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81 Cards in this Set
- Front
- Back
- 3rd side (hint)
Characteristics of the Business Market
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1.Fewer but larger buyers
2.More geographically concentrated 3.Demand is derived from demand for consumer products 4.Demand is more inelastic (less affected by changes in price) 5.Demand fluctuates more 6.Business purchases involve more buyers 7.Purchasing is more professional 8.Purchase decisions are more complex 9.Buying process is more formalized 10.Buyers and sellers develop more long term relationships |
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Major Types of Business Decisions
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1.Straight Rebuy (Reorders without modification)
2. Modified Rebuy (Reoders with modification) 3. New Task |
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Participants in the Buying Process
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1. Users
2. Influencers 3. Buyers 4. Deciders 5. Gatekeepers |
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Influencers
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– anyone in the buying center who affects the buying decision
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Buyers
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– makes the purchase (e.g. purchasing agent)
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Deciders
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– the person(s) with the authority to make the selection
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Gatekeepers
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– people who control the flow of information
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Product Specification
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- Stage of the business buying process in which a firm specifies the best technical product characteristics of a needed item
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Value Analysis
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- Cost reduction by looking for less costly methods of production
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Supplier Search
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- Stage of the business buying process where the firm tries to find the best vendors
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Proposal Solicitation
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-The stage of the business buying process in which the buyer invites qualified suppliers to submit proposals.
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Supplier Selection
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-The stage of the business buying process in which the buyer reviews proposals and selects a supplier or suppliers.
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Steps in Market Segmentation, Targeting, and Positioning
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1. Segmentation
2.Targeting 3.Differentation 4.Positioning |
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Segmentation
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-Dividing a market into smaller groups with distinct needs, characteristics, or behaviors
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Targeting
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-Evaluating each market segment’s attractiveness and selecting segments to enter.
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Differentation
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-making the market offering different to create superior customer value.
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Positioning
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-arranging for a product to occupy a clear, distinctive, and desirable place relative to other products
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Segmenting Consumer Markets
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1. Geographic
2. Demographic 3. Psychographic 4. Behavioral |
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Geographic
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– to account for consumers’ regional differences, population density or limitations in distribution.
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Demographic
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– most popular segmentation for consumer products. Vary by characteristics (Age, gender, race, education, etc.)
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Psychographic
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-different groups based on social class, lifestyle, or personality characteristics
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Behavioral
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-different groups based on consumer knowledge, attitude, use or response to a product.
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a) Occasion Segmentation
b) Benefit segmentation c) User status d) Usage rate e) Loyalty status |
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Segmenting Business Markets
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1. Geographically
2. Demographically 3. Benefits sought 4. User status 5. Usage rate 6. Loyalty status 7. Operating characteristics 8. Purchasing approaches 9. Situational factors 10. Personal characteristics |
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Segmenting International Markets
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1. Geographic location
2. Economic factors 3. Political and legal factors 4. Cultural factors |
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Political and legal factors
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a) Type and stability of government
b) Receptivity of foreign firms c) Monetary regulations d) Amount of bureaucracy |
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Intermarket Segmentation
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Forming segments of consumers who have similar needs and buying behavior even though they are located in different countries.
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Requirements for Effective Segmentation
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1. Measurable
2. Accessible 3. Substantial 4. Differential 5. Actionable |
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Evaluating Market Segments
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1. Segment Size and Growth
2. Segment Structural Attractiveness 3. Company objectives and resources |
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Types of Target Marketing
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1. Undifferentiated
2. Differentiated 3. Concentrated 4. Micromarketing |
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Choosing a Targeting Strategy
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1. Company Resources
2. Product Variability 3. Product Lifestyle Stage 4. Market Variability 5. Competitors Strategy |
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Socially Responsible Target Marketing
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1. Children to Cereal
2. Tobacco and Beer to Underage 3. Casinos and Lottery to Middle Class |
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Product Position
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the place the product occupies in consumers’ minds relative to competing products.
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Perceptual Map
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a visual depiction of consumers’ perceptions of their brands versus competing products on important buying dimensions.
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Differentiation and Positioning Task
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1.Identifying a set of possible customer value differences that provide competitive advantages
2.Choosing the right competitive advantages 3.Selecting an overall positioning strategy 4.Communicate and deliver the chosen position to the market. |
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Competitive Advantage
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1.Product differentiation
2.Services differentiation 3.Channel differentiation 4.People differentiation 5.Image differentiation |
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Overall Positioning Strategies
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1. More for More (Upscale, Premium)
2. More for Same (Lexus to Mercedes) 3.More for Less (Homedepot) 4. Same for Less (Walmart) 5.Less for Less (Dollar store) |
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Product
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Anything that can be offered to a market that satisfies a want or need
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Service
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One party can offer another an intangible product, does not result in ownership
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Consumer Product
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1. Convenience products
2. Shopping products 3. Specialty products 4. Unsought products |
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Convienence Product
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– buys frequently, immediately and with minimum amount of comparison and buying effort. (Gum)
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Shopping products
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purchased less frequently and usually involves comparison shopping. (Car, Home)
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Specialty products
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– products with a unique characteristic for which consumers will go out of their way to find. (iphone?)
