 9LVXDO0HUFKDQGLVLQJ
)RXUYLHZVZLOOEHH[DPLQHG
D $QHFRQRPLFYLHZ
E $SDVVLYHYLHZ
F $FRJQLWLYHYLHZ
G $QHPRWLRQDOYLHZ
$Q(FRQRPLF9LHZ
7KHFRQVXPHUKDVRIWHQEHHQFKDUDFWHUL]HGDVPDNLQJUDWLRQDOGHFLVLRQV
E 7REHKDYHUDWLRQDOO\LQWKHHFRQRPLFVHQVHDFRQVXPHUZRXOGKDYHWR
L %HDZDUHRIDOODYDLODEOHSURGXFWDOWHUQDWLYHV
LL %HFDSDEOHRIFRUUHFWO\UDQNLQJHDFKDOWHUQDWLYHLQWHUPVRILWV
EHQHILWVDQGLWVGLVDGYDQWDJHV
LLL %HDEOHWRLGHQWLI\WKHRQHEHVWDOWHUQDWLYH
F 7KLVSHUVSHFWLYHLVXQUHDOLVWLFEHFDXVH
L 3HRSOHDUHOLPLWHGE\WKHLUH[LVWLQJVNLOOVKDELWVDQGUHIOH[HV
LL 3HRSOHDUHOLPLWHGE\WKHLUH[LVWLQJYDOXHVDQGJRDOV
LLL 3HRSOHDUHOLPLWHGE\WKHH[WHQWRIWKHLUNQRZOHGJH
,WKDVEHHQDUJXHGWKDWWKHFODVVLFDOHFRQRPLFPRGHORIDQDOOUDWLRQDOFRQVXPHU
LVXQUHDOLVWLFIRUWKHIROORZLQJUHDVRQV
D 3HRSOHDUHOLPLWHGE\WKHLUH[LVWLQJVNLOOVKDELWVDQGUHIOH[HV
E 3HRSOHDUHOLPLWHGE\WKHLUH[LVWLQJYDOXHVDQGJRDOV
F 3HRSOHDUHOLPLWHGE\WKHH[WHQWRIWKHLUNQRZOHGJH
7KHHFRQRPLFPRGHOLVRIWHQUHMHFWHGDVWRRLGHDOLVWLFDQGVLPSOLVWLF
&RQVXPHU%HKDYLRU $3DVVLYH9LHZ
7KHRSSRVLWHRIWKHHFRQRPLFYLHZLVWKHYLHZRIWKHFRQVXPHUDVEDVLFDOO\
VXEPLVVLYHWRWKHVHOIVHUYLQJLQWHUHVWVDQGSURPRWLRQDOHIIRUWVRIPDUNHWHUV
127(6 LHWKHSDVVLYHYLHZ
&RQVXPHUVDUHSHUFHLYHGDVLPSXOVLYHDQGLUUDWLRQDOSXUFKDVHUVUHDG\WR\LHOG
WRWKHDUPVDQGDLPVRIPDUNHWHUV
7KHSULQFLSDOOLPLWDWLRQRIWKLVPRGHOLVWKDWLWIDLOVWRUHFRJQL]HWKDWWKHFRQVXPHU
SOD\VDQHTXDOLIQRWGRPLQDQWUROHLQPDQ\EX\LQJVLWXDWLRQVE\VHHNLQJ
LQIRUPDWLRQDERXWSURGXFWDOWHUQDWLYHVDQGVHOHFWLQJWKHSURGXFWWKDWDSSHDUVWR
RIIHUWKHJUHDWHVWVDWLVIDFWLRQ
7KLVYLHZLVODUJHO\XQUHDOLVWLF
$&RJQLWLYH9LHZ
7KLVYLHZSRUWUD\VWKHFRQVXPHUDVDWKLQNLQJSUREOHPVROYHU
7KHFRJQLWLYHPRGHOIRFXVHVRQWKHSURFHVVHVE\ZKLFKFRQVXPHUVVHHNDQG
HYDOXDWHLQIRUPDWLRQDERXWVHOHFWHGEUDQGVDQGUHWDLORXWOHWV
&RQVXPHUVDUHYLHZHGDVLQIRUPDWLRQSURFHVVRUVDQGWKLVOHDGVWRWKHIRUPXODWLRQ
RISUHIHUHQFHVDQGXOWLPDWHO\SXUFKDVHLQWHQWLRQV
,QFRQWUDVWWRWKHHFRQRPLFYLHZWKLVYLHZUHFRJQL]HVWKDWWKHFRQVXPHULV
XQOLNHO\WRVHHNDOOSRVVLEOHLQIRUPDWLRQEXWZLOORQO\VHHNLQIRUPDWLRQXQWLOKH
VKHKDVZKDWLVSHUFHLYHGDVVXIILFLHQWLQIRUPDWLRQWRPDNHDVDWLVIDFWRU\GHFLVLRQ
&RQVXPHUVDUHSUHVXPHGWRXVHKHXULVWLFV²VKRUWFXWGHFLVLRQUXOHVWRIDFLOLWDWH
GHFLVLRQPDNLQJ
D 7KH\DOVRXVHGHFLVLRQUXOHVZKHQH[SRVHGWRWRRPXFKLQIRUPDWLRQ²
LQIRUPDWLRQRYHUORDG
7KLVPRGHOGHSLFWVDFRQVXPHUZKRGRHVQRWKDYHFRPSOHWHNQRZOHGJHDQG
WKHUHIRUHFDQQRWPDNHSHUIHFWGHFLVLRQVEXWZKRDFWLYHO\VHHNVLQIRUPDWLRQDQG
DWWHPSWVWRPDNHVDWLVIDFWRU\GHFLVLRQV
$Q(PRWLRQDO9LHZ
$OWKRXJKDZDUHRIWKHHPRWLRQDORULPSXOVLYHVLGHRIFRQVXPHUGHFLVLRQ
PDNLQJPDUNHWHUVKDYHSUHIHUUHGWKHHFRQRPLFRUSDVVLYHPRGHOV
,QUHDOLW\ZKHQLVFRPHVWRFHUWDLQSXUFKDVHVRUSRVVHVVLRQVGHHSIHHOLQJVRU
HPRWLRQVDUHOLNHO\WREHKLJKO\LQYROYHG
3RVVHVVLRQV PD\ DOVR VHUYHWR SUHVHUYH D VHQVH RI WKH SDVW DQG KHOS ZLWK
WUDQVLWLRQVLQWLPHVRIFKDQJH
:KHQDFRQVXPHUPDNHVZKDWLVEDVLFDOO\DQHPRWLRQDOSXUFKDVHGHFLVLRQOHVV
HPSKDVLVWHQGVWREHSODFHGRQVHDUFKLQJIRUSUHSXUFKDVHLQIRUPDWLRQDQGPRUH
RQWKHFXUUHQWPRRGRUIHHOLQJV
8QOLNHDQHPRWLRQZKLFKLVDUHVSRQVHWRDSDUWLFXODUHQYLURQPHQWDPRRGLV 9LVXDO0HUFKDQGLVLQJ
PRUHW\SLFDOO\DQXQIRFXVHGSUHH[LVWLQJVWDWH²DOUHDG\SUHVHQWDWWKHWLPHD
FRQVXPHU³H[SHULHQFHV´DQDGYHUWLVHPHQWDUHWDLOHQYLURQPHQWDEUDQGRUD
SURGXFW
127(6
0RRGLVLPSRUWDQWWRFRQVXPHUGHFLVLRQPDNLQJLQWKDWLWLPSDFWVZKHQFRQVXPHUV
VKRSZKHUHWKH\VKRSZKHWKHUWKH\VKRSDORQHRUZLWKRWKHUVDQGKRZWKH
