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A Marketing Strategy for the Development of United Biscuit - Essay Example

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This essay "A Marketing Strategy for the Development of United Biscuit" is about the core strategy for Hobnobs Cookies which will be the combination of low cost and differentiation strategy that will enhance the consumers’ value by building the product’s brand in the existing market…
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A Marketing Strategy for the Development of United Biscuit
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?A marketing strategy for the development of United Biscuit Table of Contents Part Marketing Plan 3 Executive Summary 3 2.Introduction 3 3.BriefDescription of Company 4 4.Environmental Analysis 5 4.1.Micro Environment 5 4.2.Macro Environment 7 5.Market condition and Competition 9 6.Target Market and Consumer Segmentation 10 7.Objectives 10 7.1.Marketing Objectives 10 7.2.Financial Objectives 11 8.Marketing Segmentation and Positioning Statement 11 9.Marketing Strategies and Planning 13 10.Marketing Mix 16 11.Conclusion 17 Part 2: Essay 18 Ethical Marketing and Corporate Social Responsibility 18 Reference 23 Part 1: Marketing Plan 1. Executive Summary United Biscuit is the pioneer bakery company of UK and Europe. Currently, it is operating in UK and European market with its 15 famous brands. The UK bakery industry has become too competitive due to large number of giant bakery companies like Kellogg's, Northern Foods, Northern Foods, Nestle etc who also provide various ranges and tastes of biscuits, cookies and other sweet or savoury products. At such competitive market, United Biscuit is launching its new ranges of cookies under its McVitie’s brand called Hobnobs Cookies. The company is aiming to popularize this specific product brand in UK market. However, its key competitors also offer substitute cookies in the existing market that it poses great threat to the success of Hobnobs Cookies. The micro and macro environment analysis of United Biscuit have provided the base for framing proper marketing strategy for Hobnobs Cookies in its existing market. Considering three key strengths of Hobnobs Cookies i.e. high quality, lower price and different taste, its marketing strategies has been framed. As per the Ansoff matrix, United Biscuit will try to attain the product development at initial stage and in this process, promotional mix is very important. The core strategy for Hobnobs Cookies will be the combination of low cost and differentiation strategy that will enhance the consumers’ value by building the product’s brand in existing market. 2. Introduction It is very necessary to develop a proper marketing plan for organisational growth and success as marketing has become inevitable business activity. An effective marketing plan ensures sufficient amount of sales revenue that determines the existence of a firm within its industry. In recent years, the scope and importance of marketing and strategic planning has significantly increased due to intensified competition in market. For the financial success, the organisations aim to counter their key competitors for gaining an upper hand position in the market. However, in this process, the planning is the foremost task for them. Stevens and Loudon have defined that “planning is one of the key success for any undertaking” and the planning “must be founded in a root philosophy or conceptual framework that provides a basis for analysis, execution, and evaluation” (Stevens and Loudon, 2005, p.4-5). This paper will attempt to present a marketing plan for United Biscuit to position its new brands product. The primary aim of this paper is to develop a proper marketing plan for existing product in its exiting market. Therefore, various marketing tools, model and theories will be applied for analysing micro and macro environment of United Biscuit and for developing effective marketing strategies. 3. Brief Description of Company The United Biscuit is a leading multinational food manufacturer of UK and Europe and it offers wide ranges of cookies, biscuit and other savoury products. The company have developed its high brand image in UK and entire European regions. Its products are available under 15 well known brands like McVitie’s, Jacob’s, Twiglets, BN, KP etc (United Biscuit-a, 2008). This company was established during 1948 after the merging of two Scottish families who were engaged in bakery business. Later, the company acquired MacDonald's Biscuits and Crawford's Biscuits in 1960s. Finally, in 2000, Finalrealm, a group of investors acquired United Biscuit and it become a private limited company (United Biscuit-b, 2008). The core strategy of United Biscuit focuses on long term sustainability and this strategy encompasses three basic areas of business concern i.e. financial, environmental and community. The company aim to deliver “superior financial return every year”, to minimise its “impact on environment” and to engage with its “consumers, employees and local communities to improve and promote health and wellbeing, education, skills development and the support of charities” (United Biscuit-c, 2008). 