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Unsought products
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– products that consumer is not aware of or is not interested in.
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Industrial Product
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1. Materials and Parts
2. Capital Items 3. Supplies and Services |
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Materials and Parts
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products that become part of the finished product (raw materials)
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Capital Items
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installations and accessory equipment (depreciated)
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Supplies and Services
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similar to convenience products in the consumer market (not depreciated)
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Branding
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A name, term, sign, symbol or design that identifies the maker or seller
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Product Line
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A group of products that are closely related because they function in a similar manner
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Product Line Stretching
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when a company lengthens its product line beyond its current range
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(___ <---, Medium, High)
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Product Line Filling
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adding more items within the present range of the line
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(Low, ____ <----, High)
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Product Mix
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1. Width
2. Length 3. Depth 4. Consistency |
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Width
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number of different product lines a company carries.
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Length
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total number of items the company carries within its product lines.
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Depth
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number of versions or varieties offered of each product in the line
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Consistency
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how closely related the various product lines are in end use
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Brand Equity
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The amount a consumer is willing to pay to get the brand name
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Qualities for a Brand Name
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1.Suggest something about the product’s benefits and qualities
2.Easy to pronounce, recognize and remember 3.Should be distinctive 4.Should be extendable 5.Should translate easily into foreign languages 6.Capable of registration and legal protection |
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Brand Sponsorship
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1.Manufacturer’s brand – associated with the manufacturer (Example: Coca Cola, Weber grills)
2.Private brand – associated with the reseller (i.e. store brands) 3.Licensing – designer brands 4.Co-branding – using two brands together (Example: Butterfinger Blizzard) |
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Brand Development
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1. Line Extension (Crest Gel)
2. Brand Extension (Apparel) 3. Multibrands (Dove, Lux Soaps) 4. New Brands (Band-Aid, Tylenol) |
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Characteristics of Service
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1. Intangibility
2. Inseparability 3. Variability 4. Perishability |
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Interactive Marketing
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Quality of the buyer-seller interaction during the service encounter.
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New Product Development
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The development of original products, product improvements, product modifications, and new brands
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New Product Development Process
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1. Idea generation
2. Idea screening (funnel) 3. Concept development and testing (develop idea) 4. Marketing strategy development 5. Business analysis(profitability) 6. Product development (prototype) 7. Test marketing (Partial Sales) 8. Commercialization (Full scale sales) |
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Test Marketing
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1. Not used for shopping products and appliances
2. Don't do if you want secrecy 3. Interference from competitors |
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Types of Test Markets
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1. Standard Test market
2. Controlled Test Market 3. Simulated Test Market |
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Product Life Cycle
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The course of a product’s sales and profits over its life cycle.
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Product Lifestyle Stages
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1. Product Development
2. Introduction (sales low) 3. Growth (rapid sales) 4. Maturity (longest stage) 5. Decline (sales drop) |
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Product Decisions and Social Responsibility
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1. Planned obsolescence
2. New Products that lessen Competition 3. Products in Compliance with Laws |
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Price
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The amount charged for a product or service
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Value Based Pricing
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Setting Prices based on buyers perceptions
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Cost Based Pricing
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Prices set based on costs for producing
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Types of Costs via Cost Based Pricing
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1. Fixed Costs
2. Variable Costs 3. Total Costs 4. Unit Costs |
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Experience Curve
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The drop in the average per unit production cost that comes with accumulated production experience.
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Cost Plus Pricing
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Adding a standard markup to the cost of the product
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Break Even Pricing
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Setting prices to break even on the costs of making and marketing a product, or setting prices to make a target profit.
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Target Costing
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Pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met.
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Market Types
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1. Pure Competition
2. Monopolistic competition 3. Oligopolistic competition (Airlines) 4. Pure monopoly |
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Demand Curve
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A curve that shows the number of units the market will buy in a given time period, at different prices that might be charged.
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Price elasticity
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A measure of the sensitivity of the demand to changes in price. Calculated as the % Change in Quantity Demanded / % Change in price
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Price Sensitivity
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Less Price Sensitive if...
a) The product is unique b) Substitute products are hard to find or cannot easily be compared c) Total expenditure is low in relation to their income d) Expenditure is a small percentage of their total expenditure e) Consumers expect the price to go up |
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