FRQVXPHUUHVSRQGVWRDFWXDOVKRSSLQJHQYLURQPHQWV
D 6RPHUHWDLOHUVDWWHPSWWRFUHDWHDPRRGIRUVKRSSHUV
E ,QGLYLGXDOVLQDSRVLWLYHPRRGUHFDOOPRUHLQIRUPDWLRQDERXWDSURGXFW
WKDQWKRVHLQDQHJDWLYHPRRG
$02'(/2)&21680(5'(&,6,210$.,1*
7KHPRGHOORRNVDWFRJQLWLYHSURFHVVHVSUREOHPVROYLQJDQGWRVRPHGHJUHH
WKHHPRWLRQDODVSHFWVRIFRQVXPHUGHFLVLRQPDNLQJDVZHOO
7KLVLVQRWDQH[KDXVWLYHUHYLHZEXWDV\QWKHVLVDQGFRRUGLQDWLRQRIUHOHYDQW
FRQFHSWVLQWRDZKROH
,QSXW
7KHLQSXWFRPSRQHQWGUDZVRQH[WHUQDOLQIOXHQFHVWKDWSURYLGHLQIRUPDWLRQRU
LQIOXHQFHDFRQVXPHU¶VSURGXFWUHODWHGYDOXHVDWWLWXGHVDQGEHKDYLRU
&KLHIDPRQJWKHVHLQSXWIDFWRUVDUHWKHPDUNHWLQJPL[DFWLYLWLHVRIRUJDQL]DWLRQV
WKDWDWWHPSWWRFRPPXQLFDWHWKHEHQHILWVRIWKHLUSURGXFWVDQGVHUYLFHVWR
SRWHQWLDOFRQVXPHUVDQGWKHQRQPDUNHWLQJVRFLRFXOWXUDOLQIOXHQFHVZKLFKZKHQ
LQWHUQDOL]HGDIIHFWWKHFRQVXPHU¶VSXUFKDVHGHFLVLRQV
0DUNHWLQJ,QSXWV
7KHILUP¶VPDUNHWLQJDFWLYLWLHVDUHDGLUHFWDWWHPSWWRUHDFKLQIRUPDQGSHUVXDGH
FRQVXPHUVWREX\DQGXVHLWVSURGXFWV
7KHLPSDFWRIDILUP¶VPDUNHWLQJHIIRUWVLVJRYHUQHGE\WKHFRQVXPHU¶VSHUFHSWLRQ
RIWKHVHHIIRUWV
0DUNHWHUVVKRXOGEHDOHUWWRFRQVXPHUSHUFHSWLRQVE\VSRQVRULQJFRQVXPHU
UHVHDUFKUDWKHUWKDQUHO\LQJRQWKHLQWHQGHGLPSDFWRIWKHLUPDUNHWLQJPHVVDJHV
6RFLRFXOWXUDO,QSXWV
6RFLRFXOWXUDOLQSXWVFRQVLVWRIDZLGHUDQJHRIQRQFRPPHUFLDOLQIOXHQFHV²
FRPPHQWVRIDIULHQGDQHGLWRULDOLQWKHQHZVSDSHUDIDPLO\PHPEHUDQGGLUHFW
QRQFRPPHUFLDOVRXUFHVRILQIRUPDWLRQ
7KHXQZULWWHQFRGHVRIFRQGXFWFRPPXQLFDWHGE\FXOWXUHLQGLFDWHULJKWDQG
ZURQJFRQVXPSWLRQEHKDYLRU
&RQVXPHU%HKDYLRU 7KHFXPXODWLYHLPSDFWRIHDFKILUP¶VPDUNHWLQJHIIRUWVWKHLQIOXHQFHRIIDPLO\
IULHQGVDQGQHLJKERUVDQGVRFLHW\¶VH[LVWLQJFRGHRIEHKDYLRUDUHDOOOLNHO\WR
DIIHFWWKHKRZDQGZKDWRIFRQVXPHUSXUFKDVHV
127(6 3URFHVV
7KHSURFHVVFRPSRQHQWRIWKHPRGHOLVFRQFHUQHGZLWKKRZFRQVXPHUVPDNH
GHFLVLRQV
3V\FKRORJLFDOILHOG²UHSUHVHQWVWKHLQWHUQDOLQIOXHQFHV²PRWLYDWLRQSHUFHSWLRQ
OHDUQLQJSHUVRQDOLW\DQGDWWLWXGHV²WKDWDIIHFWFRQVXPHUV¶GHFLVLRQPDNLQJ
SURFHVVHV
7KHFRQVXPHUGHFLVLRQFRQVLVWVRIWKUHHVWDWHVQHHGUHFRJQLWLRQSUHSXUFKDVH
VHDUFKDQGHYDOXDWLRQRIDOWHUQDWLYHV
1HHG 5HFRJQLWLRQ
5HFRJQLWLRQRIDQHHGRFFXUVZKHQDFRQVXPHULVIDFHGZLWKDSUREOHP
$PRQJFRQVXPHUVWKHUHVHHPWREHWZRGLIIHUHQWSUREOHPUHFRJQLWLRQVW\OHV
D $FWXDOVWDWHW\SHV²FRQVXPHUVZKRSHUFHLYHWKDWWKH\KDYHDSUREOHP
ZKHQDSURGXFWIDLOVWRSHUIRUPVDWLVIDFWRULO\
E 'HVLUHGVWDWHW\SHV²WKHGHVLUHIRUVRPHWKLQJQHZPD\WULJJHUWKHGHFLVLRQ
SURFHVV
3UHSXUFKDVH6HDUFK
3UHSXUFKDVHVHDUFKEHJLQVZKHQDFRQVXPHUSHUFHLYHVDQHHGWKDWPLJKWEH
VDWLVILHGE\WKHSXUFKDVHDQGFRQVXPSWLRQRIDSURGXFW
D 7KHFRQVXPHUXVXDOO\VHDUFKHVKLVRUKHUPHPRU\ILUVW
E ,IQRH[SHULHQFHLVSUHVHQWWKHQKHVKHPD\HQJDJHLQDQH[WHQVLYHVHDUFK
RIWKHRXWVLGHHQYLURQPHQW
F 3DVWH[SHULHQFHLVFRQVLGHUHGDQLQWHUQDOVRXUFHRILQIRUPDWLRQ
L 7KHJUHDWHUWKHUHOHYDQFHRISDVWH[SHULHQFHWKHOHVVRIDQH[WHUQDO
VHDUFK
LL 7KHGHJUHHRISHUFHLYHGULVNFDQDOVRLQIOXHQFHWKLVVWDJH
LLL +LJKULVNVLWXDWLRQVZLOOOHDGWRFRPSOH[LQIRUPDWLRQJDWKHULQJORZ
ULVNVLPSOHVHDUFKDQGHYDOXDWLRQ
7KHDFWRI³VKRSSLQJ´LVDQLPSRUWDQWIRUPRIH[WHUQDOLQIRUPDWLRQ
D $FFRUGLQJWRDUHFHQWFRQVXPHUVWXG\WKHUHLVDELJGLIIHUHQFHEHWZHHQ
PHQDQGZRPHQLQWHUPVRIWKHLUUHVSRQVHWRVKRSSLQJ
E ,QDGGLWLRQWRJHQGHUGLIIHUHQFHVUHVHDUFKUHYHDOVWKDWSULFHFRQVLGHUDWLRQV
FDQDOVRSOD\DUROHLQGHWHUPLQLQJWKHH[WHQWRIWKHVHDUFKSURFHVV