4. Environmental Analysis 4.1. Micro Environment The micro environmental factors play significant role in shaping the organisational growth and success. Micro environment consists of five major factors including suppliers, consumers, intermediaries, competitors and public. These factors directly affect performance of a business, as business activities of a company involve these micro environmental factors (Prakash and Raj, 2005, p.5). Diana Luck has identified the six major components of micro environmental factors and the following figure shows these components. Figure 1: Micro Environment of a Firm (Source: Luck, 2008, p.67) Customers: Consumer satisfaction is the primary goal of United Biscuit. The company believes that creation of high value for its consumers is the most important key to success for its growth and brand image in the market. It has developed its specific department for customer care that strives to offer constant consumer support (United Biscuit-d, 2008). Suppliers: In the food manufacturing industry, the suppliers are very essential as the quality of supplied direct materials determines the quality of product and consumers satisfaction. United Biscuit has developed a proper benchmark for its high quality products. Suppliers help the organisation to meet its challenging requirements. It has successfully procured a large number of global and international suppliers for its manufacturing activities (United Biscuit-e, 2008). Competitors: United Biscuit is a giant manufacturer of biscuits and cookies. However, it faces steep competition from the other global companies. The giant companies like Nestle, Kellogg’s, Burton's Foods, Northern Foods etc are constantly trying to promote their products in UK market causing United Biscuit’s task quite difficult. Recently, it has launched Hobnobs cookies and due to intensified competition, the company is facing hindrances in promoting their products. Distributors: The distributors for United Biscuit includes mediators who are responsible to supply finished goods to retailers and finally to consumers. The company strives to offer profitable business to its distributors by supplying high demanding products. Publics: It can be defined as the external community of United Biscuits including media, local people, citizen, government etc. United Biscuit considers its community as one of the major concern for its sustainability. It conducts several community programs for bringing improvements in society (United Biscuit-f, 2008). 4.2. Macro Environment In order to assess, the macro environmental factors, PEST analysis is a very useful and effective marketing analytical tool. It helps to scan four very important external factors like political, economic, socio-cultural and technological. It helps an organisation to identify the influence of macro environmental factor upon its business activity and profitability (Reddi, 2009, p.131). Each of these factors is discussed below for United Biscuit. Political: Stable political condition of UK is one of the major key factors that have brought development in the country. The judicial system strives to protect the trade and business of UK. Queen is head of the state and prime minister is head of government. The government has implemented certain agreements ensuring peace within the country (US Department of State, 2010). Economic: UK is an economically developed nation of Europe and it has become a leading financial centre and trading power of Western Europe. The purchasing power of UK people has increased as UK’s GDP as per purchasing power parity is quite high i.e. $2.123 trillion in 2009. GDP per capita of the country was $34,200 in 2009 (CIA, 2010). Socio-Cultural: Globalisation and economic development are the two major factors that have affected the lifestyle of UK people. The population of UK was nearly 61,113,205 during 2009 and large varieties of ethnic groups like English, Scottish, and Indian etc are residing in this country. The following table shows the population age and gender ratios. Table 1: Population of UK (Source: The Intute Consortium, 2010) Nearly 99% of the total population is educated and it has enhanced their consumer buying behaviour. They have become more health consciousness and they are ready to pay high for healthier products. Technology: Technology is responsible for growth and development of trade and business. Superior infrastructural facilities have contributed towards growth of UK trade and business. UK’s communication and transportation are highly developed. Cheap and efficient transportation system is very essential for business activities of United Biscuit as it needs to procure raw material and supply finished goods to different markets of UK. 5. Market condition and Competition McVitie’s ‘Hobnobs Cookies’ is the latest offering by United Biscuits during new year of 2011. Currently, the company is facing competition from three major competitors. These three players are Burton's Foods, Northern Foods and Kellogg's. These competitors offer same ranges of products that have raised the competition among the leading players of UK bakery industry. For example, ‘Cadbury biscuits’ offered by Burton's Foods is one of the most famous cookies in UK. However, at such competitive situation, it is quite difficult for United Biscuit to position its latest product brand in market. The company aims to popularize its McVitie’s ‘Hobnobs Cookies’ and to gain higher position over its key competitors’ available products (United Biscuit-g, 2008). During the festive seasons like Christmas and New Year, the bakery companies keep introducing new products. It is the proper time to grab the larger portion of market share as consumers purchasing frequency is the highest. For example, Little Venice Cake Company has launched branded cakes (William Reed Business Media Ltd, 2010). The same strategy is followed by United Biscuit and finally it has launched its ‘Hobnobs Cookies’. 6. Target Market and Consumer Segmentation The target market of United Biscuit includes large category of consumers that include household, adult and child consumers. Currently, the company has 15 different brands and each brand offers specific category of products. For example, Jacob’s brand includes cream crackers, snacks and savoury biscuits targeting the adult consumers (United Biscuit-h, 2008). The Penguin chocolate biscuit bar targets the UK families and children. The new cookies offered by United Biscuit cover the adult as well as children consumers of entire UK bakery market. The company has aimed to target middle class population of UK and hence, the price of new product is affordable for target consumers i.e. ?1.25 (United Biscuit-g, 2008). 7. Objectives 7.1. Marketing Objectives This paper attempts to develop relevant and effective marketing plan for United Biscuit to position its latest product in existing market. The above analyses of micro and macro environment of United Biscuit have developed a base for framing proper marketing plans. The current market situation for launching the new product is quite competitive as key competitors are already present with their substitute products. However, before framing efficient marketing plan for positioning ‘Hobnobs Cookies’, some specific marketing objectives are pre-defined which are given below. Position the ‘Hobnobs Cookies’ in the existing UK market for cookies. Capture more than 8% of cookies market share by offering ‘Hobnobs Cookies’. Organise an extensive market research to identify the consumer feedbacks regarding Hobnobs Cookies’. Spread awareness regarding healthier quality of Hobnobs Cookies’ 7.2. Financial Objectives Marketing and finance are inter-related with each other and financial success is the prime parameter to evaluate the effectiveness of implemented marketing plan. Therefore, United Biscuit must aim to gain high rate of return on total marketing and promotional expenses. The marketing plan has to be incorporated with financial planning as finance determines proper allocation of resources for marketing expenses. Some definite financial objectives in respect of marketing plan of ‘Hobnobs Cookies’ are given below. Generate 2% of total revenue by offering ‘Hobnobs Cookies’ within next year. Procure cost effective suppliers for manufacturing ‘Hobnobs Cookies’. Achieve 10% return on marketing investment from the sales of ‘Hobnobs Cookies’. 8. Marketing Segmentation and Positioning Statement According to McDonald & Dunbar, “the process of splitting customers, or potential customers, in a market into different groups, or segments in order to define the target market audience” is known as market segmentation. Marketing segmentation should be the first step in the process of market planning. The marketing segmentation can be conducted on the basis of consumers’ geographical location, demography, and psychology. Nearly 99% of UK population are educated and their economic conditions are also quite stable. The spending powers of middle income group families have increased. The following diagram shows average family expenditure of UK during 2006. Figure 2: Average Family Spend by Family, 2005-06 (Source: BBC News, 2007) As per the above figure, UK family spends more than ?60 per week for their food and beverages. Therefore, United Biscuit can expect higher scope by targeting families belonged to middle income group. United Biscuit will attempt to position ‘Hobnobs Cookies’ in the UK market. Positioning means is to create the high image of the product in target markets. Hiebing and Cooper have identified that “positioning establishes the desired perception of your product within the target market relative to the competition” (Hiebing and Cooper, 2004, p.145). Therefore, United Biscuit must try to position its product in the mind of its target consumers. The positioning statement of United Biscuit for its ‘Hobnobs Cookies’ is given below. ‘Hobnobs Cookies is one of the most premier cookies offered by United Biscuit and it will become important part of diet for every UK families and for cookies lovers’. 