$QH[DPLQDWLRQRIWKHH[WHUQDOVHDUFKHIIRUWDVVRFLDWHGZLWKWKHSXUFKDVHRI 9LVXDO0HUFKDQGLVLQJ
GLIIHUHQWSURGXFWFDWHJRULHVHJ79V9&5VRUSHUVRQDOFRPSXWHUVIRXQG
WKDWDVWKHDPRXQWRIWRWDOVHDUFKHIIRUWLQFUHDVHGFRQVXPHUDWWLWXGHVWRZDUG
VKRSSLQJEHFDPHPRUHSRVLWLYHDQGPRUHWLPHZDVPDGHDYDLODEOHIRUVKRSSLQJ
127(6
D 7KHOHVVFRQVXPHUVNQRZDERXWDSURGXFWFDWHJRU\DQGWKHPRUHLPSRUWDQW
WKHSXUFKDVHLVWRWKHPWKHPRUHWLPHWKH\ZLOOPDNHDYDLODEOHDQGWKH
PRUHH[WHQVLYHWKHLUSUHSXUFKDVHVHDUFKDFWLYLW\LVOLNHO\WREH
7KH,QWHUQHWKDVKDGDJUHDWLPSDFWRQSUHSXUFKDVHVHDUFK
D :HEVLWHVFDQSURYLGHFRQVXPHUVZLWKPXFKRIWKHLQIRUPDWLRQWKH\QHHG
DERXWWKHSURGXFWVDQGVHUYLFHVWKH\DUHFRQVLGHULQJ
+RZPXFKLQIRUPDWLRQDFRQVXPHUZLOOJDWKHUDOVRGHSHQGVRQYDULRXVVLWXDWLRQDO
IDFWRUV
(YDOXDWLRQRI$OWHUQDWLYHV
:KHQHYDOXDWLQJSRWHQWLDODOWHUQDWLYHVFRQVXPHUVWHQGWRXVHWZRW\SHVRI
LQIRUPDWLRQ
D $³OLVW´RIEUDQGVWKHHYRNHGVHW
E 7KHFULWHULDWKH\ZLOOXVHWRHYDOXDWHHDFKEUDQG
(YRNHGVHW²HYRNHGVHWUHIHUVWRWKHVSHFLILFEUDQGVWKHFRQVXPHUFRQVLGHUV
LQPDNLQJDSXUFKDVHLQDSDUWLFXODUSURGXFWFDWHJRU\
D 7KHLQHSWVHWFRQVLVWVRIEUDQGVWKHFRQVXPHUH[FOXGHVIURPSXUFKDVH
FRQVLGHUDWLRQDVXQDFFHSWDEOH
E 7KHLQHUWVHWLVWKRVHEUDQGVWRZKLFKWKHFRQVXPHULVLQGLIIHUHQWEHFDXVH
WKH\DUHSHUFHLYHGDVKDYLQJQRDGYDQWDJH
F 7KHHYRNHGVHWFRQVLVWVRIWKHVPDOOQXPEHURIEUDQGVWKHFRQVXPHULV
IDPLOLDUZLWKUHPHPEHUVDQGILQGVDFFHSWDEOH
7KHILYHWHUPLQDOSRVLWLRQVLQWKHPRGHOWKDWGRQRWHQGLQSXUFKDVHZRXOG
DSSHDUWRKDYHSHUFHSWXDOSUREOHPV)RUH[DPSOH
D %UDQGVPD\EHXQNQRZQEHFDXVHRIWKHFRQVXPHU¶VVHOHFWLYHH[SRVXUHWR
DGYHUWLVLQJPHGLDDQGVHOHFWLYHSHUFHSWLRQRIDGYHUWLVLQJVWLPXOL
E %UDQGVPD\EHXQDFFHSWDEOHEHFDXVHRISRRUTXDOLWLHVRUDWWULEXWHVRU
LQDSSURSULDWHSRVLWLRQLQJLQHLWKHUDGYHUWLVLQJRUSURGXFWFKDUDFWHULVWLFV
F %UDQGV PD\ EH SHUFHLYHG DV QRW KDYLQJ DQ\ VSHFLDO EHQHILWV DQG DUH
UHJDUGHGLQGLIIHUHQWO\E\WKHFRQVXPHU
G %UDQGVPD\EHRYHUORRNHGEHFDXVHWKH\KDYHQRWEHHQFOHDUO\SRVLWLRQHG
RUVKDUSO\WDUJHWHGDWWKHFRQVXPHUPDUNHWVHJPHQWXQGHUVWXG\
&RQVXPHU%HKDYLRU H %UDQGVPD\QRWEHVHOHFWHGEHFDXVHWKH\DUHSHUFHLYHGE\FRQVXPHUVDV
XQDEOHWRVDWLVI\SHUFHLYHGQHHGVDVIXOO\DVWKHEUDQGWKDWLVFKRVHQ
7KHLPSOLFDWLRQIRUPDUNHWHUVLVWKDWSURPRWLRQDOWHFKQLTXHVVKRXOGEHGHVLJQHG
127(6 WRLPSDUWDPRUHIDYRUDEOHSHUKDSVPRUHUHOHYDQWSURGXFWLPDJHWRWKHWDUJHW
FRQVXPHU
&ULWHULDXVHGIRUHYDOXDWLQJEUDQGV²WKHFULWHULDFRQVXPHUV¶XVHIRUHYDOXDWLQJ
EUDQGVDUHXVXDOO\H[SUHVVHGLQWHUPVRILPSRUWDQWSURGXFWDWWULEXWHV
D :KHQDFRPSDQ\NQRZVWKDWFRQVXPHUVZLOOEHHYDOXDWLQJDOWHUQDWLYHV
WKH\ VRPHWLPHVDGYHUWLVH LQ DZD\ WKDW UHFRPPHQGV WKHFULWHULDWKDW
FRQVXPHUVVKRXOGXVHLQDVVHVVLQJSURGXFWRUVHUYLFHRSWLRQV
E 5HVHDUFKVKRZVWKDWZKHQFRQVXPHUVGLVFXVVVXFK³ULJKWSURGXFWV´WKHUH
LVOLWWOHRUQRPHQWLRQRISULFHEUDQGQDPHVDUHQRWRIWHQWRSRIPLQG
LWHPVRIWHQUHIOHFWSHUVRQDOLW\FKDUDFWHULVWLFVRUFKLOGKRRGH[SHULHQFHV
DQGLWLVRIWHQ³ORYHDWILUVWVLJKW´
5HVHDUFKKDVH[SORUHGWKHUROHRIEUDQGFUHGLELOLW\RQEUDQGFKRLFHDQGKDV
IRXQGWKDWEUDQGFUHGLELOLW\LPSURYHVWKHFKDQFHVWKDWDEUDQGZLOOEHLQFOXGHG
LQWKHFRQVLGHUDWLRQVHW
7KUHHIDFWRUVWKDWLPSDFWDEUDQG¶VDUH
D 7KHSHUFHLYHGTXDOLW\RIWKHEUDQG
E 7KHSHUFHLYHGULVNDVVRFLDWHGZLWKWKHEUDQG
F 7KHLQIRUPDWLRQFRVWVVDYHGZLWKWKDWEUDQG
)XUWKHUPRUHWKHVWXG\LQGLFDWHVWKDWWUXVWZRUWKLQHVVLVPRUHLPSRUWDQWWKDQ
H[SHUWLVHZKHQLWFRPHVWRPDNLQJFKRLFHV
&RQVXPHU GHFLVLRQ UXOHV²FRQVXPHU GHFLVLRQ UXOHV DUH UHIHUUHG WR DV
KHXULVWLFVGHFLVLRQVWUDWHJLHVDQGLQIRUPDWLRQSURFHVVLQJVWUDWHJLHVDQG
DUHSURFHGXUHVXVHGE\FRQVXPHUVWRIDFLOLWDWHEUDQGFKRLFHV
D 7KHVHUXOHVUHGXFHWKHEXUGHQRIGHFLVLRQPDNLQJ
E &RPSHQVDWRU\GHFLVLRQUXOHV²DFRQVXPHUHYDOXDWHVEUDQGRSWLRQVLQ
WHUPVRIHDFKUHOHYDQWDWWULEXWHDQGFRPSXWHVDZHLJKWHGRUVXPPDWHG
VFRUHIRUHDFKEUDQG
L 7KHFRPSXWHGVFRUHUHIOHFWVWKHEUDQG¶VUHODWLYHPHULWDVDSRWHQWLDO
SXUFKDVHFKRLFH
LL 7KHDVVXPSWLRQLVWKDWWKHFRQVXPHUZLOOFKRRVHWKHEUDQGZLWKWKH
KLJKHVWVFRUH
LLL $XQLTXHIHDWXUHRIDFRPSHQVDWRU\GHFLVLRQUXOHLVWKDWLWDOORZVD
SRVLWLYHHYDOXDWLRQRIDEUDQGRQRQHDWWULEXWHWREDODQFHRXWDQHJDWLYH
HYDOXDWLRQRQVRPHRWKHUDWWULEXWH
F 1RQFRPSHQVDWRU\GHFLVLRQUXOHVGRQRWDOORZFRQVXPHUVWREDODQFH 9LVXDO0HUFKDQGLVLQJ
SRVLWLYHHYDOXDWLRQVRIDEUDQGRQRQHDWWULEXWHDJDLQVWDQHJDWLYHHYDOXDWLRQ
RQVRPHRWKHUDWWULEXWH)RUPVLQFOXGH
L &RQMXQFWLYHGHFLVLRQUXOH²WKHFRQVXPHUHVWDEOLVKHVDPLQLPDOO\ 127(6
DFFHSWDEOHOHYHOWKDWLVHVWDEOLVKHGDVDFXWRIISRLQWIRUHDFKDWWULEXWH
D ,IDQ\SDUWLFXODUEUDQGIDOOVEHORZWKHFXWRIISRLQWRQDQ\RQH
DWWULEXWHWKHEUDQGLVHOLPLQDWHGIURPFRQVLGHUDWLRQ
LL 'LVMXQFWLYHUXOH²WKLVUXOHPLUURUVWKHFRQMXQFWLYHUXOH
D 7KHFRQVXPHUHVWDEOLVKHVDPLQLPDOO\DFFHSWDEOHOHYHODVDFXWRII
SRLQWIRUHDFKDWWULEXWH
E ,QWKLVFDVHLIDEUDQGDOWHUQDWLYHPHHWVRUH[FHHGVWKHFXWRII
HVWDEOLVKHGIRUDQ\RQHDWWULEXWHKRZHYHULWLVDFFHSWHG
LLL /H[LFRJUDSKLFGHFLVLRQUXOH²WKHFRQVXPHUILUVWUDQNVWKHDWWULEXWHV
LQWHUPVRISHUFHLYHGUHOHYDQFHRULPSRUWDQFH
D 7KHFRQVXPHUWKHQFRPSDUHVWKHYDULRXVEUDQGDOWHUQDWLYHVLQ
WHUPVRIWKHVLQJOHDWWULEXWHWKDWLVFRQVLGHUHGPRVWLPSRUWDQW
E ,IRQHEUDQGVFRUHVVXIILFLHQWO\KLJKRQWKLVWRSUDQNHGDWWULEXWH
LWLVVHOHFWHGDQGWKHSURFHVVHQGV
F 7KHKLJKHVWUDQNHGDWWULEXWHPD\UHYHDOVRPHWKLQJDERXWWKH
LQGLYLGXDO¶VFRQVXPHURULHQWDWLRQ
$YDULHW\RIGHFLVLRQUXOHVDSSHDUFRPPRQ1LQHRXWRIWHQVKRSSHUVZKRJR
WRWKHVWRUHIRUIUHTXHQWO\SXUFKDVHGLWHPVKDYHDVSHFLILFVKRSSLQJVWUDWHJ\IRU
VDYLQJPRQH\
D 3UDFWLFDOOR\DOLVWV²ORRNIRUZD\VWRVDYHRQWKRVHEUDQGVDQGSURGXFWV
WKDWWKH\ZRXOGEX\DQ\ZD\
E %RWWRP/LQH3ULFH6KRSSHUV²EX\WKHORZHVWSULFHGLWHPZLWKOLWWOHRUQR
UHJDUGIRUEUDQG
F 2SSRUWXQLVWLF6ZLWFKHUV²XVHFRXSRQVRUVDOHVWRGHFLGHDPRQJEUDQGV
DQGSURGXFWVWKDWIDOOZLWKLQWKHLUHYRNHGVHW
G 'HDO+XQWHUV²ORRNIRUWKHEHVW³EDUJDLQ´DQGDUHQRWEUDQGOR\DO
$V\QWKHVL]HGGHFLVLRQUXOHWKHDIIHFWUHIHUUDOGHFLVLRQUXOHLVWKHVLPSOHVW
DQGLVWKHFRQVXPHUUHPHPEHULQJSDVWHYDOXDWLRQVIURPKLVKHUHYRNHGVHWDQG
VHOHFWLQJWKHEUDQGZLWKWKHKLJKHVWSHUFHLYHGRYHUDOOUDWLQJ
+RZGR)XQFWLRQDOO\,OOLWHUDWH&RQVXPHUV'HFLGH"²7KH1DWLRQDO$GXOW
/LHWHUDF\6XUYH\IRXQG
D $ELWPRUHWKDQSHUFHQWRI$PHULFDQFRQVXPHUVGLGQRWSRVVHVVWKH
UXGLPHQWDU\VNLOOVLQODQJXDJHDQGDULWKPHWLFQHHGHGIRUWKHW\SLFDOUHWDLO
HQYLURQPHQW
&RQVXPHU%HKDYLRU E 3HUKDSVDVPXFKDVKDOIRIDOO86FRQVXPHUVODFNWKHVNLOOVQHHGHGWR
PDVWHUVSHFLILFDVSHFWVRIVKRSSLQJVXFKDVVDOHVDJUHHPHQWVDQGFUHGLW
DSSOLFDWLRQV
127(6 F 'HVSLWHWKHIDFWWKDWIXQFWLRQDOO\LOOLWHUDWHFRQVXPHUVKDYHRQO\SHUFHQW
DVPXFKSXUFKDVLQJSRZHUDVWKHLUOLWHUDWHFRXQWHUSDUWVWKH\PD\VSHQG
DVPXFKDVELOOLRQDQQXDOO\
5HVHDUFKKDVIRXQGWKDWIXQFWLRQDOO\LOOLWHUDWHFRQVXPHUVGRPDNHGHFLVLRQV
GLIIHUHQWO\LQWHUPVRIFRJQLWLYHSUHGLOHFWLRQVGHFLVLRQUXOHVDQGWUDGHRIIVDQG
FRSLQJEHKDYLRUV
*RLQJRQOLQHWRVHFXUHDVVLVWDQFHLQGHFLVLRQPDNLQJ²IRUWKHSDVWVHYHUDO
\HDUVUHVHDUFKHUVKDYHEHHQH[DPLQLQJKRZXVLQJWKH,QWHUQHWKDVLPSDFWHGWKH
ZD\FRQVXPHUVPDNHGHFLVLRQV
D 7KUHHIDFWRUVWKDWKDYHEHHQUHVHDUFKHGDUH