9. Marketing Strategies and Planning The above analysis of micro and macro environment have figured out the overall situation of existing market, and factors affecting United Biscuit’s business activity and profitability. Its new product, Hobnobs Cookies is going to be launched in the UK market, and in the respect, the Ansoff matrix is very helpful in identifying desirable strategy. The Ansoff Matrix offers four probable strategies by considering market and product. Following figure represents the Ansoff matrix showing four strategies. Figure 3: Ansoff Matrix (Source: Botten, 2006, p.279) United Biscuit’s Hobnobs Cookies is its new product for the existing market. Therefore, as per the above figure, the company must try to bring product development at the initial stage and later, it should follow market penetration for its Hobnobs Cookies. Brand development should be the first priory for United Biscuit and hence, entire strategy must focus on creating high brand image for Hobnobs Cookies. The core strategy for this product can be framed using the Porter’s generic strategy. This strategy is very effective for launching a new product in market. The following figure shows the four combination of strategy. Figure 4: The Generic Strategy (Source: Stonehouse and Campbell, 2004, p.175) The target consumers for Hobnobs Cookies are middle class families of UK and the company has set lower price for the product. United Biscuit is offering two variants in its Hobnobs Cookies i.e. “Hobnobs Milk Chocolate Chip Cookies” and “Hobnobs Milk Choc Chip & Hazelnut Cookies” (United Biscuit-g, 2008). The product features and price are suitable for following the mixed strategy of low cost and differentiation. At present, the competitors are offering wide ranges of cookies but Hobnobs Cookies have different taste. The combinations of these two strategies are effective for brand development of its new product. Primary task in brand building is to create value and satisfaction for customers that enhance brand recognition among target consumers (Yang, 2007, p.90). 10. Marketing Mix Marketing mix is a celebrated concept in marketing management for profitable organisation. It covers entire areas of marketing activities. Marketing mix describes four important aspects of marketing activities including product, price, promotion and place (Brown, 1991, p.24). In order to execute the above formulated strategies for launching Hobnobs Cookies in UK market, the marketing mix are described below. Product: United Biscuit’s Hobnobs Cookies are the latest range of cookies with two different tastes. It is a high quality product that is able to satisfy cookies lovers specifically who like Hobnobs. The two variants in this product line strive to attract consumers with different tastes and preferences. However, for manufacturing healthier and high quality, United Biscuit will need to procure quality conscious suppliers from local market. Price: The price of Hobnobs Cookies must be determined by considering the economy of target consumers and competitors’ price offering for same product category. Price is also vital for distributors and retailer as their profitability is another great concern for the company. The MRRP of Hobnobs Cookies is ?1.25 and this low price is affordable for middle income group people in UK. Promotion: The promotional activities are essential for spreading awareness regarding Hobnobs Cookies among its target consumers. Higher quality, low price and different taste are three unique selling propositions of Hobnobs Cookies and these must be communicated to target consumers. The electronic media and promotional programs are very effective for communicational purposes. United Biscuit’s must develop two way communicational systems with its consumers. Place: United Biscuit’s distribution channels are efficient and it is its one of major internal strengths. The company will launch its product in existing market and hence, efficient intermediates and retailers are inevitable for distributional activities. The company should supply Hobnobs Cookies in markets where middle income group of families are easily available. The local markets of London, Birmingham, Manchester, Liverpool, Glasgow, Leeds, Edinburgh etc are major markets of UK. United Biscuit must try to develop partnerships with major distributors and retailers in these markets. 11. Conclusion This paper has attempted to frame a marketing plan for Hobnobs Cookies offered by United Biscuit for its existing UK market. This paper has analysed the micro and macro environment of United Biscuit and outcomes of these analyses have been utilized for framing relevant marketing strategies. The marketing strategies have specifically focused on Hobnobs Cookies for positioning it in UK market. The company needs to develop its product and develop proper promotional mix strategies to spread awareness regarding the product among its target consumers. The company will combine the generic strategies of low cost and differentiation. This strategy is able to serve the target consumer which primarily includes UK households with middle income. Part 2: Essay Ethical Marketing and Corporate Social Responsibility The business organisations should develop their marketing and organisational strategies by taking such essential responsibilities into account. Ethical marketing and Corporate Social Responsibilities (CSR) are two major activities by which they can meet their social and corporate responsibilities (Luck, 2008, p.319). United Biscuit has taken multiple initiatives to meet its corporate