L 7DVNFRPSOH[LW\QXPEHURIDOWHUQDWLYHVDQGDPRXQWRILQIRUPDWLRQ
DYDLODEOHIRUHDFKDOWHUQDWLYH
LL ,QIRUPDWLRQRUJDQL]DWLRQSUHVHQWDWLRQIRUPDWDQGFRQWHQW
LLL 7LPHFRQVWUDLQWPRUHRUOHVVWLPHWRGHFLGH
/LIHVW\OHV DV D FRQVXPHU GHFLVLRQ VWUDWHJ\²DQ LQGLYLGXDO¶V RU IDPLO\¶V
GHFLVLRQVWREHFRPPLWWHGWRDSDUWLFXODUOLIHVW\OHLPSDFWVWKHLUFRQVXPHUEHKDYLRU
D 5HVHDUFKVXJJHVWVWKDWSHUFHQWRI%DE\%RRPHUVZLOOEHVHHNLQJD
VLPSOHUOLIHVW\OH
,QFRPSOHWHLQIRUPDWLRQDQGQRQFRPSDUDEOHDOWHUQDWLYHV²LQPDQ\VLWXDWLRQV
FRQVXPHUVIDFHLQFRPSOHWHLQIRUPDWLRQ7KH\FRSHZLWKWKLVPLVVLQJLQIRUPDWLRQ
LQDQXPEHURIZD\V
D 7KH\PD\GHOD\GHFLVLRQPDNLQJXQWLOWKHPLVVLQJLQIRUPDWLRQLVDYDLODEOH
E 7KH\PD\LJQRUHWKHPLVVLQJLQIRUPDWLRQDQGZRUNZLWKDYDLODEOHLQIRUPDWLRQ
F &RQVXPHUVPD\FKDQJHWKHLUGHFLVLRQPDNLQJVWUDWHJ\WRDFFRPPRGDWH
WKHPLVVLQJLQIRUPDWLRQ
G &RQVXPHUVPD\LQIHURUFRQVWUXFWWKHPLVVLQJLQIRUPDWLRQ
H &RQVXPHUVPD\FRQFOXGHWKDWQRQHRIWKHLUFKRLFHVRIIHUVXIILFLHQWEHQHILWV
WRZDUUDQWSXUFKDVH
,QDSSO\LQJGHFLVLRQUXOHV²,QDSSO\LQJGHFLVLRQUXOHVFRQVXPHUVPD\DW
WLPHVDWWHPSWWRFRPSDUHGLVVLPLODUDOWHUQDWLYHV
$VHULHVRIGHFLVLRQV²DSXUFKDVHFDQLQYROYHDQXPEHURIGHFLVLRQVUDWKHUWKDQ
DVLQJOHGHFLVLRQ
'HFLVLRQUXOHVDQGPDUNHWLQJVWUDWHJ\²DQXQGHUVWDQGLQJRIZKLFKGHFLVLRQUXOHV 9LVXDO0HUFKDQGLVLQJ
FRQVXPHUVDSSO\LQVHOHFWLQJDSDUWLFXODUSURGXFWRUVHUYLFHLVXVHIXOWRPDUNHWHUV
FRQFHUQHGZLWKIRUPXODWLQJDSURPRWLRQDOSURJUDP
287387 127(6
7KHRXWSXWSRUWLRQRIWKHFRQVXPHUGHFLVLRQPDNLQJPRGHOFRQFHUQVWZRFORVHO\
DVVRFLDWHGNLQGVRISRVWGHFLVLRQDFWLYLW\SXUFKDVHEHKDYLRUDQGSRVWSXUFKDVH
HYDOXDWLRQ
7KHREMHFWLYHRIERWKDFWLYLWLHVLVWRLQFUHDVHWKHFRQVXPHU¶VVDWLVIDFWLRQZLWK
KLVRUKHUSXUFKDVH
3XUFKDVH%HKDYLRU
&RQVXPHUVPDNHWKUHHW\SHVRISXUFKDVHVWULDOSXUFKDVHVUHSHDWSXUFKDVHV
DQGORQJWHUPFRPPLWPHQWSXUFKDVHV
D 7ULDOLVWKHH[SORUDWRU\SKDVHRISXUFKDVHEHKDYLRULQZKLFKFRQVXPHUV
DWWHPSWWRHYDOXDWHDSURGXFWWKURXJKGLUHFWXVH
L :KHQDWULDOLVVDWLVIDFWRU\FRQVXPHUVDUHOLNHO\WRUHSHDWWKHSXUFKDVH
E 5HSHDWSXUFKDVHEHKDYLRULVVLPLODUWREUDQGOR\DOW\
L $UHSHDWSXUFKDVHXVXDOO\VLJQLILHVWKDWWKHSURGXFWPHHWVZLWKWKH
FRQVXPHU¶VDSSURYDODQGWKDWWKHFRQVXPHULVZLOOLQJWRXVHLWDJDLQ
DQGLQODUJHUTXDQWLWLHV
LL 7KLVIRUPLVFORVHO\UHODWHGWREUDQGOR\DOW\
F 7ULDOLVQRWDOZD\VIHDVLEOHVXFKDVZLWKELJWLFNHWLWHPVDQGGXUDEOH
JRRGV,QWKDWFDVHWKHFRQVXPHUPRYHVIURPHYDOXDWLRQGLUHFWO\WRORQJ
WHUPFRPPLWPHQW
3RVWSXUFKDVH(YDOXDWLRQ
$VFRQVXPHUVXVHDSURGXFWWKH\HYDOXDWHLWVSHUIRUPDQFHLQOLJKWRIWKHLURZQ
H[SHFWDWLRQV
7KHUHDUHWKUHHSRVVLEOHRXWFRPHVRIVXFKHYDOXDWLRQ
D $FWXDOSHUIRUPDQFHPDWFKHVWKHVWDQGDUGOHDGLQJWRDQHXWUDOIHHOLQJ
E 3RVLWLYHGLVFRQILUPDWLRQLVZKHQWKHSHUIRUPDQFHH[FHHGVWKHVWDQGDUG
F 1HJDWLYHGLVFRQILUPDWLRQLVZKHQWKHSHUIRUPDQFHLVEHORZWKHVWDQGDUG
$QLPSRUWDQWDVSHFWRIWKHSXUFKDVHSURFHVVLVUHGXFLQJSRVWSXUFKDVHFRJQLWLYH
GLVVRQDQFH²ZKHQFRQVXPHUVWU\WRUHDVVXUHWKHPVHOYHVWKDWWKHLUFKRLFHZDV
DZLVHRQH
7KHGHJUHHRISRVWSXUFKDVHDQDO\VLVUHODWHVWRWKHLPSRUWDQFHRIWKHSURGXFW
GHFLVLRQDQGWKHH[SHULHQFHDFTXLUHGLQXVLQJWKHSURGXFW
&RQVXPHU%HKDYLRU 7KH FRQVXPHU¶V SRVWSXUFKDVH HYDOXDWLRQ IHHGV EDFN DV H[SHULHQFH WR WKH
FRQVXPHU¶VSV\FKRORJLFDOILHOGDQGVHUYHVWRLQIOXHQFHIXWXUHUHODWHGGHFLVLRQV
&21680(5*,)7,1*%(+$9,25
127(6 7KHDPRXQWRIPRQH\VSHQWDQGIHHOLQJVJHQHUDWHGE\JLIWVPDNHWKHPDQ
LQWHUHVWLQJSDUWRIFRQVXPHUEHKDYLRU
*LIWLQJEHKDYLRULVWKHSURFHVVRIJLIWH[FKDQJHWKDWWDNHVSODFHEHWZHHQD
JLYHUDQGUHFHLYHU
D ,WLQFOXGHVJLIWVJLYHQWRDQGUHFHLYHGIURPRWKHUVDQGJLIWVWRRQHVHOIRU
VHOIJLIWV
*LIWLQJLVV\PEROLFFRPPXQLFDWLRQZLWKLPSOLFLWDQGH[SOLFLWPHDQLQJV
2QHRIWKHPRGHOVRIJLIWLQJUHYHDOVWKHIROORZLQJILYHJLIWLQJVXEGLYLVLRQV
D ,QWHUJURXSJLIWLQJ
E ,QWHUFDWHJRU\JLIWLQJ
F ,QWUDJURXSJLIWLQJ
G ,QWHUSHUVRQDOJLIWLQJ
H ,QWUDSHUVRQDOJLIWLQJ
,QWHUJURXSJLIWLQJRFFXUVZKHQRQHJURXSH[FKDQJHVJLIWVZLWKDQRWKHU
,QWHUFDWHJRU\JLIWLQJLVDQLQGLYLGXDOJLYLQJDJURXSDJLIWRUDJURXSJLYLQJDQ
LQGLYLGXDODJLIW
$QLQWUDJURXSJLIWLVDJLIWWKDWDJURXSJLYHVLWVHOI
,QWHUSHUVRQDOJLIWVRFFXUEHWZHHQWZRLQGLYLGXDOV
$QLQWUDSHUVRQDOJLIWLVDVHOIJLIW
%(<21'7+('(&,6,21&21680,1*$1'3266(66,1*
+LVWRULFDOO\FRQVXPHUEHKDYLRUVWXGLHVKDYHIRFXVHGRQWKHSURGXFWVHUYLFHRU
EUDQGFKRLFHV
:HQRZVHHWKDWWKHH[SHULHQFHRISRVVHVVLQJFROOHFWLQJRUFRQVXPLQJWKLQJV
FRQWULEXWHVWRFRQVXPHUVDWLVIDFWLRQDQGRYHUDOOTXDOLW\RIOLIH
&RQVXPHUFKRLFHVPLJKWEHYLHZHGDWWKHEHJLQQLQJRIWKHFRQVXPSWLRQSURFHVV
UDWKHUWKDQDWWKHHQG
D 7KHFKRLFHRUSXUFKDVHGHFLVLRQLVWKHLQSXWRIWKHSURFHVV
E 7KHLQSXWVWDJHLQFOXGHVDFRQVXPSWLRQVHWDQGDFRQVXPSWLRQVW\OH
F 7KHSURFHVVVWDJHFRQVLVWVRIXVLQJSRVVHVVLQJFROOHFWLQJDQGGLVSRVLQJ
RIWKLQJVDQGH[SHULHQFHV
G 7KHRXWSXWVWDJHZRXOGLQFOXGHFKDQJHVLQIHHOLQJVDWWLWXGHVDQGEHKDYLRUV 9LVXDO0HUFKDQGLVLQJ
DVZHOODVUHLQIRUFHPHQWRIDOLIHVW\OH
3URGXFWV+DYH6SHFLDO0HDQLQJDQG0HPRULHV
&RQVXPLQJLVDGLYHUVHDQGFRPSOH[SURFHVV 127(6
,WLQFOXGHVXWLOLW\RIDSURGXFWWKHSV\FKRORJLFDOXVHRIWKHSURGXFWPHPRULHV
HWF
$VDFRQVHTXHQFHVRPHSRVVHVVLRQVFUHDWHSHUVRQDOPHDQLQJIRUFRQVXPHUV
DQGRUKHOSWKHPPDLQWDLQDVHQVHRIWKHSDVW
6RPHSHRSOHPDLQWDLQWKHLULGHQWLW\DIWHUPDMRUFKDQJHVLQWKHLUOLIHE\OLQNLQJ
WRWKHLUSDVW
5HODWLRQVKLS0DUNHWLQJ
0DQ\ILUPVDUHSXUVXLQJUHODWLRQVKLSPDUNHWLQJLQRUGHUWREXLOGOR\DOXVDJH
DQGDFRPPLWPHQWWRWKHLUFRPSDQ\¶VSURGXFWVDQGVHUYLFHV
D ,WLVEXLOWRQWUXVWWKDWJURZVIURPNHHSLQJSURPLVHV
7KHJRDORIUHODWLRQVKLSPDUNHWLQJLVWREXLOGVWURQJODVWLQJUHODWLRQVKLSVZLWKD
FRUHJURXSRIFXVWRPHUV
7KHHPSKDVLVLVRQGHYHORSLQJORQJWHUPERQGVPDNLQJFRQVXPHUVIHHOJRRG
DERXWWKHFRPSDQ\DQGJLYLQJWKHFRQVXPHUVRPHNLQGRISHUVRQDOFRQQHFWLRQ
WRWKHEXVLQHVV
$UHYLHZRIWKHFRPSRVLWLRQRIFRQVXPHUUHODWLRQVKLSPDUNHWLQJSURJUDPV
UHYHDOHGWKUHHHOHPHQWVVKDUHGE\PRUHWKDQSHUFHQWRIWKHSURJUDPV
D )RVWHULQJRQJRLQJFRPPXQLFDWLRQZLWKFXVWRPHUVSHUFHQWRIWKH
SURJUDPV
E )XUQLVKLQJOR\DOW\E\EXLOGLQJH[WUDVOLNHXSJUDGHVDQGRWKHUSHUNV
SHUFHQWRIWKHSURJUDPV
F 6WLPXODWLQJDVHQVHRIEHORQJLQJE\SURYLGLQJD³FOXEPHPEHUVKLS´IRUPDW
SHUFHQWRIWKHSURJUDPV
/LNHSHUVRQDOUHODWLRQVKLSVEHWZHHQLQGLYLGXDOVZKRDUHZLOOLQJWRGRIDYRUVIRU
HDFKRWKHU³UHODWLRQVKLS´PDUNHWHUVRIIHUOR\DOFXVWRPHUVVSHFLDOVHUYLFHV
GLVFRXQWVLQFUHDVHGFRPPXQLFDWLRQVDQGDWWHQWLRQEH\RQGWKHFRUHSURGXFWRU
VHUYLFHZLWKRXWH[SHFWLQJDQLPPHGLDWHSD\EDFN
D $QHZIRUPRIUHODWLRQVKLSPDUNHWLQJKDVUHVXOWHGDV,QWHUQHWXVDJHKDV
LQFUHDVHG7KHWHUPXVHGRQWKH,QWHUQHWLV³SHUPLVVLRQPDUNHWLQJ´
$OWKRXJKGLUHFWPDUNHWLQJVDOHVSURPRWLRQDQGJHQHUDODGYHUWLVLQJPD\EH
XVHGDVSDUWRIDUHODWLRQVKLSPDUNHWLQJVWUDWHJ\UHODWLRQVKLSPDUNHWLQJVWUHVVHV
ORQJWHUPFRPPLWPHQWWRWKHLQGLYLGXDOFXVWRPHU
&RQVXPHU%HKDYLRU 8OWLPDWHO\LWLVWRDILUP¶VDGYDQWDJHWRGHYHORSORQJWHUPUHODWLRQVKLSVZLWK
H[LVWLQJFXVWRPHUVEHFDXVHLWLVHDVLHUDQGOHVVH[SHQVLYHWRPDNHDQDGGLWLRQDO
VDOHWRDQH[LVWLQJFXVWRPHUWKDQWRPDNHDQHZVDOHWRDQHZFRQVXPHU