social responsibilities. The company is a food manufacturing company and hence, the company’s responsibilities toward health of society and community are very crucial. In order to meet its CSR responsibilities, the company focuses on three basic areas. Firstly, its product manufacturing process strives to meet proper health and nutrition benchmark. Secondly, it has realized its duty for environment. Thirdly, it has been contributing for community development. The health related concern is very vital for the company business and its market reputations. United Biscuit has realized the necessity of balance diet for its consumers’ healthy lifestyle. In this process, United Biscuit works with its customer and it has also developed its R&D for manufacturing healthier products. The company has reduced the level of saturated fat from its product. The following table shows list of its product categories with reduced fat in percentages. Table 2: United Biscuit’s Products with Reduced Fat (Source: United Biscuit-i, 2010) Sustainability is another major concern for the United Biscuit and hence, it has defined its specific objectives. The operational process of the company has a negative impact of environment and therefore, United Biscuits sustainability programs cover six major areas. These are to reduce “carbon emissions and energy use”, “waste sent to landfill”, “water”, “packaging waste”, and to increase “use of environmentally friendly transport” and “sustainable sourcing” (United Biscuit-j, 2008). United Biscuit has also focused on its social responsibilities and it has been working for bringing improvement in community. The company’s community programs include various volunteer work and donations for the unprivileged society (United Biscuit-k, 2009). It is very necessary to understand the emergence of the ethical marketing and CRS activities for modern business. Traditionally, the business organisations used to meet their social and corporate responsibilities but these activities were not properly organised. After the globalization of trade and business the essence of these activities increased significantly, as companies started to expand their business into new market. Initially, in most of the cases they were neglected until they realized the essence of their contribution towards social and economic and environmental development. This has caused the advent of term ‘corporate sustainability’ in the corporate world. PriceWaterhouseCooper defined corporate sustainability as “meeting society’s expectation that companies add social, environmental and economic value form their operations, products and services” (Hopkins, 2007, p.20). Therefore, CRS and corporate sustainability are interlinked with each other. A company must conduct CSR activities to meet its responsibilities for achieving corporate sustainability. CRS programs include the welfare and value maximisation of stakeholders and growth of local society, community and environment. The stakeholders’ group includes shareholders, customers, suppliers, employees and public (government and local communities). An entire business activity is carried out with the help of these stakeholders’ groups and hence, the organisations must work for increasing their value and wealth. The world organisations like OECD, WBCSD (World Business Council on Sustainable Development) etc have taken various initiative to promote CSR activities that help organisations to achieve corporate sustainability. For example WBCSD focuses on four major areas which cover business responsibilities towards “energy and climate”, “development”, “the business role” and “ecosystems” (WBCSD, 1997-2011). With the time, business scandals and failure of corporate governance has increase, and global recession of 2007-2008 was an example of governance failure. Most of lending institutions of USA have avoided the maintenance of proper accountability and transparency and they increased risk level abnormally. Finally, the entire market crashed and world economy had to experience the consequences. Hence, organisations must aim to bring to an end of corporate corruption and governance failure. OECD has formulated international conventions against corruptions, bribery, tax evasion etc (OECD, n.d.). Besides, the financial reporting standards, sustainability reporting are the two major responsibilities of business organisations. Issues relating to human rights and legislations are the other two reasons that raise the requirements of CSR activities. The above discussions on CSR and corporate sustainability revolve around the concept of ethics and morality in business activities. A business is responsible to perform a number tasks like operational, R&D, marketing etc. If a company is committed to meet the moral values, then it must include ethical concepts in its entire business activities. The concept of ethical marketing is based on the above discussed moral values and the responsibilities towards the stakeholders, society and environment. Murphy et al (2005) defined marketing ethics as “the systematic study of how moral standard are applied to marketing decisions, behaviours and institutions” (Parsons and Maclaran, 2009, p.122). The marketing