127(6 5HVHDUFKLQGLFDWHVWKDWFRQVXPHUVWRGD\DUHOHVVOR\DOWKDQLQWKHSDVWGXHWR
VL[PDMRUIRUFHV
D 7KHDEXQGDQFHRIFKRLFH
E $YDLODELOLW\RILQIRUPDWLRQ
F (QWLWOHPHQWFRQVXPHUVUHSHDWHGO\DVN³:KDWKDYH\RXGRQHIRUPHODWHO\"´
G &RPPRGLWL]DWLRQPRVWSURGXFWVVHUYLFHVDSSHDUWREHVLPLODU²QRWKLQJ
VWDQGVRXW
H ,QVHFXULW\FRQVXPHUILQDQFLDOSUREOHPVUHGXFHOR\DOW\
I 7LPHVFDUFLW\QRWHQRXJKWLPHWREHOR\DO
&DVH
,QWKHPRYLHYLUJXOH)DFH2II-RKQ7UDYROWDJRWDQHZORRNE\H[FKDQJLQJIDFHV
ZLWK1LFKRODV&DJH8QIRUWXQDWHO\KHJRWDORWRIWURXEOHDORQJZLWKLW7RGD\-RKQ
FRXOGUHFHLYHDPXFKOHVVWURXEOHVRPHQHZORRNE\XVLQJ%RWR[IURP$OOHUJDQ
/DERUDWRULHVLQ,UYLQH&DOLIRUQLD1RWRQO\KDV%RWR[VPRRWKHGWKHYLVDJHVRIDJLQJ
DFWRUVLWKDVDOVRFRPHWRWKHUHVFXHRIFRXQWOHVVFRPHGLDQVDQGODWHQLJKWWDON
VKRZKRVWV%H\RQGSHUKDSVGRLQJZRQGHUVIRUWKHLUDSSHDUDQFHLW¶VDOVRJLYHQ
WKHPDVOHZRIQHZMRNHVDVWKH³QH[W9LDJUD´
,Q$OOHUJDQZDVMXVWDVPDOOVSHFLDOW\SKDUPDFHXWLFDOILUPVHOOLQJOLWWOHNQRZQ
H\HDQGVNLQGUXJVDQGRYHUWKHFRXQWHUFRQWDFWOHQVFOHDQHUV7KHLQWURGXFWLRQRI
%RWR[ZDVQ¶WVXFKDELJGHDOLQLWLDOO\$IWHUDOOW\SLFDORI$OOHUJDQVSHFLDOW\SURGXFWV
LWZDVMXVWDQRWKHUVSHFLDOW\GUXJDLPHGDWDVPDOOPDUNHWWUHDWPHQWRIFURVVH\H
VXSSRUWHGE\OLWWOHPDUNHWLQJHIIRUW
7KDWZDVEHIRUHGRFWRUVGLVFRYHUHGWKDWLQMHFWLQJ%RWR[DURXQGH\HVQRWRQO\
HOLPLQDWHGRFXODUSUREOHPVLWHUDVHGIURZQOLQHVDVZHOO2QFHWKDWKDSSHQHGWKH
EX]]ZDVRQEHWZHHQGRFWRUVDQGSDWLHQWV%HIRUHORQJGRFWRUVLQPRVWPDMRU86
FLWLHVZHUHJLYLQJSDWLHQWVRIIODEHOQRWDSSURYHGE\WKH)'$IRUWKLVXVH%RWR[
LQMHFWLRQV(YHQWKRXJK$OOHUJDQFRXOGQRWRSHQO\PDUNHWWKHSURGXFWIRUFRVPHWLF
SXUSRVHVE\VDOHVRI%RWR[URFNHWHGWRPLOOLRQDQGZHUHJURZLQJ
EHWZHHQSHUFHQWDQGSHUFHQWSHU\HDU7KDWWUDQVODWHVLQWRRYHUPLOOLRQ
%RWR[FRVPHWLFSURFHGXUHVSHUIRUPHGRQURXJKO\SDWLHQWV)'$DSSURYDO
JUDQWHGLQ$SULORQO\DFFHOHUDWHGWKLVVDOHVERQDQ]D
7KHJRRGQHZVIRU$OOHUJDQGRHVQRWHQGZLWKZLSLQJRXWIURZQOLQHV%RWR[DOVR
HIIHFWLYHO\WUHDWVPLJUDLQHKHDGDFKHVFKURQLFQHFNDQGEDFNSDLQH[FHVVLYHVZHDWLQJ
DQGSRVVLEO\VSDVWLFGLVRUGHUV:LWKDOOWKRVHWDUJHWPDUNHWV%RWR[FRXOGEHFRPH
DEORFNEXVWHUGUXJ²ZLWKPRUHWKDQDELOOLRQGROODUVLQVDOHV²EULQJLQJ$OOHUJDQRXW
RIWKHEDFNZDWHUVRIWKHSKDUPDFHXWLFDOEXVLQHVV
%RWR[&RVPHWLFLVERWXOLQXPWR[LQ$DKHDYLO\GLOXWHGYHUVLRQRIWKHIHDUHGERWXOLQXP 9LVXDO0HUFKDQGLVLQJ
WR[LQIRXQGLQVSRLOHGFDQQHGVRXSVDQGYHJHWDEOHV,WFRQWDLQVRQO\XQLWVRIWKH
WR[LQFRPSDUHGWRWKHWKRXVDQGVRIXQLWVIRXQGLQVSRLOHGIRRGEXWLWZRUNVLQWKH
VDPHZD\²E\SDUDO\]LQJIDFLDOPXVFOHVWRWKHSRLQWZKHUHWKH\FDQQRORQJHU
FRQWUDFW 127(6
6800$5<
7KHFRQVXPHU¶VGHFLVLRQWRSXUFKDVHRUQRWWRSXUFKDVHDSURGXFWRUVHUYLFHLVDQ
LPSRUWDQWPRPHQWIRUPRVWPDUNHWHUV,WFDQVLJQLI\ZKHWKHUDPDUNHWLQJVWUDWHJ\
KDVEHHQZLVHLQVLJKWIXODQGHIIHFWLYHRUZKHWKHULWZDVSRRUO\SODQQHGDQGPLVVHG
WKHPDUN7KXVPDUNHWHUVDUHSDUWLFXODUO\LQWHUHVWHGLQWKHFRQVXPHU¶VGHFLVLRQ
PDNLQJSURFHVV)RUDFRQVXPHUWRPDNHDGHFLVLRQPRUHWKDQRQHDOWHUQDWLYHPXVW
EHDYDLODEOH7KHGHFLVLRQQRWWREX\LVDOVRDQDOWHUQDWLYH
7KHRULHV RI FRQVXPHU GHFLVLRQ PDNLQJ YDU\ GHSHQGLQJ RQ WKH UHVHDUFKHU¶V
DVVXPSWLRQVDERXWWKHQDWXUHRIKXPDQNLQG7KHYDULRXVPRGHOVRIFRQVXPHUV
HFRQRPLFYLHZSDVVLYHYLHZFRJQLWLYHYLHZDQGHPRWLRQDOYLHZGHSLFWFRQVXPHUV
DQGWKHLUGHFLVLRQPDNLQJSURFHVVHVLQGLVWLQFWO\GLIIHUHQWZD\V
$QRYHUYLHZFRQVXPHUGHFLVLRQPDNLQJPRGHOWLHVWRJHWKHUWKHSV\FKRORJLFDOVRFLDO
DQGFXOWXUDOFRQFHSWVH[DPLQHGLQ3DUWV,,DQG,,,LQWRDQHDVLO\XQGHUVWRRGIUDPHZRUN
7KLVGHFLVLRQPRGHOKDVWKUHHVHWVRIYDULDEOHVLQSXWYDULDEOHVSURFHVVYDULDEOHV
DQGRXWSXWYDULDEOHV
,QSXWYDULDEOHVWKDWDIIHFWWKHGHFLVLRQPDNLQJSURFHVVLQFOXGHFRPPHUFLDOPDUNHWLQJ
HIIRUWVDVZHOODVQRQFRPPHUFLDOLQIOXHQFHVIURPWKHFRQVXPHU¶VVRFLRFXOWXUDO
HQYLURQPHQW7KHGHFLVLRQSURFHVVYDULDEOHVDUHLQIOXHQFHGE\WKHFRQVXPHU¶V
SV\FKRORJLFDOILHOGLQFOXGLQJWKHHYRNHGVHWRUWKHEUDQGVLQDSDUWLFXODUSURGXFW
FDWHJRU\ FRQVLGHUHG LQ PDNLQJ D SXUFKDVH FKRLFH 7DNHQ DV D ZKROH WKH
SV\FKRORJLFDOILHOGLQIOXHQFHVWKHFRQVXPHU¶VUHFRJQLWLRQRIDQHHGSUHSXUFKDVH
VHDUFKIRULQIRUPDWLRQDQGHYDOXDWLRQRIDOWHUQDWLYHV
7KHRXWSXWSKDVHRIWKHPRGHOLQFOXGHVWKHDFWXDOSXUFKDVHHLWKHUWULDORUUHSHDW
SXUFKDVHDQGSRVWSXUFKDVHHYDOXDWLRQ%RWKSUHSXUFKDVHDQGSRVWSXUFKDVHHYDOXDWLRQ
IHHGEDFNLQWKHIRUPRIH[SHULHQFHLQWRWKHFRQVXPHU¶VSV\FKRORJLFDOILHOGDQG
VHUYHWRLQIOXHQFHIXWXUHGHFLVLRQSURFHVVLQJ
7KHSURFHVVRIJLIWH[FKDQJHLVDQLPSRUWDQWSDUWRIFRQVXPHUEHKDYLRU9DULRXV
JLIWJLYLQJDQGJLIWUHFHLYLQJUHODWLRQVKLSVDUHFDSWXUHGE\WKHIROORZLQJILYHVSHFLILF
JLIWLQJFODVVLILFDWLRQVFKHPHLQWHUJURXSJLIWLQJDJURXSJLYHVDJLIWWRDQRWKHU
&KHFN<RXU3URJUHVV
JURXSLQWHUFDWHJRU\JLIWLQJDQLQGLYLGXDOJLYHVDJLIWWRDJURXSRUDJURXSJLYHV
:KDWLVSRVLWLYH
DJLIWWRDQLQGLYLGXDOLQWUDJURXSJLIWLQJDJURXSJLYHVDJLIWWRLWVHOIRULWV
GLVFRQILUPDWLRQ"
PHPEHUVLQWHUSHUVRQDOJLIWLQJDQLQGLYLGXDOJLYHVDJLIWWRDQRWKHULQGLYLGXDO
:KDWLVQHJDWLYH
DQGLQWUDSHUVRQDOJLIWLQJDVHOIJLIW
GLVFRQILUPDWLRQ"
&RQVXPHUEHKDYLRULVQRWMXVWPDNLQJDSXUFKDVHGHFLVLRQRUWKHDFWRISXUFKDVLQJ
LWDOVRLQFOXGHVWKHIXOOUDQJHRIH[SHULHQFHVDVVRFLDWHGZLWKXVLQJRUFRQVXPLQJ
&RQVXPHU%HKDYLRU SURGXFWVDQGVHUYLFHV,WDOVRLQFOXGHVWKHVHQVHRISOHDVXUHDQGVDWLVIDFWLRQGHULYHG
IURPSRVVHVVLQJRUFROOHFWLQJ³WKLQJV´7KHRXWSXWVRIFRQVXPSWLRQDUHFKDQJHVLQ
IHHOLQJVPRRGVRUDWWLWXGHVUHLQIRUFHPHQWRIOLIHVW\OHVDQHQKDQFHGVHQVHRIVHOI
VDWLVIDFWLRQRIDFRQVXPHUUHODWHGQHHGEHORQJLQJWRJURXSVDQGH[SUHVVLQJDQG
127(6 HQWHUWDLQLQJRQHVHOI
$PRQJRWKHUWKLQJVFRQVXPLQJLQFOXGHVWKHVLPSOHXWLOLW\RIXVLQJDVXSHULRUSURGXFW
WKHVWUHVVUHGXFWLRQRIDYDFDWLRQWKHVHQVHRIKDYLQJD³VDFUHG´SRVVHVVLRQDQG
WKHSOHDVXUHVRIDKREE\RUDFROOHFWLRQ6RPHSRVVHVVLRQVVHUYHWRDVVLVWFRQVXPHUV
LQWKHLUHIIRUWWRFUHDWH³SHUVRQDOPHDQLQJ´DQGWRPDLQWDLQDVHQVHRIWKHSDVW
5HODWLRQVKLS PDUNHWLQJ LPSDFWV FRQVXPHUV¶ GHFLVLRQV DQG WKHLU FRQVXPSWLRQ
VDWLVIDFWLRQ)LUPVHVWDEOLVKUHODWLRQVKLSPDUNHWLQJSURJUDPVVRPHWLPHVFDOOHGOR\DOW\
SURJUDPVWRIRVWHUXVDJHOR\DOW\DQGDFRPPLWPHQWWRWKHLUSURGXFWVDQGVHUYLFHV
$WLWVKHDUWUHODWLRQVKLSPDUNHWLQJLVDOODERXWEXLOGLQJWUXVWEHWZHHQWKHILUPDQG
LWVFXVWRPHUVDQGNHHSLQJSURPLVHVPDGHWRFRQVXPHUV7KHUHIRUHWKHHPSKDVLV
LQUHODWLRQVKLSPDUNHWLQJLVDOPRVWDOZD\VRQGHYHORSLQJORQJWHUPERQGVZLWK
FXVWRPHUVE\PDNLQJWKHPIHHOVSHFLDODQGE\SURYLGLQJWKHPZLWKSHUVRQDOL]HG
VHUYLFHV
$QVZHUVWRFKHFN\RXUSURJUHVV
9LVXDO0HUFKDQGLVLQJLVWKHDUWRIGLVSOD\LQJPHUFKDQGLVHLQDPDQQHUWKDW
LVDSSHDOLQJWRWKHH\HVRIWKHFXVWRPHU
6KRSSLQJH[SHULHQFH
3RVLWLYHGLVFRQILUPDWLRQLVZKHQWKHSHUIRUPDQFHH[FHHGVWKHVWDQGDUG
1HJDWLYHGLVFRQILUPDWLRQLVZKHQWKHSHUIRUPDQFHLVEHORZWKHVWDQGDUG
7HVW<RXUVHOI
([SODLQWKHLPSDFWRIVWRUHHQYLURQPHQWRQEX\LQJEHKDYLRURIFRQVXPHUV
:KDWGR\RXXQGHUVWDQGE\9LVXDO0HUFKDQGLVLQJ"
7KURZVRPHOLJKWRQWKHYDULRXVVWUDWHJLHVRIVWRUHPDQDJHPHQW
:KDWDUHWKHYDULRXVPRGHOVRIFRQVXPHUEHKDYLRU"
:KDWDUHYDULRXVFRQVXPHUGHFLVLRQUXOHV"
)XUWKHU5HDGLQJ
x &RQVXPHU%HKDYLRUE\.LQVK