decisions are the critical as it strives to serve its customers by partnering with suppliers, distributors and management. Therefore, in the process of marketing activities, the company must aim to deliver superior satisfaction to customers, suppliers, employees, distributors and community. The marketer must consider the ethical reputation of its organisation and hence, the marketing plan should be meant to enhance ethical reputation of a company. According to Georges Enderle and Patrick E. Murphy, “ethical and CSR issues should play a prominent role in both marketing strategy development and execution in both domestic and international markets” (Enderle and Murphy, 2008). Therefore, while developing marketing strategies six prime ethical values must be considered which include respects, openness, fairness, responsibility, honesty and citizenship. Gaski’s review clearly identified some basic requirements for practising ethical aspects in marketing activities. He has developed four principals for maintaining self interest and law. The first principal asks not to market dangerous and harmful products. The second principal describes to create trust and confident in customers by not deceiving them. Third principal and fourth principals are not to “deceive the customer, coerce other members of the distribution channel”, and “disparage competitors” respectively (Smith, 2000). It is not always possible to meet these principal in case of certain business activities like cigarette and alcohol manufacturing and retailing as these products are harmful for society. However, these companies must maintain the proper transparency with its customers and provide full information of disadvantages of such products. In this respect, the management of a company must encourage its employees to practise ethics in the corporate world by explaining them its important in global market place. Reference BBC News. November 06, 2007. The UK family: In statistics. [Online]. Available at: http://news.bbc.co.uk/2/hi/7071611.stm. [Accessed on January 04, 2011]. Brown, S. W. 1991. Service quality: multidisciplinary and multinational perspectives. Lexington Books. CIA. December 28, 2010. The World Factbook: United Kingdom. [Online]. Available at: https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html. [Accessed on January 04, 2011]. Enderle, G. E. and Murphy, P. E. March 29, 2008. Ethics and Corporate Social Responsibility for Marketing in the Global Marketplace. [Pdf]. 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Available at: http://www.unitedbiscuits.com/news.php?rnd=gxwGP5GAF8z8CcACm%2BTu%2FY%2BygwhGNJlVocw7xufqCYTpZFID1df0CWRaM0OEENq%2FOqcR31EtvwjMtAuHEki7tA%3D%3D. [Accessed on January 04, 2011]. United Biscuit-h, 2008. Jacob's. [Online]. Available at: http://www.unitedbiscuits.com/our-brands.php?rnd=4YJgG9VrQXGQ%2BAYbZ0xs4pjO6OSPVxAtUrkqIktEF1k%3D. [Accessed on January 04, 2011]. United Biscuit-i. September 2010. Health & Nutrition Programme. [Pdf]. Available at: http://dev2.previewbox.co.uk/data/file/FINAL%20Health%20and%20Nutrition%20Update%20Sept%202010.pdf. [Accessed on January 08, 2011]. United Biscuit-j, 2008. Achieving Environmental Sustainability. [Online]. Available at: http://www.unitedbiscuits.com/sustainability.php. [Accessed on January 08, 2011]. United Biscuit-k, 2009. Community Progress Report 2009. [Pdf]. Available at: http://dev2.previewbox.co.uk/data/file/2009%20Community%20progress%20report%20final.pdf. [Accessed on January 08, 2011]. US Department of State. 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As a result, UFIC has five biscuit lines, two wafer lines, and increased production capacity (“Alibaba.... The united Food Industries Corporation is a global company under Lactalis Group.... In assessing organization environment and assessment, I will address Evaluation of Organizational Setting Assessment This paper addresses a company in Saudi Arabia called united Food Industries Corporation UFIC.... The united Food Industries Corporation is a global company under Lactalis Group....
2 Pages (500 words) Assignment

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Taking into consideration progressively increasing marketing On the other hand, with the increased advertisement, consumers tend to be less perceptive and naïve in terms of what they hear from TV ads, see on the boards, or read in print ads.... Among a variety of these interpretations and explanations, Fill (2013:429) recognises two major views: (1) advertising is a potent marketing force, which is done for persuading people; and (2) advertising is force for persuasion and for reminding people about brands....
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The micro and macro environment analysis of united biscuit have provided the base for framing proper marketing strategy for Hobnobs Cookies in its existing market.... Therefore, various marketing tools, model, and theories will be applied for analyzing micro and macro environment of united biscuit.... he micro and macro environment analysis of united biscuit have provided the base for framing proper marketing strategy for Hobnobs Cookies in its existing market....
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